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Federal Aviation Administration (FAA), DOT.
Amended final special conditions; request for comments.
This action amends special conditions No. 23–258–SC, issued on July 13, 2012, for the Tamarack Aerospace Group's modification to the Cirrus Model SR22 airplane. This amendment clarifies the intent of two requirements: The requirement for reporting of load alleviation system failures (see paragraph (c) under Loads, Probability of Failure of Load Alleviation System) and the requirement for consideration of limit loads with an unannunciated load alleviation system failure (see paragraph (b) under Factor of Safety, Load Alleviation Systems). This airplane as modified by Tamarack will have a novel or unusual design feature(s) associated with Tamarack Aerospace Group's modification. The design change will install winglets and an Active Technology Load Alleviation System (ATLAS). The addition of the ATLAS mitigates the negative effects of the winglets by effectively aerodynamically turning off the winglet under limit gust and maneuver loads. This is accomplished by measuring the aircraft loading and moving a small aileron-like device called a Tamarack Active Control Surface (TACS). The TACS movement reduces lift at the tip of the wing, resulting in the wing center of pressure moving inboard, thus reducing bending stresses along the wing span. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. These final special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards. Additionally, this amendment corrects the issue date of special condition No. 23–258–SC to July 13, 2012.
This final rule is effective February 13, 2013, and is applicable beginning February 6, 2013. Comments must be received by March 15, 2013.
Send comments identified by docket number FAA–2012–0485 using any of the following methods:
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•
•
•
For sections 23.301 through 23.629 (structural requirements), contact Mr. Mike Reyer; telephone (816)–329–4131. For sections 23.672 through 23.701 (control system requirements), contact Mr. Ross Schaller; telephone (816)–329–4162. The address and facsimile for both Mr. Reyer and Mr. Schaller is: Federal Aviation Administration, Small Airplane Directorate, Aircraft Certification Service, 901 Locust, Kansas City, Missouri 64106; facsimile (816) 329–4090.
We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data.
We will consider all comments we receive on or before the closing date for comments. We will consider comments filed late if it is possible to do so without incurring expense or delay. We may change these special conditions based on the comments we receive.
On February 15, 2011, Tamarack Aerospace Group applied for a supplemental type certificate for installation of winglets and an Active Technology Load Alleviation System (ATLAS) on the Cirrus Model SR 22 (serial numbers 0002—2333, 2335—2419, and 2421—2437). The Cirrus model SR22 is a certified, single reciprocating engine, four-passenger, composite airplane.
The installation of winglets, as proposed by Tamarack, increases aerodynamic efficiency. However, the winglets by themselves also increase wing static loads and the wing fatigue stress ratio, which under limit gust and maneuver loads factors may exceed the certificated wing design limits. The addition of ATLAS mitigates the negative effects of the winglets by effectively aerodynamically turning off the winglet at elevated gust and maneuver loads factors.
The ATLAS functions as a load-relief system. This is accomplished by measuring aircraft loading via an accelerometer, and by moving a small aileron-like device called a Tamarack Active Control Surface (TACS) that reduces lift at the tip of the wing. Because the ATLAS compensates for the increased wing root bending at elevated load factors, the overall effect of this modification is that the winglet can be added to the Cirrus wing without the traditionally required reinforcement of the existing structure. This is the first application of an active loads alleviation system on a part 23 aircraft and the applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature.
Under the provisions of § 21.101, Tamarack Aerospace Group must show that the Cirrus Model SR22, as changed, continues to meet the applicable provisions of the regulations incorporated by reference in Type Certificate Data Sheet A00009CH or the applicable regulations in effect on the date of application for the change. The regulations incorporated by reference in the type certificate are commonly referred to as the “original type certification basis.” The regulations incorporated by reference in Type Certificate Data Sheet A00009CH (Serial Numbers (S/Ns) 0002 through 2333, 2335 through 2419, and 2421 through 2437) are as follows:
14 CFR part 23 of the Federal Aviation Regulations, effective February 1, 1965, as amended by 23–1 through 23–53, except as follows:
Except for:
Addition of regulation 14 CFR 23.1306 through Amendment 23–61.
Addition of regulation 14 CFR 23.1308 through Amendment 23–57.
Change in Cirrus model SR22 certification basis for regulation 14 CFR 23.1359 through Amendment 23–49 from: Not Applicable to: Applicable
ACE–96–5 for 14 CFR Section 23.221 (Spinning); Refer to FAA Memorandum, dated June 10, 1998, for models SR20, SR22.
ACE–00–09 for 14 CFR 23.1143(g) (Engine Controls) and 23.1147(b) (Mixture Controls); Refer to FAA Memorandum, dated September 11, 2000, for model SR22.
ACE–01–01 for 14 CFR 23.1143(g) (Engine Controls) and 23.1147(b) (Mixture Controls); Refer to FAA Memorandum, dated February 14, 2001, for model SR20.
23–ACE–88 for ballistic parachute, for models SR20, SR22.
23–134–SC for protection of systems for High Intensity Radiated Fields continued: (HIRF), for models SR20, SR22.
23–163–SC for inflatable restraint system. Addition to the certification basis model SR20 effective S/N 1541 and subsequent; model SR22 S/N 1500, 1520 and subsequent.
If the Administrator finds that the applicable airworthiness regulations (
In addition to the applicable airworthiness regulations and special conditions, the SR22 must comply with the fuel vent and exhaust emission requirements of 14 CFR part 34 and the noise certification requirements of 14 CFR part 36.
The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type-certification basis under § 21.101.
Special conditions are initially applicable to the model for which they are issued. Should the applicant apply for a supplemental type certificate to modify any other model included on the same type certificate to incorporate the same or similar novel or unusual design feature, the special conditions would also apply to the other model under § 21.101.
The SR22 will incorporate the following novel or unusual design features:
Winglets with an Active Technology Load Alleviation System (ATLAS) that incorporates a small aileron-like device called a Tamarack Active Control Surface (TACS).
Tamarack has applied for a Supplemental Type Certificate to install a winglet and ATLAS. The ATLAS is not a primary flight control system, a trim device, or a wing flap. However, there is definite applicability to ATLAS for several regulations under part 23, Subpart D—Control Systems, which might otherwise be considered “Not Applicable” under a strict interpretation of the regulations. Other conditions may be developed, as needed, based on further FAA review and discussions with the manufacturer.
Special conditions are also necessary for the effect of ATLAS on structural performance. These special conditions are intended to provide an equivalent level of safety for ATLAS as intended by part 23, Subpart C—Structure, and portions of part 23, Subpart D—Design and Construction.
As discussed above, these special conditions are applicable to the SR22 (S/Ns 0002 thru 2333, 2335 thru 2419, and 2421 thru 2437). Should Tamarack Aerospace Group apply at a later date for a supplemental type certificate to modify any other model included on Type Certificate Data Sheet A00009CH to incorporate the same novel or unusual design feature, the special conditions would apply to that model as well.
This action affects only certain novel or unusual design features on one model of airplane. It is not a rule of general applicability and it affects only the applicant who applied to the FAA for approval of these features on the airplane.
Aircraft, Aviation safety, Signs and symbols.
The authority citation for these special conditions is as follows:
49 U.S.C. 106(g), 40113, 44701–44702, 44704.
Accordingly, the Federal Aviation Administration (FAA) are issued the following special conditions as part of the type certification basis for Cirrus Model SR22 airplanes (S/Ns 0002 through 2333, 2335 through 2419, and 2421 through 2437) modified by Tamarack Aerospace Group.
(A) The following special conditions apply to airplanes equipped with load alleviation systems that either directly, or as a result of failure or malfunction, affect structural performance. These
(B) In addition to the requirements in 14 CFR 23.301 Loads, comply with the following:
(a) Failures of the load alleviation system, including the annunciation system, must be immediately annunciated to the pilot or annunciated prior to the next flight. Failure of the load alleviation system, including the annunciation system, must be no greater than 1 x 10
(b) If failure of the load alleviation system, including the annunciation system, is greater than 1 x 10
(c) Tamarack must report failed annunciation systems to the FAA in a manner acceptable to the Administrator.
(C) In place of the requirements in 14 CFR 23.303 Factor of Safety, comply with the following:
The airplane must be able to withstand the limit and ultimate loads resulting from the following scenarios:
(a) The loads resulting from 14 CFR 23.321 through 23.537, as applicable, corresponding to a fully operative load alleviation system. A factor of safety of 1.5 must be applied to determine ultimate loads.
(b) If an independent system functional test is required by SC 23.301(b), the loads resulting from 14 CFR 23.321 through 23.537, as applicable, corresponding to the system in the inoperative state without additional flight limitations or reconfiguration of the airplane. A factor of safety of 1.0 must be applied to determine ultimate loads.
(c) The loads corresponding to the time of occurrence of load alleviation system failure and immediately after the failure. These loads must be determined at any speed up to V
(d) For airplanes equipped with “before the next flight” failure annunciation systems, the loads resulting from 14 CFR 23.321 through 23.537, as applicable, corresponding to the system in the failed state without additional flight limitations or reconfiguration of the airplane. A factor of safety of 1.25 must be applied to determine ultimate loads.
(e) For airplanes equipped with “immediate” failure annunciation systems, the loads resulting from 14 CFR 23.321 through 23.537, as applicable, corresponding to the system in the failed state with additional flight limitations or reconfiguration of the airplane. A factor of safety of 1.0 must be applied to determine ultimate loads.
(D) In addition to the requirements in 14 CFR 23.571 through 23.574, comply with the following:
If any system failure would have a significant effect on the fatigue or damage evaluations required in §§ 23.571 through 23.574, then these effects must be taken into account. If an independent system functional test is required by SC 23.301(b), the effect on fatigue and damage evaluations resulting from the selected inspection interval must be taken into account.
(E) In addition to the requirements in 14 CFR 23.629 Flutter, comply with the following:
(a) With the load alleviation system fully operative, compliance to 14 CFR 23.629 must be shown. Compliance with § 23.629(f) must include the ATLAS control system and control surface.
(b) At the time of occurrence of load alleviation system failure and immediately after the failure, compliance with 14 CFR 23.629(a) and (e) must be shown up to V
(c) For airplanes equipped with “before the next flight” failure annunciation systems and the load alleviation system in the failed state, compliance to 14 CFR 23.629 Flutter, paragraphs (a) and (e), must be shown up to V
(d) For airplanes equipped with “immediate” failure annunciation systems and the load alleviation system in the failed state, compliance to 14 CFR 23.629 Flutter, paragraphs (a) and (e), must be shown with consideration of additional operating limitations or reconfiguration of the airplane at speeds up to V
(A) In place of 14 CFR 23.672 Stability augmentation and automatic and power-operated systems requirement, comply with the following:
The load alleviation system must comply with the following:
(a) A warning, which is clearly distinguishable to the pilot under expected flight conditions without requiring the pilot's attention, must be provided for any failure in the load alleviation system or in any other automatic system that could result in an unsafe condition if the pilot was not aware of the failure. Warning systems must not activate the control system.
(b) The design of the load alleviation system or of any other automatic system must permit initial counteraction of failures without requiring exceptional pilot skill or strength, by either the deactivation of the system or a failed portion thereof, or by overriding the failure by movement of the flight controls in the normal sense.
(c) It must be shown that, while the system is active or after any single failure of the load alleviation system—
(1) The airplane is safely controllable when the failure or malfunction occurs at any speed or altitude within the approved operating limitations that is critical for the type of failure being considered;
(2) The controllability and maneuverability requirements of this part are met within a practical operational flight envelope (for example, speed, altitude, normal acceleration, and airplane configuration) that is described in the Airplane Flight Manual (AFM); and
(3) The trim, stability, and stall characteristics are not impaired below a level needed to permit continued safe flight and landing.
(B) In place of 14 CFR 23.677 Trim systems requirement, comply with the following:
(a) Proper precautions must be taken to prevent inadvertent, improper, or abrupt Tamarack Active Control Surface (TACS) operation.
(b) The load alleviation system must be designed so that, when any one connecting or transmitting element in the primary flight control system fails, adequate longitudinal control for safe flight and landing is available.
(c) The load alleviation system must be irreversible unless the TACS is properly balanced and has no unsafe flutter characteristics. The system must have adequate rigidity and reliability in the portion of the system from the tab to the attachment of the irreversible unit to the airplane structure.
(d) It must be demonstrated that the airplane is safely controllable and that the pilot can perform all maneuvers and operations necessary to effect a safe landing following any probable powered system runaway that reasonably might be expected in service, allowing for appropriate time delay after pilot recognition of the system runaway. The demonstration must be conducted at critical airplane weights and center of gravity positions.
(C) In place of 14 CFR 23.683 Operation tests requirement, comply with the following:
(a) It must be shown by operation tests that, when the load alleviation system is active and operational and loaded as prescribed in paragraph (b) of this section, the system is free from—
(1) Jamming;
(2) Excessive friction; and
(3) Excessive deflection.
(b) The prescribed test loads are, for the entire system, loads corresponding to the limit airloads on the appropriate surface.
(D) In place of 14 CFR 23.685 Control system details requirement, comply with the following:
(a) Each detail of the Tamarack Active Control Surface (TACS) must be designed and installed to prevent jamming, chafing, and interference from cargo, passengers, loose objects, or the freezing of moisture.
(b) There must be means in the cockpit to prevent the entry of foreign objects into places where they would jam any one connecting or transmitting element of the system.
(c) Each element of the load alleviation system must have design features, or must be distinctively and permanently marked, to minimize the possibility of incorrect assembly that could result in malfunctioning of the control system.
(E) In place of 14 CFR 23.697 Wing flap controls requirement, comply with the following:
(a) The Tamarack Active Control Surface (TACS) must be designed so that, when the surface has been placed in any position, it will not move from that position unless the control is adjusted or is moved by the automatic operation of a load alleviation system.
(b) The rate of movement of the TACS in response to the automatic device must give satisfactory flight and performance characteristics under steady or changing conditions of airspeed, engine power, and attitude.
(F) In place of 14 CFR 23.701 Flap interconnection requirement, comply with the following:
(a) The load alleviation system and related movable surfaces as a system must—
(1) Be synchronized by a mechanical interconnection between the movable surfaces; or by an approved equivalent means; or
(2) Be designed so that the occurrence of any failure of the system that would result in an unsafe flight characteristic of the airplane is extremely improbable; or
(b) The airplane must be shown to have safe flight characteristics with any combination of extreme positions of individual movable surfaces.
Federal Aviation Administration (FAA), DOT.
Final rule.
This rule establishes, amends, suspends, or revokes Standard Instrument Approach Procedures (SIAPs) and associated Takeoff Minimums and Obstacle Departure Procedures for operations at certain airports. These regulatory actions are needed because of the adoption of new or revised criteria, or because of changes occurring in the National Airspace System, such as the commissioning of new navigational facilities, adding new obstacles, or changing air traffic requirements. These changes are designed to provide safe and efficient use of the navigable airspace and to promote safe flight operations under instrument flight rules at the affected airports.
This rule is effective February 13, 2013. The compliance date for each SIAP, associated Takeoff Minimums, and ODP is specified in the amendatory provisions.
The incorporation by reference of certain publications listed in the regulations is approved by the Director of the Federal Register as of February 13, 2013.
Availability of matters incorporated by reference in the amendment is as follows:
1. FAA Rules Docket, FAA Headquarters Building, 800 Independence Avenue SW., Washington, DC 20591;
2. The FAA Regional Office of the region in which the affected airport is located;
3. The National Flight Procedures Office, 6500 South MacArthur Blvd., Oklahoma City, OK 73169, or
4. The National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202–741–6030, or go to:
1. FAA Public Inquiry Center (APA–200), FAA Headquarters Building, 800 Independence Avenue SW., Washington, DC 20591; or
2. The FAA Regional Office of the region in which the affected airport is located.
Richard A. Dunham III, Flight Procedure Standards Branch (AFS–420), Flight Technologies and Programs Divisions, Flight Standards Service, Federal Aviation Administration, Mike Monroney Aeronautical Center, 6500 South MacArthur Blvd. Oklahoma City, OK. 73169 (Mail Address: P.O. Box 25082, Oklahoma City, OK 73125) Telephone: (405) 954–4164.
This rule amends Title 14 of the Code of Federal Regulations, Part 97 (14 CFR part 97), by establishing, amending, suspending, or revoking SIAPS, Takeoff Minimums and/or ODPS. The complete regulators description of each SIAP and its associated Takeoff Minimums or ODP for an identified airport is listed on FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR 97.20. The applicable FAA Forms are FAA Forms 8260–3, 8260–4, 8260–5, 8260–15A, and 8260–15B when required by an entry on 8260–15A.
The large number of SIAPs, Takeoff Minimums and ODPs, in addition to their complex nature and the need for a special format make publication in the
This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP, Takeoff Minimums and ODP as contained in the transmittal. Some SIAP and Takeoff Minimums and textual ODP amendments may have been issued previously by the FAA in a Flight Data Center (FDC) Notice to Airmen (NOTAM) as an emergency action of immediate flight safety relating directly to published aeronautical charts. The circumstances which created the need for some SIAP and Takeoff Minimums and ODP amendments may require making them effective in less than 30 days. For the remaining SIAPS and Takeoff Minimums and ODPS, an effective date at least 30 days after publication is provided.
Further, the SIAPs and Takeoff Minimums and ODPS contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these SIAPS and Takeoff Minimums and ODPs, the TERPS criteria were applied to the conditions existing or anticipated at the affected airports. Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedures before adopting these SIAPS, Takeoff Minimums and ODPs are impracticable and contrary to the public interest and, where applicable, that good cause exists for making some SIAPs effective in less than 30 days.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26,1979) ; and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air Traffic Control, Airports, Incorporation by reference, and Navigation (Air).
Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal Regulations, Part 97 (14 CFR part 97) is amended by establishing, amending, suspending, or revoking Standard Instrument Approach Procedures and/or Takeoff Minimums and/or Obstacle Departure Procedures effective at 0902 UTC on the dates specified, as follows:
49 U.S.C. 106(g), 40103, 40106, 40113, 40114, 40120, 44502, 44514, 44701, 44719, 44721–44722.
On January 25, 2013 (78 FR 5256), the FAA published an Amendment in Docket No. 30880, Amdt No. 3515 to Part 97 of the Federal Aviation Regulations under section 97.33. The following 4 entries for Lakeview, CA, effective 7 March, 2013, are hereby rescinded in their entirety:
Federal Aviation Administration (FAA), DOT.
Final rule.
This rule establishes, amends, suspends, or revokes Standard Instrument Approach Procedures (SIAPs) and associated Takeoff Minimums and Obstacle Departure Procedures for operations at certain airports. These regulatory actions are needed because of the adoption of new or revised criteria, or because of changes occurring in the National Airspace System, such as the commissioning of new navigational facilities, adding new obstacles, or changing air traffic requirements. These changes are designed to provide safe and efficient use of the navigable airspace and to promote safe flight operations under instrument flight rules at the affected airports.
This rule is effective February 13, 2013. The compliance date for each SIAP, associated Takeoff Minimums, and ODP is specified in the amendatory provisions.
The incorporation by reference of certain publications listed in the regulations is approved by the Director of the Federal Register as of February 13, 2013.
Availability of matter incorporated by reference in the amendment is as follows:
1. FAA Rules Docket, FAA Headquarters Building, 800 Independence Avenue SW., Washington, DC 20591;
2. The FAA Regional Office of the region in which the affected airport is located;
3. The National Flight Procedures Office, 6500 South MacArthur Blvd., Oklahoma City, OK 73169 or,
4. The National Archives and Records Administration (NARA). For
1. FAA Public Inquiry Center (APA–200), FAA Headquarters Building, 800 Independence Avenue SW., Washington, DC 20591; or
2. The FAA Regional Office of the region in which the affected airport is located.
Richard A. Dunham III, Flight Procedure Standards Branch (AFS–420) Flight Technologies and Programs Division, Flight Standards Service, Federal Aviation Administration, Mike Monroney Aeronautical Center, 6500 South MacArthur Blvd., Oklahoma City, OK 73169 (Mail Address: P.O. Box 25082 Oklahoma City, OK 73125) telephone: (405) 954–4164.
This rule amends Title 14, Code of Federal Regulations, Part 97 (14 CFR part 97) by amending the referenced SIAPs. The complete regulatory description of each SIAP is listed on the appropriate FAA Form 8260, as modified by the National Flight Data Center (FDC)/Permanent Notice to Airmen (P–NOTAM), and is incorporated by reference in the amendment under 5 U.S.C. 552(a), 1 CFR part 51, and § 97.20 of Title 14 of the Code of Federal Regulations.
The large number of SIAPs, their complex nature, and the need for a special format make their verbatim publication in the
This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP as amended in the transmittal. For safety and timeliness of change considerations, this amendment incorporates only specific changes contained for each SIAP as modified by FDC/P–NOTAMs.
The SIAPs, as modified by FDC P–NOTAM, and contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these changes to SIAPs, the TERPS criteria were applied only to specific conditions existing at the affected airports. All SIAP amendments in this rule have been previously issued by the FAA in a FDC NOTAM as an emergency action of immediate flight safety relating directly to published aeronautical charts. The circumstances which created the need for all these SIAP amendments requires making them effective in less than 30 days.
Because of the close and immediate relationship between these SIAPs and safety in air commerce, I find that notice and public procedure before adopting these SIAPs are impracticable and contrary to the public interest and, where applicable, that good cause exists for making these SIAPs effective in less than 30 days.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air Traffic Control, Airports, Incorporation by reference, and Navigation (Air).
Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal regulations, Part 97, 14 CFR part 97, is amended by amending Standard Instrument Approach Procedures, effective at 0901 UTC on the dates specified, as follows:
49 U.S.C. 106(g), 40103, 40106, 40113, 40114, 40120, 44502, 44514, 44701, 44719, 44721–44722.
§§ 97.23, 97.25, 97.27, 97.29, 97.31, 97.33 and 97.35 [Amended]
By amending: § 97.23 VOR, VOR/DME, VOR or TACAN, and VOR/DME or TACAN; § 97.25 LOC, LOC/DME, LDA, LDA/DME, SDF, SDF/DME; § 97.27 NDB, NDB/DME; § 97.29 ILS, ILS/DME, MLS, MLS/DME, MLS/RNAV; § 97.31 RADAR SIAPs; § 97.33 RNAV SIAPs; and § 97.35 COPTER SIAPs, Identified as follows:
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a safety zone on the navigable waters of Mission Bay in support of the Sea World San Diego Fireworks. This safety zone is necessary to provide for the safety of the participants, crew, spectators, participating vessels, and other vessels and users of the waterway. Persons and vessels are prohibited from entering into, transiting through, or anchoring within this safety zone unless authorized by the Captain of the Port, or his designated representative.
This rule is effective from 8:50 p.m. to 10 p.m. on February 16, 2013.
Documents mentioned in this preamble are part of docket [USCG–2013–0022]. To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email Petty Officer Deborah Metzger, Waterways Management, U.S. Coast Guard Sector San Diego, Coast Guard; telephone 619–278–7656, email
The Coast Guard is issuing this 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 delay would be impracticable. Immediate action is necessary to ensure the safety of vessels, spectators, participants, and others in the vicinity of the marine event on the dates and times this rule will be in effect.
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 legal basis for this temporary rule is the Ports and Waterways Safety Act which authorizes the Coast Guard to establish safety zones (33 U.S.C sections 1221 et seq.).
Sea World is sponsoring the Sea World Fireworks, which will include a fireworks presentation from a barge in Mission Bay. The fireworks display is scheduled to occur between 8:50 p.m. and 10 p.m. on February 16, 2013. This fireworks display could cause a hazard for crew, spectators, participants, and other vessels and users of the waterway.
The Coast Guard is establishing a safety zone that will be enforced from 8:50 p.m. to 10 p.m. on February 16, 2013. The safety zone will cover a 600 foot radius surrounding the fireworks barge in approximate position 32°46′03″ N, 117°13′11″ W. The safety zone is necessary to provide for the safety of the crew, spectators, participants, and other vessels and users of the waterway. When this safety zone is being enforced, persons and vessels are prohibited from entering into, transiting through, or anchoring within this safety zone unless authorized by the Captain of the Port, or his designated representative.
We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on these statutes and executive orders.
This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders. This determination is based on the size and location of the safety zone. Commercial vessels will not be hindered by the safety zone. Recreational vessels will not be allowed to transit through the designated safety zone during the specified times.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601–612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
(1) This rule will affect the following entities, some of which may be small entities: The owners or operators of vessels intending to transit or anchor in a portion of Mission Bay from 8:50 p.m. to 10 p.m. on February 16, 2013.
(2) This safety zone will not have a significant economic impact on a substantial number of small entities for the following reasons: The safety zone will only be in effect for one hour and 10 minutes late in the evening when vessel traffic is low.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104–121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
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 will not call for a 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 the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and determined that this rule does not have implications for federalism.
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531–1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This rule will 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 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.
This action is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.
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 determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves establishment of a temporary safety zone. This rule is categorically excluded from further review under paragraph 34(g) of Figure 2–1 of the Commandant Instruction. An environmental analysis checklist supporting this determination 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. 1226, 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, and 160.5; Pub. L. 107–295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1.
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(b)
(c)
(d)
(2) Mariners requesting permission to transit through the safety zone may request authorization to do so from the Sector San Diego Command Center. The Command Center may be contacted on VHF–FM Channel 16.
(3) All persons and vessels shall comply with the instructions of the Coast Guard Captain of the Port or his designated representative.
(4) Upon being hailed by U.S. Coast Guard patrol personnel by siren, radio, flashing light, or other means, the operator of a vessel shall proceed as directed.
(5) The Coast Guard may be assisted by other federal, state, or local agencies.
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone in the West Duwamish Waterway in Seattle, Washington for a vessel roll-out at Vigor Industrial. The safety zone is necessary to ensure the safety of the maritime public and workers involved in the roll-out. The safety zone will prohibit any person or vessel from entering or remaining in the safety zone unless authorized by the Captain of the Port or a Designated Representative.
This rule is effective on February 28, 2013 from 2:00 a.m. until 10:00 a.m.
Documents mentioned in this preamble are part of docket [USCG–2013–0039]. To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email Ensign Nathaniel P. Clinger, Waterways Management Division, Coast Guard Sector Puget Sound, Coast Guard; telephone 206–217–6045, email
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 would be impracticable to do so. Delaying promulgation may result in injury or damage to persons and vessels since the roll-out event is scheduled to occur before a comment period would end and a Final Rule could be published.
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
Vigor Industrial is conducting a vessel roll-out in the West Duwamish Waterway in Seattle, Washington on February 28, 2013. Due to the dangers involved with a large slow moving dry dock that will be maneuvering close to the shore, the Coast Guard is establishing a temporary safety zone to ensure the safety of the workers involved as well as the maritime public.
The safety zone helps ensure the public's safety during a vessel roll-out that will take place on February 28, 2013 in the waters of the West Duwamish Waterway. The safety zone created by this rule encompasses all waters of the West Duwamish Waterway in Seattle, Washington within the area created by connecting the following points: 47°35′04″ N, 122°21′30″ W thence westerly to 47°35′04″ N, 122°21′50″ W thence northerly to 47°35′19″ N, 122°21′50″ W thence easterly to 47°35′19″ N, 122°21′30″ W
All persons and vessels will be prohibited from entering or remaining in the safety zone. The safety zone will be effective on February 28, 2013 from 2:00 a.m. to 10:00 a.m. unless cancelled sooner by the Captain of the Port or a Designated Representative. The safety zone will be enforced by the U.S. Coast Guard. The Captain of the Port may also be assisted in the enforcement of this safety zone by other federal, state, or local agencies.
We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on these statutes and executive orders.
This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders. The Coast Guard has made this finding based on the fact that the safety zone is limited in duration, and maritime traffic may be able to transit through the safety zone with permission of the Captain of the Port or a Designated Representative.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601–612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule will affect the following entities, some of which may be small entities: The owners or operators of vessels intending to transit through the safety zone created by this rule. This rule will not have a significant economic impact on a substantial number of small entities, although the safety zone will apply to the entire width of the waterway, the zone will be enforced for a limited period of time, and vessel traffic will be allowed to pass through the safety zone with the permission of the Captain of the Port or a Designated Representative.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104–121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
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 will not call for a 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 the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and determined that this rule does not have implications for federalism.
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531–1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This rule will 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 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.
This action is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.
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 determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves the establishment of a temporary safety zone. This rule is categorically excluded from further review under paragraph 34(g) of Figure 2–1 of the Commandant Instruction. An environmental analysis checklist supporting this determination 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
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(b)
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Federal Emergency Management Agency, DHS.
Final rule.
Base (1% annual-chance) Flood Elevations (BFEs) and modified BFEs are made final for the communities listed below. The BFEs and modified BFEs are the basis for the floodplain management measures that each community is required either to adopt or to show evidence of being already in effect in order to qualify or remain qualified for participation in the National Flood Insurance Program (NFIP).
The date of issuance of the Flood Insurance Rate Map (FIRM) showing BFEs and modified BFEs for each community. This date may be obtained by contacting the office where the maps are available for inspection as indicated in the table below.
The final BFEs for each community are available for inspection at the office of the Chief Executive Officer of each community. The respective addresses are listed in the table below.
Luis Rodriguez, Chief, Engineering Management Branch, Federal Insurance and Mitigation Administration, Federal Emergency Management Agency, 500 C Street SW., Washington, DC 20472, (202) 646–4064, or (email)
The Federal Emergency Management Agency (FEMA) makes the final determinations listed below for the modified BFEs for each community listed. These modified elevations have been published in newspapers of local circulation and ninety (90) days have elapsed since that publication. The Deputy Associate Administrator for Mitigation has resolved any appeals resulting from this notification.
This final rule is issued in accordance with section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR part 67. FEMA has developed criteria for floodplain management in floodprone areas in accordance with 44 CFR part 60.
Interested lessees and owners of real property are encouraged to review the proof Flood Insurance Study and FIRM available at the address cited below for each community. The BFEs and modified BFEs are made final in the communities listed below. Elevations at selected locations in each community are shown.
Administrative practice and procedure, Flood insurance, Reporting and recordkeeping requirements.
Accordingly, 44 CFR part 67 is amended as follows:
42 U.S.C. 4001
Federal Emergency Management Agency, DHS.
Final rule.
Base (1% annual-chance) Flood Elevations (BFEs) and modified BFEs are made final for the communities listed below. The BFEs and modified BFEs are the basis for the floodplain management measures that each community is required either to adopt or to show evidence of being already in effect in order to qualify or remain qualified for participation in the National Flood Insurance Program (NFIP).
The final BFEs for each community are available for inspection at the office of the Chief Executive Officer of each community. The respective addresses are listed in the table below.
Luis Rodriguez, Chief, Engineering Management Branch, Federal Insurance and Mitigation Administration, Federal Emergency Management Agency, 500 C Street SW., Washington, DC 20472, (202) 646–4064, or (email)
The Federal Emergency Management Agency (FEMA) makes the final determinations listed below for the modified BFEs for each community listed. These modified elevations have been published in newspapers of local circulation and ninety (90) days have elapsed since that publication. The Deputy Federal Insurance and Mitigation Administrator has resolved any appeals resulting from this notification.
This final rule is issued in accordance with section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR part 67. FEMA has developed criteria for floodplain management in floodprone areas in accordance with 44 CFR part 60.
Interested lessees and owners of real property are encouraged to review the
Administrative practice and procedure, Flood insurance, Reporting and recordkeeping requirements.
Accordingly, 44 CFR part 67 is amended as follows:
42 U.S.C. 4001
Legal Services Corporation.
Final rule.
This final rule amends the Legal Services Corporation's regulations on enforcement procedures through the addition of options for limited reductions of funding, expansion of non-audit based suspensions for up to ninety days, and immediate special grant conditions for compliance issues. The final rule provides updates and enhancements to the rules regarding enforcement generally, terminations, debarments, and suspensions. It also provides a technical conforming update to a cross-reference in the private attorney involvement regulation.
Mark Freedman, Senior Assistant General Counsel, Office of Legal Affairs, Legal Services Corporation, 3333 K Street NW., Washington, DC 20007; 202–295–1623 (phone); 202–337–6519 (fax);
On January 31, 2012, the Legal Services Corporation (LSC) published in the
LSC undertook this rulemaking to add three new enforcement options to the LSC regulations regarding grants for the provision of legal assistance:
(1) A new “limited reduction of funding” that enables LSC to respond quickly to instances of substantial violation of LSC requirements through funding reductions of less than five percent using more simple procedures than for terminations of five percent or greater;
(2) suspensions for non-audit based compliance issues that could last for up to ninety days, an increase from thirty days in the previous rule; and
(3) special grant conditions regarding compliance issues that LSC could add immediately to a current grant.
In the course of the rulemaking, LSC developed new administrative procedures to enhance the opportunities for informal resolution when LSC proposes to undertake a limited reduction of funding, a termination in whole or in part, or a debarment. The rule already provided for informal resolution through an informal conference with opportunities for settlement or compromise. The rule has enhanced the informal conference and added procedures to provide for resolution of the matter through prompt corrective action agreements, when appropriate.
This rulemaking also clarifies existing regulations and makes conforming changes to the rules in order to accommodate the new process and procedures indicated. All of the comments and related memos submitted to the LSC Board regarding this
After the effective date of the rule, those materials will appear in the closed rulemaking section.
The LSC Act provides general authority to the Corporation “to insure the compliance of recipients and their employees with the provisions of [the Act] and the rules, regulations, and guidelines promulgated pursuant to [the Act].” 42 U.S.C. 2996e(b)(1)(A). LSC's principal regulation discussing general enforcement authority and procedures is the Enforcement Procedures regulation at 45 CFR part 1618. LSC uses a variety of enforcement tools, formal and informal, to ensure compliance. Among these are informal consultations and compliance training, on-site Case Service Report/Case Management System reviews, the imposition of Required Corrective Actions (RCAs), and the imposition of Special Grant Conditions (SGCs) at the beginning of a grant award period or at grant renewal. Several enforcement tools involving suspending or reducing funding to a recipient to address significant non-compliance are provided in LSC-adopted regulations. LSC has adopted grant termination procedures (45 CFR part 1606) that provide for the termination of funding in whole or part in cases of a recipient's substantial noncompliance with LSC statutory or regulatory requirements and other policies, instructions, or grant terms and conditions. LSC has also adopted suspension procedures (45 CFR part 1623) and disallowed-cost procedures (45 CFR part 1630). Lastly, part 1606 provides authority for LSC to debar recipients from eligibility to receive future grants.
LSC amended the part 1606 termination procedures in 1998 and created a separate provision for reductions of funding of less than five percent, which are not considered terminations and not subject to the full set of procedures that apply to terminations. The 1998 amendments to the rule required, however, that to reduce funding to a recipient by less than five percent, LSC would have to establish additional procedures by rulemaking. 45 CFR 1606.2(d)(2)(v). LSC commenced this rulemaking to establish those procedures.
The majority of LSC recipients are in substantial compliance with LSC requirements most of the time. When non-compliance occurs, recipients almost always work diligently and cooperatively with LSC staff to come promptly into compliance, but there have been exceptions and situations in which LSC has felt the need for the kind of enforcement tools covered by this rulemaking.
This rulemaking also addresses a problem in the previous rules regarding LSC's ability to take timely actions. LSC can impose suspensions after as little as eleven days of process, but the previous rule limited suspensions to thirty days (other than audit-based suspensions). The next enforcement option available to LSC was terminations, which require five months or more of procedures if the recipient uses all available levels of review. Similarly, disallowed costs may be available to recover improperly spent funds, although that process is designed for recovery rather than enforcement and sanction. Also, disallowed costs can take over five months to complete (except for disallowed costs of less than $2,500). This rulemaking provides for suspensions of funding for up to ninety days, for limited reductions of funding that can be implemented in approximately eighty days, and for special grant conditions that can be added immediately to an existing grant.
This rulemaking also addresses concerns expressed by the Government Accountability Office (GAO) in its report, Legal Services Corporation: Improved internal controls needed in grants management and oversight, GAO–08–37 (December 2007). In that report, the GAO opined that LSC has “limited options for sanctioning or replacing poor-performing recipients.” GAO–08–37 at 17. The existing enforcement mechanisms available to LSC are best suited to situations involving numerous and/or very significant violations that merit severe actions such as terminations, or to situations in which compliance issues are technical or minor and can be resolved through corrective actions, grant conditions, and similar actions. LSC has not had enforcement mechanisms well suited to violations or compliance issues in an intermediate range (
LSC significantly revised LSC's enforcement rules in 1998 in response to Congressional changes to the governing law. Prior to 1996, section 1011 of the LSC Act provided minimum process requirements for suspensions over thirty days, terminations, and denials of refunding that included hearing rights and review by independent hearing examiners. 42 U.S.C. 2996j. LSC implemented these statutory requirements in 1976 and 1978 through the original enforcement regulations: part 1618 (General enforcement thresholds), part 1606 (Terminations and denials of refunding), and part 1623 (Suspensions). In 1996, Congress suspended section 1011 via riders to the annual LSC appropriation, which have been reincorporated every year thereafter, including some modifications in 1998.
For the purposes of the funding provided in this [FY 1996 Appropriations] Act, rights under sections 1007(a)(9) [interim funding for refunding applicants] and 1011 of the Legal Services Corporation Act (42 U.S.C. 2996f(a)(9) and 42 U.S.C. 2996j) shall not apply.
LSC implemented these statutory changes by revising 45 CFR parts 1606 and 1623. 63 FR 64636 (1998) (parts
The changes in this final rule reflect LSC's obligation to safeguard public funds appropriated by Congress for civil legal aid by ensuring compliance with LSC rules, restrictions, and requirements. These additions to the enforcement mechanisms are consistent with LSC's understanding of Congress's intent to strengthen LSC's enforcement mechanisms, while carefully accounting for the importance of continued delivery of legal services and the rights of LSC recipients.
LSC uses a variety of non-regulation based tools to track and ensure compliance. Among these are informal consultations and compliance training, on-site Case Service Report/Case Management System reviews, the imposition of Required Corrective Actions (RCAs), and the imposition of Special Grant Conditions (SGCs) at the beginning of a grant year.
LSC relies primarily on RCAs to remedy compliance problems. The LSC Office of Compliance and Enforcement (OCE) estimates that in approximately 90 percent of cases in which RCAs are imposed, recipients implement the RCAs on a timely and satisfactory basis. In approximately ten percent of the cases, however, a recipient fails to implement the required corrective actions in a timely or satisfactory manner. In some instances in which recipients have failed to implement RCAs in a timely or satisfactory manner, LSC has imposed SGCs. Although SGCs may be substantively identical to the measures contained in RCAs, SGCs elevate the matter by formally incorporating the conditions into the recipient's grant documents and ensuring that the recipient's Board Chair, who has to sign the SGCs, is aware of an ongoing problem. In recent years, LSC has also used short-term funding to encourage compliance by providing a grant or successive grants for less than a year (
Members of the LSC Board raised concerns that the parallel and interrelated procedures for different enforcement mechanisms could be confusing. For clarification, the table below summarizes the enforcement actions provided for in the rules and the respective procedures for each. This table uses the revised nomenclature provided in the final rule. The prior suspension and termination rules contained inconsistencies in the terms used for each stage of the process; those terms have been standardized in the final rule.
LSC received nineteen comments on the NPRM and eight comments on the FNPRM. All of the comments and LSC's analysis of them are posted on the rulemaking page of
The most extensive comments on both proposals were submitted by the LSC Office of Inspector General (OIG), the American Bar Association Standing Committee on Legal Aid and Indigent Defendants (SCLAID), and the National Legal Aid and Defender Association (NLADA). Colorado Legal Services and the Northwest Justice Project (NJP) also submitted detailed comments. The other comments generally endorsed the NLADA comments. Only the OIG fully supported the rulemaking, although the OIG recommended removing any time limit on suspensions and expressed concerns that the requirements for the new special grant conditions were too restrictive. SCLAID did not oppose the rulemaking, but it strongly recommended significant enhancements to standards and procedures similar to those recommended by NLADA. NLADA, and most of the other comments, opposed the rulemaking and recommended significant enhancements to standards and procedures if it proceeded.
The NPRM proposed a new set of procedures for limited reductions of funding based on the existing procedures for suspensions, which provide for one level of review through an informal meeting. In response to comments that this did not provide sufficient process, LSC revised the proposal in the FNPRM in two ways. First, the same process is used at the initial stage for terminations and for limited reductions. Thereafter, limited reductions may be appealed to the LSC President using procedures based on the disallowed cost appeal procedures in 45 CFR part 1630. Some comments also raised similar concerns for suspensions, especially if they could last for up to ninety days. In response, the final rule also adds the same appeal process for suspensions once they extend beyond thirty days (thirty-day suspensions have always been permitted without further appeal). The NPRM proposed allowing LSC to impose SGCs immediately during a grant term rather than waiting for a new grant award or renewal. The OIG's comment expressed concern that the SGC language might appear to constrain some of LSC's authority, and other comments indicated concerns that the SGC language was too vague. In the FNPRM, LSC revised the language to clarify that it applies to the kinds of situations in which LSC has investigated a matter and developed RCAs. LSC may immediately impose SGCs that incorporate those RCAs into the grant documents.
The comments that recommended enhancements in the standards and procedures were not limited to the enforcement actions in the proposed rulemaking. Rather, they recommended revisions that would significantly change the rules as they have existed since 1998. In many cases, they would return to the pre-1998 standards, such as requiring non-LSC, independent hearing examiners, or exceed those standards, such as an increased intent requirement and a safe harbor for reliance on reasonable alternate interpretations of the LSC rules. LSC commenced this rulemaking to enhance enforcement options within the standards and procedures adopted in the 1998 rulemaking to respond to Congress's changes in the enforcement requirements of the LSC Act. The final rule does not adopt the many suggestions in the comments to change that carefully constructed enforcement framework. The OIG also suggested adding a requirement for publication of all final decisions to address due process concerns in the comments through transparency for those final actions. Rather than incorporating that suggestion as a regulatory requirement, LSC will address it in the policies and procedures for enforcement actions.
The final rule makes a number of revisions to increase the focus on attempts to resolve the violation at or before the informal conference. The final rule adds to the notice of the preliminary determination a requirement for summarizing prior attempts at resolution. The previous rule required that the same LSC employee who issued the notice would hold the informal conference. The final rule permits LSC to designate any senior employee to hold the informal conference, which provides LSC with more flexibility to set a dispute resolution tone. The final rule also adds “implementation of corrective actions” as an example of the types of settlement or compromise envisioned for the informal conference.
The final rule includes a new alternative strategy for informal resolution prior to the implementation of an enforcement action. LSC has the option of notifying the recipient that it can avoid the enforcement action through corrective action, if appropriate. The recipient may elect to accept that corrective action through timelines and implementation plans acceptable to LSC and documented in a compliance agreement; LSC could hold the enforcement action in abeyance so long as the recipient honors the agreement. If the recipient completes the corrective actions to LSC's satisfaction (in both substance and timeliness), then LSC would withdraw the preliminary determination without implementing the enforcement action. If LSC at any time decides that the recipient has failed to adhere to the agreed-upon corrective action plan, including failing to act in accordance with the established timeline, then LSC could continue with the enforcement process.
In response to the comments received, LSC has included in the final rule an appeals process for suspensions that last over thirty days. The appeals process is based on the appeals process for limited reductions of funding. As with suspension decisions, the timeframe is short to enable LSC to resolve the appeal quickly. Unlike other enforcement actions, suspensions are enforced during the appeal period.
The final rule discusses the scope of partial terminations and limited reductions of funding by using the language of the previous rule regarding the level of financial assistance provided by the Corporation to a recipient pursuant to a grant or contract. 45 CFR 1600.1 defines “financial assistance” as the “annualized funding from the Corporation granted under section 1006(a)(1)(A) for the direct delivery of legal assistance to eligible clients.” These grants are for the provision of general-purpose legal assistance in a geographic area or to a specific population. Currently, LSC provides these grants for three types of service areas: basic field, Native American, and migrant. When LSC awards multiple service areas to a recipient (
Other LSC grants, under sections 1006(a)(1)(B) or (a)(3) of the LSC Act, are not subject to these procedures. Rather, LSC may provide for terminations or other enforcement actions for those grants pursuant to policies and procedures specific to those grant programs. For example, funding for Technology Initiative Grants is project-based and specifically tied to acquisitions, tasks, and timelines.
The final rule implements the NPRM provision that limited reductions apply only to one grant year. The final rule continues the provisions of the previous rule that a partial termination presumptively applies to only one grant year, but that LSC can specify a longer period up to the entire funding term.
Section 1601.1(b) contains two additions. First, the phrase “proportional to the proposed action” is added to modify “timely and fair due process procedures.” This addition corresponds to the addition of procedures for limited reductions of funding of less than five percent, which do not include a hearing before a hearing officer. The rule provides two sets of overlapping procedures, one for debarments and terminations of funding (five percent and greater) and the other for limited reductions of funding (less than five percent). Second, the phrase “or to impose a limited reduction of funding” is added to the list of remedies available under the rule.
A new § 1601.1(d) reflects a reorganization of the rule in the interest of clarity. It relocates the previous § 1606.2(c), without change, which described provisions of other LSC regulations that involve funding changes but are not subject to the termination procedures. This relocation emphasizes and clarifies that the indicated situations are not subject to the actions under part 1606. A corresponding change to matching language in 45 CFR part 1614 is included in this final rule.
This section has substantive and structural changes. All of the definitions now appear alphabetically.
The term “Corporation” is defined in 45 CFR 1600.1 to mean the Legal Services Corporation. The definition has been expanded here to provide that decisions of the Corporation, such as initiating a part 1606 proceeding, must be made by an individual acting at the level of, or senior to, an LSC office director. A deputy director could make these decisions if he or she is acting with the authority of the director, such as when the director's position is vacant, or the director is unavailable due to an illness and the deputy director has taken over the relevant responsibilities. The FNPRM had proposed that decisions could be made by deputy directors. The final rule narrows the circumstances in which deputy directors can act, in part responding to concerns raised by a commenter.
“Days” is added as a defined term to mean calendar days as computed under the Federal Rules of Civil Procedure, unless business days are specified, in which case Saturdays, Sundays, and legal holidays recognized under those rules are excluded. The rule had not previously defined days, which could have caused confusion regarding deadlines. In particular, some deadlines were five days, which in some cases could be as little as two business days. All time periods below fifteen days are changed in the rule to business days.
“Funding term” is added as a defined term to mean the time period for an award of financial assistance for a service area as that term is used in grant-making. The funding term is the longest period between competitions for a service area. Under 45 CFR part 1634, LSC can award a section 1006(a)(1)(A) grant or contract for up to five years, which is the funding term. LSC provides section 1006(a)(1)(A) awards for a maximum funding term, which is normally no greater than three years. Within the funding term, LSC provides funding for grant award periods of no more than one year, which can be renewed for additional grant award periods.
“Limited reduction of funding” is added as a defined term for reductions of funding of less than five percent, which the previous rule excluded from the definition of terminations. Unlike partial terminations, limited reductions apply only to the current grant year.
“LSC requirements” is added as a defined term in 45 CFR part 1618 to capture the full list of statutory, regulatory, and other requirements that apply to LSC grants or contracts for financial assistance under the LSC Act. Parts 1606 and 1623 of the previous rules repeatedly referenced the list of sources specified in this definition. For both clarity and consistency, the term is now defined using the language appearing in the previous rules and is cross-referenced in both parts 1606 and 1623.
“Receipt” of materials is added as a defined term to provide clarity in calculating deadlines under the rule. Formal service of process is not required. Service must be sufficient to ensure that both LSC and the recipient are fully aware of the proceedings and the actions taken by both entities at each stage.
The definition of “recipient” is functionally unchanged from the previously published version of this rule, which reiterated the definition at 45 CFR 1600.1. The final rule replaces that reiteration with a simple cross-reference.
The term “substantial noncompliance” is clarified in this rule. The term is defined to mean either a substantial violation of the LSC requirements or a substantial failure to provide high quality, economical, and effective legal assistance.
A definition of “substantial violation” has been added using the functional definition from § 1606.3(a) without any material modifications that would change its meaning or application from the previous rule.
The definition of “termination” has been updated to reflect new definitions in the rule and relocation of the cross-references to other regulations; no material modifications that would change its meaning or application from the previous rule have been made.
A definition of “violation” has been added to make clear that the scope of violations at issue under this rule is limited to the LSC requirements.
The title of this section is updated to add limited reductions of funding.
Section 1606.3(a) has minor nomenclature changes to conform to the new definitions and terms, including the new definition of “substantial violation,” but without any material modifications that would change its meaning or application from the previous rule. The definition of a “substantial failure” remains in § 1606.3(a)(2) with two adjustments: 1) the LSC appropriations have been added as a measure of performance, and 2) the term “guidance” is changed to “guidelines or instructions” consistent with the use of those terms in lieu of “guidance” throughout the previous and revised rules.
Section 1606.3(b) is added to specify that LSC may impose a limited reduction of funding for substantial violations, but not substantial failures, when LSC determines that a termination, in whole or in part, is not warranted. As with terminations, LSC can base a limited reduction of funding only on substantial violations occurring within the past five years.
Section 1606.3(c), the former paragraph (b), is changed to add limited reductions of funding. The requirements for a “substantial violation” are moved, without material modifications that would change their meaning or application from the previous rule, to the new definition of “substantial violation.” As proposed in the NPRM those same criteria apply to the determination of the magnitude of a proposed termination or limited reduction of funding. LSC stated in the NPRM that consideration of these factors was already implicit in considerations of how much funding should be affected by a proposed enforcement mechanism. SCLAID's comments recommended that LSC add an entire new section and criteria for determinations of magnitude, including the impact on client services and other funding for the recipient. The final rule does not do so because the magnitude of an enforcement action should relate directly to the magnitude of the violation and deterrence of future violations. LSC has general discretion to consider the totality of the situation when deciding how to proceed with an enforcement action to foster ongoing compliance while minimizing disruption of client services.
This section does not include any material modifications that would change its meaning or application from the previous rule. All changes are technical adjustments.
The language of section 1606.4(b)(4) is modified to clarify that it applies to any arrangements that are covered by debarments, not only subgrants or subcontracts, and that reference to a debarred “IPA,” which is undefined in the previous rule, means any debarred independent public accountant or other auditor.
Last, the reference to the “effective date of this rule” in § 1606.4(b)(5) is changed to December 23, 1998, the effective date of the previous rule.
The heading and § 1606.5(a) are updated to remove the limited reference to terminations and debarments in order to include limited reductions of funding. These procedures are available for, and apply to, all part 1606 enforcement mechanisms.
A new § 1606.5(b) is added to correspond to the new level of review in § 1606.10 for limited reductions of funding. The LSC President, or another senior LSC employee, will hear any final appeal of a limited reduction draft final decision. Those procedures are modeled on the 45 CFR part 1630 final appeal procedures for disallowed costs. The person hearing the appeal must have not been involved in the prior proceedings. The final rule requires that LSC designate the person to hear the final appeal before LSC considers whether or not to proceed with a preliminary determination for a limited reduction of funding.
The title of this section is updated to include reference to a final decision, which may be issued under this section if the recipient does not request any review of the preliminary determination. The language of this section is updated for clarity and to include limited reductions of funding, without material modifications that would change its meaning or application from the previous rule.
Section 1606.6(a)(6) is added to explicitly provide an option for LSC to specify corrective action that could resolve the situation without a termination or limited reduction of funding. This language is based on the previous suspension rule at 45 CFR part 1623; it does not appear in the previous part 1606 rule. LSC is not required to provide the recipient with a corrective action option, and the recipient does not have a right to avoid a termination or limited reduction of funding through corrective actions unless explicitly authorized by LSC. This language provides a clear option for resolving these situations through corrective action if LSC determines that doing so would be sufficient pursuant to the new § 1606.7(a).
Section 1606.6(a)(7) is added to require that the preliminary determination summarize any prior attempts at resolution of the situation. The addition of this paragraph does not require LSC to seek resolution prior to initiating a part 1606 action. Rather, when LSC and the recipient have attempted to resolve the situation, the rule will now require that LSC summarize those attempts and make them part of the administrative record.
References to a “designated employee” in this section are replaced with references to the Corporation as the actor, consistent with the definition of Corporation.
The title and content of this section have been updated to expand and clarify the options available after a recipient receives a preliminary determination. As stated in the previous rule, the informal conference is designed to create the opportunity for narrowing the issues and exploring the possibility of settlement or compromise. The informal conference is retained without material modifications that would change its meaning or application from the previous rule. The rule is changed to permit any senior LSC employee to hold the informal conference rather than the previous requirement that it be held by the same employee who issued the preliminary determination. In some cases, the same employee should handle both matters to bring consistent perspective and experience to the matter. In other situations, it may foster an atmosphere of settlement or compromise to have different LSC employees handle each stage of the process.
This section now explicitly provides an option for the recipient to submit written materials in opposition to the preliminary determination without a request for an informal conference. This option to present arguments in writing only is based on the similar option in the suspension rule at 45 CFR part 1623; a conference is not required if the recipient requests only a paper review.
Paragraph (a) provides a new option for resolving a preliminary
The provisions regarding the informal conference have been revised to clarify the procedures, permit any senior LSC employee to hold the conference, and to require that a draft decision to proceed with the enforcement option contain a summary of the issues raised in the conference or in submitted written materials.
The title of this section is updated to specify that hearings are available only for terminations and debarments, but not for limited reductions of funding. There are no material modifications that would change the meaning or application of this section from the previous rule. The deadlines have been designated as business or calendar days consistent with the new definition of days.
The title and language of this section are updated to specify that the recommended decision is applicable only to hearings for terminations or debarments. The only substantive change is a new § 1606.9(a)(2) that permits the hearing officer to recommend reducing a termination to below five percent, and thus convert a termination into a limited reduction of funding. The previous rule permitted the hearing officer to recommend terminations only, which would exclude the option of funding reductions of below five percent. Reference to limited reductions of funding is added to § 1606.9(a)(3) for consistency without any material modifications that would change its meaning or application from the previous rule referencing terminations or debarments.
This section is updated to add direct appeals to the LSC President, or designee, of draft final decisions for limited reductions of funding. This type of appeal is similar to the final appeal of a disallowed cost decision in 45 CFR part 1630. The final review is identical as that provided for in other part 1606 actions, with one exception. For limited reduction of funding appeals to the President, in which there in no right to review by a hearing officer, new paragraph (d) provides that the President must not have had prior involvement with the limited reduction of funding proceedings under this part. That provision is also based on the part 1630 process, which requires that the President not review actions in which he or she had prior involvement. As discussed in the FNPRM, the President is not disqualified merely because he or she is briefed about the situation, contacted by the recipient or other parties, or otherwise is aware but not actively involved in the part 1606 proceedings.
A number of comments recommended that the hearing officers or the final decision maker for appeals be non-LSC employees. As discussed earlier, in 1996 Congress lifted the LSC Act requirement for enforcement actions to be reviewed by an independent hearing examiner. The final rule does not change the impartiality requirement for hearing officers for terminations and debarment that they have not had prior involvement in the part 1606 enforcement action being reviewed. It also does not change the ability of LSC to suspend funding for up to thirty days without impartial review. For the new limited reductions of funding and suspensions of over thirty days, the final rule provides the same requirement of impartiality for the LSC President or other senior LSC employee providing final review of the matter. These impartiality requirements are sufficient for the process rights of recipients within the statutory framework and LSC's understanding of Congress's expectations for LSC's enforcement procedures. Other changes to this section clarify the process and deadlines without substantive changes. The FNPRM suggested adding the § 1606.6(a) preliminary determination requirements to any final decision modifying or extending the draft final decision. That suggestion is not retained in this final rule because it became apparent during the comment period that those requirements are tailored to the preliminary determination,
This section is updated for clarity without material modifications that would change its meaning or application from the previous rule. Section 1606.11(c)(3) is updated to require that LSC provide the final decision to the recipient within five days of the expiration of the appeal period. The previous rule stated that the recommended decision would become final if not appealed, but did not state when it must be provided as a final decision.
This section is updated for clarity without material modifications that would change its meaning or application from the previous rule.
This section is updated to include reference to limited reductions of funding. A new § 1606.13(d) is added to state explicitly that the manner of implementation is at the sole discretion of LSC. For example, depending on the situation, including the timing of the action in the grant year and funding term, LSC may choose to pro-rate a partial termination or limited reduction through the remaining grant payments or to withhold the reduced funds in one lump sum. The previous rule did not address that issue and this new section is consistent with the options available to LSC within its discretion under that rule.
Section 1606.13(e), the former paragraph (d), is modified to remove the reference to using the terminated or reduced funds for the same service area, as proposed in the NPRM. The previous rule provided that LSC may keep the funds in the same service area or otherwise reallocate them for any basic field purposes. Some of the comments recommended keeping the existing rule. As discussed in the NPRM, this language is eliminated because it could
One technical update to 45 CFR part 1614 relates to this rulemaking. Although not included in the NPRM or FNPRM, this update includes no material modifications that would change the meaning or application of this section from the previous rule and is necessary to harmonize that rule with this rulemaking and other prior changes to the LSC regulations. Part 1614 requires that an LSC recipient expend an amount equivalent to at least 12.5 percent of a basic field award on private attorney involvement (PAI) activities. The failure to do so may result in LSC withholding or recovering some funds from the recipient, depending on the circumstances. Section 1614.7 of the previous rule provided the requirements for those situations and stated that the withholding or recovery of funds for a failure to meet the part 1614 requirements does not constitute either a termination or a denial of refunding. The reference to terminations is changed to a reference to any action under 45 CFR part 1606. The reference to denials of refunding is eliminated, as LSC withdrew the denial of refunding regulation in 1998.
This final rule incorporates some substantive changes and some extensive structural, but non-substantive, changes to 45 CFR part 1618 as proposed in the FNPRM. The significant substantive change to the rule involves adding the imposition of special grant conditions during a grant year to § 1618.5(c). The final rule also changes references to violations of the LSC Act throughout the rule to violations of the LSC requirements as the term “LSC requirements” is defined for use in parts 1606 and 1623. The previous rule defined the “Act” as the LSC Act or the LSC rules and regulations, but did not include other applicable laws, such as the LSC appropriations riders, or LSC guidelines and instructions, which have been included in both parts 1606 and 1623 as they have been updated over the past thirty years. Part 1618 is both outdated and confusing in this regard. The new definition of LSC requirements is based on the language used in parts 1606 and 1623, and this definition applies in all three sections for consistency and clarity.
Some of the comments suggested changing the threshold standard under § 1618.5(b) for proceeding to enforcement actions under parts 1606 and 1623. The rule provides that LSC can proceed to consider enforcement actions:
[w]henever there is substantial reason to believe that a recipient has persistently or intentionally violated the Act, or, after notice, has failed to take appropriate remedial or disciplinary action to insure compliance by its employees with the Act, and attempts at informal resolution have been unsuccessful. * * *
45 CFR 1618.5(b). Those comments suggested adding a “knowing and willful” standard to this section. The OIG's comment notes that the 1998 rulemaking considered using “intent” as a factor in the standard for terminations and choose instead to use the defined term “knowing and willful.” The final rule does not change this language and retains the longstanding “intent” prong of the part 1618 analysis consistent with original structure of the rule under the LSC Act and the 1998 changes to parts 1606 and 1623. “Knowing and willful” was adopted in 1998 as a defined term in those regulations as one of many factors for consideration, while “intentionally violated” was retained in part 1618.
The purpose section is updated to incorporate the broader scope of the LSC requirements.
The definitions section is updated to incorporate the broader scope of the LSC requirements. A definition of “violation” has been added to make clear that the scope of violations at issue under this rule is limited to the LSC requirements.
The language of this section is updated for clarity and to reference the new definitions.
The language of this section is updated for clarity and to reference the new definitions. A new § 1618.4(c) is added to emphasize that this section does not create rights for recipient employees. Rather, this section is designed to ensure that recipients adopt and follow procedures designed to ensure that employees implement and follow the LSC requirements, and that the recipient applies those requirements consistent with LSC's interpretation of them.
The language of this section is updated for clarity and to reference the new definitions and include reference to limited reductions of funding. Section 1618.5(a) has a new final sentence clarifying that LSC's investigation of a possible violation may be limited to determining if the recipient is taking sufficient actions.
The existing language in § 1618.5(b) requires “attempts at informal resolution” prior to proceeding to consider enforcement actions under some circumstances. There are no changes to this language, but LSC notes that the informal resolution referenced here includes consideration of remedial actions, preventative actions, and sanctions, as discussed in the FNPRM.
A new § 1618.5(c) is added regarding immediate special grant conditions. Under previous LSC practice, special grant conditions were imposed only when a new grant was awarded or an existing grant was renewed. Under that practice, a recipient had an opportunity to consider the special grant conditions prior to agreeing to them. The NPRM proposed language to permit LSC to impose immediate grant conditions any time that the § 1618.5(b) thresholds are met. The FNPRM revised that language to permit immediate special grant conditions only after LSC determines that three factors are met: (1) A violation has occurred, (2) corrective actions are required, and (3) special grant conditions are needed prior to the next renewal or competition. The immediate special grant conditions enable LSC to convert required corrective actions contained in reports, such as OCE reports, into specific grant requirements.
The NPRM proposed to change only the language regarding the thirty-day limit on non-audit based suspensions to increase it to a ninety-day limit. The FNPRM, and this final rule, make a number of non-substantive, technical changes to harmonize the suspension
Comments on the NPRM and the FNPRM recommended an appeal process for suspensions, especially those that go beyond certain dollar thresholds. The OIG agreed that some appeal might be appropriate, but expressed concern about adopting appeal procedures that are too cumbersome and emphasized that appeals should occur during the pendency of the suspension, which is meant to protect funds from future misuse. The final rule includes an appeal procedure that mirrors the procedure for limited reductions of funding, which is based on the 45 CFR part 1630 disallowed cost appeal procedure.
The OIG also recommended eliminating any time limit for suspensions, and permitting suspensions to continue until compliance, as is the case for audit-based suspensions. In the 1998 rulemaking, LSC decided to retain a thirty-day limit on suspensions because LSC determined that a termination process was more appropriate than a prolonged suspension. 63 FR 64636 at 64638 (1998). In this rulemaking LSC has expanded suspensions to ninety days to make them more effective in short timeframes, but LSC continues to believe that terminations or reductions of funding with their corresponding procedures are more appropriate for intractable concerns that cannot be resolved within a limited suspension period.
The definitions of “knowing and willful” and “recipient” are deleted and replaced with a cross-reference to the definitions in 45 CFR part 1606, which include both of those terms. The definitions are identical in the previous rules and this change makes no substantive change to either. The use of the same definitions for other terms in both rules provides consistency throughout the regulations,
The previous rule provided a definition of “substantial violation” identical to the use of that term in 45 CFR part 1606. The term is deleted in favor of the new cross-reference to definitions in part 1606. There are no substantive changes to the definition.
Similarly the term “LSC requirements” replaces the list of LSC requirements that appeared in this rule and in other places in the regulations. It is defined in 45 CFR part 1618 and cross-referenced in 45 CFR part 1606.
In response to comments regarding the need for appeals of suspensions, LSC is adding an appeals process for suspensions that last longer than thirty days. The process is specified in § 1623.4(a) and (h). This addition preserves the previous rule's requirements for commencing suspensions based on notice and an informal meeting and continuing those suspensions for up to thirty days without further appeal. If the suspension lasts longer than thirty days, then the recipient may appeal to the LSC President. The appeal procedures are based on the new part 1606 limited reduction of funding appeal procedures, which are in turn based on the part 1630 disallowed cost appeal procedures. The discussion of those procedures in part 1606 applies equally to this section. Unlike part 1606 actions, the suspension will continue pending the appeal. The final rule requires that LSC issue a suspension decision within fifteen calendar days of receipt of the appeal in order to resolve the appeal promptly.
New § 1623.4(d) and (e) are copied from the revised informal conference procedures in 45 CFR part 1606. That language emphasizes seeking settlement or compromise and provides that the informal meeting can be conducted by the same employee who issued the proposed determination, or another senior LSC employee.
Section 1623.4(k), regarding audit-based suspensions, is updated to state that the new appeal process does not apply to audit-based suspensions, preserving the previous rule's requirements.
A technical change is made to § 1623.6(b) to state that suspended funds will be “released” at the end of the suspension period rather than “returned.”
Administrative practice and procedure, Grant programs-law, Legal services.
Grant programs-law, Legal services, Reporting and recordkeeping requirements.
Grant programs-law, Legal services.
Administrative practice and procedure, Grant programs-law, Legal services.
For the reasons set forth above, and under the authority of 42 U.S.C. 2996g(3), LSC proposes to amend 45 CFR chapter XVI as follows:
42 U.S.C. 2996e(b)(1), 2996f(a)(3), and 2996f(d); Pub. L. 105–119, Title V, Secs. 501(b) and (c), 502, 503, and 504, 111 Stat. 2440, 2510–12; Pub. L. 104–134, Title V, Sec. 503(f), 110 Stat. 1321, 1321–53.
The purpose of this rule is to:
(a) Ensure that the Corporation is able to take timely action to deal with incidents of substantial noncompliance by recipients with a provision of the LSC Act, the Corporation's appropriations act or other law
(b) Provide timely and fair due process procedures, proportional to the proposed action, when the Corporation has made a preliminary decision to terminate a recipient's LSC grant or contract, to debar a recipient from receiving future LSC awards of financial assistance, or to impose a limited reduction in funding; and
(c) Ensure that scarce funds are provided to recipients who can provide the most effective and economical legal assistance to eligible clients.
(d) None of the following actions are subject to the procedures or requirements of this part:
(1) A reduction of funding required by law, including but not limited to a reduction in, or rescission of, the Corporation's appropriation that is apportioned among all recipients of the same class in proportion to their current level of funding;
(2) A reduction or deduction of LSC support for a recipient under the Corporation's fund balance regulation at 45 CFR part 1628;
(3) A recovery of disallowed costs under the Corporation's regulation on costs standards and procedures at 45 CFR part 1630;
(4) A withholding of funds pursuant to the Corporation's Private Attorney Involvement rule at 45 CFR part 1614.
For the purposes of this part:
(1) The number of restrictions or requirements violated;
(2) Whether the violation represents an instance of noncompliance with a substantive statutory or regulatory restriction or requirement, rather than an instance of noncompliance with a non-substantive technical or procedural requirement;
(3) The extent to which the violation is part of a pattern of noncompliance with LSC requirements or restrictions;
(4) The extent to which the recipient failed to take action to cure the violation when it became aware of the violation; and
(5) Whether the violation was knowing and willful.
(a) A grant or contract may be terminated in whole or in part when:
(1) There has been a substantial violation by the recipient, and the violation occurred less than 5 years prior to the date the recipient receives a preliminary determination pursuant to § 1606.6(a) of this part; or
(2) There has been a substantial failure by the recipient to provide high quality, economical, and effective legal assistance, as measured by generally accepted professional standards, the provisions of the LSC Act or LSC appropriations, or a rule, regulation, including 45 CFR 1634.9(a)(2), or guidelines or instructions issued by the Corporation.
(b) The Corporation may impose a limited reduction of funding when the Corporation determines that there has been a substantial violation by the recipient but that termination of the recipient's grant, in whole or in part, is not warranted, and the violation occurred less than 5 years prior to the date the recipient receives a preliminary determination pursuant to § 1606.6(a) of this part.
(c) A determination of whether there has been a substantial violation for the purposes of this part, and the magnitude of any termination, in whole or in part, or any limited reduction in funding, shall be based on consideration of the criteria set forth in the definition of “substantial violation” in § 1606.2 of this part.
(a) The Corporation may debar a recipient, on a showing of good cause, from receiving an additional award of financial assistance from the Corporation.
(b) As used in paragraph (a) of this section, “good cause” means:
(1) A termination of financial assistance to the recipient pursuant to part 1640 of this chapter;
(2) A termination of financial assistance in whole of the most recent grant or contract of financial assistance;
(3) The substantial violation by the recipient of the restrictions delineated in § 1610.2(a) and (b) of this chapter, provided that the violation occurred within 5 years prior to the receipt of the debarment notice by the recipient;
(4) Knowing entry by the recipient into:
(i) Any agreement or arrangement, including, but not limited to, a subgrant, subcontract, or other similar agreement, with an entity debarred by the Corporation during the period of debarment if so precluded by the terms of the debarment; or
(ii) An agreement for professional services with an independent public accountant or other auditor debarred by the Corporation during the period of debarment if so precluded by the terms of the debarment; or
(5) The filing of a lawsuit by a recipient, provided that the lawsuit:
(i) Was filed on behalf of the recipient as plaintiff, rather than on behalf of a client of the recipient;
(ii) Named the Corporation, or any agency or employee of a Federal, State, or local government as a defendant;
(iii) Seeks judicial review of an action by the Corporation or such government agency that affects the recipient's status as a recipient of Federal funding, except for a lawsuit that seeks review of whether the Corporation or agency acted outside of its statutory authority or violated the recipient's constitutional rights; and
(iv) Was initiated after December 23, 1998.
(a) Before any final action is taken under this part, the recipient will be provided notice and an opportunity to be heard as set out in this part.
(b) Prior to a preliminary determination involving a limited reduction of funding, the Corporation shall designate either the President or another senior Corporation employee to conduct any final review that is requested pursuant to § 1606.10 of this part. The Corporation shall ensure that the person so designated has had no prior involvement in the proceedings under this part so as to meet the criterion set out in § 1606.10(d) of this part.
(a) When the Corporation has made a preliminary determination of one or more of the following, the Corporation shall issue a written notice to the recipient and the Chair of the recipient's governing body: that a recipient's grant or contract should be terminated, that a limited reduction of funding shall be imposed, or that a recipient should be debarred. The notice shall:
(1) State the substantial noncompliance that constitutes the grounds for the proposed action;
(2) Identify, with reasonable specificity, any facts or documents relied upon as justification for the proposed action;
(3) Inform the recipient of the proposed amount and proposed effective date for the proposed action;
(4) Advise the recipient of its procedural rights for review of the proposed action under this part;
(5) Inform the recipient of its right to receive interim funding pursuant to § 1606.13 of this part;
(6) Specify what, if any, corrective action the recipient can take to avoid the proposed action; and
(7) Summarize prior attempts, if any, for resolution of the substantial noncompliance.
(b) If the recipient does not request review, as provided for in this part, before the relevant time limits have expired, then the Corporation may issue a final decision to the recipient. No further appeal or review will be available under this part.
(a) If the Corporation proposes a corrective action in the preliminary determination pursuant to § 1606.6(a)(6) of this part, then the recipient may accept and implement the corrective action, in lieu of an informal conference or submission of written materials under this section, subject to the following requirements:
(1) Within 10 business days of receipt of the preliminary determination, the recipient may submit a draft compliance agreement to accept the terms of the proposed corrective action, which must include an implementation plan and timeline;
(2) If the Corporation approves the draft compliance agreement, including any modifications suggested by the recipient or the Corporation, then it shall be memorialized in a final compliance agreement signed by the Corporation and the recipient, which shall stay these proceedings;
(3) If the recipient completes the terms of the written compliance agreement in a time and manner that is satisfactory to the Corporation, then the Corporation shall withdraw the preliminary determination; and
(4) If the Corporation determines at any time that the recipient has not presented an acceptable draft compliance agreement, or has not fulfilled any terms of the final compliance agreement, then the Corporation shall notify the recipient in writing. Within 15 calendar days of that notice, the Corporation shall modify or affirm the preliminary determination as a draft final decision. The draft final decision shall summarize these attempts at resolution. The draft final decision need not engage in a detailed analysis of the failure to resolve the substantial noncompliance.
(b) A recipient may submit written materials in opposition to the preliminary determination, request an informal conference, or both, as follows:
(1) For terminations or debarments, within 30 calendar days of receipt of the preliminary determination; or
(2) For limited reductions in funding, within 10 business days of receipt of the preliminary determination.
(c) Within 5 business days of receipt of a request for a conference, the Corporation shall notify the recipient of the time and place the conference will be held. Some or all of the participants in the conference may attend via telephone, unless the recipient requests an in-person meeting between the Corporation and at least one representative of the recipient. If the recipient requests an in-person meeting, then other participants may attend via telephone. Alternative means of participation other than the telephone are permissible at the sole discretion of the Corporation.
(d) The informal conference shall be conducted by the Corporation employee who issued the preliminary determination or any other Corporation employee with a seniority level equivalent to the level of an office director or higher.
(e) At the informal conference, the Corporation and the recipient shall both have an opportunity to state their case, seek to narrow the issues, explore the possibilities of settlement or compromise including implementation of corrective actions, and submit written materials.
(f) If an informal conference is conducted or written materials are submitted in opposition to the proposed determination by the recipient, or both, the Corporation shall consider any written materials and any oral presentation or written materials submitted by the recipient at an informal conference. Based on any of these materials or the informal
(g) If the recipient does not request further process, as provided for in this part, then, after the relevant time limits have expired, the Corporation shall notify the recipient that no further appeal or review will be available under this part and may proceed to issue the final decision.
(a) For terminations or debarments only, the recipient may make a written request for a hearing within the later of: 30 calendar days of its receipt of the preliminary determination, or 15 calendar days of receipt of the draft final decision issued under § 1606.7 of this part, as the case may be.
(b) Within 10 business days after receipt of a request for a hearing, the Corporation shall notify the recipient in writing of the date, time, and place of the hearing and the names of the hearing officer and of the attorney who will represent the Corporation. The time, date, and location of the hearing may be changed upon agreement of the Corporation and the recipient.
(c) A hearing officer shall be appointed by the President or designee and may be an employee of the Corporation. The hearing officer shall not have been involved in the current termination or debarment action, and the President or designee shall determine that the person is qualified to preside over the hearing as an impartial decision maker. An impartial decision maker is a person who has not formed a prejudgment on the case and does not have a pecuniary interest or personal bias in the outcome of the proceeding.
(d) The hearing shall be scheduled to commence at the earliest appropriate date, ordinarily not later than 30 calendar days after the Corporation receives the notice required by paragraph (b) of this section.
(e) The hearing officer shall preside over and conduct a full and fair hearing, avoid delay, maintain order, and insure that a record sufficient for full disclosure of the facts and issues is maintained.
(f) The hearing shall be open to the public unless, for good cause and the interests of justice, the hearing officer determines otherwise.
(g) The Corporation and the recipient shall be entitled to be represented by counsel or by another person.
(h) At the hearing, the Corporation and the recipient each may present its case by oral or documentary evidence, conduct examination and cross-examination of witnesses, examine any documents submitted, and submit rebuttal evidence.
(i) The hearing officer shall not be bound by the technical rules of evidence and may make any procedural or evidentiary ruling that may help to insure full disclosure of the facts, to maintain order, or to avoid delay. Irrelevant, immaterial, repetitious or unduly prejudicial matter may be excluded.
(j) Official notice may be taken of published policies, rules, regulations, guidelines, and instructions of the Corporation, of any matter of which judicial notice may be taken in a Federal court, or of any other matter whose existence, authenticity, or accuracy is not open to serious question.
(k) A stenographic or electronic record shall be made in a manner determined by the hearing officer, and a copy shall be made available to the recipient at no cost.
(l) The Corporation shall have the initial burden to show grounds for a termination or debarment. The burden of persuasion shall then shift to the recipient to show by a preponderance of evidence on the record that its funds should not be terminated or that it should not be debarred.
(a) For termination or debarment hearings under § 1606.8 of this part, within 20 calendar days after the conclusion of the hearing, the hearing officer shall issue a written recommended decision to the recipient and the Corporation, which may:
(1) Terminate financial assistance to the recipient commencing as of a specific date;
(2) Impose a limited reduction of funding commencing as of a specific date;
(3) Continue the recipient's current level of financial assistance under the grant or contract, subject to any modification or condition that may be deemed necessary on the basis of information adduced at the hearing; or
(4) Debar the recipient from receiving an additional award of financial assistance from the Corporation.
(b) The recommended decision shall contain findings of the significant and relevant facts and shall state the reasons for the decision. Findings of fact shall be based solely on the record of, and the evidence adduced at the hearing or on matters of which official notice was taken.
(a) If neither the Corporation nor the recipient requests review by the President of a draft final decision pursuant to § 1606.7 of this part or a recommended decision pursuant to § 1606.9, as provided for in this part, within 10 business days after receipt by the recipient, then the Corporation shall issue to the recipient a final decision containing either the draft final decision or the recommended decision, as the case may be. No further appeal or review will be available under this part.
(b) The recipient or the Corporation may seek review by the President of a draft final decision or a recommended decision. A request shall be made in writing within 10 business days after receipt of the draft final decision or recommended decision by the party seeking review and shall state in detail the reasons for seeking review.
(c) The President's review shall be based solely on the administrative record of the proceedings, including the appeal to the President, and any additional submissions, either oral or in writing, that the President may request. A recipient shall be given a copy of, and an opportunity to respond to, any additional submissions made to the President. All submissions and responses made to the President shall become part of the administrative record. Upon request, the Corporation shall provide a copy of the administrative record to the recipient.
(d) For an appeal of a draft final decision involving a limited reduction of funding pursuant to § 1606.7 of this part (for which there is no right to a hearing under § 1606.8 of this part) the President may not review the appeal if the President has had prior involvement in the proceedings under this part. If the President cannot review the appeal, or the President chooses not to do so, then the appeal shall be reviewed by either the individual designated to do so pursuant to § 1606.5(b) of this part, or by another senior Corporation employee designated by the President who has not
(e) As soon as practicable after receipt of the request for review of a draft final decision or a recommended decision, but not later than 30 calendar days thereafter, the President or designee shall adopt, modify, or reverse the draft final decision or the recommended decision, or direct further consideration of the matter. In the event of modification or reversal of a recommended decision pursuant to § 1606.9 of this part, this decision shall conform to the requirements of § 1606.9(b) of this part.
(f) The decision of the President or designee under this section shall become final upon receipt by the recipient.
(a) Except as modified by paragraph (c) of this section, the hearing rights set out in §§ 1606.6 through 1606.10 of this part shall apply to any action to debar a recipient or to terminate a recipient's funding.
(b) The Corporation may simultaneously take action to debar and terminate a recipient within the same hearing procedure that is set out in §§ 1606.6 through 1606.10 of this part. In such a case, the same hearing officer shall oversee both the termination and debarment actions in the same hearing.
(c) If the Corporation does not simultaneously take action to debar and terminate a recipient under paragraph (b) of this section and initiates a debarment action based on a prior termination under § 1606.4(b)(1) or (2), the hearing procedures set out in § 1606.6 through 1606.10 of this part shall not apply. Instead:
(1) The President shall appoint a hearing officer, as described in § 1606.8(c), to review the matter and make a written recommended decision on debarment.
(2) The hearing officer's recommended decision shall be based solely on the information in the administrative record of the termination proceedings providing grounds for the debarment and any additional submissions, either oral or in writing, that the hearing officer may request. The recipient shall be given a copy of and an opportunity to respond to any additional submissions made to the hearing officer. All submissions and responses made to the hearing officer shall become part of the administrative record.
(3) If neither party appeals the hearing officer's recommended decision within 10 business days of receipt of the recommended decision, the decision shall become final and the final decision shall be issued by the Corporation to the recipient within 5 business days.
(4) Either party may appeal the recommended decision to the President who shall review the matter and issue a final written decision pursuant to § 1606.9(b).
(d) All final debarment decisions shall state the effective date of the debarment and the period of debarment, which shall be commensurate with the seriousness of the cause for debarment but shall not be for longer than 6 years.
(e) The Corporation may reverse a debarment decision upon request for the following reasons:
(1) Newly discovered material evidence;
(2) Reversal of the conviction or civil judgment upon which the debarment was based;
(3) Bona fide change in ownership or management of a recipient;
(4) Elimination of other causes for which the debarment was imposed; or
(5) Other reasons the Corporation deems appropriate.
(a) Except for the 6-year time limit for debarments in § 1606.11(d) of this part, any period of time provided in these rules may, upon good cause shown and determined, be extended in writing:
(1) By the Corporation, unless a hearing officer has been appointed;
(2) By the hearing officer, until the recommended decision has been issued; or
(3) By the President at any time.
(b) Failure by the Corporation to meet a time requirement of this part does not preclude the Corporation from terminating a recipient's grant or contract with the Corporation or imposing a limited reduction of funding.
(a) Pending the completion of termination or limited reduction of funding proceedings under this part, the Corporation shall provide the recipient with the level of financial assistance provided for under its current grant or contract for financial assistance with the Corporation.
(b) After a final decision has been made to terminate a recipient's grant or contract or to impose a limited reduction of funding, the recipient loses all rights to the terminated or reduced funds.
(c) After a final decision has been made to terminate a recipient's grant or contract, the Corporation may authorize closeout or transition funding, or both, if necessary to enable the recipient to close or transfer current matters in a manner consistent with the recipient's professional responsibilities to its present clients.
(d) The Corporation has sole discretion to determine the manner in which the final decision is implemented. The Corporation's discretion includes, but is not limited to the decision to pro-rate the amount of funds reduced over the remaining disbursements in the funding term or deduct the sum in a single disbursement, or any other method the Corporation deems appropriate.
(e) Funds recovered by the Corporation pursuant to a termination or limited reduction of funding shall be reallocated by the Corporation for basic field purposes at its sole discretion.
After a final decision has been issued by the Corporation terminating financial assistance to a recipient in whole for any service area, the Corporation shall implement a new competitive bidding process for the affected service area. Until a new recipient has been awarded a grant pursuant to such process, the Corporation shall take all practical steps to ensure the continued provision of legal assistance in the service area pursuant to § 1634.11 of this part.
Sec. 1007(a)(2)(C) and sec. 1007(a)(3); (42 U.S.C. 2996f(a)(2)(C) and 42 U.S.C. 2996f(a)(3)).
(b) The withholding of funds under this section shall not be construed as any action under 45 CFR part 1606.
42 U.S.C. 2996e(b)(1), 2996e(b)(2), 2996e(b)(5), 2996f(a)(3), 2996f(d), and 2996g(e).
In order to ensure uniform and consistent interpretation and application of the provisions of the LSC Act, the Corporation's appropriations act or other law applicable to LSC funds, a Corporation rule, regulation, guideline or instruction, or the terms and conditions of the recipient's grant or contract with the Corporation, and to prevent a question of whether these requirements have been violated from becoming an ancillary issue in any case undertaken by a recipient, this part establishes a systematic procedure for enforcing compliance with them.
A complaint of a violation by a recipient or an employee of a recipient may be made to the recipient, the State Advisory Council, or the Corporation.
(a) A recipient shall:
(1) Advise its employees of their responsibilities under the LSC requirements;
(2) Establish procedures, consistent with the notice and hearing requirements of section 1011 of the LSC Act, for determining whether an employee has committed a violation and whether the violation merits a sanction based on consideration of the totality of the circumstances; and
(3) Establish a policy for determining the appropriate sanction to be imposed for a violation, including:
(i) Administrative reprimand if a violation is found to be minor and unintentional, or otherwise affected by mitigating circumstances;
(ii) Suspension and termination of employment; and
(iii) Other sanctions appropriate for enforcement of the LSC requirements.
(b) Before suspending or terminating the employment of any person for a violation, a recipient shall consult the Corporation to ensure that its interpretation of these requirements is consistent with Corporation policy.
(c) This section provides procedural requirements between the Corporation and recipients. It does not create rights for recipient employees.
(a) Whenever the Corporation learns that there is reason to believe that a recipient or a recipient's employee may have committed a violation, the Corporation shall investigate the matter promptly and attempt to resolve it through informal consultation with the recipient. Such actions may be limited to determining if the recipient is sufficiently investigating and resolving the matter itself.
(b) Whenever there is substantial reason to believe that a recipient has persistently or intentionally violated the LSC requirements, or, after notice, has failed to take appropriate remedial or disciplinary action to ensure compliance by its employees with the LSC requirements, and attempts at informal resolution have been unsuccessful, the Corporation may proceed to suspend or terminate financial support of the recipient, or impose a limited reduction in funding, pursuant to the procedures set forth in parts 1623 and 1606, or may take other action to enforce compliance with the LSC requirements.
(c) Whenever the Corporation determines that a recipient has committed a violation, that corrective actions by the recipient are required to remedy the violation and/or prevent recurrence of the violation, and that imposition of special grant conditions are needed prior to the next grant renewal or competition for the service area, the Corporation may immediately impose Special Grant Conditions on the recipient to require completion of those corrective actions.
42 U.S.C. 2996e(b)(1), 2996f(a)(3), and 2996f(d); Pub. L. 105–119, Title V, Secs. 501(b), 502, and 503, 111 Stat. 2440, 2510–11; Pub. L. 104–134, Title V, Secs. 503(f) and 509(c), 110 Stat. 1321, 1321–53, 1321–58, and 1321–59.
The purpose of this rule is to:
(a) Ensure that the Corporation is able to take prompt action when necessary to safeguard LSC funds or to ensure the compliance of a recipient with applicable provisions of law, or a rule, regulation, guideline or instruction issued by the Corporation, or the terms and conditions of a recipient's grant or contract with the Corporation; and
(b) Provide procedures for prompt review that will ensure informed deliberation by the Corporation when it has made a proposed determination that financial assistance to a recipient should be suspended.
For the purposes of this part the definitions in 45 CFR part 1606 shall apply and also:
(a) Financial assistance provided to a recipient may be suspended when the Corporation determines that there has been a substantial violation by the recipient of the LSC requirements, and the Corporation has reason to believe that prompt action is necessary to:
(1) Safeguard LSC funds; or
(2) Ensure immediate corrective action necessary to bring a recipient into compliance with an applicable provision of law, or a rule, regulation, guideline or instruction issued by the Corporation, or the terms and conditions of the recipient's grant or contract with the Corporation.
(b) Financial assistance provided to a recipient may also be suspended by the Corporation pursuant to a recommendation by the Office of Inspector General when the recipient has failed to have an acceptable audit in accordance with the guidance promulgated by the Corporation's Office of Inspector General.
(a) Prior to a preliminary determination involving a suspension of funding, the Corporation shall designate either the President or another senior Corporation employee to conduct any final review that is requested pursuant this part. The Corporation shall ensure that the person so designated has had no prior involvement in the proceedings under this part so as to meet the criterion of impartiality described in this section.
(b) When the Corporation has made a proposed determination, based on the grounds set out in § 1623.3 of this part, that financial assistance to a recipient should be suspended, the Corporation
(1) State the grounds and effective date for the proposed suspension;
(2) Identify, with reasonable specificity, any facts or documents relied upon as justification for the suspension;
(3) Specify what, if any, prompt corrective action the recipient can take to avoid or end the suspension;
(4) Advise the recipient that it may request, within 5 business days of receipt of the proposed determination, an informal meeting with the Corporation at which it may attempt to show that the proposed suspension should not be imposed; and
(5) Advise the recipient that, within 10 business days of its receipt of the proposed determination and without regard to whether it requests an informal meeting, it may submit written materials in opposition to the proposed suspension.
(c) If the recipient requests an informal meeting with the Corporation, the Corporation shall designate the time and place for the meeting. The meeting shall occur within 5 business days after the recipient's request is received.
(d) The informal meeting shall be conducted by the Corporation employee who issued the preliminary determination or any other Corporation employee with a seniority level at, or equivalent to, the level of an office director or higher.
(e) At the informal meeting, the Corporation and the recipient shall both have an opportunity to state their case, seek to narrow the issues, explore the possibilities of settlement or compromise including implementation of corrective actions, and submit written materials.
(f) The Corporation shall consider any written materials submitted by the recipient in opposition to the proposed suspension and any oral presentation or written materials submitted by the recipient at an informal meeting. If, after considering such materials, the Corporation determines that the recipient has failed to show that the suspension should not become effective, the Corporation may issue a written final determination to suspend financial assistance to the recipient in whole or in part and under such terms and conditions the Corporation deems appropriate and necessary. The final determination shall include a summary of the issues raised in the informal conference and presented in any written materials. The final determination need not engage in a detailed analysis of all issues raised.
(g) The final determination shall be promptly transmitted to the recipient in a manner that verifies receipt of the determination by the recipient, and the suspension shall become effective when the final determination is received by the recipient or on such later date as is specified therein.
(h) If a suspension lasts for more than 30 days, then the recipient may seek review of the suspension by the President. A request may be made in writing on the thirty-first day or any day thereafter, and shall state, in detail, the reasons for seeking review.
(1) The President may not review the suspension appeal if the President has had prior involvement in the suspension proceedings. If the President cannot review, or the President chooses not to do so, then the appeal shall be reviewed by either the individual designated to do so pursuant to § 1623.4(a) of this part, or by another senior Corporation employee designated by the President who has not had prior involvement in the suspension proceedings.
(2) The President's review shall be based on the administrative record of the proceedings, including the appeal to the President, and any additional submissions, either oral or in writing that the President may request. A recipient shall be given a copy of, and an opportunity to respond to, any additional submissions made to the President. All submissions and responses made to the President shall become part of the administrative record. Upon request, the Corporation shall provide a copy of the administrative record to the recipient.
(3) The President shall affirm, modify, or terminate the suspension through a suspension appeal decision within 15 calendar days of receipt of the appeal by the Corporation, unless the Corporation and the recipient agree to a later date.
(i) The Corporation may at any time rescind or modify the terms of the final determination to suspend and, on written notice to the recipient, may reinstate the suspension without further proceedings under this part.
(j) Except as provided in § 1623.4(k) of this part, the total time of a suspension shall not exceed 90 calendar days, unless the Corporation and the recipient agree to a continuation of the suspension without further proceedings under this part.
(k) When the suspension is based on the grounds in § 1623.3(b) of this part, a recipient's funds may be suspended until an acceptable audit is completed. No appeal to the President will be available for audit-based suspensions pursuant to § 1623.3(b).
(a) Except for the time limits in § 1623.4(i) and (j), any period of time provided in this part may be extended by the Corporation for good cause. Requests for extensions of time shall be considered in light of the overall objective that the procedures prescribed by this part ordinarily shall be concluded within 30 calendar days of the service of the proposed determination.
(b) Any other provision of this part may be waived or modified by agreement of the recipient and the Corporation for good cause.
(c) Failure by the Corporation to meet a time requirement of this part shall not preclude the Corporation from suspending a recipient's grant or contract with the Corporation.
(a) Pending the completion of suspension proceedings under this part, the Corporation shall provide the recipient with the level of financial assistance provided for under its current grant or contract with the Corporation.
(b) Funds withheld pursuant to a suspension shall be released to the recipient at the end of the suspension period.
Federal Communications Commission.
Correcting amendments.
This document contains a correction to the final regulations of the Commission's rules, which were published in the
Effective February 13, 2013.
Richard D. Smith, Consumer and
The Federal Communications Commission published a document amending 47 CFR 1.80 in the
As published, the final regulations inadvertently created two § 1.80(b)(7)'s in the Commission's rules and needs to be corrected accordingly.
Administrative practice and procedure.
Accordingly, 47 CFR part 1 is corrected by making the following correcting amendments:
15 U.S.C. 79
(b) * * *
(9)
Federal Communications Commission.
Final rule; announcement of effective date.
In this document, the Federal Communications Commission (Commission) announces that the Office of Management and Budget (OMB) has approved, until July 31, 2013, the information collection associated with the Commission's Connect America Fund; High-Cost Universal Service
Paragraph 16 and Appendix A of document DA 12–1777, published at 78 FR 5750, January 28, 2013, are effective February 27, 2013.
Chelsea Fallon, Assistant Division Chief, Wireline Competition Bureau, at (202) 418–7991.
This document announces that, on January 23, 2013, OMB approved, for a period of six months, the information collection requirements contained in the Commission's
To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to
As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), the FCC is notifying the public that it received OMB approval on January 23, 2013, for the information collection requirements contained in paragraph 16 and Appendix A of document DA 12–1777.
Under 5 CFR part 1320, an agency may not conduct or sponsor a collection of information unless it displays a current, valid OMB Control Number.
No person shall be subject to any penalty for failing to comply with a collection of information subject to the Paperwork Reduction Act that does not display a current, valid OMB Control Number. The OMB Control Number is 3060–1181.
The foregoing notice is required by the Paperwork Reduction Act of 1995, Public Law 104–13, October 1, 1995, and 44 U.S.C. 3507.
The total annual reporting burdens and costs for the respondents are as follows:
The
The
The
State entities are well situated to assist incumbent LECs with their responsibilities under this R&O. Involvement of state entities that undertake or assist with this data collection effort could reduce the burden on incumbent LECs and on Commission staff, particularly because some states already have digitized service territory boundaries. State entities wishing to submit such data should notify the Commission in writing of their intention to do so and submit that notice to WC Docket No. 10–90 via the Commission's Electronic Comment Filing System (ECFS). The Bureau will release a Public Notice identifying the deadlines for these notices (as well as the deadlines for the shapefile submissions and incumbent LEC certifications). In cases where a state entity uploads data to the Commission-sponsored Web site on behalf of one or more incumbent LECs, each incumbent LEC whose data are submitted by the state must log into the Web site to review the shapefile. If the incumbent LEC has a reasonable basis to conclude the shapefile is correct, the incumbent LEC can certify and submit the data using the same web interface. The reporting obligation set forth in the Order ultimately rests with incumbent LECs; state entities may not certify as to the accuracy of the data on behalf of incumbent LECs. If the incumbent LEC cannot certify that the data submitted by the state entities are correct, the incumbent LEC must so notify the Bureau and upload corrected data, either on its own or in conjunction with the state entity that filed it. The incumbent LEC can then certify that the study area boundary data are accurate.
After reviewing and, if necessary, correcting the study area boundary data submitted by itself or a state entity, each incumbent LEC must certify the accuracy of the data. An official of the firm, such as a corporate officer, managing partner, or sole proprietor, must provide an electronic signature certifying that he or she has examined the study area boundary shapefile and that, to the best of his or her knowledge, information, and belief, the data contained in the shapefile are accurate and correct. The certifying official may be different from the GIS specialist or other individual who developed the study area boundary shapefile, and the web interface will allow filers to enter contact information for both the certifying official and the individual most knowledgeable about the spatial data.
Once the shapefiles have been submitted and certified, the Bureau will review the study area boundaries and resolve any voids and overlaps. Overlap areas would be those shown to be served by more than one incumbent LEC, while void areas would be those shown to be served by no incumbent LEC. The Bureau will attempt to distinguish unpopulated void areas from populated void areas that are likely to be served by some incumbent LEC, in which case an error in the submitted data may need to be resolved. The Bureau may also seek help from state commissions to resolve gaps, voids, and overlap issues. During review, if boundary overlaps or void areas are found in the submitted boundary data, the Bureau will contact the filer(s) to resolve such issues. Once these issues are resolved, the Bureau will ask incumbent LECs to recertify the new, corrected boundaries. When a complete set of the reconciled boundaries has been compiled the study area boundary data will be published.
Incumbent LECs must provide updated data when their study area boundaries change. Incumbent LECs and/or state entities must submit updated data by March 15 of each year, beginning the year following the initial data submissions, showing any changes made by December 31 of the previous year. The incumbent LEC is responsible for making any necessary changes and for filing the revised shapefile. The changes cannot be made using the web interface itself; incumbent LECs will need to modify the shapefile. However, incumbent LECs can upload a revised shapefile to the same Web site used for the original filing. In addition, all incumbent LECs must recertify their
In the near future, the Bureau will issue a Public Notice providing detailed instructions and announcing the deadline for the submission of data and providing further filing information. The Commission plans to submit information required to obtain OMB review and approval to extend approval of this collection.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; trip limit reduction.
NMFS reduces the commercial trip limit for golden tilefish in the South Atlantic to 300 lb (136 kg), gutted weight, per trip in or from the exclusive economic zone (EEZ). This trip limit reduction is necessary to protect the South Atlantic golden tilefish resource.
This rule is effective 12:01 a.m., local time, February 18, 2013, through December 31, 2013, unless changed by subsequent notification in the
Catherine Hayslip, telephone: 727–824–5305, or email:
The snapper-grouper fishery includes golden tilefish in the South Atlantic and is managed under the Fishery Management Plan for the Snapper-Grouper Resources of the South Atlantic (FMP). The FMP was prepared by the South Atlantic Fishery Management Council and is implemented under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) by regulations at 50 CFR part 622.
Under 50 CFR 622.44(c)(2), NMFS is required to reduce the trip limit in the commercial sector for golden tilefish from 4,000 lb (1,814 kg) to 300 lb (136 kg) per trip when 75 percent of the fishing year quota is met prior to September 1, by filing a notification to that effect with the Office of the Federal Register. As implemented by the final rule for Regulatory Amendment 12 (77 FR 61295, October 9, 2012), the commercial quota for golden tilefish in the South Atlantic is 541,295 lb (245,527 kg), gutted weight, as specified in 50 CFR 622.42(e)(2). Based on current statistics, NMFS has determined that 75 percent of the available commercial quota of 541,295 lb (245,527 kg), gutted weight, for golden tilefish will be reached on or before February 18, 2013. Accordingly, NMFS is reducing the commercial golden tilefish trip limit to 300 lb (136 kg), gutted weight, in the South Atlantic EEZ from 12:01 a.m., local time, on February 18, 2013, until the quota is reached and the commercial sector closes, or through December 31, 2013, whichever occurs first.
The Regional Administrator, Southeast Region, NMFS, has determined this temporary rule is necessary for the conservation and management of South Atlantic golden tilefish and is consistent with the Magnuson-Stevens Act and other applicable laws.
This action is taken under 50 CFR 622.44(c)(2) and is exempt from review under Executive Order 12866.
These measures are exempt from the procedures of the Regulatory Flexibility Act because the temporary rule is issued without opportunity for prior notice and comment.
Pursuant to 5 U.S.C. 553(b)(B), the Assistant Administrator for Fisheries, NOAA, (AA), finds good cause to waive the requirements to provide prior notice and the opportunity for public comment on this temporary rule. Such procedures are unnecessary because the rule itself has already been subject to notice and comment, and all that remains is to notify the public of the trip limit reduction.
Allowing prior notice and opportunity for public comment is contrary to the public interest because of the need to immediately implement this action to protect golden tilefish because the capacity of the fishing fleet allows for rapid harvest of the quota. Prior notice and opportunity for public comment for this trip limit reduction would require time and would potentially result in a harvest well in excess of the established quota.
For the aforementioned reasons, the AA also finds good cause to waive the 30-day delay in the effectiveness of this action under 5 U.S.C. 553(d)(3).
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; closure.
NMFS is prohibiting directed fishing for Pacific cod by vessels using pot gear in the Central Regulatory Area of the Gulf of Alaska (GOA). This action is necessary to prevent exceeding the A season allowance of the 2013 Pacific cod total allowable catch apportioned to vessels using pot gear in the Central Regulatory Area of the GOA.
Effective 1200 hours, Alaska local time (A.l.t.), February 10, 2013, through 1200 hours, A.l.t., September 1, 2013.
Obren Davis, 907–586–7228.
NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50
The A season allowance of the 2013 Pacific cod total allowable catch (TAC) apportioned to vessels using pot gear in the Central Regulatory Area of the GOA is 6,459 metric tons (mt), as established by the final 2012 and 2013 harvest specifications for groundfish of the GOA (77 FR 15194, March 14, 2012) and inseason adjustment to the final 2013 harvest specifications for Pacific cod (78 FR 267, January 3, 2013).
In accordance with § 679.20(d)(1)(i), the Administrator, Alaska Region, NMFS (Regional Administrator) has determined that the A season allowance of the 2013 Pacific cod TAC apportioned to vessels using pot gear in the Central Regulatory Area of the GOA will soon be reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 6,449 mt and is setting aside the remaining 10 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for Pacific cod by vessels using pot gear in the Central Regulatory Area of the GOA. After the effective date of this closure the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.
This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the directed fishing closure of Pacific cod for vessels using pot gear in the Central Regulatory Area of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of February 7, 2013.
The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.
This action is required by § 679.20 and is exempt from review under Executive Order 12866.
16 U.S.C. 1801
Agricultural Marketing Service, USDA.
Proposed rule.
This rule proposes to amend the Watermelon Research and Promotion Plan (Plan) importer membership requirements to serve on the National Watermelon Promotion Board (Board). The Board recommended to eliminate the requirement that an importer import more than 50 percent of the total volume handled and imported in order to qualify as an importer member. This change would allow for additional parties to qualify as an importer member.
Comments must be received by March 15, 2013.
Interested persons are invited to submit written comments on the Internet at:
Jeanette Palmer, Marketing Specialist, Promotion and Economics Division, Fruit and Vegetable Program, AMS, U.S. Department of Agriculture, Stop 0244, 1400 Independence Avenue SW., Room 0632–S, Washington, DC 20250–0244; telephone: (888) 720–9917; facsimile: (202) 205–2800; or electronic mail:
This rule is issued under the Watermelon Research and Promotion Plan [7 CFR part 1210]. The Plan is authorized under the Watermelon Research and Promotion Act (Act) [7 U.S.C. 4901–4916].
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been designated as “non-significant regulatory action” under section 3(f) of Executive Order 12866. Accordingly, the Office of Management and Budget (OMB) has waived the review process.
In addition, this rule has been reviewed under Executive Order 12988, Civil Justice Reform. The rule is not intended to have retroactive effect.
The Act allows producers, producer-packers, handlers, and importers to file a written petition with the Secretary of Agriculture (Secretary) if they believe that the Plan, any provision of the Plan, or any obligation imposed in connection with the Plan, is not established in accordance with the law. In any petition, the person may request a modification of the Plan or an exemption from the Plan. The petitioner will have the opportunity for a hearing on the petition. Afterwards, an Administrative Law Judge (ALJ) will issue a decision. If the petitioner disagrees with the ALJ's ruling, the petitioner has 30 days to appeal to the Judicial Officer, who will issue a ruling on behalf of the Secretary. If the petitioner disagrees with the Secretary's ruling, the petitioner may file, within 20 days, an appeal in the U.S. District Court for the district where the petitioner resides or conducts business.
In accordance with the Regulatory Flexibility Act [5 U.S.C. 601–612], AMS has examined the economic impact of this rule on the small producers, handlers, and importers that would be affected by this rule.
The Small Business Administration defines, in 13 CFR part 121, small agricultural producers as those having annual receipts of no more than $750,000 and small agricultural service firms (handlers and importers) as those having annual receipts of no more than $7 million. Under these definitions, the majority of the producers, handlers, and importers that would be affected by this rule would be considered small entities. Producers of less than 10 acres of watermelons are exempt from this program. Importers of less than 150,000 pounds of watermelons per year are also exempt.
USDA's National Agricultural Statistics Service (NASS) data for the 2011 crop year was about 312 hundredweight (cwt.) of watermelons were produced per acre. The 2011 grower price published by NASS was $14.00 per hundredweight. Thus, the value of watermelon production per acre in 2011 averaged about $4,368 (312 cwt. × $14.00). At that average price, a producer would have to farm over 172 acres to receive an annual income from watermelons of $750,000 ($750,000 divided by $4,368 per acre equals 172). Accordingly, as previously noted, a majority of the watermelon producers would be classified as small businesses.
Based on the Board's data, using an average of freight on board (f.o.b.) price of $.164 per pound and the number of pounds handled in 2011, none of the watermelon handlers had receipts over the $7.5 million threshold. Therefore, the watermelon handlers would all be considered small businesses. A handler would have to ship over 45.7 million pounds of watermelons to be considered large (457,317,073 times $.164 f.o.b. equals $7,500,000).
According to the Board, there are approximately 950 producers, 230 handlers, and 137 importers who are required to pay assessments under the program.
Based on the watermelon import assessments received for the year 2011, the United States imported watermelons worth over $211 million dollars. The largest imports of watermelon came from Mexico which accounted for 89 percent of the total in 2011. Other suppliers of imported watermelon are Guatemala at 8 percent and Costa Rica at 1 percent. The remaining 2 percent of imported watermelon came from Nicaragua, Honduras, Panama, Vietnam, Canada, Dominican Republic, and Israel.
The Board's audit records show imports for the fiscal years 2009, 2010, and 2011 at $754,760, $746,043, and $855,890 respectively. Based on this data, the three-year average of imports for watermelon totals $785,564 (2,356,693 divided by 3). This represents approximately 30 percent of the total assessments paid to the Board. Currently, the Board membership distribution consists of 14 producers, 14 handlers, 8 importers, and 1 public member. A final rule to increase the number of importers on the Board was published in the July 18, 2011,
The Watermelon Research and Promotion Improvement Act of 1993 amended the Watermelon Research and Promotion Act by adding importer members to the Board among other things. At that time the industry recommended that, in order to qualify as an importer member on the Board, an individual that both handles and imports watermelons may vote for importer members and serve as an importer member if that person imports 50 percent or more of the combined total volume of watermelons handled and imported by that person. A final rule was published in the
At the time of this amendment there was a more clear division of roles among producers, handlers, and importers. In other words, those individuals that imported watermelons did not cross over into handling or producing watermelons as much as they do now. Since then, the industry has become more consolidated and of the 137 importers required to pay assessments 42 also handled watermelons and would be eligible to serve as either handler or importer member.
At its February 26, 2011, meeting, the Board voted unanimously, to modify the importer eligibility requirements to serve on the Board. The Board is having difficulty finding eligible importers to serve on the Board because of the requirement in the Plan that a person who both imports and handles watermelon will be counted as an importer if that person imports 50 percent or more of the combined total volume of watermelons handled and imported by that person. The Board voted to eliminate the 50 percent requirement or more of the combined total volume of watermelons handled and imported by a person to allow more individuals to become eligible to serve on the Board as an importer. Individuals that both handle and import would be allowed to decide which part of the industry they would prefer to represent regardless of the volume handled or imported. The industry believes that this change would increase the importer representation on the Board by allowing more individuals to be eligible to serve. This action may also increase diversity representation on the Board.
The Board considered a second alternative by changing the 50 percent or more of the combined total volume of watermelons handled and imported by the person to 25 percent or more of the combined total volume of watermelons handled and imported by the person. However, the Board did not choose this option because they wanted to allow more importers to be eligible for nomination on the Board and therefore, they eliminated the percentage requirement. By eliminating the percentage requirement for the importer member, this will allow for smaller importer businesses to become eligible to serve as an importer member on the Board.
Section 1655(a) of the Act provides for referenda to be conducted to ascertain approval of changes to the Plan prior to going into effect. In order to implement the amendments to the Plan, the Secretary determines that the Plan has been approved by a majority of the producers, handlers, and importers of watermelon voting in the referendum. Accordingly, before these amendments are made to the Plan, a referendum will be conducted among eligible producers, handlers, and importers of watermelon.
In accordance with the Office of Management and Budget (OMB) regulation [5 CFR part 1320] which implements the Paperwork Reduction Act of 1995 [44 U.S.C. Chapter 35], have been assigned OMB number 0581–0093, which represents the information collection and recordkeeping requirements that are imposed by the Plan that have been approved previously, except that the background form, has been approved under OMB number 0505–0001.
USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.
We have performed this Initial Regulatory Flexibility Analysis regarding the impact of this amendment to the Plan on small entities, and we invite comments concerning potential effects of this amendment.
Under the Plan, the Board administers a nationally coordinated program of research, development, advertising, and promotion designed to strengthen the watermelon's position in the market place and to establish, maintain, and expand markets for watermelons. This program is financed by assessments on producers growing 10 acres or more of watermelons, handlers of watermelons, and importers of 150,000 pounds of watermelons or more per year. The Plan specifies that handlers are responsible for collecting and submitting both the producer and handler assessments to the Board, reporting their handling of watermelons, and maintaining records necessary to verify their reporting(s). Importers are responsible for payment of assessments to the Board on watermelons imported into the United States through the U.S. Customs Service and Border Protection. This action will not have any impact on the assessment rates paid by producers, handlers, and importers.
Membership on the Board consists of two producers and two handlers for each of the seven districts established by the Plan, at least one importer, and one public member. The Board currently consists of 37 members: 14 producers, 14 handlers, 8 importers, and 1 public member. A final rule to increase the number of importers on the Board was published in the July 18, 2011,
The Watermelon Research and Promotion Improvement Act of 1993 amended the Watermelon Research and Promotion Act by adding importer members to the Board among other things. At that time the industry recommended that, in order to qualify as an importer member on the Board, an individual that both handles and imports watermelons may vote for importer members and serve as an importer member if that person imports 50 percent or more of the combined total volume of watermelons handled and imported by that person. A final rule was published in the
At its February 26, 2011, meeting, the Board voted unanimously, to modify the importer eligibility requirements to serve on the Board. The Board is having difficulty finding eligible importers to serve on the Board because of the requirement in the Plan that a person who both imports and handles watermelon will be counted as an importer if that person imports 50 percent or more of the combined total volume of watermelons handled and imported by that person. The Board voted to eliminate the 50 percent requirement or more of the combined total volume of watermelons handled and imported by a person to allow more individuals to become eligible to serve on the Board as an importer. Individuals that both handle and import would be allowed to decide which part of the industry they would prefer to represent regardless of the volume handled or imported. The industry believes that this change would increase the importer representation on the Board by allowing more individuals to be eligible to serve. This action may also increase diversity representation on the Board.
Accordingly, the propose rule would amend sections 1210.321(d), 1210.363(b), 1210.404(g), and 1210.602(a) which reference importer eligibility requirements to be nominated to the Board and participation in a referendum. These sections would be revised to read as follows: a person who both imports and handles watermelon may vote for importer members and serve as an importer member if that person identifies that their vote will be considered as an importer.
For changes to the Plan to become effective, the proposed amendments to the Plan must be approved by a majority of producers, handlers, and importers of watermelon voting in a referendum. Accordingly, a referendum will be conducted among eligible producers, handlers, and importers of watermelon. Specific dates for the referendum will be announced at a later date.
A 30-day comment period is provided to allow interested persons to respond to this proposal. Thirty days is deemed appropriate so that the proposed amendments, if adopted, may be implemented to allow for the calendar year 2013 nomination meetings to take place before the appointments for new Board members are due. All written comments received in response to this rule by the date specified would be considered prior to finalizing this action.
Administrative practice and procedure, Advertising, Consumer information, Marketing agreements, Reporting and recordkeeping requirements, Watermelon promotion.
For the reasons set forth in the preamble, Part 1210, Chapter XI of Title 7 is proposed to be amended as follows:
7 U.S.C. 4901–4916 and 7 U.S.C. 7401.
(d) Nominations for importers positions that become vacant may be made by mail ballot, nomination conventions, or by other means prescribed by the Secretary. The Board shall provide notice of such vacancies and the nomination process to all importers through press releases and any other available means as well as direct mailing to known importers. All importers may participate in the nomination process:
(b) The Secretary may conduct a referendum at any time and shall hold a referendum on request of the Board or at least 10 percent of the combined total of the watermelon producers, handlers, and importers to determine if watermelon producers, handlers, and importers favor termination or suspension of this Plan. The Secretary shall suspend or terminate this Plan at the end of the marketing year whenever the Secretary determines that the suspension or termination is favored by a majority of the watermelon producers, handlers, and importers voting in such referendum who, during a representative period determined by the Secretary, have been engaged in the production, handling, or importing of watermelons and who produced, handled, or imported more than 50 percent of the combined total of the volume of watermelons produced, handled, or imported by those producers, handlers, and importers voting in the referendum. For purposes of this section, the vote of a person who both produces and handles watermelons will be counted as a handler vote if the producer purchased watermelons from other producers, in a combined total volume that is equal to 25 percent or more of the producer's own production; or the combined total volume of watermelon handled by the producer from the producer's own production and purchases from other producer's production is more than 50 percent of the producer's own production.
(g) Any individual who both imports and handles watermelons will be considered an importer if that person identifies themselves as an importer.
(a) Each person who is an eligible producer, handler, or importer as defined in this subpart, at the time of the referendum and who also was a producer, handler, or importer during the representative period, shall be entitled to one vote in the referendum:
Food and Drug Administration, HHS.
Notification of public meeting.
The Food and Drug Administration (FDA) is providing public meeting registration information for two FSMA related public meetings announced in the January 31, 2013,
See section II “How to Participate in the Public Meeting” in the
See section II “How to Participate in the Public Meeting” in the
FSMA (Pub. L. 111–353) was signed into law by President Obama on January 4, 2011, to better protect public health by helping to ensure the safety and security of the food supply. FSMA amends the Federal Food, Drug, and Cosmetic Act (the FD&C Act) to establish the foundation of a modernized, prevention-based food safety system. Among other things, FSMA requires FDA to issue regulations requiring preventive controls for human and animal food and set standards for produce safety.
FSMA was the first major legislative reform of FDA's food safety authorities in more than 70 years, even though FDA has increased the focus of its food safety efforts on prevention over the past several years. For example, applying the concept of Hazard Analysis and Critical Control Point (HACCP) that was pioneered by industry in the late 1960s, FDA established HACCP-based regulations for seafood (21 CFR part 123) in 1995 (60 FR 65096, December 18, 1995) and for juice (21 CFR part 120) in 2001 (66 FR 6138, January 19, 2001). Similarly, in 1996, the U.S. Department of Agriculture's Food Safety and Inspection Service instituted HACCP-based rules for meat and poultry (9 CFR part 417) (61 FR 38806, July 25, 1996).
In the
The preventive controls proposed rule would apply to human food and require domestic and foreign facilities that are required to register under the FD&C Act to have written plans that identify hazards, specify the steps that will be put in place to minimize or prevent those hazards, monitor results, and act to correct problems that arise. The preventive controls proposed rule and related fact sheets are available on FDA's FSMA Web page located at
In the
In this document, FDA is providing the locations, dates, and registration information for the Chicago, IL and Portland, OR public meetings.
FDA is holding the public meetings on the produce safety proposed rule and the preventive controls proposed rule to inform the public about the rulemaking process, including how to submit comments, data, and other information to the rulemaking docket; to respond to questions about the proposed rules; and to provide an opportunity for interested persons to make oral presentations. Due to limited space and time, FDA encourages all persons who wish to attend the public meetings to register in advance. There is no fee to register for the public meetings, and registration will be on a first-come, first-served basis. Early registration is recommended because seating is limited. Onsite registration will be accepted, as space permits, after all preregistered attendees are seated.
Those requesting an opportunity to make an oral presentation during the time allotted for public comment at the meetings are asked to submit a request and to provide the specific topic or issue to be addressed. Due to the anticipated high level of interest in presenting public comment and limited time available, FDA is allocating 3 minutes to each speaker to make an oral presentation. Speakers will be limited to making oral remarks; there will not be an opportunity to display materials such as slide shows, videos, or other media during the meeting. If time permits, individuals or organizations that did not register in advance may be granted the opportunity to make an oral presentation. FDA would like to maximize the number of individuals who make a presentation at the meetings and will do our best to accommodate all persons who wish to make a presentation or express their opinions at the meeting.
FDA encourages persons and groups who have similar interests to consolidate their information for presentation by a single representative at a single location. After reviewing the presentation requests, FDA will notify each participant before the meeting of the approximate time their presentation is scheduled to begin, and remind them of the presentation format (i.e., 3-minute oral presentation without visual media).
While oral presentations from specific individuals and organizations will be necessarily limited due to time constraints during the public meeting, stakeholders may submit electronic or written comments discussing any issues of concern to the administrative record (the docket) for the rulemaking. All relevant data and documentation should be submitted with the comments to the relevant docket (i.e., for the produce safety proposed rule,
Table 1 of this document provides information on participation in the public meetings:
Information and data submitted voluntarily to FDA during the public meetings will become part of the administrative record for the relevant rulemaking and will be accessible to the public at
Architectural and Transportation Barriers Compliance Board.
Supplemental notice of proposed rulemaking.
We, the Architectural and Transportation Barriers Compliance Board (Access Board), issued an advance notice of proposed rulemaking (ANPRM) announcing our intent to develop accessibility guidelines for shared used paths. Shared use paths are multi-use paths designed primarily for use by bicyclists and pedestrians, including pedestrians with disabilities, for transportation and recreation purposes. Shared use paths are physically separated from motor vehicle traffic by an open space or barrier, and are either within the highway right-of-way or within an independent right-of-way. We noted in the ANPRM that we are considering including accessibility guidelines for shared use paths in the accessibility guidelines that we are developing for sidewalks and other pedestrian facilities in the public right-of-way. We subsequently issued a notice of proposed rulemaking (NPRM) requesting comments on proposed accessibility guidelines for pedestrian facilities in the public right-of-way. The NPRM did not include specific provisions for shared use paths. We are issuing this supplemental notice of proposed rulemaking (SNPRM) to include specific provisions for shared use paths in the proposed accessibility guidelines for pedestrian facilities in the public right-of-way. The proposed accessibility guidelines would apply to the design, construction, and alteration of pedestrian facilities in the public right-of-way, including shared use paths, covered by the Americans with Disabilities Act and the Architectural Barriers Act, and would ensure that the facilities are readily accessible to and usable by individuals with disabilities.
Submit comments by May 14, 2013.
Submit comments by any of the following methods:
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All comments will be posted without change to
Scott Windley, Access Board, 1331 F Street NW., Suite 1000, Washington, DC 20004–1111. Telephone (202) 272–0025 (voice) or (202) 272–0028 (TTY). Email
In this preamble, “we,” “us,” and “our” refer to the Architectural and Transportation Barriers Compliance Board (Access Board).
This supplemental notice of proposed rulemaking (SNPRM) proposes to include specific provisions for shared use paths in the proposed accessibility guidelines for pedestrian facilities in the public right-of-way published in the
We are required by section 502 of the Rehabilitation Act to establish and maintain accessibility guidelines for the design, construction, and alteration of facilities covered by the Americans with Disabilities Act (ADA) and the Architectural Barriers Act (ABA) to ensure that the facilities are readily accessible to and usable by individuals with disabilities. See 29 U.S.C. 792(b)(3). The ADA covers state and local government facilities, places of public accommodation, and commercial facilities. See 42 U.S.C. 12101 et seq. The ABA covers facilities financed with federal funds. See 42 U.S.C. 4151 et seq.
We are issuing the SNPRM in response to public comments on separate rulemakings to develop accessibility guidelines for trails and other outdoor developed areas, and for sidewalks and other pedestrian facilities in the public right-of-way. The comments noted that shared use paths are distinct from trails and sidewalks, and recommended that we develop accessibility guidelines for shared use paths. As defined in the SNPRM, shared use paths are multi-use paths designed primarily for use by bicyclists and pedestrians, including pedestrians with disabilities, for transportation and recreation purposes. Shared use paths are physically separated from motor vehicle traffic by an open space or barrier, and are either within the highway right-of-way or within an independent right-of-way.
As noted above, the SNPRM would include specific provisions for shared use paths in the proposed accessibility guidelines for pedestrian facilities in the public right-of-way. The proposed accessibility guidelines for pedestrian facilities in the public right-of-way would require pedestrian access routes to be provided within pedestrian circulation paths located in the public right-of-way, and would establish proposed technical provisions for the width, grade, cross slope, and surface of pedestrian access routes. See R204.2 and R302. Where existing pedestrian circulation paths are altered and existing physical constraints make it impracticable for the altered paths to fully comply with the proposed technical provisions, compliance would be required to the extent practicable. See R202.3.1.
The SNPRM would:
• Require the full width of a shared use path to comply with the proposed technical provisions for the grade, cross slope, and surface of pedestrian access routes (see R302.3.2);
• Permit compliance with the proposed technical provisions for the grade of pedestrian access routes to the extent practicable where physical constraints or regulatory constraints prevent full compliance (see R302.5.4 and R302.5.5);
• Prohibit objects from overhanging or protruding into any portion of a shared use path at or below 8 feet measured from the finished surface (see R210.3); and
• Require the width of curb ramps and blended transitions in shared use paths to be equal to the width of the shared use path (see R304.5.1.2).
The SNPRM is consistent with the design criteria for shared used paths in the American Association of State Highway and Transportation Officials (AASHTO) “Guide for the Development of Bicycle Facilities” (2012) (hereinafter referred to as the “AASHTO Guide”). The SNPRM is not expected to increase the cost of constructing shared use paths for state and local government jurisdictions that use the AASHTO Guide.
As discussed in the preamble to the proposed accessibility guidelines for pedestrian facilities in the public right-of-way, other federal agencies are required to adopt accessibility standards for the design, construction, and alteration of facilities covered by the ADA and ABA that are consistent with our accessibility guidelines. When the other federal agencies adopt accessibility standards for the design, construction, and alteration of pedestrian facilities in the public right-of-way, including shared use paths, covered by the ADA and ABA, compliance with the standards is mandatory.
We are conducting separate rulemakings to develop accessibility guidelines for trails and other outdoor developed areas, and for sidewalks and other pedestrian facilities in the public right-of-way.
We issued a notice of proposed rulemaking (NPRM) requesting comments on proposed accessibility guidelines for trails and other outdoor developed areas in 2007. See 72 FR 34074 (June 20, 2007). A trail would be defined for purposes of these accessibility guidelines as a pedestrian route developed primarily for outdoor recreational purposes. A pedestrian route developed primarily to connect elements, spaces, or facilities within a site is not a trail.
We requested comments on draft accessibility guidelines for sidewalks and other pedestrian facilities in the public right-of-way in 2002 and 2005. See 67 FR 41206 (June 17, 2002); and 70 FR 70734 (November 23, 2005). These accessibility guidelines would adopt the definition of sidewalk in the Manual on Uniform Traffic Control Devices (MUTCD). The MUTCD (2009) defines a sidewalk as the portion of a street between the curb line, or the lateral line of a roadway, and the adjacent property line or on easements of private property that is paved or improved and intended for use by pedestrians.
Public comments on these rulemakings noted that shared use paths are distinct from trails and sidewalks in that they are used by bicyclists and pedestrians, including pedestrians with disabilities, for transportation and recreation purposes. The comments recommended that we develop accessibility guidelines for shared use paths. On March 28, 2011, we issued an advance notice of proposed rulemaking (ANPRM) announcing our intent to develop accessibility guidelines for shared use paths, and requested comments on a definition and draft technical provisions for shared use paths. See 76 FR 17064 (March 28, 2011). We noted in the ANPRM that we are considering including accessibility guidelines for shared use paths in the accessibility guidelines for pedestrian facilities in the public right-of-way since state and local transportation departments are the principal entities that design and construct shared use paths, and many of the draft technical provisions for shared use paths in the ANPRM are the same as those in the draft accessibility guidelines for pedestrian facilities in the public right-of-way (e.g., curb ramps and blended transitions, and detectable warning surfaces).
On July 26, 2011, we issued a NPRM requesting comments on proposed accessibility guidelines for pedestrian facilities in the public right-of-way. See 76 FR 44664 (July 26, 2011). The NPRM did not include specific provisions for shared use paths. The comment period on the NPRM ended on November 23, 2011. The comment period was reopened on December 5, 2011 to allow
We are issuing this SNPRM to include specific provisions for shared use paths in the proposed accessibility guidelines for pedestrian facilities in the public right-of-way published in the
The SNPRM would add a proposed definition of shared use path in R105.5 to read as follows:
The proposed definition is based on the AASHTO Guide, which defines a shared use path as a bikeway physically separated from motor vehicle traffic by an open space or barrier, and either within the highway right-of-way or within an independent right of way. The AASHTO Guide notes that pedestrians, including pedestrians with disabilities, also use shared use paths and that they can serve transportation and recreation purposes. See AASHTO Guide, 5.1 Introduction. The U.S. Department of Transportation, Federal Highway Administration (FHWA) defines a shared use path similar to the AASHTO Guide.
As noted in the AASHTO Guide, the primary factor that distinguishes shared use paths and sidewalks is the intended user. Shared use paths are designed for use by bicyclists and pedestrians, including pedestrians with disabilities. Sidewalks are designed for use by pedestrians, including pedestrians with disabilities, and are not intended for use by bicyclists. See AASHTO Guide, 5.2.2, Shared Use Paths Adjacent to Roadways (Sidepaths).
The SNPRM would revise the proposed definition of public right-of-way in R105.5 to read as follows:
The NPRM proposed to define public right-of-way as public land or property, usually in interconnected corridors, that is acquired for or dedicated to transportation purposes. Some shared use paths may cross private land. In these situations, an easement or other legal means is used to establish a right for the public to use the portion of the land that the shared use path crosses for transportation purposes. The SNPRM would revise the proposed definition of public right-of-way to include these situations.
The SNPRM would revise these sections relating to pedestrian access routes.
The SNPRM would revise R204.2 to read as follows:
As proposed in the NPRM, R204.2 would require a pedestrian access route to be provided within sidewalks and other pedestrian circulation paths located in the public right-of-way. The NPRM proposed to define a pedestrian circulation path as a prepared exterior or interior surface provided for pedestrian travel in the public right-of-way. See R105.5. Sidewalks and shared use paths are types of pedestrian circulation paths. As revised by the SNPRM, the term “pedestrian circulation paths” in R204.2 includes sidewalks and shared use paths.
The SNPRM would revise R302.3 to read as follows:
As proposed in the NPRM, R302.3 would require pedestrian access routes to be 4 feet wide minimum, except R302.3.1 would require pedestrian access routes within medians and pedestrian refuge islands to be 5 feet wide minimum to allow for passing space.
The SNPRM would add a new provision at R302.3.2 that would require a pedestrian access route to be provided for the full width of a shared use path since shared use paths are typically two-directional and path users travel in each direction on the right hand side of the path, except to pass. The AASHTO Guide recommends that two-directional shared use paths should be 10 feet wide minimum. Where shared use paths are anticipated to serve a high percentage of pedestrians and high user volumes, the AASHTO Guide recommends that the paths should be 11 to 14 feet wide to enable a bicyclist to pass another path user travelling in the same direction, at the same time a path user is approaching from the opposite direction. In certain very rare circumstances, the AASHTO Guide permits the width of shared use paths to
The SNPRM would revise R302.5 to read as follows:
As proposed in the NPRM, R302.5 would require the grade of pedestrian access routes contained within a street or highway right-of-way, except at pedestrian street crossings, to not exceed the general grade established for the adjacent street or highway; and the grade of pedestrian access routes not contained within a street or highway right-of-way to be 5 percent maximum. R302.5.1 would require the grade of pedestrian access routes contained within a pedestrian street crossing to be 5 percent maximum.
The SNPRM would renumber R302.5 to include a general provision in R302.5; the specific provision for the grade of pedestrian access routes contained within a street or highway right-of-way in R302.5.1; the specific provision for the grade of pedestrian access routes not contained within a street or highway right-of-way in R302.5.2; and the specific provision for the grade of pedestrian access routes contained within a pedestrian street crossing in R302.5.3.
The SNPRM would add new provisions at R302.5.4 and R302.5.5 that would require compliance with the grade provisions in R302.5.1 or R302.5.2 to the extent practicable where compliance is not practicable due to physical constraints and where compliance is precluded by regulatory constraints. We propose to add these new provisions in response to public comments on the ANPRM, which included draft technical provisions for grade similar to those proposed in the R302.5. The comments noted that physical or regulatory constraints may prevent full compliance with the grade provisions. Physical constraints would include existing terrain or infrastructure, right-of-way availability, a notable natural feature, or similar existing physical constraints. Regulatory constraints would include federal, state, or local laws the purpose of which is to preserve threatened or endangered species; the environment; or archaeological, cultural, historical, or significant natural features.
The proposed provisions are consistent with the AASHTO Guide. The AASHTO Guide recommends that the grade of a shared use path should not exceed 5 percent; but, where the path is adjacent to a roadway with a grade that exceeds 5 percent, the grade of the path should be less than or equal to the roadway grade. The AASHTO Guide notes that grades steeper than 5 percent are undesirable because ascents are difficult for many path users, and the descents can cause some path users to exceed the speeds at which they are competent or comfortable. See AASHTO Guide, 5.2.7 Grade.
The SNPRM would revise R210 to read as follows:
As proposed in the NPRM, R210 would require objects along or overhanging any portion of a pedestrian circulation path to comply with the proposed technical provisions for protruding objects in R402 and to not reduce the clear width required for pedestrian access routes.
The SNPRM would renumber R210 to include a general provision in R210.1 and a specific provision for pedestrian circulation paths other than shared use paths in R210.2 that would require objects along or overhanging any portion of the path to comply with the proposed technical provisions for protruding objects in R402 and to not reduce the clear width required for pedestrian access routes, as proposed in the NPRM.
The SNPRM would add a new provision for shared use paths at R210.3 that would prohibit objects from overhanging or protruding into any portion of a shared use path at or below 8 feet measured from the finish surface.
The proposed provision for shared used paths is consistent with the AASHTO Guide. The AASHTO Guide recommends 10 feet vertical clearance along shared use paths, and 8 feet minimum vertical clearance in constrained areas. The AASHTO Guide recommends that fixed objects should not be permitted to protrude within the vertical or horizontal clearance of a shared use path. See AASHTO Guide, 5.2.1 Width and Clearance.
The SNPRM would revise R218 to read as follows:
The SNPRM would not apply the technical provisions for doors, doorways, and gates referenced in R218 to shared use paths to avoid conflicts with the AASHTO Guide. The AASHTO Guide does not recommend the use of gates or other barriers to prevent unauthorized motor vehicle entry to shared use paths because gates and barriers create permanent obstacles to path users. The AASHTO Guide recommends alternative methods to control unauthorized motor vehicle entry to shared use paths, including posting regulatory signs prohibiting motor vehicle entry and targeted surveillance and enforcement. Where there is a documented history of unauthorized entry by motor vehicles despite the use of alternative methods to control such entry, the need for bollards or other vertical barriers may be justified. The AASHTO Guide includes
The SNPRM would revise R304.5.1 to read as follows:
As proposed in the NPRM, R304.5.1 would require the clear width of curb ramp runs (excluding flared sides), blended transitions, and turning spaces to be 4 feet minimum.
The SNPRM would renumber R304.5.1 to include a general provision in R304.5.1 that would clarify that if flared sides are provided at curb ramps and blended transitions, the flared sides are to be located outside the width of the curb ramp run or blended transition; and a specific provision for pedestrian circulation paths other than shared use paths in R304.5.1.1 that would require the clear width of curb ramp runs, blended transitions, and turning spaces to be 4 feet minimum, as proposed in the NPRM.
The SNPRM would add a new provision for shared use paths at R304.5.1.2 that would require the width of curb ramps runs and blended transitions to be equal to the width of the shared use path.
The proposed provision for shared used paths is consistent with the AASHTO Guide. The AASHTO Guide recommends that where curb ramps are provided on shared use paths, the curb ramps should extend the full width of the path, not including any flared sides. See AASHTO Guide, 5.3.5 Other Intersection Treatments.
The proposed technical provisions applicable to shared used paths in the proposed accessibility guidelines for pedestrian facilities in the public right-of-way, as supplemented by the SNPRM, and the design criteria for shared use paths in the AASHTO Guide are compared in the table below.
Public comments submitted in response to the ANPRM expressed concern about the risk of collisions between pedestrians who are blind or have low vision and bicyclists who pass them too closely at fast speeds, and at intersections where a shared use path crosses another shared use path or a sidewalk. According to the AASHTO Guide, the 85th percentile speed for recreational bicyclists is 18 miles per hour. See AASHTO Guide, 5.2.4 Design Speed. The comments noted that bicycles are relatively quiet and pedestrians who are blind or have low vision may not be aware when bicyclists are approaching and passing them or crossing their path at intersections. Pedestrians with other disabilities may also have limited awareness of approaching bicyclists. For example, individuals who are deaf or hard of hearing may not be aware of a bicycle approaching from behind even when riders indicate their presence audibly. Individuals with limited mobility who may be alert to bicyclists may find it difficult to move aside in time to avoid collision. The comments recommended that traffic on shared use paths be regulated and strictly enforced in order to protect pedestrians. For example, a comment stated that bicyclists should be required to always yield to pedestrians. The comments also recommended design solutions to avoid conflicts between users, including separate pathways for pedestrians and bicyclists; and detectable warning surfaces at intersections where a shared use path crosses another shared use path or a sidewalk. These design solutions are discussed below.
An organization representing individuals who are blind and have low-vision stated that “all shared use paths present an unacceptable safety risk to blind or visually impaired pedestrians unless there is a clear separation between pedestrians and other motorized and non-motorized vehicles including bicyclists.” The comments noted that path users cannot be expected to always follow the “rules of the road” and suggested that if paths cannot be physically separated that lanes for pedestrians and other users should be marked tactilely. An organization of educators and rehabilitation professionals who work with individuals who are blind suggested that blind pedestrians may have considerable difficulty maintaining the course, particularly on two-
The AASHTO Guide makes a number of recommendations to minimize conflicts between pedestrians and bicyclists. These recommendations include required sight triangles to ensure that bicyclists have the needed yielding distance to avoid conflicts, and additional width around horizontal curves to allow safe distance between users. See AASHTO 5.2.8, Stopping Sight Distance. The AAHSTO Guide also recommends use of a centerline stripe within a path to provide directional separation and to indicate when passing is permitted. For paths with “extremely heavy volume”, the AASHTO Guide recommends two alternatives for segregation of pedestrians and bicyclists. The first option is to provide separate lanes within a single path; pedestrians have a bidirectional lane and bicyclists have two one-directional lanes. Such separation is not recommended unless a minimum path width of 15 feet can be provided (10 feet for bicycles and 5 feet for pedestrians). A second alternative is to physically separate user groups, particularly where the pathway volume is “extremely heavy” and where sites and settings, such as one that constricts the path width, necessitate divergent pathways. Physically separated pathways also are recommended where the origins and destinations of pedestrians and bicyclists differ. The AAHSTO Guide notes that both alternatives (lane separation and physical separation) may not be effective unless the volume of bicycle traffic is sufficient to discourage pedestrians from encroaching into the bicycle lanes and that these solutions will not necessarily be needed for the full length of a shared use path. See AASHTO Guide, 5.2.1 Width and Clearance.
We agree with the comments that physical separation between pedestrians and other users would likely render shared use paths safer for, and more accessible to, individuals with disabilities and others. However, the AASHTO Guide does not recommend physical separation of user groups unless the traffic volume or other considerations make separate pathways necessary. The AASHTO Guide provides little guidance regarding methods for determining the point at which traffic volume or other considerations would justify separation of the pathways. In the absence of any data on which to base such a requirement, we are not proposing to require physically separated pathways for pedestrians and bicyclists. The impact of such a requirement if applied to the full length of all shared use paths would likely result in many not being constructed due to the increased costs associated with more land and the need to engineer and construct two pathways instead of one.
The comments suggested that enhanced signage and warnings, including audible signs and tactile pavement markings would improve the ability of blind pedestrians to remain within their lanes. In Great Britain, tactile pavement markings are used to indicate bicycle and pedestrian lanes. A ladder pattern is used to indicate the start and end of the pedestrian lane; a tramline pattern is used to indicate the start and end of the bicycle lane; and a tactile dividing line is used to indicate the separation between the lanes.
We are considering including an advisory section in the final accessibility guidelines on separate pathways for pedestrians and bicyclists. Advisory sections are not mandatory requirements but provide guidance for entities who want to exceed the minimum requirements for accessible design. We request comments on information to include in the advisory section.
Detectable warning surfaces consist of small truncated domes that are integral to a walking surface and that are detectable underfoot. The proposed accessibility guidelines for pedestrian facilities in the public right-of-way would require the use of detectable warning surfaces to indicate the boundary between a pedestrian route and a vehicular route where there is a curb ramp or blended transition; and the boundary of passenger boarding platforms at transit stops for buses and rail vehicles and at passenger boarding and alighting areas at sidewalk or street level transit stops for rail vehicles. See R208 and R305.
Because pedestrians who are blind would not be aware of bicyclists approaching from the left or right hand side at intersections, we are considering including a requirement in the final accessibility guidelines to provide detectable warning surfaces where a shared use path intersects another shared use path or a sidewalk to indicate the boundaries where bicyclists may be crossing the intersection. The edge of the detectable warning surface would be installed between 6 inches minimum and 12 inches maximum from the edge of the intersecting segments of the shared use paths and sidewalks. The detectable warning surface would extend 2 feet minimum in the direction of pedestrian travel and the full width of the intersecting segments. We request comments on this issue.
We prepared a preliminary regulatory assessment discussing the cost and benefits of the proposed accessibility guidelines for pedestrian facilities in the public right-of-way and an initial regulatory flexibility analysis of the impacts on small governmental jurisdictions with a population of less than 50,000 when the NPRM was issued. These regulatory analyses are available on our Web site at:
There is no database available on the number of shared use paths in the United States. AASHTO surveyed five state transportation departments when preparing comments on the ANPRM. The responding departments reported approximately 1,500 to 3,000 miles of existing shared use paths in their states. The Alliance for Biking and Walking surveyed more than 50 large cities about
The report is available at:
As discussed above, the proposed technical provisions applicable to shared use paths are consistent with the AASHTO Guide. State and local government entities that design and construct shared use paths generally use the AASHTO Guide. The SNPRM is not expected to increase the costs of constructing shared use paths for state and local government entities that use the AASHTO Guide.
We request comments on the following to assess the impacts of the SNPRM:
• The extent to which the AASHTO Guide, or other design guides and standards are used for shared use paths.
• Whether any of the proposed provisions applicable to shared use paths would result in additional costs for design work, materials, earthmoving, retaining structures, or other items compared to construction practices or design guides and standards currently used? Commenters are encouraged to identify the specific provisions that would result in additional costs and estimate the additional costs on a per mile basis to the extent possible.
• Whether any of the proposed provisions applicable to shared use paths would result in any additional costs, such as maintenance and operational costs, compared to current practices? Commenters are encouraged to identify the specific provisions that would result in additional costs and estimate the additional costs on a per mile basis to the extent possible.
• What are the benefits of the proposed provisions applicable to shared use paths?
Buildings and facilities, Civil rights, Individuals with disabilities, Transportation.
Department of Veterans Affairs.
Proposed rule.
This rulemaking proposes to amend the medical regulations of the Department of Veterans Affairs (VA) to allow VA to use Medicare or State procedures to enter into provider agreements to obtain extended care services from non-VA providers. In addition, this rulemaking proposes to include home health care, palliative care, and noninstitutional hospice care services as extended care services, when provided as an alternative to nursing home care. Under this proposed rule, VA would be able to obtain extended care services for veterans from providers who are closer to veterans' homes and communities.
Comments must be received by VA on or before March 15, 2013.
Written comments may be submitted by email through
Daniel Schoeps, Office of Geriatrics and Extended Care (10P4G), Department of Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 20420; (202) 461–6763. (This is not a toll-free number.)
Subsection (a) of 38 U.S.C. 1710B authorizes VA to provide extended care services to eligible veterans, including geriatric evaluation, nursing home care, domiciliary services, and adult day health care. Subsection (a) of 38 U.S.C. 1720 authorizes VA to pay for the nursing home care in non-VA facilities of eligible veterans and eligible members of the Armed Forces. Section 1720(f) authorizes VA to furnish (in VA and non-VA facilities) adult day health care to enrolled veterans who would otherwise need nursing home care. Contracts between VA and these non-VA facilities are currently negotiated under Federal contract statutes and regulations (including the Federal Acquisition Regulation, which is set forth at 48 CFR chapter 1; and VA Acquisition Regulations, which are set forth at 48 CFR chapter 8).
We propose to establish a new 38 CFR 17.75, which would implement VA's authority to use Medicare procedures to enter into provider agreements. Section 105 of the Veterans Health Care, Capital Asset, and Business Improvement Act of 2003 (Pub. L. 108–170) amended section 1720 to authorize VA to use these procedures. This amendment, which is codified at 38 U.S.C. 1720(c)(1), authorizes VA to enter into agreements with providers of nursing home care, adult day health care, and other community-based extended care services under “the procedures available for entering into provider agreements under section 1866(a) of the Social Security Act.” Section 1866(a) (codified at 42 U.S.C. 1395cc(a)) authorizes the Department of Health and Human Services to enter into agreements with participating Medicare providers, and specifies the terms of those agreements.
The plain language of 38 U.S.C. 1720(c)(1)(B) authorizes VA, in its discretion, to furnish extended care services through non-VA providers using the above-described noncontractual mechanism. Moreover, the legislative history of Public Law 108–170 further shows that its purpose was to improve VA's ability to furnish eligible veterans with extended care services of non-VA providers by using a noncontractual mechanism. A Senate committee report explains that Medicare procedures are simpler and less burdensome than VA contracting procedures. The report includes the following discussion of this provision:
Under current law, VA is authorized to enter into contractual arrangements with private providers of extended care services to serve the needs of veterans. Federal reporting requirements relating to the demographics of contractor employees and applicants are required to be submitted to the Department of Labor under these contractual arrangements. The Committee has learned that, due to these reporting requirements,
The Social Security Act allows the Centers for Medicare and Medicaid Services (hereinafter, “CMS”) to enter into provider agreements for the provision of care to both Medicare and Medicaid beneficiaries. Such agreements require that contractors comply with Federal laws concerning hiring practices. But they do not require that providers prepare reports of such compliance. Nor do they subject providers to annual audits like most Federal contracts do. Not surprisingly, CMS is more successful than VA in inducing smaller providers to provide care to its beneficiaries.
Section 102 of the Committee bill places VA contractors in a similar position as CMS contractors with respect to Federal reporting requirements. By this action, the Committee seeks to encourage VA to bring care closer to veterans' homes and community support structures by contracting with small community-based providers. Even so, however, the Committee fully anticipates and expects that VA will require compliance with all applicable Federal laws concerning employment and hiring practices.
Proposed § 17.75(a) would define “[e]xtended care services” as “geriatric evaluation; nursing home care; domiciliary services; adult day health care; noninstitutional palliative care, noninstitutional hospice care, and home health care when they are noninstitutional alternatives to nursing home care; and respite care.” The proposed definition is derived from 38 U.S.C. 1710B(a), which requires VA to “operate and maintain a program to provide extended care services,” and requires that such extended care services include geriatric evaluation, nursing home care, domiciliary services, adult day health care, respite care, and “[s]uch other noninstitutional alternatives to nursing home care as the Secretary may furnish as medical services under [38 U.S.C. 1701(10)].” 38 U.S.C. 1710B(a)(1)–(6).
We propose to include home health care in the definition of “[e]xtended care services” as a noninstitutional alternative to nursing home care because in many circumstances it would be a noninstitutional alternative to nursing home care. For example, a veteran applying for nursing home care would receive a person-centered assessment by a VA health care team. The team, working with the veteran and caregiver, would explore care needs and how these needs could be met. In this process, they may decide that a combination of skilled nursing, home health aide, and respite services would meet the veteran's needs and allow the veteran to remain at home. In this case, home health services would avert a nursing home placement. We also propose to include noninstitutional palliative and noninstitutional hospice care in the definition because they would always be alternatives to nursing home care.
We understand that Medicare and States do not necessarily enter into provider agreements for all the services listed under the proposed definition for “extended care services.” We are proposing only to enter into provider agreements with providers that do have a Medicare or State provider agreement for the services listed in this proposed rule as “extended care services.” VA would continue to use contracts and other mechanisms to ensure that veterans receive needed health care services for which they are eligible, but for which there is no available provider agreement. Additionally, many States enter into provider agreements for a broader array of services than those listed in this proposed rule. We do not intend to enter into agreements that would expand beyond the scope of those services specifically listed in the proposed definition of extended care services.
Including home health care, noninstitutional palliative care, and noninstitutional hospice care in the definition of extended care services would not require VA to consider these services as extended care services for purposes of determining whether a copayment is required. Noninstitutional hospice care is exempt from both outpatient and extended care copayments. 38 U.S.C. 1710(g)(1), 1710B(c)(2)(B). Noninstitutional palliative care is a form of home health care, and the law currently requires VA to charge the outpatient copayment for home health care. 38 U.S.C. 1710(g)(1).
As noted above, under 38 U.S.C. 1710B(a)(5), VA is required to “operate and maintain a program to provide extended care services” that includes “[s]uch * * * noninstitutional alternatives to nursing home care as the Secretary may furnish as medical services under [38 U.S.C. 1701(10)]”. 38 U.S.C. 1710B(a)(5). However, section 1701 no longer contains a subsection (10).
Prior to enactment of section 801 of Public Law 110–387, 38 U.S.C. 1701(10) defined medical services to include noninstitutional extended care services provided through December 31, 2008, and defined such services as follows: “[T]he term `noninstitutional extended care services' means such alternatives to institutional extended care which [VA] may furnish (i) directly, (ii) by contract, or (iii) (through provision of case management) by another provider or payer.” See 38 U.S.C. 1710(10) (2008). With the enactment of Public Law 110–387 in 2008, section 1701 was amended to essentially move subsection (10) to subsection (6)(E) of section 1701 which provides that medical services include “[n]oninstitutional extended care services, including alternatives to institutional extended care that [VA] may furnish directly, by contract, or through provision of case management by another provider or payer.” Public Law 110–387, title VIII, § 801 (Oct. 10, 2008). Thus, the language of former subsection (10) and current subsection (6)(E) is virtually identical, except that subsection (6)(E) does not contain the 2008 sunset provision. We therefore believe that the reference to section 1701(10) in 38 U.S.C. 1710B(a)(5) must now be read as a reference to section 1701(6)(E).
Consistent with section 1720(c)(1), we would define “[p]rovider” in § 17.75(a) to mean any non-VA entity that provides extended care services and is participating in Medicare under title XVIII of the Social Security Act or a State Medicaid plan under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) pursuant to a valid provider agreement. This could include physicians and other providers who provide extended care services to veterans in non-VA nursing homes.
In proposed paragraph (b), we would implement VA's authority under section 1720(c)(1) to obtain extended care
Proposed paragraph (c)(1) would establish the procedure that VA would use to notify a provider of the agreement that VA proposes to use to obtain extended care services from the provider. The Director of the VA medical center of jurisdiction would provide written notification identifying the applicable Medicare or State Medicaid provider agreement to be used and the changes and additional terms that would apply to the agreement with VA, and would request written acceptance of the agreement from the provider. This documentation would serve as a record for both VA and the provider that an agreement is in place and of the parties' acceptance of all the terms of the adopted agreement. Therefore, VA would not attempt to obtain services under a provider agreement from the provider until after the provider's acceptance is received. For providers with both Medicare and State Medicaid agreements, the letter would clarify which of the two provider agreements would be used as the basis for VA's provider agreement.
Paragraph (c)(2) would establish that the terms and rates of a provider's agreement with VA would be the same as the terms and rates of the provider's separate Medicare provider agreement with CMS or agreement under a State Medicaid plan, or, if a provider has agreements with both Medicare and under a State Medicaid plan, the terms and rates would be the same as the agreement with the highest rates. VA's payment under the agreement with the highest rates would serve as an incentive to encourage providers to enter into agreements with VA for the care of veterans. We interpret VA's authority under section 1720(c)(1)(B) to use Medicare procedures as also authorizing the use of rates established under the appropriate Medicare fee schedule or payment system because there are no procedures for rate negotiation in obtaining Medicare provider agreements.
Although a provider's agreement with VA would generally contain the same terms as the provider's separate Medicare provider agreement or agreement under a State Medicaid plan, VA would need unique terms for purposes of identifying VA as the Government agency entering into the agreement with the provider and paying for the provider's services for veterans. Since the purpose of this proposed rule is to address the needs of specific veterans or groups of veterans based upon location and the availability of VA resources, VA might also need unique agreement terms to limit the scope of the agreement consistent with VA's authority under section 1720(c)(1)(B). Accordingly, proposed paragraph (c)(3) would clarify that a provider's agreement with VA will not be the same as the provider's agreement with CMS under Medicare or under a State Medicaid plan to the extent that the provider's agreement with VA will identify VA as the Government agency entering into the agreement and specify that the provider's services are for specific veterans or groups of veterans. It would also make clear that the provider's agreement with VA would be administered by VA according to the procedures in this proposed rule and not under the rules applicable to the administration of Medicare provider agreements with CMS or agreements under a State Medicaid plan. In all other respects, VA intends that a provider's agreement with VA will be the same as the provider's Medicare provider agreement with CMS or under a State Medicaid plan.
Proposed paragraph (d) would delegate to the Director of the VA medical center of jurisdiction (or a designee) the authority to enter into an agreement under the proposed rule. Under paragraph (d)(1), we would also establish that the criteria for whether to enter into an agreement under this section will be based on the needs of local veterans and the ability of VA to provide for those needs. For example, where VA does not provide equivalent care in a particular locality, or where providing VA care would be more expensive than providing care through a non-VA provider, VA would enter into agreements under this section. Similarly, if resources permit, wherever possible VA would enter into an agreement with a provider selected by the veteran. This is consistent with the purpose of section 1720(c)(1)(B), which is to help veterans receive the care that they require from providers in their own communities, as well as to improve the efficiency of care delivery from an economic perspective. However, we do not interpret section 1720(c)(1) as creating any right to care pursuant to a provider agreement or any right to enter into a provider agreement with VA. We interpret the statute as authorizing care pursuant to an agreement when a Director, based upon medical judgment and evaluation of available resources, determines that an agreement is in the best interest of the veteran under the Director's care.
Under proposed paragraph (d)(2), VA would empower the veteran to select his or her preferred provider, should more than one provider exist within a given region, subject to the provider's determination to accept the veteran, clinical appropriateness and available resources at the VA medical center of jurisdiction. VA understands the significance of placing such an important life decision in the hands of the veteran and would only intervene if a provider was not able to provide the care clinically required by the veteran, or the VA medical center of jurisdiction is simply unable to accommodate the veteran's selection due to limited resources. Foreseeable strains on resources that might prevent VA from accommodating a veteran's request could include whether the veteran has special needs that can be addressed by resources in that region or whether VA has sufficient staff to monitor the veteran in a particular facility due to the facility being remote or because VA is monitoring several veterans at another facility that is distant from the veteran's preferred provider. The decision to approve or deny a particular provider for an agreement with VA would be made by the Director (or designee) according to the criteria prescribed in paragraphs (d)(2)(A), (B), and (C).
Proposed paragraph (d)(3) would establish that the factual determination of whether a provider is eligible to enter into an agreement with VA to provide extended care services for veterans will be made based on evidence of an existing Medicare provider agreement or agreement under a State Medicaid plan as verified through Web sites maintained by CMS or the appropriate State office.
Proposed paragraph (e) would govern termination of a VA provider agreement. Under paragraph (e)(1), we would allow
Proposed paragraph (e)(2) would set forth when VA may terminate an agreement. VA would also be required to give providers at least 15 days notice before terminating an agreement. If, however, VA finds that the health of the veteran is in immediate jeopardy, VA would be authorized to terminate the agreement with only 2 days notice. The termination of the agreement should not be confused with VA's ability to physically remove the veteran from a dangerous situation, which can be done as soon as necessary in order to protect the health of the veteran. Proposed paragraph (e)(2) thus would assert VA's right to remove a veteran from a dangerous situation prior to terminating the applicable provider agreement.
Proposed paragraph (f) would establish procedures for appeal of a Director's decision not to enter into a VA provider agreement or to terminate an agreement. A provider may appeal a decision issued by the Director by filing a written request for review with the Chief Consultant, Office of Geriatrics and Extended Care. An appeal must be filed in writing within 90 days after the date of the Director's decision. The Chief Consultant would provide written notice of the determination, which would constitute the final agency decision regarding eligibility for or termination of a VA provider agreement. The notice would explain why the decision is appropriate.
Proposed paragraph (g) would state that providers need not comply with the Service Contract Act of 1965 (set forth at 41 U.S.C. 351, et seq.). This is the law referred to in the legislative history that requires contractors to report to the Department of Labor. While this Act applies to contracts entered into by the United States for services through the use of service employees, it does not apply to Medicare providers because they do not enter into contracts with the United States—Medicare provider agreements with CMS are used instead of contracts. However, proposed paragraph (g) would require that providers comply with all other applicable Federal laws concerning employment and hiring practices including the Fair Labor Standards Act, National Labor Relations Act, the Civil Rights Acts, the Age Discrimination in Employment Act of 1967, the Vocational Rehabilitation Act of 1973, Worker Adjustment and Retraining Notification Act, Sarbanes-Oxley Act of 2002, Occupational Health and Safety Act of 1970, Immigration Reform and Control Act of 1986, Consolidated Omnibus Reconciliation Act, the Family and Medical Leave Act, the Americans with Disabilities Act, the Uniformed Services Employment and Reemployment Rights Act, the Immigration and Nationality Act, the Consumer Credit Protection Act, the Employee Polygraph Protection Act, and the Employee Retirement Income Security Act. This is consistent with the legislative history set forth above.
We would rescind all conflicting internal VA guidance that could be interpreted as providing an alternate benefit pertaining to extended care services. Specifically, we would rescind Veterans Health Administration (VHA) Handbooks 1143.2, “VHA Community Nursing Home Oversight Procedures”; 1140.6, “Purchased Home Health Care Services Procedures”; and 1140.5, “Community Hospice Care: Referral and Purchase Procedures”; and VHA Manual M–5 Part III, Chapter 6, pertaining to Community Residential Care. This policy guidance would be reissued in connection with the final rule.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and other advantages; distributive impacts; and equity). Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 12866 (Regulatory Planning and Review) defines a “significant regulatory action,” which requires review by the Office of Management and Budget (OMB), as “any regulatory action that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive Order.”
The economic, interagency, budgetary, legal, and policy implications of this regulatory action have been examined and it has been determined to be a significant regulatory action under the Executive Order.
Although under the rulemaking guidelines in Executive Order 12866, VA ordinarily provides a 60-day comment period, the Secretary has determined that there is good cause to limit the public comment period on this proposed rule to 30 days. VA does not expect to receive a large number of comments on this proposed rule, particularly comments that are negative or that oppose this rule, because it would increase the opportunity for veterans to obtain non-VA extended care services from local providers that furnish vital and often life-sustaining medical services. Accordingly, VA has provided that comments must be received within 30 days of publication in the
The proposed rule does not contain any collections of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3521).
The Secretary hereby certifies that the provisions of this proposed rule would not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601–612. The proposed rule would not have a significant economic impact on any small entities because such entities would obtain only an insignificant
The Unfunded Mandates Reform Act requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in an expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year. This proposed rule would have no such effect on State, local, and tribal governments, or on the private sector.
The Catalog of Federal Domestic Assistance program numbers and titles affected by this rulemaking are 64.007, Blind Rehabilitation Centers; 64.009, Veterans Medical Care Benefits; 64.010, Veterans Nursing Home Care; 64.011, Veterans Dental Care; 64.013, Veterans Prosthetic Appliances; 64.018, Sharing Specialized Medical Resources; 64.019, Veterans Rehabilitation Alcohol and Drug Dependence; and 64.022, Veterans Home Based Primary Care.
The Secretary of Veterans Affairs, or designee, approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. John R. Gingrich, Chief of Staff, Department of Veterans Affairs, approved this document on February 5, 2013, for publication.
Administrative practice and procedure, Alcohol abuse, Alcoholism, Claims, Day care, Dental health, Drug abuse, Foreign relations, Government contracts, Grant programs-health, Grant programs-veterans, Health care, Health facilities, Health professions, Health records, Homeless, Medical and dental schools, Medical devices, Medical research, Mental health programs, Nursing homes, Philippines, Reporting and record-keeping requirements, Scholarships and fellowships, Travel and transportation expenses, Veterans.
For the reasons set forth in the preamble, VA proposes to amend 38 CFR Part 17 as follows:
38 U.S.C. 501, and as noted in specific sections.
(a)
(b)
(1) The provider has entered into a Medicare provider agreement under 42 U.S.C. 1395cc(a) with the Centers for Medicare & Medicaid Services (“CMS agreement”); or
(2) If the provider has not entered into a Medicare provider agreement, but the provider is participating in an agreement under a State plan under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).
(c)
(2) Provider agreements with VA under this section must reflect the following:
(i) For a provider with a valid Medicare provider agreement, the terms of the provider's agreement with VA, including the payment rates, will be the same as the terms of the provider's agreement with CMS pursuant to the Medicare Enrollment Application for Institutional Providers (OMB No. 0938–0685).
(ii) For providers with no Medicare provider agreement but one or more agreements under a State plan, the terms of the provider's agreement with VA, including the payment rates, will be the same as the terms of the provider's agreement with the State that pays the highest rates.
(iii) For providers with both a Medicare provider agreement and an agreement under a State Medicaid plan, the terms of the provider's agreement with VA, including the payment rates, will be the same as the CMS or State agreement that provides for the higher rates.
(iv) The provider shall not charge any individual, insurer, or entity (other than VA) for the items or services obtained by VA under this section.
(3) The terms of the provider's agreement with VA will be different from the provider's separate agreement with CMS or a State only to the extent that the non-VA agreement prescribes terms or procedures inconsistent with this section and that it is necessary to identify VA as the Government agency entering into the agreement with the provider and paying for the provider's services for veterans.
(d)
(2) If there is more than one provider in a given region, the veteran will select his or her preferred provider, subject to:
(i) The provider's determination to accept the veteran;
(ii) The availability and feasibility of resources at the VA medical center of jurisdiction; and
(iii) The determination of the Director of the VA medical center of jurisdiction, or designee, that the services offered by
(3) Factual determination of whether a provider has a Medicare provider agreement or an agreement under a State Medicaid plan will be based on verification of an existing agreement. Medicare provider agreements will be verified using CMS Web sites, which list providers with agreements. State agreements will be verified using appropriate State Web sites, which list providers with agreements, or using records maintained by the appropriate State office.
(e)
(2) VA may terminate an agreement with any provider if the Director of the VA medical center of jurisdiction, or designee, determines that the provider's service is no longer required or that the provider is not complying with a provision of the provider agreement, and must terminate an agreement with a provider that no longer has a Medicare provider agreement with CMS or no longer participates under a State Medicaid plan. VA will provide written notice of termination at least 15 days before the effective date of termination of the provider agreement. If the Director of the VA medical center of jurisdiction, or designee, determines the health of the veteran to be in immediate jeopardy, VA will provide notice of termination at least 2 days before the effective date of termination of the provider agreement. VA may physically remove a veteran from a dangerous situation at any time in order to protect the health of the veteran prior to terminating the applicable provider agreement.
(f)
(g)
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Proposed rule; request for comments.
NMFS proposes to implement management measures described in Amendment 37 to the Fishery Management Plan for the Reef Fish Resources of the Gulf of Mexico (FMP) prepared by the Gulf of Mexico Fishery Management Council (Council). If implemented, this rule would revise the commercial and recreational sector's annual catch limits (ACLs) and annual catch targets (ACTs) for gray triggerfish; revise the recreational sector accountability measures (AMs) for gray triggerfish; revise the gray triggerfish recreational bag limit; establish a commercial trip limit for gray triggerfish; and establish a fixed closed season for the gray triggerfish commercial and recreational sectors. Additionally, Amendment 37 would modify the gray triggerfish rebuilding plan. The intent of this rule is to end overfishing of gray triggerfish and help achieve optimum yield (OY) for the gray triggerfish resource in accordance with the requirements of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).
Written comments must be received on or before March 15, 2013.
You may submit comments on this document, identified by “NOAA–NMFS–2012–0199”, by any of the following methods:
•
•
Electronic copies of Amendment 37, which includes a draft environmental assessment and a regulatory impact review, may be obtained from the Southeast Regional Office Web site at
Rich Malinowski, Southeast Regional Office, telephone 727–824–5305, email
The reef fish fishery of the Gulf is managed under the FMP. The FMP was prepared by the Council and is implemented through regulations at 50 CFR part 622 under the authority of the Magnuson-Stevens Act. All gray triggerfish weights discussed in this proposed rule are in round weight.
The Magnuson-Stevens Act requires NMFS and regional fishery management councils to prevent overfishing and achieve, on a continuing basis, the OY from federally managed fish stocks. These mandates are intended to ensure that fishery resources are managed for the greatest overall benefit to the nation, particularly with respect to providing food production and recreational opportunities, and protecting marine ecosystems. To further this goal, the Magnuson-Stevens Act requires fishery managers to end overfishing of stocks and to minimize bycatch and bycatch mortality to the extent practicable.
The last Southeast Data, Assessment, and Review (SEDAR) benchmark stock assessment for gray triggerfish was completed in 2006 (SEDAR 9). SEDAR 9 indicated that the gray triggerfish stock was both overfished and possibly undergoing overfishing. Subsequently, Amendment 30A to the FMP established a gray triggerfish rebuilding plan beginning in the 2008 fishing year (73 FR 38139, July 3, 2008). In 2011, a SEDAR 9 update stock assessment for gray triggerfish determined that the gray triggerfish stock was still overfished and was additionally undergoing overfishing. The 2011 SEDAR 9 Update indicated the 2008 gray triggerfish rebuilding plan had not made adequate progress toward ending overfishing and rebuilding the stock. NMFS informed the Council of this determination in a letter dated March 13, 2012. NMFS also requested that the Council work to end overfishing of gray triggerfish immediately and to revise the gray triggerfish stock rebuilding plan.
As a way to more quickly implement measures to end overfishing and rebuild the stock, the Council requested and NMFS implemented a temporary rule to reduce the gray triggerfish commercial and recreational ACLs and ACTs (77 FR 28308, May 14, 2012). The temporary rule also established an in-season AM for the gray triggerfish recreational sector to be more consistent with the commercial sector AMs and provide for an additional level of protection to ensure that the recreational ACL is not exceeded and that the risk of overfishing is reduced. These interim measures were then extended through May 15, 2013, to ensure that the more permanent measures being developed through Amendment 37 could be implemented without a lapse in these more protective management measures (77 FR 67303, November 9, 2012).
This proposed rule would revise the gray triggerfish commercial and recreational sector ACLs and ACTs (commercial ACT expressed as commercial quota in the regulatory text), revise the gray triggerfish recreational sector AMs, revise the gray triggerfish recreational bag limit, establish a commercial trip limit for gray triggerfish, and establish a fixed closed season for the gray triggerfish commercial and recreational sectors.
This rule would revise the ACLs for the gray triggerfish commercial and recreational sectors. This rule would also revise the ACTs (commercial ACT expressed as a quota in the regulatory text) for both sectors.
The Council's Scientific and Statistical Committee (SSC) reviewed the gray triggerfish 2011 SEDAR 9 Update. The SSC recommended that the gray triggerfish acceptable biological catches (ABC) for the 2012 and 2013 fishing years be set at 305,300 lb (138,346 kg). The current gray triggerfish stock ABC is 595,000 lb (269,887 kg). Based on this recommendation, the commercial and recreational ACLs and ACTs for the gray triggerfish need to be updated.
The Magnuson-Stevens Act requires that the FMP contain a mechanism for specifying ACLs at a level such that overfishing does not occur. An ACT is a management target established to account for management uncertainty in controlling the actual catch at or below the ACL. An ACT is used in the system of AMs so that the ACL is not exceeded. Therefore, a sector ACT should be set below the sector ACL to allow the sector to be closed when the ACT is projected to be reached.
In Amendment 30A to the FMP, the Council established a 21 percent commercial and 79 percent recreational allocation of the gray triggerfish ABC (73 FR 38139, July 3, 2008). These allocations are used to set the commercial and recreational sector-specific ACLs. The ABC recommended by the SSC is 305,300 lb (138,482 kg) and the combined sector ACLs are equal to the ABC. Based on the allocations established in Amendment 30A to the FMP, this proposed rule would set a reduced commercial ACL of 64,100 lb (29,075 kg), and a reduced recreational ACL of 241,200 lb (109,406 kg).
The Generic Annual Catch Limit Amendment developed by the Council and implemented by NMFS (76 FR 82044, December 29, 2011) established a standardized procedure to set sector-specific ACTs based on the ACLs. ACTs are intended to account for management uncertainty and provide a buffer that better ensures a sector does not exceed its designated ACL. The Council chose to use this procedure, which resulted in a 5 percent buffer between the commercial ACL and ACT, and a 10 percent buffer between the recreational ACL and ACT. Therefore, this proposed rule would set the commercial ACT (commercial quota) at 60,900 lb (27,624 kg), and the recreational ACT at 217,100 lb (98,475 kg). The proposed ACLs and ACTs in this rule are the same as those currently in place as implemented through the temporary rule (77 FR 28308, May 14, 2012). The current commercial gray triggerfish quota functions as the commercial ACT.
To reduce the risk of overfishing, Amendment 30A to the FMP established gray triggerfish AMs. AMs are management controls that are implemented to prevent ACLs from being exceeded (in-season AMs), and to correct or mitigate overages of the ACL if they occur (post-season AMs). For the commercial sector, there are currently both in-season and post-season AMs. The in-season AM closes the commercial sector after the commercial quota (commercial ACT) is reached or projected to be reached. Additionally, if the commercial ACL is exceeded despite the quota closure, the post-season AM would reduce the following year's commercial quota (commercial ACT) by the amount of the prior-year's commercial ACL overage.
For the recreational sector, there is currently no in-season AM, but a post-season AM is in effect. For the recreational sector, if the recreational ACL is exceeded, NMFS will reduce the length of the following year's fishing season by the amount necessary to ensure that recreational landings do not exceed the recreational ACT during the following year.
In 2008, recreational landings exceeded both the recreational ACT and ACL. In 2009, the recreational ACT was exceeded. However, in 2010, recreational landings did not exceed the ACT or ACL. Reduced 2010 recreational landings may be attributable to fishery closures implemented that year as a result of the Deepwater Horizon MC252 oil spill. Based on recent trends in recreational landings and anticipated future recreational effort, the Council and NMFS have determined that implementing an in-season AM would reduce the risk of exceeding the ACL in the future. This proposed rule would
Currently, there is no trip limit for the commercial sector. This rule proposes to establish a commercial trip limit for gray triggerfish of 12 fish. This commercial trip limit would be applicable until the commercial ACT (commercial quota) is reached or projected to be reached during a fishing year and the commercial sector is closed.
This proposed rule would establish a seasonal closure of the gray triggerfish commercial and recreational sectors in the Gulf from June through July, each year. This fixed seasonal closure would assist rebuilding of the gray triggerfish stock by prohibiting harvest during the gray triggerfish peak spawning season. Additionally, June and July are the months that have the highest percentage of recreational landings.
Gray triggerfish currently have a recreational bag limit that is part of the 20-fish aggregate reef fish bag limit. As part of this 20-fish aggregate, there is currently no specific limit for recreational gray triggerfish landings as long as the total is 20 fish or less. This proposed rule would establish a 2-fish gray triggerfish recreational bag limit within the 20-fish aggregate reef fish bag limit. This recreational bag limit would be applicable until the recreational ACT is reached or projected to be reached during a fishing year and the recreational sector is closed.
Amendment 37 would revise the rebuilding plan for gray triggerfish. The gray triggerfish stock is currently in the 5th year of a rebuilding plan that began in 2008. Amendment 37 would modify the rebuilding plan in response to the results from the 2011 SEDAR update assessment and subsequent SSC review and recommendations for the gray triggerfish ABC. The modified rebuilding plan would be based on a constant fishing mortality rate that does not exceed the fishing mortality rate at OY.
Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the Assistant Administrator, NMFS, has determined that this proposed rule is consistent with the FMP, Amendment 37, the Magnuson-Stevens Act and other applicable law, subject to further consideration after public comment.
This proposed rule has been determined to be not significant for purposes of Executive Order 12866.
The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration that this proposed rule, if implemented, would not have a significant economic impact on a substantial number of small entities. The factual basis for this determination is as follows:
The purpose of this proposed rule is to end overfishing of gray triggerfish and rebuild the gray triggerfish stock by the end of 2017 to achieve OY. The Magnuson-Stevens Act provides the statutory basis for this proposed rule. No duplicative, overlapping, or conflicting Federal rules have been identified. This proposed rule would not introduce any changes to current reporting, record-keeping, and other compliance requirements.
This rule, if implemented, is expected to directly affect approximately 400 vessels that have a valid (non-expired) or renewable commercial Gulf reef fish permit. A renewable permit is an expired permit that may not be actively fished, but is renewable for up to 1 year after permit expiration. Although over 900 vessels have a commercial Gulf reef fish permit, which is required to possess and sell quantities of gray triggerfish in excess of the recreational bag limit, only an average of 382 vessels per year harvested gray triggerfish during the period 2005 through 2009. More recent commercial landings data is either not available (2011 to current) or is not expected to be representative of normal fishing performance,
This rule, if implemented, is also be expected to directly affect 1,366 vessels that possess a valid or renewable charter/headboat permit for Gulf reef fish (for-hire). The for-hire fleet is comprised of charterboats, which charge a fee on a vessel basis, and headboats, which charge a fee on an individual angler (head) basis. Although the for-hire permit does not distinguish between charterboats and headboats, an estimated 69 headboats operate in the Gulf. The average charterboat is estimated to earn approximately $77,000 (2010 dollars) in annual revenue, and the average headboat is estimated to earn approximately $234,000 (2010 dollars).
NMFS has not identified any other small entities that would be expected to be directly affected by this proposed rule.
The Small Business Administration has established size criteria for all major industry sectors in the U.S. including fish harvesters. A business involved in fish harvesting is classified as a small business if it is independently owned and operated, is not dominant in its field of operation (including its affiliates), and has combined annual receipts not in excess of $4.0 million (NAICS code 114111, finfish fishing) for all its affiliated operations worldwide. The revenue threshold for a business involved in the for-hire fishing industry is $7.0 million (NAICS code 713990, recreational industries). All commercial and for-hire vessels expected to be directly affected by this proposed rule are believed to be small business entities.
Amendment 37, on which this proposed rule is based, addresses five basic actions: (1) Revision of the gray triggerfish rebuilding plan; (2) specification of the commercial and recreational gray triggerfish ACLs and ACTs; (3) establishment of a gray triggerfish commercial sector closed season and trip limit; (4) establishment of a gray triggerfish recreational closed season and bag limit; and (5) revision of the AMs for the gray triggerfish recreational sector.
Rebuilding plans are not contained in the regulatory text associated with this proposed rule and are therefore outside the scope of the Regulatory Flexibility Act (RFA). Further, revision of the rebuilding plan would be an administrative action and, as a result, would not be expected to have any direct economic effects on any small entities. Direct effects of a rebuilding plan would only be expected to accrue to any resultant harvest restrictions implemented through a future rulemaking to achieve the goals of the
AMs are intended to ensure harvest overages do not occur and to correct or mitigate for overages if they do occur. In-season AMs are specifically intended to prevent or minimize harvest overages. The establishment of AMs, or their modification, would be an administrative action that would only be expected to have indirect effects on small entities. These effects would occur if the AMs are triggered. Because the proposed action would only modify and not implement the current AMs, no direct effects would be expected to accrue to any small entities. As a result, this component of the proposed rule is also outside the scope of the RFA.
However, because the potential implementation of the proposed in-season AM would be expected to restrict fishing operations and potentially result in direct short-term reductions in revenue and profit, further discussion of the potential significance of these effects is provided. The proposed in-season gray triggerfish recreational sector AM would result in closure of the gray triggerfish recreational season if the recreational sector ACT is reached or is projected to be reached. As a result, harvest and possession would be prohibited. Few, if any, fishing trips would be expected to be cancelled in response to a prohibition on the harvest and possession of gray triggerfish because anglers rarely target gray triggerfish: It was identified as a primary target species for less than 1/10th of 1 percent of all fishing trips (2005–2009). Rather, gray triggerfish are often harvested incidental to fishing for other reef fish species. Because other, more desirable reef species would still be available for recreational harvest, any prohibition on the harvest or possession of gray triggerfish would not be expected to have a significant impact on a substantial number of small entities.
Because gray triggerfish is not a significantly targeted species, the proposed overage adjustment if the recreational ACL is exceeded would also be expected to result in minimal, if any, reduction in revenue to small entities. Because of the combination of in-season closure authority, low total harvest and target effort, and the expected recovery of gray triggerfish, overage adjustments would be expected to be infrequent and, if necessary, require only minimal reductions in the recreational ACT. Therefore, few, if any, recreational trips would be expected to be lost and the revenue to small entities would not be expected to be significantly affected.
Although Amendment 37 contained three proposed actions associated with the commercial harvest of gray triggerfish—specification of the ACT, establishment of the closed season, and establishment of a commercial trip limit—the expected economic effects of this rule would be determined primarily by the specification of the ACT. Individually, assuming no change in fishing behavior, the proposed commercial sector closed season and trip limit would be expected to result in a reduction in total annual revenue for all vessels that harvest gray triggerfish of approximately $26,000 and $72,000, respectively. All reductions are expressed in 2010 dollars. Combined, these two measures would be expected to result in a reduction in total annual revenue of approximately $88,000. This result is less than the total of the two individual proposed actions, approximately $98,000, because the proposed closed season would negate the expected effects of the trip limit during that period. However, the combined effects of these two proposed actions would not be expected to be sufficient to constrain commercial gray triggerfish harvest to the ACT and avoid an in-season closure. The proposed ACT, 60,900 lb (27,624 kg), would be expected to require a reduction in expected annual commercial harvest of approximately 118,000 lb (53,524 kg). The combined effects of the proposed commercial sector seasonal closure and trip limit would be a reduction in annual commercial harvest of approximately 92,000 lb (41,730 kg). Because commercial harvest would be prohibited when the commercial ACT is reached, the full necessary commercial sector harvest reduction would be expected to occur as a result of the three measures combined (seasonal closure, trip limit, and closure when the ACT is reached). Thus, although the total effect of the proposed seasonal closure and trip limit would be an expected reduction in annual revenue of approximately $88,000, the net effect of the proposed commercial ACT, seasonal closure, and trip limit would be a reduction in annual revenue of approximately $112,000. Distributed across all commercial sector entities expected to be directly affected by these proposed measures (382 vessels), the average expected effect would be a reduction in annual revenue of approximately $300 per entity, or less than one percent of the average annual revenue per vessel of $87,000. Although some vessels may be expected to experience a reduction in revenue by more than the average, overall, any reduction would not be expected to be significant because of the small amount of gray triggerfish traditionally harvested by commercial reef fish fishermen.
Impacts on the recreational sector are expected to be similar to those affecting the commercial sector. The proposed gray triggerfish recreational ACT, seasonal closure, and recreational bag limit would be expected to individually result in an annual reduction in producer surplus, used as a proxy for profit, of approximately $295,000, $232,000, and $137,000, respectively. All reductions are expressed in 2010 dollars and equal the combined effects of the proposed actions across all affected entities. Combined, the proposed seasonal closure and bag limit would be expected to result in an annual reduction in producer surplus of approximately $310,000, which would be less than the effects of the two individual proposed actions combined because of the interactive effects of the two proposed measures. The combined effects of these two proposed measures exceeds the expected effects of the proposed recreational ACT because the estimated reduction in harvest under the proposed seasonal closure and bag limit exceeds the reduction necessary to limit harvest to the proposed gray triggerfish recreational ACT and avoid an in-season closure. Thus, for the proposed actions affecting the recreational sector, the net expected economic effect would be determined by the combined effects of the proposed seasonal closure and bag limit rather than the proposed ACT.
Unlike the case for the commercial sector, the number of vessels within the for-hire fleet that take trips targeting gray triggerfish cannot be determined with available data. If the projected reduction in producer surplus is distributed across all Gulf reef fish for-hire vessels (1,366 vessels), the average annual reduction in producer surplus would be approximately $230 (2010 dollars) per vessel, or approximately 1 percent in average annual profit per vessel (approximately $22,800 (2010 dollars)). Because all vessels would not be expected to target gray triggerfish, however, the average reduction in producer surplus per affected vessel would be expected to increase. However, the estimates of expected reduction in producer surplus associated with the proposed actions affecting the recreational sector were generated using a worst-case
In summary, the proposed rule, if implemented, would not be expected to have a significant impact on a substantial number of small entities and, as a result, an initial regulatory flexibility analysis is not required and none has been prepared.
Fisheries, Fishing, Puerto Rico, Reporting and recordkeeping requirements, Virgin Islands.
For the reasons set out in the preamble, 50 CFR part 622 is proposed to be amended as follows:
16 U.S.C. 1801
(w)
(b) * * *
(1) * * *
(v) Gulf reef fish, combined, excluding those specified in paragraphs (b)(1)(i) through (b)(1)(iv) and paragraphs (b)(1)(vi) through (b)(1)(vii) of this section—20. In addition, within the 20-fish aggregate reef fish bag limit, no more than two fish may be gray triggerfish.
(a) * * *
(1) * * *
(vi) Gray triggerfish—60,900 lb (27,624 kg), round weight.
(g)
(a) * * *
(2)
(ii)
(B) In addition to the measures specified in paragraphs (a)(2)(ii)(A) of this section, if gray triggerfish recreational landings, as estimated by the SRD, exceed the applicable ACL specified in paragraph (a)(2)(ii)(C) of this section, and gray triggerfish are overfished, based on the most recent Status of U.S. Fisheries Report to Congress, the AA will file a notification with the Office of the Federal Register, at or near the beginning of the following fishing year to reduce the ACL and the ACT for that following year by the amount of the ACL overage in the prior fishing year, unless the best scientific information available determines that a greater, lesser, or no overage adjustment is necessary.
(C) The recreational ACL for gray triggerfish is 241,200 lb (109,406 kg), round weight. The recreational ACT for gray triggerfish is 217,100 lb (98,475 kg), round weight. Recreational landings will be evaluated relative to the ACL based on a moving multi-year average of landings, as described in the FMP.
Natural Resources Conservation Service, United States Department of Agriculture.
Notice of Request for Nominations to the Agricultural Air Quality Task Force.
The Secretary of Agriculture invites nominations of qualified candidates to be considered for a 2-year term on the Agricultural Air Quality Task Force (AAQTF) which was established by the Federal Agriculture Improvement and Reform Act of 1996 to provide recommendations to the Secretary of Agriculture on agricultural air quality issues. This notice solicits nominations for membership on the AAQTF.
Nominations should be postmarked no later than April 1, 2013 to: Greg Johnson, Designated Federal Official, Department of Agriculture, Natural Resources Conservation Service, 1201 Lloyd Boulevard, Suite 1000, Portland, Oregon 97232, or by email at
Greg Johnson, Designated Federal Official, Department of Agriculture, Natural Resources Conservation Service, 1201 Lloyd Boulevard, Suite 1000, Portland, Oregon 97232; telephone: (503) 273–2424; fax: (503) 273–2401; email:
Section 391 of the Federal Agriculture Improvement and Reform Act of 1996, Public Law 104–127, 7 U.S.C. 5405, requires the Chief of the Natural Resource Conservation Service (NRCS) to establish a task force to address air agricultural quality issues. The task force advises the Secretary of Agriculture on the role of the Secretary for providing oversight and coordination related to agricultural air quality. The requirements of the Federal Advisory Committee Act, 5 U.S.C. App.2., apply to this task force.
The task force will:
1. Strengthen vital research efforts related to agricultural air quality;
2. Determine the extent to which agricultural activities contribute to air pollution;
3. Determine cost-effective ways in which the agricultural industry can improve air quality;
4. Coordinate and ensure intergovernmental cooperation on research activities related to agricultural air quality issues to avoid duplication and ensure data quality and sound interpretation of data; and
5. Advise the Secretary of Agriculture on the role of the Secretary for providing oversight and coordination related to agricultural air quality.
The task force expects to meet 2–3 times each year, with meetings held at various locations across the United States. A task force member will serve for a term of 2 years, starting with the date of charter establishment for this task force. The Chief of NRCS serves as Chair of the task force. The task force is composed of United States citizens representing a broad spectrum of individuals with interest in agricultural air quality issues. This includes, but is not limited to, representatives from the agricultural production/processing sector, as well as those from academia, agribusiness, regulatory organizations, environmental organizations, and local or state agencies.
Nominees to the AAQTF will be evaluated on a number of criteria, including expertise in or experience with agricultural air quality research, agricultural production, and air quality environmental or regulatory issues.
Serving as a task force member will not constitute employment by, or the holding of, an office of the United States for the purpose of any Federal law. Persons selected for membership on the task force will not receive compensation from NRCS for their service as task force members except that while away from home or regular place of business, the member will be eligible for travel expenses paid by NRCS, including per diem in lieu of subsistence, at the same rate as a person employed intermittently in the government service, under section 5703 of Title 5, U.S.C.
Additional information about the AAQTF may be found on the World Wide Web at
Any interested person or organization may nominate qualified individuals for membership. Interested candidates may nominate themselves. Previous nominees and task force members who wish to be considered for membership on the task force must submit a new nomination with updated information, including a new background disclosure form (Form AD–755).
Nominations should be typed and include the following:
1. A brief summary, of no more than two pages, explaining the nominee's qualifications to serve on the AAQTF and addressing the criteria described above;
2. Resume, which provides the nominee's background, experience, and educational qualifications;
3. A completed background disclosure form (Form AD–755) signed by the nominee (
4. Any recent publications by the nominee relative to air quality (if appropriate); and
5. Up to two letters of endorsement (optional).
Send written nominations to: Greg Johnson, Designated Federal Official, Department of Agriculture, Natural Resources Conservation Service, 1201 Lloyd Boulevard, Suite 1000, Portland, Oregon 97232; email to
To ensure that recommendations of the task force take into account the needs of underserved and diverse communities served by USDA, membership will include, to the extent practicable, individuals representing minorities, women, and persons with disabilities. USDA prohibits
Rural Utilities Service, USDA.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35, as amended), the United States Department of Agriculture (USDA) Rural Development administers rural utilities programs through the Rural Utilities Service (RUS). The USDA Rural Development invites comments on the following information collections for which the Agency intends to request approval from the Office of Management and Budget (OMB).
Comments on this notice must be received by April 15, 2013.
Michele Brooks, Director, Program Development and Regulatory Analysis, USDA Rural Development, 1400 Independence Ave. SW., STOP 1522, Room 5162, South Building, Washington, DC 20250–1522. Telephone: (202) 690–1078. FAX: (202) 720–8435. EMAIL:
The Office of Management and Budget's (OMB) regulation (5 CFR part 1320) implementing provisions of the Paperwork Reduction Act of 1995 (Pub. L. 104–13) requires that interested members of the public and affected agencies have an opportunity to comment on information collection and recordkeeping activities [see 5 CFR 1320.8(d)]. This notice identifies information collections that RUS is submitting to OMB for extension.
Copies of this information collection can be obtained from Anne Mayberry, Program Development and Regulatory Analysis, at (202) 690–1756, FAX (202) 720–8345 or email:
Pursuant to its authority under the Foreign-Trade Zones Act of June 18, 1934, as amended (19 U.S.C. 81a–81u), the Foreign-Trade Zones Board (the Board) adopts the following Order:
The application to expand and reorganize Subzone 70T is approved, subject to the FTZ Act and the Board's regulations, including Section 400.13.
Pursuant to its authority under the Foreign-Trade Zones Act of June 18, 1934, as amended (19 U.S.C. 81a–81u), the Foreign-Trade Zones Board (the Board) adopts the following Order:
The application to expand scope of FTZ manufacturing authority to include additional finished products and foreign components, as described in the application and
Pursuant to its authority under the Foreign-Trade Zones Act of June 18, 1934, as amended (19 U.S.C. 81a–81u), the Foreign-Trade Zones Board (the Board) adopts the following Order:
The application to reorganize FTZ 90 under the alternative site framework is approved, subject to the FTZ Act and the Board's regulations, including Section 400.13, to the Board's standard 2,000-acre activation limit for the zone, and to a five-year ASF sunset provision for magnet sites that would terminate authority for Sites 2 and 3 if not activated by January 31, 2018.
Pursuant to its authority under the Foreign-Trade Zones Act of June 18, 1934, as amended (19 U.S.C. 81a-81u), the Foreign-Trade Zones Board (the Board) adopts the following Order:
The application to reorganize FTZ 70 under the alternative site framework is approved, subject to the FTZ Act and the Board's regulations, including Section 400.13, to the Board's standard 2,000-acre activation limit for the zone, to five-year ASF sunset provisions for magnet sites that would terminate authority for Sites 3, 5, 12, 14 and 19 if not activated by January 31, 2018, and to three-year ASF sunset provisions for usage-driven sites that would terminate authority for Sites 2, 4, 6, 8–11, 13, 15, 17, 18, 20–26, and 29–31 and 33–51 if no foreign-status merchandise is admitted for a
Import Administration, International Trade Administration, Department of Commerce.
The Department of Commerce (the “Department”) published its
Karine Gziryan or Robert Bolling, AD/CVD Operations, Office 4, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482–4081 or (202) 482–3434, respectively.
On August 8, 2012, the Department published its
As explained in the memorandum from the Assistant Secretary for Import Administration, the Department has exercised its discretion to toll deadlines for the duration of the closure of the Federal Government from October 29, through October 30, 2012. Thus, all deadlines in this segment of the proceeding have been extended by two days.
The merchandise covered by this order includes narrow woven ribbons with woven selvedge, in any length, but with a width (measured at the narrowest span of the ribbon) less than or equal to 12 centimeters, composed of, in whole or in part, man-made fibers (whether artificial or synthetic, including but not limited to nylon, polyester, rayon, polypropylene, and polyethylene teraphthalate), metal threads and/or metalized yarns, or any combination thereof.
The merchandise subject to the order is classifiable under the Harmonized Tariff Schedule of the United States (“HTSUS”) statistical categories 5806.32.1020; 5806.32.1030; 5806.32.1050 and 5806.32.1060. Subject merchandise also may enter under subheadings 5806.31.00; 5806.32.20; 5806.39.20; 5806.39.30; 5808.90.00; 5810.91.00; 5810.99.90; 5903.90.10; 5903.90.25; 5907.00.60; and 5907.00.80 and under statistical categories 5806.32.1080; 5810.92.9080; 5903.90.3090; and 6307.90.9889. The HTSUS statistical categories and subheadings are provided for convenience and customs purposes; however, the written description of the merchandise covered by the order is dispositive.
All issues raised in the case and rebuttal briefs submitted by parties in this review are addressed in the Memorandum from Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, to Paul Piquado, Assistant Secretary for Import Administration, “Issues and Decision Memorandum for the Final Results of the Administrative Review of Narrow Woven Ribbons with Woven Selvedge from the People's Republic of China” (dated concurrently with this notice) (“Issues and Decision Memorandum”) and the Memorandum to the File from Karine Gziryan, Senior Financial Analyst, Office 4, NME Unit, “Antidumping Administrative Review of Narrow Woven Ribbons with Woven Selvedge from the People's Republic of China: Proprietary Memorandum regarding Corroboration of Adverse Facts Available Rate” (dated concurrently with this notice) (“Final Corroboration Memo”), which is hereby adopted by this notice. The issue that parties raised and to which the Department responded in the Issues and Decision Memorandum is attached to this notice as an appendix. The Issues and Decision Memorandum is a public document and is on file electronically via Import Administration's Antidumping and Countervailing Duty
Based on an analysis of the comment received, the Department made no changes to the margins assigned in the
The PRC has been treated as a non-market economy (“NME”) in every proceeding conducted by the Department. In accordance with section 771(18)(C)(i) of the Tariff Act of 1930, as amended (the “Act”), any determination that a foreign country is an NME shall remain in effect until revoked by the administering authority. The Department has not revoked the PRC's status as an NME. Therefore, the Department continues to treat the PRC as an NME for purposes of these final results and, accordingly, applied the NME methodology.
In proceedings involving NMEs, the Department maintains a rebuttable presumption that all companies within the NME are subject to government control and, therefore, should be assessed a single weighted-average dumping margin.
In the
In accordance with section 777A(c)(2)(B) of the Act, the Department employed a limited examination methodology, as it did not have the resources to examine all companies for which a review request was made. The Department selected two respondents for review, Precious Planet Ribbons & Bows Co., Ltd. (“Precious Planet”) and Hubschercorp. On January 24, 2012, Precious Planet timely withdrew its request for an administrative review of its sales.
We note that the Act and the Department's regulations do not directly address the establishment of a rate to be applied to individual companies not selected for examination where the Department limited its examination in an administrative review pursuant to section 777A(c)(2) of the Act. The Department's practice in cases involving limited selection based on exporters accounting for the largest volumes of trade has been to look to section 735(c)(5) of the Act, which provides instructions for calculating the all-others rate in an investigation, for guidance. Section 735(c)(5)(A) of the Act instructs that in most investigations we are not to calculate an all-others rate using any zero or
In this instance, because one of the two selected respondents, Precious Planet, timely withdrew its request for an administrative review of its sales, the only rate determined in this review for a selected respondent, Hubschercorp, is based entirely on facts available.
We note that the Department has used other reasonable means to assign separate-rate margins to non-reviewed companies in instances in which the use of an “average” of calculated zero rates,
In this review, we preliminarily found that a reasonable method was to assign to the separate rate company Weifang Dongfang, with no history of an individually calculated rate, the margin calculated for cooperative separate rate respondents in the underlying investigation, 123.83 percent.
In addition to the separate-rate certification discussed above, there were two companies, Stribbons (Guangzhou) Ltd. (“Stribbons Guangzhou”), Stribbons (Nanyang) MNC, Ltd. (“Stribbons MNC”), (collectively “MNC Stribbons”
We note that MNC Stribbons filed a request to be selected as a voluntary respondent after one of the selected respondents withdrew from the proceeding. However, MNC Stribbons made this request after it had missed the 60-day deadline to demonstrate its eligibility for a separate rate (
Section 776(a) of the Act provides that the Department shall apply “facts otherwise available” if: (1) necessary information is not on the record; or (2) an interested party or any other person (A) withholds information that has been requested, (B) fails to provide information within the deadlines established, or in the form and manner requested by the Department, subject to subsections (c)(1) and (e) of section 782 of the Act, (C) significantly impedes a proceeding, or (D) provides information that cannot be verified as provided by section 782(i) of the Act.
Hubschercorp did not respond to the Department's Section D questionnaire or Sections A and C supplemental questionnaires in this administrative review, and informed the Department that it would no longer participate in this review.
Hubschercorp withheld requested information, significantly impeded this proceeding and did not provide the Department with the information necessary to calculate an antidumping duty margin. Therefore, pursuant to section 776(a)(1) and (2)(A) and (C) of the Act, the Department finds that the use of total facts available is appropriate.
Section 776(b) of the Act further provides that the Department may use an adverse inference in applying the facts otherwise available when a party has failed to cooperate by not acting to the best of its ability to comply with a request for information.
Section 776(b) of the Act provides that the Department may use as AFA information derived from: (1) The petition; (2) the final determination in the investigation; (3) any previous review; or (4) any other information placed on the record.
In the SAA, Congress expressly stated that the choice of AFA must “ensure
As a result, we have assigned to Hubschercorp a rate of 247.65 percent, which is the highest rate alleged in the petition, as noted in the initiation of the less-than-fair-value (“LTFV”) investigation, adjusted with the surrogate value for labor rate used in the final determination.
Information from prior segments of the proceeding constitutes secondary information and section 776(c) of the Act provides that the Department shall, to the extent practicable, corroborate that secondary information from independent sources reasonably at its disposal. The Department's regulations provide that “corroborate” means that the Department will satisfy itself that the secondary information to be used has probative value.
To determine whether the information is reliable, we placed information from the LTFV investigation on the record of this segment of the proceeding, and reviewed the adequacy and accuracy of the information in the petition during our pre-initiation analysis for purposes of these final results, including source documents as well as publicly available information.
To determine the relevance of the petition margin, we placed the model-specific rates calculated for the mandatory respondent, Yama Ribbons and Bows Co., Ltd. (“Yama”), in the LTFV investigation on the record of this segment of the proceeding and compared the 247.65 percent rate with those model-specific rates. We find that this margin is relevant because the petition rate fell within the range of model-specific margins calculated for the mandatory respondent in the LTFV investigation, this is the first review under this order (
Further, the Department will consider information reasonably at its disposal as to whether there are circumstances that would render a margin inappropriate. Where circumstances indicate that the selected margin is not appropriate as AFA, the Department may disregard the margin and determine an appropriate margin.
Based on the above, for these final results, the Department finds the highest rate derived from the petition (
The Department
Pursuant to section 751(a)(2)(A) of the Act and 19 CFR 351.212(b), the Department will determine, and U.S. Customs and Border Protection (“CBP”) shall assess, antidumping duties on all appropriate entries of subject merchandise in accordance with the final results of this review. In this case, the Department determined that the assessment rate for the separate rate respondent Weifang Dongfang will be the separate rate of 123.83 percent from the previous period less the 0.39 percent export subsidy rate
While the Department did not conduct a companion countervailing duty (“CVD”) administrative review, in the final determination of the CVD investigation on narrow woven ribbons from the PRC, the Department determined that the product under investigation benefitted from an export subsidy.
The following cash deposit requirements will be effective upon publication of the final results of this administrative review for all shipments of the subject merchandise from the PRC entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided for by section 751(a)(2)(C) of the Act: (1) For Hubschercorp, a third-country reseller from Canada, the cash deposit rate will be that established in the final results of this review; (2) for Weifang Dongfang, a PRC exporter which has a separate rate, the cash deposit rate will be that established in the final results of this review; (3) for previously investigated PRC exporters not listed above that received a separate rate in a prior segment of this proceeding, the cash deposit rate will continue to be the exporter-specific rate; (4) for all PRC exporters of subject merchandise that have not been found to be entitled to a separate rate, the cash deposit rate will be the PRC-wide rate of 247.26 percent;
This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during the review period. Pursuant to 19 CFR 351.402(f)(3), failure to comply with this requirement could result in the Department presuming that the exporter or producer paid or reimbursed the antidumping duties.
This notice also serves as a reminder to parties subject to administrative protective order (“APO”) of their responsibility concerning the disposition of proprietary information disclosed under APO. Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
This notice of the final results of this review is issued and published in accordance with sections 751(a)(1) and 777(i) of the Act.
Import Administration, International Trade Administration, Department of Commerce.
On October 1, 2012, the Department of Commerce (the Department) initiated the second sunset review of the antidumping duty order on welded large diameter line pipe (line pipe) from Japan pursuant to section 751(c) of the Tariff Act of 1930, as amended (the Act).
John Drury or Angelica Mendoza, AD/CVD Operations, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482–0195 or (202) 482–3019, respectively.
On October 1, 2012, the Department initiated the sunset review of the antidumping duty order on line pipe from Japan pursuant to section 751(c) of the Act.
The product currently is classified under U.S. Harmonized Tariff Schedule (HTSUS) item numbers 7305.11.10.30, 7305.11.10.60, 7305.11.50.00, 7305.12.10.30, 7305.12.10.60, 7305.12.50.00, 7305.19.10.30. 7305.19.10.60, and 7305.19.50.00. Although the HTSUS item numbers are provided for convenience and customs purposes, the written description of the scope in the accompanying decision memorandum remains dispositive.
All issues raised in this sunset review are addressed in the Decision Memorandum, which is hereby adopted by this notice. The issues discussed in the Decision Memorandum include the likelihood of the continuation or recurrence of dumping and the magnitude of the margin of dumping that is likely to prevail if the order were revoked. Parties can find a complete discussion of all issues raised in this sunset review and the corresponding recommendations in this public memorandum, which is on file electronically via Import Administration's Antidumping and Countervailing Duty Centralized Electronic Service System (IA ACCESS). IA ACCESS is available to registered users at
The Department determines that revocation of the antidumping duty order on line pipe from Japan would likely lead to continuation or recurrence of dumping. Further, the Department finds that the magnitude of the margin of dumping that is likely to prevail if the order was revoked is 30.80 percent for Nippon Steel Corporation, Kawasaki Steel Corporation, and for all other Japanese producers and exporters of subject merchandise.
This notice also serves as the only reminder to parties subject to administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
The Department is issuing and publishing the results and notice in accordance with sections 751(c), 752(c), and 777(i)(1) of the Act.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration, Commerce.
Notice of fee rate adjustment.
NMFS issues this notice to decrease the fee rate for the non-pollock groundfish fishery to repay the $35,000,000 reduction loan to finance the non-pollock groundfish fishing capacity reduction program.
The non-pollock groundfish program fee rate decrease is effective January 1, 2013.
Send questions about this notice to Paul Marx, Chief, Financial Services Division, National Marine Fisheries Service, 1315 East-West Highway, Silver Spring, MD 20910–3282.
Paul Marx, (301) 427–8799.
Sections 312(b)–(e) of the Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 1861a(b) through (e)) generally authorize fishing capacity reduction programs. In particular, section 312(d) authorizes industry fee systems for repaying reduction loans which finance reduction program costs.
Subpart L of 50 CFR part 600 is the framework rule generally implementing section 312(b)–(e).
Sections 1111 and 1112 of the Merchant Marine Act, 1936 (46 App. U.S.C. 1279f and 1279g) generally authorize reduction loans.
Enacted on December 8, 2004, section 219, Title II, of FY 2005 Appropriations Act, Public Law 104–447 (Act) authorizes a fishing capacity reduction program implementing capacity reduction plans submitted to NMFS by catcher processor subsectors of the Bering Sea and Aleutian Islands (“BSAI”) non-pollock groundfish fishery (“reduction fishery”) as set forth in the Act.
The longline catcher processor subsector (the “Longline Subsector”) is among the catcher processor subsectors eligible to submit to NMFS a capacity reduction plan under the terms of the Act.
The longline subsector non-pollock groundfish reduction program's objective was to reduce the number of vessels and permits endorsed for longline subsector of the non-pollock groundfish fishery.
All post-reduction fish landings from the reduction fishery are subject to the longline subsector non-pollock groundfish program's fee.
NMFS proposed the implementing notice on August 11, 2006 (71 FR 46364), and published the final notice on September 29, 2006 (71 FR 57696).
NMFS allocated the $35,000,000 reduction loan (A loan) to the reduction fishery and this loan is repayable by fees from the fishery.
On September 24, 2007, NMFS published in the
NMFS published, in the
NMFS published a final rule to implement a second $2,700,000 reduction loan (B loan) for this fishery in the
The purpose of this notice is to adjust the fee rate for the reduction fishery in accordance with the framework rule's § 600.1013(b). Section 600.1013(b) directs NMFS to recalculate the fee to a rate that will be reasonably necessary to ensure reduction loan repayment within the specified 30 year term.
NMFS has determined for the reduction fishery that the current fee rate of $0.0145 per pound is more than is needed to service the A loan. Therefore, NMFS is decreasing the fee rate to $0.0111 per pound which NMFS has determined is sufficient to ensure timely loan repayment. The fee rate for the B loan will remain $0.001 per pound.
Subsector members may continue to use
Please visit the NMFS Web site for additional information at:
The new fee rate for the non-pollock Groundfish fishery is effective January 1, 2013.
From and after this date, all subsector members paying fees on the non-pollock groundfish fishery shall begin paying non-pollock groundfish fishery program fees at the revised rate. Any over-payments of landings made using the previous higher fee rate will be credited to future landings.
Fee collection and submission shall follow previously established methods in § 600.1013 of the framework rule and in the final fee rule published in the
The authority for this action is Public Law 108–447, 16 U.S.C. 1861a (b-e), and 50 CFR 600.1000
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice, approved monitoring service providers.
NMFS has approved four companies to provide dockside and/or at-sea monitoring services to Northeast (NE) multispecies vessels in fishing year (FY) 2013. Regulations implementing Amendment 16 to the NE Multispecies Fishery Management Plan (Amendment 16) require third-party monitoring service providers to apply to, and be approved by, NMFS in a manner consistent with the Administrative Procedure Act in order to be eligible to provide dockside and/or at-sea monitoring services to sectors.
Copies of the list of NMFS-approved sector monitoring service providers are available at
• Fax: (978) 281–9135, Attn: Mark Grant.
• Mail: 55 Great Republic Drive, Gloucester, MA 01930, Attn: Mark Grant.
For service provider contact information, see the
Mark Grant, Sector Policy Analyst, (978) 281–9145, fax (978) 281–9135, email
Amendment 16 expanded the sector management program, including adding a requirement to ensure accurate monitoring of both sector at-sea catch and dockside landings, and common pool dockside landings (75 FR 18262; April 9, 2010). Framework Adjustment 45 to the FMP (Framework 45, 76 FR 23042, April 25, 2011) revised several dockside monitoring requirements.
Regulations at 50 CFR 648.87(b)(4) describe the criteria for NMFS approval of interested at-sea and dockside service providers. Once approved, providers must document having met performance requirements in order to maintain eligibility (§ 648.87(b)(4)(ii)). NMFS can disapprove any previously approved service provider during the FY if the service provider in question ceases to meet the performance standards. NMFS must notify service providers of disapproval in writing.
NMFS first approved service providers for FY 2010, based upon the completeness of their application addressing the regulatory requirements (§ 648.87(b)(4)(i)), and a determination of the applicant's ability to perform the duties and responsibilities of a monitoring service provider. In FY 2011, NMFS approved service providers based on completeness of applications, determination of ability, and performance during FY 2010. NMFS did not approve any providers for FY 2012 because there was no dockside monitoring requirement and at-sea monitoring was provided solely by NMFS.
NMFS is approving service providers for FY 2013 (beginning May 1, 2013) based on: (1) Completeness of applications; (2) determination of the applicant's ability to perform the duties and responsibilities of a sector monitoring service provider; and (3) performance as NMFS-funded providers in FY 2012.
NE multispecies sectors are required to design and implement independent, third-party at-sea monitoring in FY 2013, and are responsible for the costs of these monitoring requirements, unless otherwise instructed by NMFS. The regulations currently require the NE multispecies fishery to hire and pay for dockside monitoring in FY 2013. In December 2012, the New England Fishery Management Council approved measures to modify the at-sea
NMFS received complete applications from three service providers intending to provide dockside and/or at-sea monitoring services, and one service provider intending to provide only at-sea monitoring services. All four applicants were previously approved and provided dockside and/or at-sea monitoring services to sectors. The Regional Administrator has approved the following service providers as eligible to provide dockside monitoring and/or at-sea monitoring services in FY 2013:
16 U.S.C. 1801
National Marine Fisheries Service, National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; proposed incidental harassment authorization; request for comments.
We have received an application from the Lamont-Doherty Earth Observatory (Observatory), in collaboration with the National Science Foundation (Foundation), for an Incidental Harassment Authorization to take marine mammals, by harassment, incidental to conducting a marine geophysical (seismic) survey on the Mid-Atlantic Ridge in the north Atlantic Ocean in international waters, from April 2013 through May 2013. Per the Marine Mammal Protection Act, we are requesting comments on our proposal to issue an Incidental Harassment Authorization to the Observatory and the Foundation to incidentally harass by Level B harassment only, 28 species of marine mammals during the 20-day seismic survey.
Comments and information must be received no later than March 15, 2013.
Comments on the application should be addressed to P. Michael Payne, Chief, Permits and Conservation Division, Office of Protected Resources, National Marine Fisheries Service, 1315 East-West Highway, Silver Spring, MD 20910–3225. The mailbox address for providing email comments is
All submitted comments are a part of the public record and we will post to
To obtain an electronic copy of the application, write to the previously mentioned address, telephone the contact listed here (see
The following associated documents are also available at the same internet address:
The Foundation's draft environmental analysis titled, “Marine geophysical survey by the R/V MARCUS G.
The public can view documents cited in this notice by appointment, during regular business hours, at the aforementioned address.
Jeannine Cody, National Marine Fisheries Service, Office of Protected Resources, (301) 427–8401.
Section 101(a)(5)(D) of the Marine Mammal Protection Act of 1972, as amended (MMPA; 16 U.S.C. 1361
We shall grant authorization for the incidental taking of small numbers of marine mammals if we find 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 subsistence uses (where relevant). The authorization must set forth the permissible methods of taking; other means of effecting the least practicable adverse impact on the species or stock and its habitat; and requirements pertaining to the mitigation, monitoring and reporting of such taking. We have defined “negligible impact” in 50 CFR 216.103 as “* * * an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.”
Section 101(a)(5)(D) of the MMPA established an expedited process by which citizens of the United States can apply for an authorization to incidentally take small numbers of marine mammals by harassment. Section 101(a)(5)(D) of the MMPA establishes a 45-day time limit for our review of an application followed by a 30-day public notice and comment period on any proposed authorizations for the incidental harassment of small numbers of marine mammals. Within 45 days of the close of the public comment period, we must either issue or deny the authorization and must publish a notice in the
Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as: any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild [Level A harassment]; or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering [Level B harassment].
We received an application from the Observatory on December 7, 2012, requesting that we issue an Incidental Harassment Authorization (Authorization) for the take, by Level B harassment only, of small numbers of marine mammals incidental to conducting a marine seismic survey in the north Atlantic Ocean in international waters from April 8, 2013, through May 13, 2013. We received a revised application from the Observatory on December 23, 2012 and January 17, 2013, which reflected updates to the mitigation safety zones, incidental take requests for marine mammals, and information on marine protected areas. Upon receipt of additional information, we determined the application complete and adequate on January 18, 2013.
In the Observatory's application, they did not request authorization to take marine mammals by Level A Harassment because their environmental analyses estimate that marine mammals would not be exposed to levels of sound likely to result in Level A harassment (we refer the reader to Appendix B of the Foundation's NEPA document titled, “2011 Final Programmatic Environmental Impact Statement/Overseas Environmental Impact Statement (2011 PEIS) for Marine Seismic Research funded by the National Science Foundation or Conducted by the U.S. Geological Survey,” (NSF/USGS, 2011) at
We do not expect that the use of the multibeam echosounder, the sub-bottom profiler, or the ocean bottom seismometer would result in the take of marine mammals and will discuss our reasoning later in this notice. Also, we do not expect take to result from a collision with the LANGSETH during seismic acquisition activities because the vessel moves at a relatively slow speed (approximately 8.3 kilometers per hour (km/h); 5.2 miles per hour (mph); 4.5 knots (kts)), for a relatively short period of time (approximately 20 operational days). It is likely that any marine mammal would be able to avoid the vessel during seismic acquisition activities. The Observatory has no recorded cases of a vessel strike with a marine mammal during the conduct of over eight years of seismic surveys covering over 160,934 km (86,897.4 nmi) of transect lines.
The Observatory's proposed seismic survey on the Mid-Atlantic Ridge in the north Atlantic Ocean would commence
Some minor deviation from these dates is possible, depending on logistics, weather conditions, and the need to repeat some lines if data quality is substandard. Therefore, we propose to issue an authorization that is effective from April 8, 2013, to June 24, 2013.
Typically, 2–D surveys acquire data along single track lines with wide intervals; cover large areas; provide a coarse sampled subsurface image; and project less acoustic energy into the environment than other types of seismic surveys. During the survey, the LANGSETH would deploy an 36-airgun array as an energy source, an 8-kilometer (km)-long (3.7 mi-long) hydrophone streamer, and 46 seismometers. The seismometers are portable, self-contained passive receiver systems designed to sit on the seafloor and record seismic signals generated primarily by airguns and earthquakes.
The LANGSETH would transect approximately 2,582 km (1.6 mi) of transect lines which are spaced 1 to 2 meters (m) (3.2 to 6.6 feet (ft)) apart from one another (see Figure 1 in the Observatory's application). As the LANGSETH tows the airgun array along the transect lines, the hydrophone streamer would receive the returning acoustic signals and transfer the data to the vessel's onboard processing system. The seismometers also record and store the returning signals for later analysis. The LANGSETH would retrieve the seismometers at the conclusion of the survey.
The proposed study (e.g., equipment testing, startup, line changes, repeat coverage of any areas, and equipment recovery) would require approximately 20 days. At the proposed survey area, the LANGSETH would conduct seismic acquisition activities in a grid pattern using the seismometers as a receiver over a total of approximately 1,680 km (1,044 mi) of survey lines and would also conduct seismic acquisition activities in multichannel seismic (MCS) mode using the 8-km (3.7 mi) streamer as the receiver over a total of approximately 900 km (559 mi). The seismic lines are over water depths of approximately 900 to 3,000 m (2,952 ft to 1.9 mi). Approximately 2,565 km (1,594 mi) of the survey effort would occur in depths greater than 1,000 m (3,280 ft). The remaining effort (17 km; 10.5 mi) would occur in water depths of 100 to 1,000 m (328 to 3,280 ft).
The proposed data acquisition would include approximately 480 hours of airgun operations (i.e., 20 days over 24 hours), with airgun discharges occurring on either a 3.25 minute interval with the seismometers or a 16-second interval for the MCS seismic portion. The Observatory would conduct all planned seismic activities with on-board assistance by the scientists who have proposed the study, Drs. J.P. Canales and R. Sohn of Woods Hole Oceanographic Institution and Dr. R. Dunn of the University of Hawaii. The vessel is self-contained and the crew would live aboard the vessel for the entire cruise.
The LANGSETH, owned by the Foundation and operated by the Observatory, is a seismic research vessel with a quiet propulsion system that avoids interference with the seismic signals emanating from the airgun array. The vessel is 71.5 m (235 ft) long; has a beam of 17.0 m (56 ft); a maximum draft of 5.9 m (19 ft); and a gross tonnage of 3,834 pounds. Its two 3,550 horsepower (hp) Bergen BRG–6 diesel engines drive two propellers. Each propeller has four blades and the shaft typically rotates at 750 revolutions per minute. The vessel also has an 800-hp bowthruster, which is not used during seismic acquisition. The cruising speed of the vessel outside of seismic operations is 18.5 km/h (11.5 mph; 10 kts).
The LANGSETH would tow the 36-airgun array, as well as the hydrophone streamer during the first and last surveys, along predetermined lines. When the LANGSETH is towing the airgun array and the hydrophone streamer, the turning rate of the vessel is limited to five degrees per minute. Thus, the maneuverability of the vessel is limited during operations with the streamer.
The vessel also has an observation tower from which protected species visual observers (observer) would watch for marine mammals before and during the proposed seismic acquisition operations. When stationed on the observation platform, the observer's eye level would be approximately 21.5 m (71 ft) above sea level providing the observer an unobstructed view around the entire vessel.
The LANGSETH would deploy an 36-airgun array, with a total volume of approximately 6,600 cubic inches (in
This section includes a brief explanation of the sound measurements frequently used in the discussions of acoustic effects in this document. Sound pressure is the sound force per unit area, and is usually measured in micropascals (µPa), where 1 pascal (Pa) is the pressure resulting from a force of one newton exerted over an area of one square meter. We express sound pressure level as the ratio of a measured sound pressure and a reference level. The commonly used reference pressure level in underwater acoustics is 1 µPa, and the units for sound pressure levels are dB re: 1 μPa. Sound pressure level (in decibels (dB)) = 20 log (pressure/reference pressure).
Sound pressure level is an instantaneous measurement and can be expressed as the peak, the peak-peak (p-p), or the root mean square. Root mean square, which is the square root of the arithmetic average of the squared instantaneous pressure values, is typically used in discussions of the effects of sounds on vertebrates and all references to sound pressure level in this document refer to the root mean square unless otherwise noted. Sound
Airguns function by venting high-pressure air into the water which creates an air bubble. The pressure signature of an individual airgun consists of a sharp rise and then fall in pressure, followed by several positive and negative pressure excursions caused by the oscillation of the resulting air bubble. The oscillation of the air bubble transmits sounds downward through the seafloor and the amount of sound transmitted in the near horizontal directions is reduced. However, the airgun array also emits sounds that travel horizontally toward non-target areas.
The nominal source levels of the airgun array on the LANGSETH is 236 to 265 dB re: 1 µPa
Accordingly, the Observatory predicted the received sound levels in relation to distance and direction from the 36-airgun array and the single Bolt 1900LL 40-in
Appendix H of the Foundation's PEIS (NSF/USGS, 2011) provides a detailed description of the modeling for marine seismic source arrays for species mitigation. These are the source levels applicable to downward propagation. The effective source levels for horizontal propagation are lower than those for downward propagation because of the directional nature of the sound from the airgun array. We refer the reader to the Observatory's authorization application and the Foundation's PEIS for additional information.
The Observatory has developed a model (Diebold
Additionally, Tolstoy
The Observatory used the results from their algorithm for acoustic modeling (Diebold
Comparison of the Tolstoy
In contrast, for actual received levels at longer distances, the Observatory found that their model (Diebold
Table 1 summarizes the predicted distances at which one would expect to receive three sound levels (160-, 180-, and 190-dB) from the 36-airgun array and a single airgun. To avoid the potential for injury or permanent physiological damage (Level A harassment), serious injury, or mortality we have concluded that cetaceans and pinnipeds should not be exposed to pulsed underwater noise at received levels exceeding 180 dB re: 1 μPa and 190 dB re: 1 μPa, respectively (NMFS, 1995, 2000). The 180-dB and 190-dB level shutdown criteria are applicable to cetaceans and pinnipeds, respectively, specified by us (NMFS, 1995, 2000). Thus the Observatory used these received sound levels to establish the mitigation zones. We also assume that marine mammals exposed to levels exceeding 160 dB re: 1 µPa may experience Level B harassment.
The Observatory proposes to place 46 seismometers on the sea floor prior to the initiation of the seismic survey. Each seismometer is approximately 0.9 m (2.9 ft) high with a maximum diameter of 97 centimeters (cm) (3.1 ft). An anchor, made of a rolled steel bar grate which measures approximately 7 by 91 by 91.5 cm (3 by 36 by 36 inches) and weighs 45 kilograms (99 pounds) would anchor the seismometer to the seafloor.
After the Observatory completes the proposed seismic survey, an acoustic signal would trigger the release of each of the 46 seismometers from the ocean floor. The LANGSETH
The LANGSETH crew would deploy the seismometers one-by-one from the stern of the vessel while onboard protected species observers will alert them to the presence of marine mammals and recommend ceasing deploying or recovering the seismometers to avoid potential entanglement with marine mammal. Thus, entanglement of marine mammals is highly unlikely.
Although placement of the seismometers is dispersed over approximately1,500 square km (km
The LANGSETH would operate a Kongsberg EM 122 multibeam echosounder concurrently during airgun operations to map characteristics of the ocean floor. The hull-mounted echosounder emits brief pulses of sound (also called a ping) (10.5 to 13.0 kHz) in a fan-shaped beam that extends downward and to the sides of the ship. The transmitting beamwidth is 1 or 2° fore-aft and 150° athwartship and the maximum source level is 242 dB re: 1 μPa.
For deep-water operations, each ping consists of eight (in water greater than 1,000 m; 3,280 ft) or four (less than 1,000 m; 3,280 ft) successive, fan-shaped transmissions, from two to 15 milliseconds (ms) in duration and each ensonifying a sector that extends 1° fore-aft. Continuous wave pulses increase from 2 to 15 ms long in water depths up to 2,600 m (8,530 ft). The echosounder uses frequency-modulated chirp pulses up to 100-ms long in water greater than 2,600 m (8,530 ft). The successive transmissions span an overall cross-track angular extent of about 150°, with 2-ms gaps between the pulses for successive sectors.
The LANGSETH would also operate a Knudsen Chirp 3260 sub-bottom profiler concurrently during airgun and echosounder operations to provide information about the sedimentary features and bottom topography. The profiler is capable of reaching depths of 10,000 m (6.2 mi). The dominant frequency component is 3.5 kHz and a hull-mounted transducer on the vessel directs the beam downward in a 27º cone. The power output is 10 kilowatts (kW), but the actual maximum radiated power is three kilowatts or 222 dB re: 1 µPa. The ping duration is up to 64 ms with a pulse interval of one second, but a common mode of operation is to broadcast five pulses at 1-s intervals followed by a 5-s pause.
We expect that acoustic stimuli resulting from the proposed operation of the single airgun or the 36-airgun array has the potential to harass marine mammals, incidental to the conduct of the proposed seismic survey. We assume that during simultaneous operations of the airgun array and the other sources, any marine mammals close enough to be affected by the echosounder and sub-bottom profiler would already be affected by the airguns. We also expect these disturbances to result in a temporary modification in behavior and/or low-level physiological effects (Level B harassment) of small numbers of certain species of marine mammals.
We do not expect that the movement of the LANGSETH, during the conduct of the seismic survey, has the potential to harass marine mammals because of the relatively slow operation speed of the vessel (4.6 kts; 8.5 km/hr; 5.3 mph) during seismic acquisition.
Twenty-eight marine mammal species under our jurisdiction may occur in the proposed survey area, including seven mysticetes (baleen whales), and 21 odontocetes (toothed cetaceans) during April through May, 2013. Six of these species are listed as endangered under the Endangered Species Act of 1973 (ESA; 16 U.S.C. 1531
Based on the best available data, the Observatory does not expect to encounter the following species because of these species rare and/or extralimital occurrence in the survey area. They include the: Atlantic white-sided dolphin (
Of these 28 species, the most common marine mammals in the survey area would be the: short-beaked common dolphin (
Table 2 presents information on the abundance, distribution, and conservation status of the marine mammals that may occur in the proposed survey area during April through June, 2013.
Refer to Section 4 of the Observatory's application and Sections 3.6.3.4 and 3.7.3.4 of the 2011 PEIS (NSF/USGS, 2011) for detailed information regarding the abundance and distribution, population status, and life history and behavior of these species and their occurrence in the proposed project area. We have reviewed these data and determined them to be the best available scientific information for the purposes of the proposed incidental harassment authorization.
Acoustic stimuli generated by the operation of the airguns, which introduce sound into the marine environment, may have the potential to cause Level B harassment of marine mammals in the proposed survey area. The effects of sounds from airgun operations might include one or more of the following: tolerance, masking of natural sounds, behavioral disturbance, temporary or permanent impairment, or non-auditory physical or physiological effects (Richardson
Permanent hearing impairment, in the unlikely event that it occurred, would constitute injury, but temporary threshold shift is not an injury (Southall
Studies on marine mammals' tolerance to sound in the natural environment are relatively rare. Richardson
Numerous studies have shown that pulsed sounds from airguns are often readily detectable in the water at distances of many kilometers. Several studies have shown that marine mammals at distances more than a few kilometers from operating seismic vessels often show no apparent response. That is often true even in cases when the pulsed sounds must be readily audible to the animals based on measured received levels and the hearing sensitivity of the marine mammal group. Although various baleen whales and toothed whales, and (less frequently) pinnipeds have been shown to react behaviorally to airgun pulses under some conditions, at other times marine mammals of all three types have shown no overt reactions (Stone, 2003; Stone and Tasker, 2006; Moulton
The term masking refers to the inability of a subject to recognize the occurrence of an acoustic stimulus as a result of the interference of another acoustic stimulus (Clark
We expect that the masking effects of pulsed sounds (even from large arrays of airguns) on marine mammal calls and other natural sounds will be limited, although there are very few specific data on this. Because of the intermittent nature and low duty cycle of seismic airgun pulses, animals can emit and receive sounds in the relatively quiet intervals between pulses. However, in some situations, reverberation occurs for much or the entire interval between pulses (e.g., Simard
Marine mammals are thought to be able to compensate for masking by adjusting their acoustic behavior through shifting call frequencies, increasing call volume, and increasing vocalization rates. For example, blue whales are found to increase call rates when exposed to noise from seismic surveys in the St. Lawrence Estuary (Dilorio and Clark, 2009). The North Atlantic right whales exposed to high shipping noise increased call frequency (Parks
In general, we expect that the masking effects of seismic pulses would be minor, given the normally intermittent nature of seismic pulses.
Marine mammals may behaviorally react to sound when exposed to anthropogenic noise. Disturbance includes a variety of effects, including subtle to conspicuous changes in behavior, movement, and displacement. Reactions to sound, if any, depend on species, state of maturity, experience, current activity, reproductive state, time of day, and many other factors (Richardson
The biological significance of many of these behavioral disturbances is difficult to predict, especially if the detected disturbances appear minor. However, the consequences of behavioral modification could be expected to be biologically significant if the change affects growth, survival, and/or reproduction. Some of these significant behavioral modifications include:
• Change in diving/surfacing patterns (such as those thought to be causing beaked whale stranding due to exposure to military mid-frequency tactical sonar);
• Habitat abandonment due to loss of desirable acoustic environment; and
• Cessation of feeding or social interaction.
The onset of behavioral disturbance from anthropogenic noise depends on both external factors (characteristics of noise sources and their paths) and the receiving animals (hearing, motivation, experience, demography) and is also difficult to predict (Richardson
The sound criteria used to estimate how many marine mammals might be
Studies of gray, bowhead, and humpback whales have shown that seismic pulses with received levels of 160 to 170 dB re: 1 µPa seem to cause obvious avoidance behavior in a substantial fraction of the animals exposed (Malme
Researchers have studied the responses of humpback whales to seismic surveys during migration, feeding during the summer months, breeding while offshore from Angola, and wintering offshore from Brazil. McCauley
Data collected by observers during several seismic surveys in the northwest Atlantic Ocean showed that sighting rates of humpback whales were significantly greater during non-seismic periods compared with periods when a full array was operating (Moulton and Holst, 2010). In addition, humpback whales were more likely to swim away and less likely to swim towards a vessel during seismic versus non-seismic periods (Moulton and Holst, 2010).
Humpback whales on their summer feeding grounds in southeast Alaska did not exhibit persistent avoidance when exposed to seismic pulses from a 1.64–L (100-in
Other studies have suggested that south Atlantic humpback whales wintering off Brazil may be displaced or even strand upon exposure to seismic surveys (Engel
A few studies have documented reactions of migrating and feeding (but not wintering) gray whales to seismic surveys. Malme
Observers have seen various species of
Ship-based monitoring studies of baleen whales (including blue, fin, sei, minke, and whales) in the northwest Atlantic found that overall, this group had lower sighting rates during seismic versus non-seismic periods (Moulton and Holst, 2010). Baleen whales as a group were also seen significantly farther from the vessel during seismic compared with non-seismic periods, and they were more often seen to be swimming away from the operating seismic vessel (Moulton and Holst, 2010). Blue and minke whales were initially sighted significantly farther from the vessel during seismic operations compared to non-seismic periods; the same trend was observed for fin whales (Moulton and Holst, 2010). Minke whales were most often observed to be swimming away from the vessel when seismic operations were underway (Moulton and Holst, 2010).
Data on short-term reactions by cetaceans to impulsive noises are not necessarily indicative of long-term or biologically significant effects. It is not known whether impulsive sounds affect reproductive rate or distribution and habitat use in subsequent days or years. However, gray whales have continued to migrate annually along the west coast of North America with substantial increases in the population over recent years, despite intermittent seismic exploration (and much ship traffic) in that area for decades (Appendix A in Malme
Seismic operators and protected species observers (observers) on seismic vessels regularly see dolphins and other small toothed whales near operating airgun arrays, but in general there is a tendency for most delphinids to show some avoidance of operating seismic vessels (e.g., Goold, 1996a,b,c; Calambokidis and Osmek, 1998; Stone, 2003; Moulton and Miller, 2005; Holst
Captive bottlenose dolphins (
Results for porpoises depend on species. The limited available data suggest that harbor porpoises (
Most studies of sperm whales exposed to airgun sounds indicate that the whale shows considerable tolerance of airgun pulses (e.g., Stone, 2003; Moulton
There are almost no specific data on the behavioral reactions of beaked whales to seismic surveys. However, some northern bottlenose whales (
There are increasing indications that some beaked whales tend to strand when naval exercises involving mid-frequency sonar operation are underway
Odontocete reactions to large arrays of airguns are variable and, at least for delphinids and Dall's porpoises, seem to be confined to a smaller radius than has been observed for the more responsive of the mysticetes. However, other data suggest that some odontocete species, including harbor porpoises, may be more responsive than might be expected given their poor low-frequency hearing. Reactions at longer distances may be particularly likely when sound propagation conditions are conducive to transmission of the higher frequency components of airgun sound to the animals' location (DeRuiter
Exposure to high intensity sound for a sufficient duration may result in auditory effects such as a noise-induced threshold shift—an increase in the auditory threshold after exposure to noise (Finneran
Researchers have studied temporary threshold shift in certain captive odontocetes and pinnipeds exposed to strong sounds (reviewed in Southall
To avoid the potential for Level A harassment, serious injury or mortality we (NMFS 1995, 2000) concluded that cetaceans should not be exposed to pulsed underwater noise at received levels exceeding 180 dB re: 1 μPa. We do not consider the established 180 criterion to be the level above which temporary threshold shift might occur. Rather, it is a received level above which, in the view of a panel of bioacoustics specialists convened by us before temporary threshold shift measurements for marine mammals started to become available, one could not be certain that there would be no injurious effects, auditory or otherwise, to marine mammals. We also assume that cetaceans exposed to levels exceeding 160 dB re: 1 μPa may experience Level B harassment.
For toothed whales, researchers have derived temporary threshold shift information for odontocetes from studies on the bottlenose dolphin and beluga. The experiments show that exposure to a single impulse at a received level of 207 kilopascals (or 30 psi, p-p), which is equivalent to 228 dB re: 1 Pa (p-p), resulted in a 7 and 6 dB temporary threshold shift in the beluga whale at 0.4 and 30 kHz, respectively. Thresholds returned to within 2 dB of the pre-exposure level within four minutes of the exposure (Finneran
For baleen whales, there are no data, direct or indirect, on levels or properties of sound that are required to induce temporary threshold shift. The frequencies to which baleen whales are most sensitive are assumed to be lower than those to which odontocetes are most sensitive, and natural background noise levels at those low frequencies tend to be higher. As a result, auditory thresholds of baleen whales within their frequency band of best hearing are believed to be higher (less sensitive) than are those of odontocetes at their best frequencies (Clark and Ellison, 2004). From this, one could suspect that received levels causing temporary threshold shift onset may also be higher in baleen whales (Southall
In pinnipeds, researchers have not measured temporary threshold shift thresholds associated with exposure to brief pulses (single or multiple) of underwater sound. Initial evidence from more prolonged (non-pulse) exposures suggested that some pinnipeds (harbor seals in particular) incur temporary threshold shift at somewhat lower received levels than do small odontocetes exposed for similar durations (Kastak
Relationships between temporary and permanent threshold shift thresholds have not been studied in marine mammals, but are assumed to be similar to those in humans and other terrestrial mammals. Permanent threshold shift might occur at a received sound level at least several decibels above that inducing mild temporary threshold shift if the animal were exposed to strong sound pulses with rapid rise times. Based on data from terrestrial mammals, a precautionary assumption is that the permanent threshold shift threshold for impulse sounds (such as airgun pulses as received close to the source) is at least six decibels higher than the temporary threshold shift threshold on a peak-pressure basis, and probably greater than 6 dB (Southall
Given the higher level of sound necessary to cause permanent threshold shift as compared with temporary threshold shift, it is considerably less likely that permanent threshold shift would occur. Baleen whales generally avoid the immediate area around operating seismic vessels, as do some other marine mammals.
When a living or dead marine mammal swims or floats onto shore and becomes “beached” or incapable of returning to sea, the event is termed a “stranding” (Geraci
Marine mammals are known to strand for a variety of reasons, such as infectious agents, biotoxicosis, starvation, fishery interaction, ship strike, unusual oceanographic or weather events, sound exposure, or combinations of these stressors sustained concurrently or in series. However, the cause or causes of most strandings are unknown (Geraci
Over the past 12 years, there have been five stranding events coincident with military mid-frequency active sonar use in which exposure to sonar is believed to have been a contributing factor to strandings: Greece (1996); the Bahamas (2000); Madeira (2000); Canary Islands (2002); and Spain (2006). Refer to Cox
However, the association of strandings of beaked whales with naval exercises involving mid-frequency active sonar and, in one case, the co-occurrence of a Lamont-Doherty's seismic survey (Malakoff, 2002; Cox
Specific sound-related processes that lead to strandings and mortality are not well documented, but may include:
(1) Swimming in avoidance of a sound into shallow water;
(2) A change in behavior (such as a change in diving behavior) that might contribute to tissue damage, gas bubble formation, hypoxia, cardiac arrhythmia, hypertensive hemorrhage or other forms of trauma;
(3) A physiological change such as a vestibular response leading to a behavioral change or stress-induced hemorrhagic diathesis, leading in turn to tissue damage; and
(4) Tissue damage directly from sound exposure, such as through acoustically-mediated bubble formation and growth or acoustic resonance of tissues. Some of these mechanisms are unlikely to apply in the case of impulse sounds. However, there are increasing indications that gas-bubble disease (analogous to the bends), induced in supersaturated tissue by a behavioral response to acoustic exposure, could be a pathologic mechanism for the strandings and mortality of some deep-diving cetaceans exposed to sonar. However, the evidence for this remains circumstantial and associated with exposure to naval mid-frequency sonar, not seismic surveys (Cox
Seismic pulses and mid-frequency sonar signals are quite different from one another, and some mechanisms by which sonar sounds have been hypothesized to affect beaked whales are unlikely to apply to airgun pulses. Sounds produced by airgun arrays are broadband impulses with most of the energy below one kHz. Typical military mid-frequency sonar emits non-impulse
There is no conclusive evidence of cetacean strandings or deaths at sea as a result of exposure to seismic surveys, but a few cases of strandings in the general area where a seismic survey was ongoing have led to speculation concerning a possible link between seismic surveys and strandings. Suggestions that there was a link between seismic surveys and strandings of humpback whales in Brazil (Engel
We anticipate no injuries of beaked whales during the proposed study because of:
(1) The likelihood that any beaked whales nearby would avoid the approaching vessel before being exposed to high sound levels; and
(2) Differences between the sound sources operated by the LANGSETH and those involved in the naval exercises associated with strandings.
Non-auditory physiological effects or injuries that theoretically might occur in marine mammals exposed to strong underwater sound include stress, neurological effects, bubble formation, resonance, and other types of organ or tissue damage (Cox
In general, very little is known about the potential for seismic survey sounds (or other types of strong underwater sounds) to cause non-auditory physical effects in marine mammals. Such effects, if they occur at all, would presumably be limited to short distances and to activities that extend over a prolonged period. The available data do not allow identification of a specific exposure level above which non-auditory effects can be expected (Southall
The Observatory would operate the Kongsberg EM 122 multibeam echosounder from the source vessel during the planned study. Sounds from the multibeam echosounder are very short pulses, occurring for two to 15 ms once every five to 20 s, depending on water depth. Most of the energy in the sound pulses emitted by this echosounder is at frequencies near 12 kHz, and the maximum source level is 242 dB re: 1 μPa. The beam is narrow (1 to 2°) in fore-aft extent and wide (150°) in the cross-track extent. Each ping consists of eight (in water greater than 1,000 m deep) or four (less than 1,000 m deep) successive fan-shaped transmissions (segments) at different cross-track angles. Any given mammal at depth near the trackline would be in the main beam for only one or two of the segments. Also, marine mammals that encounter the Kongsberg EM 122 are unlikely to be subjected to repeated pulses because of the narrow fore aft width of the beam and will receive only limited amounts of pulse energy because of the short pulses. Animals close to the vessel (where the beam is narrowest) are especially unlikely to be ensonified for more than one 2- to 15-ms pulse (or two pulses if in the overlap area). Similarly, Kremser
Navy sonars linked to avoidance reactions and stranding of cetaceans: (1) Generally have longer pulse duration than the Kongsberg EM 122; and (2) are often directed close to horizontally versus more downward for the echosounder. The area of possible influence of the echosounder is much smaller—a narrow band below the source vessel. Also, the duration of exposure for a given marine mammal can be much longer for naval sonar. During the Observatory's operations, the individual pulses will be very short, and a given mammal would not receive many of the downward-directed pulses as the vessel passes by the animal. The following section outlines possible effects of an echosounder on marine mammals.
Captive bottlenose dolphins and a beluga whale exhibited changes in behavior when exposed to 1-s tonal signals at frequencies similar to those that would be emitted by the Observatory's echosounder, and to shorter broadband pulsed signals. Behavioral changes typically involved what appeared to be deliberate attempts to avoid the sound exposure (Schlundt
Based upon the best available science, we believe that the brief exposure of marine mammals to one pulse, or small numbers of signals, from the echosounder is not likely to result in the harassment of marine mammals.
The Observatory would also operate a sub-bottom profiler from the source vessel during the proposed survey. The profiler's sounds are very short pulses, occurring for one to four ms once every second. Most of the energy in the sound pulses emitted by the profiler is at 3.5 kHz, and the beam is directed downward. The sub-bottom profiler on the LANGSETH has a maximum source level of 222 dB re: 1 µPa. Kremser
Vessel movement in the vicinity of marine mammals has the potential to result in either a behavioral response or a direct physical interaction. Both scenarios are discussed below this section.
There are limited data concerning marine mammal behavioral responses to vessel traffic and vessel noise, and a lack of consensus among scientists with respect to what these responses mean or whether they result in short-term or long-term adverse effects. In those cases where there is a busy shipping lane or where there is a large amount of vessel traffic, marine mammals may experience acoustic masking (Hildebrand, 2005) if they are present in the area (e.g., killer whales in Puget Sound; Foote
Behavioral responses to stimuli are complex and influenced to varying degrees by a number of factors, such as species, behavioral contexts, geographical regions, source characteristics (moving or stationary, speed, direction, etc.), prior experience of the animal and physical status of the animal. For example, studies have shown that beluga whales' reactions varied when exposed to vessel noise and traffic. In some cases, naive beluga whales exhibited rapid swimming from ice-breaking vessels up to 80 km (49.7 mi) away, and showed changes in
In reviewing more than 25 years of whale observation data, Watkins (1986) concluded that whale reactions to vessel traffic were “modified by their previous experience and current activity: Habituation often occurred rapidly, attention to other stimuli or preoccupation with other activities sometimes overcame their interest or wariness of stimuli.” Watkins noticed that over the years of exposure to ships in the Cape Cod area, minke whales changed from frequent positive interest (e.g., approaching vessels) to generally uninterested reactions; fin whales changed from mostly negative (e.g., avoidance) to uninterested reactions; right whales apparently continued the same variety of responses (negative, uninterested, and positive responses) with little change; and humpbacks dramatically changed from mixed responses that were often negative to reactions that were often strongly positive. Watkins (1986) summarized that “whales near shore, even in regions with low vessel traffic, generally have become less wary of boats and their noises, and they have appeared to be less easily disturbed than previously. In particular locations with intense shipping and repeated approaches by boats (such as the whale-watching areas of Stellwagen Bank), more and more whales had positive reactions to familiar vessels, and they also occasionally approached other boats and yachts in the same ways.”
Although the radiated sound from the LANGSETH would be audible to marine mammals over a large distance, it is unlikely that animals would respond behaviorally (in a manner that we would consider MMPA harassment) to low-level distant shipping noise as the animals in the area are likely to be habituated to such noises (Nowacek
Ship strikes of cetaceans can cause major wounds, which may lead to the death of the animal. An animal at the surface could be struck directly by a vessel, a surfacing animal could hit the bottom of a vessel, or an animal just below the surface could be cut by a vessel's propeller. The severity of injuries typically depends on the size and speed of the vessel (Knowlton and Kraus, 2001; Laist
The most vulnerable marine mammals are those that spend extended periods of time at the surface in order to restore oxygen levels within their tissues after deep dives (e.g., the sperm whale). In addition, some baleen whales, such as the North Atlantic right whale, seem generally unresponsive to vessel sound, making them more susceptible to vessel collisions (Nowacek
An examination of all known ship strikes from all shipping sources (civilian and military) indicates vessel speed is a principal factor in whether a vessel strike results in death (Knowlton and Kraus, 2001; Laist
The Observatory's proposed operation of one vessel for the proposed survey is relatively small in scale compared to the number of commercial ships transiting at higher speeds in the same areas on an annual basis. The probability of vessel and marine mammal interactions occurring during the proposed survey is unlikely due to the LANGSETH
As a final point, the LANGSETH has a number of other advantages for avoiding ship strikes as compared to most commercial merchant vessels, including the following: The LANGSETH
Entanglement can occur if wildlife becomes immobilized in survey lines, cables, nets, or other equipment that is moving through the water column. The proposed seismic survey would require towing approximately 8.0 km (4.9 mi) of equipment and cables. This large of an array carries the risk of entanglement for marine mammals. Wildlife, especially slow moving individuals, such as large whales, have a low probability of becoming entangled due to slow speed of the survey vessel and onboard monitoring efforts. The Observatory has no recorded cases of entanglement of marine mammals during the conduct of over 8 years of seismic surveys covering over 160,934 km (86,897.4 nmi) of transect lines.
In May, 2011, there was one recorded entanglement of an olive ridley sea turtle (
The potential effects to marine mammals described in this section of the document do not take into consideration the proposed monitoring and mitigation measures described later in this document (see the “Proposed Mitigation” and “Proposed Monitoring and Reporting” sections) which, as noted are designed to effect the least practicable adverse impact on affected marine mammal species and stocks.
The proposed seismic survey is not anticipated to have any permanent impact on habitats used by the marine mammals in the proposed survey area, including the food sources they use (i.e., fish and invertebrates). Additionally, no physical damage to any habitat is
One reason for the adoption of airguns as the standard energy source for marine seismic surveys is that, unlike explosives, they have not been associated with large-scale fish kills. However, existing information on the impacts of seismic surveys on marine fish populations is limited. There are three types of potential effects of exposure to seismic surveys: (1) Pathological, (2) physiological, and (3) behavioral. Pathological effects involve lethal and temporary or permanent sub-lethal injury. Physiological effects involve temporary and permanent primary and secondary stress responses, such as changes in levels of enzymes and proteins. Behavioral effects refer to temporary and (if they occur) permanent changes in exhibited behavior (e.g., startle and avoidance behavior). The three categories are interrelated in complex ways. For example, it is possible that certain physiological and behavioral changes could potentially lead to an ultimate pathological effect on individuals (i.e., mortality).
The specific received sound levels at which permanent adverse effects to fish potentially could occur are little studied and largely unknown. Furthermore, the available information on the impacts of seismic surveys on marine fish is from studies of individuals or portions of a population; there have been no studies at the population scale. The studies of individual fish have often been on caged fish that were exposed to airgun pulses in situations not representative of an actual seismic survey. Thus, available information provides limited insight on possible real-world effects at the ocean or population scale.
Hastings and Popper (2005), Popper (2009), and Popper and Hastings (2009a,b) provided recent critical reviews of the known effects of sound on fish. The following sections provide a general synopsis of the available information on the effects of exposure to seismic and other anthropogenic sound as relevant to fish. The information comprises results from scientific studies of varying degrees of rigor plus some anecdotal information. Some of the data sources may have serious shortcomings in methods, analysis, interpretation, and reproducibility that must be considered when interpreting their results (see Hastings and Popper, 2005). Potential adverse effects of the program's sound sources on marine fish are noted.
Little is known about the mechanisms and characteristics of damage to fish that may be inflicted by exposure to seismic survey sounds. Few data have been presented in the peer-reviewed scientific literature. As far as the Observatory, and we know, there are only two papers with proper experimental methods, controls, and careful pathological investigation implicating sounds produced by actual seismic survey airguns in causing adverse anatomical effects. One such study indicated anatomical damage, and the second indicated temporary threshold shift in fish hearing. The anatomical case is McCauley
Wardle
An experiment of the effects of a single 700 in
For a proposed seismic survey in Southern California, USGS (1999) conducted a review of the literature on the effects of airguns on fish and fisheries. They reported a 1991 study of the Bay Area Fault system from the continental shelf to the Sacramento River, using a 10 airgun (5,828 in
Some studies have reported, some equivocally, that mortality of fish, fish eggs, or larvae can occur close to seismic sources (Kostyuchenko, 1973; Dalen and Knutsen, 1986; Booman
The Minerals Management Service (MMS, 2005) assessed the effects of a proposed seismic survey in Cook Inlet, Alaska. The seismic survey proposed using three vessels, each towing two, four-airgun arrays ranging from 1,500 to 2,500 in
In general, any adverse effects on fish behavior or fisheries attributable to seismic testing may depend on the species in question and the nature of the fishery (season, duration, fishing method). They may also depend on the age of the fish, its motivational state, its size, and numerous other factors that are difficult, if not impossible, to quantify at this point, given such limited data on effects of airguns on fish, particularly under realistic at-sea conditions.
The existing body of information on the impacts of seismic survey sound on marine invertebrates is very limited. However, there is some unpublished and very limited evidence of the potential for adverse effects on invertebrates, thereby justifying further discussion and analysis of this issue. The three types of potential effects of exposure to seismic surveys on marine invertebrates are pathological, physiological, and behavioral. Based on the physical structure of their sensory organs, marine invertebrates appear to be specialized to respond to particle displacement components of an impinging sound field and not to the pressure component (Popper
The only information available on the impacts of seismic surveys on marine invertebrates involves studies of individuals; there have been no studies at the population scale. Thus, available information provides limited insight on possible real-world effects at the regional or ocean scale. The most important aspect of potential impacts concerns how exposure to seismic survey sound ultimately affects invertebrate populations and their viability, including availability to fisheries.
Literature reviews of the effects of seismic and other underwater sound on invertebrates were provided by Moriyasu
Some studies have suggested that seismic survey sound has a limited pathological impact on early developmental stages of crustaceans (Pearson
Tenera Environmental (2011b) reported that Norris and Mohl (1983, summarized in Mariyasu
Andre
In order to issue an incidental take authorization under section 101(a)(5)(D) of the MMPA, we must set forth the permissible methods of taking pursuant to such activity, and other means of effecting the least practicable adverse impact on such species or stock and its habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and the availability of such species or stock for taking for certain subsistence uses.
The Observatory has reviewed the following source documents and have incorporated a suite of proposed mitigation measures into their project description.
(1) Protocols used during previous Foundation and Observatory-funded seismic research cruises as approved by us and detailed in the Foundation's 2011 PEIS;
(2) Previous incidental harassment authorizations applications and authorizations that we have approved and authorized; and
(3) Recommended best practices in Richardson
To reduce the potential for disturbance from acoustic stimuli associated with the activities, the Observatory, and/or its designees have proposed to implement the following mitigation measures for marine mammals:
(1) Vessel-based visual mitigation monitoring;
(2) Proposed exclusion zones;
(3) Power down procedures;
(4) Shutdown procedures;
(5) Ramp-up procedures; and
(6) Speed and course alterations.
The Observatory would position observers aboard the seismic source vessel to watch for marine mammals near the vessel during daytime airgun operations and during any start-ups at night. Observers would also watch for marine mammals near the seismic vessel for at least 30 minutes prior to the start of airgun operations after an extended shutdown (i.e., greater than approximately eight minutes for this proposed cruise). When feasible, the observers would conduct observations during daytime periods when the seismic system is not operating for comparison of sighting rates and behavior with and without airgun operations and between acquisition periods. Based on the observations, the LANGSETH would power down or shutdown the airguns when marine mammals are observed within or about to enter a designated 180-dB exclusion zone.
During seismic operations, at least four protected species observers would be aboard the LANGSETH. The Observatory would appoint the observers with our concurrence and they would conduct observations during ongoing daytime operations and nighttime ramp-ups of the airgun array. During the majority of seismic operations, two observers would be on duty from the observation tower to monitor marine mammals near the seismic vessel. Using two observers would increase the effectiveness of detecting animals near the source vessel. However, during mealtimes and bathroom breaks, it is sometimes difficult to have two observers on effort, but at least one observer would be on watch during bathroom breaks and mealtimes. Observers would be on duty in shifts of no longer than four hours in duration.
Two observers on the LANGSETH would also be on visual watch during all nighttime ramp-ups of the seismic airguns. A third observer would monitor the passive acoustic monitoring equipment 24 hours a day to detect vocalizing marine mammals present in the action area. In summary, a typical daytime cruise would have scheduled two observers (visual) on duty from the observation tower, and an observer (acoustic) on the passive acoustic monitoring system. Before the start of the seismic survey, the Observatory would instruct the vessel's crew to assist in detecting marine mammals and implementing mitigation requirements.
The LANGSETH is a suitable platform for marine mammal observations. When stationed on the observation platform, the eye level would be approximately 21.5 m (70.5 ft) above sea level, and the observer would have a good view around the entire vessel. During daytime, the observers would scan the area around the vessel systematically with reticle binoculars (e.g., 7 x 50 Fujinon), Big-eye binoculars (25 x 150), and with the naked eye. During darkness, night vision devices would be available (ITT F500 Series Generation 3 binocular-image intensifier or equivalent), when required. Laser range-finding binoculars (Leica LRF 1200 laser rangefinder or equivalent) would be available to assist with distance estimation. Those are useful in training observers to estimate distances visually, but are generally not useful in measuring distances to animals directly;
When the observers see marine mammals within or about to enter the designated exclusion zone, the LANGSETH would immediately power down or shutdown the airguns. The observer(s) would continue to maintain watch to determine when the animal(s) are outside the exclusion zone by visual confirmation. Airgun operations would not resume until the observer has confirmed that the animal has left the zone, or if not observed after 15 minutes for species with shorter dive durations (small odontocetes and pinnipeds) or 30 minutes for species with longer dive durations (mysticetes and large odontocetes, including sperm, pygmy sperm, dwarf sperm, killer, and beaked whales).
If the protected species visual observer detects marine mammal(s) within or about to enter the appropriate exclusion zone, the LANGSETH crew would immediately power down the airgun array, or perform a shutdown if necessary (see Shut-down Procedures).
If the observer detects a marine mammal outside the exclusion zone and the animal is likely to enter the zone, the crew would power down the airguns to reduce the size of the 180-dB exclusion zone before the animal enters that zone. Likewise, if a mammal is already within the zone when first detected, the crew would power-down the airguns immediately. During a power down of the airgun array, the crew would operate a single 40-in
Resuming Airgun Operations After a Power Down—Following a power-down, the LANGSETH crew would not resume full airgun activity until the marine mammal has cleared the 180-dB exclusion zone (see Table 1). The observers would consider the animal to have cleared the exclusion zone if:
• The observer has visually observed the animal leave the exclusion zone; or
• An observer has not sighted the animal within the exclusion zone for 15 minutes for species with shorter dive durations (i.e., small odontocetes or pinnipeds), or 30 minutes for species with longer dive durations (i.e., mysticetes and large odontocetes, including sperm, pygmy sperm, dwarf sperm, and beaked whales); or
The LANGSETH crew would resume operating the airguns at full power after 15 minutes of sighting any species with short dive durations (i.e., small odontocetes or pinnipeds). Likewise, the crew would resume airgun operations at full power after 30 minutes of sighting any species with longer dive durations (i.e., mysticetes and large odontocetes, including sperm, pygmy sperm, dwarf sperm, and beaked whales).
We estimate that the LANGSETH would transit outside the original 180-dB exclusion zone after an 8-minute wait period. This period is based on the 180-dB exclusion zone for the 36-airgun array towed at a depth of 12 m (39.4 ft) in relation to the average speed of the LANGSETH while operating the airguns (8.5 km/h; 5.3 mph). Because the vessel has transited away from the vicinity of the original sighting during the 8-minute period, implementing ramp-up procedures for the full array after an extended power down (i.e., transiting for an additional 35 minutes from the location of initial sighting) would not meaningfully increase the effectiveness of observing marine mammals approaching or entering the exclusion zone for the full source level and would not further minimize the potential for take. The LANGSETH
(1) If an animal enters the exclusion zone of the single airgun after the crew has initiated a power down; or
(2) If an animal is initially seen within the exclusion zone of the single airgun when more than one airgun (typically the full airgun array) is operating.
Considering the conservation status for north Pacific right whales, the LANGSETH crew would shutdown the airgun(s) immediately in the unlikely event that this species is observed, regardless of the distance from the vessel. The LANGSETH would only begin ramp-up would only if the north Pacific right whale has not been seen for 30 minutes.
Resuming Airgun Operations After a Shutdown—Following a shutdown in excess of eight minutes, the LANGSETH crew would initiate a ramp-up with the smallest airgun in the array (40-in
During periods of active seismic operations, there are occasions when the LANGSETH crew would need to temporarily shut down the airguns due to equipment failure or for maintenance. In this case, if the airguns are inactive longer than eight minutes, the crew would follow ramp-up procedures for a shutdown described earlier and the observers would monitor the full exclusion zone and would implement a power down or shutdown if necessary.
If the full exclusion zone is not visible to the observer for at least 30 minutes prior to the start of operations in either daylight or nighttime, the LANGSETH crew would not commence ramp-up unless at least one airgun (40-in
If one airgun has operated during a power down period, ramp-up to full power would be permissible at night or in poor visibility, on the assumption that marine mammals would be alerted to the approaching seismic vessel by the sounds from the single airgun and could move away. The vessel's crew would not initiate a ramp-up of the airguns if a marine mammal is sighted within or near the applicable exclusion zones during the day or close to the vessel at night.
Ramp-up would begin with the smallest airgun in the array (40 in
If the complete exclusion zone has not been visible for at least 30 minutes prior to the start of operations in either daylight or nighttime, the Observatory would not commence the ramp-up unless at least one airgun (40 in
If during seismic data collection, the Observatory detects marine mammals outside the exclusion zone and, based on the animal's position and direction of travel, is likely to enter the exclusion zone, the LANGSETH would change speed and/or direction if this does not compromise operational safety. Due to the limited maneuverability of the primary survey vessel, altering speed and/or course can result in an extended period of time to realign onto the transect. However, if the animal(s) appear likely to enter the exclusion zone, the LANGSETH would undertake further mitigation actions, including a power down or shut down of the airguns.
We have carefully evaluated the applicant's proposed mitigation measures and have considered a range of other measures in the context of ensuring that we have prescribed the means of effecting the least practicable adverse impact on the affected marine mammal species and stocks and their habitat. Our evaluation of potential measures included consideration of the following factors in relation to one another:
(1) The manner in which, and the degree to which, we expect that the successful implementation of the measure would minimize adverse impacts to marine mammals;
(2) The proven or likely efficacy of the specific measure to minimize adverse impacts as planned; and
(3) The practicability of the measure for applicant implementation.
In order to issue an incidental take authorization for an activity, section 101(a)(5)(D) of the MMPA states that we must set forth “requirements pertaining to the monitoring and reporting of such taking.” The Act's implementing regulations at 50 CFR 216.104 (a)(13) indicate that requests for an authorization must include the suggested means of accomplishing the necessary monitoring and reporting that would result in increased knowledge of the species and our expectations of the level of taking or impacts on populations of marine mammals present in the action area.
The Observatory proposes to sponsor marine mammal monitoring during the present project to supplement the mitigation measures that require real-time monitoring, and to satisfy the monitoring requirements of the Incidental Harassment Authorization. The Observatory understands that this monitoring plan would be subject to review by us, and that we may require refinements to the plan. The Observatory planned the monitoring work as a self-contained project independent of any other related monitoring projects that may occur in the same regions at the same time. Further, the Observatory is prepared to discuss coordination of its monitoring program with any other related work that might be conducted by other groups working insofar as it is practical and desirable.
Passive acoustic monitoring would complement the visual mitigation monitoring program, when practicable. Visual monitoring typically is not effective during periods of poor visibility or at night, and even with good visibility, is unable to detect marine mammals when they are below the surface or beyond visual range. Passive acoustical monitoring can be used in conjunction with visual observations to improve detection, identification, and localization of cetaceans. The passive acoustic monitoring would serve to alert visual observers (if on duty) when vocalizing cetaceans are detected. It is only useful when marine mammals call, but it can be effective either by day or by night, and does not depend on good visibility. The acoustic observer would monitor the system in real time so that he/she can advise the visual observers if they acoustic detect cetaceans.
The passive acoustic monitoring system consists of hardware (i.e., hydrophones) and software. The “wet end” of the system consists of a towed hydrophone array that is connected to the vessel by a tow cable. The tow cable is 250 m (820.2 ft) long, and the hydrophones are fitted in the last 10 m (32.8 ft) of cable. A depth gauge is attached to the free end of the cable, and the cable is typically towed at depths less than 20 m (65.6 ft). The LANGSETH crew would deploy the array from a winch located on the back deck. A deck cable would connect the tow cable to the electronics unit in the main computer lab where the acoustic station, signal conditioning, and processing system would be located. The acoustic signals received by the hydrophones are amplified, digitized, and then processed by the Pamguard software. The system
One acoustic observer, an expert bioacoustician with primary responsibility for the passive acoustic monitoring system would be aboard the LANGSETH in addition to the four visual observers. The acoustic observer would monitor the towed hydrophones 24 hours per day during airgun operations and during most periods when the LANGSETH is underway while the airguns are not operating. However, passive acoustic monitoring may not be possible if damage occurs to both the primary and back-up hydrophone arrays during operations. The primary passive acoustic monitoring streamer on the LANGSETH is a digital hydrophone streamer. Should the digital streamer fail, back-up systems should include an analog spare streamer and a hull-mounted hydrophone.
One acoustic observer would monitor the acoustic detection system by listening to the signals from two channels via headphones and/or speakers and watching the real-time spectrographic display for frequency ranges produced by cetaceans. The observer monitoring the acoustical data would be on shift for one to six hours at a time. The other observers would rotate as an acoustic observer, although the expert acoustician would be on passive acoustic monitoring duty more frequently.
When the acoustic observer detects a vocalization while visual observations are in progress, the acoustic observer on duty would contact the visual observer immediately, to alert him/her to the presence of cetaceans (if they have not already been seen), so that the vessel's crew can initiate a power down or shutdown, if required. The observer would enter the information regarding the call into a database. Data entry would include an acoustic encounter identification number, whether it was linked with a visual sighting, date, time when first and last heard and whenever any additional information was recorded, position and water depth when first detected, bearing if determinable, species or species group (e.g., unidentified dolphin, sperm whale), types and nature of sounds heard (e.g., clicks, continuous, sporadic, whistles, creaks, burst pulses, strength of signal, etc.), and any other notable information. The acoustic detection can also be recorded for further analysis.
Observers would record data to estimate the numbers of marine mammals exposed to various received sound levels and to document apparent disturbance reactions or lack thereof. They would use the data to estimate numbers of animals potentially `taken' by harassment (as defined in the MMPA). They will also provide information needed to order a power down or shut down of the airguns when a marine mammal is within or near the exclusion zone.
When an observer makes a sighting, they will record the following information:
1. Species, group size, age/size/sex categories (if determinable), behavior when first sighted and after initial sighting, heading (if consistent), bearing and distance from seismic vessel, sighting cue, apparent reaction to the airguns or vessel (e.g., none, avoidance, approach, paralleling, etc.), and behavioral pace.
2. Time, location, heading, speed, activity of the vessel, sea state, visibility, and sun glare.
The observer will record the data listed under (2) at the start and end of each observation watch, and during a watch whenever there is a change in one or more of the variables.
Observers will record all observations and power downs or shutdowns in a standardized format and will enter data into an electronic database. The observers will verify the accuracy of the data entry by computerized data validity checks as the data are entered and by subsequent manual checking of the database. These procedures will allow the preparation of initial summaries of data during and shortly after the field program, and will facilitate transfer of the data to statistical, graphical, and other programs for further processing and archiving.
Results from the vessel-based observations will provide:
1. The basis for real-time mitigation (airgun power down or shutdown).
2. Information needed to estimate the number of marine mammals potentially taken by harassment, which the Observatory must report to the Office of Protected Resources.
3. Data on the occurrence, distribution, and activities of marine mammals and turtles in the area where the Observatory would conduct the seismic study.
4. Information to compare the distance and distribution of marine mammals and turtles relative to the source vessel at times with and without seismic activity.
5. Data on the behavior and movement patterns of marine mammals detected during non-active and active seismic operations.
The Observatory would submit a report to us and to the Foundation within 90 days after the end of the cruise. The report would describe the operations that were conducted and sightings of marine mammals and turtles near the operations. The report would provide full documentation of methods, results, and interpretation pertaining to all monitoring. The 90-day report would summarize the dates and locations of seismic operations, and all marine mammal sightings (dates, times, locations, activities, associated seismic survey activities). The report would also include estimates of the number and nature of exposures that could result in “takes” of marine mammals by harassment or in other ways.
In the unanticipated event that the specified activity clearly causes the take of a marine mammal in a manner not permitted by the authorization (if issued), such as an injury, serious injury, or mortality (e.g., ship-strike, gear interaction, and/or entanglement), the Observatory shall immediately cease the specified activities and immediately report the incident to the Incidental Take Program Supervisor, Permits and Conservation Division, Office of Protected Resources, NMFS, at 301–427–8401 and/or by email to
• Time, date, and location (latitude/longitude) of the incident;
• Name and type of vessel involved;
• Vessel's speed during and leading up to the incident;
• Description of the incident;
• Status of all sound source use in the 24 hours preceding the incident;
• Water depth;
• Environmental conditions (e.g., wind speed and direction, Beaufort sea state, cloud cover, and visibility);
• Description of all marine mammal observations in the 24 hours preceding the incident;
• Species identification or description of the animal(s) involved;
• Fate of the animal(s); and
• Photographs or video footage of the animal(s) (if equipment is available).
The Observatory shall not resume its activities until we are able to review the circumstances of the prohibited take. We shall work with the Observatory to determine what is necessary to minimize the likelihood of further prohibited take and ensure MMPA compliance. The Observatory may not resume their activities until notified by us via letter, email, or telephone.
In the event that the Observatory discovers an injured or dead marine
In the event that the Observatory discovers an injured or dead marine mammal, and the lead visual observer determines that the injury or death is not associated with or related to the authorized activities (e.g., previously wounded animal, carcass with moderate to advanced decomposition, or scavenger damage), the Observatory would report the incident to the Incidental Take Program Supervisor, Permits and Conservation Division, Office of Protected Resources, at 301–427–8401 and/or by email to
Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as: Any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild [Level A harassment]; or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering [Level B harassment].
We propose to authorize take by Level B harassment for the proposed seismic survey. Acoustic stimuli (i.e., increased underwater sound) generated during the operation of the seismic airgun array may have the potential to result in the behavioral disturbance of some marine mammals. There is no evidence that planned activities could result in serious injury or mortality within the specified geographic area for the requested authorization. The required mitigation and monitoring measures would minimize any potential risk for serious injury or mortality.
The following sections describe the Observatory's methods to estimate take by incidental harassment and present their estimates of the numbers of marine mammals that could be affected during the proposed seismic program. The estimates are based on a consideration of the number of marine mammals that could be harassed by seismic operations with the 36-airgun array during approximately 5,572 km
We assume that during simultaneous operations of the airgun array and the other sources, any marine mammals close enough to be affected by the echosounder and sub-bottom profiler would already be affected by the airguns. However, whether or not the airguns are operating simultaneously with the other sources, we expect that the marine mammals would exhibit no more than short-term and inconsequential responses to the echosounder and profiler given their characteristics (e.g., narrow downward-directed beam) and other considerations described previously. Based on the best available information, we do not consider that these reactions constitute a “take” (NMFS, 2001). Therefore, the Observatory did not provide any additional allowance for animals that could be affected by sound sources other than the airguns.
The number of different individuals potentially exposed to received levels greater than or equal to 160 re: 1 µPa (rms) was calculated by multiplying:
(1) The expected species density (in number/km
(2) The anticipated area to be ensonified to that level during airgun operations (5,571 km
The Observatory's estimates of exposures to various sound levels assume that the proposed surveys would be carried out in full (i.e., approximately 20 days of seismic airgun operations), however, the ensonified areas calculated using the planned number of line-kilometers have been increased by 25 percent to accommodate lines that may need to be repeated, equipment testing, account for repeat exposure, etc. As is typical during offshore ship surveys, inclement weather and equipment malfunctions are likely to cause delays and may limit the number of useful line-kilometers of seismic operations that can be undertaken.
The Observatory would coordinate the planned marine mammal monitoring program associated with the seismic survey on the Mid-Atlantic Ridge in the north Atlantic Ocean with other parties that may have interest in the area and/or may be conducting marine mammal studies in the same region during the seismic surveys.
We have defined “negligible impact” in 50 CFR 216.103 as “* * * an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.” In making a negligible impact determination, we consider:
(1) The number of anticipated injuries, serious injuries, or mortalities;
(2) The number, nature, and intensity, and duration of Level B harassment (all relatively limited); and
(3) The context in which the takes occur (i.e., impacts to areas of significance, impacts to local populations, and cumulative impacts when taking into account successive/contemporaneous actions when added to baseline data);
(4) The status of stock or species of marine mammals (i.e., depleted, not depleted, decreasing, increasing, stable, impact relative to the size of the population);
(5) Impacts on habitat affecting rates of recruitment/survival; and
(6) The effectiveness of monitoring and mitigation measures.
For reasons stated previously in this document and based on the following factors, the specified activities associated with the marine seismic surveys are not likely to cause permanent threshold shift, or other non-auditory injury, serious injury, or death. They include:
(1) The likelihood that, given sufficient notice through relatively slow ship speed, we expect marine mammals to move away from a noise source that is annoying prior to its becoming potentially injurious;
(2) The potential for temporary or permanent hearing impairment is relatively low and that we would likely avoid this impact through the incorporation of the required monitoring and mitigation measures (including power-downs and shutdowns); and
(3) The likelihood that marine mammal detection ability by trained visual observers is high at close proximity to the vessel.
We do not anticipate that any injuries, serious injuries, or mortalities would occur as a result of the Observatory's planned marine seismic surveys, and we do not propose to authorize injury, serious injury or mortality for this survey. We anticipate only behavioral disturbance to occur during the conduct of the survey activities.
Table 4 in this document outlines the number of requested Level B harassment takes that we anticipate as a result of these activities. Due to the nature, degree, and context of Level B (behavioral) harassment anticipated and described (see “Potential Effects on Marine Mammals” section in this notice), we do not expect the activity to impact rates of recruitment or survival for any affected species or stock.
Further, the seismic surveys would not take place in areas of significance for marine mammal feeding, resting, breeding, or calving and would not adversely impact marine mammal habitat.
Many animals perform vital functions, such as feeding, resting, traveling, and socializing, on a diel cycle (i.e., 24 hour cycle). Behavioral reactions to noise exposure (such as disruption of critical life functions, displacement, or avoidance of important habitat) are more likely to be significant if they last more than one diel cycle or recur on subsequent days (Southall
Of the 28 marine mammal species under our jurisdiction that are known to occur or likely to occur in the study area, six of these species are listed as endangered under the ESA, including: The blue, fin, humpback, north Atlantic right, sei, and sperm whales. These species are also categorized as depleted under the MMPA. With the exception of the north Atlantic right whale, the Observatory has requested authorized take for these listed species.
As mentioned previously, we estimate that 28 species of marine mammals under our jurisdiction could be potentially affected by Level B harassment over the course of the proposed authorization. For each species, these take numbers are small (most estimates are less than or equal to two percent) relative to the regional or overall population size and we have provided the regional population estimates for the marine mammal species that may be taken by Level B harassment in Table 4 in this document.
Our practice has been to apply the 160 dB re: 1 µPa received level threshold for underwater impulse sound levels to determine whether take by Level B harassment occurs. Southall
We have preliminarily determined, provided that the aforementioned mitigation and monitoring measures are implemented, that the impact of conducting a proposed survey on the Mid-Atlantic Ridge in the north Atlantic Ocean in international waters, from April 2013 through June 2013, may result, at worst, in a modification in behavior and/or low-level physiological effects (Level B harassment) of certain species of marine mammals.
While these species may make behavioral modifications, including temporarily vacating the area during the operation of the airgun(s) to avoid the resultant acoustic disturbance, the availability of alternate areas within these areas and the short and sporadic duration of the research activities, have led us to preliminary determine that this action would have a negligible impact on the species in the specified geographic region.
Based on the analysis contained herein of the likely effects of the specified activity on marine mammals and their habitat, and taking into consideration the implementation of the mitigation and monitoring measures, we preliminarily find that the Observatory's planned research activities would result in the incidental take of small numbers of marine mammals, by Level B harassment only, and that the required measures mitigate impacts to affected species or stocks of marine mammals to the lowest level practicable.
Section 101(a)(5)(D) of the Marine Mammal Protection Act also requires us to determine that the authorization would not have an unmitigable adverse effect on the availability of marine mammal species or stocks for subsistence use. There are no relevant subsistence uses of marine mammals in the study area (on the Mid-Atlantic Ridge in the north Atlantic Ocean in international waters) that implicate section 101(a)(5)(D) of the Marine Mammal Protection Act.
Of the species of marine mammals that may occur in the proposed survey area, several are listed as endangered under the Endangered Species Act, including the blue, fin, humpback, north Atlantic right, sei, and sperm whales. The Observatory did not request take of endangered north Atlantic right whales because of the low likelihood of encountering these species during the cruise.
Under section 7 of the Act, the Foundation has initiated formal consultation with the Service's, Office of Protected Resources, Endangered Species Act Interagency Cooperation Division, on this proposed seismic survey. We (i.e., National Marine Fisheries Service, Office of Protected Resources, Permits and Conservation Division), have also initiated formal consultation under section 7 of the Act with the Endangered Species Act Interagency Cooperation Division to obtain a Biological Opinion (Opinion) evaluating the effects of issuing an incidental harassment authorization for threatened and endangered marine mammals and, if appropriate, authorizing incidental take. Both agencies would conclude the formal section 7 consultation (with a single Biological Opinion for the Foundation's Division of Ocean Sciences and NMFS' Office of Protected Resources, Permits and Conservation Division federal actions) prior to making a determination on whether or not to issue the authorization. If we issue the take authorization, the Foundation and the Observatory must comply with the mandatory Terms and Conditions of the Opinion's Incidental Take Statement which would incorporate the mitigation and monitoring requirements included
To meet our NEPA requirements for the issuance of an IHA to the Observatory, we intend to prepare an Environmental Assessment (EA) titled “Issuance of an Incidental Harassment Authorization to the Lamont-Doherty Earth Observatory to Take Marine Mammals by Harassment Incidental to a Marine Geophysical on the Mid-Atlantic Ridge in the north Atlantic Ocean, from April 2013 through June 2013.” This EA would incorporate as appropriate the Foundation's Environmental Analysis Pursuant To Executive Order 12114 (NSF, 2010) titled, “Marine geophysical survey by the R/V MARCUS G.
The Foundation's environmental analysis is available for review at the addresses set forth earlier in this notice. This notice and the documents it references provide all relevant environmental information related to our proposal to issue the IHA. We invite the public's comment and will consider any comments related to environmental effects related to the proposed issuance of the IHA submitted in response to this as we conduct and finalize our NEPA analysis.
As a result of these preliminary determinations, we propose to authorize the take of marine mammals incidental to the Observatory's proposed marine seismic surveys on the Mid-Atlantic Ridge in the north Atlantic Ocean from April 2013, through June 2013, provided the previously mentioned mitigation, monitoring, and reporting requirements are incorporated. The duration of the incidental harassment authorization would not exceed one year from the date of its issuance.
We request interested persons to submit comments and information concerning this proposed project and our preliminary determination of issuing a take authorization (see
Notice is hereby given that the Delaware River Basin Commission will hold a public hearing on Tuesday, March 5, 2013. A business meeting will be held the following day on Wednesday, March 6, 2013. Both the hearing and business meeting are open to the public and will be held at the Commission's office building located at 25 State Police Drive, West Trenton, New Jersey.
There will be no opportunity for additional public comments at the March 6 business meeting on items for which a hearing was completed on March 5 or a previous date. Commission consideration on March 6 of items for which the public hearing is closed may result in either approval of the docket or resolution as proposed, approval with changes, denial, or deferral. When the commissioners defer an action, they may announce an additional period for written comment on the item, with or without an additional hearing date, or they may take additional time to consider the input they have already received without requesting further public input. Any deferred items will be considered for action at a public meeting of the commission on a future date.
National Advisory Committee on Institutional Quality and Integrity, Office of Postsecondary Education, U.S. Department of Education.
Announcement of an open meeting of the National Advisory Committee on Institutional Quality and Integrity (NACIQI) and information pertaining to members of the public submitting third–party written and oral comments.
U.S. Department of Education, Office of Postsecondary Education, 1990 K Street NW., Room 8072, Washington, DC 20006.
• The establishment and enforcement of the criteria for recognition of accrediting agencies or associations under Subpart 2, Part H, Title IV, of the HEA, as amended.
• The recognition of specific accrediting agencies or associations or a specific State approval agency.
• The preparation and publication of the list of nationally recognized accrediting agencies and associations.
• The eligibility and certification process for institutions of higher education under Title IV, of the HEA, together with recommendations for improvement in such process.
• The relationship between (1) accreditation of institutions of higher education and the certification and eligibility of such institutions, and (2) State licensing responsibilities with respect to such institutions.
• Any other advisory function relating to accreditation and institutional eligibility that the Secretary may prescribe.
This notice sets forth the agenda for the June 6–7, 2013 meeting of the National Advisory Committee on Institutional Quality and Integrity (NACIQI); and provides information to members of the public on submitting written comments and on requesting to make oral comments at the meeting. The notice of this meeting is required under Section 10(a)(2) of the Federal Advisory Committee Act (FACA) and Section 114(d)(1)(B) of the Higher Education Act (HEA) of 1965, as amended.
1. Accrediting Council for Continuing Education and Training (ACCET) (Current Scope: The accreditation of institutions of higher education throughout the United States that offer non-collegiate continuing education programs and those that offer occupational associate degree programs and those that offer such programs via distance education.)
2. Accreditation Council on Optometric Education (ACOE) (Current Scope: The accreditation in the United States of professional optometric degree programs, optometric technician (associate degree) programs, and optometric residency programs, and for the preaccreditation categories of Preliminary Approval for professional optometric degree programs and Candidacy Pending for optometric residency programs in Department of Veterans Affairs facilities.)
3. Association of Advanced Rabbinical and Talmudic Schools (AARTS) (Current Scope: The accreditation and pre-accreditation (“Correspondent” and “Candidate”) within the United States of advanced rabbinical and Talmudic schools.) (Requested Scope: The accreditation and pre-accreditation (“Correspondent” and “Candidate”) within the United States of advanced rabbinical and Talmudic schools which grant postsecondary degrees such as Baccalaureate, Masters, Doctorate, First Rabbinic and First Talmudic degrees.)
4. Commission on Accreditation of Healthcare Management Education (CAHME) (Current Scope: The accreditation throughout the United States of graduate programs in healthcare management.)
5. National Association of Schools of Dance, Commission on Accreditation (NASD) (Current Scope: The accreditation throughout the United States of freestanding institutions, and units offering dance and dance-related programs (both degree- and non-degree-granting), including those offered via distance education.) (Requested Scope: The accreditation throughout the United States of freestanding institutions, and units offering dance and dance-related programs (both degree- and non-degree-granting), including those offered via distance and correspondence education.)
6. National Association of Schools of Art and Design, Commission on Accreditation (NASAD)(Current Scope: The accreditation throughout the United States of freestanding institutions, and units offering art/design and art/design-related programs (both degree- and non-degree-granting), including those offered via distance education.) (Requested Scope: The accreditation throughout the United States of freestanding institutions, and units offering art/design and art/design-related programs (both degree- and non-degree-granting), including those offered via distance and correspondence education.)
7. National Association of Schools of Music, Commission on Accreditation (NASM) (Current Scope: The accreditation throughout the United States of freestanding institutions, and units offering music and music-related programs (both degree- and non-degree-granting), including those offered via distance education.) (Requested Scope: The accreditation throughout the United States of freestanding institutions, and units offering music and music-related programs (both degree- and non-degree-granting), including those offered via distance and correspondence education.)
8. National Association of Schools of Theatre, Commission on Accreditation (NAST) (Current Scope: The accreditation throughout the United States of freestanding institutions, and units offering theatre and theatre-related programs (both degree-and non-degree-granting), including those offered via distance education.) (Requested Scope:
9. New England Association Of Schools and Colleges, Commission on Institutions of Higher Education (NEA–CIHE) (Current Scope: The accreditation and preaccreditation (“Candidacy status”) of institutions of higher education in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont that award bachelor's, master's, and/or doctoral degrees, and associate degree-granting institutions in those states that include degrees in liberal arts or general studies among their offerings, including the accreditation of programs offered via distance education within these institutions. This recognition extends to the Board of Trustees of the Association jointly with the Commission for decisions involving preaccreditation, initial accreditation, and adverse actions.) (Requested Scope: The accreditation and pre-accreditation (“Candidacy status”) of institutions of higher education in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont that award bachelor's, master's, and/or doctoral degrees, and associate degree-granting institutions in those states that include degrees in liberal arts or general studies among their offerings, including the accreditation of programs offered via distance education within these institutions. This recognition extends jointly, to the Commission for accreditation and pre-accreditation decisions and to the Board of Trustees of the Association and the Commission for the appeal of adverse actions.)
10. North Central Association of Colleges and Schools, The Higher Learning Commission (NCA–HLC) (Current Scope: The accreditation and preaccreditation (“Candidate for Accreditation”) of degree-granting institutions of higher education in Arizona, Arkansas, Colorado, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, New Mexico, North Dakota, Ohio, Oklahoma, South Dakota, West Virginia, Wisconsin, and Wyoming, including the tribal institutions and the accreditation of programs offered via distance education within these institutions. This recognition extends to the Institutional Actions Council jointly with the Board of Trustees of the Commission for decisions on cases for continued accreditation or reaffirmation, and continued candidacy. This recognition also extends to the Review Committee of the Accreditation Review Council jointly with the Board of Trustees of the Commission for decisions on cases for continued accreditation or candidacy and for initial candidacy or initial accreditation when there is a consensus decision by the Review Committee.) (Requested Scope: The accreditation and preaccreditation (“Candidate for Accreditation”) of degree-granting institutions of higher education in Arizona, Arkansas, Colorado, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, New Mexico, North Dakota, Ohio, Oklahoma, South Dakota, West Virginia, Wisconsin, and Wyoming, including the tribal institutions and the accreditation of programs offered via distance education within these institutions. This recognition extends to the Institutional Actions Council jointly with the Board of Trustees of the Commission for decisions on cases for continued accreditation or reaffirmation, and continued candidacy and to the Appeal Body jointly with the Board of Trustees of the Commission for decisions related to initial candidacy or accreditation or reaffirmation of accreditation.)
1. Accreditation Commission for Acupuncture and Oriental Medicine (ACAOM) (Current Scope: The accreditation and preaccreditation (“Candidacy” status) throughout the United States of first-professional master's degree and professional master's level certificate and diploma programs in acupuncture and Oriental medicine and professional post-graduate doctoral programs in acupuncture and in Oriental Medicine (DAOM), as well as freestanding institutions and colleges of acupuncture or Oriental medicine that offer such programs.)
2. Accrediting Council for Independent Colleges and Schools (ACICS) (Current Scope: The accreditation of private postsecondary institutions throughout the United States offering certificates or diplomas, and postsecondary institutions offering associate, bachelor's, or master's degrees in programs designed to educate students for professional, technical, or occupational careers, including those that offer those programs via distance education.)
3. American Bar Association (ABA) (Current Scope: The accreditation throughout the United States of programs in legal education that lead to the first professional degree in law, as well as freestanding law schools offering such programs. This recognition also extends to the Accreditation Committee of the Section of Legal Education (Accreditation Committee) for decisions involving continued accreditation (referred to by the agency as “approval”) of law schools.)
4. American Psychological Association (APA) (Current Scope: The accreditation in the United States of doctoral programs in clinical, counseling, school and combined professional-scientific psychology; predoctoral internship programs in professional psychology; and postdoctoral residency programs in professional psychology.)
5. Commission on Accrediting of the Association of Theological Schools (ATSUSC) (Current Scope: The accreditation and pre-accreditation (“Candidate for Accredited Membership”) of theological schools and seminaries, as well as schools or programs that are parts of colleges or universities, in the United States, offering post baccalaureate degrees in professional and academic theological education, including delivery via distance education.)
6. American Dental Association, Commission on Dental Accreditation (CODA) (Current Scope: The accreditation of predoctoral dental education programs (leading to the D.D.S. or D.M.D. degree), advanced dental education programs, and allied dental education programs that are fully operational or have attained “Initial Accreditation” status, including programs offered via distance education.)
7. Council On Occupational Education (COE) (Current Scope: The accreditation and preaccreditation (“Candidacy Status”) throughout the United States of postsecondary occupational education institutions offering non-degree and applied associate degree programs in specific career and technical education fields, including institutions that offer programs via distance education.)
8. Transnational Association Of Christian Colleges and Schools (TRACS) (Current Scope: The accreditation and pre-accreditation (“Candidate” status) of Christian postsecondary institutions in the United States that offer certificates, diplomas, and associate, baccalaureate, and graduate degrees, including institutions that offer distance education.)
1. Maryland Board of Nursing (MBN) (Current Scope: State agency for the approval of nurse education.
1. The name, title, affiliation, mailing address, email address, telephone and facsimile numbers, and Web site (if any) of the person/group requesting to speak; and,
2. A brief summary of the principal points to be made during the oral presentation.
If a person or group requests, in advance, to make comments they cannot also register for an oral presentation opportunity on June 6 or June 7, 2013. The oral comments made will become part of the official record and will be considered by the Department and NACIQI in their deliberations. No individual or group in attendance or making oral presentations may distribute written materials at the meeting.
Carol Griffiths, Executive Director, NACIQI, U.S. Department of Education, 1990 K Street NW., Room 8073, Washington, DC 20006–8129, telephone: (202) 219–7035, fax: (202) 219–7005, or email:
You may also access documents of the Department published in the
U.S. Department of Energy.
Notice of availability.
The Department of Energy (DOE) announces the availability of the
The comment period will end on May 1, 2013. Comments received after this date will be considered to the extent practicable.
The Draft HTF Section 3116 Basis document is available on the Internet at h
Written comments on the draft HTF Section 3116 Basis document may be submitted by U.S. mail to the following address: Ms. Sherri Ross, DOE–SR, Building 704–S, Room 43, U.S. Department of Energy, Savannah River Operations Office, Aiken, SC 29802 (ATTN: H-Tank Farm Draft Basis).
Alternatively, comments may also be filed electronically by email to
The HTF is a 45-acre site, located at the Savannah River Site (SRS) near Aiken, South Carolina. The HTF consists of 29 underground radioactive waste storage tanks and supporting ancillary structures. The major HTF ancillary structures are three evaporator systems, transfer lines, eight diversion boxes, one catch tank, a concentrate transfer system, ten pump pits, nine pump tanks, and eleven valve boxes. There are four waste tank types (Type I, II, III/IIIA, and IV) in HTF with operating capacities ranging from 750,000 gallons to 1,300,000 gallons. The waste tanks have varying degrees of secondary containment and in-tank structural features such as cooling coils and columns. All HTF waste tanks are constructed of carbon steel. The HTF tanks and ancillary structures contain, in part, waste from the prior reprocessing of spent nuclear fuel, and from various SRS production, processing and laboratory facilities.
DOE is in the process of closing the HTF and is engaged in an expansive campaign to clean, stabilize, and close the tanks and ancillary structures in the HTF, using a process that includes removing bulk waste from tanks and applicable ancillary structures, followed by deployment of tested technologies to remove the majority of the remaining waste. After completing cleaning operations, a small amount of residual radioactive waste will remain in the tanks and ancillary structures. DOE plans to stabilize the residuals in the tanks and certain ancillary structures in place with grout, followed by a closure cap system for the HTF. Tank waste storage and removal operations in the HTF are governed by a South Carolina Department of Health and Environmental Control (SCDHEC) industrial wastewater operating permit. Removal of tanks from service and stabilization of the HTF waste tanks and ancillary structures will be carried out pursuant to a State-approved closure plan, the
As demonstrated and documented in the Draft HTF 3116 Basis Document, the stabilized HTF tanks, ancillary structures and residuals at closure meet the public dose performance objective and other criteria set forth in section 3116(a) of the NDAA. DOE is consulting with the NRC pursuant to section 3116, and will consider this consultation as well as public comments before preparing a final HTF 3116 Basis Document. DOE anticipates that the final HTF 3116 Basis Document will serve as a predicate for the Secretary to determine whether or not the stabilized HTF tanks, ancillary structures and residuals at closure meet the criteria in section 3116(a), are not high-level radioactive waste, and may be disposed of in place as low-level waste.
Take notice that the Commission received the following electric rate filings:
Description: ISO New England Inc. submits Order No. 755 Regulation Mkt. Compliance Changes to be effective 12/31/9998.
Take notice that the Commission received the following electric securities filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
Any person desiring to protest in any the above proceedings must file in accordance with Rule 211 of the Commission's Regulations (18 CFR 385.211) on or before 5:00 p.m. Eastern time on the specified comment date.
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, and service can be found at:
Environmental Protection Agency (EPA).
Notice.
This notice announces that pesticide related information submitted to EPA's Office of Pesticide Programs (OPP) pursuant to the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and the Federal Food, Drug, and Cosmetic Act (FFDCA), including information that may have been claimed as Confidential Business Information (CBI) by the submitter, will be transferred to Access Interpreting in accordance with the CBI regulations. Access Interpreting has been awarded a contract to perform work for OPP, and access to this information will enable Access Interpreting to fulfill the obligations of the contract.
Access Interpreting will be given access to this information on or before February 19, 2013.
MaryC Simmons, Information Technology and Resources Management Division (7502P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460–0001; telephone number: (703) 305–6452: email address:
This action applies to the public in general. As such, the Agency has not attempted to describe all the specific entities that may be affected by this action. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under
EPA has established a docket for this action under docket identification (ID) number EPA–HQ–OPP–2013–0036. Publicly available docket materials are available either in the electronic docket
Under Contract No. EP10H000109, this contract is to provide the Environmental Protection Agency, Office of Human Resources (OHR) with Sign Language interpreting services. The contractor shall provide professional interpreters who shall make every effort to arrive at scheduled assignments 15 minutes prior to the start of the assignment, concurrent with general interpreting standards. Contract interpreters whom the Contractor sends must have a cell phone or text pager that will allow them to get instant messages for quick communication of last minute changes.
The work will be performed in a space to be designated by EPA, primarily at EPA Headquarters and other Washington, DC area EPA facilities. Occasional travel will be involved. The sign language personnel will report to the location specified by the EPA Headquarters Interpreting Coordinator, also identified as the Project Officer under this contract. There will be some requests for interpreters in different areas of the United States. The contractor must have the ability to procure services in different locations throughout the country. The Contractor must primarily serve Deaf and hard of hearing persons as a major function of their business and be stationed in the Washington, DC metropolitan area.
This contract involves no subcontractors.
OPP has determined that the contract described in this document involves work that is being conducted in connection with FIFRA, in that pesticide chemicals will be the subject of certain evaluations to be made under this contract. These evaluations may be used in subsequent regulatory decisions under FIFRA.
Some of this information may be entitled to confidential treatment. The information has been submitted to EPA under FIFRA sections 3, 4, 6, and 7 and under FFDCA sections 408 and 409.
In accordance with the requirements of 40 CFR 2.307(h)(3), the contract with Access Interpreting prohibits use of the information for any purpose not specified in this contract; prohibits disclosure of the information to a third party without prior written approval from the Agency; and requires that each official and employee of the contractor sign an agreement to protect the information from unauthorized release and to handle it in accordance with the
Environmental protection, Business and industry, Government contract, Government property, Security measures.
Environmental Protection Agency (EPA).
Notice.
The Office of Chemical Safety and Pollution Prevention, in conjunction with the United States Department of Agriculture, will facilitate a public meeting with parties engaged in activities to reduce potential acute exposure of honey bees and pollinators to pesticides. Invited presenters will provide briefings on current activities in three key areas related to improving seed treatment techniques; reducing the generation of dust that occurs during planting operations; and raising awareness of current best management practices that are available to mitigate potential acute pesticide exposure to pollinators. Pollinators are an important component of agricultural production, critical to food and ecosystems, and must be protected so that they can continue to play this important role. The intended outcome of this meeting is to share information and look for areas of collaboration to lessen the unintended impacts of pesticides on pollinators during coming and future growing seasons. This meeting complements EPA's ongoing work through the Pesticide Program Dialogue Committee (PPDC) to support and take action to improve pollinator health.
The meeting will be held on March 5, 2013 from 8:00 a.m. to 5:00 p.m. e.s.t.
To request accommodation of a disability, please contact the person listed under
The meeting will be held at the Office of Pesticide Programs (OPP), First Floor Conference Center, One Potomac Yard (South Bldg.), 2777 S. Crystal Dr., Arlington, VA 22202.
Mary Clock-Rust, Environmental Fate and Effects Division, (7507P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460–0001; telephone number: (703) 308–2718; fax number: (703) 305–6309 email address:
You may be potentially affected by this action if you are engaged in activities to reduce potential exposure of honey bees and pollinators to pesticides. This action is directed to the public in general, and may be of particular interest to, but is not limited to the following entities: Agricultural workers and farmers; beekeepers; pesticide industry and trade associations; environmental, consumer, and farm worker groups; animal welfare organizations; pesticide users and growers; pest consultants, state, local and tribal governments and academia. If you have questions regarding the applicability of this action to a particular entity, consult the person listed under
This meeting is open to the public and seating is limited. Please use the following email address to make a reservation for seating:
EPA is convening a public meeting to facilitate the exchange of information among parties engaged in various activities related to improving the safety of pollinators around agricultural crops. While there are several factors affecting honey bee health, pesticides are among these variables; and, new research is rapidly becoming available on practices and technology aimed at reducing exposure of pollinators to pesticides. Specifically, this summit will focus on the pesticide treated seed, including the technology of seed treatment and the management of dust that can be associated with planting treated seed and which may lead to pesticide exposure to bees. The public meeting will also include best management techniques associated with commercial agriculture and bees. This summit complements EPA's on-going work with the PPDC Workgroup on Pollinator Protection, which is addressing pesticide labeling, best management practices, enforcement, communication and education. This public summit is being held to increase the awareness among the participants and the public of the rapidly changing understanding of, and response to protecting pollinators at agricultural crops.
Environmental protection, Pesticides and pests.
Environmental Protection Agency (EPA).
Notice.
EPA has received applications to register pesticide products containing an active ingredient not included in any currently registered pesticide products. Pursuant to the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), EPA is hereby providing notice of receipt and opportunity to comment on these applications.
Comments must be received on or before March 15, 2013.
Submit your comments, identified by docket identification (ID) number and the EPA File Symbol
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•
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A contact person is listed at the end of each registration application summary and may be contacted by telephone, email, or mail. Mail correspondence to the Registration Division (RD) (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460–0001. As part of the mailing address, include the contact person's name, division, and mail code.
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
1.
2.
i. Identify the document by docket ID number and other identifying information (subject heading,
ii. Follow directions. The Agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.
iii. Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.
iv. Describe any assumptions and provide any technical information and/or data that you used.
v. If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.
vi. Provide specific examples to illustrate your concerns and suggest alternatives.
vii. Explain your views as clearly as possible, avoiding the use of profanity or personal threats.
viii. Make sure to submit your comments by the comment period deadline identified.
EPA has received applications to register pesticide products containing an active ingredient not included in any currently registered pesticide products. Pursuant to the provisions of FIFRA section 3(c)(4), EPA is hereby providing notice of receipt and opportunity to comment on these applications. Notice of receipt of these applications does not imply a decision by the Agency on these applications. For actions being evaluated under the Agency's public participation process for registration actions, there will be an additional opportunity for a 30-day public comment period on the proposed decision. Please see the Agency's public participation Web site for additional information on this process (
Environmental protection, Pesticides and pest.
Export-Import Bank of the United States.
Submission for OMB Review and Comments Request.
The Export-Import Bank of the United States (Ex-Im Bank), as a part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal Agencies to comment on the proposed information collection, as required by the Paperwork Reduction Act of 1995.
Ex-Im Bank has developed an electronic disbursement approval processing system for guaranteed lenders with Credit Guarantee Facilities. After a Credit Guarantee Facility (CGF) has been authorized by Ex-Im Bank and legal documentation has been completed, the Lender will obtain and
This form will enable Ex-Im Bank to identify the specific details of the export transaction. These details are necessary for determining the eligibility of disbursements for approval.
The application can be reviewed at:
Comments should be received on or before April 15, 2013 to be assured of consideration.
Comments maybe submitted electronically on
Export-Import Bank of the United States.
Submission for OMB review and comments request.
The Export-Import Bank of the United States (Ex-Im Bank), as a part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal Agencies to comment on the proposed information collection, as required by the Paperwork Reduction Act of 1995.
Ex-Im Bank has developed an electronic disbursement approval processing system for guaranteed lenders with transactions documented under Medium-term Master Guarantee Agreements. After an export transaction has been authorized by Ex-Im Bank and legal documentation has been completed, the lender will obtain and review the required disbursement documents (e.g. invoices, bills of lading, Exporter's Certificates, etc.) and will disburse the proceeds of the loan for eligible goods and services. In order to obtain approval of the disbursement, the lender will access and complete an electronic questionnaire through Ex-Im Bank's automatic application system (ExIm Online). Ex-Im Bank's action (approved or declined) will be posted on the lender's history page.
The information collected will assist in determining that each disbursement under a Medium-Term Guarantee meets all of the terms and conditions for approval.
The application can be reviewed at:
Comments should be received on or before April 15, 2013 to be assured of consideration.
Comments maybe submitted electronically on
Federal Communications Commission.
Notice of public meeting.
In accordance with the Federal Advisory Committee Act, this notice advises interested persons that the Federal Communications Commission's (FCC) Communications Security, Reliability, and Interoperability Council (CSRIC) will hold its final meeting. Working groups Next Generation Alerting, E9–1–1 Location Accuracy, Network Security Best Practices, DNSSEC Implementation Practices for ISPs, Secure BGP Deployment, Botnet Remediation, Alerting Issues Associated with CAP Migration, 9–1–1 Prioritization, and Consensus Cybersecurity Controls will be presenting reports for a vote by the Council.
March 6, 2013.
Federal Communications Commission, Room TW–C305 (Commission Meeting Room), 445 12th Street SW., Washington, DC 20554.
Jeffery Goldthorp, Designated Federal Officer, (202) 418–1096 (voice) or
The meeting will be held on March 6, 2013, from 9:00 a.m. to 1:00 p.m. in the Commission Meeting Room of the Federal Communications Commission, Room TW–C305, 445 12th Street SW., Washington, DC 20554. The CSRIC is a federal advisory committee that will provide recommendations to the FCC regarding best practices and actions the FCC can take to ensure the security, reliability, and interoperability of communications systems. On March 19, 2011, the FCC, pursuant to the Federal Advisory Committee Act, renewed the charter for the CSRIC for a period of two years through March 18, 2013. Working Groups are described in more detail at
The FCC will attempt to accommodate as many attendees as possible; however, admittance will be limited to seating availability. The Commission will provide audio and/or video coverage of the meeting over the Internet from the FCC's Web page at
Open captioning will be provided for this event. Other reasonable accommodations for people with disabilities are available upon request. Requests for such accommodations should be submitted via email to
Federal Election Commission.
Notice of filing dates for special election.
Massachusetts has scheduled special elections on April 30, 2013, and June 25, 2013, to fill the U.S. Senate seat vacated by Secretary John F. Kerry.
Committees required to file reports in connection with the Special Primary Election on April 30, 2013, 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 June 25, 2013, shall file a 12-day Pre-Primary Report, 12-day Pre-General, and a 30-day Post-General Report.
Ms. Elizabeth S. Kurland, Information Division, 999 E Street NW., Washington, DC 20463; Telephone: (202) 694–1100; Toll Free (800) 424–9530.
All principal campaign committees of candidates who participate in the Massachusetts Special Primary and Special General Elections shall file a 12-day Pre-Primary Report on April 18, 2013; a 12-day Pre-General on June 13, 2013; and a 30-day Post-General Report on July 25, 2013. (See charts below for the closing date for each report.)
All principal campaign committees of candidates participating
Political committees filing on a semi-annual basis in 2013 are subject to special election reporting if they make previously undisclosed contributions or expenditures in connection with the Massachusetts Special Primary or Special General Elections by the close of books for the applicable report(s). (See charts below for the closing date for each report.)
Committees filing monthly that make contributions or expenditures in connection with the Massachusetts Special Primary or General Elections will continue to file according to the monthly reporting schedule.
Additional disclosure information in connection with the Massachusetts Special Elections may be found on the FEC Web site at
Principal 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 $17,100 during the special election reporting periods (see charts below for closing date of each period). 11 CFR 104.22(a)(5)(v) and (b).
On behalf of the Commission,
Federal Election Commission.
Notice of filing dates for special party nominating convention.
The South Carolina Green Party will select their party's nominee at a Special Party Convention on March 9, 2013. Committees required to file reports in connection with the Special Green Party Convention shall file a 12-day Pre-Convention Report.
Ms. Elizabeth S. Kurland, Information Division, 999 E Street NW., Washington, DC 20463; Telephone: (202) 694–1100; Toll Free (800) 424–9530.
On January 8, 2013, the Commission approved the filing dates for the Special Primary, Runoff and General Elections that will be held in the First Congressional District to fill the U.S. House seat vacated by Senator Tim Scott. The Special General Election date is May 7, 2013. The Democratic and Republican parties will nominate candidates for that election in Special Primary Elections on March 19, 2013, with Special Runoff Elections held on April 2, 2013, if necessary. At the time the Commission approved the filing requirements for the Special Primary, Runoff and General Elections, no special nominating conventions had been scheduled by any of the other certified political parties in South Carolina.
The Commission has received additional information that the South Carolina Green Party has scheduled a convention on March 9, 2013, to select their nominee for the Special General Election. Committees required to file reports in connection with the Special Green Party Convention on March 9, 2013, shall file a 12-day Pre-Convention Report. The date for the Special General is unchanged and, as such, this
All principal campaign committees of candidates who participate in the South Carolina Special Green Party Convention shall file a 12-day Pre-Convention Report on February 25, 2013. (See charts below for the closing date for the report.)
Political committees filing on a semi-annual basis in 2013 are subject to special election reporting if they make previously undisclosed contributions or expenditures in connection with the South Carolina Special Green Party Convention or Special General Election by the close of books for the applicable report(s). (See charts below for the closing date for each report.)
Committees filing monthly that make contributions or expenditures in connection with the South Carolina Special Green Party Convention or Special General Election will continue to file according to the monthly reporting schedule.
Additional disclosure information in connection with the South Carolina Special Elections may be found on the FEC Web site at
Principal 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 $17,100 during the special election reporting periods (see charts below for closing date of each period). 11 CFR 104.22(a)(5)(v) and (b).
On behalf of the Commission,
The Commission hereby gives notice of the filing of the following agreements under the Shipping Act of 1984. Interested parties may submit comments on the agreements to the Secretary, Federal Maritime Commission, Washington, DC 20573, within ten days of the date this notice appears in the
By Order of the Federal Maritime Commission.
Notice is given that a complaint has been filed with the Federal Maritime Commission (Commission) by Lisa
Complainant alleges that Respondents, by banning Complainants from traveling on ships operated by Princess and Carnival plc and failing to refund a deposit, violated 46 U.S.C. 41104(10) which provides that “[a] common carrier, either alone or in conjunction with any other person, directly or indirectly, may not * * * (10) unreasonably refuse to deal or negotiate * * *”
Complainant requests that “the Commission issue appropriate relief, including, but not limited to, entry of a final order enjoining the refusal to deal policy as to Lisa Cornell and Ware Cornell, entry of final order restoring all economic losses as set forth herein in the amount of $33,1000.00 and a award of fees and costs of action.”
The full text of the complaint can be found in the Commission's Electronic Reading Room at
This proceeding has been assigned to the Office of Administrative Law Judges. The initial decision of the presiding officer in this proceeding shall be issued by February 10, 2014 and the final decision of the Commission shall be issued by June 9, 2014.
The Commission gives notice that the following applicants have filed an application for an Ocean Transportation Intermediary (OTI) license as a Non-Vessel-Operating Common Carrier (NVO) and/or Ocean Freight Forwarder (OFF) pursuant to section 19 of the Shipping Act of 1984 (46 U.S.C. 40101). Notice is also given of the filing of applications to amend an existing OTI license or the Qualifying Individual (QI) for a licensee.
Interested persons may contact the Office of Ocean Transportation Intermediaries, Federal Maritime Commission, Washington, DC 20573, by telephone at (202) 523–5843 or by email at
By the Commission.
The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors.
A. Federal Reserve Bank of Kansas City (Dennis Denney, Assistant Vice President) 1 Memorial Drive, Kansas City, Missouri 64198–0001:
1.
General Services Administration (GSA).
Notice of Public Availability of FY 2012 Service Contract Inventories.
In accordance with Section 743 of Division C of Fiscal Year (FY) 2010 Consolidated Appropriations Act Public Law 111–117, GSA is publishing this notice to advise the public of the availability of the FY 2012 Service Contract Inventories.
February 13, 2013.
Questions regarding the service contract inventory should be directed to Mr. Paul F. Boyle in the Office of Acquisition Policy at 202–501–0324 or
In accordance with Section 743 of Division C of Fiscal Year (FY) 2010 Consolidated Appropriations Act Public Law 111–117, GSA is publishing this notice to advise the public of the availability of the FY 2012 Service Contract Inventories. These inventories provide information on service contract actions over $25,000 that were made in FY 2012. The information is organized by function to show how contracted resources are distributed throughout the agency. The inventory has been developed in accordance with guidance issued on December 19, 2011 by the Office of Management and Budget's Office of Federal Procurement Policy (OFPP). OFPP's guidance is available at:
The GSA has posted its inventory and a summary of the inventory on the GSA.Gov homepage at the following link:
Office of the Secretary, HHS.
Notice.
In compliance with section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, the Office of the Secretary (OS), Department of Health and Human Services, announces plans to submit a new Information Collection Request (ICR), described below, to the Office of Management and Budget (OMB). Prior to submitting that ICR to OMB, OS seeks comments from the public regarding the burden estimate, below, or any other aspect of the ICR.
Comments on the ICR must be received on or before April 15, 2013.
Submit your comments to
Information Collection Clearance staff,
When submitting comments or requesting information, please include the document identifier HHS–OS–18774–60D for reference. Information Collection Request Title: Survey of Physician Time Use Patterns under the Medicare Fee Schedule.
OS specifically requests comments on (1) the necessity and utility of the proposed information collection for the proper performance of the agency's functions, (2) the accuracy of the estimated burden, (3) ways to enhance the quality, utility, and clarity of the information to be collected, and (4) the use of automated collection techniques or other forms of information technology to minimize the information collection burden.
Agency for Healthcare Research and Quality, HHS.
Notice.
This notice announces the intention of the Agency for Healthcare Research and Quality (AHRQ) to request that the Office of Management and Budget (OMB) approve the proposed information collection project: “Patient-Reported Health Information Technology and Workflow.” In accordance with the Paperwork Reduction Act, 44 U.S.C. 3501–3521, AHRQ invites the public to comment on this proposed information collection.
Comments on this notice must be received by April 15, 2013.
Written comments should be submitted to: Doris Lefkowitz, Reports Clearance Officer, AHRQ, by email at
Copies of the proposed collection plans, data collection instruments, and specific details on the estimated burden can be obtained from the AHRQ Reports Clearance Officer.
Doris Lefkowitz, AHRQ Reports Clearance Officer, (301) 427–1477, or by email at
Health IT can improve quality of care by arraying relevant information, displaying clinical guidelines, highlighting test values of concern, calculating medication doses, and supporting clinical decisionmaking in many ways (Chaudhry
In recent years there has been an increase in the use of health IT to capture patient reporting of medical histories, symptoms, results of self-testing (e.g., blood glucose levels, blood pressure), weight questions and concerns, over-the-counter medication use, and other information that patients need to share with their care providers. Health IT can elicit such information from patients, and help incorporate it into the flow of information within a physician's practice so that the information is detailed, actionable, timely, and can be used to meet patients' treatment goals. Gathering and integrating information from patients using health IT can include patient surveys and other pre-formatted information collection mechanisms (e-forms), secure messaging (email) between patients and their providers (Byrne, Elliott, and Firek, 2009; Bergmo, Kummervold, Gammon et al., 2005); and patient portals (sometimes referred to as [electronic] personal health records or PHRs, patient portals allow patients to view portions of their medical records [e.g., view laboratory test results] and support other health-related tasks such as making appointments or requesting medication refills). The use of patient-reported information is not yet widely integrated into health IT.
This project will fill the gaps in the current literature by exploring the influence of sociotechnical factors—for clinicians and their office staff, and for patients—in capturing and using patient-reported information in ambulatory health IT systems and associated workflows. The goal of the project is to answer the following research questions:
• How does the use of health IT to capture and use patient-reported information support or hinder the workflow from the viewpoints of clinicians, office staff, and patients?
• How does the sociotechnical context influence workflow related to
• How do practices redesign their workflow to incorporate the capture and use of patient-reported information?
The study will consist of rigorous mixed-methods case studies of six ambulatory care physician practices including three small practices (1–3 physicians and the other clinicians and office staff in their practices) and three medium-sized practices (4–10 physicians, and the other clinicians and office staff in their practices). These case studies will be conducted during multiday (3 to 4 days) site visits to collect information for this exploratory research. The multiple case study research approach of Eisenhardt and colleagues (Brown & Eisenhardt, 1997; Eisenhardt, 1989) will guide data collection and data analysis, to elucidate health IT workflows and important sociotechnical factors (for patients, clinicians, and office staff) in the capture and use of patient-reported information.
A focus of the case studies will be to identify current workflows related to patient-reported information, and determine the work system factors that influence workflows (barriers and facilitators). In particular, data collected from the six practices will help identify bottlenecks and sources of delay, unnecessary steps or duplication, rework to correct errors or inconsistencies, role ambiguity, missing information, and lack of data quality controls or reconciliation of inconsistencies. The focus is not on the content of information reported by patients, or how it alters clinicians' diagnostic or treatment decisions. Rather, the focus is on the workflows required to capture, process, and make use of information that patients report to their care providers.
This study is being conducted by AHRQ through its contractor, Abt Associates Inc., and subcontractors University of Wisconsin-Madison and University of Alabama-Birmingham, pursuant to AHRQ's statutory authority to conduct and support research on health care and on systems for the delivery of such care, including activities with respect to health care technologies and the quality, effectiveness, efficiency, appropriateness and value of health care services including quality measurement and improvement. 42 U.S.C. 299a(a)(1), (2) and (5).
To achieve the goal of this project the following activities will be conducted at each of six participating ambulatory physician practices (referred to herein as `study sites'):
(1) Preliminary Conference Call: The Practice Manager (the individual in each practice who manages day-to-day operations) and the Physician Leader (the physician in each practice who is most knowledgeable about health IT and health IT implementation) will be asked to participate in a preliminary conference call to learn about the study site and what will be expected of their practice as a study site. This call will last approximately one hour and will be completed by up to 2 participants per site for a total of up to 12 participants across sites.
(2) Pre-Visit Questionnaire: The Practice Manager will be asked to complete a brief questionnaire prior to the site visit, describing the practice size, health IT installed, patient population served, and other general contextual information about the practice and use of health IT. The Pre-Visit Questionnaire will take approximately one hour to complete and will be completed by up to one respondent per study site.
(3) Practice Tour: Each of the six site visits will begin with a one-hour tour of the practice and discussion with the Practice Manager to observe the physical layout and computer work stations, clarify the purpose of the study and the site visit, and clarify information from the Pre-Visit Questionnaire.
(4) Interviews with Practice Manager and Physician Leader: Following the tour at each study site, the Practice Manager and Physician Leader will be asked to participate in a one hour interview. The interview with the Practice Manager will focus on the sociotechnical context of the practice, with an emphasis on the social context of the practice. The interview with the Physician Leader will also focus on the sociotechnical context of the practice, and, in particular, the technical aspects of clinicians using the health IT system. The focus will be on the workflow across the practice, not the workflow of these two individuals. This information will be used to create the basic outline or structure of a Workflow Process Map(s), a diagram that shows the temporal sequencing of tasks in relation to other work system elements (person, organization, environment, and tools and technologies). It will also be used to begin to identify potential variation or flexibility in individuals' workflows, and provide context regarding multiple IT systems that may be in use in the practice. The information obtained from these interviews will be augmented by observation of workflows in the practice and interviews with others in the practice, as described in #5 and #6.
(5) Observations of Clinicians and Office Staff: Researchers will observe between 7 to 20 clinicians (including physicians, nurse practitioners, physician assistants, nurses, medical assistants, and ancillary staff) and between 3 to 7 office staff (including the front desk receptionist, IT staff, clerks, and other non-clinical staff) per study site, depending on site size for a total of up to 81 clinicians and up to 30 office staff observations across the study sites. Observations will take place as clinicians and office staff work to elicit, integrate and work with patient-reported information. Each clinician will be observed for up to two hours and each office staff person will be observed for up to 30 minutes. These observations periods are different because clinicians' work is more complex and varies more from one patient to the next, while office staff work varies less. Observations will focus on processes, bottlenecks, facilitators, workarounds, and points in the workflow when paper information supplements electronic information. Observations of both clinicians and office staff will be recorded on the Observation Form. The observations will be used to create a detailed Workflow Process Map(s). This data collection will not burden the clinic staff and is not included in the burden estimates in Exhibit 1.
(6) Interviews with Clinicians and Office Staff: Following observations of the workflow, each clinician and office staff person who was observed will be interviewed for up to one hour, for a total of up to 81 clinicians and up to 30 office staff interviews. If there are more clinicians or office staff than can be interviewed during the site visit, those with the most extensive experience with patient-reported information will be selected for interviews. These interviews will include discussion about the sociotechnical context, the workflow observed (see above), facilitators and barriers to capturing and using patient-reported information, and whether there are uncommon workflow patterns that arise occasionally but were not observed. Unlike the interviews with the Physician Leader and Practice Manager, these interviews will focus on the workflow of each individual, not the workflow across the entire practice. The same interview guide will be used for both clinician and office staff interviews.
(7) Survey of Clinicians and Office Staff: All clinicians and office staff in the six study sites will be invited to respond to a survey. Although there may not be sufficient time on site to
(8) Patient Interviews: Patients will be interviewed to understand the workflow of entering or reporting information from the patient's perspective; the extent and adequacy of training or instruction patients received in using the health IT; attitudes about the time it takes to report information; and whether there are challenges, barriers, facilitators, or workarounds commonly used by patients as they report information requested by their care providers. Five patients will be interviewed at each small practice and up to seven at each medium-sized practice, for a total of up to 36 across the six study sites. More patients will be interviewed in the medium-sized practices because there are more clinicians in these practices, and each may have different patterns of interacting with their patients. Interviewing more patients will enhance the ability to capture information about variation in the clinician-patient information sharing and interaction. These interviews will help researchers understand the range of patient experiences.
(9) Post-Visit Follow-up to Review the Workflow Process Map(s): Following each site visit, researchers will complete the Workflow Process Map(s) for the study site and send it to the Practice Manager and Physician Leader, requesting confirmation that the understanding of their workflows is correct.
The lessons learned from this research may be used in a variety of ways:
(1) To identify additional workflow components that ambulatory practices should consider when implementing health IT to capture and use patient-reported information;
(2) To identify issues relevant to best practice guidelines for health IT implementation;
(3) To identify issues for consideration in the design and evaluation of other patient-centered health IT tools.
The study findings will be widely disseminated to health IT researchers and implementers via AHRQ's National Resource Center for Health IT Web site. The study will enhance the existing knowledge about sociotechnical factors that impact health IT workflow, and how small and medium-sized ambulatory practices employ health IT to capture and use patient-reported information as they redesign their workflow to deliver patient-centered care.
Exhibit 1 shows the estimated annual burden hours for the respondents' time to participate in this research. The Preliminary Conference Call with each site will involve two people, the Practice Manager and the Physician Leader, and will require up to one hour per site. A total of 12 people across the six study sites will be involved. The Pre-Visit Questionnaire and the Practice Tour will be completed by the Practice Manager at each site and will require up to one hour each. The Practice Manager and the Physician Leader at each site (12 individuals in total across the 6 sites) will be separately interviewed to gather in depth information about the sociotechnical context of the practice. The interviews will each take up to one hour to complete. Interviews with Clinicians and Office Staff will be completed with a maximum of 111 clinicians and office staff across the six study sites, and each interview will last up to one hour. A maximum of 135 clinicians and office staff combined (up to 10 for each of three small-sized sites and 35 for each of 3 medium-sized sites) will be asked to complete the clinician and office staff survey, which will take approximately 15 minutes for each respondent to complete. Up to 36 patients will be interviewed (5 in each of the small sites and up to 7 in each of the medium-sized sites). Each interview will take no more than 30 minutes to complete. A total of 12 persons (the Practice Manager and the Physician Leader at each site) will be involved in the Post-Visit Follow-up to Review the Workflow Process Map(s), which will take one hour. The total annual burden hours, is estimated to be 211 hours.
Exhibit 2 shows the estimated annual cost burden associated with the study sites' time to participate in the research. The total annual cost burden is estimated to be $11,031.
In accordance with the Paperwork Reduction Act, comments on AHRQ's information collection are requested with regard to any of the following: (a) Whether the proposed collection of information is necessary for the proper performance of AHRQ health care research and health care information dissemination functions, including whether the information will have practical utility; (b) the accuracy of AHRQ's estimate of burden (including hours and costs) of the proposed collection(s) 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 upon the respondents, including the use of automated collection techniques or other forms of information technology.
Comments submitted in response to this notice will be summarized and included in the Agency's subsequent request for OMB approval of the proposed information collection. All comments will become a matter of public record.
The American Recovery and Reinvestment Act (ARRA) of 2009, Public Law 111–5 has authorized emergency TANF funds to be awarded to States, Tribes, and Territories who meet certain eligibility requirements written in the legislation. TANF Policy Announcement TANF–ACF–PA–2009–01 provides additional guidance on eligibility requirements. Recipients of ARRA funds are to report spending and performance data to Federal agencies quarterly for posting on the public Web site, “Recovery.gov”. Federal agencies are required to collect ARRA expenditures data and the data must be clearly distinguishable from the regular TANF (non-ARRA) funds. Therefore, in order to meet this data collection requirement, the ACF–196T has been modified with the addition two line items and a column to report ARRA expenditures. The collection and posting of this data is to allow the public to see where their tax dollars are spent.
Copies of the proposed collection may be obtained by writing to the Administration for Children and Families, Office of Planning, Research and Evaluation, 370 L'Enfant Promenade SW., Washington, DC 20447, Attn: ACF Reports Clearance Officer. All requests should be identified by the title of the information collection. Email address:
OMB is required to make a decision concerning the collection of information between 30 and 60 days after publication of this document in the
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 March 15, 2013.
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, Attn: FDA Desk Officer, FAX: 202–395–7285, or emailed to
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
The guidance for industry and FDA staff entitled “Center for Devices and Radiological Health (CDRH) Appeals Processes” revises, updates, and combines two previous guidance documents: “Medical Device Appeals and Complaints: Guidance for Dispute Resolution,” dated February 1998, and “Resolving Scientific Disputes Concerning the Regulation of Medical Devices, A Guide to Use of the Medical Devices Dispute Resolution Panel; Final Guidance for Industry and FDA,” dated July 2001.
The document is intended to provide clarity to internal and external audiences regarding CDRH's appeal processes. Individuals outside of FDA who disagree with a decision or action taken by CDRH and wish to have it reviewed or reconsidered have several processes for resolution from which to choose, including requests for supervisory review of an action, petitions, and hearings. In most cases, it is up to the party seeking resolution of an adverse action or resolution of a difference of opinion to determine the appropriate process for a given circumstance or issue. The guidance describes these mechanisms and includes the following topics: (1) Appealable actions (i.e., warning letters, post-approval study requirements, premarket decisions, deficiency letters, or requests for additional information); (2) paths and options available at different stages of appeals; (3) use of expedited or “paper” appeals versus appeal meetings or teleconferences; (4) recommended format for appeals; (5) appeal authorities; (6) appeal conflicts; and (7) issues that are appropriate for dispute resolution.
This guidance is intended to describe the processes available to outside stakeholders to request additional review of decisions and actions by CDRH employees. There are several processes for resolution, including a request for supervisory review of an action, petitions, and hearings. The proposed information collection seeks approval for the reporting burden associated with requests for additional review of decisions and actions by CDRH employees under this guidance. The guidance also refers to currently approved information collections found in FDA regulations.
The collections of information in 21 CFR 10.30, 10.33, and 10.35 have been approved under OMB control number 0910–0183; the collections of information in 21 CFR part 12 have been approved under OMB control number 0910–0184; the collections of information for 21 CFR part 807 subpart E have been approved under OMB control number 0910–0120; the collections of information under 21 CFR part 812 have been approved under OMB control number 0910–0078; the collections of information under 21 CFR
In the
FDA estimates it will receive 50 requests annually from outside stakeholders requesting additional review of decisions and actions by CDRH employees. The Agency reached this estimate based on data collected about requests received over the last 2 years. FDA estimates it will take outside stakeholders approximately 8 hours to prepare a request based on the Agency's experience with past requests.
Before the proposed information collection provisions contained in this guidance become effective, FDA will publish a notice in the
FDA estimates the burden of this collection of information as follows:
Food and Drug Administration, HHS.
Notice of public conference.
The Food and Drug Administration (FDA), in cosponsorship with the Pharmaceutical Users Software Exchange (PhUSE), is announcing a public conference entitled “The FDA/PhUSE Annual Computational Science Symposium.” The purpose of the conference is to help the broader community align and share experiences to advance computational science. At the conference, which will bring together FDA, industry, and academia, FDA will update participants on current initiatives, and collaborative project groups will address specific challenges in accessing and reviewing data to support product development. These project groups will focus on solutions and practical ways to implement them.
The public conference will be held on March 18 and 19, 2013, from 9 a.m. to 5:30 p.m.
The public conference will be held at the Silver Spring Civic Building at Veterans Plaza, One Veterans Pl., Silver Spring, MD 20910, 1–240–777–5300.
Chris Decker, PhUSE FDA Liaison Director, Pharmaceutical Users Software Exchange (PhUSE), 64 High St., Broadstairs CT10 1JT, United Kingdom, 609–514–5105, email:
A description of the project groups and planned activities can be found at
To register, please submit the registration form online at
The costs of registration for different categories of attendee are as follows:
Government and nonprofit attendees and exhibitors will need an invitation code to register at the discounted rate. An invitation code can be obtained by sending an email to:
Attendees are responsible for their own accommodations. Attendees making reservations at the DoubleTree by Hilton Silver Spring Hotel are eligible for a reduced conference rate of $199, not including applicable taxes. Those making reservations online should use the following link to receive the special rate:
Those wishing to present posters at the conference should submit an abstract online at
• Data submission standards development, implementation, and best practices;
• User experience and evaluation of current processes and tools and their effects on organizational performance;
• Needs and specifications for proposed new tools and processes;
• Business processes driving the development of information systems; and
• The effect of processes and tools on problem solving quality, efficiency, and cost.
The conference will make available an exhibition hall. The exhibitor price for this conference is $3,500. Neither PhUSE nor FDA endorse any commercial software or vendor.
Food and Drug Administration, HHS.
Notice of public workshop.
The Food and Drug Administration (FDA) Cincinnati District Office, in cosponsorship with the Association of Food and Drug Officials (AFDO), is announcing a public workshop entitled “Global Quality Systems—An Integrated Approach to Improving Medical Product Safety.” This 2-day public workshop is intended to provide information about FDA drug and device regulation to the regulated industry.
The public workshop will be held on June 10 and 11, 2013, from 8 a.m. to 5 p.m.
The public workshop will be held at the Louisville Marriott Downtown, 280 West Jefferson St., Louisville, KY, 502–627–5045 or toll-free 800–533–0127;
Attendees are responsible for their own accommodations. To make reservations at the Louisville Marriott Downtown, at the reduced conference rate, contact the Louisville Marriott Downtown before May 2, 2013, and cite meeting code “AFDO Conference.”
Krystal Reed, Association of Food and Drug Officials, 2550 Kingston Rd., suite 311, York, PA 17402, 717–757–2888, FAX: 717–650–3650,
If you need special accommodations due to a disability, please contact Krystal Reed (see
The registrar will also accept payment through Visa and MasterCard credit cards. For more information on the public workshop, or for questions about registration, please contact AFDO at 717–757–2888, FAX: 717–650–3650, or email:
The public workshop helps fulfill the Department of Health and Human Services' and FDA's important mission to protect the public health. The workshop will provide FDA-regulated drug and device entities with information on a number of topics concerning FDA requirements related to the production and marketing of drugs and/or devices. Topics for discussion include the following:
• Future of Combination Product Regulation.
• Unique Device Identifier Progress.
• Health Canada Update.
• The Safety of our Drugs and Devices—the Complex Reality.
• Nanotechnology.
• Drug and Medical Device Trends.
• Case for Quality (Center for Devices and Radiological Health) Presented by Steve Silverman.
• Working Luncheon Interactive Session—Lessons Learned From the Mistakes of Others.
• Complaint Handling—It's Not Just About Compliance—It's an Effective Business Driver.
• FDA's Cosmetic Regulatory Agenda.
• Challenges With Implementation of U.S.P. 35 on a Global Basis.
• Pilot Program for Abbreviated Drug Inspections.
FDA has made education of the drug and device manufacturing community a high priority to help ensure the quality of FDA-regulated drugs and devices. The workshop helps to achieve objectives set forth in section 406 of the Food and Drug Administration Modernization Act of 1997 (Pub. L. 105–115) (21 U.S.C. 393), which includes working closely with stakeholders and maximizing the availability and clarity of information to stakeholders and the public. The workshop also is consistent with the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104–121), as outreach activities by Government Agencies to small businesses.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing the availability of the following revised final versions of documents that support making regulatory submissions in
Submit written requests for single copies of the documents to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, rm. 2201, Silver Spring, MD 20993–0002 or Office of Communication, Outreach and Development (HFM–40), Center for Biologics Evaluation and Research, Food and Drug Administration, 1401 Rockville Pike, suite 200N, Rockville, MD 20852–1448. Send one self-addressed adhesive label to assist that office in processing your requests. See the
The eCTD is an International Conference on Harmonisation (ICH) standard based on specifications developed by ICH and its member parties. FDA's Center for Drug Evaluation and Research (CDER) and Center for Biologics Evaluation and Research (CBER) have been receiving submissions in the eCTD format since 2003; the eCTD has been the standard for electronic submissions to CDER and CBER since January 1, 2008. The majority of new electronic submissions are now received in eCTD format. Since adoption of the eCTD standard, it has become necessary to update the administrative portion of the eCTD (Module 1) to reflect regulatory changes, provide clarification of business rules for submission processing and review, refine the characterization of promotional marketing and advertising material, and facilitate automated processing of submissions. FDA announced availability of final versions of technical documentation in the
• “The eCTD Backbone Files Specification for Module 1, version 2.1,” which provides specifications for creating the eCTD backbone file for Module 1 for submission to CDER and CBER. It should be used in conjunction with the guidance for industry entitled “Providing Regulatory Submissions in Electronic Format—Human Pharmaceutical Applications and Related Submissions,” which will be revised as part of the implementation of the updated eCTD backbone files specification.
• “Comprehensive Table of Contents Headings and Hierarchy, version 2.1,” which reflects updated headings that are specified in the document entitled “The eCTD Backbone Files Specification for Module 1, version 2.1.”
A complete summary of the revisions made are included in the updated documents. The revisions include the following:
• The 1.16 heading regarding risk management was modified and subheadings were added.
• The application-type attribute file was modified to include PMA and 510(k).
• Attribute files were modified to allow the version, date, and number to be machine readable.
FDA is not prepared at present to accept submissions utilizing this new version, because eCTD software vendors need time to update their software to accommodate this information and because its use will require software upgrades within the Agency. FDA estimates it will be able to receive submissions utilizing Module 1 Specifications 2.1 by September 2013 and will give 30 days advanced notice to industry.
Persons with access to the Internet may obtain the documents at either
Health Resources and Services Administration (HRSA), Department of Health and Human Services.
Notice of Ryan White HIV/AIDS Program (Part C) Early Intervention Services One-Time Noncompetitive Award to Ensure Continued HIV Primary Medical Care.
To prevent a lapse in comprehensive primary care services for persons living with HIV/AIDS, HRSA will provide one-time noncompetitive Part C funds to the Hoboken Community Healthcare, Inc., Hoboken, New Jersey.
The amount of the award to ensure ongoing HIV medical services is $327,166.
Section 2651 of the Public Health Service Act, 42 U.S.C. § 300ff–51.
John Fanning; by email at
Health Resources and Services Administration (HRSA), Department of Health and Human Services.
Notice of Ryan White HIV/AIDS Program Part C Early Intervention Services One-Time Noncompetitive Award to Ensure Continued HIV Primary Medical Care.
To prevent a lapse in comprehensive primary care services for persons living with HIV/AIDS, HRSA will provide one-time noncompetitive Ryan White HIV/AIDS Program (Part C) funds to the University of Pittsburgh Medical Center, Presbyterian Shadyside, Pittsburgh, Pennsylvania.
The amount of the award to ensure ongoing HIV medical services is $543,037.
Section 2651 of the Public Health Service Act, 42 U.S.C. § 300ff–51
CFDA Number: 93.918.
John Fanning; by email at
Health Resources and Services Administration (HRSA), Department of Health and Human Services.
Notice of Ryan White Part C Early Intervention Services One-Time Noncompetitive Award to Ensure Continued HIV Primary Medical Care.
To prevent a lapse in comprehensive primary care services for persons living with HIV/AIDS, HRSA will provide one-time noncompetitive Part C funds to the Aaron E. Henry Community Health Center (AEHCHC), Clarksville, Mississippi.
The amount of the award to ensure ongoing HIV medical services is $178,579.
Section 2651 of the Public Health Service Act, 42 U.S.C. 300ff–51
CFDA Number: 93.918
John Fanning; by email at
Health Resources and Services Administration (HRSA), Department of Health and Human Services.
Notice of One-Time Noncompetitive Award of Part C Funds for the District Four Health Services (DFHS), Lagrange, Georgia.
To prevent a lapse in comprehensive primary care services for persons living with HIV/AIDS, HRSA will be providing a one-time noncompetitive Part C funds award to DFHS, Lagrange, Georgia.
The amount of the award is $104,218 to ensure ongoing clinical services to this rural population.
Section 2651 of the Public Health Service Act, 42 U.S.C. 300ff–51.
John Fanning; by email at
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 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(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(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.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
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(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(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 contract proposals and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the contract proposals, 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 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 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.
Federal Emergency Management Agency, DHS.
Notice.
This notice lists communities where the addition or modification of Base Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, or the regulatory floodway (hereinafter referred to as flood hazard determinations), as shown on the Flood Insurance Rate Maps (FIRMs), and where applicable, in the supporting Flood Insurance Study (FIS) reports, prepared by the Federal Emergency Management Agency (FEMA) for each community, is appropriate because of new scientific or technical data. The FIRM, and where applicable, portions of the FIS report, have been revised to reflect these flood hazard determinations through issuance of a Letter of Map Revision (LOMR), in accordance with Title 44, Part 65 of the Code of Federal Regulations (44 CFR Part 65). The LOMR will be used by insurance agents and others to calculate appropriate flood insurance premium rates for new buildings and the contents of those buildings. For rating purposes, the currently effective community number is shown in the table below and must be used for all new policies and renewals.
These flood hazard determinations will become effective on the dates listed in the table below and revise the FIRM panels and FIS report in effect prior to this determination for the listed communities.
From the date of the second publication of notification of these changes in a newspaper of local circulation, any person has ninety (90) days in which to request through the community that the Deputy Associate Administrator for Mitigation reconsider the changes. The flood hazard determination information may be changed during the 90-day period.
The affected communities are listed in the table below. Revised flood hazard information for each community is available for inspection at both the online location and the respective community map repository address listed in the table below. Additionally, the current effective FIRM and FIS report for each community are accessible online through the FEMA Map Service Center at
Submit comments and/or appeals to the Chief Executive Officer of the community as listed in the table below.
Luis Rodriguez, Chief, Engineering Management Branch, Federal Insurance and Mitigation Administration, FEMA, 500 C Street SW., Washington, DC 20472, (202) 646–4064, or (email)
The specific flood hazard determinations are not described for each community in this notice. However, the online location and local community map repository address where the flood hazard determination information is available for inspection is provided.
Any request for reconsideration of flood hazard determinations must be submitted to the Chief Executive Officer of the community as listed in the table below.
The modifications are made pursuant to section 201 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are in accordance with the National Flood Insurance Act of 1968, 42 U.S.C. 4001
The FIRM and FIS report are the basis of the floodplain management measures that the community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in the National Flood Insurance Program (NFIP).
These flood hazard determinations, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities. The flood hazard determinations are in accordance with 44 CFR 65.4.
The affected communities are listed in the following table. Flood hazard determination information for each community is available for inspection at both the online location and the respective community map repository address listed in the table below. Additionally, the current effective FIRM and FIS report for each community are accessible online through the FEMA Map Service Center at
Federal Emergency Management Agency, DHS.
Final Notice.
New or modified Base (1% annual-chance) Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, and/or the regulatory floodway (hereinafter referred to as flood hazard determinations) as shown on the indicated Letter of Map Revision (LOMR) for each of the communities listed in the table below are finalized. Each LOMR revises the Flood Insurance Rate Maps (FIRMs), and in some cases the Flood Insurance Study (FIS) reports, currently in effect for the listed communities. The flood hazard determinations modified by each LOMR will be used to calculate flood insurance premium rates for new buildings and their contents.
The effective date for each LOMR is indicated in the table below.
Each LOMR is available for inspection at both the respective Community Map Repository address listed in the table below and online through the FEMA Map Service Center at
Luis Rodriguez, Chief, Engineering Management Branch, Federal Insurance and Mitigation Administration, FEMA, 500 C Street SW., Washington, DC 20472, (202) 646–4064, or (email)
The Federal Emergency Management Agency (FEMA) makes the final flood hazard determinations as shown in the LOMRs for each community listed in the table below. Notice of these modified flood hazard determinations has been published in newspapers of local circulation and ninety (90) days have elapsed since that publication. The Deputy Associate Administrator for Mitigation has resolved any appeals resulting from this notification.
The modified flood hazard determinations are made pursuant to section 206 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are in accordance with the National Flood Insurance Act of 1968, 42 U.S.C. 4001
For rating purposes, the currently effective community number is shown and must be used for all new policies and renewals.
The new or modified flood hazard determinations are the basis for the floodplain management measures that the community is required either to adopt or to show evidence of being already in effect in order to remain qualified for participation in the National Flood Insurance Program (NFIP).
These new or modified flood hazard determinations, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities.
These new or modified flood hazard determinations are used to meet the floodplain management requirements of the NFIP and also are used to calculate the appropriate flood insurance premium rates for new buildings, and for the contents in those buildings. The changes in flood hazard determinations are in accordance with 44 CFR 65.4.
Interested lessees and owners of real property are encouraged to review the final flood hazard information available at the address cited below for each community or online through the FEMA Map Service Center at
Federal Emergency Management Agency, DHS.
Notice.
This notice lists communities where the addition or modification of Base Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, or the regulatory floodway (hereinafter referred to as flood hazard determinations), as shown on the Flood Insurance Rate Maps (FIRMs), and where applicable, in the supporting Flood Insurance Study (FIS) reports, prepared by the Federal Emergency Management Agency (FEMA) for each community, is appropriate because of new scientific or technical data. The FIRM, and where applicable, portions of the FIS report, have been revised to reflect these flood hazard determinations through issuance of a Letter of Map Revision (LOMR), in accordance with Title 44, part 65 of the Code of Federal Regulations (44 CFR part 65). The LOMR will be used by insurance agents and others to calculate appropriate flood insurance premium rates for new buildings and the contents of those buildings. For rating purposes, the currently effective community number is shown in the table below and must be used for all new policies and renewals.
These flood hazard determinations will become effective on the dates listed in the table below and revise the FIRM panels and FIS report in effect prior to this determination for the listed communities.
From the date of the second publication of notification of these changes in a newspaper of local circulation, any person has ninety (90) days in which to request through the community that the Deputy Associate Administrator for Mitigation reconsider the changes. The flood hazard determination information may be changed during the 90-day period.
The affected communities are listed in the table below. Revised flood hazard information for each community is available for inspection at both the online location and the respective community map repository address listed in the table below. Additionally, the current effective FIRM and FIS report for each community are accessible online through the FEMA Map Service Center at
Submit comments and/or appeals to the Chief Executive Officer of the community as listed in the table below.
Luis Rodriguez, Chief, Engineering Management Branch, Federal Insurance and Mitigation Administration, FEMA, 500 C Street SW., Washington, DC 20472, (202) 646–4064, or (email)
The specific flood hazard determinations are not described for each community in this notice. However, the online location and local community map repository address where the flood hazard determination information is available for inspection is provided.
Any request for reconsideration of flood hazard determinations must be submitted to the Chief Executive Officer of the community as listed in the table below.
The modifications are made pursuant to section 201 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are in accordance with the National Flood Insurance Act of 1968, 42 U.S.C. 4001
The FIRM and FIS report are the basis of the floodplain management measures that the community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in the National Flood Insurance Program (NFIP).
These flood hazard determinations, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities. The flood hazard determinations are in accordance with 44 CFR 65.4.
The affected communities are listed in the following table. Flood hazard determination information for each community is available for inspection at both the online location and the respective community map repository address listed in the table below. Additionally, the current effective FIRM and FIS report for each community are accessible online through the FEMA Map Service Center at
Office of the Assistant Secretary for Housing, HUD.
Notice.
The proposed information collection requirement described below will be submitted to the Office of Management and Budget (OMB) for review, as required by the Paperwork Reduction Act. The Department is soliciting public comments on the subject proposal.
Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name and/or OMB Control Number and should be sent to: Reports Liaison Officer, Department of Housing and Urban Development, 451 7th Street SW., Washington, DC 20410, Room 9120 or the number for the Federal Information Relay Service (1–800–877–8339).
Program Contact, Aretha Williams, Director, Office of Housing Assistance and Grants Administration, Department of Housing and Urban Development, 451 7th Street SW., Washington, DC 20410, telephone (202) 708–3000 (this is not a toll free number) for copies of the proposed forms and other available information.
The Department is submitting the proposed information collection to OMB for review, as required by the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35, as amended).
This Notice is soliciting comments from members of the public and affected agencies concerning the proposed collection of information to: (1) Evaluate whether the proposed collection is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information; (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 the use of appropriate automated collection techniques or other forms of information technology, e.g., permitting electronic submission of responses.
This Notice also lists the following information:
The Delegated Processing Agreement establishes the relationship between the Department and a Delegated Processing Agency (DPA) and details the duties and compensation of the DPA. The Certifications form provides the Department with assurances that the review of the application was in accordance with HUD requirements. The Schedule of Projects form provides the DPA with information necessary to determine if they wish to process the project and upon signature commits them to such processing. Staff of the Office of Housing Assistance and Grant Administration, Multifamily Housing Office will use the information to determine if a housing finance agency wishes to participate in the program, and obtain certifications that the review of the application was in accord with HUD requirements.
The Paperwork Reduction Act of 1995, 44 U.S.C., Chapter 35, as amended.
Fish and Wildlife Service, Interior.
Notice; request for comments.
We (U.S. Fish and Wildlife Service) have sent an Information Collection Request (ICR) to OMB for review and approval. We summarize the ICR below and describe the nature of the collection and the estimated burden and cost. This information collection is scheduled to expire on March 31, 2013. We may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. However, under OMB regulations, we may continue to conduct or sponsor this information collection while it is pending at OMB.
You must submit comments on or before March 15, 2013.
Send your comments and suggestions on this information collection to the Desk Officer for the Department of the Interior at OMB–OIRA at (202) 395–5806 (fax) or
To request additional information about this ICR, contact Hope Grey at
The information that we collect is unique to each wildlife shipment and enables us to:
• Accurately inspect the contents of the shipment;
• Enforce any regulations that pertain to the fish, wildlife, or wildlife products contained in the shipment; and
• Maintain records of the importation and exportation of these commodities.
Businesses or individuals must file FWS Forms 3–177 and 3–177a with us at the time and port where they request clearance of the import or export of wildlife or wildlife products. Our regulations allow for certain species of wildlife to be imported or exported between the United States and Canada or Mexico at U.S. Customs and Border Protection ports, even though our wildlife inspectors may not be present. In these instances, importers and exporters may file the forms with U.S. Customs and Border Protection. We collect the following information:
(1) Name of the importer or exporter and broker.
(2) Scientific and common name of the fish or wildlife.
(3) Permit numbers (if permits are required).
(4) Description, quantity, and value of the fish or wildlife.
(5) Natural country of origin of the fish or wildlife.
In addition, certain information, such as the airway bill or bill of lading number, the location of the shipment containing the fish or wildlife for inspection, and the number of cartons containing fish or wildlife, assists our wildlife inspectors if a physical examination of the shipment is necessary.
In October 2012, we requested that OMB approve, on an emergency basis, our request to collect information associated with a user fee exemption program for low-risk importations and exportations. OMB approved our request and assigned OMB Control No. 1018–0152, which expires April 30, 2013.
Businesses that possess a valid Service import/export license may request to participate in this fee exemption program through our electronic filing system (eDecs). Qualified licensees must create an eDecs filer account as an importer or exporter if they do not already have one and file their required documents electronically. To be an approved participating business in the program and receive an exemption from the designated port base inspection fee, the licensed business must certify that it will exclusively import or export nonliving wildlife that is not listed as injurious under 50 CFR part 16 and does not require a permit or certificate under 50 CFR parts 15 (Wild Bird Conservation Act), 17 (Endangered Species Act), 18 (Marine Mammal Protection Act), 20 (Migratory Bird Treaty Act), 21 (Migratory Bird Treaty Act), 22 (Bald and Golden Eagle Protection Act), or 23 (the Convention on International Trade in Endangered Species of Wild Fauna and Flora). The requesting business also must certify that it will exclusively import or export the above type of wildlife shipments where the quantity in each shipment of wildlife parts or products is 25 or fewer and the total value of each wildlife shipment is $5,000 or less. Any licensed business that has more than two wildlife shipments that were refused clearance in the 5 years prior to its request is not eligible for the program. In addition, any licensees that have been assessed a civil penalty, issued a Notice of Violation, or convicted of a misdemeanor or felony violation involving wildlife import or export will not be eligible to participate in the program.
We are incorporating the certification statement for the user fee exemption program into our renewal of OMB Control No. 1018–0012. If OMB approves this renewal, we will discontinue OMB Control No. 1018–0152.
We again invite comments concerning this information collection on:
• Whether or not the collection of information is necessary, including whether or not the information will have practical utility;
• The accuracy of our estimate of the burden for this collection of information;
• Ways to enhance the quality, utility, and clarity of the information to be collected; and
• Ways to minimize the burden of the collection of information on respondents.
Comments that you submit in response to this notice are a matter of public record. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment, including your personal identifying information, may be made publicly available at any time. While you can ask OMB in your comment to withhold your personal identifying information from public review, we cannot guarantee that it will be done.
Fish and Wildlife Service, Interior.
Notice; request for comments.
We (U.S. Fish and Wildlife Service) will ask the Office of Management and Budget (OMB) to approve the information collection (IC) described below. As required by the Paperwork Reduction Act of 1995 and as part of our continuing efforts to reduce paperwork and respondent burden, we invite the general public and other Federal agencies to take this opportunity to comment on this IC. This IC is scheduled to expire on August 31, 2013. We may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
To ensure that we are able to consider your comments on this IC, we must receive them by April 15, 2013.
Send your comments on the IC to the Service Information Collection Clearance Officer, U.S. Fish and Wildlife Service, MS 2042–PDM, 4401 North Fairfax Drive, Arlington, VA 22203 (mail); or
To request additional information about this IC, contact Hope Grey at
The Captive Wildlife Safety Act (CWSA) amends the Lacey Act by making it illegal to import, export, buy, sell, transport, receive, or acquire, in interstate or foreign commerce, live lions, tigers, leopards, snow leopards, clouded leopards, cheetahs, jaguars, or cougars, or any hybrid combination of any of these species, unless certain exceptions are met. There are several exemptions to the prohibitions of the CWSA, including accredited wildlife sanctuaries.
There is no requirement for wildlife sanctuaries to submit applications to qualify for the accredited wildlife sanctuary exemption. Wildlife sanctuaries themselves will determine if they qualify. To qualify, they must meet all of the following criteria:
• Approval by the United States Internal Revenue Service (IRS) as a corporation that is exempt from taxation under section 501(a) of the Internal Revenue Code of 1986, which is described in sections 501(c)(3) and 170(b)(1)(A)(vi) of that code.
• Do not engage in commercial trade in the prohibited wildlife species, including offspring, parts, and products.
• Do not propagate the prohibited wildlife species.
• Have no direct contact between the public and the prohibited wildlife species.
The basis for this information collection is the recordkeeping requirement that we place on accredited wildlife sanctuaries. We require accredited wildlife sanctuaries to maintain complete and accurate records of any possession, transportation, acquisition, disposition, importation, or exportation of the prohibited wildlife species as defined in the CWSA (50 CFR part 14, subpart K). Records must be up to date and include: (1) the names and addresses of persons to or from whom any prohibited wildlife species has been acquired, imported, exported, purchased, sold, or otherwise transferred; and (2) the dates of these transactions. Accredited wildlife sanctuaries must:
• Maintain these records for 5 years.
• Make these records accessible to Service officials for inspection at reasonable hours.
• Copy these records for Service officials, if requested.
We invite comments concerning this information collection on:
• Whether or not the collection of information is necessary, including whether or not the information will have practical utility;
• The accuracy of our estimate of the burden for this collection of information;
• Ways to enhance the quality, utility, and clarity of the information to be collected; and
• Ways to minimize the burden of the collection of information on respondents.
Comments that you submit in response to this notice are a matter of public record. We will include or summarize each comment in our request to OMB to approve this IC. Before including your address, phone number, email address, or other personal identifying information in your comment, you should 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.
Fish and Wildlife Service, Interior.
Notice; request for comments.
We (U.S. Fish and Wildlife Service) will ask the Office of Management and Budget (OMB) to approve the information collection (IC) described below. As required by the Paperwork Reduction Act of 1995 and as part of our continuing efforts to reduce paperwork and respondent burden, we invite the general public and other Federal agencies to take this opportunity to comment on this IC. We may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
To ensure that we are able to consider your comments on this IC, we must receive them by April 15, 2013.
Send your comments on the IC to the Service Information Collection Clearance Officer, U.S. Fish and Wildlife Service, MS 2042–PDM, 4401 North Fairfax Drive, Arlington, VA 22203 (mail); or
To request additional information about this IC, contact Hope Grey at
On March 16, 1934, President Roosevelt signed the Migratory Bird Hunting Stamp Act (16 U.S.C. 718a et seq.) requiring all migratory waterfowl hunters 16 years of age or older to buy a Federal migratory bird hunting and conservation stamp (Federal Duck Stamp) annually. The stamps are a vital tool for wetland conservation. Ninety-eight cents out of every dollar generated by the sale of Federal Duck Stamps goes directly to purchase or lease wetland habitat for protection in the National Wildlife Refuge System. The Federal Duck Stamp is one of the most successful conservation programs ever initiated and is a highly effective way to conserve America's natural resources. Besides serving as a hunting license and a conservation tool, a current year's Federal Duck Stamp also serves as an entrance pass for national wildlife refuges where admission is charged. Duck Stamps and products that bear stamp images are also popular collector items.
The Electronic Duck Stamp Act of 2005 (Pub. L. 109–266) required the Secretary of the Interior to conduct a 3-year pilot program under which States could issue electronic Federal Duck Stamps. The electronic stamp is valid for 45 days from the date of purchase and can be used immediately while customers wait to receive the actual stamp in the mail. After 45 days, customers must carry the actual Federal Duck Stamp while hunting or to gain free access to national wildlife refuges. Eight States participated in the pilot. At the end of the pilot, we provided a report to Congress outlining the successes of the program. The program improved public participation by increasing the ability of the public to obtain required Federal Duck Stamps.
Under our authorities in 16 U.S.C. 718b(a)(2), we have continued the Electronic Duck Stamp Program in the eight States that participated in the pilot. In September 2013, we will expand the program by inviting all State fish and wildlife agencies to participate. Anyone, regardless of State residence, may purchase an electronic Duck Stamp through any State that participates in the program. Interested States must submit an application (FWS Form 3–2341). We will use the information provided in the application to determine a State's eligibility to participate in the program. Information includes, but is not limited to:
• Information verifying the current systems the State uses to sell hunting, fishing, and other associated licenses and products.
• Applicable State laws, regulations, or policies that authorize the use of electronic systems to issue licenses.
• Example and explanation of the codes the State proposes to use to create and endorse the unique identifier for the individual to whom each stamp is issued.
• Mockup copy of the printed version of the State's proposed electronic stamp, including a description of the format and identifying features of the licensee to be specified on the stamp.
• Description of any fee the State will charge for issuance of an electronic stamp.
• Description of the process the State will use to account for and transfer the amounts collected by the State that are required to be transferred under the program.
• Manner by which the State will transmit electronic stamp customer data.
Each State approved to participate in the program must provide the following information on a weekly basis:
• First name, last name, and complete mailing address of each individual that purchases an electronic stamp from the State.
• Face value amount of each electronic stamp sold by the State.
• Amount of the Federal portion of any fee required by the agreement for each stamp sold.
We invite comments concerning this information collection on:
• Whether or not the collection of information is necessary, including whether or not the information will have practical utility;
• The accuracy of our estimate of the burden for this collection of information;
• Ways to enhance the quality, utility, and clarity of the information to be collected; and
• Ways to minimize the burden of the collection of information on respondents.
Comments that you submit in response to this notice are a matter of public record. We will include or summarize each comment in our request to OMB to approve this IC. Before including your address, phone number, email address, or other personal identifying information in your comment, you should 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.
Fish and Wildlife Service, Interior.
Notice of availability; request for comment/information.
We, the Fish and Wildlife Service (Service), announce the availability of an incidental take permit (ITP) application and a Habitat Conservation Plan (HCP). SP Behavioral, LLC (the applicant) requests an ITP under the Endangered Species Act of 1973, as amended (Act). The applicant anticipates taking about 2.99 acres of foraging, breeding, and sheltering habitat used by the Florida scrub-jay (
We must receive your written comments on the ITP application and HCP on or before March 15, 2013.
See the
Ms. Elizabeth Landrum, Fish and Wildlife Biologist, South Florida Ecological Services Office (see
If you wish to comment on the ITP application and HCP, you may submit comments by any one of the following methods:
Before including your address, phone number, email address, or other personal identifying information in your comments, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can request in your comments that your personal identifying information be withheld from public review, we cannot guarantee that we will be able to do so.
We received an application from the applicant for an incidental take permit, along with a proposed habitat conservation plan. The applicant requests a 15-year permit under section 10(a)(1)(B) of the Act (16 U.S.C. 1531
The applicant proposes to mitigate for impacts by one of the three following methods: (1) Establish and manage in perpetuity a 6-acre on-site conservation area; (2) establish and manage in perpetuity a 4.54-acre on-site conservation area and contribute $53,375 to the Florida Scrub-jay Conservation Program Fund; or (3) contribute $219,348 to the Florida Scrub-jay Conservation Program Fund. The Service listed the scrub-jay as threatened in 1987 (June 3, 1987; 52 FR 20715), effective July 6, 1987. The Service listed the indigo snake as threatened in 1978 (January 31, 1978; 43 FR 4028), effective March 3, 1978. The Service identified the gopher tortoise as a candidate species in the eastern portion of its range in 2011 (July 27, 2011; 76 FR 45130) and determined that listing this species as threatened was warranted but precluded by higher priority listing actions.
The Service has made a preliminary determination that the applicant's project, including the mitigation measures, will individually and cumulatively have a minor or negligible effect on the species covered in the HCP. Therefore, issuance of the ITP is a “low-effect” project and qualifies as a categorical exclusion under the National Environmental Policy Act (NEPA), as provided by the Department of the Interior Manual (516 DM 2 Appendix 1
The Service will evaluate the HCP and comments submitted thereon to determine whether the application meets the requirements of section 10(a) of the Act. The Service will also evaluate whether issuance of the section 10(a)(1)(B) ITP complies with section 7 of the Act by conducting an intra-Service section 7 consultation. The results of this consultation, in combination with the above findings, will be used in the final analysis to determine whether or not to issue the ITP. If it is determined that the requirements of the Act are met, the ITP will be issued.
We provide this notice under Section 10 of the Endangered Species Act (16 U.S.C. 1531 et seq.) and NEPA regulations (40 CFR 1506.6).
Bureau of Indian Affairs, Interior.
Notice of Approved Tribal State Class III Gaming Compact.
This notice publishes the Approval of the Class III Tribal-State Gaming Compact between the Chippewa-Cree Tribe of the Rocky Boy's Indian Reservation and the State of Montana.
Paula L. Hart, Director, Office of Indian Gaming, Office of the Deputy Assistant Secretary—Policy and Economic Development, Washington, DC 20240, (202) 219–4066.
Under Section 11 of the Indian Gaming Regulatory Act of 1988 (IGRA) Public Law 100–497, 25 U.S.C. 2701
Bureau of Land Management, Interior.
Notice of Final Supplementary Rules.
The Bureau of Land Management (BLM) is establishing supplementary rules to regulate conduct on public lands within the Arkansas River Travel Management Area (ARTMA) in Chaffee, Custer, and Fremont Counties, Colorado. These supplementary rules address decisions found in the Arkansas River Travel Management Plan (ARTMP). Travel management actions and changes to the off-highway vehicle (OHV) designations were detailed and analyzed in an Environmental Assessment (EA). The Royal Gorge Field Office (RGFO) signed a Finding of No Significant Impact (FONSI) on December 18, 2007. The BLM issued two Decision Records following the ARTMP EA: one on April 29, 2008, to amend OHV designations identified in the EA, and a second on May 21, 2008, to implement the travel management actions identified in the EA. The rules were published in the
You may send inquiries by mail to the BLM Royal Gorge Field Office, 3028 East Main Street, Cañon City, Colorado 81212; or by email to
Keith Berger, Field Manager, BLM Royal Gorge Field Office, at the address listed above, or by phone at 719–269–8500. Persons who use a telecommunications device for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1–800–877–8339 to contact the above individual during normal business hours. The FIRS is available 24 hours a day, 7 days a week, to leave a message or question with the above individual. You will receive a reply during normal business hours.
The ARTMA covers approximately 240,555 acres of public land within Chaffee, Custer, and Fremont Counties, Colorado, in the following townships:
The ARTMA includes the Methodist Mountain Area south of Salida, Colorado (2,314 acres), located in T. 49 N., R. 9 E., secs. 7 to 10, inclusive, secs. 15 to 18, inclusive, and T. 49 N., R. 8 E., secs. 12 and 13. The Turkey Rock Area near Howard, Colorado (361 acres), is located in T. 48 N., R., 10 E., secs. 1 and 2, and the Turkey Rock Trials Area (52 acres) is located in T. 48 N., R. 10 E., secs. 1 and 2, within the Turkey Rock Area. Part of the ARTMA lies within the Arkansas River Special Recreation Management Area.
Travel management actions and changes to the OHV designations for the ARTMA were analyzed in the ARTMP EA and documented in the two 2008 Decision Records including the one that amended the Royal Gorge Resource Management Plan. Proposed Supplementary Rules were developed to enforce the decisions made in these documents. The proposed supplementary rules were published in the
The BLM received three comment letters during the 60-day public comment period. In response to these comments, the BLM has:
• Revised proposed rule number 1 to clarify that all motorized travel is limited to designated roads and trails, and for purposes of parking and camping travel is allowed up to 100 feet from the centerline of a road or trail only if this travel does not cause or is unlikely to cause significant undue damage to or disturbances of the soil, wildlife, wildlife habitat, improvements, cultural, or vegetative resources or other other uses of the public lands;
• Clarified allowable uses under proposed rule number 4 for the Turkey Rock Trials Area; and
• Added a fifth rule to reflect an ARTMP decision regarding day use in the Turkey Rock Trials Area.
In addition, the BLM has changed the heading “Exceptions” to “Exemptions,” added the Taylor Grazing Act to the penalties provision, and reworded several of the proposed supplementary rules to reflect the third-person style.
One commenter expressed concern about proposed supplementary rule number 2. However, the commenter did not oppose this rule or any of the other proposed supplementary rules since there is a good working relationship between the BLM Royal Gorge Field Office and the local mountain bike community. Proposed supplementary rule number 2, which restricts mountain bicycle travel to designated routes that are identified as available for this use, was analyzed in the 2008 ARTMP EA. This supplementary rule is essential to enforce the decision found in the ARTMP and Decision Record that was made to protect resources.
A second commenter suggested that a recreational target shooting closure in the Cotopaxi, Colorado, area should be added to the proposed supplementary rules. The area identified by the commenter was not addressed in the ARTMP, and therefore no supplementary rules were proposed or studied for this area. The proposed supplementary rules were not revised in response to this comment because the suggested closure cannot occur without revising the ARTMP.
A third commenter identified several issues of concern. The commenter suggested that proposed supplementary rule number 1 be clarified in order to carry out the intent of the Decision Record. The commenter thought that the intent of the Decision Record was to prohibit all motor vehicle travel more than 100 feet in any direction off a designated route and that as written, this restriction would not carry out the BLM's intent of allowing vehicle travel within the 100-foot corridor for the purpose of parking. As proposed, rule number 1 stated, “You must not operate a motor vehicle more than 100 feet in any direction off a designated road in the Arkansas River Travel Management Plan (TMP) area.” In response to this comment, proposed supplementary rule number 1 has been revised as follows: “All motorized travel is limited to designated roads and trails. For the purposes of parking, including camping, travel is allowed up to 100 feet from the centerline of a designated road or trail only if this travel does not cause or is unlikely to cause significant undue damage to or disturbances of the soil, wildlife, wildlife habitat, improvements, cultural, or vegetative resources or other other uses of the public lands.”
The commenter also asked that proposed rule number 2 be revised to prohibit the possession of a mountain bike off of designated trails. As proposed, rule number 2 stated, “You must not ride mountain bicycles other than on roads and trails designated open to mountain bicycles by a Bureau of Land Management (BLM) sign or map in the Arkansas River TMP area.” The prohibition recommended by the commenter does not follow the language set forth in the ARTMP and Decision Record for limiting travel using bicycles to designated roads and trails; therefore, the BLM has not revised the proposed rule in response to this comment.
The commenter also expressed concern with proposed rule number 4, which provided as follows: “You may not operate a motorized vehicle within the area known as Turkey Rock Trials Area (52 acres) unless it is a motorcycle specifically designed for observed trials riding, including rear wheel drive and universal trial tires with a width that does not exceed a 4.00 inch cross-section.” The commenter stated that “observed trials riding” should be better defined to clarify the allowable use. The BLM agrees with the comment that “observed trials riding” must be carefully defined; however, there is concern that by further defining the type of equipment, any changes in the observed trials industry could make the rule obsolete. As a result, the proposed rule was changed to eliminate equipment details and simplify the phrase as “motorcycle specifically designed for observed trials riding.” This change will rule out non-trials type motorcycles and should also capture any changes in the motorcycle trials industry.
Finally, the commenter noted that the ARTMP identified the Turkey Rock Area as day-use only and asked the BLM to establish a supplementary rule to reflect that status. The ARTMP limits trials bike use at the Turkey Rock Trials Area to “day use” only. The original proposal unintentionally omitted this detail but it was identified as a management action in the Decision Record so the BLM has added a supplementary rule that provides that motorcycles specifically designed for observed trials riding are prohibited within the Turkey Rock Trials Area after sunset and before sunrise. However, the new supplementary rule does not close the area to all night uses. Camping and hiking will still be permitted at night in the Turkey Rock Trials Area.
The final supplementary rules are not significant regulatory action and are not subject to review by the Office of Management and Budget under Executive Order 12866. They do not have an annual effect of $100 million or more on the economy. They do not adversely affect, in a material way, the economy, productivity, competition,
A `Notice of Intent to Prepare the Arkansas River TMP and Amend the Royal Gorge Resource Management Plan' was published in the
Congress enacted the Regulatory Flexibility Act of 1980 (RFA), as amended, 5 U.S.C. 601–612, to ensure that government regulations do not unnecessarily or disproportionately burden small entities. The RFA requires a regulatory flexibility analysis if a rule would have a significant economic impact, either detrimental or beneficial, on a substantial number of small entities. These final supplementary rules merely establish rules of conduct for public use of a limited area of public lands. Therefore, the BLM has determined under the RFA that these supplementary rules would not have a significant economic impact on a substantial number of small entities.
These final supplementary rules are not considered a `major rule' as defined under 5 U.S.C. 804(2). The supplementary rules merely establish rules of conduct for public use of a limited area of public lands and do not affect commercial or business activities of any kind.
These final supplementary rules will not impose an unfunded mandate on state, local, or tribal governments in the aggregate, or the private sector, of more than $100 million per year; nor will they have a significant or unique effect on small governments. The final supplementary rules will have no effect on governmental or tribal entities and will impose no requirements on any of these entities. The final supplementary rules merely establish rules of conduct for public use of a limited area of public lands and do not affect tribal, commercial, or business activities of any kind. Therefore, the BLM is not required to prepare a statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531
The final supplementary rules are not government action capable of interfering with constitutionally protected property rights. Therefore, the BLM has determined that the final supplementary rules will not cause a taking of private property or require further discussion of takings implications under this Executive Order.
The final supplementary rules will not have a substantial direct effect on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, the BLM has determined that the supplementary rules will not have sufficient Federalism implications to warrant preparation of a Federalism Assessment.
Under Executive Order 12988, the BLM has determined that these final supplementary rules will not unduly burden the judicial system and that they meet the requirements of sections 3(a) and 3(b)(2) of Executive Order 12988.
In accordance with Executive Order 13175, the BLM determined that these supplementary rules do not include policies that have tribal implications. The supplementary rules merely establish rules of conduct for public use of a limited area of public land and do not affect land held for the benefit of Indians or Alaska Natives or impede their rights.
The final supplementary rules do not directly provide for any information collection that the Office of Management and Budget must approve under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501
Under Executive Order 13211, the BLM determined that these final supplementary rules are not a significant energy action, and that they will not have an adverse effect on energy supplies, distribution, or use.
The principal author of these supplementary rules is Leah Quesenberry, Associate District Manager, BLM Colorado Front Range District.
For the reasons stated in the preamble, and under the authority of the Federal Land Policy and Management Act, 43 U.S.C. 1733 and 1740, the Taylor Grazing Act, 43 U.S.C. 315a,, and 43 CFR 8365.1–6, the BLM Colorado State Director establishes the following final supplementary rules for public lands within the ARTMA, Colorado, to read as follows:
1. All motorized travel is limited to designated roads and trails. For the purposes of parking, including camping, travel is allowed up to 100 feet from the centerline of a designated road or trail only if this travel does not cause or is unlikely to cause significant undue damage to or disturbances of the soil, wildlife, wildlife habitat, improvements, cultural, or vegetative resources or other uses of the public lands.
2. Bicycle riding is limited to designated roads and trails marked open to such use by a Bureau of Land Management (BLM) sign or map.
3. Recreational target shooting is prohibited on all public lands within the Methodist Mountain Area south of Salida (2,314 acres) and the Turkey Rock area near Howard (361 acres). These areas are identified as closed to recreational target shooting by either a BLM sign or map.
4. Operation of a motorized vehicle within the area known as Turkey Rock Trials Area (52 acres) is limited to motorcycles specifically designed for observed trials riding.
5. Motorcycles specifically designed for observed trials riding are prohibited within the Turkey Rock Trials Area after sunset or before sunrise.
The following persons are exempt from these supplementary rules: any Federal, state, local, and/or military employee acting within the scope of their official duties; members of any organized rescue or fire fighting force performing an official duty; or persons who are expressly authorized or approved by the BLM.
The prohibition of target shooting in Rule 3 has no effect on hunting by licensed hunters in legitimate pursuit of game during the proper season with appropriate firearms, as defined by the Colorado Parks and Wildlife.
Under the Taylor Grazing Act, 43 U.S.C. 315a, any willful violation of these supplementary rules on public lands within a grazing district of the ARTMA is punishable by a fine of not more than $500. Under Section 303(a) of the Federal Land Policy and Management Act, 43 U.S.C. 1733(a), and 43 CFR 8360.0–7, any person who knowingly and willfully violates any of these supplementary rules on public lands within the ARTMA may be tried before a United States Magistrate and fined no more than $1,000, imprisoned for no more than 12 months, or both.
Such violations may also be subject to the enhanced fines provided for by 18 U.S.C. 3571.
Bureau of Land Management, Interior.
Final supplementary rules.
In accordance with the Record of Decision (ROD) for the Ukiah Field Office Approved Resource Management Plan (RMP), the Bureau of Land Management (BLM) is establishing final supplementary rules. The Final Environmental Impact Statement (EIS) identified and thoroughly analyzed the effects of land use limitations and restrictions, and specified that supplementary rules would be required for resource protection and visitor safety. Upon publication, these final supplementary rules will supersede the interim final supplementary rules that apply to public lands within the Ukiah Field Office's jurisdiction. The BLM has determined that these final supplementary rules are necessary to enhance visitor safety, protect natural resources, improve recreation opportunities, and protect public health. These rules do not impose or implement any land use limitations and restrictions other than those included within the Ukiah RMP.
The final supplementary rules are effective February 13, 2013.
Bureau of Land Management, Ukiah Field Office, 2550 North State Street, Ukiah, CA 95482. The final supplementary rules are available for inspection at the Ukiah Field Office and on the Ukiah Field Office Web page (
Jonna Hildenbrand, Bureau of Land Management, Ukiah Field Office, 2550 North State Street, Ukiah, California 95482, 707–468–4024, or email
The BLM is establishing these final supplementary rules under the authority of 43 CFR 8365.1–6, which allows BLM State Directors to establish supplementary rules for the protection of persons, property, and public lands and resources. This provision allows the BLM to issue rules of less than national effect without codifying the rules in the Code of Federal Regulations. These final supplementary rules apply to public lands managed by the Ukiah Field Office in Lake, Sonoma, Mendocino, Glenn, Colusa, Napa, Marin, Yolo, and Solano Counties of California. Maps of the management areas and boundaries can be obtained by contacting the Ukiah Field Office (see
The BLM published interim final supplementary rules on June 2, 2011 (76 FR 31979). The rules became effective immediately upon publication with the BLM having set forth good cause for such in the preamble language, which detailed unsafe target shooting practices, resource degradation, and the presence of critical habitat. The BLM invited public comments on the interim rules for 60 days. The comment period closed on August 1, 2011. No comments were received during this period.
The final supplementary rules have been clarified, mapping efforts explained, definitions refined, and typographical and grammatical errors corrected. In Sections 2 and 3, all references to “interim final supplementary rules of conduct” and “interim supplementary rules” have been deleted and, in appropriate instances, have been replaced with text indicating that these are now final supplementary rules.
These supplementary rules are not a significant regulatory action and are not subject to review by the Office of
The BLM prepared a draft and final EIS on the RMP and has determined that the rules would not constitute a major Federal action significantly affecting the quality of the human environment under Section 102(2)(C) of the National Environmental Policy Act (NEPA), 42 U.S.C. 4332(2)(C). The final supplementary rules, limitations, and associated effects were thoroughly analyzed under NEPA in the draft and final EIS for the Ukiah RMP as well as in various environmental assessments for activity-level plans adopted in the Ukiah RMP. The draft EIS was published in the
Congress enacted the Regulatory Flexibility Act (RFA) of 1980, as amended, 5 U.S.C. 601–612, to ensure that government regulations do not unnecessarily or disproportionately burden small entities. The RFA requires a regulatory flexibility analysis if a rule would have a significant economic impact, either detrimental or beneficial, on a substantial number of small entities. These supplementary rules merely establish rules of conduct for public recreational use of a limited area of public lands. Therefore, the BLM has determined under the RFA that these supplementary rules would not have a significant economic impact on a substantial number of small entities.
These supplementary rules do not constitute a “major rule” as defined at 5 U.S.C. 804(2). These supplementary rules merely contain rules of conduct for recreational use of a limited area of public lands and do not affect commercial or business activities of any kind.
These supplementary rules do not impose an unfunded mandate on State, local, or tribal governments, in the aggregate, or on the private sector, of $100 million or more per year; nor do they have a significant or unique effect on small governments. The supplementary rules have no effect on State, local, or tribal governments and do not impose any requirements on any of these entities. Therefore, the BLM is not required to prepare a statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531
These supplementary rules are not government action capable of interfering with constitutionally protected property rights. These supplementary rules do not address property rights in any form, and do not cause the impairment of one's property rights. Therefore, the BLM has determined that these supplementary rules would not cause a “taking” of private property or require further discussion of takings implications under this Executive Order.
These supplementary rules will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. These supplementary rules affect land in only one State, California, and do not conflict with any California State law or regulation. Therefore, in accordance with Executive Order 13132, the BLM has determined that these supplementary rules do not have sufficient Federalism implications to warrant preparation of a Federalism Assessment.
Under Executive Order 12988, the BLM has determined that these supplementary rules will not unduly burden the judicial system and that they meet the requirements of Sections 3(a) and 3(b)(2) of the Order.
In accordance with Executive Order 13175, the BLM has found that these supplementary rules do not include policies that have tribal implications. The supplementary rules do not affect lands held for the benefit of Indians, Aleuts, or Eskimos, Indian resources, or tribal property rights. To comply with Executive Orders regarding government-to-government relations with Native Americans, formal and informal contacts were made with 26 federally recognized and 2 non-recognized tribal governments with interests in the affected area. The tribes were provided with a copy of the draft RMP. In addition, the BLM contacted each tribe directly requesting comments and assessing the need for a tribal briefing. The tribes expressed no concerns about the RMP or the decisions related to these supplementary rules.
The Information Quality Act (Section 515 of Pub. L. 106–554) requires that Federal agencies maintain adequate quality, objectivity, utility, and integrity of the information that they disseminate. In developing these supplementary rules, the BLM did not conduct or use a study, experiment, or survey or disseminate any information in developing these supplementary rules.
These supplementary rules are not a significant energy action, as defined in Executive Order 13211. The rules will not have a significant adverse effect on the supply, distribution, or use of energy and have no connection with energy policy.
These supplementary rules do not contain information collection requirements that the Office of Management and Budget must approve under the Paperwork Reduction Act, 44 U.S.C. 3501
The principal author of these supplementary rules is Rich Burns, Field Manager, Ukiah Field Office.
For the reasons stated in the preamble and under the authority for supplementary rules found in 43 CFR 8365.1–6, the California State Director, Bureau of Land Management, issues these supplementary rules, effective upon publication for good cause shown at 76 FR 31980 (June 2, 2011) for public lands managed by the Ukiah Field Office to read as follows:
The following rules apply year round to all BLM lands managed by the Ukiah Field office and persons unless explicitly stated otherwise in a particular rule. Specific rules for individual management areas are identified in subparts b, c and d. Additionally, the following persons are exempt from these supplementary rules: Federal, State, or local officers or employees acting within the scope of their official duties; members of any organized rescue or firefighting force in performance of an official duty; and any person whose activities are authorized in writing by the BLM Authorized Officer.
a. The following rules apply to all public lands within the Ukiah Field Office jurisdiction.
1. All lands managed by the Ukiah Field Office, with the exception of wilderness study areas, are designated as limited to designated routes for motorized and off-highway vehicle use (43 CFR 8340.0–5(g)).
2. All routes are closed to motorized vehicles unless designated as open within the Resource Management Plan.
3. The use or possession of fireworks is prohibited.
4. Hunting is allowed except where specifically prohibited.
5. Management areas and ROS zones within the management areas will be delineated on maps provided to the public.
b. The following rules apply to all designated Scattered Tracts Management Areas within the jurisdiction of the Ukiah Field Office.
Scattered tracts are BLM lands that are covered by the Resource Management Plan but are not contiguous to any other management area. These tracts are mostly small parcels of public land surrounded by private property making them inaccessible to the public. Scattered tracts total approximately 47,000 acres and are found in every county containing public lands within the Ukiah Field Office jurisdiction. The use of weapons is prohibited except when hunting.
c. The following rules apply to all designated Areas of Critical Environmental Concern (ACEC) and Research Areas within the jurisdiction of the Ukiah Field Office.
It is prohibited to deface, remove, or destroy plants or their parts, soil, rocks, minerals, or cave resources within the following areas: Lost Valley—40 acres (Cow Mountain Management Area, Mendocino County); Knoxville—5,236 acres (Knoxville Management Area, Lake County); Walker Ridge—3,685 acres (Indian Valley Management Area, Lake and Colusa Counties); Indian Valley Brodiaea—100 acres (Indian Valley Management Area, Lake County); Cache Creek—11,228 acres (Cache Creek Management Area, Lake, Colusa, and Yolo counties); Northern California Chaparral Research Area—11,206 acres (Cache Creek Management Area, Lake County); Cedar Roughs Research Natural Area—6,350 acres (Scattered Tracts Management Area, Napa County); Stornetta—887 acres (Stornetta Management Area, Mendocino County); Black Forest—247 acres (Scattered Tracts Management Area, Lake County); and The Cedars of Sonoma County—1,500 acres (Scattered Tracts Management Area, Sonoma County).
d. The following rules apply to Cache Creek, Cow Mountain, Knoxville, Geysers, Indian Valley, and Stornetta Management Areas and The Black Forest and The Cedars of Sonoma County within the jurisdiction of the Ukiah Field Office.
Cache Creek encompasses approximately 73,000 acres of public
1. Use of weapons is prohibited except when hunting.
2. Defacing, removing, or destroying plants or their parts, soil, rocks, minerals, or cave resources are prohibited.
3. Motorized and Street Legal Vehicles and horses are allowed in the Cowboy Camp group camp site from the third Saturday in April through the third Saturday in November.
4. Camping is limited to the group camp site within the cowboy camp developed recreation site.
5. High Bridge and Cowboy Camp developed recreation sites are open for day use only from one-half hour before sunrise to one-half hour after sunset except for long-term parking for overnight backcountry visitors.
Cow Mountain is comprised of approximately 51,000 acres of public lands and is divided into North and South Cow Mountain. The use of weapons is limited to designated shooting areas except when hunting.
1. Operating a motorized vehicle is prohibited within South Cow Mountain OHV unit during wet weather closures (resulting from accumulated precipitation) or administrative closures.
2. Wet Weather Closure—When total annual (beginning and measured as of October 1st of each year) precipitation exceeds 4 inches, at least one-half inch of precipitation has fallen in 24 hours or 1 inch in 72 hours, and the authorized officer has determined that motorized vehicles will cause considerable adverse effects upon the soil, vegetation, wildlife, and other resources, the authorized officer, pursuant to 43 CFR 8341.2, will implement a temporary closure of all existing roads, existing trails and public lands within the management area to all motorized vehicles for a minimum of 3 days. Once the area has been closed, a field inspection will be completed prior to reopening and daily thereafter to determine suitability of road and trail conditions. When field observations show that motorized vehicle use can occur without causing considerable adverse effects as described in 43 CFR 8341.2, the temporary closure will be terminated. Exceptions to this temporary closure will only be allowed for valid existing rights (private landowners, landowners' representatives, lessees, and/or authorized parties) who need access to their property. Landowners, landowners' representatives, lessees, and/or authorized parties will only be able to access their property via the most direct route and are not allowed to use a motorized vehicle on any other part of the South Cow Mountain OHV Area. This policy is subject to modification due to changing resource conditions which may include immediate closure due to adverse effects (43 CFR 8341.2).
1. The Mendo-Rock Road, Water Tank Spur, Willow Creek Road, Rifle Range Road, Radio Tower Road, Rifle Range Maintenance Spur, and Mayacmas Campground Road are open year round and limited to street legal vehicles only.
2. Roads open during general (rifle) deer season and limited to street legal vehicles only are Firebreak #1, McClure Creek Ridge Spur, McClure Creek Spur, Sulphur Creek Spur, and Sulphur Creek Ridge Spur.
3. All other roads are closed year round to street legal, off-highway and motorized vehicles.
The Knoxville area contains approximately 24,000 acres of public lands.
1. Use of weapons is prohibited except when hunting.
2. Adams Ridge Road is open to street legal vehicles during general (rifle) deer season.
The Geysers Management Area encompasses about 7,100 acres of public lands.
Shooting is allowed in ROS zone Middlecountry.
Shooting is allowed in ROS zones Middlecountry and Frontcountry.
Black Forest includes 247 acres of public lands on Mount Konocti just south of Soda Bay on Clear Lake.
The Cedars of Sonoma County includes 1,500 acres of public lands and is located 2 miles northeast of the Austin Creek State Recreation Area.
1. Motorized and off-highway vehicle use is prohibited.
2. Climbing on the cliffs is prohibited.
3. Use of weapons is prohibited except when hunting.
The 1,132-acre Stornetta Management Area is located along the Mendocino County coastline just north of the town of Point Arena.
1. Use of weapons is prohibited.
2. Hunting is prohibited.
3. Hang gliding or paragliding is prohibited.
4. Camping is prohibited.
5. The area is open for day use only from one-half hour before sunrise to one-half hour after sunset.
6. Use of motorized vehicles is prohibited.
7. Beach access is permitted only at the designated access trails marked by signs. These locations are mile marker 1.4 and 2.3 from the Highway 1 and Lighthouse Road intersection.
8. Climbing on cliffs and in or around sink holes is prohibited.
9. Dogs must be on a leash no longer than 6 feet or otherwise physically restricted at all times.
10. Open fires are prohibited.
11. Cutting or collecting firewood is prohibited.
12. Feeding or harassing wildlife is prohibited.
13. Physical removal of any resources including, but not limited to, vegetation, animals, driftwood, and shells, is prohibited.
Any person who violates any of these supplementary rules may be tried before a United States Magistrate and fined no more than $1,000 or imprisoned for no more than 12 months, or both. 43 U.S.C. 1733(a); 43 CFR 8360.0–7. Such violations may also be subject to the enhanced fines provided for by 18 U.S.C. 3571.
Bureau of Land Management, Interior.
Notice.
The purpose of this notice is to inform the public and interested State and local government officials of the filing of Plats of Survey in Nevada.
David D. Morlan, Chief, Branch of Geographic Sciences, Bureau of Land Management, Nevada State Office, 1340 Financial Blvd., Reno, NV 89502–7147, phone: 775–861–6490. Persons who use a telecommunications device for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1–800–877–8339 to contact the above individual during normal business hours. The FIRS is available 24 hours a day, 7 days a week, to leave a message or question with the above individual. You will receive a reply during normal business hours.
1. The Supplemental Plats of the following described lands were officially filed at the Nevada State Office, Reno, Nevada on October 26, 2012:
A supplemental plat, in 1 sheet, showing amended lottings of section 6, Township 21 South, Range 63 East, Mount Diablo Meridian, Nevada under Group 917 was accepted October 24, 2012. This supplemental plat was prepared to meet certain administrative needs of the Bureau of Land Management.
A supplemental plat, in 1 sheet, showing amended lottings of section 36, Township 20 South, Range 62 East, Mount Diablo Meridian, Nevada under Group 917 was accepted October 24, 2012. This supplemental plat was prepared to meet certain administrative needs of the Bureau of Land Management.
A supplemental plat, in 1 sheet, showing amended lottings of section 1, Township 21 South, Range 62 East, Mount Diablo Meridian, Nevada under Group 917 was accepted October 24, 2012. This supplemental plat was prepared to meet certain administrative needs of the Bureau of Land Management.
A supplemental plat, in 1 sheet, showing amended lottings of section 12, Township 21 South, Range 62 East, Mount Diablo Meridian, Nevada under Group 917 was accepted October 24, 2012. This supplemental plat was prepared to meet certain administrative needs of the Bureau of Land Management.
2. The Supplemental Plat of the following described lands was officially filed at the Nevada State Office, Reno, Nevada on December 3, 2012:
The supplemental plat, in 1 sheet, showing the subdivision of former lots 23 and 24, section 1, Township 21 South, Range 62 East, of the Mount Diablo Meridian, Nevada, under Group No. 917, was accepted November 27, 2012. This supplemental plat was prepared to meet certain administrative needs of the Bureau of Land Management.
3. The Plat of Survey of the following described lands was officially filed at the Nevada State Office, Reno, Nevada on December 4, 2012:
A plat, in 3 sheets, representing the dependent resurvey of a portion of the subdivisional lines, and the subdivision of certain sections, Township 18 South, Range 51 East, of the Mount Diablo Meridian, Nevada, under Group No. 833, was accepted November 30, 2012. This survey was executed to meet certain administrative needs of the U.S. Fish and Wildlife Service.
A plat, in 3 sheets, representing the dependent resurvey of a portion of the east boundary and a portion of the subdivisional lines, and the subdivision of certain sections, Township 18 South, Range 50 East, of the Mount Diablo Meridian, Nevada, under Group No. 834, was accepted November 30, 2012. This survey was executed to meet certain administrative needs of the U.S. Fish and Wildlife Service.
The surveys listed above are now the basic record for describing the lands for all authorized purposes. These surveys have been placed in the open files in the Bureau of Land Management, Nevada State Office and are available to the public as a matter of information. Copies of the surveys and related field notes may be furnished to the public upon payment of the appropriate fees.
On the basis of the record
The Commission instituted these investigations effective December 29, 2011, following receipt of a petition filed with the Commission and Commerce by Broadwind Towers, Inc., Manitowoc, WI; DMI Industries, Fargo, ND; Katana Summit LLC, Columbus, NE; and Trinity Structural Towers, Inc., Dallas, TX. The final phase of the investigations was scheduled by the Commission following notification of preliminary determinations by Commerce that imports of utility scale wind towers from China were subsidized within the meaning of section 703(b) of the Act (19 U.S.C. 1671b(b)) and that such imports from China and Vietnam were dumped within the meaning of 733(b) of the Act (19 U.S.C. 1673b(b)). Notice of the scheduling of the final phase of the Commission's investigations and of a public hearing to be held in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the
By order of the Commission.
On February 7, 2013, the Department of Justice filed a complaint and lodged a proposed Consent Decree with the United States District Court for the Northern District of Florida, Gainesville Division in the lawsuit entitled
Pursuant to Sections 106 and 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9606, 9607(a), the United States' complaint sought to recover costs it has incurred and will incur in response to the release and threatened release of hazardous substances at or from the Cabot/Koppers Superfund Site, located in the City of Gainesville, Alachua County, Florida (the Site). The United States also sought an Order enjoining the Defendant to perform the remedial action at the Site selected by EPA in the Amended Record of Decision dated February 2011 (Amended ROD) and included as Appendix A to the Decree.
The United States has agreed to resolve the claims alleged in the complaint through the proposed Consent Decree in which Beazer will perform the Amended ROD at the Site. In the Decree, Beazer has also agreed to pay all of EPA's future costs including oversight costs. The United States covenants not to sue under CERCLA Sections 106 and 107 relating to the Site subject to statutory reopeners.
The publication of this notice opens a period for public comment on the Consent Decree. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and should refer to
During the public comment period, the Consent Decree may be examined and downloaded at this Justice Department Web site:
Please enclose a check or money order for $253.75 (25 cents per page reproduction costs for 1,015 pages for the entire Decree plus appendices) payable to the United States Treasury. For a paper copy without the Decree appendices, the cost is $28.75 (25 cents per page reproduction costs for 115 pages).
Notice.
The Department of Labor (DOL) is submitting the Employee Benefits Security Administration (EBSA) sponsored information collection request (ICR) titled, “Securities Lending by Employee Benefit Plans,” to the Office of Management and Budget (OMB) for review and approval for continued use in accordance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501
Submit comments on or before March 15, 2013.
A copy of this ICR with applicable supporting documentation; including a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained from the RegInfo.gov Web site,
Submit comments about this request to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL–EBSA, Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503, Fax: 202–395–6881 (this is not a toll-free number), email:
Michel Smyth by telephone at 202–693–4129 (this is not a toll-free number) or by email at
44 U.S.C. 3507(a)(1)(D).
The Securities Lending by Employee Benefit Plans Prohibited Transaction Exemption (PTE 2006–16) permits an employee benefit plan to lend securities to certain broker-dealers and banks and to make compensation arrangements for lending services provided by a plan fiduciary in connection with such securities loans. The PTE includes third-party disclosures, specifically financial statements and lending and compensation agreements.
Such third-party disclosures are information collections subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless it is approved by the OMB under the PRA and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid Control Number.
Interested parties are encouraged to send comments to the OMB, Office of Information and Regulatory Affairs at the address shown in the
• 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;
• 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;
• Enhance the quality, utility, and clarity of the information to be collected; and
• 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, e.g., permitting electronic submission of responses.
Occupational Safety and Health Administration (OSHA), Labor.
Request for public comments.
OSHA solicits public comments concerning its proposal to extend the Office of Management and Budget's (OMB) approval of the information collection requirements contained in the Walking and Working Surfaces Standard for General Industry (29 CFR part 1910, subpart D).
Comments must be submitted (postmarked, sent, or received) by April 15, 2013.
Theda Kenney or Todd Owen, Directorate of Standards and Guidance, OSHA, U.S. Department of Labor, Room N–3609, 200 Constitution Avenue NW., Washington, DC 20210; telephone (202) 693–2222.
The Department of Labor, as part of its continuing effort to reduce paperwork and respondent (i.e., employer) burden, conducts a preclearance consultation program to provide the public with an opportunity to comment on proposed and continuing information collection requirements in accord with the Paperwork Reduction Act of 1995 (PRA–95) (44 U.S.C. 3506(c)(2)(A)). This program ensures that information is in the desired format, reporting burden (time and costs) is minimal, collection instruments are clearly understood, and OSHA's estimate of the information collection burden is accurate. The Occupational Safety and Health Act of 1970 (the OSH Act) (29 U.S.C. 651
The collections of information contained in the Walking and Working Surfaces Standard for General Industry are necessary to protect workers from the collapse of overloaded floors, outrigger scaffolds, and failure of defective portable metal ladders. The following describes the information collection requirements in subpart D:
Paragraph 1910.22(d)(1) requires that in every building or other structure, or part thereof, used for mercantile, business, industrial, or storage purposes, the loads approved by the building official shall be marked on plates of approved design which shall be supplied and securely affixed by the owner of the building, or his duly authorized agent, in a conspicuous place in each space to which they relate. Such plates shall not be removed or defaced but, if lost, removed, or defaced, shall be replaced by the owner or his agent.
Under paragraph 1910.26(c)(2)(vii), portable metal ladders having defects are to be marked and taken out of service until repaired by either the maintenance department or the manufacturer.
Paragraph 1910.28(e)(3) specifies that unless outrigger scaffolds are designed by a licensed professional engineer, they shall be constructed and erected in accordance with table D–16 of this section. A copy of the detailed drawings and specifications showing the sizes and spacing of members shall be kept on the job.
OSHA has a particular interest in comments on the following issues:
• Whether the proposed information collection requirements are necessary for the proper performance of the Agency's functions, including whether the information is useful;
• The accuracy of OSHA's estimate of the burden (time and costs) of the information collection requirements, including the validity of the methodology and assumptions used;
• The quality, utility, and clarity of the information collected; and
• Ways to minimize the burden on employers who must comply; for example, by using automated or other technological information collection and transmission techniques.
OSHA is requesting that OMB extend its approval of the information collection requirements contained in the Walking and Working Surfaces Standard for General Industry (29 CFR Part 1910, subpart D). OSHA is proposing to retain the burden hours in the currently approved information collection request. The Agency will summarize the comments submitted in response to this notice and will include this summary in the request to OMB.
You may submit comments in response to this document as follows: (1) Electronically at
Because of security procedures, the use of regular mail may cause a significant delay in the receipt of comments. For information about security procedures concerning the delivery of materials by hand, express delivery, messenger, or courier service, please contact the OSHA Docket Office at (202) 693–2350, (TTY (877) 889–5627).
Comments and submissions are posted without change at
David Michaels, Ph.D., MPH, Assistant Secretary of Labor for Occupational Safety and Health, directed the preparation of this notice. The authority for this notice is the Paperwork Reduction Act of 1995 (44 U.S.C. 3506
National Aeronautics and Space Administration.
Notice of meeting.
In accordance with the Federal Advisory Committee Act, Public Law 92–462, as amended, the National Aeronautics and Space Administration (NASA) announces a meeting of the Commercial Space Committee of the NASA Advisory Council (NAC). This Committee reports to the NAC. The meeting will be held for the purpose of soliciting, from the scientific community and other persons, scientific and technical information relevant to program planning.
Friday, March 1, 2013, 8:00 a.m.–11:30 a.m., Local Time.
Embassy Suites—Denver Tech Center, Belleview Room, 10250 E Costilla Avenue, Centennial, CO 80112
Mr. Thomas W. Rathjen, Human Exploration and Operations Mission Directorate, NASA Headquarters, Washington, DC 20546, (202) 358–0552, fax (202) 358–2885, or
The meeting will be open to the public up to the capacity of the room. This meeting is also available telephonically and by WebEx. Any interested person may call the USA toll free conference call number (866) 818–9721 or toll number (210) 339–6199, pass code 030113, to participate in this meeting by telephone. The WebEx link is
The agenda for the meeting includes the following topics:
It is imperative that the meeting be held on these dates to accommodate the scheduling priorities of the key participants. U.S. citizens, Permanent Resident (green card holders), and foreign nationals can attend this meeting without prior registration. Public attendees will be required to sign-in; parking at the Embassy Suites Denver Tech Center is free.
National Archives and Records Administration (NARA).
Notice of availability of proposed records schedules; request for comments.
The National Archives and Records Administration (NARA) publishes notice at least once monthly of certain Federal agency requests for records disposition authority (records schedules). Once approved by NARA, records schedules provide mandatory instructions on what happens to records when no longer needed for current Government business. They authorize the preservation of records of continuing value in the National Archives of the United States and the destruction, after a specified period, of records lacking administrative, legal, research, or other value. Notice is published for records schedules in which agencies propose to destroy records not previously authorized for disposal or reduce the retention period of records already authorized for disposal. NARA invites public comments on such records schedules, as required by 44 U.S.C. 3303a(a).
Requests for copies must be received in writing on or before March 15, 2013. Once the appraisal of the records is completed, NARA will send a copy of the schedule. NARA staff usually prepare appraisal memorandums that contain additional information concerning the records covered by a proposed schedule. These, too, may be requested and will be provided once the appraisal is completed. Requesters will be given 30 days to submit comments.
You may request a copy of any records schedule identified in this notice by contacting Records Management Services (ACNR) using one of the following means:
Requesters must cite the control number, which appears in parentheses after the name of the agency which submitted the schedule, and must provide a mailing address. Those who desire appraisal reports should so indicate in their request.
Margaret Hawkins, Director, Records Management Services (ACNR), National Archives and Records Administration, 8601 Adelphi Road, College Park, MD 20740–6001. Telephone: 301–837–1799. Email:
Each year Federal agencies create billions of records on paper, film, magnetic tape, and other media. To control this accumulation, agency records managers prepare schedules proposing retention periods for records and submit these schedules for NARA's approval, using the Standard Form (SF) 115, Request for Records Disposition Authority. These schedules provide for the timely transfer into the National Archives of historically valuable records and authorize the disposal of all other records after the agency no longer needs them to conduct its business. Some schedules are comprehensive and cover all the records of an agency or one of its major subdivisions. Most schedules, however, cover records of only one office or program or a few series of records. Many of these update previously approved schedules, and some include records proposed as permanent.
The schedules listed in this notice are media neutral unless specified otherwise. An item in a schedule is media neutral when the disposition instructions may be applied to records regardless of the medium in which the records are created and maintained. Items included in schedules submitted to NARA on or after December 17, 2007, are media neutral unless the item is limited to a specific medium. (See 36 CFR 1225.12(e).)
No Federal records are authorized for destruction without the approval of the Archivist of the United States. This approval is granted only after a thorough consideration of their administrative use by the agency of origin, the rights of the Government and of private persons directly affected by the Government's activities, and whether or not they have historical or other value.
Besides identifying the Federal agencies and any subdivisions requesting disposition authority, this public notice lists the organizational unit(s) accumulating the records or indicates agency-wide applicability in the case of schedules that cover records that may be accumulated throughout an agency. This notice provides the control number assigned to each schedule, the total number of schedule items, and the number of temporary items (the records proposed for destruction). It also includes a brief description of the temporary records. The records schedule itself contains a full description of the records at the file unit level as well as their disposition. If NARA staff has prepared an appraisal memorandum for the schedule, it too includes information about the records. Further information about the disposition process is available on request.
1. Department of Agriculture, Forest Service (N1–95–10–6, 66 items, 24 temporary items). Records related to various programs throughout the agency, including land management, pesticide use, livestock grazing, free-roaming wild horses and burros, timber appraisals and sales, water uses, soil interpretation, animal damage, mineral leases, and rural development. Proposed for permanent retention are records related to organization standards, legislative affairs, resource and land planning, heritage program management, timber management, silvicultural practices, watershed protection, wildlife and fish habitat, resource conservation, and the Smokey the Bear program.
2. Department of Agriculture, Forest Service (N1–95–10–10, 226 items, 226 temporary items). Records related to agency programs such as groundwater resource management; fire management; wildfire prevention, preparedness, and suppression; agency landownership and exchanges; and title claims. Also included are records related to grants, land surveys, and engineering, geospatial, and road construction projects.
3. Department of the Army, Agency-wide (N1–AU–11–1, 1 item, 1 temporary item). Master files of an electronic system used to track officer and soldier assignments to the Korean Theater of Operations.
4. Department of the Army, Agency-wide (N1–AU–11–9, 1 item, 1 temporary item). Master files of an electronic system used to track Army aviation products throughout their life cycle.
5. Department of the Army, Agency-wide (N1–AU–10–106, 1 item, 1 temporary item). Master files of an electronic system used to track the location and duty status of deployed personnel.
6. Department of Commerce, Bureau of the Census (DAA–0029–2013–0001, 6 items, 3 temporary items). Records relating to the administration of housing surveys in the field. Proposed for permanent retention are public use data files documenting the results of the periodic surveys.
7. Department of State, Bureau of Diplomatic Security (DAA–0059–2011–0006, 11 items, 9 temporary items). Records relating to management of property, reimbursement agreements, resource allocation working papers, responses to congressional and agency records requests, and working and administrative records of a policy board and an advisory board. Proposed for permanent retention are substantive records of a policy board and an advisory board.
8. Department of Treasury, Internal Revenue Service (DAA–0058–2012–0009, 1 item, 1 temporary item). Lists of pseudonyms used to protect the identity of agency employees.
9. Department of Treasury, Internal Revenue Service (DAA–0058–2013–0001, 1 item, 1 temporary item). User agreements documenting the use of personal electronic equipment for agency business.
10. Department of Treasury, Internal Revenue Service (DAA–0058–2013–0002, 1 item, 1 temporary item). Master files of an electronic system used to evaluate product quality and employee performance.
11. Administrative Office of the United States Courts, Judicial Panel on Multidistrict Litigation (N1–482–11–1, 12 items, 9 temporary items). Case files, sealed records, duplicate judges' orders, and administrative files. Proposed for permanent retention are docket sheets, significant case files, and policies and procedures.
National Science Foundation.
Notice of Public Availability of FY 2012 Service Contract Inventories.
In accordance with Section 743 of Division C of the Consolidated Appropriations Act of 2010 (Pub. L. 111–117), the National Science Foundation is publishing this notice to advise the public of the availability of the FY 2012 Service Contract inventory. This inventory provides information on service contract actions over $25,000 that were made in FY 2012. The information is organized by function to show how contracted resources are distributed throughout the agency. The inventory has been developed in accordance with guidance issued on November 5, 2010, and December 19, 2011, by the Office of Management and Budget's Office of Federal Procurement Policy (OFPP). OFPP's guidance is available at
Questions regarding the service contract inventory should be directed to Richard Pihl in the BFA/DACS at 703–292–7395 or
Nuclear Regulatory Commission.
Notice of the OMB review of information collection and solicitation of public comment.
The U.S. Nuclear Regulatory Commission (NRC) has recently submitted to OMB for review the following proposal for the collection of information under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). The NRC hereby informs potential respondents that an agency may not conduct or sponsor, and that a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The NRC published a
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The public may examine and have copied, for a fee, publicly available documents including the final supporting statement at the NRC's Public Document Room, Room O–1F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20874. The OMB clearance requests are available at the NRC worldwide web site:
Comments and questions should be directed to the OMB reviewer listed below by March 15, 2013. Comments received after this date will be considered if it is practical to do so, but assurance of consideration cannot be given to comments received after this date.
Chad Whiteman, Desk Officer, Office of Information and Regulatory Affairs (3150–0008), NEOB–10202, Office of Management and Budget, Washington, DC 20503.
Comments can also be emailed to
The NRC Clearance Officer is Tremaine Donnell, 301–415–6258.
For the Nuclear Regulatory Commission.
Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 350l–3520) (the “Paperwork Reduction Act”), the Securities and Exchange Commission (the “Commission”) is soliciting comments on the collection of information summarized below. The Commission plans to submit this existing collection of information to the Office of Management and Budget for extension and approval.
Section 17(f) (15 U.S.C. 80a–17(f)) under the Investment Company Act of 1940 (the “Act”)
Rule 17f–4 (17 CFR 270.17f–4) under the Act specifies the conditions for the use of securities depositories by funds
The Commission staff estimates that 140 respondents (including an estimated 79 active funds that may deal directly with a securities depository, an estimated 42 custodians, and 19 possible securities depositories)
Rule 17f–4 contains two general conditions. First, a fund's custodian must be obligated, at a minimum, to exercise due care in accordance with reasonable commercial standards in discharging its duty as a securities intermediary to obtain and thereafter maintain financial assets.
Second, the custodian must provide, promptly upon request by the fund, such reports as are available about the internal accounting controls and financial strength of the custodian.
If a fund deals directly with a securities depository, rule 17f–4 requires that the fund implement internal control systems reasonably designed to prevent an unauthorized officer's instructions (by providing at least for the form, content, and means of giving, recording, and reviewing all officers' instructions).
Based on the foregoing, the Commission staff estimates that the total annual hour burden of the rule's collection of information requirement is 805 hours.
The estimate of average burden hours is made solely for the purposes of the Paperwork Reduction Act. This estimate is not derived from a comprehensive or even representative survey or study of the costs of Commission rules.
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid control number.
Written comments are invited on: (a) Whether the collection of information is necessary for the proper performance of the functions of the Commission, including whether the information will have practical utility; (b) the accuracy of the Commission's estimate of the burden of the collections of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burdens of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication.
Please direct your written comments to Thomas Bayer, Director/Chief Information Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 6432 General Green Way, Alexandria, VA 22312; or send an email to:
Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Rule 606 (formerly known as Rule 11Ac1–6) requires broker-dealers to prepare and disseminate quarterly order routing reports. Much of the information needed to generate these reports already should be collected by broker-dealers in connection with their periodic evaluations of their order routing practices. Broker-dealers must conduct such evaluations to fulfill the duty of best execution that they owe their customers.
The collection of information obligations of Rule 606 apply to broker-dealers that route non-directed customer orders in covered securities. The Commission estimates that out of the currently 5178 broker-dealers that are subject to the collection of information obligations of Rule 606, clearing brokers bear a substantial portion of the burden of complying with the reporting and recordkeeping requirements of Rule 606 on behalf of small to mid-sized introducing firms. There currently are approximately 527 clearing brokers. In addition, there are approximately 2426 introducing brokers that receive funds or securities from their customers. Because at least some of these firms also may have greater involvement in determining where customer orders are routed for execution, they have been included, along with clearing brokers, in estimating the total burden of Rule 606.
The Commission staff estimates that each firm significantly involved in order routing practices incurs an average burden of 40 hours to prepare and disseminate a quarterly report required by Rule 606, or a burden of 160 hours per year. With an estimated 2953
Rule 606 also requires broker-dealers to respond to individual customer requests for information on orders handled by the broker-dealer for that customer. Clearing brokers generally bear the burden of responding to these requests. The Commission staff estimates that an average clearing broker incurs an annual burden of 400 hours (2000 responses × 0.2 hours/response) to prepare, disseminate, and retain responses to customers required by Rule 606. With an estimated 527 clearing brokers subject to Rule 606, the total industry-wide burden per year to comply with the customer response requirement in Rule 606 is estimated to be 210,800 hours (527 × 400).
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 will have practical utility; (b) the accuracy of the Commission's estimate of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information 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. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication.
The Commission may not conduct or sponsor a collection of information
Comments should be directed to Thomas Bayer, Director/Chief Information Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 6432 General Green Way, Alexandria, Virginia 22312 or send an email to:
Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Form BD is the application form used by firms to apply to the Commission for registration as a broker-dealer, as required by Rule 15b1–1. Form BD also is used by firms other than banks and registered broker-dealers to apply to the Commission for registration as a municipal securities dealer or a government securities broker-dealer. In addition, Form BD is used to change information contained in a previous Form BD filing that becomes inaccurate.
The total industry-wide annual time burden imposed by Form BD is approximately 5,941 hours, based on approximately 15,890 responses (288 initial filings + 15,602 amendments). Each application filed on Form BD requires approximately 2.75 hours to complete and each amended Form BD requires approximately 20 minutes to complete. (288 × 2.75 hours = 792 hours; 15,602 × 0.33 hours = 5,149 hours; 792 hours + 5,149 hours = 5,941 hours.) The staff believes that a broker-dealer would have a Compliance Manager complete and file both applications and amendments on Form BD at a cost of $279/hour. Consequently, the staff estimates that the total internal cost of compliance associated with the annual time burden is approximately $1,657,539 per year ($279 × 5941). There is no external cost burden associated with Rule 15b1–1 and Form BD.
The Commission uses the information disclosed by applicants in Form BD: (1) To determine whether the applicant meets the standards for registration set forth in the provisions of the Exchange Act; (2) to develop a central information resource where members of the public may obtain relevant, up-to-date information about broker-dealers, municipal securities dealers and government securities broker-dealers, and where the Commission, other regulators and SROs may obtain information for investigatory purposes in connection with securities litigation; and (3) to develop statistical information about broker-dealers, municipal securities dealers and government securities broker-dealers. Without the information disclosed in Form BD, the Commission could not effectively implement policy objectives of the Exchange Act with respect to its investor protection function.
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 estimate of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information 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. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication.
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.
Please direct your written comments to: Thomas Bayer, Director/Chief Information Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 6432 General Green Way, Alexandria, Virginia 22312 or send an email to:
On July 1, 2011, the Securities and Exchange Commission (“Commission”) issued an order granting temporary exemptive relief from compliance with certain provisions of the Securities Exchange Act of 1934 (“Exchange Act”) in connection with the revision of the Exchange Act definition of “security” to encompass security-based swaps (“Exchange Act Exemptive Order”).
Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) amended the Exchange Act definition of “security” to expressly encompass security-based swaps.
Title VII established a new regulatory framework for swaps and security-based swaps. Under the comprehensive framework established in Title VII, the Commission is given authority over security-based swaps, the CFTC is given regulatory authority over swaps, and the CFTC and SEC are provided with joint regulatory authority over mixed swaps.
On July 1, 2011, the Commission granted temporary relief from compliance with certain provisions of the Exchange Act by providing for the Expiring Temporary Exemptions.
The Commission recently received a request to extend the Expiring Temporary Exemptions until July 17, 2013, citing concerns that key issues and questions regarding the application of the federal securities laws to security-based swaps remain unresolved and that the expiration of these exemptions on February 11, 2013 would be premature.
To date, the Commission has proposed substantially all of the rules related to the new regulatory regime for derivatives under Title VII and has recently begun the process of adopting these rules.
The Commission believes it is necessary or appropriate in the public interest and consistent with the protection of investors to extend the Expiring Temporary Exemptions until February 11, 2014 in order to both avoid a potential unnecessary disruption to the security-based swap market that may result without an extension,
The Commission believes that it would be useful to continue to provide interested parties opportunity to comment on any exemption contained in the Exchange Act Exemptive Order and any additional relief that should be granted upon the expiration of the extension for the Expiring Temporary Exemptions. Comments may be
• Use the Commission's Internet comment form (
• Send an email to
• Use the Federal eRulemaking Portal (
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F St. NE., Washington, DC 20549–1090.
By the Commission.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The purpose of the proposed rule changes is to implement the enhanced margin segregation model for cleared swaps that the Commodity Futures Trading Commission (“CFTC”) adopted in Part 22 of the CFTC regulations (generally referred to as “legal segregation with operational commingling” or “LSOC”). As result of the LSOC requirements, ICE Clear Europe principally proposes to (i) introduce new procedures for allocating initial margin to the positions carried for each customer of an FCM/BD Clearing Member on a customer-by-customer basis, (ii) introduce new procedures for calling for, holding and returning customer margin in light of the requirement to allocate initial margin on a customer-by-customer basis, and (iii) change the net sum calculation for defaulting Clearing Members to limit ICE Clear Europe's ability to use customer margin in the event that an FCM/BD Clearing Member defaults, consistent with the requirements of LSOC. The LSOC requirements are intended to mitigate the risk that one customer of an FCM/BD Clearing Member would suffer a loss because of a default by another customer. ICE Clear Europe also will be removing existing provisions of the ICE Clear Europe Rules (“Rules”) that addressed the holding of excess margin for customers of such Clearing Members and will not be necessary in ICE Clear Europe's initial implementation of LSOC.
Specifically, ICE Clear Europe proposes to amend Parts 9 and 16 of the Rules, as well as related definitions, to incorporate Part 22 of the CFTC Regulations. The amendments to Part 9 of the Rules change the net sum calculation for defaulting FCM/BD Clearing Members. The amendments to Part 16 of the Rules contain the procedures for allocating initial margin on a customer-by-customer basis and related procedures for calling for, holding and returning such margin. The other proposed changes in the Rules reflect conforming changes and drafting clarifications, and do not affect the substance of the ICE Clear Europe Rules or forms of cleared products.
Another purpose of the proposed rule changes is to adopt a set of settlement and notices terms (“Settlement and Notices Terms”) that will apply to all Customer-CM CDS Transactions and, where specified, to the clearing arrangements between an FCM/BD CDS Clearing Member and its FCM/BD Customers and, in each case, to the related CDS Contracts. The Settlement and Notices Terms will be published by ICE Clear Europe as an exhibit to the Rules but will not form part of ICE Clear Europe's Rules, Procedures or Standard Terms. The Settlement and Notices Terms adopt certain notice and related procedures for the customer clearing model for CDS products (in which customers of ICE Clear Europe Clearing Members will have the ability to clear CDS products through ICE Clear Europe Clearing Members).
In its filing with the Commission, ICE Clear Europe included statements concerning the purpose of and basis for proposing the LSOC changes to the Rules and the Settlement and Notices Terms exhibit. The text of these statements may be examined at the places specified in Item III below. ICE Clear Europe has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of these statements.
The proposed rule amendments in connection with the LSOC model are intended to update the particular characteristics of the Rules applicable to the segregation of customer margin. Specifically, the proposed rule changes affect Parts 9 and 16 of the ICE Clear Europe Rules, and related definitions, by providing, in summary, that initial margin allocated to a particular customer's positions may not be used to cover losses arising from another customer's positions. Each of these changes is described in detail as follows.
Under Rules 905(f) and 906(a), the net sum calculation with respect to “
A new definition for “Customer Swap Portfolio” has been added under Rule 1602(f) to accommodate the LSOC model, including the customer-by-customer tracking of positions. Under the proposed new Rule 1604(e), ICE Clear Europe has incorporated new CFTC Rule 22.15, which limits ICE Clear Europe's use of the initial margin provided in respect of customer swap positions. Revisions to Rule 1605(d) eliminate various provisions that are now covered by CFTC regulations and are no longer necessary with the implementation of the LSOC framework. To comply with LSOC, under new Rule 1605(h), ICE Clear Europe will calculate the initial margin requirement separately for each Customer Swap Portfolio and compare it to the value of initial margin provided by the FCM/BD Clearing Member and allocated by ICE Clear Europe under CFTC Rules to that portfolio. In each margin cycle, ICE Clear Europe will call for additional initial margin for each Customer Swap Portfolio for which there is a shortfall. ICE Clear Europe will separately make available for return to the FCM/BD Clearing Member any excess initial margin held with respect to a Customer Swap Portfolio. Further, under the proposed new Rule 1605(i), ICE Clear Europe states that it will not accept the deposit of Margin from a FCM/BD Clearing Member in respect of Contracts or Open Contract Positions recorded in a Swap Customer Account in excess of the amount required by ICE Clear Europe, within the meaning of CFTC Rule 22.13(c).
The Settlement and Notices Terms are an exhibit to the Rules that is intended to complement the customer clearing model for CDS products whereby customers of ICE Clear Europe Clearing Members have the ability to clear CDS products through ICE Clear Europe Clearing Members.
The Settlement and Notices Terms establish the processes for dealing with certain aspects of Physical Notices in the limited circumstances under the Rules and CDS Procedures in which physical, as opposed to electronic, notices may be delivered. “Physical Notices” mean those notices that may be delivered in connection with CDS Contracts and, where applicable, Customer-CM CDS Transactions (other than Electronic Notices and other equivalent electronic notices under Customer-CM CDS Transactions which are or are required pursuant to the Rules or CDS Procedures to be given through Deriv/SERV). Physical Notices include Manual MP Notices (and equivalent notices under Customer-CM CDS Transactions) and notices relating to physical settlement delivered pursuant to or in connection with a CDS Contract or Customer-CM CDS Transaction, including all notices in connection with the physical settlement processes to which the Settlement and Notices Terms apply. Further, for restructuring credit events, there is an electronic notice facility provided by DTCC which is of mandatory use under ICE Clear Europe's rules. Physical Notices relating to restructuring credit events may only be used in the unlikely event of a DTCC or clearing house technology failure or a self-certified clearing member technology failure, as a back-up methodology. Other physical notices are only relevant to physical settlement of CDS, which is nowadays considered a highly unlikely eventuality, following the introduction of ISDA protocols aimed at ensuring that CDS contracts are auction settled where there is sufficient interest in a particular name. The Settlement and Notice Terms also specify certain procedures for fall back settlement of CDS Contracts in the limited circumstances where normal settlement under the Rules and CDS Procedures does not apply.
ICE Clear Europe believes that the proposed LSOC rule amendments and the Settlement and Notices Terms are consistent with the requirements of Section 17A of the Act and the regulations thereunder applicable to ICE Clear Europe. The LSOC rule amendments are intended to adopt a more comprehensive segregation model for the protection of customer property, and thus further the protection of investors and the public interest. ICE Clear Europe believes such segregation also will facilitate the prompt and accurate clearance of transactions. ICE Clear Europe believes the Settlement and Notices Terms also are designed to improve the operational procedures for cleared trades, and thereby promote the prompt and accurate clearance of transactions.
ICE Clear Europe does not believe the proposed Settlement and Notices Terms and the proposed rule changes to implement the CFTC's Part 22 regulations would have any impact, or impose any burden, on competition.
Written comments relating to the LSOC proposed amendments and Settlement and Notices Terms have not been solicited or received. ICE Clear Europe will notify the Commission of any written comments received by ICE Clear Europe.
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 email to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission,
All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–ICEEU–2013–02 and should be submitted on or before March 6, 2013.
Section 19(b) of the Act
In its filing, ICE Clear Europe requested that the Commission approve the proposed rule changes on an accelerated basis for good cause shown. ICE Clear Europe believes there is good cause for accelerated approval because the LSOC rule changes are required in order to be in compliance with Part 22 of the CFTC Regulations in connection with clearing of customer positions in swaps. ICE Clear Europe will not be able to commence customer clearing in CDS or other swaps (including those CDS subject to mandatory clearing under the CFTC's rules) without implementing the LSOC rule amendments. Furthermore, ICE Clear Europe has stated that the changes relating to the Settlement and Notices Terms are part of the implementation of ICE Clear Europe's CDS customer clearing framework recently approved by the Commission and are therefore also important to the commencement of customer clearing in CDS.
The Commission finds good cause, pursuant to Section 19(b)(2) of the Act,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On December 13, 2012, NYSE Arca, Inc. (“Exchange” or “NYSE Arca”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act” or “Exchange Act”)
The Exchange proposes to list and trade Shares of the Fund under NYSE Arca Equities Rule 8.600, which governs the listing and trading of Managed Fund Shares. The Shares will be offered by the Claymore Exchange-Traded Fund Trust 2 (“Trust”),
The Fund's investment objective will be to seek maximum total return, composed of income and capital appreciation. The Fund will normally
The fixed-income instruments in which the Fund will invest include bonds, debt securities, and other similar instruments—such as Treasury securities, collateralized mortgage obligations, collateralized loan obligations, and mortgage- and asset-backed securities—issued by various U.S. and non-U.S. public- or private-sector entities. The Fund will normally invest at least 65% of its assets in fixed-income instruments. In addition, the Fund may invest in U.S. and non-U.S. dollar-denominated debt securities of U.S. and foreign corporations, governments, agencies, and supra-national agencies.
While the Fund generally will invest more than 50% of its assets in investment-grade fixed-income instruments, the Fund also expects to invest to a maximum of 35% of its total assets in high-yield debt securities (“junk bonds”), which are debt securities that are rated below investment-grade by nationally recognized statistical rating organizations, or are unrated securities that the Adviser believes are of comparable quality. The Fund may invest up to 30% of its total assets in debt securities denominated in foreign currencies and may invest without limitation in U.S. dollar-denominated debt securities of foreign issuers. The Fund may invest up to 20% of its total assets in debt securities and instruments that are economically tied to emerging market countries.
The Fund may invest in mortgage- or asset-backed securities and is limited to 10% of its total assets in any combination of mortgage-related or other asset-backed interest-only or principal-only securities.
The Fund may invest in short-term instruments such as commercial paper,
The Fund may invest in debt securities that have variable or floating interest rates that are readjusted on set dates (such as the last day of the month or calendar quarter) in the case of variable rates, or whenever a specified interest rate change occurs in the case of a floating rate instrument. The Fund will not, however, invest in inverse
With respect to fixed-income instrument investments, the Fund may, without limitation, seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as buy backs or dollar rolls).
The Fund may invest up to 35% of its total assets in U.S. exchange-listed equity securities and foreign equity securities.
As a non-principal investment strategy, the Fund may invest in insurance-linked securities and structured notes (notes on which the amount of principal repayment and interest payments are based on the movement of one or more specified factors, such as the movement of a particular security or security index) other than ETNs. The Fund may invest in certificates of deposit (“CDs”), time deposits, and bankers' acceptances from U.S. banks. A bankers' acceptance is a bill of exchange or time draft drawn on and accepted by a commercial bank. A CD is a negotiable interest-bearing instrument with a specific maturity. CDs are issued by banks and savings and loan institutions in exchange for the deposit of funds and normally can be traded in the secondary market prior to maturity. A time deposit is a non-negotiable receipt issued by a bank in exchange for the deposit of funds. Like a CD, it earns a specified rate of interest over a definite period of time; however, it cannot be traded in the secondary market.
The Fund may invest in zero-coupon or pay-in-kind securities. These securities are debt securities that do not make regular cash interest payments. Zero-coupon securities are sold at a deep discount to their face value. Pay-in-kind securities pay interest through the issuance of additional securities. Because zero-coupon and pay-in-kind securities do not pay current cash income, the price of these securities can be volatile when interest rates fluctuate.
The Fund may use delayed-delivery transactions as an investment technique. Delayed-delivery transactions, also referred to as forward-commitments, involve commitments by the Fund to dealers or issuers to acquire or sell securities at a specified future date beyond the customary settlement for such securities. These commitments may fix the payment price and interest rate to be received or paid on the investment. The Fund may purchase securities on a delayed-delivery basis to the extent that it can anticipate having available cash on the settlement date. Delayed-delivery agreements will not be used as a speculative or leverage technique.
The Adviser may attempt to reduce foreign currency exchange rate risk by entering into contracts with banks, brokers, or dealers to purchase or sell foreign currencies at a future date (“forward contracts”).
The Fund may invest in the securities of other investment companies. Under Section 12(d) of the 1940 Act, or as otherwise permitted by the Commission, the Fund's investment in investment companies is limited to, subject to certain exceptions, (i) 3% of the total outstanding voting stock of any one investment company, (ii) 5% of the Fund's total assets with respect to any one investment company, and (iii) 10% of the Fund's total assets with respect to investment companies in the aggregate.
The Fund will be considered non-diversified and can invest a greater portion of assets in securities of individual issuers than a diversified fund.
The Fund may not invest more than 25% of the value of its net assets in securities of issuers in any one industry or group of industries. This restriction does not apply to obligations issued or guaranteed by the U.S. Government, its agencies, or its instrumentalities.
The Fund may hold up to an aggregate amount of 15% of its net assets in illiquid securities
The Fund intends to qualify for and to elect to be treated as a separate regulated investment company under Subchapter M of the Internal Revenue Code.
The Exchange represents that the Shares will conform to the initial and continued listing criteria under NYSE Arca Equities Rule 8.600. The Exchange further represents that, for initial and continued listing, the Fund will be in compliance with Rule 10A–3 under the Exchange Act,
Consistent with 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. That is, while the Fund will be permitted to borrow as permitted under the 1940 Act, the Fund's investments will not be used to seek performance that is the multiple or inverse multiple (
Additional information regarding the Trust, the Fund, and the Shares, including investment strategies, risks, creation and redemption procedures, fees, portfolio holdings disclosure policies, distributions, and taxes, among other things, is included in the Notice and Registration Statement, as applicable.
After careful review, the Commission finds that the proposed rule change is consistent with the requirements of Section 6 of the Act
The Commission finds that the proposal to list and trade the Shares on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the Act,
The Commission further believes that the proposal to list and trade the Shares is reasonably designed to promote fair disclosure of information that may be necessary to price the Shares appropriately and to prevent trading when a reasonable degree of transparency cannot be assured. The Commission notes 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.
The Exchange represents that the Shares are deemed to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities. In support of this proposal, the Exchange has made representations, including:
(1) The Shares will conform to the initial and continued listing criteria under NYSE Arca Equities Rule 8.600.
(2) The Exchange has appropriate rules to facilitate transactions in the Shares during all trading sessions.
(3) The Exchange's surveillance procedures applicable to derivative products, which include Managed Fund Shares, 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.
(4) Prior to the commencement of trading, the Exchange will inform its Equity Trading Permit (“ETP”) Holders in an Information Bulletin of the special characteristics and risks associated with trading the Shares. Specifically, the Information Bulletin will discuss the following: (a) The procedures for purchases and redemptions of Shares in Creation Units (and that Shares are not individually redeemable); (b) 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; (c) 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; (d) how information regarding the Portfolio Indicative Value is disseminated; (e) 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 (f) trading information.
(5) For initial and continued listing, the Fund will be in compliance with Rule 10A–3 under the Exchange Act,
(6) While the Fund generally will invest more than 50% of its assets in investment-grade fixed-income instruments, the Fund may invest up to 35% of its total assets in high-yield debt securities.
(7) Consistent with the Exemptive Order, the Fund will not invest in options contracts, futures contracts, or swap agreements. The Fund's investments will be consistent with its investment objective and will not be used to enhance leverage.
(8) The Fund may hold up to an aggregate amount of 15% of its net assets in illiquid securities (calculated at the time of investment), including Rule 144A securities, master demand notes, and loan participation interests.
(9) A minimum of 100,000 Shares of the Fund will be outstanding at the commencement of trading on the Exchange.
For the foregoing reasons, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) 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 (the
The Exchange proposes to contemporaneously delete the text of Rule 1600, which governs NYBX functionality. The text of the proposed rule change is available on the Exchange's Web site at
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 intends to cease operating New York Block Exchange (“NYBX”), effective February 28, 2013, and as such, proposes to contemporaneously delete the text of Rule 1600, which governs NYBX's functionality.
The Exchange also proposes to make conforming changes to remove references to Rule 1600 and NYBX from the following other Exchange rules: Rule 13, Rule 15, Supplementary Materials .15 and .20 to Rule 79A, Rule 80C, Supplementary Material .10 to Rule 104, Supplementary Material .10, .12, and .13 to Rule 104T, Supplementary Material .40 to Rule 116, Rule 123B, Supplementary Material .10 to Rule 123C, Supplementary Material .25 to Rule 123D, and Supplementary Material .11 to Rule 1000.
The Exchange believes that its proposal is consistent with Section 6(b) 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. The proposed changes are being made to remove references for NYBX from the Exchange Rules to correspond with the Exchange ceasing operations of NYBX facility. The Exchange is ceasing operations of NYBX Facility because after years of operations the facility has not garnered enough volume to achieve critical mass and does not have strong support customers [sic]. The Exchange is ceasing operations of NYBX because the facility was not competitive, therefore ceasing operations should not have any burden on competition.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
The Exchange has requested a waiver of the 30-day operative delay so that the Exchange can cease operations of the NYBX Facility by February 28, 2013. The Exchange notes that NYBX has not achieved significant volume during its operations and does not believe that ceasing its operation will significantly affect the protection of investors or the public interest. The Exchange further notes that discontinuing operations of NYBX at month end will coincide with the Exchange's billing cycle and avoid the expense and inconvenience of extending operations into a partial month. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because such waiver would allow the Exchange to cease operations of NYBX without incurring the expense of extending operations into a partial month. Therefore, the Commission
At any time within 60 days of the filing of such 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 email to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549.
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 (the “Act”),
The Exchange proposes to amend its Fees Schedule. The text of the proposed rule change is available on the Exchange's Web site (
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 aspects of such statements.
The Exchange is proposing to eliminate the customer transaction fee for XSP index options. Currently, the Exchange has a $0.18 customer transaction fee per contract for all index products, with some exceptions.
The propose changes are to take effect on February 1, 2013.
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
In particular, the proposed change is reasonable because it will allow TPHs who engage in XSP options trading the opportunity to pay lower fees for such transactions. The proposed changes to the customer XSP options transaction fees are equitable and not unfairly discriminatory because they are designed to attract greater customer order flow to the Exchange. This would bring greater liquidity to the market, which benefits all market participants.
CBOE 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. The Exchange does not believe that the proposed changes to customer XSP options transaction fees will cause any unnecessary burden on intramarket competition because, while customers are assessed different, and often lower, fee rates than other market participants, this is a common practice within the options marketplace, and customers often do not have the sophisticated trading algorithms and systems that other market participants often possess. Further, to the extent that any change in intramarket competition may result from the proposed changes to customer XSP options transaction fees, such possible change is justifiable and offset because the changes to such fees are designed to attract greater customer order flow to the Exchange. This would bring greater liquidity to the market, which benefits all market participants. The Exchange does not believe that the proposed changes to customer XSP options transaction fees will cause any unnecessary burden on intermarket competition because the changes are minimal and apply to a single index on the Exchange. The Exchange also notes that it operates in a highly-competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive. The proposed rule change reflects a competitive pricing structure designed to incent market participants to direct their order flow to the Exchange, and the Exchange believes that such structure will help the Exchange remain competitive with those fees and rebates assessed by other venues.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) 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 email 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) of the Securities Exchange Act of 1934 (the “Act”)
The Exchange filed a proposal for the BATS Options Market (“BATS Options”) to amend its rules to modify the short term option series (“Short Term Option Series” or “STOS”) Program
The text of the proposed rule change is available at 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 purpose of this proposed rule change is to amend BATS Rules 16.1(a)(57), 19.6, 29.2(n), and 29.11(h) related to the STOS Program. Specifically, the Exchange proposes to: (1) Adopt a rule to permit the Exchange to list Short Term Option Series at $0.50 strike price intervals for option classes that trade in one dollar increments and are in the STOS Program (“Eligible Option Classes”); (2) expand the number of expirations to five consecutive expirations under the STOS Program for trading on the Exchange; (3) increase the number of classes (from 15 to 30) that are eligible to participate in the STOS Program; (4) increase the number of strikes that may be listed per class (from 20 to 30) that participates in the STOS Program; (5) allow the Exchange to open Short Term Option Series that are opened by other securities exchanges in option classes selected by such exchanges under their respective short term option rules; (6) indicate that during the expiration week of an option class that is selected for the STOS Program, the strike price intervals for the related non-STOS option shall be the same as the strike price intervals for the STOS option and that during the week before the expiration week of a STOS option, the Exchange shall open the related non-STOS option for trading in STOS option intervals in the same manner as for STOS options; (7) make clear that the Exchange may open up to 20 initial series for each option class that participates in the STOS Program; (8) amend the definitions of Short Term Option Series in order to reflect the proposed increase in expirations; and (9) make BATS Rules clearer by adding titles to certain paragraphs.
The Exchange is proposing to amend BATS Rules 19.6 and 29.11(h) to permit the Exchange to list Short Term Option Series at $0.50 strike price intervals for option classes that trade in one dollar increments and are in the STOS Program. Currently, BATS Rules do not permit the Exchange to list Short Term Option Series at $0.50 strike price intervals. Rather, BATS Rules 19.6 and 29.11(h) only state that after an option class has been approved for listing and trading on the Exchange, the Exchange may open for trading on any Thursday or Friday that is a business day series of options on that class that expire on the Friday of the following business week that is a business day.
The principal reason for the proposed structure is to compete on an equal playing field with other options exchanges in satisfying the high market demand for weekly options. Multiple options exchanges, including ISE, have implemented substantially similar STOS Programs, although there are some differences in the practical implementation of permitted strike prices. ISE's STOS Program differs from the other programs in that ISE permits $0.50 strike price intervals for weekly options for option classes that trade in one dollar increments and are in the STOS Program.
There is continuing strong customer demand for having the ability to execute hedging and trading strategies effectively via STOS, particularly in the current fast, multi-faceted trading and investing environment that extends across numerous markets and platforms.
The changes proposed by the Exchange should allow execution of more trading and hedging strategies on the Exchange. The Exchange notes that in conformance with Exchange Rules, the Exchange shall not list $0.50 or $1 strike price intervals on Related non-STOS options within five (5) days of expiration. For example, if a Related non-STOS in an options class is set to expire on Friday, September 21, the Exchange could begin to trade $0.50 strike price intervals surrounding that Related non-STOS on Thursday, September 13, but no later than Friday September 14.
The Exchange believes that there are substantial benefits to market participants in the ability to trade the Eligible Option Classes at more granular strike price intervals [sic] the proposed interval for the Eligible Option Classes would allow traders and investors, and in particular public (retail) investors to more effectively and with greater precision consummate trading and hedging strategies on the Exchange. The Exchange believes that this precision is increasingly necessary, and in fact crucial, as traders and investors engage in trading and hedging strategies across various investment platforms (
The Exchange is also proposing to amend BATS Rules 19.6 and 29.11(h) to permit the Exchange to open up to five consecutive expirations under the STOS Program for trading on the Exchange. Currently under the STOS Program, the Exchange may open STOS option series for only one week expirations.
This proposal seeks to allow the Exchange to add a maximum of five consecutive week expirations under the STOS Program, however it will not add a STOS expiration in the same week that a monthly options series expires or, in the case of Quarterly Option Series, on an expiration that coincides with an expiration of Quarterly Option Series on the same class. In other words, the total number of consecutive expirations will be five, including any existing monthly or quarterly expirations.
The Exchange is also proposing to amend BATS Rules 19.6 and 29.11(h) to permit the Exchange to increase the number of classes that are eligible to participate in the STOS Program from 15 to 30. Currently, for each option class that has been approved for listing and trading on the Exchange, the Exchange may open for trading on any Thursday or Friday that is a business day series of options on no more than fifteen option classes that expire on the Friday of the following business week that is a business day.
Several other options exchanges, including NASDAQ Options Market (“NOM”),
The proposed increase to the number of classes eligible to participate in the STOS Program is required for competitive purposes as well as to ensure consistency and uniformity among the competing options exchanges that have adopted similar short term options series programs.
The Exchange is also proposing to amend its rules to permit the Exchange to increase the number of series that the Exchange may open per class that is eligible to participate in the STOS Program from 20 to 30 as well as to make a clarifying change that states that the Exchange may open 20 initial series for each option class that participates in the STOS Program. Currently, for each class that has been approved for listing and trading on the Exchange as part of the STOS Program, the Exchange may open up to 20 series.
ISE's rules and the rules of other exchanges allow them to open up to 30 STOS for each option class eligible for participation in the STOS Program.
The Exchange is proposing to amend its rules to allow the Exchange to open up to ten additional series (a total of 30) for each option class that participates in the STOS Program when the Exchange deems it necessary to maintain an orderly market, to meet customer demand, or when the market price of the underlying security moves substantially from the exercise price or prices of the series already opened. The Exchange is also proposing to amend its rules in order to clarify that it may open up to 20 initial series for each option class that participates in the STOS Program.
The Exchange is also proposing to amend its rules to allow the Exchange to open STOS that are opened by other securities exchanges in option classes selected by other exchanges under their respective short term option rules. Currently, for each option class eligible for participation in the STOS Program, the Exchange may open up to 20 short term option series for each expiration date in that class.
This proposal seeks to allow the Exchange to open STOS that are opened by other securities exchanges in option classes selected by other exchanges under their respective short term option rules. This change is being proposed notwithstanding the current cap of 20 series per class under the STOS Program. This too is a competitive change and is based on approved filings and existing rules of ISE, NOM, and PHLX.
The Exchange is competitively disadvantaged because it operates a substantially similar STOS Program as ISE, NOM, and PHLX, but is limited to listing a maximum of 20 series per options class that participates in its STOS Program (whereas ISE, NOM, and PHLX are not similarly restricted).
The Exchange again notes that the STOS Program has been well-received by market participants, in particular by retail investors. The Exchange believes that the current proposed revision to the STOS Program will permit the Exchange to meet increased customer demand and provide market participants with the ability to hedge in a greater number of option classes and series, as well as provide consistency and uniformity among competing options exchanges.
The Exchange is also proposing to add Rule 19.6(g) and to amend Rule 19.6 Commentary .05(e) and Rule 29.11(h)(5) to indicate during the expiration week of an option class that is selected for the STOS Program, the strike price intervals for the related non-STOS option shall be the same as the strike price intervals for the STOS option. Currently, the Exchange does not list STOS options during the expiration week of an option class. The Exchange is not proposing to change this functionality, but rather, the Exchange is proposing to allow the use of the same strike price intervals for the related non-short term option during expiration week as are used for the short term option. This will allow option classes that are selected for the STOS Program that are trading at narrower strike price intervals as part of the STOS Program to continue trading at the narrower strike price intervals during expiration week, even though the short term option will not be traded during that week. In addition, the Exchange proposes that during the week before the expiration week of a STOS option, the Exchange shall open the related non-STOS option for trading in STOS option intervals in the same manner that they are opened for STOS options. Thus, a non-STOS option may be opened in STOS option intervals on a Thursday or Friday that is a business day before the non-STOS option expiration week. This functionality is identical to that of BOX,
The Exchange is also proposing to amend Rules 16.1(a)(57) and 29.2(n) to make the definition of Short Term Option Series accurately reflect the proposed additional expirations proposed above. Currently, the definitions only include one expiration for STOS. The Exchange is proposing to include the additional expirations proposed above in both definitions of STOS.
The Exchange is also proposing to amend its rules in order to make more clear which paragraphs are related to the initials series and additional series for each option class that participates in the STOS Program as well as the strike intervals on Short Term Option Series.
With regard to the impact of these proposals on system capacity, the Exchange has analyzed its capacity and represents that it and the Options Price Reporting Authority have the necessary systems capacity to handle the potential additional traffic associated with proposed expansion to the STOS Program.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. To the contrary, the Exchange believes that the proposal will allow the Exchange to compete more effectively with other options exchanges that have already adopted changes to their short term options series programs that are identical to the changes proposed by this filing.
The Exchange has neither solicited nor received written comments on the proposed rule change.
Because the foregoing proposed rule change does not significantly affect the protection of investors or the public interest, does not impose any significant burden on competition, and by its terms, does not become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, it has become effective pursuant to Section 19(b)(3)(A) of the
The Exchange has requested that the Commission waive the 30-day operative delay. The Commission believes that waiver of the operative delay is consistent with the protection of investors and the public interest because the proposal is substantially similar to those of other exchanges that have expanded and modified their STOS programs, which been approved by the Commission or filed for immediate effectiveness as “copycat” filings.
At any time within 60 days of the filing of such proposed rule change, the Commission may summarily abrogate 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 email 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 shares of the SPDR Blackstone/GSO Senior Loan ETF under NYSE Arca Equities Rule 8.600. The text of the proposed rule change is available on the Exchange's Web site at
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 shares (“Shares”) of the following under NYSE Arca Equities Rule 8.600, which governs the listing and trading of 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.
The investment objective of the Fund is to provide current income consistent with the preservation of capital. Under normal market conditions,
According to the Registration Statement, in pursuing its investment objective, the Fund, under normal market conditions, will seek to outperform a primary and secondary loan index (as described below), by investing at least 80% of its net assets (plus any borrowings for investment purposes) in “Senior Loans,” which are described further below in “Description of Senior Loans and the Senior Loan Market.” The S&P/LSTA U.S. Leveraged Loan 100 Index (the “Primary Index”) is comprised of the 100 largest Senior Loans, as measured by the borrowed amounts outstanding. The Markit iBoxx USD Leveraged Loan Index (the “Secondary Index”) selects the 100 most liquid Senior Loans in the market. In addition to size, liquidity is also measured, in part, based on the number of market makers who trade a specific Senior Loan and the number and size of transactions in the context of the prevailing bid/offer spread. Markit utilizes proprietary models for the Secondary Index composition and updates to the Secondary Index.
The Fund will not seek to track either the Primary or Secondary Index, but rather will seek to outperform those indices. In doing so, the Sub-Adviser represents that the Portfolio will primarily invest in Senior Loans.
The Sub-Adviser considers Senior Loans to be first lien senior secured floating rate bank loans. A Senior Loan is an advance or commitment of funds made by one or more banks or similar financial institutions to one or more corporations, partnerships or other business entities and typically pays interest at a floating or adjusting rate that is determined periodically at a designated premium above a base lending rate, most commonly the London-Interbank Offered Rate (“LIBOR”). A Senior Loan is considered senior to all other unsecured claims against the borrower, senior to or pari passu with all other secured claims, meaning that in the event of a bankruptcy the Senior Loan, together with other first lien claims, is entitled to be the first to be repaid out of proceeds of the assets securing the loans, before other existing unsecured claims or interests receive repayment. However, in bankruptcy proceedings, there may be other claims, such as taxes or additional advances which take precedence.
According to the Registration Statement, the Portfolio will invest in Senior Loans that are made predominantly to businesses operating in North America, but may also invest in Senior Loans made to businesses operating outside of North America. The Portfolio may invest in Senior Loans directly, either from the borrower as part of a primary issuance or in the secondary market through assignments of portions of Senior Loans from third parties, or participations in Senior Loans, which are contractual relationships with an existing lender in a loan facility whereby the Portfolio purchases the right to receive principal and interest payments on a loan but the existing lender remains the record holder of the loan. Under normal market conditions, the Portfolio expects to maintain an average interest rate duration of less than 90 days.
In selecting securities for the Portfolio, the Portfolio's Sub-Adviser will seek to construct a portfolio of loans that it believes is less volatile than the general loan market. In addition, when making investments, the Sub-Adviser will seek to maintain appropriate liquidity and price transparency for the Portfolio. On an on-going basis, the Sub-Adviser will add or remove those individual loans that it believes will cause the Portfolio to outperform or underperform, respectively, either the Primary or Secondary Index.
When identifying prospective investment opportunities in Senior Loans, the Sub-Adviser currently intends to invest primarily in Senior Loans that are below investment grade quality and will rely on fundamental credit analysis in an effort to attempt to minimize the loss of the Portfolio's capital.
According to the Registration Statement, since 2008, the aggregate size of the market has contracted, characterized by limited new loan issuance and payoffs of outstanding loans. From the peak in 2008 through July 2010, the overall size of the loan market contracted by approximately 15%. The number of market participants also decreased during that period. Although the number of new loans being issued in the market since 2010 is increasing, there can be no assurance that the size of the loan market, and the number of participants, will return to earlier levels. An increase in demand for Senior Loans may benefit the Fund by providing increased liquidity for such loans and higher sales prices, but it may also adversely affect the rate of interest payable on such loans acquired by the Portfolio and the rights provided to the Portfolio under the terms of the applicable loan agreement, and may increase the price of loans that the Portfolio wishes to purchase in the secondary market. A decrease in the demand for Senior Loans may adversely affect the price of loans in the Portfolio, which could cause the Fund's net asset value (“NAV”) to decline.
The Sub-Adviser intends to invest in Senior Loans or other debt of companies that it believes have developed strong positions within their respective markets and exhibit the potential to maintain sufficient cash flows and profitability to service their obligations in a range of economic environments. The Sub-Adviser will seek Senior Loans or other debt of companies that it believes possess advantages in scale, scope, customer loyalty, product pricing, or product quality versus their competitors, thereby minimizing business risk and protecting profitability.
The Sub-Adviser intends to invest primarily in Senior Loans or other debt of established companies which have demonstrated a record of profitability and cash flows over several economic cycles. The Sub-Adviser believes such companies are well-positioned to maintain consistent cash flow to service and repay their obligations and maintain growth in their businesses or market share. The Sub-Adviser does not intend to invest in Senior Loans or other debt of primarily start-up companies, companies in turnaround situations or companies with speculative business plans.
The Sub-Adviser intends to focus on investments in which the Senior Loans or other debt of a target company has an experienced management team with an established track record of success. The Sub-Adviser will typically require companies to have in place proper incentives to align management's goals with the Portfolio's goals.
Often the Sub-Adviser will seek to participate in transactions sponsored by what it believes to be high-quality private equity firms. The Sub-Adviser believes that a private equity sponsor's willingness to invest significant sums of equity capital into a company is an implicit endorsement of the quality of the investment. Further, private equity sponsors of companies with significant investments at risk have the ability and a strong incentive to contribute
The Sub-Adviser will seek to invest in Senior Loans or other debt broadly among companies and industries, thereby potentially reducing the risk of a downturn in any one company or industry having a disproportionate impact on the value of the Portfolio's holdings. However, as a result of its investment in participations in loans and the fact that originating banks may be deemed issuers of loans, the Portfolio may be deemed to concentrate its investments in the financial services industries. Loans, and the collateral securing them, are typically monitored by agents for the lenders, which may be the originating bank or banks.
The Portfolio and the Fund are expected to be managed in a “master-feeder” structure, under which the Fund, under normal market conditions, will invest all of its assets in the Portfolio, the corresponding “master fund,” which is a separate 1940 Act-registered mutual fund that has an identical investment objective. As a result, the Fund (
The Sub-Adviser will manage the investments of the Portfolio. Under the master-feeder arrangement, investment advisory fees charged at the master-fund level are deducted from the advisory fees charged at the feeder-fund level. According to the Registration Statement, this arrangement avoids a “layering” of fees,
According to the Registration Statement, historically, the amount of public information available about a specific Senior Loan has been less extensive than if the loan were registered or exchange-traded. As noted above, the loans in which the Portfolio will invest will, in most instances, be Senior Loans, which are secured and senior to other indebtedness of the borrower. Each Senior Loan will generally be secured by collateral such as accounts receivable, inventory, equipment, real estate, intangible assets such as trademarks, copyrights and patents, and securities of subsidiaries or affiliates. The value of the collateral generally will be determined by reference to financial statements of the borrower, by an independent appraisal, by obtaining the market value of such collateral, in the case of cash or securities if readily ascertainable, or by other customary valuation techniques considered appropriate by the Sub-Adviser. The value of collateral may decline after the Portfolio's investment, and collateral may be difficult to sell in the event of default. Consequently, the Portfolio may not receive all the payments to which it is entitled. By virtue of their senior position and collateral, Senior Loans typically provide lenders with the first right to cash flows or proceeds from the sale of a borrower's collateral if the borrower becomes insolvent (subject to the limitations of bankruptcy law, which may provide higher priority to certain claims such as employee salaries, employee pensions, and taxes). This means Senior Loans are generally repaid before unsecured bank loans, corporate bonds, subordinated debt, trade creditors, and preferred or common stockholders. To the extent that the Portfolio invests in unsecured loans, if the borrower defaults on such loan, there is no specific collateral on which the lender can foreclose. If the borrower defaults on a subordinated loan, the collateral may not be sufficient to cover both the senior and subordinated loans.
According to the Registration Statement, there is no organized exchange on which loans are traded and reliable market quotations may not be readily available. A majority of the Portfolio's assets are likely to be invested in loans that are less liquid than securities traded on national exchanges. Loans with reduced liquidity involve greater risk than securities with more liquid markets. Available market quotations for such loans may vary over time, and if the credit quality of a loan unexpectedly declines, secondary trading of that loan may decline for a period of time. During periods of infrequent trading, valuing a loan can be more difficult and buying and selling a loan at an acceptable price can be more difficult and delayed. In the event that the Portfolio voluntarily or involuntarily liquidates Portfolio assets during periods of infrequent trading, it may not receive full value for those assets. Therefore, elements of judgment may play a greater role in valuation of loans. To the extent that a secondary market exists for certain loans, the market may be subject to irregular trading activity, wide bid/ask spreads and extended trade settlement periods.
According to the Registration Statement, Senior Loans will usually require, in addition to scheduled payments of interest and principal, the prepayment of the Senior Loan from free cash flow, as described in the Registration Statement. The degree to which borrowers prepay Senior Loans, whether as a contractual requirement or at their election, may be affected by general business conditions, the financial condition of the borrower and competitive conditions among loan investors, among others. As such, prepayments cannot be predicted with accuracy. Recent market conditions, including falling default rates among others, have led to increased prepayment frequency and loan renegotiations. These renegotiations are often on terms more favorable to borrowers. Upon a prepayment, either in part or in full, the actual outstanding debt on which the Portfolio derives interest income will be reduced. However, the Portfolio may receive a prepayment penalty fee assessed against the prepaying borrower.
According to the Registration Statement, in addition to the principal investments described above, the Portfolio may invest in other investments, as described below. The Fund may (indirectly through its investments in the Portfolio or, in extraordinary circumstances, directly) invest in the following types of investments. The investment practices of the Portfolio are the same in all material respects to those of the Fund.
The Portfolio may invest in bonds, including corporate bonds; high yield debt securities; and U.S. Government
The Portfolio may invest in repurchase agreements with commercial banks, brokers or dealers to generate income from its excess cash balances and its securities lending cash collateral. A repurchase agreement is an agreement under which the Portfolio acquires a financial instrument (
The Portfolio may invest in commercial paper. Commercial paper consists of short-term, promissory notes issued by banks, corporations and other entities to finance short-term credit needs. These securities generally are discounted but sometimes may be interest bearing.
Subject to limitations, the Portfolio may invest in secured loans that are not first lien loans or loans that are unsecured. These loans have the same characteristics as Senior Loans except that such loans are not first in priority of repayment and/or may not be secured by collateral. Accordingly, the risks associated with these loans are higher than the risks for loans with first priority over the collateral. Because these loans are lower in priority and/or unsecured, they are subject to the additional risk that the cash flow of the borrower may be insufficient to meet scheduled payments after giving effect to the secured obligations of the borrower or in the case of a default, recoveries may be lower for unsecured loans than for secured loans.
The Portfolio may invest in short-term instruments, including money market instruments (including money market funds advised by the Adviser), cash and cash equivalents, on an ongoing basis to provide liquidity or for other reasons.
The Portfolio may invest in the securities of other investment companies, including closed-end funds (including loan-focused closed end funds), subject to applicable limitations under Section 12(d)(1) of the 1940 Act.
In addition, the Portfolio may invest in exchange-traded notes (“ETNs”), such as securities listed on the Exchange under NYSE Arca Equities Rule 5.2(j)(6), which are debt obligations of investment banks that are traded on exchanges and the returns of which are linked to the performance of certain reference assets, which may include market indexes.
The Portfolio will not invest 25% or more of the value of its total assets in securities of issuers in any one industry; however it may be deemed to concentrate its investment in any of the industries or group of industries in the financial services sector (consisting of financial institutions, including commercial banks, insurance companies and other financial companies and their respective holding companies) to the extent that the banks originating or acting as agents for the lenders, or granting or acting as intermediaries in participation interests, in loans held by the Portfolio are deemed to be issuers of such loans.
The Portfolio may hold up to an aggregate amount of 15% of its net assets in illiquid securities (calculated at the time of investment), including Rule 144A securities, junior subordinated loans and unsecured loans deemed illiquid by the Adviser and Sub-Adviser. The Portfolio will monitor its portfolio liquidity on an ongoing basis to determine whether, in light of current circumstances, an adequate level of liquidity is being maintained, and will consider taking appropriate steps in order to maintain adequate liquidity if, through a change in values, net assets, or other circumstances, more than 15% of the Portfolio's net assets are held in illiquid securities. Illiquid securities include securities subject to contractual or other restrictions on resale and other instruments that lack readily available markets as determined in accordance with Commission staff guidance.
Except for investments in ETFs that may hold non-U.S. issues, the Portfolio will not otherwise invest in non-U.S.-registered equity issues.
The Portfolio will not invest in options contracts, futures contracts or swap agreements.
In certain situations or market conditions, the Portfolio may temporarily depart from its normal investment policies and strategies provided that the alternative is consistent with the Portfolio's investment objective and is in the best interest of the Portfolio. For example, the Portfolio may hold a higher than normal proportion of its assets in cash in times of extreme market stress.
The Portfolio will be classified as a “diversified” investment company under the 1940 Act.
The Portfolio intends to qualify for and to elect treatment as a separate
The Portfolio's investments will be consistent with the Portfolio's investment objective and will not be used to enhance leverage.
While the Fund, which would be listed pursuant to the criteria applicable to actively managed funds under NYSE Arca Equities Rule 8.600, is not eligible for listing under NYSE Arca Equities Rule 5.2(j)(3) applicable to listing and trading of Investment Company Units based on a securities index, the Adviser and Sub-Adviser represent that, under normal market conditions, the Fund would satisfy the generic fixed income initial listing requirements in NYSE Arca Equities Rule 5.2(j)(3), Commentary .02 on a continuous basis measured at the time of purchase, as described below.
With respect to the requirement of Commentary .02(a)(1), as noted in the Registration Statement, the Fund (though its investment in the Portfolio) will invest at least 80% of its net assets (plus any borrowings for investment purposes) in Senior Loans. The Adviser and Sub-Adviser expect that substantially all of the Fund's assets will be invested in Fixed Income Securities or cash/cash-like instruments. With respect to the requirement of Commentary .02(a)(2), the Portfolio's Adviser and Sub-Adviser expect that substantially all, but at least 75% of the Portfolio's portfolio will be invested in loans that have an aggregate outstanding exposure of greater than $100 million. With respect to the requirement of Commentary .02(a)(3), the Sub-Adviser represents that the Portfolio will not typically invest in convertible securities; however, should the Portfolio make such investments, the Sub-Adviser would direct the Portfolio to divest any converted equity security as soon as practicable.
With respect to the requirement of Commentary .02(a)(4), the Sub-Adviser represents that the Portfolio will not concentrate its investments in excess of 30% in any one security (excluding Treasury Securities and GSE Securities), and will not invest more than 65% of its assets in five or fewer securities (excluding Treasury Securities and GSE Securities).
With respect to the requirement of Commentary .02(a)(5), the Sub-Adviser represents that the Portfolio will invest in Senior Loans issued to at least 13 non-affiliated borrowers.
With respect to the requirements of Commentary .02(a)(6), the Sub-Adviser represents that the Portfolio's portfolio may make investments on a continuous basis in compliance with such requirement at the time of purchase; however, the market for Senior Loans differs in several material respects from the market of other fixed income securities (
The Sub-Adviser represents that Senior Loans represent debt obligations of sub-investment grade corporate borrowers, similar to high yield bonds; however, Senior Loans are different from traditional high yield bonds in several important respects. First, Senior Loans are typically senior to other obligations of the borrower and secured by the assets of the borrower. Senior Loans rank at the top of a borrower's capital structure in terms of priority of payment, ahead of any subordinated debt (high yield) or the borrower's common equity. These loans are also secured, as the holders of these loans have a lien on most if not all of the corporate issuer's plant, property, equipment, receivables, cash balances, licenses, trademarks, etc. Furthermore, the corporate borrower of Senior Loans executes a credit agreement that typically restricts what it can do (debt incurrence, asset dispositions, etc.) without the lenders' approval, and, in addition, often requires the borrower to meet certain ongoing financial covenants (EBITDA, leverage tests, etc.). Finally, Senior Loans are floating rate obligations which typically pay a fixed spread over 3 month LIBOR.
Institutional investors access the market today primarily through commingled funds or separately managed accounts. Individual investors have gained exposure to Senior Loans primarily through registered open end or closed end mutual funds and business development companies or occasionally through limited partnerships.
The performance of a Senior Loans portfolio is driven by credit selection. Investing in Senior Loans involves detailed credit analysis and sound investment judgment culminating in the timely payout of interest and ultimate return of principal. Loans are generally prepayable at any time, typically without penalty. Loans are typically
The Sub-Adviser represents that the Senior Loan market, in terms of total outstanding loans by dollar volume is approximately equal in size to the high yield corporate bond market in the U.S.—between $1.2 trillion and $1.5 trillion. The market for Senior Loans is almost exclusively comprised of non-investment grade corporate borrowers. The Loan Syndication and Trading Association (“LSTA”), a trade group sponsored by both underwriters of and institutional investors in senior bank loans, has been tracking trading volumes and bid-offer spreads for the asset class since 2007. For the month ended June 30, 2012—a representative period—$30 billion of Senior Loans changed hands representing 1,109 individual transactions. (Source: LSTA.) Average quarterly Senior Loan trading volume exceeded $100 billion during 2011. Quarterly trading volumes fell modestly to $98 billion in the second calendar quarter of 2012.
The Portfolio, as noted above, will primarily invest in the more liquid and higher rated segment of the Senior Loan market. The average credit rating of the Senior Loans that the Fund typically will hold will be rated between BB+ and B+ as rated by S&P. The most actively traded loans will generally have a tranche size outstanding (or total float of the issue) in excess of $250 million. The borrowers of these broadly syndicated bank loans will typically be followed by many “buy-side” and “sell-side” credit analysts who will in turn rely on the borrower to provide transparent financial information concerning its business performance and operating results. The Sub-Adviser represents that such borrowers typically provide significant financial transparency to the market through the delivery of financial statements on at least a quarterly basis as required by the executed credit agreements. Additionally, bid and offers in the Senior Loans are available throughout the trading day on larger Senior Loans issues with multiple dealer quotes available.
The Sub-Adviser represents that the underwriters, or agent banks, which distribute, syndicate and trade Senior Loans are among the largest global financial institutions, including JPMorgan, Bank of America, Citigroup, Goldman Sachs, Morgan Stanley, Wells Fargo, Deutsche Bank, Barclays, Credit Suisse and others. It is common for multiple firms to act as underwriters and market makers for a specific Senior Loan issue. For example, two underwriters may co-underwrite and fund a Senior Loan that has a $1 billion institutional tranche. One of the underwriters acting as syndication agent for the financing, will then draft an offering memorandum (similar to an equity IPO prospectus), distribute it to potential investors, schedule management meetings with the largest loan investors and arrange a bank meeting that includes management presentations along with a question and answer session. The investor audience attends in person as well as via telephone with both live and recorded conference call options. After a two week syndication process where investors can complete their due diligence work with access to company management and underwriter bankers to answer credit questions, investors' commitments are collected by the underwriter. The underwriter will typically allocate the loan to 80–120 investors within the following week, with the largest position representing 3–5% of the tranche size in a successful syndication. The underwriters will both make executable two sided markets in the loan with eighth to a quarter point bid/ask spreads on sizes in the $2 million to $20 million range, depending on the issue. Other banks also have Senior Loan trading desks that make secondary bid/ask markets in the loans after they are allocated. Senior Loan investors can also obtain information on Senior Loans and their borrowers from numerous public sources, including Bloomberg, FactSet, public financial statement filings (Forms 10–K and 10–Q), and sell side research analysts.
The Sub-Adviser represents that the segment of the Senior Loan market that the Portfolio will focus on is highly liquid. Senior Loans of $250 million or more in issuance are typically quite liquid and will have multiple market makers and typically 75 or more institutional holders. The standard bid/offer spreads for such loans are
The Sub-Adviser represents that, while Senior Loans are not reported through TRACE,
The Primary Index is a market value-weighted index designed to measure the performance of the largest segment of the U.S. syndicated leveraged loan market. The Primary Index consists of 100 loan facilities drawn from a larger benchmark—the S&P/LSTA Leveraged Loan Index (“LLI”)—which covers more than 900 facilities and, as of June 30, 2011, had a market value of more than US$ 490 billion. As of June 30, 2011, the Primary Index had a total market value of US$ 183.4 billion.
The Primary Index is designed to reflect the largest facilities in the leveraged loan market. It mirrors the market-weighted performance of the largest institutional leveraged loans based upon market weightings, spreads and interest payments.
The Primary Index is rules based, although the S&P/LSTA U.S. Leveraged Loan 100 Index Committee (the “Index Committee,” described below) reserves the right to exercise discretion when necessary.
The Primary Index is rebalanced semi-annually to avoid excessive turnover, but reviewed weekly to reflect pay-downs and ensure that the Primary Index portfolio maintains 100 loan facilities. The constituents of the Primary Index (the “Index Loans”) are drawn from a universe of syndicated leveraged loans representing over 90% of the leveraged loan market.
All syndicated leveraged loans covered by the LLI universe are eligible for inclusion in the Primary Index. Term loans from syndicated credits must meet the following criteria at issuance in order to be eligible for inclusion in the LLI:
• Senior secured
• Minimum initial term of one year
• Minimum initial spread of LIBOR + 125 basis points
• U.S. dollar denominated.
All Primary Index loans must have a publicly assigned CUSIP.
According to the Primary Index Description, the Primary Index is designed to include the largest loan facilities from the LLI universe. Par outstanding is a key criterion for loan selection. Loan facilities are included if they are among the largest first lien facilities from the Primary Index in terms of par amount outstanding. There is no minimum size requirement on individual facilities in the Primary Index, but the LLI universe minimum is US$ 50 million. Only the 100 largest first lien facilities from the LLI that meet all eligibility requirements are considered for inclusion. The Primary Index covers all borrowers regardless of origin; however, all facilities must be denominated in U.S. dollars.
A Primary Index addition is generally made only if a vacancy is created by a Primary Index deletion. Primary Index additions are reviewed on a weekly basis and are made according to par outstanding and overall liquidity. Liquidity is determined by the par outstanding and number of market bids available. Facilities are retired when they are no longer priced by “LSTA/LPC Mark-to-Market Pricing” or when the facility is repaid.
Each loan facility's total return is calculated by aggregating the interest return, reflecting the return due to interest paid and accrued interest, and price return, reflecting the gains or losses due to changes in end-of-day prices and principal prepayments.
The Primary Index is maintained in accordance with the following rules:
• The Primary Index is reviewed each week to ensure that it includes 100 Index Loans.
• A complete review and rebalancing of all Primary Index constituents is completed on a semi-annual basis coinciding with the last weekly rebalance in June and in December.
• Eligible loan facilities approved by the Primary Index Committee are added to the Primary Index during the semi-annual rebalancing. Eligible loan facilities are added to the Primary Index at the weekly review only if other facilities are repaid or otherwise drop out of the Primary Index, in order to maintain 100 Index Loans.
• Any loan facility that fails to meet any of the eligibility criteria or that has a term to maturity less than or equal to 12 months plus 1 calendar day, as of the weekly Rebalancing Date, will not be included in the Primary Index.
• Par amounts of Primary Index loans will be adjusted on the weekly Rebalancing Date to reflect any changes that have occurred since the previous Rebalancing Date, due, for example, to partial pre-payments and pay-downs.
• Constituent facilities are capped at 2% of the Primary Index and drawn-down at the weekly rebalancing. When a loan facility exceeds the 2% cap, the weight is reduced to 1.90% and the proceeds are invested in the other Primary Index components on a relative-weight basis.
The Primary Index is normally reviewed and rebalanced on a weekly basis to maintain 100 constituents. The Primary Index Committee (as described below), nevertheless, reserves the right to make adjustments to the Primary Index at any time that it believes appropriate.
Weekly Primary Index rebalancing maintenance (additions, deletions, pay-downs, and other changes to the Primary Index) is based on data as of Friday (or the last business day of the week in the case of holidays) and is announced the following Wednesday (or Tuesday in the case of a holiday) for implementation on the following Friday. Publicly available information, up to and including each Wednesday's close, is considered in each weekly rebalancing.
Primary Index changes published in the announcement generally are not subject to revision and will become effective on the date listed in the announcement.
The Primary Index Committee maintains the Primary Index.
Meetings are held annually and, from time to time, as needed. It is the sole responsibility of the Primary Index Committee to decide on all matters relating to methodology, maintenance, constituent selection and index procedures. The Primary Index Committee makes decisions based on all available information and Primary Index Committee discussions are kept confidential to avoid any unnecessary impact on market trading.
According to the Secondary Index Description, the Markit iBoxx USD Liquid Leveraged Loan Index is a subset of the benchmark Markit iBoxx USD Leveraged Loan Index (USD LLI). The Secondary Index limits the number of constituent loans by selecting larger and more liquid loans from the wider USD LLI index universe as determined by the Liquidity Ranking Procedure, described below. The procedure utilizes daily liquidity scores from the Markit Loan Pricing Service, which is a broader measure of liquidity, summarizing the performance of each loan across several
The selection process for the Secondary Index will be used on the index inception date and at every monthly rebalancing (“Secondary Index Selection Date”). The selection process will involve the identification of the eligible universe using the eligibility criteria set out below. If the size of the eligible universe is greater than the target number of loans, the Liquidity Ranking Procedure will be used to determine the final index constituents. Once the index members are selected, they are automatically carried forward to the following month's selection, unless they no longer satisfy the eligibility criteria or enter a prolonged period of relative illiquidity. The Secondary Index eligibility criteria and the liquidity ranking procedure are described in further detail below.
The following six selection criteria are used to derive the eligible universe from the MarkitWSO USD-denominated loan universe: loan type; minimum size; liquidity/depth of market; spread; credit rating; and minimum time to maturity.
Only USD-denominated loans are eligible for the Secondary Index.
Eligible loan types are fully funded term loans (fixed and floating rate) and defaulted loans. Ineligible loan types are 364-day facility; delayed term loans; deposit-funded tranche; letters of credit; mezzanine; PIK Toggle; PIK; pre-funded acquisition; revolving credit; strips; synthetic lease; and unfunded loans.
A minimum facility size of $500 million USD nominal is required to be eligible for the Secondary Index. A constituent is removed at the next rebalancing if its nominal outstanding falls below $500 million USD.
According to the Secondary Index Description, liquidity and depth of the market can be measured by the number of prices available for a particular loan and the length of time prices have been provided by the minimum required number of price contributors. The liquidity check is based on the 3-month period prior to the rebalancing cut-off date (liquidity test period). Only loans with a minimum liquidity/depth of 2 for at least 50% of trading days of the liquidity test period are eligible. Loans issued less than 3 months prior to the rebalancing cut-off date require a minimum liquidity/depth of 3 for at least 50% of trading days in the period from the issue date to the rebalancing cut-off date.
Only sub-investment grade loans are eligible for the Secondary Index. Each rated loan is assigned a composite index rating based on the ratings from Moody's and S&P's. If more than one agency publishes a rating for a loan, the average of the ratings determines the composite rating. The average rating is calculated as the numerical average of the ratings provided. To calculate the average, each rating [sic] assigned an integer number as follows: AAA/Aaa is assigned a 1, AA+/Aa1 a 2, etc. The resulting average is rounded to the nearest integer with .5 rounded up. Loans designated as “Not Rated” by both Moody's and S&P must have a minimum current spread of 125 basis points over LIBOR to be eligible for the Secondary Index. Loans designated as “Not Rated” are not assigned an index rating. Defaulted loans are eligible for the Secondary Index provided they meet all other criteria.
The initial time to maturity is measured from the loan's issue date to its maturity date. A minimum initial time to maturity of one year is required for potential constituents. The minimum time to maturity threshold reduces the Secondary Index turnover and transaction costs associated with short-dated loans. Existing constituents with time to maturities of less than 1 year remain in the Secondary Index until maturity provided they meet all other eligibility criteria.
In order to determine the final Secondary Index constituents, the loans in the eligible universe are ranked according to their liquidity scores, as provided by the Markit Loan Pricing Service. Each loan in the MarkitWSO database
• Sources Quote: The number of dealers sending out runs.
• Frequency of Quotes: Total number of dealer runs.
• Number of Sources with Size: The number of dealer runs with associated size.
• Bid-offer spreads: The average bid-offer spread in dealer runs.
• Average quote size: The average size parsed from quotes.
• Movers Count: The end of day composite contributions which have moved on that day.
Each loan carries a score ranging from 1 to 5 in ascending order of liquidity, depending on the daily values for the above components. A loan with a score of 1 will have the best performance in each of the categories above. In the liquidity ranking procedure described below, average liquidity scores are calculated for each loan, over a calendar one or three month period immediately preceding each rebalancing date.
On the Secondary Index inception day, the target number of loans will be 100. Loans will be removed from the Secondary Index if they are no longer present in the current eligible universe or are not ranked within the first 125 places in terms of 3 month average liquidity score. On every subsequent rebalancing, the number of new loans to be selected will be equal to the number of loans which will be removed from the Secondary Index.
According to the Secondary Index Description, the parameters used in the selection process, including the target number of loans and the eligibility criteria, are subject to an annual review process to ensure that the Secondary Index continues to reflect the underlying loans market. The results of the analysis are submitted to the oversight committee for the Markit iBoxx USD Leveraged Loans Indices (”Oversight Committee”).
All Markit iBoxx USD Leveraged Loans Indices are calculated at the end of each business day and re-balanced at the end of each month.
The Markit iBoxx USD Leveraged Loans Indices are calculated on the basis of end-of-day prices provided by Markit Loan Pricing services on each recommended Securities Industry and Financial Markets Association (“SIFMA”) U.S. trading day.
On each pricing day, end-of-day bid, mid and ask price quotes for the applicable loans are received from Markit Loan Pricing. Prices for all loans are taken at 4:15 p.m. Eastern time
Markit will provide bid, mid and ask prices for all eligible loans at the end of each index calculation day. Reference loan data will be provided by Markit, which represents up-to-date reference and transactional information on over 1,000 leveraged loans.
The Fund will issue and redeem Shares only in Creation Units at the NAV next determined after receipt of an order on a continuous basis every day except weekends and specified holidays. The NAV of the Fund will be determined once each business day, normally as of the close of trading of the New York Stock Exchange (“NYSE”), generally, 4:00 p.m. E.T. Creation Unit sizes will be 50,000 Shares per Creation Unit. The Trust will issue and sell Shares of the Fund only in Creation Units on a continuous basis through the Distributor, without a sales load (but subject to transaction fees), at their NAV per Share next determined after receipt of an order, on any business day, in proper form pursuant to the terms of the Authorized Participant agreement (as referred to below).
The consideration for purchase of a Creation Unit of the Fund generally will consist of either (i) the in-kind deposit of a designated portfolio of securities (primarily Senior Loans) (the “Deposit Securities”) per each Creation Unit and the Cash Component (defined below), computed as described below or (ii) the cash value of the Deposit Securities (“Deposit Cash”) and the “Cash Component,” computed as described below. The primary method of creation and redemption transactions will be in cash. In-kind creation and redemption transactions will be available only if requested by an Authorized Participant and approved by the Trust.
When accepting purchases of Creation Units for cash, the Fund may incur additional costs associated with the acquisition of Deposit Securities that would otherwise be provided by an in-kind purchaser. Together, the Deposit Securities or Deposit Cash, as applicable, and the Cash Component will constitute the “Fund Deposit,” which represents the minimum initial and subsequent investment amount for a Creation Unit of the Fund. The “Cash Component” will be an amount equal to the difference between the NAV of the Shares (per Creation Unit) and the market value of the Deposit Securities or Deposit Cash, as applicable. If the Cash Component is a positive number (
According to the Registration Statement, to be eligible to place orders with respect to creations and redemptions of Creation Units, an entity must be (i) a “Participating Party,”
The Custodian, through the NSCC, will make available on each business day, immediately prior to the opening of business on the Exchange's Core Trading Session (currently 9:30 a.m., E.T.), the list of the names and the required number of shares of each Deposit Security or the required amount of Deposit Cash, as applicable, to be included in the current Fund Deposit (based on information at the end of the previous business day) for the Fund. Such Fund Deposit is subject to any applicable adjustments as described below, in order to effect purchases of Creation Units of the Fund until such time as the next-announced composition of the Deposit Securities or the required amount of Deposit Cash, as applicable, is made available.
Shares may be redeemed only in Creation Units at their NAV next determined after receipt of a redemption request in proper form by the Fund through the Transfer Agent and only on a business day.
With respect to the Fund, the Custodian, through the NSCC, will make available immediately prior to the opening of business on the Exchange (9:30 a.m. Eastern time) on each business day, the list of the names and share quantities of the Portfolio's portfolio securities (“Fund Securities”) or the required amount of Deposit Cash that will be applicable (subject to possible amendment or correction) to redemption requests received in proper form (as defined below) on that day. Fund Securities received on redemption may not be identical to Deposit Securities.
Redemption proceeds for a Creation Unit will be paid either in-kind or in cash or a combination thereof, as determined by the Trust. With respect to in-kind redemptions of the Fund, redemption proceeds for a Creation Unit will consist of Fund Securities as announced by the Custodian on the business day of the request for redemption received in proper form plus cash in an amount equal to the difference between the NAV of the Shares being redeemed, as next determined after a receipt of a request in proper form, and the value of the Fund Securities (the “Cash Redemption Amount”), less a fixed redemption transaction fee and any applicable additional variable charge as set forth in the Registration Statement. In the event that the Fund Securities have a value greater than the NAV of the Shares, a compensating cash payment equal to the differential will be required to be made by or through an Authorized Participant by the redeeming shareholder. Notwithstanding the foregoing, at the Trust's discretion, an Authorized Participant may receive the corresponding cash value of the securities in lieu of the in-kind securities value representing one or more Fund Securities.
The creation/redemption order cut-off time for the Fund is expected to be 4:00 p.m. Eastern Time for purchases of Shares. On days when the Exchange closes earlier than normal, the Fund may require orders for Creation Units to be placed earlier in the day.
The NAV per Share for the Fund will be computed by dividing the value of the net assets of the Fund (
In calculating the Portfolio's and Fund's NAV per Share, the Portfolio's investments will generally be valued using market valuations. A market valuation generally means a valuation (i) obtained from an exchange, a pricing service, or a major market maker (or dealer), (ii) based on a price quotation or other equivalent indication of value supplied by an exchange, a pricing service, or a major market maker (or dealer) or (iii) based on amortized cost. The Adviser may use various pricing services, or discontinue the use of any pricing service, as approved by the Fund's Board from time to time. A price obtained from a pricing service based on such pricing service's valuation matrix may be considered a market valuation. Any assets or liabilities denominated in currencies other than the U.S. dollar will be converted into U.S. dollars at the current market rates on the date of valuation as quoted by one or more sources.
In the event that current market valuations are not readily available or such valuations do not reflect current market value, the Trust's procedures require the Pricing and Investment Committee to determine a security's fair value if a market price is not readily available.
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's Web site (
On a daily basis, the Disclosed Portfolio will include each portfolio security, including Senior Loans, and other financial instruments of the Portfolio with the following information on the Fund's Web site: ticker symbol (if applicable), name of security and financial instrument, number of shares (if applicable) and dollar value of securities (including Senior Loans) and financial instruments held in the Portfolio, and percentage weighting of the security and financial instrument in the Portfolio. The Web site information will be publicly available at no charge.
One or more major market data vendors will widely disseminate, every fifteen seconds during the NYSE Arca Core Trading Session, a Portfolio Indicative Value (“PIV”) (as defined in NYSE Arca Equities Rule 8.600 (c)(3)), relating to the Fund.
In addition, a basket composition file, which includes the security names, amount and share quantities, as applicable, required to be delivered in exchange for the Fund's Shares, together with estimates and actual cash components, will be publicly disseminated daily prior to the opening of the NYSE via NSCC. The basket represents one Creation Unit of the Fund.
The Primary Index description and Secondary Index description are publicly available. Primary and Secondary Index information, including values, components, and weightings, is updated and provided daily on a subscription basis by S&P and Markit, respectively. Complete methodologies for the Primary and Secondary Index are
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
The dissemination of the PIV, together with the Disclosed Portfolio, will allow investors to determine the value of the underlying Portfolio of the Fund on a daily basis and to provide a close estimate of that value throughout the trading day. The intra-day, closing and settlement prices of the Portfolio securities, including Senior Loans and other assets, will also be readily available from the national securities exchanges trading such securities, automated quotation systems, published or other public sources, or on-line information services such as Bloomberg or Reuters.
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 4:00 a.m. to 8:00 p.m. E.T. 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 represents that trading in the Shares will be subject to the existing trading surveillances, administered by FINRA on behalf of the Exchange, which are designed to detect violations of Exchange rules and applicable federal securities laws.
The surveillances referred to above generally focus on detecting securities trading outside their normal patterns, which could be indicative of manipulative or other violative activity. 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. FINRA, on behalf of the Exchange, will communicate as needed regarding trading in the Shares with other markets that are members of the Intermarket Surveillance Group (“ISG”) or with which the Exchange has in place 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 PIV will not be calculated or publicly disseminated; (4) how information regarding the PIV 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 Act. The Bulletin will also disclose that the NAV for the Shares will be calculated after 4:00 p.m., E.T. each trading day.
The basis under the 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. In pursuing its investment objective, the Portfolio seeks to outperform the Primary Index by normally investing at least 80% of its net assets (plus any borrowings for investment purposes) in Senior Loans. It is anticipated that the Portfolio, in accordance with its principal investment strategy, will invest 50% to 75% of its net assets in Senior Loans that are eligible for inclusion and meet the liquidity thresholds of the Primary and/or the Secondary Indices. Each of the Portfolio's Senior Loan investments will have no less than $250 million USD par outstanding. The Portfolio will not invest 25% or more of the value of its total assets in securities of borrowers in any one industry. The Portfolio may hold up to an aggregate amount of 15% of its net assets in illiquid securities (calculated at the time of investment), including Rule 144A securities deemed illiquid by the Adviser and Sub-Adviser. The Adviser and the Sub-Adviser are each affiliated with a broker-dealer and have implemented a “fire wall” with respect to such broker-dealers regarding access to information concerning the composition and/or changes to the Fund's Portfolio. The Portfolio's and Fund's investments will be consistent with the Portfolio's and Fund's investment objective and will not be used to enhance leverage. The Portfolio will not invest in options contracts, futures contracts or swap agreements. The Adviser and Sub-Adviser represent that, under normal market conditions, the Fund would satisfy the generic fixed income listing requirements in NYSE Arca Equities Rule 5.2(j)(3), Commentary .02 on a continuous basis measured at the time of purchase, as described above. Except for Underlying ETFs that may hold non-U.S. issues, the Fund will not otherwise invest in non-U.S.-registered equity issues. The Primary Index Committee has implemented procedures designed to prevent the use and dissemination of material, non-public information regarding the Primary Index. The Oversight Committee has implemented procedures designed to prevent the use and dissemination of material, non-public information regarding the Secondary Index.
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. S&P and Markit are not broker-dealers or affiliated with a broker-dealer and each has implemented procedures designed to prevent the use and dissemination of material, non-public information regarding the Primary Index and Secondary Index, respectively. The PIV 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 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 intra-day, closing and settlement prices of the Portfolio securities are also readily available from the national securities exchanges trading such securities, automated quotation systems, published or other public sources, or on-line information services. 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 PIV, 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 PIV, 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. The Exchange believes that the proposed rule change 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.
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 email 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.
60 Day Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, this notice announces the Small Business Administration's intentions to request approval on a new and/or currently approved information collection.
Submit comments on or before April 15, 2013.
Send all comments regarding whether these information collections are necessary for the proper performance of the function of the agency, whether the burden estimates are accurate, and if there are ways to minimize the estimated burden and enhance the quality of the collections, to Sandra Johnston, Program Analyst, Office of Financial Assistance, Small Business Administration, 409 3rd Street, 8th Floor, Washington, DC 20416.
Sandra Johnston, Program Analyst,
Small Business Administration (SBA) regulations require that we determine that a participating Certified Development Company's Non-Bank Lender Institutions' or Microlender's management, ownership, etc. is of “good character”. To do so requires the information requested on the Form 1081. This form also provides data used to determine the qualifications and capabilities of the lenders key personnel.
Under Small Business Administration (SBA) Dealer Floor Plan Pilot initiative SBA can now guarantee floor plan lines of credit made by participating lenders. The information collected from these lenders helps SBA to determine whether and to what extent the lines are revolving, as well as to develop more efficient and effective subsidy model for revolving loans.
Send all comments regarding whether this information collection is necessary for the proper performance of the function of the agency, whether the burden estimates are accurate, and if there are ways to minimize the estimated burden and enhance the quality of the collection, to Brenda Washington, Senior Program Analyst Office of HUBZone, Small Business Administration, 409 3rd Street, 8th Floor, Washington, DC 20416.
Brenda Washington, Office of HUBZone,
The purpose of collecting this data is to perform economic impact analysis of the HUBZone Program. With the data collected, the Program will be able to measure the effect of the jobs creation and capital investment of the participating firms on various economic activity indicators of the designed communities such as unemployment rate, income and poverty rate.
Send all comments regarding whether this information collection is necessary for the proper performance of the function of the agency, whether the burden estimates are accurate, and if there are ways to minimize the estimated burden and enhance the quality of the collection, to Rachel Newman-Karton, Program Analyst, Office of Small Business Development Centers, Small Business Administration, 409 3rd Street, 6th Floor, Washington, DC 20416.
Rachel Newman-Karton, Program Analyst,
The Small Business Administration's (SBA) resource partners are required under their cooperative agreement with the agency to provide business management training to small business owners and nascent owners. This information is needed to monitor and access the quality of training provided by these resource partners. Respondents are attendees at their training sessions.
Small Business Administration.
Notice of reporting requirements submitted for OMB review.
Under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35), agencies are required to submit proposed reporting and recordkeeping requirements to OMB for review and approval, and to publish a notice in the
Submit comments on or before March 15, 2013. If you intend to comment but cannot prepare comments promptly, please advise the OMB Reviewer and the Agency Clearance Officer before the deadline.
Address all comments concerning this notice to:
Curtis Rich, Agency Clearance Officer,
Federal Aviation Administration (FAA), DOT.
Notice of intent of waiver with respect to land; Chicago Executive Airport, Wheeling, IL.
The FAA is considering a proposal to change a portion of airport land from aeronautical use to non-aeronautical use and to authorize the sale of the airport property located at Chicago Executive Airport, Wheeling, IL. The Parcels are now considered excess land not beneficial for future airport use. Proceeds from the sale of the land will be used for future airport improvement projects. This notice announces that the FAA is considering the release of the subject airport property at Chicago Executive Airport, from all federal land covenants. Approval does not constitute a commitment by the FAA to financially assist in disposal of the subject airport property nor a determination that all measures covered by the program are eligible for grant-in-aid funding from the FAA.
Comments must be received on or before March 15, 2013.
Gary D. Wilson, Program Manager, 2300 East Devon Avenue, Des Plaines, IL 60018. Telephone Number 847–294–7631/FAX Number 847–294–7046. Documents reflecting this FAA action may be reviewed at this same location by appointment or at the Chicago Executive Airport, 1020 Plant Road, Wheeling, Illinois 60093.
In accordance with section 47107(h) of Title 49, United States Code, this notice is required to be published in the
Part of the East 580 feet of the North half of the Southeast Quarter of the Northeast Quarter of Section 14, and part of Lot 13 in J.R. Willens Wheeling Estates, a subdivision in said North half recorded as Document No. 17012886 all in Township 42 North, Range 11, East of the third Principal Meridian Cook, Illinois described as follows:
Beginning at the Southwest corner of said Lot 13; thence North 00 Degrees 03 Minutes 47 Seconds West along the West line of said Lot 13, a distance of 150.65 feet to the South right of line of Debra Lane as dedicated by said J.R. Willen Wheeling Estates; thence South 89 Degrees 56 Minutes 17 Seconds East along said South line, a distance of 89.18 feet to a point on a non tangent curve; thence Southerly along a curve concave East having a radius of 1989.86 feet and a chord bearing of South 20 Degrees 45 Minutes 28 Seconds East, an ARC distance of 63.74 feet; thence South 21 Degrees 40 Minutes 26 Seconds East, a distance of 270.83 feet; thence South 31 Degrees 12 Minutes 26 Seconds West, a distance of 18.87 feet to the North line of Cindy Lane as dedicated by said J.R. Willens Wheeling Estates; thence North 89 Degrees 56 Minutes 17 Seconds West along said North line a distance of 68.94 feet to the West line of said East 590 feet; thence
Part of Lots 9–12. Both inclusive in Wolf Road Estates, a subdivision of the North 495.92 feet of the South
Beginning at the Southwest corner of said Lot 12; thence North 00 Degrees 09 Minute 20 Seconds West along the West line of said Lots 9–12. A distance of 462.64 feet to the South Right of Way line of Kerry Lane as dedicated by said Wolf Road Estates; thence South 89 Degrees 59 Minutes 35 Seconds East along said South line, a distance of 75.70 feet; thence South 37 Degrees 26 Minutes 44 Seconds East, a distance of 50.48 feet to a point on a non tangent curve; thence Southerly along a curve concave Easterly having a radius of 1989.86 feet and a chord bearing of South 10 Degrees 12 Minutes 58 Seconds East, an ARC distance of 598.51 feet to the North Right of Way line of Debra Lane as dedicated by J.R. Willens Wheeling Estates a subdivision in the North half of the Southeast Quarter of the Northeast Quarter of said Section 14 recorded as Document No. 17012886; thence North 89 Degrees 56 Minutes 17 Seconds West along said Debra Lane, A distance of 682.70 feet to the West line of said Northeast Quarter of the Northeast Quarter; thence North 00 Degrees 09 Minutes 01 Second West along said West line. A distance of 163.57 feet to the South line of said Wolf Road Estates; thence South 89 Degrees 59 Minutes 35 Seconds East along the South line of Wolf Road Estates. A distance of 472.24 feet to the place of beginning.
Part of Lots 9–12, both inclusive in Wolf Road Estates, a subdivision of the North 495.92 feet of the South
Beginning at the Southwest corner of said Lot 12; thence North 00 Degrees 09 Minutes 20 Seconds West along the West line of said Lots 9–12, a distance of 462.64 feet to the South Right of Way line of Kerry Lane as dedicated by said Wolf Road Estates; thence South 89 Degrees 59 Minutes 35 Seconds East along said South line, a distance of 75.70 feet; thence South 37 Degrees 26 Minutes 44 Seconds East, a distance of 50.48 feet to a point on a non tangent curve; thence Southerly along a curve concave Easterly having a radius of 1989.86 feet and a chord bearing of South 10 Degrees 12 Minutes 58 Seconds East, an ARC distance of 598.51 feet to the North Right of Way line of Debra Lane as dedicated by J.R. Willens Wheeling Estates, a subdivision in the North half of the Southeast Quarter of the Northeast Quarter of said Section 14 recorded as Document No. 17012886; thence North 89 Degrees 56 Minutes 17 Seconds West along said Debra Lane, a distance of 682.70 feet to the West line of said Northeast Quarter of the Northeast Quarter; thence North 00 Degrees 09 Minutes 01 Seconds West along said West line, a distance of 163.57 feet to the South line of said Wolf Road Estates, a distance of 472.24 feet to the place of beginning. Said parcels contain 5.28 acres, more or less.
Federal Aviation Administration (FAA), DOT.
Notice of intent of waiver with respect to land; Lewis University Airport, Romeoville, IL.
The FAA is considering a proposal to change a portion of airport land from aeronautical use to non-aeronautical use and to authorize the sale of the airport property. The Will County Department of Highways has offered fair market value to purchase the land for the Weber Road improvement project. The parcel is not needed for aeronautical purposes and the proceeds from the sale of the land will be used for future airport improvement projects. This notice announces that the FAA is considering the release of the subject airport property at the Lewis University Airport, Romeoville, IL, from all federal land covenants. Approval does not constitute a commitment by the FAA to financially assist in disposal of the subject airport property nor a determination that all measures covered by the program are eligible for grant-in-aid funding from the FAA.
Comments must be received on or before March 15, 2013.
Gary D. Wilson, Program Manager, 2300 East Devon Avenue, Des Plaines, IL, 60018. Telephone Number 847–294–7631/FAX Number 847–294–7046. Documents reflecting this FAA action may be reviewed at this same location by appointment or at the Lewis University Airport, George Michas Drive, 1 Executive Terminal, Romeoville, Illinois 60446–1806.
In accordance with section 47107(h) of Title 49, United States Code, this notice is required to be published in the
A part of the West Half of the Northwest Quarter of Section 17, Township 36 North, Range 10 East of the Third Principal Meridian, described as follows: the east 25.00 feet of the west 75.00 feet of the South 50.00 feet of the West Half of the Northwest Quarter of said Section 17, in Will County, Illinois.
Said Parcel containing 0.029 acres, more or less.
Federal Highway Administration (FHWA), DOT.
Notice of Intent.
The FHWA is issuing this notice to advise the public that a Tier Two Environmental Impact Statement will be prepared for the Illiana Corridor in Will and Kankakee Counties, Illinois and Lake County, Indiana.
J. Michael Bowen, P.E., Acting Division Administrator, Federal Highway Administration, 3250 Executive Park Drive, Springfield, Illinois 62703, Phone: (217) 492–4600. John Fortmann, P.E., Deputy Director of Highways, Region One Engineer, Illinois Department of Transportation, 201 West Center Court, Schaumburg, Illinois 60196, Phone: (847) 705–4000. James A. Earl, II, P.E., Project Manager, Indiana Department of Transportation, 100 North Senate Avenue, IGCN 642, Indianapolis, Indiana 46204, Phone: (317) 232–2072.
The FHWA, in cooperation with the Illinois Department of Transportation (IDOT) and the Indiana Department of Transportation (INDOT), will prepare a Tier Two Environmental Impact Statement (EIS) for the Illiana Corridor. The study area is an approximately 2,000 foot wide, 47-mile long east-west oriented corridor with a western terminus at I–55 just north of the City of Wilmington in Illinois and an eastern terminus at I–65 approximately 3 miles north of State Route 2 in Indiana. The Tier Two EIS will present further detail on a range of alternatives within the selected corridor identified in Tier One, an evaluation of impacts of the alternatives, and actions for mitigating project impacts to environmental resources. In general, the range of alternatives considered in a Tier Two study will be confined to the selected corridor. However, the flexibility will exist to consider alternatives with minor excursions outside the selected corridor to avoid impacts within the selected corridor not anticipated in the Tier One EIS, or to address context sensitive design issues in a way that does not materially increase overall impacts.
The primary environmental resources that may be affected are: residential properties, agricultural land, floodplains, wetlands, and sensitive wildlife species. This project is being developed using the Context Sensitive Solutions policies of the Illinois and Indiana Departments of Transportation and will strive to achieve sustainable design concepts. Alternatives to be evaluated will include (1) taking no action and (2) evaluating alternatives within the corridor that was selected in Tier One, including consideration of multiple alignment or design options within the selected corridor, financing options, and construction sequencing options.
As part of the EIS process, a scoping meeting for obtaining input from federal and state resource and regulatory agencies will be held on February 22, 2013. The scoping meeting will discuss the level of detail and methodologies to be used in the Tier Two EIS, as well as addressing the continuation of the bi-state agency coordination process, and will be conducted interactively on February 22, 2013 at multiple locations including Chicago and Springfield, Illinois and Indianapolis, Indiana. For details regarding these locations, Mr. J. Michael Bowen may be contacted at (217) 492–4600. A Tier Two Stakeholder Involvement Plan (SIP), which meets the requirements of a coordination plan, will be developed to ensure that a full range of issues related to the Tier Two studies are identified and addressed. The SIP provides meaningful opportunities for all stakeholders to participate in defining transportation issues and solutions for the study area. The web site established for this project (
Comments or questions concerning this proposed action and the Tier Two EIS are invited from all interested parties and should be directed to the FHWA at the address provided above. The Tier Two Draft EIS will be available for public and agency review after its publication. A public hearing will be held during the public comment period for the Draft EIS. Public notice will be given of the time and place of public meetings and hearings.
The Tier Two EIS will conclude with a Record of Decision identifying a selected alignment for the transportation facility.
In notice document 2013–02580 appearing on pages 8686–8689, in the issue of Wednesday, February 6, 2013, make the following correction:
In the Table appearing on page 8687, in the third column, in the final row, “Connect top water ports marked by weight and values” should read “Connect top land ports for both weight and values”.
Federal Highway Administration (FHWA), DOT.
Notice of Limitation on Claims for Judicial Review of Actions by the California Department of Transportation (Caltrans), pursuant to 23 U.S.C. 327.
The FHWA, on behalf of Caltrans, is issuing this notice to announce actions taken by Caltrans, that are final within the meaning of 23 U.S.C. 139(
By this notice, the FHWA, on behalf of Caltrans, is advising the public of final agency actions subject to 23 U.S.C. 139(
For Caltrans: Kevin Hovey, Senior Environmental Planner, Caltrans, 4050
Effective July 1, 2007, the Federal Highway Administration (FHWA) assigned, and the California Department of Transportation (Caltrans) assumed, environmental responsibilities for this project pursuant to 23 U.S.C. 327. Notice is hereby given that the Caltrans, has taken final agency actions subject to 23 U.S.C. 139(
1. Council on Environmental Quality Regulations.
2. National Environmental Policy Act of 1969, as amended, 42 U.S.C. 4321 et seq.
3. Federal-Aid Highway Act of 1970, 23 U.S.C 109.
4. MAP–21, the Moving Ahead for Progress in the 21st Century Act (Pub. L. 112–141).
5. Clean Air Act Amendments of 1990 (CAAA).
6. Clean Water Act of 1977 and 1987.
7. Federal Water Pollution Control Act of 1972 (see Clean Water Act of 1977 & 1987).
8. Noise Control Act of 1972.
9. Safe Drinking Water Act of 1944, as amended.
10. Endangered Species Act of 1973.
11. Executive Order 11990, Protection of Wetlands.
12. Executive Order 13112, Invasive Species.
13. Executive Order 13186, Migratory Birds.
14. Fish and Wildlife Coordination Act of 1934, as amended.
15. Migratory Bird Treaty Act.
16. Wildflowers, Surface Transportation and Uniform Relocation Act of 1987 Section 130.
17. Department of Transportation (DOT) Executive Order 5650.2—Floodplain Management and Protection (April 23, 1979).
18. Title VI of the Civil Rights Act of 1964, as amended.
19. Executive Order 12898, Federal Actions to Address Environmental Justice and Low-Income Populations.
23 U.S.C. 139(
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of renewal of exemptions; request for comments.
FMCSA announces its decision to renew the exemptions from the vision requirement in the Federal Motor Carrier Safety Regulations for 15 individuals. FMCSA has statutory authority to exempt individuals from the vision requirement if the exemptions granted will not compromise safety. The Agency has concluded that granting these exemption renewals will provide a level of safety that is equivalent to or greater than the level of safety maintained without the exemptions for these commercial motor vehicle (CMV) drivers.
This decision is effective March 7, 2013. Comments must be received on or before March 15, 2013.
You may submit comments bearing the Federal Docket Management System (FDMS) numbers: Docket No. [FMCSA–2000–7918; FMCSA–2006–25246; FMCSA–2010–0385], using any of the following methods:
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•
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Elaine M. Papp, Chief, Medical Programs Division, 202–366–4001,
Under 49 U.S.C. 31136(e) and 31315, FMCSA may renew an exemption from the vision requirements in 49 CFR 391.41(b)(10), which applies to drivers
This notice addresses 15 individuals who have requested renewal of their exemptions in accordance with FMCSA procedures. FMCSA has evaluated these 15 applications for renewal on their merits and decided to extend each exemption for a renewable two-year period. They are:
The exemptions are extended subject to the following conditions: (1) That each individual has a physical examination every year (a) by an ophthalmologist or optometrist who attests that the vision in the better eye continues to meet the requirements in 49 CFR 391.41(b)(10), and (b) by a medical examiner who attests that the individual is otherwise physically qualified under 49 CFR 391.41; (2) that each individual provides a copy of the ophthalmologist's or optometrist's report to the medical examiner at the time of the annual medical examination; and (3) that each individual provide a copy of the annual medical certification to the employer for retention in the driver's qualification file and retains a copy of the certification on his/her person while driving for presentation to a duly authorized Federal, State, or local enforcement official. Each exemption will be valid for two years unless rescinded earlier by FMCSA. The exemption will be rescinded if: (1) the person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained before it was granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315.
Under 49 U.S.C. 31315(b)(1), an exemption may be granted for no longer than two years from its approval date and may be renewed upon application for additional two year periods. In accordance with 49 U.S.C. 31136(e) and 31315, each of the 15 applicants has satisfied the entry conditions for obtaining an exemption from the vision requirements (65 FR 66286; 66 FR 13825; 68 FR 10300; 70 FR 7546; 72 FR 180; 72 FR 7111; 72 FR 9397; 74 FR 6211; 74 FR 6212; 75 FR 77942; 76 FR 5425; 76 FR 9861). Each of these 15 applicants has requested renewal of the exemption and has submitted evidence showing that the vision in the better eye continues to meet the requirement specified at 49 CFR 391.41(b)(10) and that the vision impairment is stable. In addition, a review of each record of safety while driving with the respective vision deficiencies over the past two years indicates each applicant continues to meet the vision exemption requirements.
These factors provide an adequate basis for predicting each driver's ability to continue to drive safely in interstate commerce. Therefore, FMCSA concludes that extending the exemption for each renewal applicant for a period of two years is likely to achieve a level of safety equal to that existing without the exemption.
FMCSA will review comments received at any time concerning a particular driver's safety record and determine if the continuation of the exemption is consistent with the requirements at 49 U.S.C. 31136(e) and 31315. However, FMCSA requests that interested parties with specific data concerning the safety records of these drivers submit comments by March 15, 2013.
FMCSA believes that the requirements for a renewal of an exemption under 49 U.S.C. 31136(e) and 31315 can be satisfied by initially granting the renewal and then requesting and evaluating, if needed, subsequent comments submitted by interested parties. As indicated above, the Agency previously published notices of final disposition announcing its decision to exempt these 15 individuals from the vision requirement in 49 CFR 391.41(b)(10). The final decision to grant an exemption to each of these individuals was made on the merits of each case and made only after careful consideration of the comments received to its notices of applications. The notices of applications stated in detail the qualifications, experience, and medical condition of each applicant for an exemption from the vision requirements. That information is available by consulting the above cited
Interested parties or organizations possessing information that would otherwise show that any, or all, of these drivers are not currently achieving the statutory level of safety should immediately notify FMCSA. The Agency will evaluate any adverse evidence submitted and, if safety is being compromised or if continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315, FMCSA will take immediate steps to revoke the exemption of a driver.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of applications for exemptions; request for comments.
FMCSA announces receipt of applications from 8 individuals for exemption from the vision requirement in the Federal Motor Carrier Safety Regulations. They are unable to meet the vision requirement in one eye for various reasons. The exemptions will enable these individuals to operate commercial motor vehicles (CMVs) in interstate commerce without meeting the prescribed vision requirement in one eye. If granted, the exemptions would enable these individuals to qualify as drivers of commercial motor vehicles (CMVs) in interstate commerce.
Comments must be received on or before March 15, 2013.
You may submit comments bearing the Federal Docket Management System (FDMS) Docket No. FMCSA–2013–0021 using any of the following methods:
•
•
•
•
Elaine M. Papp, Chief, Medical Programs Division, (202) 366–4001,
Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption from the Federal Motor Carrier Safety Regulations for a 2-year period if it finds “such exemption would likely achieve a level of safety that is equivalent to or greater than the level that would be achieved absent such exemption.” FMCSA can renew exemptions at the end of each 2-year period. The 8 individuals listed in this notice have each requested such an exemption from the vision requirement in 49 CFR 391.41(b)(10), which applies to drivers of CMVs in interstate commerce. Accordingly, the Agency will evaluate the qualifications of each applicant to determine whether granting an exemption will achieve the required level of safety mandated by statute.
Mr. Bergman, age 56, has a prosthetic right eye due to a traumatic incident in 2009. The best corrected visual acuity in his left eye is 20/20. Following an examination in 2012, his optometrist noted, “I believe that Mike's vision is sufficient to perform the driving tasks required to operate a commercial vehicle.” Mr. Bergman reported that he has driven straight trucks for 37 years, accumulating 74,000 miles, and tractor-trailer combinations for 25 years, accumulating 250,000 miles. He holds a Class A Commercial Driver's License (CDL) from Kansas. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Gonzalez, 52, has had amblyopia in his left eye since birth. The visual acuity in his right eye is 20/20, and in his left eye, 20/70. Following an examination in 2012, his optometrist noted, “At this time, Mr. Gonzalez has sufficient vision to safely operate a commercial motor vehicle.” Mr. Gonzalez reported that he has driven straight trucks for 12 years, accumulating 360,000 miles. He holds a Class A CDL from Utah. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Hall, 43, has had a retinal vein occlusion in his right eye since 2003. The visual acuity in his right eye is no light perception, and in his left eye, 20/20. Following an examination in 2012, his ophthalmologist noted, “In my opinion, the patient has full fields of his left eye and 20/20 vision in his left eye. He is capable of operating a commercial vehicle.” Mr. Hall reported that he has driven tractor-trailer combinations for 13 years, accumulating 1.2 million miles. He holds a Class A CDL from Louisiana. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Holum, 32, has had optic nerve atrophy in his right eye since 2002 due to a traumatic incident. The best corrected visual acuity in his right eye is light perception, and in his left eye, 20/20. Following an examination in 2012, his optometrist noted, “In my opinion he has sufficient vision to drive and operate a commercial vehicle.” Mr. Holum reported that he has driven straight trucks for 4 years, accumulating 16,000 miles. He holds a Class A CDL from Oregon. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Morris, 70, has had optic nerve atrophy in his left eye since 1992. The best corrected visual acuity in his right eye is 20/20, and in his left eye, no light perception. Following an examination in 2012, his optometrist noted, “I want to certify in my medical opinion that Mr. Morris has sufficient vision to perform the driving task required to operate a commercial vehicle.” Mr. Morris reported that he has driven straight trucks for 8 years, accumulating 80,000 miles. He holds a Class A CDL from Missouri. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Nestel, 53, has had a ruptured globe in his right eye due to a traumatic incident in 2009. The best corrected visual acuity in his right eye is counting fingers, and in his left eye, 20/20. Following an examination in 2012, his ophthalmologist noted, “In my medical opinion Mr. Nestel does have sufficient vision to perform the driving tasks required to operate a commercial vehicle.” Mr. Nestel reported that he has driven tractor-trailer combinations for 25 years, accumulating 1.2 million miles. He holds a Class A CDL from Indiana. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
Mr. Normington, 47, has a prosthetic right eye due to a traumatic incident in 1986. The best corrected visual acuity in his left eye is 20/15. Following an
Mr. Terrell, 57, has had a chronic retinal detachment in his left eye due to a traumatic incident in 1984. The best corrected visual acuity in his right eye is 20/20, and in his left eye, no light perception. Following an examination in 2012, his ophthalmologist noted, “He has sufficient vision in his right eye and unless he has some future problem in the right eye, he should have no problems performing his duties of operating a commercial vehicle.” Mr. Terrell reported that he has driven straight trucks for 39 years, accumulating 78,000 miles, and tractor-trailer combinations for 39 years, accumulating 273,000 miles. He holds a Class A CDL from Iowa. His driving record for the last 3 years shows no crashes and no convictions for moving violations in a CMV.
In accordance with 49 U.S.C. 31136(e) and 31315, FMCSA requests public comment from all interested persons on the exemption petitions described in this notice. The Agency will consider all comments received before the close of business March 15, 2013. Comments will be available for examination in the docket at the location listed under the
In addition to late comments, FMCSA will also continue to file, in the public docket, relevant information that becomes available after the comment closing date. Interested persons should monitor the public docket for new material.
Federal Transit Administration, DOT.
Notice of availability.
The Federal Transit Administration (FTA) is directed to publish annually a list of all certifications required under 49 U.S.C. Chapter 53. For Federal Fiscal Year 2013 (FY 2013), FTA consolidated and updated the various pre-award Certifications and Assurances required to be submitted by an Applicant seeking an award of Federal public transportation assistance (funding) during FY 2013. This notice announces the availability of the FY 2013 Annual List of Certifications and Assurances for Federal Transit Administration Grants and Cooperative Agreements and the FTA Master Agreement, both of which are available at the FTA Web site,
The appropriate Regional or Metropolitan Office listed in this Notice. For copies of related documents and information, see our Web site at
The second sentence of 49 U.S.C. 5323(n) states in pertinent part that “The Secretary [of Transportation] shall publish annually a list of all certifications required under this
01. Required Certifications and Assurances for Each Applicant.
02. Lobbying.
03. Private Sector Protections.
04. Procurement and Procurement System.
05. Rolling Stock Reviews and Bus Testing.
06. Demand Responsive Service.
07. Intelligent Transportation Systems.
08. Interest and Finance Costs and Leasing Costs.
09. Transit Asset Management and Agency Safety Plans.
10. Alcohol and Controlled Substances Testing.
11. Fixed Guideway Capital Investment Program (New Starts, Small Starts, and Core Capacity) and Capital Investment Program in Effect before MAP–21.
12. State of Good Repair Program.
13. Fixed Guideway Modernization Grant Program.
14. Bus/Bus Facilities Programs.
15. Urbanized Area Formula Programs and Job Access and Reverse Commute (JARC) Program.
16. Seniors/Elderly/Individuals with Disabilities Programs and New Freedom Program.
17. Rural/Other Than Urbanized Areas/Appalachian Development/Over-the-Road Bus Accessibility Programs.
18. Public Transportation on Indian Reservations and “Tribal Transit Programs”.
19. Low or No Emission/Clean Fuels Grant Programs.
20. Paul S Sarbanes Transit in Parks Program.
21. State Safety Oversight Program.
22. Public Transportation Relief Program.
23. Expedited Project Delivery Pilot Program.
24. Infrastructure Finance Programs.
Since 1995, we have consolidated Certifications and Assurances into a single document for publication in the
In addition to reading the information in this Notice and its Appendix A (located at our Web site,
a. The Moving Ahead for Progress in the 21st Century Act (MAP–21) Pub. L. 112–141, July 6, 2012, which is FTA's most recent authorizing legislation, and
b. The Continuing Appropriations Resolution, 2013 (CR), Pub. L. 112–175, September 28, 2012, which provides appropriations to FTA for October 1, 2012 through March 27, 2013.
a.
After publication in the
b. Binding Commitment. An Applicant typically acts through its certified or authorized representative. In that case, your Applicant will be required to comply with any Certifications or Assurances you make on its behalf irrespective of how long you remain your Applicant's authorized representative. When you provide your Applicant's Certifications and Assurances to FTA, both you and your Applicant are agreeing to comply with their terms. As a result, when Certifications and Assurances that would apply under MAP–21 differ from Certifications and Assurances that would apply in FY 2012 or a previous fiscal year, we have included both types in the single Group used to support the funding your Applicant's requests.
c. Length of Commitment. Your Applicant's FY 2013 Certifications and Assurances remain in effect until its Project is closed or the useful life of its Project property has expired, whichever is later. If your Applicant provides different Certifications and Assurances in a later fiscal year, the later Certifications and Assurances generally will apply to its Project, except as we determine otherwise in writing.
d. Duration. You and your Applicant may use the FY 2013 Certifications and Assurances in Appendix A to support applications for FTA funding until we issue our FY 2014 Certifications and Assurances.
e. Our FY 2013 Certifications and Assurances are an Incomplete List of Federal Requirements. We caution that our FY 2013 Certifications and Assurances focus mainly on those representations your Applicant is required to present to FTA before FTA may award Federal funds for your Applicant's Project. Consequently, our Certifications and Assurances do not include many other Federal requirements that will apply to your Applicant and its Project.
f. Federal Requirements. In addition to the information in this Notice and our FTA FY 2013 Apportionments Notice, we also strongly encourage you and your Applicant's staff and Third Party Participants to review all Federal legislation, regulations, and guidance that apply to your Applicant and its proposed Project. Our FY 2013 Master Agreement identifies many of those requirements and can be accessed at
g. Penalties for False or Fraudulent Statements. If you or your Applicant provides any false or fraudulent statement to the Federal government, you or your Applicant may incur both Federal civil and criminal penalties.
(1) The Program Fraud Civil Remedies Act of 1986, as amended, 31 U.S.C. 3801
(2) U.S. Department of Transportation (U.S. DOT) regulations, “Program Fraud Civil Remedies,” 49 CFR part 31, and
(3) Section 5323(l)(1) of title 49, U.S.C., which provides for Federal criminal penalties and termination of Federal funding should you or your Applicant provide a false or fraudulent certificate, submission, or statement in connection with the Federal transit program authorized by 49 U.S.C. chapter 53.
a. Make Sure All Involved With Your Applicant's Project Understands the Federal Requirements That Will Apply to Your Applicant and Its Project.
Your Applicant will be responsible for compliance with all Federal requirements that apply to itself and its Project. Nevertheless, people and organizations participating in your Applicant's Project (Third Party Participants) can seriously affect your Applicant's ability to comply with those Federal requirements. Therefore, all Third Party Participants involved in your Applicant's Project need to know and agree to comply with the Federal requirements that affect their Project related activities.
b. Subrecipient and Other Third Party Participation. Except in limited circumstances when we have determined otherwise, your Applicant is ultimately responsible for compliance with all Certifications and Assurances that you select on its behalf even though much of its Project will be carried out by Subrecipients or other Third Party Participants. Therefore, we strongly recommend that you take appropriate measures to ensure that the Subrecipients and other Third Party Participants in your Applicant's Project do not take actions that will cause your Applicant to violate the representations made in its Certifications and Assurances.
c. Submit Your Applicant's Certifications and Assurances. You must submit all Groups of the FY 2013 Certifications and Assurances that apply to your Applicant and the Projects for which it seeks FTA funding in FY 2013. For your convenience, we recommend that you submit all 24 Groups of Certifications and Assurances. Those provisions of the various Certifications and Assurances that do not apply to your Applicant or its Project will not be enforced.
d. Obtain the Affirmation of Your Applicant's Attorney. You must obtain an affirmation of your Applicant's Attorney, signed in FY 2013, stating that your Applicant has sufficient authority under its State and local law to certify its compliance with the FY 2013 Certifications and Assurances that you have selected on its behalf. Your Applicant's Attorney must sign this affirmation during FY 2013. An Affirmation of your Applicant's Attorney dated in a previous fiscal year is insufficient, unless FTA expressly determines otherwise in writing.
e. When To Submit.
(1) If your Applicant is applying for funding under any of the discretionary capital programs (New Starts, Small Starts, or Core Capacity Improvement), we expect to receive your FY 2013 Certifications and Assurances within ninety (90) days from the date of this publication or soon after the submittal of your Applicant's request for FY 2013 funding. Likewise, if your Applicant is a current FTA grantee with an active project funded with FTA capital or formula funds, we expect to receive your FY 2013 Certifications and Assurances within ninety (90) days from the date of this publication or soon after the submittal of your Applicant's request for FY 2013 funding.
(2) If your Applicant seeks funding from an FTA program other than a formula program or a discretionary capital program, we expect to receive your Applicant's FY 2013 Certifications and Assurances as soon as possible.
a. Appendix A of this Notice, which is available at our Web site,
b. TEAM-Web, our electronic award and management system,
a.
b.
(1) Projects financed with funding made available or appropriated in FY 2012 or a previous fiscal year, which funding FTA has awarded before October 1, 2012, when MAP–21 became effective,
(2) Projects financed with funding made available or appropriated for FY 2012 or a previous fiscal year, which funding FTA awards or will award after October 1, 2012, when MAP–21 became effective.
c. Notwithstanding the applicability of program and eligibility requirements in effect in FY 2012 or a previous fiscal year for those Projects listed in the preceding subsection 5.b above, FTA has determined that the following MAP–21 requirements apply to Projects funded with appropriations for FY 2012 or a previous fiscal year. (FTA refers to these requirements as “MAP–21 cross-cutting” requirements.) As listed in the FTA FY 2013 Apportionments Notice, FTA has determined MAP–21 cross-cutting requirements include, but are not limited to:
(1) Metropolitan and Statewide Planning,
(2) Environmental Review Process,
(3) Agency Safety Plans,
(4) Transit Asset Management Provisions (and Asset Inventory and Condition Reporting),
(5) Costs Incurred by Providers of Public Transportation by Vanpool,
(6) Revenue Bonds as Local Match,
(7) Debt Service Reserve,
(8) Government's Share of Cost of Vehicles, Vehicle-Equipment, and Facilities for ADA and Clean Air Act Compliance,
(9) Private Sector Participation,
(10) Bus Testing,
(11) Buy America,
(12) Corridor Preservation,
(13) Rail Car Procurements,
(14) Veterans Preference/Employment, and
(15) Alcohol and Controlled Substance Testing.
d.
e.
(1) In the past, we have cautioned Applicants that their Subrecipients may also be responsible for compliance with certain Federal requirements that are not identified in our annual Certifications and Assurances. Now, throughout this Notice and the FY 2013 Certifications and Assurances, we are cautioning your Applicant that its other Third Party Participants may also need to comply with certain Federal requirements, regardless of whether those requirements are identified in our annual Certifications and Assurances, and
(2) Because TEAM-Web has the capacity for only twenty-four (24) Groups of Certifications and Assurances, we have consolidated related Certifications and Assurances, both old and new, into a single group, so that the total number of groups does not exceed twenty-four (24). Should one or more certifications or assurances within a group not apply to your Applicant or its Project, selecting the entire group will not make those inapplicable certifications or assurances then applicable to your Applicant and its Project. Provisions of any Certification or Assurance that do not apply to your Applicant or its Project will not be enforced.
f.
(1) For consistency with the MAP–21 amendment to 49 U.S.C. 5332 that added disability to the list of prohibited reasons for discrimination, we made the following changes:
(a) We consolidated the former Group 01, Certification E, prohibiting discrimination against individuals with disabilities with the former Group 01, Certification D, the “Nondiscrimination” certifications that apply to various other prohibitions against discrimination,
(b) We added “disability” as a prohibited reason for discrimination in Sections 1 and 1.a, and
(c) We substituted “religion for “creed,” in Sections 1 and 1.a,
(2) We added a reference to U.S. DOT regulations, 49 CFR part 39, in Sections 1.f, and
(3) We added a new Section 2 to obtain your Applicant's agreement to follow Federal guidance issued to implement Federal nondiscrimination requirements, except as FTA determines otherwise in writing.
g.
(1) Former Group 01, Certification F as Group 01, Certification E, and
(2) Former Group 01, Assurance G, as Group 01, Assurance F.
h.
i.
(1) The “Private Sector Property Protections” of Group 03 include the following:
(a) Private Sector Property Protections, with no substantive changes made,
(b) Charter Service Agreement, with the following substantive changes:
(1) Consistent with the exception for JARC activities authorized in FTA's Charter Service Regulations, 49 CFR 604.2, for repealed 49 U.S.C. 5316 in effect in FY 2012 or a previous fiscal year, the Federal Transit Administrator has determined that FTA's Charter Service requirements are not appropriate for the JARC activities that will be funded under 49 U.S.C. 5307, as amended by MAP–21,
(2) Consistent with the exception for New Freedom activities authorized in FTA's Charter Service Regulations, 49 CFR 604.2, for repealed 49 U.S.C. 5317, the Federal Transit Administrator has determined that FTA's Charter Service requirements are not appropriate for the New Freedom activities that will be funded under 49 U.S.C. 5310, as amended by MAP–21, and
(3) Use by intercity and charter operators of FTA funded facilities as specified in 49 U.S.C. 5323(r), as amended by MAP–21, will not result in a violation of FTA's Charter Service Regulations, and
(c) School Bus Agreement, with no substantive changes made.
j.
k.
(1) The following Certifications are included in the new Group 05:
(a) “Rolling Stock Reviews,” required by 49 U.S.C. 5323(m), and
(b) “Bus Testing,” required by 49 U.S.C. 5318, as amended by MAP–21, and
(2) MAP–21 Changes:
(a) MAP–21 did not make any substantive changes to the “Rolling Stock Reviews” certification, but
(b) MAP–21 did change the bus testing requirements, which requirements are now reflected in the FY 2013 “Bus Testing” certification.
l.
m.
n.
(1) We transferred the “Intelligent Transportation Systems” assurance from former Group 14 to Group 7, and
(2) We changed the assurance to add the new citation to the Intelligent Transportation System statutory provisions now codified at 23 U.S.C. 517.
o.
(1) We established a new Group 08 focused on certifications involving finance that includes the following certifications:
(a) “Interest and Financing Costs,” and
(b) “Acquisition of Capital Assets by Lease,”
(2) In addition to transferring the certifications identified above,
(a) Rather than include in the “Financing and Leasing Costs
(b) We made no substantive changes to the “Acquisition of Capital Assets through a Lease” certification.
p.
(1) The “Transit Asset Management Plan” certification of compliance with the rule issued under 49 U.S.C. 5326(d), as amended by MAP–21, are required by 49 U.S.C. 5337(a)(4), as amended by MAP–21, and
(2) The “Public Transportation Agency Safety Plan” certifications required by 49 U.S.C. 5329(d), as amended by MAP–21.
q.
r.
(1) We established a new Group 11 focused on certifications for FTA's new Fixed Guideway Capital Investment Program, consisting of only the New Starts Program, the Small Starts Program, and the Core Capacity Program.
(a) Before MAP–21 became effective, the Capital Investment Program under former 49 U.S.C. 5309 consisted of the:
(i) New Fixed Capital Program,
(ii) Fixed Guideway Modernization Grant Program, and
(iii) Buses and Bus Related Equipment and Facilities Program,
(b) MAP–21:
(i) Repealed the former Fixed Guideway Modernization Grant Program, and
(ii) Established the new Bus and Bus Facilities Formula Program in 49 U.S.C. 5339, as amended by MAP–21.
(c) Therefore, we have established separate certifications for Fixed Guideway Capital Investment Program, encompassing the New Starts Program, the Small Starts Program, and the Core Capacity Program) that remain in 49 U.S.C. 5309, as amended by MAP–21, irrespective of whether those programs are:
(i) Financed with funding that was made available or appropriated for 49 U.S.C. 5309, as amended by MAP–21, or
(ii) Financed with funding that was made available or appropriated for former 49 U.S.C. 5309 in effect in FY 2012 or a previous fiscal year, and
(2) Your Applicant should provide the certifications in Group 11 if it seeks funding made available or appropriated for:
(a) 49 U.S.C. 5309, as amended by MAP–21, or
(b) Former 49 U.S.C. 5309 in effect in FY2012 or a previous fiscal year.
s.
t.
u.
(1) MAP–21 amended former 49 U.S.C. 5309 by:
(a) Changing the Bus and Bus Related Equipment and Facilities Program from a discretionary program to a new formula Bus and Bus Facilities Formula program,
(b) Establishing the new program under 49 U.S.C. 5339, and
(c) Repealing the Alternatives Analysis Program under former 49 U.S.C. 5339 in effect in FY 2012 or a previous fiscal year,
(2) Accordingly, we established a new Group 14 with certifications for Bus and Bus Facilities Projects depending on whether the funding source for those Projects is:
(a) The Bus and Bus Facilities Formula Program under MAP–21, or
(b) The Bus and Bus Related Equipment and Facilities Grant Program (Discretionary),
(3) The “Bus and Bus Facilities Formula Program” certification reflects the provisions of MAP–21, while the “Bus and Bus Related Equipment and Facilities Grant Program (Discretionary)” certification, reflects the provisions of FTA enabling legislation in effect in FY 2012 or a previous fiscal year,
(4) Notwithstanding 49 U.S.C. 5339(b), as amended by MAP–21, which makes 49 U.S.C. 5307 requirements applicable to the new Bus and Bus Facilities Formula Program, the Federal Transit Administrator has determined that:
(a) The certification required by 49 U.S.C. 5307(c)(1)(J), as amended by MAP–21, to spend one (1) percent of the funds made available for security projects does not apply to the Bus and Bus Facilities Formula Program because the requirement applies only to the 49 U.S.C. 5307 urbanized area formula apportionments, and
(b) The certification required by 49 U.S.C. 5307(c)(1)(K), as amended by MAP–21, to spend one (1) percent of the funds made available for associated transit improvement projects does not apply to the Bus and Bus Facilities Formula Program because the requirement applies only to the 49 U.S.C. 5307 urbanized area formula apportionments, and
(5) Therefore, to assure that FTA can award the type of funding most suitable for your Applicant's Project, your Applicant should provide the certifications in Group 14 if it seeks funding made available or appropriated for:
(a) 49 U.S.C. 5339, as amended by MAP–21, or
(b) Former 49 U.S.C. 5309 in effect in FY2012 or a previous fiscal year.
v.
(1) We established a new Group 15 focused on our public transportation programs in urbanized areas, including separate certifications for each of the following three programs:
(a) The Urbanized Area Formula Grant Program under MAP–21,
(b) The Urbanized Area Formula Program in effect in FY 2012 or a previous fiscal year, and
(c) The Job Access and Reverse Commute (JARC) Program, which authorized the separate JARC program,
(2) Therefore, to assure that FTA can award the type of funding most suitable for your Applicant's Project, your Applicant should provide the certifications in Group 15 if it seeks funding made available or appropriated for:
(a) 49 U.S.C. 5307, as amended by MAP–21,
(b) Former 49 U.S.C. 5307 in effect in FY2012 or a previous fiscal year, or
(c) Former 49 U.S.C. 5316 in effect in FY 2012 or a previous fiscal year.
w.
(1) We established a new Group 16 focused on our programs that provide specialized public transportation for seniors and individuals with disabilities, including separate certifications for each of the following three programs:
(a) The Formula Grants for the Enhanced Mobility of Seniors and Individuals with Disabilities Program,
(b) The Formula Grants for the Special Needs of Elderly Individuals and Individuals with Disabilities Program in effect in FY 2012 or a previous fiscal year, and
(c) The New Freedom Program, even though MAP–21 repealed former 49 U.S.C. 5317 in effect in FY 2012 or a previous fiscal year, which authorized the separate New Freedom program,
(2) Consistent with the legislation under former 49 U.S.C. 5310 in effect in FY 2012 and previous fiscal years, the new Formula Grants for the Enhanced Mobility of Seniors and Individuals with Disabilities Program authorized by 49 U.S.C. 5310, as amended by MAP–21, must comply with the requirements of 49 U.S.C. 5307, as amended by MAP–21, but does permit exceptions. Therefore, as authorized by 49 U.S.C. 5310(c)(1), as amended by MAP–21, and consistent with similar determinations made for the Formula Grants for the Special Needs of Elderly Individuals and Individuals with Disabilities Program authorized by former 49 U.S.C. 5310 in effect in FY 2012 or a previous fiscal year, the Federal Transit Administrator has determined that the following Certifications required by 49 U.S.C. 5307(c)(1), as amended by MAP–21, are not appropriate for the Formula Grants for the Enhanced Mobility of Seniors and Individuals with Disabilities Program:
(a) The half fare requirements of U.S.C. 5307(c)(1)(D), as amended by MAP–21, are not appropriate for the Formula Grants for the Enhanced Mobility of Seniors and Individuals with Disabilities Program because:
(i) The services financed under this Program are designed specifically for and available primarily to seniors and individual who, because of illness, injury, age, congenital malfunction, or other incapacity or temporary or permanent disability (including an individual who is a wheelchair user or has semi-ambulatory capability), cannot use a public transportation service or a public transportation facility effectively without special facilities, planning, or design, and
(ii) The half fare provisions that benefit those individuals are focused on peak periods, and peak demand that has not been relevant to the provision of 49 U.S.C. 5310 specialized services,
(b) The public participation, planning, and coordination provisions of 49 U.S.C. 5307(c)(1)(F), as amended by MAP–21, are not appropriate for the Formula Grants for the Enhanced Mobility of Seniors and Individuals with Disabilities Program because 49 U.S.C. 5310, as amended by MAP–21, prescribes specific public participation, planning, and coordination provisions for this Program,
(c) The requirements of 49 U.S.C. 5307(c)(1)(I), as amended by MAP–21, for a “locally developed process to solicit and consider public comment before raising a fare or carrying out a major reduction of transportation” are not appropriate for the Formula Grants for the Enhanced Mobility of Seniors and Individuals with Disabilities Program because 49 U.S.C. 5310(c)(2)(B), as amended by MAP–21, expressly requires a locally coordinated transportation plan from which projects to support public transportation for seniors and individuals with disabilities are to be selected,
(d) The requirement of 49 U.S.C. 5307(c)(1)(J), as amended by MAP–21, to spend one (1) percent of funds made available for 49 U.S.C. 5310, as amended by MAP–21, for security projects is not appropriate for the Formula Grants for the Enhanced Mobility of Seniors and Individuals with Disabilities because the requirement applies only to the 49 U.S.C. 5307 urbanized area formula apportionments, and
(e) The requirement of 49 U.S.C. 5307(c)(1)(K), as amended by MAP–21, to spend one (1) percent of funds authorized for 49 U.S.C. 5310, as amended by MAP–21, for associated transit improvements is not appropriate for the Formula Grants for the Enhanced Mobility of Seniors and Individuals with Disabilities Program because the requirement applies only to the 49 U.S.C. 5307 urbanized area formula apportionments, and
(4) To assure that FTA will be able to award the type of funding most suitable for your Applicant's Project, your Applicant should provide the certifications in Group 16 if it seeks funding made available or appropriated for:
(a) 49 U.S.C. 5310, as amended by MAP–21,
(b) Former 49 U.S.C. 5310 in effect in FY 2012 or a previous fiscal year, or
(c) Former 49 U.S.C. 5317 in effect in FY 2012 or a previous fiscal year.
x.
(1) We established a new Group 17 focused on our public transportation programs in rural areas, including separate certifications for the following four programs:
(a) The Formula Grants for Rural Areas Program,
(b) The Formula Grants for Other than Urbanized Areas Program,
(c) The Appalachian Development Public Transportation Assistance Program, and
(d) The Over-the-Road Bus Accessibility Program, and
(2) Therefore, to assure that FTA will be able to award the type of funding most suitable for your Applicant's Project, your Applicant should provide the certifications in Group 17 if it seeks funding made available or appropriated for:
(a) 49 U.S.C. 5311(b), as amended by MAP–21,
(b) Former 49 U.S.C. 5311(b) in effect in FY2012 or a previous fiscal year,
(c) 49 U.S.C. 5311(c)(2), as amended by MAP–21, or
(d) Former section 3038 of the Transportation Equity Act for the 21st Century, as amended by section 3039 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users.
y.
(1) We established a new Group 18 focused on our public transportation programs in Indian tribal areas, including separate certifications for the following two programs:
(a) The Public Transportation on Indian Reservations Program, and
(b) The “Tribal Transit Program,” and
(2) Therefore, to assure that FTA can award the type of funding most suitable for your Applicant's Project, your Applicant should provide the certifications in Group 18 if it seeks funding made available or appropriated for:
(a) 49 U.S.C. 5311(c)(1), as amended by MAP–21, or
(b) Former 49 U.S.C. 5311(c)(1) in effect in FY2012 or a previous fiscal year.
z.
(1) We established a new Group 19 focused on our programs to reduce emissions, including separate certifications for the following two programs:
(a) The Low or No Emission Vehicle Deployment Program, authorized by 49 U.S.C. 5312(d)(5), as amended by MAP–21, and
(b) The Clean Fuels Grant Program, authorized by former 49 U.S.C. 5308 in effect in FY 2012 or a previous fiscal year,
(2) Consistent with the determinations made for the Clean Fuels Program authorized by former 49 U.S.C. 5308 in effect in FY 2012 or a previous fiscal year, the new Low or No Emission Vehicle Deployment Program must comply with the requirements of 49 U.S.C. 5307, as amended by MAP–21. The Federal Transit Administrator has determined, however, that the following Certifications required by 49 U.S.C. 5307(c)(1), as amended by MAP–21, are not appropriate for the Low or No Emission Vehicle Deployment Program:
(a) The certification required by 49 U.S.C. 5307(c)(1)(J), as amended by MAP–21, to spend one (1) percent of funds made available for the Low or No Emission Vehicle Deployment Program, 49 U.S.C. 5312(d)(5), as amended by MAP–21, for security projects:
(i) Does not apply to the Low or No Emission Vehicle Deployment Program because the requirement applies only to the 49 U.S.C. 5307 urbanized area formula apportionments, but
(ii) Does apply to the Low or No Emission Vehicle Deployment Program if funds made available or appropriated for 49 U.S.C. 5307 will be used for projects within the Low or No Emission Vehicle Deployment Program, and
(b) The certification required by 49 U.S.C. 5307(c)(1)(K), as amended by MAP–21, to spend one (1) percent of funds made available for 49 U.S.C. 5312(d)(5), as amended by MAP–21, for associated transit improvement projects:
(i) Does not apply to the Low or No Emission Vehicle Deployment Program because the requirement applies only to the 49 U.S.C. 5307 urbanized area formula apportionments, but
(ii) Does apply to the extent that funds made available or appropriated for 49 U.S.C. 5307 will be used for a project within the Low or No Emission Vehicle Deployment Program, and
(3) To assure that FTA can award the type of funding most suitable for your Applicant's Project, your Applicant should provide the certifications in Group 19 if it seeks funding made available or appropriated for:
(a) 49 U.S.C. 5312(d)(5), as amended by MAP–21, or
(b) Former 49 U.S.C. 5308 in effect in FY2012 or a previous fiscal year.
aa.
bb.
cc.
dd.
ee.
(1) We established a new Group 24 focused on infrastructure finance programs, including:
(a) The Transportation Infrastructure Finance and Innovation Act (TIFIA) Program under 23 U.S.C. 601–609, and
(b) The State Infrastructure Banks (SIB) Program under 23 U.S.C. 610,
(2) For the TIFIA Program, we added references to MAP–21, TIFIA financing, and the 49 U.S.C. 5337 requirements added for Projects funded with TIFIA financing pursuant to 49 U.S.C. 5323(o), as amended by MAP–21,
(3) For the SIB Program, we added references to MAP–21, SIB financing, and the 49 U.S.C. 5337 requirements added for Projects funded with SIB financing pursuant to 49 U.S.C. 5323(o), as amended by MAP–21.
(4) To clarify, the Federal Transit Administrator has determined that the following Certifications required by 49 U.S.C. 5307(c)(1), as amended by MAP–21, are not appropriate for the TIFIA or SIB Programs:
(a) The certification required by 49 U.S.C. 5307(c)(1)(J), as amended by MAP–21, to spend one (1) percent of funds made available for the TIFIA and for the SIB Programs, as amended by MAP–21, for security projects:
(i) Does not apply to the TIFIA or SIB Programs because the requirement applies only to the 49 U.S.C. 5307 urbanized area formula apportionments, but
(ii) Does apply to any TIFIA or SIB Program to the extent that funds made available or appropriated for 49 U.S.C. 5307 will be used for a project within a TIFIA or SIB Program, and
(b) The certification required by 49 U.S.C. 5307(c)(1)(K), as amended by MAP–21, to spend one (1) percent of funds made available for 49 U.S.C. 5312(d)(5), as amended by MAP–21, for associated transit improvement projects, which:
(i) Does not apply to the Low or No Emission Vehicle Deployment Program because the requirement applies only to the 49 U.S.C. 5307 urbanized area formula apportionments, but
(ii) Does apply if funds made available or appropriated for 49 U.S.C.
a.
The TEAM-Web “Recipients” option at the “Cert's & Assurances” tab of the “View/Modify Recipients” page contains fields for selecting among the 24 Groups of Certifications and Assurances that apply to your Applicant and also a designated field for selecting all 24 Groups of which only the requirements that apply to your Applicant will be enforced.
The “Cert's & Assurances” tab has a field for you to enter your personal identification number (PIN), which is your electronic signature. There is also a field for the Attorney's PIN, affirming your Applicant's legal authority to make and comply with the Certifications and Assurances you have selected on your Applicant's behalf. You may enter your PIN in place of the Attorney's PIN, provided that your Applicant has on file a similar affirmation that has been written, dated, and signed by its Attorney in FY 2013.
b.
You must enter your signature on the Signature Page(s) and provide an Affirmation by your Applicant's Attorney concerning your Applicant's legal capacity to make and comply with the FY 2013 Certifications and Assurances you have selected on your Applicant's behalf. You may enter your signature in place of the Attorney's signature in the Affirmation by Applicant's Attorney part of the Signature Page, provided that your Applicant has on file a similar affirmation, written, dated, and signed by its Attorney in FY 2013.
For more information, you may contact the appropriate FTA Regional or Metropolitan Office.
49 U.S.C. chapter 53; the Moving Ahead for Progress in the 21st Century Act (MAP–21) Pub. L. 112–141, June 6, 2012; other Federal laws administered by FTA; U.S. DOT and FTA regulations codified or to be codified in Title 49, Code of Federal Regulations; and FTA Circulars.
Maritime Administration, DOT.
Notice and request for comments.
In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), this notice announces that the Information Collection abstracted below has been forwarded to the Office of Management and Budget (OMB) for review and approval. The nature of the information collection is described as well as its expected burden. The
Comments must be submitted on or before March 15, 2013.
Send comments regarding this collection to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street NW., Washington, DC 20503, Attention: MARAD Desk Officer. Alternatively comments may be sent via email to the Office of Information and Regulatory Affairs, Office of Management and Budget, at the following address:
Lisa Simmons, Maritime Administration, 1200 New Jersey Avenue SE., Washington, DC 20590. Telephone: 202–366–2321; FAX: 202–366–7901 or email:
Maritime Administration (MARAD).
49 CFR 1.93.
Pipeline and Hazardous Materials Safety Administration (PHMSA), DOT.
Notice and request for comments.
PHMSA is preparing to request Office of Management and Budget (OMB) approval for the revision of the gas distribution annual report currently approved under OMB Control #2137–0522. In addition to making several minor changes to the report, PHMSA will also request a new OMB Control number for this information collection. In accordance with the Paperwork Reduction Act of 1995, PHMSA invites comments on the proposed revisions to the form and instructions.
Interested persons are invited to submit comments on or before April 15, 2013.
Comments may be submitted in the following ways:
Cameron Satterthwaite by telephone at 202–366–1319, by fax at 202–366–4566, or by mail at DOT, PHMSA, 1200 New Jersey Avenue SE., PHP–30, Washington, DC 20590–0001.
Section 1320.8(d), Title 5, Code of Federal Regulations, requires PHMSA to provide interested members of the public and affected agencies an opportunity to comment on information collection and recordkeeping requests. This notice identifies an information collection request that PHMSA will be submitting to OMB for approval.
PHMSA intends to revise the gas distribution annual report (PHMSA F 7100.1–1, gas distribution annual report) to improve the granularity of the data collected. Background for these topics is as follows:
We have added a section for operators to specify the commodity type transported, similar to the gas transmission and hazardous liquid reporting forms. These commodity groups include “Natural Gas,” “Synthetic Gas,” “Hydrogen Gas,” “Propane Gas,” “Landfill Gas,” and “Other Gas.” Operators will select a commodity group based on the predominant gas carried and complete the report for that commodity group. If “Other Gas” is selected, operators will need to provide the name of the other gas. Operators will need to file a separate report for each commodity group included in a specific Operator Identification number.
We have added a section to the report for submitters to identify the operator type. The operator type groups include “Municipal,” “Privately Owned,” and “Other” (e.g., cooperatives, public utility districts).
We have removed the requirement to populate certain fields in Tables B1, B2, and B3 as that data will now be calculated automatically and populated appropriately from the operator filling in the data for certain other fields in the tables.
We have revised the “Cause of Leak” categories in Part C to align the leak causes in the gas distribution annual report with the incident causes from the gas distribution incident reporting form (PHMSA F 7100.1, Incident Report—Gas Distribution System).
We added a new data collection in “Excavation Damage” to include the
The following information is provided for that information collection: (1) Title of the information collection; (2) OMB control number; (3) Current expiration date; (4) Type of request; (5) Abstract of the information collection activity; (6) Description of affected public; (7) Estimate of total annual reporting and recordkeeping burden; and (8) Frequency of collection. PHMSA is only focusing on the revisions detailed in this notice and will request revisions to the following information collection activities. PHMSA requests comments on the following information collection:
Comments are invited on:
(a) The need for the proposed collection of information for the proper performance of the functions of the agency, including whether the information will have practical utility;
(b) The accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(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 those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques.
Surface Transportation Board, DOT.
Proposed railroad cost recovery procedures productivity adjustment.
In a decision served on February 8, 2013, we proposed to adopt 1.009 (0.9% per year) as the measure of average change in railroad productivity for the 2007–2011 (5-year) averaging period. This represents a 0.1% increase over the average for the 2006–2010 period. The Board's February 8, 2013 decision in this proceeding stated that comments may be filed addressing any perceived data and computational errors in our calculation. It also stated that, if there were no further action taken by the Board, the proposed productivity adjustment would become effective on March 1, 2013.
The productivity adjustment is effective March 1, 2013. Comments are due by February 26, 2013.
Send comments (an original and 10 copies) referring to Docket No. EP 290 (Sub-No. 4) to: Surface Transportation Board, 395 E Street SW., Washington, DC 20423–0001.
Michael Smith, (202) 245–0322. Federal Information Relay Service (FIRS) for the hearing impaired: (800) 877–8339.
Additional information is contained in the Board's decision, which is available on our Web site,
This action will not significantly affect either the quality of the human environment or the conservation of energy resources.
By the Board, Chairman Elliott, Vice Chairman Begeman, and Commissioner Mulvey.
The Surface Transportation Board has received a request from the Association of American Railroads (WB463–15—1/18/13) for permission to use certain data from the Board's Carload Waybill Samples. A copy of this request may be obtained from the Office of Economics.
The waybill sample contains confidential railroad and shipper data; therefore, if any parties object to these requests, they should file their objections with the Director of the Board's Office of Economics within 14 calendar days of the date of this notice. The rules for release of waybill data are codified at 49 CFR 1244.9.
Pursuant to a temporary trackage rights agreement dated January 24, 2013, Grand Trunk Western Railroad Company and Wisconsin Central Ltd. (collectively, CN) have agreed to grant temporary overhead trackage rights
The transaction may be consummated on or after February 27, 2013, the effective date of the exemption (30 days after the exemption is filed).
The purpose of this transaction is to allow NSR to interchange with CN at CN's Kirk Yard in Gary during the construction of the Gary City Track Connection.
As a condition to this exemption, any employee affected by the trackage rights will be protected by the conditions imposed in
This notice is filed under 49 CFR 1180.2(d)(7). If it contains false or misleading information, the exemption is void
An original and 10 copies of all pleadings, referring to Docket No. FD 35715, must be filed with the Surface Transportation Board, 395 E Street SW., Washington, DC 20423–0001. In addition, a copy of each pleading must be served on Christine I. Friedman, Norfolk Southern Railway Company, Three Commercial Place, Norfolk, VA 23510.
Board decisions and notices are available on our Web site at
By the Board, Rachel D. Campbell, Director, Office of Proceedings.
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)). Currently, the IRS is soliciting comments concerning the ADA Accommodations Packet.
Written comments should be received on or before April 15, 2013 to be assured of consideration.
Direct all written comments to Yvette Lawrence, Internal Revenue Service, Room 6129, 1111 Constitution Avenue NW., Washington, DC 20224.
Requests for additional information or copies of the packet should be directed to Martha R. Brinson, at (202) 622–3869, 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.
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)). Currently, the IRS is soliciting comments concerning Form 8082, Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR).
Written comments should be received on or before April 15, 2013 to be assured of consideration.
Direct all written comments to Yvette Lawrence, Internal Revenue Service, Room 6129, 1111 Constitution Avenue NW., Washington, DC 20224.
Requests for additional information or copies of the form and instructions should be directed to Martha R. Brinson, at (202) 622–3869, 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.
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)). Currently, the IRS is soliciting comments concerning Form 8870, Information Return for Transfers Associated With Certain Personal Benefit Contracts.
Written comments should be received on or before April 15, 2013 to be assured of consideration.
Direct all written comments to Yvette Lawrence, Internal Revenue Service, Room 6129, 1111 Constitution Avenue NW., Washington, DC 20224.
Requests for additional information or copies of the form and instructions should be directed to Katherine Dean at Internal Revenue Service, Room 6242, 1111 Constitution Avenue NW., Washington, DC 20224, or at (202) 622–3186, 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.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Department of the Treasury, as part of its 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)). Currently, the IRS is soliciting comments concerning Definition of Contribution in Aid of Construction Under Section 118(c)(§ 1.118–2).
Written comments should be received on or before April 15, 2013 to be assured of consideration.
Direct all written comments to Yvette Lawrence, Internal Revenue Service, Room 6129, 1111 Constitution Avenue NW., Washington, DC 20224.
Requests for copies of the regulation should be directed to Martha R. Brinson at Internal Revenue Service, Room 6129, 1111 Constitution Avenue NW., Washington, DC 20224, or at (202) 622–3869, 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.
United States Mint, Department of the Treasury.
Notice.
The United States Mint is announcing prices for the 2013 Girl Scouts of the USA Centennial Silver Dollar and the 2013 5-Star Generals Commemorative Coin Program for the silver and clad coin options.
Marc Landry, Acting Associate Director for Sales and Marketing, United States Mint, 801 9th Street NW., Washington, DC 20220; or call 202–354–7500.
31 U.S.C. §§ 5111, 5112 & 9701; Pub. L. 111–86, sec. 6; Pub. L. 111–262, sec. 6.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
The Veterans Benefits Administration (VBA) is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Written comments and recommendations on the proposed collection of information should be received on or before April 15, 2013.
Submit written comments on the collection of information through Federal Docket Management System (FDMS) at
Nancy J. Kessinger at (202) 632–8924 or FAX (202) 632–8925.
Under the PRA of 1995 (Pub. L. 104–13; 44 U.S.C. 3501–3521), Federal agencies must obtain approval from OMB for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VBA invites comments on: (1) Whether the proposed collection of information is necessary for the proper performance of VBA's functions, including whether the information will have practical utility; (2) the accuracy of VBA's estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology.
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
The Veterans Benefits Administration (VBA), Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Written comments and recommendations on the proposed collection of information should be received on or before
Submit written comments on the collection of information through the Federal Docket Management System (FDMS) at
Nancy J. Kessinger at (202) 632–8924 or FAX (202) 632–8925.
Under the PRA of 1995 (Pub. L. 104–13; 44 U.S.C., 3501—3521), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VBA invites comments on: (1) Whether the proposed collection of information is necessary for the proper performance of VBA's functions, including whether the information will have practical utility; (2) the accuracy of VBA's estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology.
By direction of the Secretary.
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA or the Agency) is finalizing revisions to the 1989 Total Coliform Rule (TCR). The Revised Total Coliform Rule (RTCR) offers a meaningful opportunity for greater public health protection beyond the 1989 TCR. Under the RTCR there is no longer a monthly maximum contaminant level (MCL) violation for multiple total coliform detections. Instead, the revisions require systems that have an indication of coliform contamination in the distribution system to assess the problem and take corrective action that may reduce cases of illnesses and deaths due to potential fecal contamination and waterborne pathogen exposure. This final rule also updates provisions in other rules that reference analytical methods and other requirements in the 1989 TCR (e.g., Public Notification and Ground Water Rules). These revisions are in accordance with the 1996 Safe Drinking Water Act (SDWA) Amendments, which require EPA to review and revise, as appropriate, each national primary drinking water regulation no less often than every six years. These revisions also conform with the SDWA provision that requires any revision to “maintain, or provide for greater, protection of the health of persons.” As with the 1989 TCR, the RTCR applies to all public water systems.
This final rule is effective on April 15, 2013. For judicial purposes, this final rule is promulgated as of February 13, 2013. The compliance date for the rule requirements is April 1, 2016. The incorporation by reference of certain publications listed in the rule is approved by the Director of the Federal Register (FR) as of April 15, 2013.
EPA has established a docket for this action under Docket ID No. EPA–HQ–OW–2008–0878. All documents in the docket are listed on the
Sean Conley, Standards and Risk Management Division, Office of Ground Water and Drinking Water (MC–4607M), Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460; telephone number: (202) 564–1781; email address:
Entities potentially regulated by the RTCR are all public water systems (PWSs). Regulated categories and entities include the following:
This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities regulated by this action. This table lists the types of entities that EPA is now aware could potentially be regulated by this action. Other types of entities not listed in the table could also be regulated. To determine whether your facility is regulated by this action, you should carefully examine the definition of “public water system” in § 141.2 and the section entitled “Coverage” in § 141.3 in title 40 of the Code of Federal Regulations (CFR), and the applicability criteria in § 141.851(b) of this rule. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding
This document is available for download at [INSERT WEBSITE ADDRESS]. For other related information, see preceding discussion on docket. EPA also prepared a
EPA is finalizing the Revised Total Coliform Rule (RTCR). The RTCR maintains the purpose of the 1989 Total Coliform Rule (TCR) to protect public health by ensuring the integrity of the drinking water distribution system and monitoring for the presence of microbial contamination. EPA anticipates greater public health protection under the RTCR, as it requires public water systems (PWSs) that are vulnerable to microbial contamination to identify and fix problems, and it establishes criteria for systems to qualify for and stay on reduced monitoring, thereby providing incentives for improved water system operation.
The RTCR, as with the 1989 TCR, is the only microbial drinking water regulation that applies to all PWSs. Systems are required to meet a legal limit (i.e., maximum contaminant level (MCL)) for
The entities potentially affected by the RTCR are PWSs that are classified as community water systems (CWSs) (e.g., systems that provide water to year-round residents in places like homes or apartment buildings) or non-community water systems (NCWSs) (e.g., systems that provide water to people in locations such as schools, office buildings, restaurants, etc.); State primacy agencies; and local and tribal governments. The RTCR applies to approximately 155,000 PWSs that serve approximately 310 million (M) individuals.
The RTCR establishes a health goal (maximum contaminant level goal, or MCLG) and an MCL for
Under the treatment technique for coliforms, total coliforms serve as an indicator of a potential pathway of contamination into the distribution system. A PWS that exceeds a specified frequency of total coliform occurrence must conduct an assessment to determine if any sanitary defects exist (a sanitary defect is defined by the RTCR as a “defect that could provide a pathway of entry for microbial contamination into the distribution system or that is indicative of a failure or imminent failure of a barrier that is already in place”); if any are found, the system must correct them. In addition, under the treatment technique requirements, a PWS that incurs an
The RTCR links monitoring frequency to compliance monitoring results and system performance. It provides criteria that well-operated small systems must meet to qualify for and stay on reduced monitoring. It requires increased monitoring for high-risk small systems with unacceptable compliance history. It also requires some new monitoring requirements for seasonal systems (such as state and national parks).
The RTCR eliminates public notification requirements based only on the presence of total coliforms. Total coliforms in the distribution system may indicate a potential pathway for contamination but by themselves do not indicate a health threat. Instead, the RTCR requires public notification when an
EPA believes that the provisions of the RTCR will improve public health protection by requiring assessment and corrective action and providing incentives for improved operation. The estimated net incremental cost of the RTCR is $14 million annually at either a three or seven percent discount rate. This represents total increased costs relative to 1989 TCR provisions. PWSs are estimated to incur approximately 97 percent of the rule's net annualized present value costs at the three percent discount rate. States and other primacy agencies incur the remaining costs.
The Safe Drinking Water Act (SDWA) requires the EPA to review and revise, as appropriate, each existing national primary drinking water regulation (NPDWR) no less often than every six years (SDWA section 1412(b)(9), 42 U.S.C. 300g–1(b)(9)). In 2003, EPA completed its review of the 1989 TCR (USEPA 1989a, 54 FR 27544, June 29, 1989) and 68 NPDWRs for chemicals that were promulgated prior to 1997 (USEPA 2003, 68 FR 42908, July 18, 2003). The purpose of the review was to identify new health risk assessments, changes in technology, and other factors that would provide a health-related or technological basis to support a regulatory revision that would maintain or improve public health protection. In the Six-Year Review 1 determination published in July 2003 (USEPA 2003, 68 FR 42908, July 18, 2003), EPA stated its intent to revise the 1989 TCR.
EPA promulgated the 1989 TCR to decrease the risk of waterborne illness. Among all SDWA rules promulgated for preventing waterborne illness, only the TCR applies to all PWSs, making the rule an essential component of the multi-barrier approach in public health protection against endemic and epidemic disease. In combination with the other SDWA rules (e.g., the Ground Water Rule (GWR) (USEPA 2006c, 71 FR 65574, November 8, 2006) and the suite of surface water treatment rules (USEPA 1989b; USEPA 1998b; USEPA 2002; USEPA 2006d)), the RTCR will better address the 1989 TCR objectives and enhance the multi-barrier approach to protecting public health, especially with respect to small ground water PWSs.
In recent years, the number of violations under the 1989 TCR have remained relatively steady, as shown and discussed in Exhibit 4.11 and Appendix G of the
The RTCR aims for greater public health protection than the 1989 TCR in a cost-effective manner by: (1) Maintaining the objectives of the 1989 TCR (i.e., to evaluate the effectiveness of treatment, to determine the integrity of the distribution system, and to signal the possible presence of fecal contamination); (2) reducing the potential pathways of contamination into the distribution system (see section II.D of this preamble,
The revisions to the 1989 TCR are primarily based on the recommendations of the Total Coliform Rule Distribution System Advisory Committee (“TCRDSAC” or the “advisory committee”). EPA established the TCRDSAC in June 2007 in accordance with the provisions of the Federal Advisory Committee Act, 5 U.S.C. App.2, 9(c), to provide recommendations to EPA on revisions to the 1989 TCR and on what information about distribution system issues is needed to better understand and address possible public health impacts from potential degradation of drinking water quality in distribution systems (USEPA 2007a, 72 FR 35869, June 29, 2007).
All advisory committee members agreed to a set of recommendations and signed a final Agreement in Principle (AIP) in September 2008. Pursuant to the AIP, EPA on July 14, 2010 proposed revisions to the 1989 TCR (USEPA 2010a, 75 FR 40926, July 14, 2010) that, to the maximum extent consistent with EPA's legal obligations, had the same substance and effect as the elements of the AIP. The AIP and details about the advisory committee can be found at EPA's Web site at
In accordance with one of the recommendations of the TCRDSAC, EPA held two annual stakeholder meetings, prior to publishing the proposed revisions, to which all advisory committee members and the public at large were invited. In April 2009 and May 2010, EPA held these stakeholder meetings to provide updates and an opportunity for stakeholders to provide feedback on the development of a proposed RTCR that had the same substance and effect as the recommendations in the AIP.
EPA proposed the RTCR on July 14, 2010 (USEPA 2010a, 75 FR 40926, July 14, 2010) and requested public comment. EPA received approximately 150 comment letters on the proposal and considered the comments in making revisions to the final RTCR. Key issues raised by the commenters are discussed in their corresponding sections of this preamble. A
During the public comment period for the proposed RTCR, EPA also held several meetings to solicit and provide the public with information about the provisions of the proposed rule. In addition to consulting with the advisory committee and holding stakeholder meetings, EPA consulted with specific stakeholders such as the National Drinking Water Advisory Council (NDWAC), the Science Advisory Board (SAB), and Tribal representatives, among others. These consultations are discussed in section VII of this preamble,
The RTCR aims to increase public health protection through the reduction of potential pathways of entry for fecal contamination into the distribution system. Since these potential pathways represent vulnerabilities in the distribution system whereby fecal contamination and/or waterborne pathogens, including bacteria, viruses and parasitic protozoa could possibly enter the system, the reduction of these pathways in general should lead to reduced exposure and associated risk from these contaminants. Fecal contamination and waterborne pathogens can cause a variety of illnesses, including acute gastrointestinal illness (AGI) with diarrhea, abdominal discomfort, nausea, vomiting, and other symptoms. Most AGI cases are of short duration and result in mild illness. Other more severe illnesses caused by waterborne pathogens include hemolytic uremic syndrome (HUS) (kidney failure), hepatitis, and bloody diarrhea (WHO 2004). Chronic disease such as irritable bowel syndrome, renal impairment, hypertension, cardiovascular disease and reactive arthritis can result from infection by a waterborne agent (Clark
When humans are exposed to and infected by waterborne enteric pathogens, the pathogens become capable of reproducing in the gastrointestinal tract. As a result, healthy humans shed pathogens in their feces for a period ranging from days to weeks. This shedding of pathogens often occurs in the absence of any signs of clinical illness. Regardless of whether a pathogen causes clinical illness in the person who sheds it in his or her feces, the pathogen being shed may infect other people directly by person-to-person spread, contact with contaminated surfaces, and other means referred to as secondary spread. As a result, waterborne pathogens that are initially waterborne may subsequently infect other people through a variety of routes (WHO 2004). Sensitive subpopulations are at greater risk from waterborne disease than the general population (Gerba
Total coliforms are a group of closely related bacteria that, with a few exceptions, are not harmful to humans. Coliforms are abundant in the feces of warm-blooded animals, but can also be found in aquatic environments, in soil, and on vegetation. Coliform bacteria may be transported to surface water by run-off or to ground water by infiltration. Total coliforms are common in ambient water and may be injured by environmental stresses such as lack of nutrients, and water treatments such as chlorine disinfection, in a manner similar to most bacterial pathogens and
Under the 1989 TCR, each total coliform-positive sample is assayed for either fecal coliforms or
Co-occurrence of indicators and waterborne pathogens is difficult to measure. While the analytical methods approved by EPA to assay for
Because EPA-approved standard methods for
One notable exception is the data reported by Cooley
Because
The National Research Council strongly suggests that the number of identified and reported outbreaks in the CDC database for surface and ground waters represents only a small percentage of the actual number of waterborne disease outbreaks (NRC 1997; Bennett
The RTCR maintains and strengthens the objectives of the 1989 TCR and is consistent with the recommendations in the AIP. The objectives are: (1) To evaluate the effectiveness of treatment, (2) to determine the integrity of the distribution system, and (3) to signal the possible presence of fecal contamination. The RTCR better addresses these objectives by requiring systems that may be vulnerable to fecal contamination (as indicated by their monitoring results) to do an assessment, to identify whether any sanitary defect(s) is (are) present, and to correct the defects. Therefore, the Agency anticipates greater public health protection under the RTCR compared to the 1989 TCR because of its more preventive approach to identifying and fixing problems that affect or may affect public health. The following is an overview of the key provisions of the RTCR:
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•
Sample siting plans under the RTCR must continue to be representative of the water throughout the distribution system. Under the RTCR, systems have the flexibility to propose repeat sample locations that best verify and determine the extent of potential contamination of the distribution system rather than having to sample within five connections upstream and downstream of the total coliform-positive sample location. In lieu of proposing new repeat sample locations, the systems may stay with the default used under the 1989 TCR of within-five-connections-upstream-and-downstream of the total coliform-positive sample location.
As with the 1989 TCR, the RTCR allows reduced monitoring for some small ground water systems. The RTCR is expected to improve public health protection compared to the 1989 TCR by requiring small ground water systems that are on or wish to conduct reduced monitoring to meet certain eligibility criteria. Examples of the criteria include a sanitary survey showing that the system is free of sanitary defects, a clean compliance history for 12 months, and a recurring annual site visit by the State and/or a voluntary Level 2 assessment for systems on annual monitoring.
For small ground water systems, the RTCR requires increased monitoring for high-risk systems such as those that do not have a clean compliance history under the RTCR. The RTCR specifies conditions under which systems will no longer be eligible for reduced monitoring and be required to return to routine monitoring or to monitor at an increased frequency.
The RTCR requires systems on a quarterly or annual monitoring frequency (applicable only to ground water systems serving 1,000 or fewer people) to collect at least three additional routine monitoring samples the month following one or more total coliform-positive samples, unless the State waives the additional routine monitoring. This is a reduction in the required number of additional routine samples from the 1989 TCR, which requires at least five routine samples in the month following a total coliform-positive sample for all systems serving 4,100 or fewer people.
The 1989 TCR requires all systems serving 1,000 or fewer people to collect at least four repeat samples while requiring PWSs serving 1,000 people or greater to collect three repeat samples. The RTCR requires three repeat samples after a routine total coliform-positive sample, regardless of the system type and size.
See sections III.C,
•
•
•
•
The provisions of the RTCR are contained in the new 40 CFR part 141 subpart Y, superseding 40 CFR 141.21 beginning April 1, 2016.
A Level 1 assessment is an evaluation to identify the possible presence of sanitary defects, defects in distribution system coliform monitoring practices, and (when possible) the likely reason that the system triggered the assessment. It is conducted by the system operator or owner (or his designated representative). Minimum elements include review and identification of atypical events that could affect distributed water quality or indicate that distributed water quality was impaired; changes in distribution system maintenance and operation that could affect distributed water quality (including water storage); source and treatment considerations that bear on distributed water quality, where appropriate (e.g., whether a ground water system is disinfected); existing water quality monitoring data; and inadequacies in sample sites, sampling protocol, and sample processing. The system must conduct the assessment consistent with any State directives that tailor specific assessment elements with respect to the size and type of the system and the size, type, and
A Level 2 assessment is an evaluation to identify the possible presence of sanitary defects, defects in distribution system coliform monitoring practices, and (when possible) the likely reason that the system triggered the assessment. A Level 2 assessment provides a more detailed examination of the system (including the system's monitoring and operational practices) than does a Level 1 assessment through the use of more comprehensive investigation and review of available information, additional internal and external resources, and other relevant practices. It is conducted by an individual approved by the State, which may include the system operator. Minimum elements include review and identification of atypical events that could affect distributed water quality or indicate that distributed water quality was impaired; changes in distribution system maintenance and operation that could affect distributed water quality (including water storage); source and treatment considerations that bear on distributed water quality, where appropriate (e.g., whether a ground water system is disinfected); existing water quality monitoring data; and inadequacies in sample sites, sampling protocol, and sample processing. The system must conduct the assessment consistent with any State directives that tailor specific assessment elements with respect to the size and type of the system and the size, type, and characteristics of the distribution system. The system must comply with any expedited actions or additional actions required by the State in the case of an
However, while the definition of “clean compliance history” includes only 1989 TCR/RTCR violations, the State may (and should) consider compliance history under other rules if relevant. For example, failure to take a triggered source water sample required under the GWR (USEPA 2006, 71 FR 65574, November 8, 2006) may appropriately cause the State to not allow less frequent monitoring because this could (1) lead the system to miss source water contamination and (2) indicate a system's lack of attention to regulatory requirements or proper operation.
The advisory committee deliberated on the definition of sanitary defect and suggested that the definition should be broad enough to facilitate corrective action without absolute confirmation of cause and effect, as such confirmation may be impossible or may significantly delay corrections that would address a sanitary defect that represents a potential threat to public health. Conversely, the language is not intended to suggest that corrections must be undertaken where the linkage between the defect and public health is tenuous. The advisory committee also agreed that
The advisory committee specifically stated that “sanitary defects” are specific to the assessment and corrective action requirements of the RTCR and are not intended to be linked directly to “significant deficiencies” under the Interim Enhanced Surface Water Treatment Rule (IESWTR) (USEPA 1998, 63 FR 69389, December 16, 1998) and the GWR, although some problems could meet either definition. The term “significant deficiency” is tied or associated with the eight elements of a sanitary survey. There are problems that are “sanitary defects” and are also “significant deficiencies”. For instance, source water problems like those associated with the well casing may fit the definition of both a “sanitary defect” and a “significant deficiency.” Depending on when the problem was identified (i.e., during a sanitary survey or during an assessment triggered under RTCR) and on the guidelines set by the State, the system should coordinate with their State regarding how to characterize the problem and how to coordinate the corrective action requirements under the GWR and RTCR, if needed. Conversely, there are problems that are “sanitary defects” but are not “significant deficiencies” and vice versa. “Significant deficiency” can include problems other than those in the distribution system that can have an effect on the long term viability of the system in delivering safe water to its customers. “Significant deficiencies” can also exist in the areas of reporting and data verification, system management and operation, and operator compliance with State requirements, which are not considered “sanitary defects.”
Furthermore, although there might be overlap between a “sanitary defect” and “significant deficiency,” there are differences in the required timeframes for responding to them (see 40 CFR 141.403(a)(5) and 142.16(b)(1)(ii), and §§ 141.859(b)(3) and (b)(4) of the RTCR). It might therefore be more confusing to use only one term for the requirements of the GWR and RTCR, as suggested by some commenters.
In addition, the GWR only applies to ground water systems. Relying only on the corrective action provisions of the GWR (triggered by a fecal indicator-positive sample) will leave out those systems not covered by the GWR. Also, these GWR provisions are focused on the source water. Since contamination is intermittent and can be from a location other than the source water, the assessment and corrective action provisions in the RTCR will help to better address other types of defects.
As noted in the preamble to the proposed RTCR, nothing in the RTCR is intended to limit the existing authorities of States under other regulations.
The advisory committee recognized that seasonal systems have unique characteristics that make them susceptible to contamination. As their name implies, seasonal systems are not operated year-round. The depressurizing and dewatering of the water system, as often occurs with the temporary shutdown of the system, present opportunities for contamination to enter or spread through the distribution system. For example, loss of pressure after a system's shutdown can lead to intrusion of contaminants. Even a system that remains pressurized may be subject to water quality degradation due to stagnant water or loss of disinfectant residual. Microbial growth prior to start-up can result in biofilm formation, which can lead to the accumulation of contaminants. These systems are also more susceptible to contamination due to changes in the conditions of the source water (such as variable contaminant loading due to increased septic tank or septic field use), the seasonal nature of the demand, and the stress that the system experiences. As a result, the Agency is establishing a definition for seasonal systems and setting forth provisions that mitigate the risk associated with the unique characteristics of this type of system (see section III.C.1.f of this preamble,
The definition of seasonal system that EPA is promulgating with this final rule is different from the definition proposed in July 2010 (USEPA 2010a, 75 FR 40926, July 14, 2010), which is “a non-community water system that is operated in three or fewer calendar quarters per calendar year.” As discussed in the preamble to the proposed rule, EPA was aware of the limitations of the proposed definition that could lead to less public health protection and less effective and more complicated implementation. EPA gave the example of a system that is operated from March to October. Such a system would operate in all four calendar quarters and therefore would not be considered a seasonal system according to the proposed definition, but would nonetheless be subject to the same possibility of distribution system contamination as a seasonal system operated from April to November (i.e., in only three calendar quarters). To address limitations such as this, EPA specifically requested comment on the proposed definition of a seasonal system. The change in the definition from the proposed rule is based on the comments received. Specific requirements (e.g., monitoring, start-up procedure, etc.) for seasonal systems that address the issues associated with such systems are discussed in section III.C.1.f,
The definition does not include intermittent systems, such as those that are open year-round but are not operated continuously (e.g., a church open only on Saturdays and Sundays). It also does not include systems that operate year-round but may shut down part of their distribution system for part of the year (e.g., parts of the distribution system that serve a factory that is open only certain times of the year). Since these systems might be subject to the same type of risks as seasonal systems, States may want to consider whether to establish requirements that will mitigate the risks associated with their operation.
Since it is possible and perhaps likely that some systems may keep the distribution system pressurized while out of season, EPA has included an additional provision in the RTCR whereby a State can exempt any seasonal system from some or all of the requirements for seasonal systems if the entire distribution system remains pressurized during the entire period that the system is not operating (see §§ 141.854(i)(3), 141.856(a)(4)(ii), and 141.857(a)(4)(ii) of the RTCR). In providing such exemption, the State should conclude that public health protection is maintained. However, a seasonal system monitoring less frequently than monthly must still monitor during the vulnerable period designated by the State. See section III.C.1.f of this preamble,
Some commenters suggested that seasonal systems be defined by the number of days, months, or quarters they are not in operation, e.g., 30, 60, or 90 consecutive days, three or more consecutive months, one full calendar quarter, etc. While such a change could address some of EPA's concerns, it does not address the potential for contamination associated with lack of operation and loss of pressure.
• A system has an
• A routine sample is
• A system fails to test for
• A system fails to take all required repeat samples following a routine sample that is positive for
Although not explicitly stated, as a logical consequence of the second condition, a system also violates the MCL when an
EPA is establishing an MCLG of zero for
However, there were some who commented that removing the MCLG and MCL for total coliforms will result in backsliding in public health protection. These commenters stated that the elimination of the non-acute MCL violation removes a strong incentive for water systems to perform proactive maintenance and operations activities to maintain distribution system water quality and avoid MCL violations and subsequent public notice to customers. EPA disagrees. EPA and the advisory committee decided that removing the MCLG and MCL for total coliforms is appropriate. SDWA section 1412(b)(3)(A)(i) directs EPA to use “the best available, peer-reviewed science and supporting studies conducted in accordance with sound and objective science practices” in conducting the risk assessment when promulgating an NPDWR. In 1989, EPA set an MCLG of zero for total coliforms. Since the promulgation of the 1989 TCR, a better understanding of the nature of total coliforms, especially fecal coliforms, has become available. Many of the organisms detected by total coliform and fecal coliform methods are not of fecal origin and do not have any direct public health implications (Edberg
Commenters agreed with EPA's proposal to eliminate the provisions on fecal coliforms. Therefore, fecal coliforms will no longer be used in the RTCR and all analytical methods used to detect for fecal coliforms are also removed from the rule. For a discussion on analytical methods, see section III.I of this preamble,
EPA disagrees that the treatment technique construct will not work for small NCWSs. The requirement to assess the system after a trigger consists of looking at all of the elements that might have affected the quality of the distributed water, including not only the distribution system but also the source and the treatment process. Although some small systems have limited or no distribution system, they can still have parts of their system (e.g., building plumbing, or buried piping at a campground) that are vulnerable to contamination, such as that introduced by a cross-connection or infiltration. In addition, relying only on the corrective action provisions of the GWR will leave out those systems not covered by the GWR, or in cases of positive results, systems where corrective action under the GWR is not immediately required by the State. For example, total coliform-positive repeat samples do not trigger any action under the GWR, even if those samples are also triggered source water samples. Also, a State may require additional source samples instead of a corrective action after the first fecal indicator positive sample (see 40 CFR 141.402(a)(3)). In addition, some small NCWSs with limited or no distribution system use surface water. Finally, the GWR provisions are focused on the source water. Since contamination is intermittent and can be from a location other than the source water, the assessment and corrective action provisions in the RTCR will help address other types of defects.
EPA understands that there will be implementation challenges during the first few years of the rule implementation, especially for small PWSs. However, as systems with limited or no distribution system are simple systems, the assessments should also be relatively simple. There is nothing in the RTCR that prohibits the States from conducting assessments that integrate the requirements of the GWR and RTCR where appropriate (see section III.E of this preamble,
As discussed earlier, EPA believes that the treatment technique requirements are more protective of public health because they require a system to take preventive actions to address problems. This is a change from just issuing a PN and conducting additional monitoring under the 1989 TCR to proactively doing an assessment to determine the cause of the possible contamination under the RTCR and performing corrective action where needed.
Under the RTCR, all PWSs are still required to take repeat samples within 24 hours of learning of any routine monitoring sample that is total coliform-positive. PWSs must comply with the repeat monitoring requirements and
EPA notes that a system must still take the required minimum number of samples even if it has had an
Under the RTCR, systems' sample siting plans must include routine and repeat sample sites and any sampling points necessary to meet the Ground Water Rule (GWR) requirements. As with the 1989 TCR, the sample siting plan is subject to State review and revision.
The repeat sample sites may be alternative monitoring locations that the PWS is proposing to use instead of the repeat sample locations that are within five connections upstream and downstream of the original sampling location that tested total coliform-positive. The PWS must demonstrate to the State's satisfaction that the alternative monitoring locations are representative of a pathway for contamination into the distribution system (for example, near a storage tank), and that the sample siting plan remains representative of the water quality in the distribution system. Systems may elect to specify either alternative fixed locations or criteria for selecting their repeat sampling locations on a situational basis in a standard operating procedure (SOP), which is part of the sample siting plan. The State may determine that monitoring at the entry point to the distribution system (especially for undisinfected ground water systems) is effective to differentiate between potential source water and distribution problems. The use of alternative monitoring locations or an SOP does not require prior State approval but systems are required to submit to their primacy agencies their proposed alternative locations. States can modify and revise these locations or the SOP as needed. Additional discussion about the alternative monitoring locations can be found in section III.D of this preamble,
Monitoring locations that serve both as a repeat sampling location and a triggered source water monitoring location for the GWR (i.e., locations for dual purpose sampling) must also be included in the sample siting plan. These locations need to be approved by
Under the RTCR, PWSs may take more than the minimum required number of routine samples and must include the results in calculating whether the total coliform treatment technique trigger for conducting an assessment has been exceeded, but only if the samples are taken in accordance with the sample siting plan and are representative of water throughout the distribution system (see section III.E of this preamble,
Under the RTCR, EPA is not making substantive changes to the requirements of the TCR for (1) special purpose samples, and (2) invalidation of total coliform samples.
New systems that begin operation on or after the compliance date of the RTCR must comply with the routine monitoring frequency established by the RTCR for their system size and type beginning in their first month of operation.
The following are the monitoring requirements for different categories of systems.
ii. Transition to the RTCR. The RTCR requires all ground water NCWSs serving 1,000 or fewer people, including seasonal systems, to continue with their 1989 TCR monitoring schedules as of the compliance date of the RTCR, unless or until any of the conditions for increased monitoring discussed later in this section are triggered on or after the compliance date, or unless otherwise directed by the State as a result of the special monitoring evaluation conducted under a sanitary survey or at any other time the State believes that the sampling the system is conducting may not be adequate. In addition, systems on annual monitoring, including seasonal systems, must have an initial annual site visit by the State within one year of the compliance date and an annual site visit each calendar year thereafter to remain on annual monitoring. Systems may substitute a voluntary Level 2 assessment by a party approved by the State for the annual site visit in any given year. The periodic sanitary survey may be used to meet the requirement for an annual site visit for the year in which the sanitary survey was completed.
After the compliance date of the final RTCR, during each sanitary survey the State must perform a special monitoring evaluation to review the status of the water system, including the distribution system, to determine whether the system is on an appropriate RTCR monitoring schedule and modify the monitoring schedule as necessary. States must evaluate system factors such as the pertinent water quality and compliance history, the establishment and maintenance of contamination barriers, and other appropriate protections, and validate the appropriateness of the water system's existing RTCR monitoring schedule and modify as necessary. For seasonal systems on quarterly or annual monitoring, this evaluation must also include review of the approved sample siting plan, which designates the time period(s) for monitoring based on site-specific considerations (such as during periods of highest demand or highest vulnerability to contamination). The system must collect compliance samples during these designated time periods.
iii. Reduced monitoring. The State has the discretion to reduce the monitoring frequency for well-operated ground water NCWSs from the quarterly routine monitoring to no less than annual monitoring, if the water system can demonstrate that it meets the criteria for reduced monitoring provided in this section.
To be eligible to qualify for and remain on annual monitoring after the compliance date, a ground water NCWS serving 1,000 or fewer people must meet all of the following criteria:
• The system must have a clean compliance history (no MCL violations or monitoring violations under the 1989 TCR and/or RTCR, no Level 1 or Level 2 trigger exceedances or treatment technique violations under the RTCR) for a minimum of 12 months. (For a more detailed discussion on Level 1 and Level 2 triggers, see section III.E of this preamble,
• The most recent sanitary survey shows the system is free of sanitary defects, has a protected water source and meets approved construction standards; and
• An initial site visit by the State within the last 12 months to qualify for reduced annual monitoring, and recurring annual site visits to stay on reduced annual monitoring; and correction of all identified sanitary defects. A voluntary Level 2 assessment by a party approved by the State may be substituted for the State annual site visit in any given year.
iv. Increased monitoring. Ground water NCWS serving 1,000 or fewer people on quarterly or annual monitoring must begin monthly monitoring the month after any of the following events occurs:
• The system triggers a Level 2 assessment or two Level 1 assessments in a rolling 12 month period;
• The system has an
• The system has a coliform treatment technique violation (for example, if the system fails to conduct a Level 1 assessment or correct for sanitary defects if required to do so);
• The system on quarterly monitoring has two RTCR monitoring violations; or
• The system has one RTCR monitoring violation and triggers a Level 1 assessment in a rolling 12-month period.
EPA added the last condition by which a ground water NCWS serving ≤ 1,000 people can be triggered into increased monitoring to improve the internal consistency of these triggers, given that these NCWSs monitor less frequently in general, and given the added flexibility for States to elect not to count monitoring violations at TNCWS toward triggers to increased monitoring as described in the next paragraph. Since either two Level 1 assessments or two RTCR monitoring violations in a rolling 12-month period triggers increased monitoring, EPA believes it is appropriate for one of each of these events to also trigger increased monitoring for these NCWSs. See section III.E.1 of this preamble,
EPA also added flexibility to allow States to elect to not count TNCWS monitoring violations in determining whether the trigger for increased monitoring has been exceeded, but only if the missed sample is collected no later than the end of the next monitoring period. The system must collect the make-up sample in a different week than the routine sample for the next monitoring period and should collect the sample as soon as possible during the next monitoring period. This
Ground water NCWS serving 1,000 or fewer people on annual monitoring must begin quarterly monitoring the month after the following event occurs:
• The system on annual monitoring has one RTCR monitoring violation.
This is a change from the proposed rule requirement where the event would have triggered the system to go to monthly monitoring instead of quarterly monitoring. This change is further discussed in section III.C.2.b of this preamble,
The system must continue monthly or quarterly monitoring until the requirements in this section for returning to quarterly or annual monitoring are met.
v. Requirements for returning to quarterly monitoring. To be eligible to return from increased monthly monitoring to quarterly monitoring, ground water NCWSs serving 1,000 or fewer people must meet all of the following criteria:
• Within the last 12 months, the system must have a completed sanitary survey or a site visit by the State or a voluntary Level 2 assessment by a party approved by the State. The system is free of sanitary defects, and has a protected water source; and
• The system has a clean RTCR compliance history (no
For TNCWSs, the State may elect not to count monitoring violations towards the requirement of a clean compliance history (as presented in the last bullet) if the missed sample is collected no later than the end of the next monitoring period. This applies only for routine samples. The TNCWS would still incur a monitoring violation and must follow the other requirements associated with such violation (e.g., public notification and reporting). See section III.C.2.b of this preamble,
vi. Requirements for returning to reduced annual monitoring. To be eligible to return from increased monthly monitoring to reduced annual monitoring, the system must meet the criteria to return to routine quarterly monitoring plus the following criteria:
• An annual site visit (recurring) by the State and correction of all identified sanitary defects. An annual voluntary Level 2 assessment may be substituted for the State annual site visit in any given year; and
• The system must have in place or adopt one or more additional enhancements to the water system barriers to contamination as approved by the State. These measures could include but are not limited to the following:
vii. Additional routine monitoring. All systems collecting samples on a quarterly or annual frequency must conduct additional routine monitoring following a single total coliform-positive sample (with or without a Level 1 trigger event). The additional routine monitoring consists of three samples in the month following the total coliform-positive sample at routine monitoring locations identified in the sample siting plan. This is a change from the 1989 TCR additional routine monitoring requirement of taking a total of five samples the month following a total coliform-positive sample for systems that take four or fewer samples per month. Consistent with the 1989 TCR, the State may waive the additional routine monitoring requirement if:
• The State, or an agent approved by the State, performs a site visit before the end of the next month the system provides water to the public. Although a sanitary survey need not be performed, the site visit must be sufficiently detailed to allow the State to determine whether additional monitoring and/or any corrective action is needed. The State cannot approve an employee of the system to perform this site visit, even if the employee is an agent approved by the State to perform sanitary surveys or RTCR assessments.
• The State has determined why the sample was total coliform-positive and establishes that the system has corrected the problem or will correct the problem before the end of the next month the system serves water to the public. In this case, the State must document this decision to waive the following month's additional monitoring requirement in writing, have it approved and signed by the supervisor of the State official who recommends such a decision, and make this document available to the EPA and public. The written documentation must describe the specific cause of the total coliform-positive sample and what action the system has taken and/or will take to correct this problem.
• The State may not waive the requirement to collect three additional routine samples the next month in which the system provides water to the public solely on the grounds that all repeat samples are total coliform-negative. If the State determines that the system has corrected the contamination problem before the system takes the set of repeat samples required in § 141.858, and all repeat samples were total coliform-negative, the State may waive the requirement for additional routine monitoring the next month.
All additional routine samples are included in determining compliance with the MCL and coliform treatment technique requirements.
The State may reduce the monitoring frequency for ground water CWS from the monthly routine monitoring to quarterly reduced monitoring if the water system can demonstrate that it meets the criteria for reduced monitoring provided later in this section.
ii. Transition to the RTCR. All ground water CWSs serving 1,000 or fewer people continue with their 1989 TCR monitoring schedules unless or until any of the increased monitoring requirements in this section occur or as directed by the State.
After the compliance date of the final RTCR, the State must determine
iii. Reduced monitoring. The State has the flexibility to reduce the monitoring frequency for well-operated ground water CWS from the monthly routine monitoring to no less than quarterly monitoring if the water system can demonstrate that it meets the criteria for reduced monitoring provided in this section.
To be eligible to change from monthly to quarterly reduced monitoring after the compliance date, ground water CWSs serving 1,000 or fewer people must be in compliance with any State-certified operator provisions and meet each of the following criteria:
• The system must have a clean compliance history (no MCL violations or monitoring violations under the TCR and/or RTCR, no Level 1 or Level 2 trigger exceedances or treatment technique violations under the RTCR) for a minimum of 12 months;
• The most recent sanitary survey shows the system is free of sanitary defects (or has an approved plan and schedule to correct them and is in compliance with the plan and the schedule), has a protected water source, and meets approved construction standards; and
• The system must meet at least one of the following criteria:
iv. Requirements for returning to monthly monitoring. When a system on quarterly monitoring experiences any of the following events the system must begin monthly monitoring the month after the event occurs:
• System triggers a Level 2 assessment or two Level 1 assessments in a rolling 12-month period.
• System has an
• System has a coliform treatment technique violation (e.g., fails to conduct a Level 1 or Level 2 assessment or to correct for a sanitary defect if required to do so).
• System has two routine RTCR monitoring violations in a rolling 12-month period.
v. Additional routine monitoring. Ground water CWSs serving ≤ 1,000 people collecting samples on a quarterly frequency must conduct additional routine monitoring following a single total coliform-positive sample (with or without a Level 1 trigger event), similar to the additional monitoring requirements for ground water NCWS serving ≤ 1,000 people. See section III.C.1.b.vii of this preamble,
Under the RTCR, all seasonal systems are required to take at least one routine sample per month for total coliforms and
Only seasonal systems using ground water and serving ≤ 1,000 people are eligible for reduced monitoring. To be newly eligible for reduced monitoring after the compliance date, they must meet the following criteria:
• The system must have an approved sample siting plan that designates the time period for monitoring based on site-specific considerations (e.g., during periods of highest demand or highest vulnerability to contamination). The system must collect compliance samples during this time period; and
• To be eligible for reduced quarterly monitoring, the system must also meet all the reduced monitoring criteria discussed in section III.C.1.b.v of this preamble,
• To be eligible for reduced annual monitoring, the system must also meet all the reduced monitoring criteria discussed in section III.C.1.b.vi of this preamble,
The State may exempt any seasonal system from some or all of the requirements for seasonal systems (e.g., performing start-up procedures) if the entire distribution system remains pressurized during the entire period that the system is not operating. However, systems that monitor less frequently than monthly must still monitor during the time period designated in their approved sample siting plan.
EPA received comment that supported the use of dedicated sampling locations. Although not specifically addressed this practice is already in use by some States and systems under the 1989 TCR. As discussed in the proposed RTCR, EPA is specifically allowing the use of dedicated sampling stations for the following reasons:
• To reduce potential contamination of the sampling taps. Utilities will have more control to prevent contamination of the sampling tap by preventing its use by unauthorized persons and allowing no routine use of the tap except for sampling.
• To facilitate access to sampling taps. Currently systems may be constrained by where they sample, e.g., only at public buildings or in certain individual customer's house.
• To improve sampling representation of the distribution system. Allowing dedicated sampling taps in areas where systems have not been able to gain access will facilitate better sampling representation of the distribution system.
The advisory committee recommended that the routine monitoring frequency for ground water NCWSs serving 1,000 or fewer people remain at quarterly monitoring as provided in the 1989 TCR. EPA believes that quarterly monitoring carried out in conjunction with the assessment and corrective action requirements would maintain or improve public health protection without increasing sampling costs over the 1989 TCR requirements. The advisory committee also recognized that current sampling costs are not insignificant for small systems, and wanted to allow reduced monitoring for well-performing systems under the more specific and rigorous criteria described previously in sections III.C.1.b.iii,
EPA requested comment in the proposed rule on whether to require NTNCWSs to comply with the CWS requirements (as they are in other rules such as disinfection byproduct (DBP) rules) since NTNCWSs serve the same people over time and include populations that may be at greater risk (e.g., schools, hospitals, daycare centers).
EPA received comments both in agreement and disagreement with this approach. Those who disagreed stated that such requirement would result in disproportionate impact on NTNCWS, since these systems are small systems with limited resources. One commenter said that the 1989 TCR has been in effect for decades now and there have been no adverse health effect impacts by not having NTNCWSs comply with CWS requirements.
Considering the comments EPA received, the Agency is not requiring NTNCWSs to comply with CWS requirements under the RTCR. However, EPA recommends that States consider the population served at NTNCWSs, especially those that serve sensitive subpopulations such as schools, hospitals, and daycare centers, when they decide on an appropriate monitoring frequency. EPA is aware that some States are already doing so and suggests that other States consider the same.
EPA received comments that the criteria for returning to reduced monitoring are overly strict, including a suggestion that the requirement to have an additional barrier enhancement to return to annual monitoring is too burdensome and costly. Some commenters stated that systems that are triggered into increased monitoring will be unlikely to return to reduced monitoring. Another commenter suggested that a system should be able to return to reduced monitoring sooner than 12 months.
EPA continues to believe that for a system to be able to monitor only once a year, it should be able to demonstrate that it has the ability to continually deliver safe water by ensuring that barriers are in place to protect against contamination. A system that has been triggered into increased monitoring has failed in some way to demonstrate that it has those barriers in place. The requirements to return to reduced monitoring are intended to show that the system has made the long-term commitment and provided the necessary additional barriers to eliminate the vulnerability to contamination that triggered the increased monitoring in the first place. EPA believes that the requirements for returning to reduced monitoring are not impossible to meet but require an appropriate level of effort over at least 12 months to show the commitment and ability to deliver safe water.
EPA received comments regarding monitoring violations as a trigger for increased monitoring and as part of the criteria for returning to reduced monitoring. EPA heard from States with large numbers of NCWSs that including monitoring violations as a trigger for increased monitoring and as part of the criteria for reduced monitoring will make the RTCR difficult to implement in their States. NCWSs, especially TNCWSs, pose unique challenges to rule compliance as they typically do not have the resources that CWSs have and providing water is not their primary business. Commenters suggested that triggering a NCWS into increased monitoring because of just one or two missed samples is not appropriate and will burden the State with compliance and enforcement tracking. They indicated that this will shift limited State resources away from oversight activities for CWSs that serve large populations to compliance and enforcement activities for NCWSs that serve small populations, resulting in decreases in public health protection. The commenters also concluded that once a system is triggered into increased monitoring, it would not be able to qualify for reduced monitoring because it would not be able to meet the requirements for clean compliance history (e.g., no monitoring violations).
EPA recognizes the burden on States that may result from implementing the increased and reduced monitoring provisions of the RTCR. EPA is therefore providing States the flexibility to not count monitoring violations towards eligibility for remaining on quarterly monitoring or for returning to quarterly monitoring as long as a make-up sample is collected by the end of the next monitoring period. This flexibility only applies to TNCWSs and only for routine samples. The State cannot use this flexibility to qualify a system for annual monitoring. When exercising the flexibility about whether to count a monitoring violation towards eligibility for reduced monitoring, the State may find it appropriate to also consider the system's history of monitoring violations. The TNCWSs would still incur a monitoring violation and must comply with the other associated requirements after such violation (e.g., public notification and reporting).
In the proposed rule, a NCWS on annual monitoring with one RTCR monitoring violation is triggered into monthly monitoring. Some commenters expressed concern that many systems on annual monitoring will be triggered to monthly monitoring because of just one missed sample. The commenters stated that this was unreasonable considering that these systems typically do not have the resources that CWSs have, such as a certified operator. These systems typically experience frequent staff shortages or turnover that result in missed samples. Having these systems do monthly monitoring would require significant tracking and enforcement activities on the part of the State.
To address this concern, EPA has changed the consequence of having one RTCR monitoring violation for systems on annual monitoring. Instead of having to go to monthly monitoring, the system now moves to quarterly monitoring. EPA also believes that the annual site visit by the State, and the fact that some States conduct and/or pay for the annual monitoring, reduces the likelihood that systems on annual monitoring will miss samples and be triggered to increase to quarterly monitoring, so that PWS and State resource needs are not likely to significantly increase because of this requirement. EPA is not changing the consequence of exceeding the other triggers for increased monitoring; systems that experienced any of the other events in section III.C.1.b.iv of this preamble,
EPA requested comment on whether daily chlorine residual measurements should be one of the criteria for reduced monitoring. EPA received comments that said that it should not be a criterion. Some commenters expressed concern that one missed measurement might be a basis for being bumped to increased monitoring. One commenter suggested giving the State the discretion to either allow or not allow it as a criterion. Section 141.854(h)(2)(iii) of the RTCR specifies that one of the
One commenter expressed concern that a reduction in the number of additional routine samples (i.e., from five to three) reduces the likelihood of detecting both total coliforms and
As discussed in section III.A.4 of this preamble,
One commenter said that a regular sampling schedule is more easily achieved and more practical than identifying vulnerable time periods as these periods can vary from year to year. EPA believes that a system that will monitor less frequently than monthly should sample based on site-specific considerations (e.g., during periods of high demand or highest vulnerability of contamination). This increases the probability of detecting a possible contamination; hence, measures can be taken to address the possible contamination before it becomes a public health threat.
One commenter suggested that start-up procedures must include flushing, disinfection, re-flushing to eliminate disinfectant residual, and taking a sample prior to serving water to the public. EPA is not requiring specific practices regarding the start-up procedure. States are given the flexibility to determine what start-up procedures are appropriate for a particular system based on its site-specific considerations and must describe their process for determining start-up procedures in their primacy application. EPA recommends that States require seasonal systems to take a sample as part of the required start-up procedures. Systems must allow sufficient time for completing start-up procedures (including receiving sample results) and notifying the State as required prior to serving water to the public.
Under the RTCR, all PWSs must take at least three repeat samples for each routine sample that tested positive for total coliforms. This is a change from the 1989 TCR requirements where systems serving 1,000 or fewer people must collect at least four repeat samples while the rest of the systems must collect three repeat samples.
As discussed in the preamble to the proposed RTCR, EPA believes that sampling again immediately after determining that a sample is positive (i.e., conducting repeat sampling) increases the likelihood of identifying the source and/or nature of the possible contamination. Analyses conducted by EPA indicated that once a total coliform-positive is found, there is a much greater likelihood of finding another total coliform-positive within a short period of time of the initial finding (see page 40939 of the
The repeat monitoring requirements of the RTCR are essentially the same as the requirements of the 1989 TCR, except for some new provisions promulgated by the RTCR to provide flexibility to States and PWSs. The following requirements are not changing under the RTCR:
• PWSs must collect the repeat samples within 24-hours of being notified that their routine sample is total coliform-positive.
• The State can extend the 24-hour limit on a case-by-case basis. EPA is providing flexibility to this provision as discussed later in this section.
• The State cannot waive the requirement for a system to collect repeat samples.
• In addition to taking repeat samples, PWSs must test each routine total coliform-positive sample for
• The State has the discretion to allow the system to forgo
• The system must collect at least one repeat sample from the sampling tap where the original total coliform-positive sample was taken. Unless different locations are specified in its sample siting plan (this is a new provision of the RTCR and is discussed later in this section), the system must also collect at least one repeat sample at a tap within five service connections upstream, and at least one repeat sample at a tap within five service connections
• Systems must collect all repeat samples on the same day. The State may allow systems with a single service connection to collect the required set of repeat samples over a three-day period or to collect a larger volume repeat sample(s) in one or more sample containers of any size, as long as the total volume collected is at least 300 milliliters (ml).
• Systems must collect an additional set of repeat samples for each total coliform-positive repeat sample. As with the original set of repeat samples, the system must collect the additional repeat samples within 24 hours of being notified of the positive result, unless the State extends the time limit. The system must repeat this process until either total coliforms are not detected in one complete set of repeat samples or, as the RTCR is adding, the system determines that the coliform treatment technique trigger has been exceeded and notifies the State. After a trigger (see section III.E, of this preamble,
• A subsequent routine sample, which is within five service connections of the initial routine sample and is collected after an initial routine sample but before the system learns the initial routine sample is total coliform-positive, may count as a repeat sample instead.
• A ground water system with a single well serving 1,000 or fewer people may still use a repeat sample collected from a ground water source to meet both the repeat monitoring requirements of the RTCR and the triggered source monitoring requirements of the GWR (i.e., a dual purpose sample). Modifications to this provision under the RTCR are discussed later in this section.
As mentioned previously, the RTCR adds some new provisions to the repeat monitoring requirements to provide flexibility to the States and PWSs. One of these changes is the additional flexibility provided to States regarding the waiver or the extension of the 24-hour limit for a PWS to collect repeat samples. States are given the option to describe in their primacy application the criteria they will use to waive or extend the 24-hour limit instead of making the decisions on a case-by-case basis. This is discussed further in section V of this preamble,
Another change is the use of alternative monitoring locations. As discussed in section III.C of this preamble,
There are also some modifications to the dual purpose sampling allowed under the GWR and 1989 TCR. Ground water systems required to conduct triggered source monitoring under the GWR must take ground water source samples in addition to the repeat samples required by the RTCR. However, a ground water system serving 1,000 or fewer people may use a repeat sample collected from a ground water source to meet both the repeat monitoring requirements of the RTCR and the source water monitoring requirements of the GWR (i.e., a dual purpose sample), but only if the State approves the use of a single sample to meet both rule requirements and the use of
If a system with a limited number of monitoring locations (such as a system with only one service connection or a campground with only one tap) takes more than one repeat sample at the triggered source water monitoring location, the system may reduce the number of additional source water samples by the number of repeat samples taken at that location that were not
Results of all routine and repeat samples not invalidated by the State must be used to determine whether the coliform treatment technique trigger has been exceeded (see section III.E of this preamble,
A majority of the commenters supported the change from four to three repeat samples for systems serving 1,000 or fewer people. However, one commenter stated that decreasing the number of repeat samples would also lessen the likelihood of detecting total coliforms and
EPA also received comments generally supporting the use of alternative sites for repeat monitoring since they provide more flexibility in determining the locations of the repeat samples, allowing for better protection of public health on a site-specific basis, subject to State review. One commenter disagreed, saying that repeat samples should be near the original positive sample site so that they can provide the necessary information to confirm the original positive sample. A few commenters are against having within-five-connections-upstream-and-downstream locations from the original positive sample as the default locations for repeat monitoring. They suggested that these default locations should be eliminated altogether and that all PWSs be allowed to take the other two repeat samples at alternative locations.
EPA believes that not all systems will use the option of taking repeat samples at alternative locations. Some PWSs, especially small NCWSs, may not avail themselves of this option for reasons of simplicity and lack of resources and expertise. They may elect to stick with the set repeat monitoring locations of five connections upstream and downstream of the original total coliform-positive sample, as it will be less burdensome on them than locating alternative sites and demonstrating that the alternative sites are more effective. Hence, EPA is maintaining within-five-connections-upstream-and-downstream locations as the default repeat sampling locations.
While the prescribed locations may work for some systems, other systems may find them too limiting. Taking repeat samples at the prescribed locations of within five-connections-upstream-and-downstream can be difficult for some systems to implement within the required 24 hours for a repeat sample because of issues such as access to the site. Therefore, EPA is allowing PWSs to propose alternative repeat monitoring locations, either as fixed locations or as criteria in an SOP, to facilitate the identification of the source and extent of any problem. EPA believes that both the within-five-connections-upstream-and-downstream repeat sampling locations and the locations as identified by an SOP can be used by the operator to better understand the extent and duration of potential pathways of contamination into the distribution system with the appropriate amount of State supervision.
EPA requested comment on whether systems should be required to obtain prior State approval for using repeat monitoring sites other than the within-five-connections-upstream-and-downstream locations of the original routine total coliform-positive site. Most of the commenters were against requiring prior State approval for the use of alternative repeat monitoring locations. They suggested that it is more appropriate to include these sites (or the criteria to choose sites) in the SOP or in the sample siting plan, which is then subject to State review and revision. Some commenters also stated that requiring pre-approval for each individual instance of using alternative sites is not practical.
EPA agrees that obtaining prior State approval to use alternative repeat monitoring locations is not necessary since there is no reduction in monitoring and EPA expects the SOP to be used only by large systems with the technical resources to justify alternative monitoring sites. Although State approval is not required, EPA requires PWSs that are intending to use this option to submit their proposed alternative sampling sites (as part of an SOP or the sample siting plan) to the State. The PWS must be able to demonstrate to the State that the alternative monitoring sites are appropriate to help characterize the extent of the possible contamination. The State is given the discretion to review and revise the alternative monitoring locations consistent with their practice regarding sample siting plans. EPA does not require that the State formally acknowledge and approve the alternative monitoring locations. The alternative monitoring locations are considered appropriate unless the State disapproves or modifies them, which results in the requirement being self-implementing.
EPA received general support for allowing samples taken at the ground water source to serve both as a triggered source sample under the GWR and as one of the repeat samples under the RTCR (i.e., as dual purpose samples). Some States said that this practice is already being done in their States and therefore should continue under the RTCR. Most commenters supported the provision with the understanding that the practice would be subject to State approval. One commenter, however, disagreed with the provision and thought the PWS would not be collecting a sufficient number of repeat samples to represent the water quality in the distribution system if one of the repeat samples is taken at the source water. Another commenter suggested making the option available for ground water systems of all sizes, as it will help reduce labor and analytical costs, and will provide a clearer picture as to the location and cause of the total coliform-positive sample.
The preamble to the proposed RTCR discussed the drawbacks to allowing dual purpose samples i.e., a reduction in the number of repeats in the distribution system. By requiring State approval of the use of dual purpose sampling, the RTCR ensures that this flexibility will only be allowed where the State has determined it is appropriate. EPA believes that PWSs with limited or no distribution systems are the best candidates for approval since there is little to no chance of contamination from the distribution system except from cross connection. On the other hand, EPA believes that dual purpose samples may not be appropriate for systems with extensive distribution systems because the reduction in monitoring (i.e., one less repeat sample in a distribution system that extends far from the source water sample site) may not provide public health protection equivalent to taking separate samples.
EPA requested comment on whether the use of dual purpose samples should be allowed by simply including it in the sample siting plan, without prior State approval. As stated earlier, most of the comments supported allowing dual purpose sampling with the understanding that it will be approved by the State. Some commenters, on the other hand, said that it should be allowed without prior State approval. One commenter said that the State may not be able to review and approve the sample siting plan until the next
As discussed earlier, EPA believes that requiring State approval for allowing dual purpose sampling limits the practice only to systems that can avail themselves of it without compromising public health protection. State approval is required because this constitutes a reduction in monitoring (no separate triggered source water samples), relative to requiring separate samples for compliance with the two rules. EPA believes this reduction in monitoring is appropriate only if the State determines that the dual purpose sample provides public health protection equivalent to that provided by separate repeat and source water samples.
As part of the special primacy requirements for the RTCR in § 142.16(q), States adopting the reduced monitoring provisions of the RTCR, including dual purpose sampling, must describe how they will do so in their primacy application package. States must include their approval process for dual purpose sampling in their application. This gives States the flexibility to determine how and when they want to grant approval, i.e., whether on a case-by-case basis (whenever a total coliform-positive occurs) or on a pre-approved basis (i.e., the system has prior State approval to take a dual purpose sample whenever it is triggered to do source water monitoring).
The system has exceeded the trigger immediately once any of the following conditions have been met.
• For systems taking 40 or more samples per month, the PWS exceeds 5.0 percent total coliform-positive samples for the month; or
• For systems taking fewer than 40 samples per month, the PWS has two or more total coliform-positive samples in the same month; or
• The PWS fails to take every required repeat sample after any single routine total coliform-positive sample.
The first two treatment technique triggers were the conditions that define a non-acute MCL violation under the 1989 TCR. The third trigger provides incentive for systems to take their repeat samples to ensure that they are assessing the extent of the total coliform contamination; if they do not do so by repeat sampling, they must conduct an assessment instead to ensure there are no pathways to contamination (sanitary defects). Repeat monitoring is critical in identifying the extent, source, and characteristics of fecal contamination in a timely manner. EPA's analysis, as discussed in the preamble to the proposed RTCR (see section III.A.4 of the preamble to the proposed RTCR,
• The PWS has an
• The PWS has a second Level 1 treatment technique trigger within a rolling 12-month period, unless the initial Level 1 treatment technique trigger was based on exceeding the allowable number of total coliform-positive samples, the State has determined a likely reason for the total coliform-positive samples that caused the initial Level 1 treatment technique trigger, and the State establishes that the system has fully corrected the problem; or
• For PWSs with approved reduced annual monitoring, the system has a Level 1 treatment technique trigger in two consecutive years.
EPA disagrees that the PWS will avoid taking repeat samples because of economic reasons. EPA's analysis indicates that a Level 1 assessment costs about four times as much as taking three repeat samples (see Exhibits 3–12 and
One commenter suggested that EPA clarify that collecting samples outside the 24-hour required time is not a Level 1 trigger as there are instances when the repeat samples cannot be collected within 24 hours of the routine total coliform-positive sample. EPA notes that there is a provision in the RTCR, § 141.858(a)(1), that allows the State to extend the 24-hour limit on a case-by-case basis if the system has a logistical problem in collecting the repeat samples within 24 hours that is beyond its control. In such cases when the State allows the system to collect the repeat samples beyond the 24 hours, the system does not trigger a Level 1 assessment.
One commenter suggested that EPA include an additional provision that an assessment need not be triggered if the total coliform-positive occurred when there are representative levels of disinfectant residual in the distribution system, stating that historical total coliform-positive results occurred with normal levels of chlorine residuals in the distribution system and did not cause any waterborne disease. EPA disagrees that there is no public health risk in this situation. The fact that total coliforms can be detected even in the presence of a disinfectant residual is an indication that there might be a bigger, hidden problem that needs further investigation. An assessment is warranted to determine if there exists a potential pathway of contamination into the distribution system and corrective action is warranted if a sanitary defect is identified.
EPA received comments to eliminate the Level 2 treatment technique trigger where a second Level 1 assessment is triggered within a rolling 12-month period, or for systems on annual monitoring, where two Level 1 assessments in two consecutive years trigger a Level 2 assessment. Some of the commenters thought that many small systems will be triggered to conduct a Level 2 assessment multiple times. EPA believes that although the conditions (i.e., a second Level 1 trigger) that lead to the Level 2 trigger do not necessarily pose an immediate acute public health threat, it may still pose a potential serious health impact because of the persistence of the contamination and the failure of the system to address it. EPA believes that a Level 2 assessment is warranted in this case because a more in-depth examination of the system is needed to determine the cause of the persistent occurrences of total coliforms. EPA also notes that, ideally, a well-performed Level 1 assessment and appropriate corrective action will prevent most systems from developing conditions that lead to a Level 2 assessment.
• Atypical events that may affect distributed water quality or indicate that distributed water quality was impaired;
• Changes in distribution system maintenance and operation that may affect distributed water quality, including water storage;
• Source and treatment considerations that bear on distributed water quality, where appropriate;
• Existing water quality monitoring data; and
• Inadequacies in sample sites, sampling protocol, and sample processing.
The system must conduct the assessment consistent with any State directives that tailor specific assessment elements with respect to the size and type of the system and the size, type, and characteristics of the distribution system. The PWS must complete the assessment as soon as practical after the PWS learns it has exceeded a treatment technique trigger. Failure to conduct a triggered assessment is a treatment technique violation. See section III.F.1.b of this preamble,
A Level 1 assessment must be conducted when a PWS exceeds one or more of the Level 1 treatment technique triggers specified previously. Under the rule, this self-assessment consists of a basic examination of the source water, treatment, distribution system and relevant operational practices. The PWS should look at conditions that could have occurred prior to and caused the total coliform-positive sample. Example conditions include treatment process interruptions, loss of pressure, maintenance and operation activities, recent operational changes, etc. In addition, the PWS should check the conditions of the following elements: sample sites, distribution system, storage tanks, source water, etc.
A Level 2 assessment must be conducted when a PWS exceeds one or more of the Level 2 treatment technique triggers specified previously. It is a more comprehensive examination of the system and its monitoring and operational practices than the Level 1 assessment. The level of effort and resources committed to undertaking a Level 2 assessment is commensurate with the more comprehensive investigation and review of available information, and engages additional parties and expertise relative to the Level 1 assessment. Level 2 assessments must be conducted by a party approved by the State: the State itself, a third party, or the PWS where the system has staff or management with the required certification or qualifications specified by the State. If the PWS or a third party conducts the Level 2 assessment, the PWS or third party must follow the State requirements for conducting the Level 2 assessment. The PWS must also comply with any expedited actions or additional actions required by the State in the case of an
The PWS must submit the completed assessment form for either a Level 1 or Level 2 assessment to the State for review within 30 days after the PWS learns that it has exceeded the trigger. Failure to submit the completed assessment form after the PWS properly conducts the assessment is a reporting violation (see section III.F.1.d of this preamble,
The completed assessment form must include assessments conducted, all sanitary defects found (or a statement that no sanitary defects were identified), corrective actions completed, and a proposed timetable for any corrective actions not already completed. Upon completion and submission of the assessment form by the PWS to the State, the State must determine if the system has identified the likely cause(s) for the Level 1 or Level 2 treatment technique trigger and, if so, establish that the system has corrected the problem(s). Whether or not the system has identified any sanitary defects or a likely cause for the trigger, the State may determine whether or not the assessment is sufficient, and if it is not, the State must discuss its concerns with the system. The State may require revisions to the assessment after the consultation.
EPA agrees that there already is some level of assessment and corrective action being performed voluntarily by proactive systems, and accounted for this fact in the economic analyses for the final RTCR (see chapter 7.4.5 of the RTCR EA (USEPA 2012a),
EPA acknowledges that small systems, especially small NCWSs may not have the knowledge and the resources that other systems, like CWSs, have. However, most small NCWSs are simple systems that often consist of just the source water and a limited distribution system. EPA anticipates then that the level of effort and expertise needed to conduct a Level 1 assessment at these systems will not be considerable. At a minimum, the Level 1 assessment should be conducted or managed by a responsible party of the PWS. While EPA does not expect the Level 1 assessor to be an expert in the requirements of SDWA, the assessor should be someone familiar enough with the system to answer the questions in the Level 1 assessment form or to gather correct information from others who work for the system.
To help in the implementation of the assessment, a PWS may conduct a Level 1 assessment while it consults with the State by phone. This is in lieu of having the State physically perform the assessment when the PWS needs assistance. Generally, the PWS would still need to fill-out the assessment form and submit it to the State. The State would still need to review the form but the process will not take as much effort as previously anticipated since the State would already be familiar with that particular assessment. It is also permissible that the State fill out the form while the PWS consults with the State by phone when doing the assessment. The State may also want to set up alternative methods for the PWS to submit the assessment form, such as via an online submission or email. The State should document its process in the primacy application.
EPA disagrees that the assessment requirements will reduce follow-up sampling. PWSs are still required to take repeat samples following a routine total coliform-positive sample. PWSs on quarterly or annual monitoring must conduct additional routine monitoring the month following the total coliform-positive sample. In addition, nothing in the treatment technique requirements precludes a PWS from taking additional compliance samples or special purpose samples such as those taken to determine whether disinfection practices are sufficient following pipe replacement or repairs (see § 141.853(b) of the RTCR).
EPA disagrees that PWSs conducting the assessment will “guess assess” the cause of the positive samples. Conducting an assessment is a methodical process that requires a PWS to evaluate the different elements of its operation and distribution system (§ 141.859(b)(2) of the RTCR specifies the minimum elements that an assessment must have, keeping in mind that some of the elements may not be applicable to some PWSs like small NCWSs). The RTCR requires that an assessment form be completed. The assessment form should help and guide the PWS in conducting the assessment by laying out the different elements the PWS must look into. EPA provides examples of assessment forms that States and PWSs can use to help them in conducting the assessment (these examples are given in Appendix X of the AIP (USEPA 2008c) and in Appendix A of the
Some commenters suggested that for systems with limited distribution systems that have a first Level 1 trigger, the Level 1 assessment should be delayed and the focus of the evaluation should be on the source water, and the Level 1 assessment should only be conducted if there is another Level 1 trigger.
The system may conduct an integrated assessment that meets the requirements of all applicable rules, such as the GWR and the RTCR, as long as the assessment is consistent with any State directives that tailor specific assessment elements with respect to the size and type of the system and the size, type, and characteristics of the distribution system, as required under § 141.859(b)(2) of the RTCR. EPA further notes that source water issues are one of the elements that need to be considered in a Level 1 (or 2) assessment where they may be a contributing factor to a coliform exceedance or other trigger. EPA expects that assessments at PWSs
EPA received comments both in support and against having two levels of assessment. The commenters in the second category concluded that both levels of assessment would involve the same effort. There were comments to eliminate the Level 1 assessment and emphasize the Level 2 assessment, as the Level 1 assessment will not lead to any meaningful evaluation and will only take up the State's resources. EPA disagrees that there is no need for two levels of assessment. The RTCR requires two levels of assessment to recognize that a higher level of effort to diagnose a problem should be applied to situations of greater potential public health concern such as repeated Level 1 triggers or an
EPA received comments that the qualifications of assessors are not clear in the rule. The commenters suggested including the qualifications in the rule or referencing the qualifications described in the
EPA does not require that a separate certification program be established to determine who can perform a Level 2 assessment. Instead of being prescriptive on who can conduct a Level 2 assessment, EPA is allowing the State to determine its criteria and process for approval of Level 2 assessors and to determine who is appropriate to conduct the assessment given the State's knowledge of the complexity of the system and the knowledge and policies of the State. Although the rule allows that certified operators may perform a Level 2 assessment if approved by the State, EPA recommends that States consider whether having the assessment done by someone from outside the system can provide a fresh perspective. Qualified certified operators can be allowed to conduct assessments at other systems.
EPA requested comments on how to ensure that a Level 2 assessment is more comprehensive than a Level 1 assessment (e.g., by possibly including asset management and capacity development). EPA asked in the proposed rule whether EPA should provide more detail in guidance or rule language, on the elements and differences between a Level 1 and Level 2 assessment. A majority of the commenters were against the inclusion of asset management and capacity development in the Level 2 assessment. EPA received comments stating that the proposed rule language regarding the two levels of assessment was adequate and that additional discussion about the differences between the two should instead be addressed in guidance. One commenter, on the other hand, said that there was no difference in the scope between the two assessments based on the way the proposed rule language was written.
EPA defined in § 141.2 both a Level 1 assessment and a Level 2 assessment to provide a better distinction between the two levels of assessment and facilitate the implementation of the RTCR. See section III.A.1 of this preamble,
EPA received comments to allow the extension of the assessment period beyond 30 days. A commenter suggested that intermediate deadlines for a Level 2 assessment triggered by the presence of
EPA expects that the PWS will conduct an assessment as soon as practical after the PWS receives notice or becomes aware that the system has exceeded a trigger. EPA imposes a 30-day limit because the possible occurrence of contamination, as indicated by the conditions that trigger the assessment, must be addressed immediately. The system has 30 days from the time it learns of exceeding the trigger to conduct the assessment and complete the corrective action. EPA believes that the 30-day period is sufficient time for problem identification and potential remediation of the problem in conjunction with the follow-up assessment in most cases. The system can work out a schedule with the State to complete the corrective action if more time is needed. It is very important, however, that the assessment is conducted as soon as possible within those 30 days. In the case of an
At any time during the assessment or corrective action phase, either the PWS or the State may request a consultation with the other entity to discuss and determine the appropriate actions to be taken. The system may consult with the State on all relevant steps that the system is considering to complete the corrective action, including the method of accomplishment, an appropriate timeframe, and other relevant information. EPA is not requiring this to be a mandatory consultation to provide ease of implementation for States. In many cases, consultation may not be necessary because the type of corrective action for the sanitary defect will be clear and can be implemented right away (e.g., replacement of a missing screen).
EPA acknowledges that it may or may not be possible to conclusively link the total coliform-
The RTCR requires that sanitary defects be corrected but does not mandate how the defects are to be corrected. States and PWSs may have other authorities under local ordinances and State laws that they may use to address the problem. For example, in cases where the location of the sanitary defect is outside the normal control of the PWS (e.g., cross connection occurring on private property), community water systems that are part of the local government may have some authority to address the problem under the public health code if the issue is affecting the water in the distribution system (AWWA 2010) or through other local ordinances such as plumbing codes. EPA encourages States and PWSs to work together to determine the best course of action when correcting sanitary defects.
Some commenters said that it is unclear how a water utility should demonstrate that it has corrected a sanitary defect and how the primacy agency would take enforcement action on any defects identified by the system. One commenter suggested that EPA clarify whether a sanitary defect would be considered corrected if subsequent samples are total coliform-negative. EPA notes that because of the intermittent nature of microbial contamination, it may not be adequate to just rely on follow-up samples to verify that the problem has been corrected or has gone away. Depending on the nature of the sanitary defect, States may require additional measures to ensure that the integrity of the distribution system has been restored (e.g., pressure monitoring, follow-up inspection of tanks, etc.). States have discretion on how to determine that defects have been corrected (e.g., site visits, sanitary surveys, etc.). Failure to correct identified sanitary defects is a treatment technique violation and States are expected to use their legal authority to take enforcement action to return the system to compliance.
EPA is establishing the definition of the following violations—MCL violation, treatment technique violation, monitoring violation, and reporting violation—consistent with the proposed RTCR. Each type of violation requires public notice, the level of which depends on the severity of the violation (see section III.G of this preamble,
• A routine sample is total coliform-positive and one of its associated repeat samples is
• A routine sample is
• A system fails to take all required repeat samples following a routine sample that is positive for
• A system fails to test for
• A system fails to conduct a required assessment within 30 days of notification of the system exceeding the trigger (see section III.E of this preamble,
• A system fails to correct any sanitary defect found through either a Level 1 or 2 assessment within 30 days (see also section III.E of this preamble,
• A seasonal system fails to complete a State-approved start-up procedure prior to serving water to the public. This is further discussed later on in the
There is no treatment technique violation associated solely with a system exceeding one or more action triggers (Level 1 or Level 2 triggers).
• A system fails to take every required routine or additional routine sample in a compliance period.
• A system fails to test for
• A system fails to timely submit a monitoring report or a correctly completed assessment form after it properly monitors or conducts an assessment by the required deadlines. The PWS is responsible for reporting this information to the State regardless of any arrangement with a laboratory.
• A system fails to timely notify the State following an
• A seasonal system fails to submit certification of completion of State-approved start-up procedure. This is further discussed in the
EPA received comments that supported the proposed definition of the violations. Others offered suggestions to ease implementation burden. For example, one commenter recommended that only one violation be generated for each compliance situation (i.e., if an MCL violation is determined, then neither treatment technique, nor monitoring, nor reporting violation can be generated; if a treatment technique violation is determined, then neither monitoring nor reporting violation can be generated). However, EPA believes that it is important to track each of these situations individually so that the State can be aware of the system's progress resolving situations and complying with all rule requirements. Each situation is also accompanied by public notification requirements so that consumers can be aware of problems at the water system and the progress and efforts to correct them. EPA believes it is important to continue to notify the public of each situation.
Some commenters were uncertain about when failure to take all repeat samples triggers the associated Tier 1 PN (i.e., when the 24-hour clock starts). Some questioned how the State will know when the failure to collect these repeats has occurred in such a way to assure timely Tier 1 PN when the sample results do not need to be reported until the 10th day of the month following the month in which the samples were collected. EPA believes that State programs have been designed to address timely response to follow-up requirements such as the need to take repeat samples, through education, compliance assistance, and tracking and enforcement programs. The time limit is established to assure that systems act promptly to investigate positive samples. Some States require direct electronic reporting of results, which provides for more timely notification, and EPA encourages such practice. In the situations where it is not possible for the system to take the repeat samples within 24 hours, States have the discretion to waive the requirement (see section III.D of this preamble,
Other commenters suggested adding to the list of violations. EPA received comment that there should be a violation when a seasonal system fails to perform the start-up procedure. EPA agrees and is designating such failure as a treatment technique violation. EPA is also requiring seasonal systems to certify that they have completed the start-up procedure and submit this certification to the State. Failure to do so is a reporting violation. EPA believes that performing start-up procedures is very important to mitigate the possible risks resulting from the seasonal system being shutdown, depressurized, or drained. Designating such failure as a violation will compel seasonal systems to make sure that they take the necessary steps to mitigate public health risks before serving water to the public.
Other commenters, on the other hand, suggested deleting the MCL violation resulting from failure to take all required repeat samples following a routine
Some commenters do not agree with the treatment technique violation because they do not agree that the treatment technique requirements of the RTCR are appropriate. For a discussion on the treatment technique, see section III.E of this preamble,
Commenters also supported EPA's proposal of separating the combined monitoring and reporting violation under the 1989 TCR into two separate violations. One commenter noted that it has been difficult to determine the significance of a violation when two types of violations—monitoring and reporting—are captured and reported under only one heading. It is, therefore, difficult to develop performance measures and ensure data quality when the two violations are combined.
EPA is promulgating changes to the public notification (PN) requirements contained in 40 CFR part 141 subpart Q to correspond to the violation provisions of the RTCR (see section III.F of this preamble,
Tier 1 PN is required for NPDWR violations and situations with significant potential to have serious adverse effects on human health as a result of short-term exposure, such as could occur with exposure to fecal pathogens. Tier 1 PN is required as soon as possible but no later than 24 hours after the system learns of the violation. An
In the 1989 TCR, if a system has an acute MCL violation, which is based on
Tier 2 PN is required for all NPDWR violations and situations with potential to have serious adverse effects on human health not requiring Tier 1 PN. The system must provide public notice as soon as practical, but no later than 30 days after the system learns of the violation. A treatment technique violation under the RTCR meets these criteria because it is an indication that the public water system failed to protect public health when the system failed to conduct an assessment or complete corrective action following identification of sanitary defects. Sanitary defects indicate that a pathway may exist in the distribution system that has potential to cause public health concern.
In the 1989 TCR, a system is required to publish a Tier 2 PN when the system has a non-acute MCL violation, which is based on total coliform presence. Under the RTCR, a system is required to publish a Tier 2 PN if the system violates the coliform treatment technique requirements. Also, EPA is modifying the standard health effects language for coliform to emphasize the assessment and corrective action requirements of the RTCR.
Tier 3 PN is required for all other NPDWR violations and situations not included in Tier 1 or Tier 2. The existing Tier 3 PN requires a system to provide public notice no later than one year after the system learns of the violation or situation or begins operating under a variance or exemption. Monitoring and reporting violations have historically been designated as Tier 3 PN unless an immediate public health concern has been identified (e.g., failure to monitor for
In the 1989 TCR, a system is required to publish a Tier 3 PN when the system has a monitoring and reporting violation. In the RTCR, monitoring violations are considered distinct from reporting violations. Both types of violations require Tier 3 PN.
Consumer confidence report (CCR) requirements are also modified. Health effects language for the CCR for total coliforms and
CCR requirements are updated to reflect the advisory committee's recommendations that total coliforms be used as an indicator to start an evaluation process that, where necessary, will require the PWS to correct sanitary defects. EPA believes it is most appropriate to inform the public about actions taken, in the form of assessments and corrective actions, since failure to conduct these activities lead to treatment technique violations under the RTCR. Because the RTCR no longer includes the total coliform MCL but now includes a trigger, EPA believes that systems no longer need to report the number of total coliform-positive samples via the CCR, since that could cause confusion or inappropriate changes in behavior among consumers. In addition, the CCR requirements will also reflect the removal of fecal coliform.
In general, EPA received comments in support of the PN requirements of the RTCR. The commenters stated that the changes are consistent with the intent and recommendations of the TCRDSAC. However, there were a few commenters who disagreed on certain aspects of the requirements. These comments are discussed in detail in the following paragraphs.
EPA requested comment on whether the elimination of the PN associated with the presence of total coliforms (i.e., the Tier 2 PN associated with the non-acute MCL violation under the 1989 TCR) will result in a loss of information to consumers. Although the majority of the commenters said that it would not result in a loss of information, some commenters said that it would. One commenter said that the PN associated with the presence of total coliforms has been an effective tool to motivate PWSs to take corrective actions; to eliminate such PN and replace it with a PN associated with treatment technique violations is not “equal to or better” public health protection. One commenter believed that if the non-acute PN requirement is eliminated, then NCWSs would not have the tool to communicate to the public the possible health risk as these PWSs are not required to send out a CCR.
As EPA discussed in section III.B of this preamble,
EPA received comments that under the 1989 TCR some States require a Tier 1 PN when a NCWS has a non-acute MCL violation. EPA would like to note that the 1989 TCR requires a Tier 2 PN for a non-acute MCL violation, not a Tier 1 PN. Some States using their own authority have chosen to elevate the PN
EPA notes that NCWSs are required, like CWSs, to publish a PN, either a Tier 1, Tier 2, or Tier 3, depending on the violation. Even if they are not required to issue a CCR, NCWS must provide PN in other forms or methods consistent with the requirements of 40 CFR 141.153. States can also direct the PWS to perform additional public health measures (e.g., boil water orders, elevated PNs, etc.) as allowed under SDWA and the authority granted to them by their own legislation similar to EPA's authority under section 1431 of SDWA.
EPA requested comment on whether to require special notice to the public of sanitary defects similar to the special notice requirements for significant deficiencies under the GWR. Most commenters were against including such provision. They stated that it would cause confusion and unnecessary alarm to customers. Several commenters noted that it is not appropriate for sanitary defects under the RTCR to have similar notice requirements as that of significant deficiencies under the GWR. The special notice requirement for significant deficiencies under the GWR only applies to NCWSs since they are not required to send out a CCR. EPA agrees that no special notice of sanitary defects is necessary and is not including such provision in the RTCR.
EPA received comments suggesting modifications to the standard PN and CCR health effects language regarding total coliforms and the treatment technique violations included in the proposed RTCR. EPA has modified the standard health effects language found in Subpart O and Subpart Q of part 141 to make the language consistent with the use of total coliforms in the RTCR as an indicator of a potential pathway through which a contamination can enter the distribution system.
• Notify the State no later than the end of the next business day after it learns of an
• Report an
• Report a treatment technique violation to the State no later than the end of the next business day after it learns of the violation. The PWS must also notify the public in accordance with 40 CFR part 141 subpart Q.
• Report monitoring violations to the State within ten days after the system discovers the violation, and notify the public in accordance with 40 CFR part 141 subpart Q.
• Submit completed assessment form to the State within 30 days after determination that the coliform treatment technique trigger has been exceeded.
• Notify the State when each scheduled corrective action is completed for corrections not completed by the time of the submission of the assessment form.
• A seasonal system must certify that it has completed a State-approved start-up procedure prior to serving water to the public.
EPA is adding the submission of the assessment form and the certification of completion of start-up procedure to the reporting requirements under § 141.861 of the RTCR for better clarity and ease of tracking compliance. In the proposed rule, the submission of the assessment form is found only in § 141.859,
The system must also maintain a record of any repeat sample taken that meets State criteria for an extension of the 24-hour period for collecting repeat samples.
EPA received comments that support the reporting and recordkeeping requirements proposed by EPA. Most commenters said that the timeframes are appropriate and are consistent with EPA's practice regarding reporting and recordkeeping requirements in other regulations under SDWA. One commenter, however, said that EPA should standardize the recordkeeping requirements in all its rules, including the RTCR, for a period equal to the compliance cycle (i.e., nine years). The commenter adds that by standardization and being consistent with the compliance cycle, all monitoring and compliance records including corrective actions will be easily maintained, tracked, and available for State's inspections without the confusion of varying recordkeeping durations with different regulations. However, EPA's suite of drinking water regulations addresses different kinds of contaminants with different inherent characteristics, occurrence, and health effects. Because of these differences, monitoring of these contaminants occurs at different frequencies; hence, different reporting and recordkeeping requirements. The reporting and recordkeeping requirements specific to a
A second commenter expressed concern that the ETV program was established to facilitate incorporation of commercially-ready test kits into the market, which differs from the task of determining what are appropriate performance criteria for SDWA compliance methods. This commenter also expressed concern that the ETV program has not generated rigorous enough product evaluations adequate to support approval of alternative analytical procedures.
Lastly, this commenter also suggested that the ETV studies do not have the same level of independence in protocol development as other third party studies, stating that in ETV studies, reviewers modify the protocol at the beginning of each study, and that for the recent verification study, there was not a clear discussion between the study organizers and the technical review panel regarding development of the final test protocol.
EPA will take the comments concerning the ETV program into consideration as the Agency develops a final approach to the reevaluation of methods. EPA notes that ETV work is accomplished through cooperative agreements between EPA and private non-profit testing and evaluation organizations. ETV partners verify performance claims but do not endorse, certify or approve technologies. EPA has the regulatory authority and the responsibility to approve/disapprove methods and typically does so based on a review of method performance data generated by third party laboratories. Testing under the ETV program is typically paid for by participating vendors.
ETV expert panels typically include representatives from industry, academia, EPA, and other stakeholders and collaborators. The rigor of an ETV study is determined by the objectives of the study and the resources available. If such a study is conducted, EPA, by virtue of participation in the expert panel, would ensure that the study is rigorous enough to meet the Agency's needs.
EPA held a series of three open technical webinars in fall 2010. Participants recommended the development of a coliform strain library. The Water Research Foundation has funded a project to accomplish this task and the Agency will be monitoring the progress of that work as it considers the appropriate course of action.
Many comments expressed concern over the ability of the States to enforce such a provision. Additionally, several commenters noted that this provision would hold the water system accountable for the actions of the laboratory, which the public water system does not have immediate control over.
EPA believes that the public is well served by timely reporting of results but recognizes some of the challenges associated with addressing this via regulation. Accordingly, the Agency intends to use guidance documents associated with this regulation to address this issue. Through the guidance documents, the Agency expects to urge public water systems to establish language in their contract with the laboratories requiring that the water system be notified by the laboratory within 24 hours of any positive results.
Additionally, the Agency plans to encourage the certified laboratory community to ensure that laboratories
ii. Taking repeat samples within 24 hours. During the Advisory Committee meetings, the factors impacting the timeframe between a coliform detection and the collection of the repeat sample were discussed. It was noted that in some cases, repeat samples are not collected for several days after notification of a coliform detection. EPA requested comment in the proposed rule whether the RTCR should require repeat samples be taken within 24 hours of a total coliform-positive with no (or limited) exceptions.
Several commenters noted that including such a provision in the final RTCR would create a hardship on systems, with many mentioning that weekend sample collection is a challenge for many small systems. Concern was expressed that this provision in the final rule would result in more monitoring violations but not necessarily change repeat sample collection practice.
Based on consideration of the concerns expressed, EPA is not changing the provision that States may extend the 24-hour limit if the system has a logistical problem in collecting the repeat samples within 24 hours that is beyond its control. See sections III.D of this preamble,
As explained in the proposed rule, EPA recognizes that this provision may slightly decrease the amount of time that a water system has to get the sample to the lab, by approximately 30 minutes or less. EPA believes the impact of this provision is minimal, as a well managed laboratory will be able to recognize a sample that is received near the end of the holding time and make this sample a priority for analysis.
The inclusion of this provision in the final rule serves to ensure consistency in the analyses of the compliance samples on a national basis and will have a minimal impact on water systems. As such, the provision is included in the final rule.
All filtration series must begin with membrane filtration equipment that has been sterilized by autoclaving. Exposure of filtration equipment to UV light is not adequate to ensure sterilization. Subsequent to the initial autoclaving, exposure of the filtration equipment to UV light may be used to sanitize the funnels between filtrations within a filtration series. Alternatively, disposable membrane filtration equipment that is pre-sterilized by the manufacturer (i.e., disposable funnel units) may be used.
No comments were received on the following changes to the methods table. Accordingly these modifications have been incorporated into the final rule.
• The table is organized by methodology.
•
• The 18th and 19th editions
• The references to Standard Methods 9221A and 9222A are removed.
• The reference to Standard Methods 9221B is changed to 9221B.1, B.2.
• The reference to Standard Methods 9221D is changed to 9221D.1, D.2.
• The citation for MI agar is changed to EPA Method 1604.
• The table clarifies that Standard Methods 9221 F.1 and 9222 G.1
• The table clarifies the correct formulation for
• The table reflects the approval of a modified Colitag method for the simultaneous detection of
The proposed rule also contained a provision to allow the use of Standard Methods 9221D in an enumerative format, specifically, in the multiple tube format as described in Standard Methods 9221B.
Since use of this method in a multiple-tube format does not change the formulation of the medium, nor the volume of sample analyzed, the Agency has determined that an ATP evaluation is not necessary. Therefore, the provision is included in the final rule.
Based on further consideration of the potential additional burden on both the PWSs and the States, EPA has determined that the provision in the 1989 TCR will stay as is: “Systems are encouraged but not required to hold samples below 10 deg. C during transit.”
Finally, in this final rule, there have been some further changes to the analytical methods table to improve its clarity. Such changes include the addition of the approved online versions of Standard Methods in the analytical methods table and correction of some clerical errors.
Systems falling under direct oversight of EPA (e.g., Tribal systems, PWSs in Wyoming, and PWSs in States that have not yet obtained primacy for the RTCR) where EPA acts as the State, must comply with decisions made by EPA for implementation of the RTCR. Under § 142.16(q), to obtain primacy for the RTCR, States/Tribes are required to demonstrate how they intend to implement the various requirements of the rule; States/Tribes may do so in a manner that maximizes the efficiency of the rule for the States/Tribes and the PWSs while maintaining or increasing the effectiveness of the rule to protect public health. EPA has the same responsibilities when the Agency acts as the State in directly implementing the RTCR. In the proposed RTCR, EPA requested comment on whether to make this explicit in the final RTCR. All commenters who responded to this request for comment were in support of such action. EPA already has such authority or flexibility in direct implementation situations, both in the 1989 TCR and in all other NPDWRs, but solicited comment and has added this provision to the final rule for the sake of clarity in situations where EPA directly implements the RTCR.
Consistent with SDWA section 1412(b)(10), States and PWSs are given three years after the promulgation of the RTCR to prepare for compliance with the rule. PWSs must begin compliance with the requirements of the RTCR on April 1, 2016, a compliance effective date that is just over three years from promulgation and coincides with quarterly monitoring schedules applicable to many water systems. EPA believes that capital improvements generally are not necessary to ensure compliance with the RTCR. However, a State may allow individual systems up to two additional years to comply with the RTCR if the State determines that additional time is necessary for capital improvements, in accordance with SDWA section 1412(b)(10).
EPA is making three modifications to the 1989 TCR provisions regarding the best technology, treatment techniques, or other means available for achieving compliance with the MCL for
• “Coliforms” in 40 CFR 141.63(d)(1) under the 1989 TCR is replaced with “fecal contaminants” in 40 CFR 141.63(e)(1).
• “Cross connection control” is added to the list of proper maintenance practices for the distribution system in 40 CFR 141.63(e)(3) (formerly 40 CFR 141.63(d)(3)).
• Subparts P, T, and W (filtration and/or disinfection of surface water), and subpart S (disinfection of ground water), are added in 40 CFR 141.63(e)(4) (formerly 40 CFR 141.63(d)(4)).
The Agency is listing the same technology, treatment techniques, or other means available for achieving compliance with the MCL for
EPA received comments that supported the modifications to the list of best available technologies (BATs). The Agency also received comments suggesting the addition of other items to the list, such as the optional barriers that may qualify systems for reduced monitoring, unidirectional flushing, storage tank inspection, maintenance, and cleaning, and re-pressurization. EPA heard from a few commenters who are against the inclusion of cross connection control in the list of BATs. They stated that it is not appropriate to do so because EPA has not defined cross connection control, and risks associated with cross connection and backflow are being addressed in the research efforts of the Research and Information Collection Partnership (see
The methods for achieving compliance listed in 40 CFR 141.63(e) represent the technology, treatment technique, and other means which EPA finds to be feasible for purposes of meeting the MCL for
EPA believes that the inclusion of cross connection control to the list of BATs is appropriate given the public health risk associated with unprotected cross connection. Several States already require that PWSs implement a cross connection control program. As
EPA is not allowing variances or exemptions to the
EPA is adding a note to the provision in § 141.4(a) to clarify that small system variances or exemptions for treatment technique requirements in this rule and other rules that control microbial contaminants may not be granted under SDWA section 1415(e)(6)(B) and § 142.304(a). This action reflects the statutory provision within EPA's regulations and adds no new requirements or limitations to any of these rules.
Most commenters support these changes. However, EPA also received comment that supported the retention of the variance for the presence of biofilms. The commenter said that the retention of the biofilm variance would require PWSs to have a biofilm control program in place that will require ongoing assessment and research to determine and address the cause of the biofilms, thereby providing valuable information. Some commenters suggested that if the biofilm variance is removed, EPA should make it clear that the finding of biofilms as the cause of the positive sample during an assessment is not a sanitary defect which requires correction.
As discussed previously in section IV.B.1 of this preamble,
EPA recognizes that there are linkages among monitoring requirements between the 1989 TCR and other NPDWRs. For instance, under the Surface Water Treatment Rule (SWTR) (USEPA 1989b, 54 FR 27486, June 29, 1989) and the Stage 1 Disinfectants and Disinfection Byproducts Rule (Stage 1 DBPR) (USEPA 1998a, 63 FR 69389, December 16, 1998), the residual disinfectant monitoring must be conducted at the same time and location at which total coliform samples are taken, as required. Under the SWTR, high measurements of turbidity in an unfiltered subpart H system (i.e., a system using surface water or ground water under the influence of surface water) trigger additional total coliform samples; and compliance with the total coliform MCL under the 1989 TCR is one of the criteria for a PWS to avoid filtration. Under the GWR, 1989 TCR distribution system monitoring results determine whether a system is required to conduct source water monitoring.
For the criteria for avoiding filtration in the SWTR (§ 141.71(b)(5)), the Agency is clarifying that unfiltered systems must continue to meet the
After considering other possible linkages between the RTCR and the SWTR, GWR, Stage 1 DBPR, Stage 2 DBPR (USEPA 2006e, 71 FR 388, January 4, 2006), and Airline Drinking Water Rule (USEPA 2009), EPA has concluded that the only other necessary revision to these NPDWRs is to update the references to the 1989 TCR at 40 CFR 141.21, which is superseded by 40 CFR part 141 subpart Y beginning April 1, 2016. The monitoring requirements themselves are not changing as a result of the RTCR. Residual disinfectant samples must still be taken at the same time and location at which total coliform samples are taken under the RTCR. High measurements of turbidity under the SWTR would still result in additional total coliform samples. Results of total coliform monitoring under the RTCR would still be a trigger for the GWR. Although there are changes to the dual-purpose sampling requirement (i.e., one sample to satisfy both the repeat monitoring requirement of the RTCR and the triggered source water monitoring requirement of the GWR), these changes are addressed in the RTCR and not in the GWR (see section III.D of this preamble,
EPA also received comments regarding the relationship between source water evaluations under the GWR and assessments under RTCR; those comments are addressed in section III.E.2 of this preamble,
The RTCR is also not changing the existing sanitary survey requirements
EPA did not receive any other substantial comments regarding the relationships between RTCR and other NPDWRs.
EPA recognizes that there are sections of part 141 that will no longer be applicable after the RTCR compliance effective date. EPA intends to review and update these sections in the future.
In the proposed RTCR, EPA discussed the potential public health implications associated with poorly maintained storage facilities (such as those associated with significant sediment accumulation inside the tank and the presence of breaches). EPA requested comment and supporting information regarding the current status of storage tanks and their inspection as implemented by individual States and PWSs. Some of the information EPA requested comment on included the state and condition of tanks that have been cleaned and inspected, costs of storage tank inspection and cleaning, the frequency of inspection and cleaning, and how public health can be better protected. Based on the comments and information that EPA received, the Agency is considering the need for inspection requirements for finished water storage facilities that would help mitigate potential public health risks if PWSs do not inspect their storage facilities as recommended by industry guidance (e.g., American Water Works Association (AWWA) Manual 42). EPA plans to provide further information on the results of its consideration of this issue in a future notice.
SDWA establishes requirements that States or eligible Indian Tribes must meet to assume and maintain primary enforcement responsibility (primacy) to implement national primary drinking water regulations. This section describes the requirements that States must meet to maintain primacy under the RTCR, including adoption of drinking water regulations that are no less stringent than the RTCR and meeting recordkeeping and reporting requirements. This section also provides an update on the Safe Drinking Water Information System (SDWIS) revisions that EPA is developing to facilitate the implementation of RTCR.
States are required to adopt or maintain requirements that are at least as stringent as all of the sections of 41 CFR part 141that are revised or added by the RTCR. SDWA provides two years after promulgation of the RTCR (plus up to two more years if the Administrator approves) for the State to adopt their regulations. States may adopt more stringent requirements (e.g., requiring all systems to conduct routine monthly monitoring). Many States have used this authority in the past to improve public health protection and/or simplify implementation.
EPA grants interim primary enforcement authority for a new or revised regulation during the period in which EPA is making a determination with regard to primacy for that new or revised regulation. States that have primacy (including interim primacy) for every existing NPDWR already in effect may obtain interim primacy for the RTCR, beginning on the date that the State submits the application for this rule to EPA, or the effective date of its revised regulations, whichever is later. A State that wishes to obtain interim primacy for future NPDWRs must obtain primacy for this rule.
EPA regulations at 40 CFR part 142 contain the program implementation requirements for States to obtain primacy for the public water supply supervision program as authorized under SDWA section 1413. In addition to adopting rule requirements that are at least as stringent as the requirements of the RTCR, and basic primacy requirements specified in 40 CFR part 142, States are required to adopt special primacy provisions pertaining to each specific regulation where State implementation of the rule involves activities beyond general primacy provisions. States must include these regulation-specific provisions in their application for approval of any program revision. States must also continue to meet all other conditions of primacy for all other rules in 40 CFR part 142.
The RTCR provides States with flexibility to implement the requirements of the rule in a manner that maximizes the efficiency of the rule for the States and water systems while increasing the effectiveness of the rule to protect public health. To ensure an effective and enforceable program under the RTCR, the State primacy application for RTCR must include a description of how the State will meet the following special primacy provisions contained in the RTCR at 40 CFR part 142:
• Baseline and Reduced Monitoring Provisions—The State primacy application must indicate what baseline and reduced monitoring provisions of the RTCR the State will adopt and describe how the State will implement the RTCR in these areas so that EPA can be assured that implementation plans meet the minimum requirements of the rule.
• Sample Siting Plans—States must describe the frequency and process used to review and revise sample siting plans in accordance with 40 CFR part 141, subpart Y to determine adequacy.
• Reduced Monitoring Criteria—The primacy application must indicate whether the State will adopt the reduced monitoring provisions of the RTCR (e.g., reduced monitoring provisions for ground water systems serving 1,000 or fewer people, including provisions on dual purpose sampling). If the State adopts the reduced monitoring provisions, it must describe the specific types or categories of water systems that will be covered by reduced monitoring and whether the State will use all or a reduced set of the optional criteria. For each of the reduced monitoring criteria, both mandatory and optional, the State must describe how the criteria will be evaluated to determine when systems qualify.
• Assessments and Corrective Actions—States must describe their process to implement the new assessment and corrective action phase of the rule. The description must include how the State will ensure that Level 2 assessments are more comprehensive than Level 1 assessments, examples of sanitary defects, examples of assessment forms or formats, and methods that systems may use to consult with the State on appropriate corrective actions.
• Invalidation of routine and repeat samples collected under the RTCR—States must describe their criteria and process to invalidate total coliform-positive and
• Approval of individuals allowed to conduct RTCR Level 2 assessments—States must describe their criteria and process for approval of individuals allowed to conduct RTCR Level 2 assessments.
• Special monitoring evaluation—States must describe how they will perform special monitoring evaluations during sanitary surveys for ground water systems serving 1,000 or fewer people to determine whether systems are on an appropriate monitoring schedule.
• Seasonal systems—States must describe how they will identify seasonal systems, how they will determine when systems on less than monthly monitoring must monitor, and what will be the seasonal system start-up provisions.
• Additional criteria for reduced monitoring—States must describe how they will require systems on reduced monitoring to demonstrate, where appropriate:
• Criteria for extending the 24-hour period for collecting repeat samples—If the State elects to use a set of criteria in lieu of case-by-case decisions, they must describe the criteria they will use to waive the 24-hour time limit for collecting repeat samples after a total coliform-positive routine sample, or to extend the 24-hour limit for collection of samples following invalidation. If the State elects to use only case-by-case waivers, the State does not need to develop and submit criteria.
Commenters generally supported the inclusion of these activities in the primacy application and emphasized the importance of the flexibility and discretion that this approach provides for States to build on existing authorities of the 1989 TCR and focus on systems with the greatest need. They suggested that EPA allow States as much flexibility and discretion as possible to design their approach to implementing the RTCR, including how to address seasonal water systems, qualifications of assessors, the content of sample siting plans, and compliance with multiple rules (e.g., coordination between 1989 TCR/RTCR and GWR compliance), and how to consider multiple Level 1 assessments where the cause of the first Level 1 assessment has been identified and corrected. However, some commenters suggested removal of some of the special primacy requirements, such as those regarding seasonal system startup procedures and how the States will review sample siting plans, implement the assessment and corrective action phase, and determine who is approved to conduct Level 2 assessments. EPA is maintaining these primacy requirements in the RTCR because they provide the States with the flexibility to design their programs to fit their own needs without prescriptive, one-size-fits-all requirements. Describing how the State will accomplish them in the primacy application assures that consumers nationwide are receiving adequate and comparable public health protection under the rule.
EPA also requested comment on whether it is appropriate to have States describe their criteria for waiving or extending the 24-hour limit to collect repeat samples as a special primacy condition, or instead have States keep records of decisions to waive and/or extend the 24-hour limit. The majority of the commenters supported the former option as it reduces paperwork burden and adds flexibility to the implementation of the RTCR. EPA concurs and added the waiver or extension of the 24-hour limit to the special primacy requirements as an option for States that would rather describe their criteria for waiving or extending the 24-hour limit in their primacy application, instead of having to make the decision on a case-by-case basis. States that elect to use only case-by-case waivers do not need to develop and submit criteria.
The current regulations in 40 CFR 142.14 require States with primacy to keep records, including: analytical results to determine compliance with MCLs, maximum residual disinfectant levels (MRDLs), and treatment technique requirements; PWS inventories; State approvals; enforcement actions; and the issuance of variances and exemptions. Consistent with the recordkeeping requirements of the current regulations, the RTCR requires States to keep records and supporting information for each of the following decisions or activities for five years:
• Any case-by-case decision to waive the 24-hour time limit for collecting repeat samples after a total coliform-positive routine sample, or to extend the 24-hour limit for collection of samples following invalidation.
• Any decision to allow a system to waive the requirement for three routine samples the month following a total coliform-positive sample. The record of the waiver decision must contain all the items listed in §§ 141.854(j) and 141.855(f) of the RTCR.
• Any decision to invalidate a total coliform-positive sample. If the State decides to invalidate a total coliform-positive sample as provided in § 141.853(c)(1) of the RTCR, the record of the decision must contain all the items listed in that paragraph.
Also, consistent with the recordkeeping requirements of the current regulations, under the RTCR States must retain records of each of the following decisions in such a manner that each system's current status may be determined at any time:
• Any decision to reduce the total coliform monitoring frequency for a community water system serving 1,000 or fewer people to less than once per month, as provided in § 141.855(d) of the RTCR; and what the reduced monitoring frequency is. A copy of the reduced monitoring frequency must be provided to the system.
• Any decision to reduce the total coliform monitoring frequency for a non-community water system using only ground water and serving 1,000 or fewer people to less than once per quarter, as provided in § 141.854(e) of the RTCR, and what the reduced monitoring frequency is. A copy of the reduced monitoring frequency must be provided to the system.
• Any decision to reduce the total coliform monitoring frequency for a non-community water system using only ground water and serving more than 1,000 persons during any month the system serves 1,000 or fewer people, as provided in § 141.857(d) of the RTCR. A copy of the reduced monitoring frequency must be provided to the system.
• Any decision to waive the 24-hour limit for taking a total coliform sample for a public water system that uses surface water, or ground water under the direct influence of surface water, and that does not practice filtration in accordance with part 141, subparts H, P, T, and W, and that measures a source water turbidity level exceeding 1 nephelometric turbidity unit (NTU) near the first service connection.
• Any decision to allow a public water system to forgo
The RTCR also adds the following new recordkeeping requirement:
• States must keep records and supporting information regarding completed and approved RTCR assessments, including reports from the system that corrective action has been completed, for five years.
EPA currently requires at 40 CFR 142.15 that States report to EPA information such as violations, variance and exemption status, and enforcement actions. The RTCR requires States to develop and maintain a list of public water systems that the State is allowing to monitor less frequently than once per month for community water systems or less frequently than once per quarter for non-community water systems, including the compliance date (the date that reduced monitoring was approved) of the reduced monitoring requirement for each system.
EPA has begun to plan and develop the next version of SDWIS, SDWIS Next Gen, which will provide improved capabilities to update the system when there are new rule requirements and that enables more efficient data sharing among systems, laboratories, States, and EPA. EPA has established a governance structure to allow States to provide input on SDWIS Next Gen and begin identifying and prioritizing necessary system functions. Developing the portions of the system that are needed for implementing RTCR is a high priority. EPA remains committed to completing revisions to SDWIS that will facilitate implementation of RTCR and to completing them well in advance of the effective date of the rule.
Many commenters emphasized the importance of developing revisions to SDWIS sufficiently in advance of the effective date of the rule to allow for efficient, effective, and consistent implementation, tracking, recordkeeping, and reporting. As indicated above, EPA has already begun planning and development of SDWIS Next Gen to incorporate changes necessary to implement RTCR. EPA plans to complete the revisions necessary to implement RTCR well in advance of the RTCR effective date. Commenters also noted the advisory committee recommendation to develop metrics for evaluating the effectiveness of RTCR. Identifying metrics and incorporating them into SDWIS Next Gen will be part of the process completed by the governance structure with the input of stakeholders.
Some commenters objected to the requirement for States to maintain lists of systems on reduced monitoring and information on decisions on sample invalidations and waivers of time limits. EPA notes that these requirements also existed under the 1989 TCR and are not new under the RTCR. These requirements, and the requirements to maintain other information such as regarding assessments and review of seasonal system startup procedures, will be considered in the design of SDWIS Next Gen and incorporated to the extent possible to help States efficiently manage their implementation requirements.
Commenters also expressed the need for guidance to help States implement rule requirements regarding annual site visits for systems on annual monitoring, review of system RTCR monitoring frequency during sanitary surveys, review of seasonal system startup procedures, and identification of qualified assessors for Level 2 assessments. EPA plans to work with States to develop the necessary changes in implementation guidance well before the effective date of the RTCR.
This section summarizes the economic analysis (EA) for the final RTCR. The EA is an assessment of the benefits, both health and non-health-related, and costs to the regulated community of the final regulation, along with those of regulatory alternatives that the Agency considered. EPA developed the EA for the RTCR to meet the requirement of SDWA section 1412(b)(3)(C) for a Health Risk Reduction and Cost Analysis (HRRCA), as well as the requirements of Executive Order 12866, Regulatory Planning and Review, and Executive Order 13563, Improving Regulation and Regulatory Review, under which EPA must estimate the costs and benefits of the rule. The full EA for the final RTCR (RTCR EA) (USEPA 2012a) includes additional details and discussion on the topics presented throughout this section of the preamble. It is available in the docket (Docket ID No. EPA–HQ–OW–2008–0878) and is also published on the government's Web site at
SDWA section 1412(b)(3)(C) requires that the HRRCA for a NPDWR take into account the following seven elements: (1) Quantifiable and nonquantifiable health risk reduction benefits; (2) quantifiable and nonquantifiable health risk reduction benefits from reductions in co-occurring contaminants; (3) quantifiable and nonquantifiable costs that are likely to occur solely as a result of compliance; (4) incremental costs and benefits of rule options; (5) effects of the contaminant on the general population and sensitive subpopulations including infants, children, pregnant women, elderly, and individuals with a history of serious illness; (6) any increased health risks that may occur as a result of compliance, including risks associated with co-occurring contaminants; and (7) other relevant factors such as uncertainties in the analysis and factors with respect to the degree and nature of risk. A summary of these elements is provided in this section of the preamble, and a complete discussion can be found in the RTCR EA.
Both benefit and cost measures are adjusted using social discounting. In social discounting, future values of a rule's or policy's effects are multiplied by discount factors. The discount factors reflect both the amount of time between the present and the point at which these events occur and the degree to which current consumption is more highly valued than future consumption (USEPA 2000a). This process allows comparison of cost and benefit streams that are variable over a given time period. EPA uses social discount rates of both three percent and seven percent to calculate present values from the stream of benefits and costs and also to annualize the present value estimates. Historically, the use of three percent is based on after tax rates of return to consumers on relatively risk-free financial instruments, while seven percent is an estimate of average economy-wide before-tax rate of return to incremental private investment generally. For further information, see USEPA 2000a and OMB 1996.
The time frame used for both benefit and cost comparisons in this rule is 25 years. This time interval accounts for rule implementation activities occurring soon after promulgation (e.g., States adopting the criteria of the regulation) and the time for different types of compliance actions (e.g., assessments and corrective actions) to be realized up through the 25th year following rule promulgation. In the RTCR EA, EPA also presents the undiscounted stream of benefits and costs over the 25-year time frame in constant 2007 dollars (2007$).
The benefits described in this section are discussed qualitatively, and reductions in occurrence of total coliforms and
The net costs of the rule stem mostly from the new assessment and corrective action requirements as well as the revised monitoring provisions described earlier in this preamble. The costs discussed in this section are presented as annualized present values in constant 2007$.
This section of the preamble includes elements as follows: (A) Regulatory Options Considered, (B) Major Sources of Data and Information Used in Supporting Analyses, (C) Occurrence and Predictive Modeling, (D) Baseline Profiles, (E) Anticipated Benefits of the RTCR, (F) Anticipated Costs of the RTCR, (G) Potential Impact of the RTCR on Households, (H) Incremental Costs and Benefits, (I) Benefits from Simultaneous Reduction of Co-occurring Contaminants, (J) Change in Risk from Other Contaminants, (K) Effects of Fecal Contamination and/or Waterborne Pathogens on the General Population and Sensitive Subpopulations, (L) Uncertainties in the Benefit and Cost Estimates for the RTCR, (M) Benefit Cost Determination for the RTCR, (N) Comments Received in Response to EPA's Requests for Comment, and (O) Other Comments Received by EPA.
EPA evaluated the following three regulatory options as part of this revised rule: (1) The 1989 TCR option, (2) the RTCR option (today's final rule), and (3) an Alternative option. EPA discusses the three regulatory options briefly in this preamble and in greater detail in chapter 3 of the RTCR EA.
First, the 1989 TCR option reflects EPA's understanding of how the 1989 TCR is currently being implemented. That is, the 1989 TCR option is assumed to include “status quo” PWS and State implementation practices. Next, the RTCR option is based on the provisions of this final rule as described in detail in section III of this preamble,
The Alternative option differs from the RTCR option in two ways. First, under the Alternative option, at the compliance date all PWSs are required to sample monthly for an initial period until they meet the eligibility criteria for reduced monitoring. EPA assumes that eligibility for reduced monitoring is determined during the next sanitary survey following the RTCR compliance date. This more stringent approach differs from the RTCR option that allows PWSs to continue to monitor at their current frequencies (with an additional annual site visit or voluntary Level 2 assessment requirement for PWSs wishing to remain on annual monitoring) until they are triggered into an increased sampling frequency. Second, under the Alternative option, no PWSs are allowed to reduce monitoring to an annual basis. EPA defined the Alternative option this way and included it in the RTCR EA to assess the relative impacts of a more stringent rule and to better understand the balance between costs and public health protection. EPA wishes to emphasize that it is not adopting the Alternative Option, but is providing cost and benefit information on it as a point of comparison with the final rule as promulgated.
To understand the relative impacts of the options, EPA gathered available data and information to develop and provide input into an occurrence and predictive model. EPA estimated both baseline conditions and changes to these conditions anticipated to occur over time as a result of these revised rule options. The analysis is described in more detail in the RTCR EA.
This section of the preamble briefly discusses the data sources that EPA used in its supporting analyses for the RTCR. For a more detailed discussion, see chapter 4 of the RTCR EA.
Safe Drinking Water Information System Federal Version (SDWIS/FED) is EPA's national regulatory compliance database for the drinking water program and is the main source of PWS inventory and violation data for the RTCR baseline. SDWIS/FED contains information on each of the approximately 155,000 active PWSs as reported by primacy agencies, EPA Regions, and EPA headquarters personnel. SDWIS/FED includes records of MCL violations and monitoring and reporting violations (both routine and repeat and minor and major). It does not include sample results. It also contains information to characterize the US inventory of PWSs including system name and location, retail population served, source water type (ground water (GW), surface water (SW), or ground water under the direct influence of surface water (GWUDI)), disinfection status, and PWS type (community water system (CWS), transient non-community water system (TNCWS), and non-transient non-community water system (NTNCWS)).
To create the PWS and population baseline, EPA used the fourth quarter of SDWIS/FED 2007 (USEPA 2007b), which was the most current PWS inventory data available when EPA began developing the RTCR EA. These data represent all current, active PWSs and the population served by these systems.
EPA also used the MCL violation data from SDWIS/FED to validate model predictions for systems serving 4,100 or fewer people and to predict
Through an Information Collection Request (ICR) (USEPA 2006b), States voluntarily submitted electronically available 1989 TCR monitoring data
In this EA, EPA included data from 37 primacy agencies (35 States and 2 Tribes). Records included data for:
• PWS information (system type, population served, source water type)
• Sample type (routine, repeat, special purpose)
• Analytical result
• Sampling location—entry point, distribution system and, for repeat samples, original location, downstream, upstream, and other
• Analytical method
• Disinfectant residual data collected at TCR monitoring sites
As discussed in greater detail in section 4.2.2.1 of the RTCR EA, EPA used 2005 data exclusively in the analyses supporting the RTCR because the 2005 data set was the most complete year of data among the Six-Year Review 2 data. The 2005 data was also the most recent data available suggesting that it may be the most representative of present conditions.
The Six-Year Review 2 data also informed EPA's assumptions regarding the proportions of ground water systems serving 1,000 or fewer people that sample monthly, quarterly, or annually.
Additional data and information sources included the Economic Analysis for the Ground Water Rule (GWR EA) (USEPA 2006a), the
The GWR EA provided occurrence information on
US Census data were used to estimate population per household and to characterize sensitive subpopulations. Lastly, knowledge and experience from stakeholders helped to inform the assumptions that were made for the analysis.
A more detailed discussion of these data sources and how EPA used them are included in the RTCR EA.
EPA used the data to develop an occurrence and predictive model for PWSs serving 4,100 or fewer people based primarily on the 2005 Six-Year Review 2 data. The model predicts changes in total coliform and
Chapter 5 of the RTCR EA includes a more detailed description of the occurrence and predictive model used for PWSs serving 4,100 or fewer people, and the other simpler predictive model used for PWSs serving greater than 4,100 people.
The occurrence and predictive model used for PWSs serving 4,100 or fewer people has two components. The first component of the model characterized how the presence or positive rates of total coliform and
The model assumed that the national occurrence of total coliforms and
Before the RTCR goes into effect, GWR implementation begins and is also expected to affect the steady state. To estimate the effects that GWR implementation is expected to have on present steady state conditions, EPA used the occurrence and predictive model to simulate five years of implementation of the 1989 TCR with the GWR, which became effective in December 2009. EPA assumed these five years to account for the approximately two years before the expected promulgation date of the final RTCR and an additional three years after that until the RTCR effective date. The assumptions made to account for the GWR are described in detail in the in the RTCR EA and summarized in Exhibit VI–2.
Actual reductions in occurrence from the implementation of GWR requirements may differ from what is presented here. However, based on assumptions used in this model, the analysis of how the RTCR and Alternative option perform relative to each other are not affected.
In addition to capturing the effect of implementation of GWR requirements with the 1989 TCR for a five-year period of analysis, the model captures an additional 25 years with the 1989 TCR, the RTCR option, and the Alternative option. Along with changes in total coliform and
EPA made different assumptions for the effectiveness of assessments and subsequent corrective actions to account for the differences between the two types of assessments. The Level 2 assessment is a more comprehensive investigation that may result in finding more substantial problems than what may be found during a Level 1 assessment, and for that reason the corrective actions that result from a Level 2 assessment were modeled to result in corrective action measures that are generally more expensive and have bigger and longer lasting effects than those of the Level 1 assessments. EPA conducted sensitivity analyses around the key assumptions summarized in Exhibit VI–2 as discussed in section VI.L of this preamble,
For systems serving more than 4,100 people, EPA estimated violation and trigger rates using SDWIS/FED because the Six-Year Review 2 data for PWSs serving more than 4,100 people were not as robust as the Six-Year Review 2 data for systems serving 4,100 or fewer people. EPA did not quantify changes in violation or trigger rates for systems serving more than 4,100 people among the 1989 TCR, RTCR, and Alternative options because of: (1) Limited Six-Year Review 2 data to characterize these systems, (2) the essentially unchanged monitoring requirements across options for these systems, and (3) the level of effort already occurring to implement the 1989 TCR.
The estimate of baseline conditions that EPA developed provides a reference point for understanding net impacts of the RTCR.
Compliance with the GWR began in December 2009, and the expected compliance date of the RTCR is approximately six years following commencement of the GWR implementation. The majority of PWSs are ground water systems and these systems are expected to be affected by the GWR. Because GWR implementation prior to the effective date of RTCR is expected to cause changes to ground water systems, the baseline conditions that EPA developed for ground water systems account for the expected effects of the GWR.
For PWSs serving more than 4,100 people, EPA assumed that present conditions, as reflected in 2005 SDWIS/FED data, are an appropriate representation of the conditions that are likely to exist when the RTCR becomes effective. EPA assumed that a steady state exists at the national level.
The number of ground water PWSs that disinfect is expected to change during implementation of the GWR before the expected rule compliance date of the RTCR. Exhibit VI–4 shows the estimated baseline number of the ground water PWSs at the RTCR compliance date.
EPA estimated the numbers of ground water PWSs that monitor monthly, quarterly, and annually under the 1989 TCR based on an analysis of the Six-Year Review 2 data and individual State statutes conducted by EPA and the advisory committee Technical Work Group (TWG). Of the ground water PWSs serving 1,000 or fewer people, EPA estimated that approximately 34,000 monitor monthly, 67,000 monitor quarterly, and 27,000 monitor annually. EPA assumed that the numbers of systems on monthly, quarterly, and annual monitoring remain unchanged at the rule effective date for a continuation of the 1989 TCR. For the RTCR option, EPA assumed that only the percentage of systems that received an annual site visit under the 1989 TCR would continue on annual monitoring under the RTCR; the percentage of systems that would therefore no longer qualify for annual monitoring under the RTCR were assumed to revert to baseline quarterly monitoring. Under the Alternative option, all PWSs, regardless of size or type, start at monthly monitoring at the rule effective date.
The following two tables provide an overview of summary statistics relating to baseline water quality. Exhibit VI–5 shows the percentage of total coliform- and
Exhibit VI–6 presents the number of acute and non-acute violations reported by PWSs. The number of violations is also an indicator of baseline water quality prior to implementation of the RTCR. As discussed in detail chapter 5 of the RTCR EA, EPA used these data to estimate the numbers of MCL violations and triggers for PWSs serving more than 4,100 people for the three options. Under the 1989 TCR, larger systems incur a relatively small number of violations annually, while smaller systems incur the majority.
In promulgating the RTCR, EPA expects to further reduce the risk of contamination of public drinking water supplies from the current baseline risk under the 1989 TCR. The options considered during development of this rule and analyzed as part of the RTCR EA are designed to achieve this reduction while maintaining public health protection in a cost-effective manner.
This section examines the benefits in terms of trade-offs among compliance with the 1989 TCR option, the RTCR option, and the Alternative option. Because there are insufficient data reporting the co-occurrence in a single sample of fecal indicator
Since
As presented in Exhibit VI–5, the percentages of samples that are positive for total coliforms and
When revising an existing drinking water regulation, one of the main concerns is to ensure that backsliding on water quality and public health protection does not occur. SDWA requires that EPA maintain or improve public health protection for any rule revision. The RTCR is more stringent than the 1989 TCR with regard to protecting public health. The basis for this perspective is provided in this subsection and the following subsections (sections VI.E.2,
Risk reduction for the RTCR is characterized by the activities performed that are presumed to reduce risk of exposing the public to contaminated water. These activities are considered under each rule component presented in Exhibit VI–8.
More frequent monitoring has the potential to decrease the risk of contamination in PWSs based on an enhanced ability to diagnose and mitigate system issues in a more timely fashion. Conversely, less frequent monitoring has the potential to increase risk. Real-time continuous sampling would mitigate the most risk possible based on sampling schedule; however, it would cost prohibitively more than the periodic sampling practiced under the 1989 TCR and included in the RTCR and the Alternative option. EPA's objective in proposing the sampling schedules included in the RTCR and Alternative option was to find an appropriate balance between the factors of risk mitigation and cost management.
Under the RTCR and Alternative option, the reduction in the number of required repeat samples and additional routine samples for some PWSs has the potential to contribute to increased risk for PWS customers (see also section III.C,
The effect that the elimination of public notification requirements for monthly/non-acute MCL violations has on risk is difficult to predict. Some factors, such as reduction in available public information and possible PWS complacency, lead to a potential increase in risk and other factors, such as less confusion (PN more in line with potential health risks) and PWSs resources used more efficiently, lead to a potential decrease, as discussed in Exhibit VI–8. This change to PN is addressing a key concern expressed by various stakeholders in the advisory committee and during the Six-Year Review 1 comment solicitation process. By eliminating the requirement and replacing it with assessment and corrective action requirements, the Agency expects less public confusion, more effective use of resources, increased transparency, and increased public health protection.
Other rule components are expected to have a negligible effect on risk. However, the overall effect of the RTCR is expected to be a further reduction in risk from the current baseline risk under the 1989 TCR. Chapter 6 of the RTCR EA presents a detailed discussion of the potential influence on health risk for each rule component.
The quantified portion of the benefits analysis focuses on several measures that contribute to the changes in risk expected under the RTCR. Specifically, EPA modeled the predicted outcomes based on each regulatory option considered—baseline (1989 TCR), the RTCR (final rule), and the Alternative option—in the form of estimates of non-acute violations for the 1989 TCR and assessment triggers for the RTCR and Alternative option;
Evaluation of each of these endpoints informed EPA's understanding of potential changes to the underlying quality of drinking water. In particular, the number of corrective actions performed has a strong relationship to potential improvements in water quality and public health. For a given rate of total coliform and
For each of the graphs presented in Exhibit VI–9 through Exhibit VI–14, there are two main model drivers that affect the endpoints depicted: the total number of samples taken over time (including routine, additional routine, and repeat samples) and the effect of corrective actions taken. When looking at the comparisons between the 1989 TCR with the RTCR across all PWSs, the overall effect of the total numbers of samples taken is negligible because the total number of samples predicted to be taken throughout the period of analysis is almost the same (approximately 82M samples) under both the 1989 TCR and RTCR. For the Alternative option, the analysis predicts that approximately 88M total samples are taken over the period of analysis. Exhibit VI–18 of this preamble presents estimated total numbers of samples taken over the 25-year period of analysis. Based on the relationships of total samples taken among the 1989 TCR, RTCR, and Alternative option, the best way to interpret the graphs presented in this section is in a step-wise manner.
The first comparison that should be made is between the 1989 TCR option and RTCR. Because similar total numbers of samples are taken under the 1989 TCR and RTCR, the major effect seen in the graphs can be isolated to the effects that implementation of corrective actions has on underlying occurrence and how that occurrence influences the endpoint in question (assessments,
More detailed descriptions of each endpoint considered in terms of the evaluation process described previously are provided in this section as they apply to the individual graphs in Exhibit VI–9 through VI–14. Each of the graphs shown in this section is presented first in nondiscounted terms, and then based on a discount rate of three percent to reflect the reduced valuation of potential benefits over time, consistent with the presentation of costs in the section that follows. Graphs of benefits discounted using seven percent discounted rates are presented in Appendix B of the RTCR EA.
Exhibit VI–9 shows the effect (on average across all PWSs) of the RTCR and the Alternative option on the annual number of non-acute violations (1989 TCR) and assessment triggers (RTCR and Alternative option) over time. The estimated reduction of annual assessment triggers (from the 1989 TCR
Exhibit VI–10 shows the effect (on average across all PWSs) of the RTCR and the Alternative option with respect to
Exhibit VI–11 presents estimates over the 25-year period of analysis of the increase in corrective actions relative to the 1989 TCR (on average across all PWSs) attributable to the RTCR and Alternative option. Performance of these additional corrective actions is expected to result in the most direct benefits under the RTCR. Because only the incremental numbers of corrective actions estimated under the RTCR and Alternative option were modeled, the reference point for comparison to the 1989 TCR is the base (zero) line in the graph. The RTCR EA assumes that corrective actions are already being performed under the 1989 TCR. Baseline corrective actions are taken into account by assuming only a modest incremental increase of 10 percent in implementation of effective corrective actions under both the RTCR and Alternative option.
Exhibit VI–11 indicates that more corrective actions are implemented under the Alternative option than under the RTCR. This is driven, again, by the increased diagnostic power of more sampling and reflects additional potential benefits beyond those gained under the RTCR.
Taken together, Exhibit VI–9 through Exhibit VI–11 indicate that the modeled endpoints for the RTCR and the Alternative option predict positive benefits in comparison to the 1989 TCR; in particular, the Alternative option captures more benefits than the RTCR. Similar to the patterns seen in Exhibits VI–9 through VI–11, for each of the discounted endpoints presented over time in Exhibits VI–12 though VI–14, the graphs show that (on average across all PWSs) the Alternative option provides more benefit than the RTCR, and both provide more benefit than the 1989 TCR. These outcomes are consistent with the qualitative assessment of the benefits summarized in this section of this preamble.
The major difference between the RTCR and the Alternative option is the increased monitoring that is required under the Alternative option. The increased diagnostic ability of the extra samples taken under the Alternative option is seen in the large difference in the endpoint counts through the first several years in Exhibit VI–9 through Exhibit VI–14. Absent this effect, the Alternative option essentially mirrors the RTCR in the exhibits. Even though the predicted results (assessments,
EPA was unable to quantify the cases of morbidity or mortality avoided because there are insufficient data reporting the co-occurrence of fecal indicator
By requiring PWSs to conduct assessments that meet minimum elements focused on identifying sanitary defects in response to triggers for total coliform- or
Another non-quantified benefit is that systems may choose corrective actions that also address other drinking water contaminants. For example, correcting for a pathway of potential contamination into the distribution system can possibly also mitigate a variety of other potential contaminants. Due to the lack of data available on the effect of corrective action on contamination entering through distribution system pathways, EPA has not quantified such potential benefits.
Some systems may see additional nonquantified benefits associated with the acceleration of their capital replacement fund investments in response to early identification of impending problems with large capital components. Although such capital investment will eventually occur in the absence of RTCR requirements, earlier investment may ensure that problems are addressed in a preventive manner and may preclude some decrease in protection that might have occurred otherwise. At the very least, the increased operator awareness is expected to reduce the occurrence of unplanned capital expenditures in any given year. However, because of the difficulty of projecting when capital replacements would occur, EPA has not costed this acceleration of capital replacement, so there would also be a nonquantified cost of making such investments sooner.
Another major non-health benefit is the avoided costs associated with outbreak response. Outbreaks can be very costly for both the PWS and the community in which they occur. Avoided outbreak response costs include such costs as issuing public health warnings, boiling drinking water and providing alternative supplies, remediation and repair, and testing and laboratory costs. Reduced total coliform occurrence resulting from the RTCR may also lead to a reduction of costs associated with boil-water orders, which some States require following non-acute violations under the 1989 TCR. Taken together, these expenses can be quite significant. For example, an analysis of the economic impacts of a waterborne disease outbreak in Walkerton, Ontario (population 5,000) estimated the economic impact (excluding estimates of the value of a statistical life for seven deaths and intangible costs for illness-related suffering) to be over $45.9M in 2007 Canadian dollars (approximately $42.8M 2007 US dollars) (Livernois 2002). Note that some of these costs were incurred by individuals and businesses in neighboring communities. The author of the study suggested that this was a conservative estimate.
In addition, the RTCR may also reduce uncertainty regarding drinking water safety, which may lead to reduced costs for averting behaviors. Averting behaviors include the use of bottled water and point-of-use devices. This benefit also includes the reductions in time spent on averting behavior such as the time spent obtaining alternative water supplies.
To understand the net impacts of the RTCR on public water systems and States in terms of costs, EPA first used available data, information, and best professional judgment to characterize how PWSs and States are currently implementing the 1989 TCR. Then, EPA considered the net change in costs that results from implementing the RTCR or Alternative option as compared to the costs of continuing with the 1989 TCR. The objective was to present the net change in costs resulting from revisions to the 1989 TCR rather than absolute total costs of implementing the 1989 TCR as revised by the RTCR. More detailed information on cost estimates is provided in the sections that follow and a complete discussion can be found in chapter 7 of the RTCR EA. A detailed discussion of the RTCR requirements is located in section III of this preamble,
To compare cost of compliance activities for the three regulatory scenarios, the year or years in which all costs are expended are determined and the costs are then calculated as a net present value. For the purposes of this EA, one-time and yearly costs were projected over a 25-year time period to allow comparison with other drinking water regulations using the same analysis period. For this analysis, the net present values of costs in 2007 dollars are calculated using discount rates of three percent and seven percent. These present value costs are then annualized over the 25-year period using the two discount rates.
Exhibit VI–15 summarizes the comparison of total and net change in annualized present value costs of the RTCR and Alternative option relative to the 1989 TCR baseline. A continuation of the 1989 TCR will result in no net change in costs. In calculating the 1989 TCR baseline, not all activities that PWSs and States are performing under the 1989 TCR were quantified (see Exhibit VI–16 of this preamble). Some of these activities are not required under the 1989 TCR but PWSs are performing them nonetheless (e.g., corrective actions); or these activities are required under the 1989 TCR and PWSs and States will continue to perform them under either the RTCR or Alternative option (e.g., revising sample siting plans). Instead of determining the absolute costs of performing these activities, EPA estimated the net increase in costs from these activities as a result of implementing either the RTCR or the Alternative option. The net change in mean annualized national costs of the RTCR option relative to the 1989 TCR is estimated to be approximately $14M using either a three percent or seven percent discount rate. The net change in mean annualized national costs for the Alternative option relative to the 1989 TCR are estimated to be approximately $30M using a three percent discount rate and $32M using a seven percent discount rate.
Under the RTCR, public water systems are estimated to incur greater than 90 percent of the RTCR's net annualized costs. States are expected to incur the remaining costs.
Exhibit VI–16 presents the comparison of total and net change in annualized costs for PWSs and States by rule component. The table shows that corrective action costs are the most significant contributors to the net increase in costs for PWSs under the RTCR. For the Alternative option, routine monitoring costs are the most significant contributor to the net increase in costs for PWSs. For States, revision of sample siting plans contributes most to the cost increase under the RTCR and Alternative option. For both PWSs and States, a net decrease in costs associated with PN requirements helps to offset the total net cost increase.
Like the 1989 TCR, the RTCR applies to all PWSs. Exhibit VI–17 presents the total and net change in annualized costs to PWSs by size and type for the three regulatory options. No net change in costs will result from a continuation of the 1989 TCR. Among PWSs serving 4,100 or fewer people, looking at the three percent discount rate, the largest increase in aggregate net costs is incurred by the TNCWSs serving 100 or fewer people under either the RTCR ($5.3M) or Alternative option ($14.7M) because of the large number of systems. On a per system basis, this translates to a net annualized present value increase of approximately $86 per system under the RTCR and $240 per system under the Alternative option for the TNCWSs serving 100 or fewer people. As described in section VII.C of this preamble,
The total net change in national annualized present value costs for all
The following subsections discuss the different components of the costs to PWSs: Rule implementation and annual administration, sample siting plan revision, monitoring, annual site visits, assessments, corrective actions, and public notification.
The overall reductions in the numbers of additional routine samples required under the RTCR and Alternative option result in lower costs for additional routine monitoring when compared to the 1989 TCR. Under the RTCR and Alternative option, additional routine monitoring is no longer required for systems that monitor at least monthly, and when additional routine monitoring is required, the number of samples required is reduced from five to three. Cost reductions are greater under the Alternative option than under the RTCR because under the Alternative option all PWSs start on monthly monitoring and are not required to take additional routine samples during that period.
Costs for repeat sampling are also lower under the RTCR and Alternative option. Under the 1989 TCR, PWSs serving 1,000 or fewer people take four repeat samples, at and within five service connections upstream and downstream of the initial total coliform positive occurrence location, over the course of 24 hours following the event. Under the RTCR and Alternative option, PWSs serving 1,000 or fewer people will need to take only three repeat samples, and they have greater flexibility about where to take them, consistent with the system sample siting plan that is developed in accordance with RTCR requirements and subject to review and revision by the State. The number of repeat samples required for PWSs serving more than 1,000 people is the same under the 1989 TCR and the RTCR and Alternative option, although these systems also have greater flexibility in sample location.
Exhibit VI–18 summarizes the cumulative number of samples taken by PWS size and category for routine, additional, and repeat monitoring under the 1989 TCR, RTCR, and Alternative option over the entire 25-year period of analysis. Under the 1989 TCR option, approximately 82.1M samples are taken over the 25-year period of analysis compared to approximately 82.2M samples under the RTCR and approximately 87.9M samples under the Alternative option (less than 10 percent more than 1989 TCR option). Appendix A of the RTCR EA presents additional information on the number of samples taken each year during the analysis period.
The annualized total and net change cost estimates for PWSs to perform monitoring under the 1989 TCR, RTCR, and Alternative option are presented in Exhibit VI–19. EPA estimated a net increase in national annualized cost estimates incurred by PWSs for monitoring of $1.14M (three percent discount rate) and $0.95M (seven percent discount rate) under the RTCR and a net increase of $14.36M (three percent discount rate) and $16.15M (seven percent discount rate) under the Alternative option. See also Exhibit VI–16 of this preamble for a breakdown on the costs of monitoring (i.e., routine, additional routine, repeat).
The overall estimated increase in monitoring costs seen under the RTCR is driven by increases in routine monitoring due to stricter requirements to qualify for reduced monitoring. However, this is mostly offset by reductions in additional routine and repeat monitoring. For the Alternative option, the requirement for all PWSs to sample on a monthly basis at the beginning of rule implementation results in a much larger cost differential that is only partially offset by reduced costs from reductions in additional routine monitoring requirements.
Under the RTCR, all PWSs are required to conduct assessments of their systems when they exceed Level 1 or Level 2 treatment technique triggers. While PWSs are not required to conduct assessments under the 1989 TCR, some PWSs do currently engage in assessment activity (which may or may not meet the RTCR criteria) following non-acute and acute MCL violations. EPA estimates both the costs to PWSs to conduct assessments under the RTCR as well as the level of effort that PWSs already put toward assessment activities under the 1989 TCR. These estimates are based on the work of the stakeholders in the Technical Work Group (TWG) during the proceedings of the TCRDSAC. These estimates allowed EPA to determine the average net costs to conduct assessments under the RTCR. EPA assumes that the numbers of non-acute and acute MCL violations would remain steady under a continuation of the 1989 TCR based on the review of SDWIS/FED violation data. Under the RTCR, EPA assumes that the numbers of assessment triggers decrease over time from the steady state level estimate based on the 1989 TCR to a new steady state level, as a result of reduced fecal indicator occurrence associated with the beneficial effects of requiring assessments and corrective action.
The overall number of assessments is larger under the Alternative option compared to the RTCR option. This is a result of the initial monthly monitoring requirements for all PWSs under the Alternative option. The modeling results indicate that a greater number of samples early in the implementation period results in more positive samples and associated assessments despite the predicted long term reductions in occurrence as informed by the assumptions. This increase in total assessments performed, combined with the higher unit cost of performing assessments compared to existing practices under the 1989 TCR, results in a higher net cost increase for the Alternative option than under the RTCR. The total net increase in cost for the Alternative option is estimated to be nearly twice that of the RTCR option. See Exhibit 7.15 of the RTCR EA.
To estimate the costs incurred for the correction of sanitary defects, EPA assumed the percent distribution of PWSs that perform different types of corrective actions as presented in the compliance forecast shown in Exhibit VI–20 (i.e., distribution of the additional 10 percent of corrective actions) based on best professional judgment and stakeholder input. The compliance forecast presented in this section was informed by discussions of the TCRDSAC Technical Work Group and focuses on broad categories of types of corrective actions anticipated. EPA used best professional judgment and stakeholder input to make simplifying assumptions on the distribution of these categories that are implemented by different systems based on size and type of system. For each of the categories listed, a PWS is assumed to take a specific action that falls under that general category. Detailed compliance forecasts showing the specific corrective actions used in the cost analysis are provided in Appendix D of the RTCR EA, along with summary tables of the unit costs used in the analysis. Each corrective action in the detailed compliance forecast is also assigned a representative unit cost. Detailed descriptions of the derivation of unit costs are provided in Exhibits 5–1 through 5–47 of the
Level 1 assessments generally are less involved than Level 2 assessments and may result in finding less complex problems. As shown in the compliance forecast in Exhibit VI–20, EPA estimated that corrective actions found through Level 1 assessments result in corrective actions that focus more on transient solutions or training (columns A and B) than on permanent fixes to the PWS. However, in the case of flushing, EPA assumed that in a majority of instances, PWSs implement a regular flushing program as opposed to a single flushing, based on EPA and stakeholder best professional judgment.
Corrective actions taken as a result of Level 2 assessments are expected to find a higher proportion of structural/technical issues (columns C–K) resulting in material fixes to the PWSs and distribution system. Consistent with the discussions of the TCRDSAC regarding major structural fixes or replacements, EPA did not include these major costs in the analysis. Distribution system appurtenances such as storage tanks and water mains generally have a useful life that is accounted for in water system capital planning. The assessments conducted in response to RTCR triggers could identify when that useful life has ended but are not solely responsible for the need to correct the defect. In addition, EPA ran two sensitivity analyses to assess the potential impacts of different distributions within the compliance forecast. Results of the sensitivity analyses are presented in Exhibit VI–21, which indicates that the low bound estimates of annualized net change in costs at three percent discount rate are approximately $3M for the RTCR and $17M for the Alternative option, and the high bound estimates are approximately $25M for the RTCR and $43M for the Alternative option. Varying the assumptions about the percentage of corrective actions identified and the effectiveness of those actions had less than a linear effect on outcomes, and the RTCR continues to be less costly than the Alternative option under all scenarios modeled.
As indicated in the more detailed analysis presented in chapter 7 of the RTCR EA, PWSs also incur reporting and recordkeeping burden to notify the State upon completion of each corrective action. PWSs may also consult with the State or with outside parties to determine the appropriate corrective action to be implemented.
Annualized cost estimates for PWSs to perform corrective actions are estimated by multiplying the number of Level 1 and Level 2 corrective actions estimated by the predictive model, (i.e., 10 percent of Level 1 and Level 2 assessments) by the percentages in the compliance forecast and unit costs of corrective actions and associated reporting and recordkeeping. Exhibit 7.13 of the RTCR EA presents the estimated totals of non-acute and acute MCL violations (1989 TCR) and Level 1 and Level 2 assessments (RTCR and Alternative option). The model predicts a total of approximately 109,000 single non-acute MCL violations, 58,000 cases of a second non-acute MCL violation, and 16,000 acute MCL violations for the 1989 TCR, under which some PWSs currently engage in assessment activity which may or may not meet the RTCR criteria (see section 7.4.5 of the RTCR EA for details). For the RTCR, the model predicts approximately 104,000 Level 1 assessments and 52,000 Level 2 assessments. For the Alternative option, the model predicts approximately 120,000 Level 1 assessments and 81,000 Level 2 assessments. EPA estimated a net increase in national annualized cost estimates incurred by PWSs for conducting corrective actions of $12.44M (three percent discount rate) and $10.63M (seven percent discount rate) under the RTCR and a net increase of $13.79M (three percent discount rate) and $12.09M (seven percent discount rate) under the Alternative option. The annualized net present value total and net change cost estimates for PWSs to perform corrective actions under the 1989 TCR, RTCR, and Alternative option are presented in Exhibit VI–16 of this preamble.
The differences in the net change in corrective action costs between the RTCR and Alternative option are a function of the different number of assessments estimated to be performed in the predictive model.
Total and net change in annualized costs for PN under the RTCR and Alternative option are estimated by multiplying the model estimates of PWSs with acute (Tier 1 public notification) and non-acute (Tier 2 public notification) violations by the PWS unit costs for performing PN activities. The RTCR cost model assumed that all violations are addressed following initial PN, and no burden is incurred by PWSs for repeat notification. EPA estimated a net decrease in national annualized cost estimates incurred by PWSs for public notification of $3.49M (three percent discount rate) and $3.35M (seven percent discount rate) under the RTCR and a net decrease of $3.40M (three percent discount rate) and $3.25M (seven percent discount rate) under the Alternative option. The annualized total and net cost estimates for PWSs to perform public notification under the 1989 TCR, RTCR, and Alternative option are presented in Exhibit VI–16 of this preamble.
A significant reduction in costs is estimated due to the elimination of Tier 2 public notification for non-acute/monthly MCL violations under both the RTCR and Alternative option.
EPA estimated that States as a group incur a net increase in national annualized present value costs under the RTCR of $0.2M (at three percent discount rate) and $0.4M (at seven percent discount rate) and under the Alternative option of $0.3M (at three percent discount rate) and $0.6M (at seven percent discount rate). State costs include implementing and administering the rule, revising sample siting plans, reviewing sampling results, conducting annual site visits, reviewing completed assessment forms, tracking corrective actions, and tracking public notifications. The costs presented in the RTCR EA are summary costs; costs to individual states vary based on state programs and the number and types of systems in the state. The following sections summarize the key assumptions that EPA made to estimate the costs of the RTCR and Alternative option to States. Chapter 7 of the RTCR EA provides a description of the analysis.
Although some States may choose to conduct assessments for their PWSs, EPA does not quantify these costs. The costs are attributed to PWSs that are responsible for ensuring that assessments are done.
As explained in chapter 7 of the RTCR EA, EPA assumes a certain level of assessment activity already occurs under the 1989 TCR based on discussions with the technical workgroup supporting the advisory committee. Under the RTCR, the overall number of Level 1 and Level 2 assessment triggers decreases compared to the 1989 TCR as a function of reduced occurrence over time. This reduction in assessments under the RTCR is estimated to translate directly to a small national cost savings ($0.08M at either three or seven percent discount rate) for States. The overall number of Level 1 and Level 2 assessments is higher under the Alternative option as a result of the initial monthly monitoring requirements for all PWSs. The increase in the number of assessments under the Alternative option is estimated to translate directly to a national cost increase ($0.05M at three percent discount rate and $0.08M at seven percent discount rate) for States. The annualized net present value total and net change cost estimates for States to review completed Level 1 and Level 2 assessment forms under the 1989 TCR, RTCR, and Alternative option are presented in Exhibit VI–16 of this preamble.
EPA believes that all of the rule elements that are the major drivers of the net change in costs from the 1989 TCR have been quantified to the greatest degree possible. However, cost reductions related to fewer monitoring and reporting violations are not specifically accounted for in the cost analysis, and their exclusion from consideration may result in an overestimate of the net increase in cost between the 1989 TCR option and the RTCR or Alternative option.
Furthermore, under the 1989 TCR, RTCR, and Alternative option, Tier 3 public notification for monitoring and reporting violations are assumed to be reported once per year as part of the Consumer Confidence Reports (CCRs). Because of the use of the CCR to communicate Tier 3 public notification on a yearly basis, no cost differential between the current 1989 TCR and the RTCR and Alternative option is estimated in the cost model. However, the advisory committee concluded that significant reductions in monitoring and reporting violations may be realized through the revised regulatory framework of the RTCR, which includes new consequences for failing to comply with monitoring provisions such as the requirement to conduct an assessment or ineligibility for reduced monitoring. These possible reductions have not been quantified. System resources used to process monitoring violation notices for the CCR and respond to customer inquiries about the notices, as well as State resources to remind systems to take samples, may be reduced if significant reductions in monitoring and reporting violations are realized. Exclusion of this potential cost savings may lead to an underestimate of the PN cost savings under both the RTCR and Alternative option.
Additionally, as an underlying assumption to the costing methodology, EPA assumed that all PWSs subject to the RTCR requirements are already complying with the 1989 TCR. There may be some PWSs that are not in full compliance with the 1989 TCR, and if so, additional costs and benefits may be incurred. EPA does not anticipate non-compliance when performing economic analyses for NPDWRs, therefore those costs and benefits are not captured in this analysis.
The household cost analysis considers the potential increase in a household's annual water bill if a CWS passed the entire cost increase resulting from the rule on to their customers. This analysis is a tool to gauge potential impacts and should not be construed as a precise estimate of potential changes to household water bills. State costs and costs to TNCWSs and NTNCWSs are not included in this analysis since their costs are not typically passed through directly to households. Exhibit VI–22 presents the mean expected increases in annual household costs for all CWSs, including those systems that do not have to take corrective action. Exhibit VI–22 also presents the same information for CWSs that must take corrective action. Household costs tend to decrease as system size increases, due mainly to the economies of scale for the corrective actions.
Exhibit VI–22 presents net costs per household under the RTCR and Alternative option for all rule components spread across all CWSs. Comparison to the 1989 TCR shows a cost savings for some households. The average annual water bill is expected to increase by six cents or less on average per year.
While the average increase in annual household water bills to implement the RTCR is well less than a dollar, customers served by a small CWS that have to take corrective actions as a result of the rule incur slightly larger increases in their water bills. The subsequent categories of the exhibit present net costs per household for three different subsets of CWSs: (1) CWSs that perform assessments but no corrective actions, (2) CWSs that perform corrective actions, and (3) CWSs that do not perform assessments or corrective actions. Approximately 67 percent of households are served by CWSs that perform assessments but do not perform corrective actions over the 25-year period of analysis (because no sanitary defects are found). These households experience a slight cost savings on an annual basis, due to a slight reduction in monitoring and public notification costs. The nine percent of households belonging to CWSs that perform corrective actions over the 25-year period of analysis experience an increase in annual net household costs of less than $0.70 on average for CWSs serving greater than 4,100 people to approximately $4.50 on average for CWSs serving 4,100 or fewer people on an annual basis. EPA estimated that 24 percent of households are served by CWSs that do not perform assessments or corrective actions over the 25-year period of analysis because they never exceed an assessment trigger. This group of households served by small systems (4,100 or fewer people) experiences a slight cost change on an annual basis, comparable to those performing assessments but no corrective actions. Overall, the main driver of additional household costs under the RTCR is corrective actions.
The RTCR regulatory options achieve increasing levels of benefits at increasing levels of costs. The regulatory options for this rule, in order of increasing costs and benefits (Option 1 lowest and Option 3 highest) are as follows:
• Option 1: 1989 TCR option
• Option 2: RTCR
• Option 3: Alternative option
Incremental costs and benefits are those that are incurred or realized to reduce potential illnesses and deaths from one alternative to the next more stringent alternative. Estimates of incremental costs and benefits are useful when considering the economic efficiency of different regulatory alternatives considered by EPA. One goal of an incremental analysis is to identify the regulatory alternatives where net social benefits are maximized. However, incremental net benefits analysis is not possible when benefits are discussed qualitatively and are not monetized, as is the case with the RTCR.
However, incremental analysis can still provide information on relative cost-effectiveness of different regulatory options. For the RTCR, only costs were monetized. While benefits were not quantified, an indirect proxy for benefits was quantified. To compare the additional net cost increases and associated incremental benefits of the RTCR and the Alternative option, benefits are presented in terms of corrective actions performed since performance of corrective actions is expected to have the impact that is most directly translatable into potential health benefits.
Exhibit VI–23 shows the incremental cost of the RTCR over the 1989 TCR and the Alternative option over the RTCR for costs annualized using three percent and seven percent discount rates. The non-monetized corrective action endpoints are discounted in order to make them comparable to monetized endpoints. The relationship between the incremental costs and benefits is examined further with respect to cost effectiveness in section VI.M of this preamble,
As discussed in section VI.E of this preamble,
Systems may choose corrective actions that also reduce other drinking water contaminants as a result of the fact that the corrective action eliminates a pathway of potential contamination into the distribution system. For example, eliminating a cross connection reduces the potential for chemical contamination as well as microbial. Due to a lack of contamination co-occurrence data that could relate to the effect that treatment corrective action may have on contamination entering through distribution system pathways, EPA has not quantified such potential benefits.
All surface water systems are already required to disinfect under the SWTR (USEPA 1989b, 54 FR 27486, June 29, 1989) but the RTCR could impact currently undisinfected ground water systems. If a previously undisinfected ground water system chooses disinfection as a corrective action, the disinfectant can react with pipe scale causing increased risk from some contaminants that may be entrained in the pipe scales and other water quality problems. Examples of contaminants that could be released include lead, copper, and arsenic. Disinfection could also possibly lead to a temporary discoloration of the water as the scale is loosened from the pipe. These risks can be addressed by gradually phasing in disinfection to the system, by targeted flushing of distribution system mains, and by maintaining an effective corrosion control program.
Introducing a disinfectant could also result in an increased risk from disinfection byproducts (DBPs). Risk from DBPs has already been addressed in the Stage 1 Disinfection Byproducts Rule (DBPR) (USEPA 1998a) and additional consideration of DBP risk has been addressed in the final Stage 2 DBPR (USEPA 2006e). In general, ground water systems are less likely to experience high levels of DBPs than surface water systems because they have lower levels of naturally occurring organic materials that contribute to DBP formation.
EPA does not expect many previously undisinfected systems to add disinfection as a result of either the RTCR or Alternative rule options. Ground water systems that are not currently disinfecting may eventually install disinfection if RTCR distribution system monitoring and assessments, and/or subsequent source water monitoring required under the GWR, result in the determination that source water treatment is required.
It is anticipated that the requirements of the RTCR will help reduce pathways of entry for fecal contamination and/or waterborne pathogens into the distribution system, thereby reducing risk to both the general population as well as to sensitive subpopulations.
As discussed previously in this preamble, fecal contamination may contain waterborne pathogens including bacteria, viruses, and parasitic protozoa. Waterborne pathogens can cause a variety of illnesses, including acute gastrointestinal illness (AGI) with diarrhea, abdominal discomfort, nausea, vomiting, and other symptoms. Most AGI cases are of short duration and result in mild illness. Other more severe illnesses caused by waterborne pathogens include hemolytic uremic syndrome (HUS) (kidney failure), hepatitis, and bloody diarrhea (WHO 2004). Chronic disease such as irritable bowel syndrome, reduced kidney function, hypertension and reactive arthritis can result from infection by a waterborne agent (Clark
Waterborne pathogens may subsequently infect other people through a variety of other routes (WHO 2004). When humans are exposed to and infected by an enteric pathogen, the pathogen becomes capable of reproducing in the gastrointestinal tract. As a result, healthy humans shed pathogens in their feces for a period ranging from days to weeks. This shedding of pathogens often occurs in the absence of any signs of clinical illness. Regardless of whether a pathogen causes clinical illness in the person who sheds it in his or her feces, the pathogen being shed may infect other people directly by person-to-person spread, contact with contaminated surfaces, and other means, which are collectively referred to as secondary spread.
When sensitive subpopulations are exposed to fecal contamination and/or waterborne pathogens, more severe illness (and sometimes death) can occur. Examples of sensitive subpopulations are provided in chapter 2 of the RTCR EA. The potential health effects associated with sensitive population groups—children, pregnant women, the elderly, and the immunocompromised—are described in the following paragraphs.
Children and the elderly are particularly vulnerable to kidney failure (hemolytic uremic syndrome) caused by the pathogenic bacterium
The risk of acute illness and death due to viral contamination of drinking water depends on several factors, including the age of the exposed individual. Infants and young children have higher rates of infection and disease from enteroviruses than other age groups (USEPA 1999). Several enteroviruses that can be transmitted through water can have serious health consequences in children. Enteroviruses (which include poliovirus, coxsackievirus, and echovirus) have been implicated in cases of flaccid
Other waterborne viruses can also be particularly harmful to children. Rotavirus disproportionately affects children less than five years of age (Parashar
The elderly are particularly at risk from diarrheal diseases (Glass
It is anticipated that the requirements of the RTCR will help reduce pathways of entry for fecal contamination and/or waterborne pathogens into the distribution system, thereby reducing risk to both the general population as well as to sensitive subpopulations such as children, pregnant women, and the elderly.
AGI symptoms may be more severe in immunocompromised persons (Frisby
For the immunocompromised, Gerba
It is anticipated that the requirements of the RTCR will help reduce pathways of entry for fecal contamination and/or waterborne pathogens into the distribution system, thereby reducing risk to both the general population as well as to sensitive subpopulations such as the immunocompromised.
A computer simulation model was used to estimate costs and indicators of benefits of the RTCR. Exhibit VI–24 shows that these outputs depend on a number of key model inputs. This section describes analyses that were conducted to understand how uncertainties in these inputs contributed to uncertainty in model outputs.
It is anticipated that the requirements of the RTCR will help reduce pathways of entry for fecal contamination and/or waterborne pathogens into the distribution system, thereby reducing exposure and illness from these contaminants in drinking water. These exposure and illness reductions could not be modeled and estimated quantitatively, due to a lack of a quantitative relationship between indicators and pathogens. Section VI.E.3 of this preamble,
Model outputs include two important indicators that are used to qualitatively describe benefits:
Quantified national cost estimates include costs of required monitoring, assessments, corrective actions, and public notifications. Total costs were monitored as end-points in the sensitivity analyses described in this section.
None of the inputs shown in Exhibit VI–24 is perfectly known, so each has some degree of uncertainty. Some of these inputs are informed directly by data, so their uncertainties are due to limitations of the data. For example, uncertainty about the statistical model used to characterize occurrence is due to the limited numbers of systems and measurements per system in the Six-Year Review 2 dataset. Other inputs are informed by professional judgment, so their uncertainties are expressed in terms of reasonable upper and lower bounds that are, themselves, based on expert judgment. For example, 10 percent of assessments (representing the incremental increase over the 1989 TCR) are expected to result in effective corrective actions, based on professional judgment, with reasonable upper and lower bounds of 20 percent and 5 percent, respectively.
Sensitivity analyses were conducted to assess the degree to which uncertainties about selected inputs contribute to uncertainty in the resulting cost estimates. The analyses focused on the inputs that are listed in Exhibit VI–24. Varying the assumptions about the percentages of corrective actions identified and the effectiveness of those actions has a less than linear effect on outcomes, and the RTCR continues to be less costly than the Alternative option under all scenarios modeled. Exhibits 5.22a and 5.22b of the RTCR EA provide summaries of the driving model parameters and indicate where in the RTCR EA the full discussion of uncertainty on each parameter is contained.
Not shown in Exhibit VI–24 are some inputs that are very well known. These are inventory data, which include the list of all PWSs affected by the RTCR and, for each system, information on its source water type, disinfection practice, and population served. Although this information is not perfect, any uncertainty is believed to have negligible impact on model outputs. EPA did not conduct sensitivity analyses to evaluate the importance of these small uncertainties.
Default values of the model inputs are considered reasonable best-estimates. Model outputs that are obtained when the inputs are set to these default values are also considered to be reasonable best-estimates. EPA conducted sensitivity analyses to learn how much the outputs might change when individual inputs are changed from their default values. The approach taken was to change each input to some reasonable upper and lower bounds, based on professional judgment.
Many of the uncertainties are expected to impact the model output in a similar fashion for the 1989 TCR, RTCR, and the Alternative option. For example, an increase in a total coliform occurrence tends to increase the total cost and benefit estimates for all of the rule alternatives. Because the benefit and cost analyses focus on net changes among the 1989 TCR, RTCR, and Alternative option, these common sources of uncertainty may tend to cancel out in the net change analyses. Other uncertainties were expected to have stronger influence on net changes among the 1989 TCR, RTCR, and Alternative option because of their unequal influence on the options. For example, assumptions about the effectiveness of corrective actions influences total costs of the RTCR and Alternative option, but not the 1989 TCR option.
Results of the sensitivity analyses (reported in the RTCR EA) showed that the fundamental conclusions of the economic analysis do not change over a wide range of assumptions. Both the RTCR and Alternative option provide benefits as compared to the 1989 TCR. Varying key assumptions has a less than linear effect on outcomes, and the RTCR continues to be less costly than the Alternative option under all scenarios modeled. See section 5.3.3.1 of the RTCR EA for details.
Pursuant to SDWA section 1412(b)(6)(A), EPA has determined that the benefits of the RTCR justify the costs. In making this determination, EPA considered quantified and nonquantified benefits and costs as well as the other components of the HRRCA outlined in section 1412(b)(3)(C) of the SDWA.
Additionally, EPA used several other techniques to compare benefits and costs including a break-even analysis and a cost effectiveness analysis. EPA developed a break-even analysis to inform the discussion of whether the benefits justify the cost of the regulation. The break-even analysis (see chapter 9 of the RTCR EA) was conducted using two example pathogens responsible for some (unknown) proportion of waterborne illnesses in the United States: shiga toxin-producing
Based on either example pathogen considered in the breakeven analysis, a small number of fatal cases annually would need to be avoided, relative to the CDC's estimate of cases caused by waterborne pathogens, in order to break even with rule costs. For example, under the RTCR, just two deaths would need to be avoided annually using a three percent discount rate based on consideration of the bacterial pathogen STEC O157:H7. Alternatively, approximately 3,000 or 8,000 non-fatal cases, using the enhanced or traditional benefits valuations approaches,
As Exhibit VI–25 shows, approximately 2 deaths would need to be avoided from a
Cost-effectiveness is another way of examining the benefits and costs of the rule. Exhibit VI–26 shows the cost of the rule per corrective action implemented. The cost-effectiveness analysis, as with the net benefits, is limited because EPA was able to only partially quantify and monetize the benefits of the RTCR. As discussed previously and demonstrated in the RTCR EA, the RTCR achieves the lowest cost per corrective action avoided among the options considered. The incremental cost-effectiveness analysis shows that the RTCR has a lower cost per corrective action than the Alternative option.
The preferred option for the final rule is the RTCR. The analyses performed as part of the RTCR EA (USEPA 2012a) support the collective judgment and consensus of the advisory committee that the RTCR requirements provide for effective and efficient revisions to the 1989 TCR regulatory requirements. The estimated net cost increase of the RTCR is small ($14M annually) relative to the 1989 TCR and small compared to the net cost increase of the Alternative option ($30M–$32M) relative to the 1989 TCR. In addition, no backsliding in overall risk is predicted.
In the proposal for the RTCR, EPA requested comment on the SAB's concerns (selection of the RTCR option and measures for tracking long term effectiveness of RTCR), on replacement and maintenance costs for major distribution system appurtenances, on assumptions regarding State use of annual monitoring and annual site visits, and on assumptions regarding the results and effectiveness of Level 1 and Level 2 assessments. This section summarizes the comments EPA received on these issues.
Most comments EPA received were in favor of the selection of the RTCR option over the 1989 TCR and the Alternative option. Commenters thought that the additional transition costs associated with the Alternative option did not justify the relatively small increase in benefits and noted that over the long term the benefits for both options were extremely similar. Some commenters provided EPA with specific input on what kind of data to collect in order to indicate the long term effectiveness of the RTCR. However, most commenters instead emphasized the need for SDWIS to be equipped to record the data, and that necessary changes to SDWIS be made in time for the rule to take effect. EPA remains committed to providing the necessary update to SDWIS before the final rule goes into effect and will continue to work with data users to identify system data collection needs and measures.
Most comments supported EPA's decision not to include replacement or maintenance costs of major distribution system appurtenances under the RTCR. However, some commenters expressed concern that some systems, in particular small systems, do not plan for capital expenditures, and therefore these costs should be included. EPA continues to believe, as informed by the TCRDSAC deliberations, that the assessment requirement of the RTCR may help to identify when the useful life of an appurtenance has occurred or
Comments on this subject were mixed. Most commenters thought that the assumption that only states that currently allow annual monitoring and conduct annual site visits would continue to do so under the RTCR was a reasonable one. However, there were some commenters that pointed out that some States that currently do not allow annual monitoring may begin to allow it because of a lack of resources and because of the desire to meet only the minimum aspects of the RTCR. Based on stakeholder input and comments received, EPA continues to believe that EPA's original assumption is valid, that only States that currently allow annual monitoring and perform annual visits would continue to do so.
Several commenters agreed that EPA made a reasonable assumption that 10 percent of assessments would lead to corrective action above what is occurring under the 1989 TCR. For those that did not agree the assumption was reasonable, the response was split between those that thought the estimate was too high, and those that thought the estimate was too low. Therefore, EPA has chosen to retain the estimate of 10 percent, which was originally derived with stakeholder input.
Several commenters supported the assumptions regarding the effectiveness of corrective actions. Many of these commenters stated that it would be extremely difficult to determine if these assumptions are accurate or not. Some commenters thought that these assumptions were too optimistic and that little or no benefit would be realized by the use of the assessments and corrective action. In the absence of strong consensus for changing these assumptions, EPA has elected to keep the assumptions in place.
In addition to comments received as a result of requests for comment, EPA also received comments on various technical aspects of the EA. Those comments included concerns with the analysis in the following areas: EPA's inability to quantify health benefits, small PWS's possible inability to return to reduced monitoring after being triggered into monthly monitoring, the shift of State resources from public health related activities to tracking and compliance under the RTCR, and estimates about the State burden.
Some commenters expressed concern that EPA is not quantifying benefits. Instead of quantifying the benefits, the RTCR EA examines the benefits in terms of trade-offs between compliance with the 1989 TCR and the other options considered (RTCR and Alternative option). As allowed under and consistent with the HRRCA requirements outlined in section 1412 (b)(3)(C) of the SDWA, EPA used several methods to qualitatively evaluate the benefits of the RTCR and Alternative option. The qualitative evaluation uses both the judgment of EPA as informed by the TCRDSAC deliberations as well as quantitative estimates of changes in total coliform occurrence and counts of systems implementing corrective actions. EPA acknowledges that the predicted benefits of changes in total coliform occurrence and numbers of corrective actions implemented are a function of model assumptions, and EPA recognizes that there is some uncertainty with the assumptions. However, sensitivity analyses showed that the fundamental conclusions of the EA do not change over a wide range of assumptions tested, and that the RTCR provides benefits over the 1989 TCR.
EPA notes that the supporting analyses that formed the foundation of the RTCR EA were reviewed by the SAB. SAB noted in their report that “in general, the Committee was impressed by the work the Agency undertook. The Agency obviously did a great deal of work and put a significant amount of thought into making use of the limited amount of data.” SAB also acknowledged that “the EA represents the best possible analysis given the paucity of available data” (SAB 2010).
Some commenters stated that PWSs, in particular NCWSs, will never again qualify for quarterly or annual monitoring under the RTCR once they are triggered into increased monthly monitoring. EPA disagrees with this statement. Under the RTCR, NCWSs that are triggered into monthly monitoring could possibly meet the criteria to once again qualify for (routine) quarterly or (reduced) annual monitoring in as little as one year. Some commenters stated that EPA has underestimated the numbers of systems that will be triggered into monthly monitoring based on existing noncompliance rates, with particular emphasis on systems with monitoring violations.
Consistent with past EPA EA analyses, the occurrence model and cost estimates in the EA do not include estimates for non-compliance with EPA regulatory requirements such as monitoring. In addition, EPA disagrees with many commenters' assumptions that monitoring violation rates will remain the same under the RTCR. EPA believes that the rates of monitoring violations will decrease because of strengthened incentives for systems to monitor and the enhanced consequences of noncompliance. A PWS on quarterly or annual monitoring has a greater incentive under the RTCR to do its monitoring because if it doesn't, it will be triggered into increased monitoring. The 1989 TCR did not include such a requirement. Under the RTCR, if a PWS does not complete its repeat samples, it will be triggered to conduct an assessment. With greater consequences for not completing required sampling, systems will be more likely to complete their monitoring. Thus, EPA believes that rates of monitoring and reporting violations will be lower under the RTCR than they are under the 1989 TCR.
Many commenters had concerns with monitoring violation rates specifically for those systems that are on annual monitoring. EPA believes that the monitoring violation rates for these systems will not be as high as predicted by commenters since one of the requirements to remain on annual monitoring is an annual site visit by the State or a Level 2 assessment. If, at the time of the site visit or the Level 2 assessment, that year's annual samples have not been taken, the State or assessor will have the opportunity to remind the system to take the required samples, assist the system in taking the sample at that time, or include taking the sample as part of the site visit or assessment.
All triggers to increased monitoring in the RTCR are consistent with EPA's position, as informed by TCRDSAC discussions, that annual monitoring is a privilege for only the most well run systems. Systems that are not able to meet annual monitoring requirements would not be considered among the most well run, and therefore would be triggered into more frequent monitoring.
Some commenters assert that States will be overwhelmed by the burden of tracking and enforcement activities of RTCR because all small PWSs, especially NCWSs, will be triggered into monthly monitoring under the RTCR
In order to address these concerns, EPA made a change from the proposal to this final rule by changing the result of a monitoring violation trigger for systems on annual monitoring. Instead of a monitoring violation triggering a system directly into monthly monitoring, a monitoring violation will now trigger the system in violation to quarterly monitoring. All other triggers (i.e.,
EPA disagrees with any characterization of tracking and enforcement activities as unrelated to public health protection. Tracking and enforcement helps to ensure that systems take their samples, find contamination when it is present, and assess the system and make any necessary corrections improving public health protection. Thus, tracking and enforcement serves an integral role in the protection of public health that RTCR provides.
Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is a significant regulatory action. Accordingly, EPA submitted this action to the Office of Management and Budget (OMB) for review under Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011) and any changes made in response to OMB recommendations have been documented in the docket for this action.
EPA estimates that the RTCR will have an overall annual impact on PWSs of $14 M and that the impact on small entities (PWSs serving 10,000 people or fewer) will be $10.0M–$10.3M annualized at three and seven percent discount rates, respectively. These impacts are described in sections VI,
The information collection requirements in this rule will be submitted for approval to the OMB under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The information collection requirements are not enforceable until OMB approves them.
The information collected as a result of this rule will allow States/primacy agencies and EPA to determine appropriate requirements for specific systems and evaluate compliance with the proposed RTCR. Burden is defined at 5 CFR 1320.3(b) and means the total time, effort, and financial resources required to generate, maintain, retain, disclose, or provide information to or for a Federal agency. The burden for this final rule includes the time needed to conduct the following State and PWS activities:
State activities:
• Read and understand the rule;
• Mobilize (including primacy application), plan, and implement;
• Train PWS and consultant staff;
• Track compliance;
• Analyze and review PWS data;
• Review sample siting plans and recommend any revisions to PWSs;
• Make determinations concerning PWS monitoring requirements;
• Respond to PWSs that have positive samples;
• Recordkeeping;
• Review completed assessment forms and consult with the PWS about the assessment report;
• Review and coordinate with PWSs to determine optimal corrective actions to be implemented; and
• Provide consultation, review PN certifications, and file reports of violations.
PWS activities:
• Read and understand the rule;
• Planning and mobilization activities;
• Revise existing sample siting plans to identify sampling locations and collection schedules that are representative of water throughout the distribution system;
• Conduct routine, additional routine, and repeat monitoring, and report the results as required;
• Complete a Level 1 assessment if the PWS experiences a Level 1 trigger, and submit a form to the State to identify sanitary defects detected, corrective actions completed, and a timetable for any corrective actions not already completed;
• Complete a Level 2 assessment if the PWS experiences a Level 2 trigger, and submit a form to the State to identify sanitary defects detected, corrective actions completed, and a timetable for any corrective actions not already completed;
• Correct sanitary defects found through the performance of Level 1 or
• Develop and distribute Tier 1 public notices when
• Develop and distribute Tier 2 public notices when the PWSs fail to take corrective action; and
• Develop and distribute Tier 3 public notices when the PWSs fail to comply with the monitoring requirements or with mandatory reporting of required information within the specified timeframe.
For the first three years after publication of the RTCR in the FR, the major information requirements apply to 154,894 respondents. The total incremental burden associated with the change in moving from the information requirements of the 1989 TCR to those in the RTCR over the three years covered by the ICR is 2,518,578 hours, for an average of 839,526 hours per year. The total incremental cost over the three-year clearance period is $71.3M, for an average of $23.8M per year (simple average over three years). (Note that this is higher than the annualized costs for the RTCR because in the EA, the up-front costs that occur in the first three years, as well as future costs, are annualized over a 25-year time horizon.) The average burden per response (i.e., the amount of time needed for each activity that requires a collection of information) is 5.4 hours; the average cost per response is $153. The collection requirements are mandatory under SDWA section 1445(a)(1). Detail on the calculation of the RTCR's information collection burden and costs can be found in the ICR for the Revised Total Coliform Rule (USEPA 2012c) and chapter 8 of the EA (USEPA 2012a). A summary of the burden and costs of the collection is presented in Exhibit VII–1.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9. When this ICR is approved by OMB, the Agency will publish a technical amendment to 40 CFR part 9 in the FR to display the OMB control number for the approved information collection requirements contained in this final rule.
The Regulatory Flexibility Act (RFA) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.
The RFA provides default definitions for each type of small entity. Small entities are defined as: (1) A small business as defined by the Small Business Administration's (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any “not-for-profit enterprise which is independently owned and operated and is not dominant in its field.” However, the RFA also authorizes an agency to use alternative definitions for each category of small entity, “which are appropriate to the activities of the agency” after proposing the alternative definition(s) in the FR and taking comment. 5 USC 601(3)–(5). In addition, to establish an alternative small business definition, agencies must consult with SBA's Chief Counsel for Advocacy.
For purposes of assessing the impacts of the RTCR on small entities, EPA considered small entities to be PWSs serving 10,000 or fewer people. This is the cut-off level specified by Congress in the 1996 Amendments to the SDWA for small system flexibility provisions. As required by the RFA, EPA proposed using this alternative definition in the FR (63 FR 7620, February 13, 1998), requested public comment, consulted with the SBA, and finalized the alternative definition in the Agency's CCR regulation (63 FR 44524, August 19, 1998). As stated in that Final Rule, the alternative definition would be applied for all future drinking water regulations.
After considering the economic impacts of the RTCR on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. The small entities directly regulated by this rule are small PWSs serving 10,000 or fewer people. These include small CWSs, NTNCWSs, and TNCWSs, entities such as municipal water systems (publicly and privately owned), and privately-owned PWSs and for-profit businesses where provision of water may be ancillary, such as mobile home parks, day care centers, churches, schools and homeowner associations. We have determined that only 61 of 150,672 small systems (0.04%) will experience an impact of more than 1% of revenues, and that none of the small systems will experience an impact of 3% or greater of revenue. This information is described further in chapter 8 of the RTCR EA.
Although this final rule will not have a significant economic impact on a substantial number of small entities, EPA nonetheless has tried to reduce the impact of this rule on small PWSs. Provisions in the RTCR that result in
• Reduced routine monitoring for qualifying PWSs serving 1,000 or fewer people.
• Reduced number of repeat samples required for systems serving 1,000 or fewer people.
• Reduced additional routine monitoring for PWSs serving 4,100 or fewer people.
• Reduced PN requirements for all systems, including small systems.
EPA also conducted outreach to small entities and convened a Small Business Advocacy Review Panel to obtain advice and recommendations of representatives of the small entities that potentially would be subject to this rule's requirements. For a description of the Small Business Advocacy Review Panel and stakeholder recommendations, please see section VII.C of the preamble to the proposed RTCR,
This rule does not contain a Federal mandate under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531–1538 that may result in expenditures to State, local, and Tribal governments, in the aggregate, or to the private sector, of $100M or more in any one year. Expenditures associated with compliance, defined as the incremental costs beyond the 1989 TCR, will not surpass $100M in the aggregate in any year. Thus, this rule is not subject to the requirements of sections 202 and 205 of UMRA.
The RTCR is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. Costs to small entities are generally not significant, as described previously in section VII.C of this preamble,
This action does not have Federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government as specified in Executive Order 13132. The net change in cost for State, local, and Tribal governments in the aggregate is estimated to be approximately $0.2M and $0.4M at three percent and seven percent discount rates, respectively. Thus, Executive Order 13132 does not apply to this final rule.
Although section 6 of Executive Order 13132 does not apply to the RTCR, EPA conducted a Federalism Consultation, consistent with Executive Order 13132, in July 2008. The consultation included a stakeholder meeting where EPA requested comments on the impacts of the potential revisions to the 1989 TCR with respect to State, county and local governments. EPA did not receive any comments in response to this consultation. In addition, the advisory committee included representatives of State, local and Tribal governments, and through this process EPA consulted with State, local, and Tribal government representatives to ensure that their views were considered when the AIP recommendations for the proposed RTCR were developed. EPA also included representatives from four states on its workgroup for developing the proposed RTCR.
In the spirit of Executive Order 13132 and consistent with EPA policy to promote communications between EPA and State and local governments, EPA specifically solicited comment on the proposed action from State and local officials. Some States were concerned with the burden of implementing the rule, especially those States that have a high proportion of NCWSs. Under this rule, expenditures for assessments and corrective actions and increased monitoring are targeted to the fraction of PWSs that are most vulnerable to pathways for contamination of the distribution system, thereby minimizing the burden for the majority of PWSs and for States implementing the rule. As described in sections III.E.2,
This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). EPA consulted with Tribes throughout the development of the RTCR (as described in this section) and no issues that were particular to Tribal entities were identified.
Although Executive Order 13175 does not apply to this action, EPA consulted with Tribal officials in developing this action. EPA consulted with Tribal governments through the EPA American Indian Environmental Office; included a representative of the Native American Water Association on the advisory committee who helped develop and signed the AIP on recommendations on the proposed rule; and addressed Tribal concerns throughout the regulatory development process, as appropriate. The consultation included participation in three Tribal conference calls (EPA regional Tribal call (February 2008), National Indian Workgroup call (March 2008), and National Tribal Water Conference (March 2008)). EPA requested comments on the 1989 TCR, requested suggestions for 1989 TCR revisions (March 2008), and presented possible revisions to the 1989 TCR to the National Tribal Council (April 2008). In addition, the advisory committee included a representative from the Native American Water Association who represented Tribal entities, and through this process EPA ensured that Tribal views were considered when the AIP recommendations for the proposed RTCR were developed. None of these consultations identified issues that were particular to Tribal entities. EPA also specifically solicited additional comment on the proposed rule from Tribal officials, and no additional issues were identified. As a result of the Tribal consultations and other Tribal outreach, EPA has determined that the RTCR is not anticipated to have a negative impact on Tribal systems. Thus, Executive Order 13175 does not apply to this action.
The RTCR is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because it is not economically significant as defined in Executive Order 12866, and because the Agency does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. This action's health and risk assessments regarding children are contained in section VI.K.1 of this preamble,
This rule is not a “significant energy action” as defined in Executive Order 13211 (66 FR 28355, May 22, 2001), because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Additionally, none of the requirements of this rule involve the installation of treatment or other components that use a measurable amount of energy.
Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104–113, 12(d) (15 U.S.C. 272 note), directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when EPA decides not to use available and applicable voluntary consensus standards.
This rule involves technical voluntary consensus standards. As in the 1989 TCR, under the provisions of the RTCR water systems are required to use several analytical methods to monitor for total coliforms and/or
Executive Order 12898 (59 FR 7629, February 16, 1994) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission. Agencies must do this by identifying and addressing, as appropriate, any disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the U.S.
EPA has determined that this action will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it increases the level of environmental protection for all affected populations without having any disproportionately high and adverse human health or environmental effects on any population, including any minority or low-income population. The RTCR applies uniformly to all PWSs and consequently provides health protection equally to all income and minority groups served by PWSs. The RTCR and other drinking water regulations are expected to have a positive effect on human health regardless of the social or economic status of a specific population. To the extent that contaminants in drinking water might be disproportionately high among minority or low-income populations (which is unknown), the RTCR contributes toward removing those differences by assuring that all public water systems meet drinking water standards and take appropriate corrective action whenever appropriate. Thus, the RTCR meets the intent of the Federal policy requiring incorporation of environmental justice into Federal agency missions.
In accordance with section 1412(d) and (e) of the SDWA, EPA consulted with the SAB, the NDWAC, and the Secretary of the US Department of Health and Human Services on the RTCR.
EPA met with the Drinking Water Committee (DWC) of the SAB to discuss the proposed RTCR on May 20, 2009 (teleconference) and June 9 and 10, 2009 (Washington, DC). The SAB DWC review focused on (1) the data sources used to estimate baseline total coliform and
Overall, the SAB DWC supported EPA's analysis. SAB members commended EPA for making use of the best available data to assess the impacts of the proposed rule. The SAB DWC supported the decision by EPA not to quantify public health benefits, acknowledging that EPA had insufficient data to do so. However, they noted in their analysis of the EA that they are not generally supportive of decreased monitoring, and that overall, the Alternative option appears to address and protect public health sooner in time than the AIP proposed implementation. The SAB DWC recommended that EPA clarify rationales for assumptions; expand explanations of sensitivity analyses that were included; provide further justification in those areas in which sensitivity analyses were not conducted; and collect data after promulgation of the rule to allow EPA to better understand the public health impacts of the RTCR.
In response to the SAB DWC recommendations, EPA conducted sensitivity analyses to explore a wider range of assumptions regarding the percentage of assessments leading to corrective actions and to demonstrate that using an annual average for occurrence provided results comparable to varying the occurrence based on the season. EPA also added an exhibit in the EA that summarizes all significant model parameters and assumptions, their influence on variability and uncertainty, and their most likely effect on benefits or costs. The added exhibits and expanded and clarified text can be found in the RTCR EA. A copy of the SAB report (SAB 2010) is available in the docket for this rule.
EPA consulted with NDWAC on May 28, 2009, in Seattle, Washington, to discuss the proposed RTCR. NDWAC members expressed concern that a rule based on the AIP sounds complicated and recommended that EPA provide the utilities and States with tools to help them understand the revised rule provisions and to assist with providing public education. In response to
EPA heard from commenters that the RTCR will be difficult to implement in States that have a lot of small NCWSs, especially the reduced and increased monitoring provisions. To address this concern, EPA provided flexibility to States to help them implement, and to PWSs to help them comply, with the monitoring provisions of the RTCR. States are given the flexibility to not count monitoring violations towards eligibility for a TNCWS to remain on quarterly monitoring or to return to quarterly monitoring as long as the system collects the make-up sample by the end of the next monitoring period. EPA also changed the consequence of having one RTCR monitoring violation for systems on annual monitoring. Instead of having to go to monthly monitoring, the system now moves to quarterly monitoring. See section III.C.2.b of this preamble,
NDWAC members also suggested that EPA request comment on the costs and benefits of reduced monitoring. Specifically, NDWAC expressed concern that a reduction in the number of certain samples taken (such as the reduction in the number of repeat and additional routine samples for some small systems) could lessen the opportunity for systems to identify violations. Thus, EPA requested comment on the cost and benefit of reduced monitoring.
EPA received comment that expressed concern that a reduction in the number of additional routine samples reduces the likelihood of detecting both total coliforms and
A few NDWAC members stated that they would like to provide EPA with additional advice on PN. To follow up on this request, EPA met with several NDWAC members on July 1, 2009, to review and discuss the 1989 TCR PN requirements, the advisory committee's recommendations on revisions to the PN requirements, and to obtain feedback from NDWAC members. EPA considered the recommendations from NDWAC in developing the PN requirements and requested comment on these issues in the preamble to the proposed RTCR.
EPA consulted with NDWAC again on July 21, 2011, to discuss the draft final rule and comments received on the proposed RTCR, specifically regarding those areas where NDWAC made recommendations in the March and July 2009 consultations. The NDWAC members recommended that in finalizing the RTCR, EPA follow the recommendations of the TCRDSAC.
EPA completed its consultations with the US Department of Health and Human Services on October 5, 2009, and August 8, 2011, as required by SDWA section 1412(d). EPA provided an informational briefing to the Center for Food Safety office of the Food and Drug Administration and representatives from the Office of the Assistant Secretary for Health and the Assistant Secretary for Planning and Evaluation at the Department of Health and Human Services. No substantive comments were received as a result of the briefing and consultation.
As required by Section 1412(b)(3)(C)(i)(V) of the SDWA, EPA sought public comment regarding the effects of contamination associated with the proposed RTCR on the general population and sensitive subpopulations. Sensitive subpopulations include “infants, children, pregnant women, the elderly, individuals with a history of serious illness, or other subpopulations that are identified as likely to be at greater risk of adverse health effects due to exposure to contaminants in drinking water than the general population” (SDWA section 1412(b)(3)(C)(i)(V), 42 U.S.C. 300g–1(b)(3)(C)(i)(V)).
Pregnant and lactating women may be at an increased risk from pathogens as well as act as a source of infection for newborns. Infection during pregnancy may also result in the transmission of infection from the mother to the child
Infectious diseases are also a major problem for the elderly because immune function declines with age. As a result, outbreaks of waterborne diseases can be devastating on the elderly community (e.g., nursing homes) and may increase the possibility of significantly higher mortality rates in the elderly than in the general population.
Immunocompromised individuals are a growing proportion of the population with the continued increase in Human Immunodeficiency Virus/AIDS, the aging population, and the escalation in organ and tissue transplantations. Immunocompromised individuals are more susceptible to severe and invasive infection. These infections are particularly difficult to treat and can result in a significantly higher mortality than in immunocompetent persons.
It is anticipated that the requirements of the RTCR will help reduce pathways of entry for fecal contamination and/or waterborne pathogens into the distribution system, thereby reducing exposure and risk from these contaminants in drinking water to the entire general population. The RTCR seeks to provide a similar level of drinking water protection to all groups including sensitive subpopulations, thus meeting the intent of this Federal policy. See also section VI.K of this preamble,
Section 1420(d)(3) of the SDWA, as amended, requires that, in promulgating an NPDWR, the Administrator shall include an analysis of the likely effect of compliance with the regulation on the technical, managerial, and financial (TMF) capacity of PWSs. The following analysis fulfills this statutory obligation by identifying the incremental impact that the RTCR will have on the TMF capacity of regulated water systems. Analyses presented in this document reflect only the impact of new or revised requirements, as established by the RTCR; the impacts of previously established requirements on system capacity are not considered.
EPA has defined overall water system capacity as the ability to plan for, achieve, and maintain compliance with applicable drinking water standards. Capacity encompasses three components: technical, managerial, and financial. Technical capacity is the physical and operational ability of a water system to meet SDWA requirements. This refers to the physical infrastructure of the water system,
EPA looked at the major requirements of the RTCR that may affect the TMF capacity of PWSs. These requirements include: sample siting plan revision, monitoring, assessments, corrective actions, and PNs. Another factor that may affect the TMF capacity is the need for PWS personnel to familiarize themselves with the RTCR requirements. EPA developed a scoring system to analyze the impact of complying with these requirements on the TMF capacity of PWSs. A detailed discussion of EPA's analysis is presented in chapter 8.14 of the RTCR EA (USEPA 2012a).
The RTCR will apply to all PWSs and may affect 51,972 CWSs, 18,729 NTNCWSs, and 84,136 TNCWSs—154,837 systems in all. While some systems may require increased TMF capacity to comply with the new RTCR requirements, or will need to tailor their compliance approaches to match their capacities, most systems will not.
Small systems will likely face only a small challenge to their technical and managerial capacity as a result of efforts to familiarize themselves with the monitoring requirements of the RTCR. Routine and repeat monitoring requirements under the RTCR are essentially the same as under the 1989 TCR, with more explicit criteria to qualify for reduced monitoring. Therefore, understanding the RTCR monitoring requirements is not expected to pose many new technical or managerial capacity issues for small systems.
Small system technical and managerial capacity may be affected by the assessment requirements of the RTCR. Performing assessments may require the system to increase staffing levels in addition to providing training to ensure that system staff understand how those assessments are to be performed. Reporting, record-keeping, and data administration requirements will also affect the managerial capacity of small systems.
Small systems that are required to take corrective action are expected to experience the most significant financial challenge since some corrective actions may consist of a large, one-time capital expenditure to resolve the problem.
Large systems will likely not face any significant challenge to their technical and managerial capacity as a result of efforts to familiarize themselves with the RTCR. Most large systems are familiar with the 1989 TCR and there are no changes in the basic monitoring requirements for large systems under the RTCR. They are therefore assumed to already have the TMF capacity in place for the RTCR.
Only large systems performing assessments and corrective actions would be expected to face a significant challenge meeting the TMF capacity requirements. However, this requirement is only necessary when monitoring reveals potential problems, and this is not expected to occur significantly in large systems above that experienced under the 1989 TCR. Many large systems already have the TMF capacity to conduct assessments and
The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the US. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the US prior to publication of the rule in the FR. A Major rule cannot take effect until 60 days after it is published in the FR. This action is not a “major rule” as defined by 5 U.S.C. 804(2). This rule will be effective April 15, 2013.
Environmental protection, Chemicals, Incorporation by reference, Indian-lands, Intergovernmental relations, Radiation protection, Reporting and recordkeeping requirements, Water supply.
Environmental protection, Administrative practice and procedure, Chemicals, Indian-lands, Radiation protection, Reporting and recordkeeping requirements, Water supply.
For the reasons set forth in the preamble, Title 40 chapter 1 of the Code of Federal Regulations is amended as follows:
42 U.S.C. 300f, 300g–1, 300g–2, 300g–3, 300g–4, 300g–5, 300g–6, 300j–4, 300j–9, and 300j–11.
(a) Variances or exemptions from certain provisions of these regulations may be granted pursuant to sections 1415 and 1416 of the Act and subpart K of part 142 of this chapter (for small system variances) by the entity with primary enforcement responsibility, except that variances or exemptions from the MCLs for total coliforms and
(b) EPA has stayed the effective date of this section relating to the total coliform MCL of § 141.63(a) for systems that demonstrate to the State that the violation of the total coliform MCL is due to a persistent growth of total coliforms in the distribution system rather than fecal or pathogenic contamination, a treatment lapse or deficiency, or a problem in the operation or maintenance of the distribution system. This is stayed until March 31, 2016, at which time the total coliform MCL is no longer effective.
Note to paragraph (a): As provided in § 142.304(a), small system variances are not available for rules addressing microbial contaminants, which would
(h) The provisions of paragraphs (a) and (d) of this section are applicable until March 31, 2016. The provisions of paragraphs (b), (c), (e), (f), and (g) of this section are applicable until all required repeat monitoring under paragraph (b) of this section and fecal coliform or
(a) MCLGs for the following contaminants are as indicated:
(b) The MCLG identified in paragraph (a)(4) of this section is applicable until March 31, 2016. The MCLG identified in paragraph (a)(6) of this section is applicable beginning April 1, 2016.
(a) Until March 31, 2016, the total coliform MCL is based on the presence or absence of total coliforms in a sample, rather than coliform density.
(1) For a system that collects at least 40 samples per month, if no more than 5.0 percent of the samples collected during a month are total coliform-positive, the system is in compliance with the MCL for total coliforms.
(2) For a system that collects fewer than 40 samples per month, if no more than one sample collected during a month is total coliform-positive, the system is in compliance with the MCL for total coliforms.
(b) Until March 31, 2016, any fecal coliform-positive repeat sample or
(c) Beginning April 1, 2016, a system is in compliance with the MCL for
(1) The system has an
(2) The system has a total coliform-positive repeat sample following an
(3) The system fails to take all required repeat samples following an
(4) The system fails to test for
(d) Until March 31, 2016, a public water system must determine compliance with the MCL for total coliforms in paragraphs (a) and (b) of this section for each month in which it is required to monitor for total coliforms. Beginning April 1, 2016, a public water system must determine compliance with the MCL for
(e) The Administrator, pursuant to section 1412 of the Act, hereby identifies the following as the best technology, treatment techniques, or other means available for achieving compliance with the maximum contaminant level for total coliforms in paragraphs (a) and (b) of this section and for achieving compliance with the maximum contaminant level for
(1) Protection of wells from fecal contamination by appropriate placement and construction;
(2) Maintenance of a disinfectant residual throughout the distribution system;
(3) Proper maintenance of the distribution system including appropriate pipe replacement and repair procedures, main flushing programs, proper operation and maintenance of storage tanks and reservoirs, cross connection control, and continual maintenance of positive water pressure in all parts of the distribution system;
(4) Filtration and/or disinfection of surface water, as described in subparts H, P, T, and W of this part, or disinfection of ground water, as described in subpart S of this part, using strong oxidants such as chlorine, chlorine dioxide, or ozone; and
(5) For systems using ground water, compliance with the requirements of an EPA-approved State Wellhead Protection Program developed and implemented under section 1428 of the SDWA.
(f) The Administrator, pursuant to section 1412 of the Act, hereby identifies the technology, treatment techniques, or other means available identified in paragraph (e) of this section as affordable technology, treatment techniques, or other means available to systems serving 10,000 or fewer people for achieving compliance with the maximum contaminant level for total coliforms in paragraphs (a) and (b) of this section and for achieving compliance with the maximum contaminant level for
(b) * * *
(5) The public water system must comply with the maximum contaminant level (MCL) for total coliforms in § 141.63(a) and (b) and the MCL for
(b) * * *
(6)(i) Until March 31, 2016, the residual disinfectant concentration must be measured at least at the same points in the distribution system and at the same time as total coliforms are sampled, as specified in § 141.21.
(c) * * *
(3)(i) Until March 31, 2016, the residual disinfectant concentration must be measured at least at the same points in the distribution system and at the same time as total coliforms are sampled, as specified in § 141.21. Beginning April 1, 2016, the residual disinfectant concentration must be measured at least at the same points in the distribution system and at the same time as total coliforms are sampled, as specified in §§ 141.854 through 141.858. The State may allow a public water system which uses both a surface water source or a ground water source under direct influence of surface water, and a ground water source, to take disinfectant residual samples at points other than the total coliform sampling points if the State determines that such points are more representative of treated (disinfected) water quality within the distribution system. Heterotrophic bacteria, measured as heterotrophic plate count (HPC) as specified in paragraph (a)(1) of this section, may be measured in lieu of residual disinfectant concentration.
(c) * * *
(1) * * *
(i)
(c) * * *
(4) A report that contains information regarding a Level 1 or Level 2 Assessment required under Subpart Y of this part must include the applicable definitions:
(i)
(ii)
(d) * * *
(4) * * *
(iv) For contaminants subject to an MCL, except turbidity, total coliform, fecal coliform and
(vii) For total coliform analytical results until March 31, 2016:
(viii) For fecal coliform and
(x) For
(h) * * *
(7)
(A) Coliforms are bacteria that are naturally present in the environment and are used as an indicator that other, potentially harmful, waterborne pathogens may be present or that a potential pathway exists through which contamination may enter the drinking water distribution system. We found coliforms indicating the need to look for potential problems in water treatment or distribution. When this occurs, we are required to conduct assessment(s) to identify problems and to correct any problems that were found during these assessments.
(B) During the past year we were required to conduct [INSERT NUMBER OF LEVEL 1ASSESSMENTS] Level 1 assessment(s). [INSERT NUMBER OF LEVEL 1 ASSESSMENTS] Level 1 assessment(s) were completed. In addition, we were required to take [INSERT NUMBER OF CORRECTIVE ACTIONS] corrective actions and we completed [INSERT NUMBER OF CORRECTIVE ACTIONS] of these actions.
(C) During the past year [INSERT NUMBER OF LEVEL 2 ASSESSMENTS] Level 2 assessments were required to be completed for our water system. [INSERT NUMBER OF LEVEL 2 ASSESSMENTS] Level 2 assessments were completed. In addition, we were required to take [INSERT NUMBER OF CORRECTIVE ACTIONS] corrective actions and we completed [INSERT NUMBER OF CORRECTIVE ACTIONS] of these actions.
(D) Any system that has failed to complete all the required assessments or correct all identified sanitary defects, is in violation of the treatment technique requirement and must also include one or both of the following statements, as appropriate:
(
(
(ii) Any system required to conduct a Level 2 assessment due to an
(A)
(B) We were required to complete a Level 2 assessment because we found
(C) Any system that has failed to complete the required assessment or correct all identified sanitary defects, is in violation of the treatment technique requirement and must also include one or both of the following statements, as appropriate:
(
(
(iii) If a system detects
(A) We had an
(B) We had a total coliform-positive repeat sample following an
(C) We failed to take all required repeat samples following an
(D) We failed to test for
(iv) If a system detects
(b) * * *
(2) The public water system must repeat the notice every three months as long as the violation or situation persists, unless the primacy agency determines that appropriate circumstances warrant a different repeat notice frequency. In no circumstance may the repeat notice be given less frequently than once per year. It is not appropriate for the primacy agency to allow less frequent repeat notice for an MCL or treatment technique violation under the Total Coliform Rule or subpart Y of this part or a treatment technique violation under the Surface Water Treatment Rule or Interim Enhanced Surface Water Treatment Rule. It is also not appropriate for the primacy agency to allow through its rules or policies across-the-board reductions in the repeat notice frequency for other ongoing violations requiring a Tier 2 repeat notice. Primacy agency determinations allowing repeat notices to be given less frequently than once every three months must be in writing.
(a) * * *
† Until March 31, 2016.
‡ Beginning April 1, 2016.
1. Violations and other situations not listed in this table (e.g., failure to prepare Consumer Confidence Reports), do not require notice, unless otherwise determined by the primacy agency. Primacy agencies may, at their option, also require a more stringent public notice tier (e.g., Tier 1 instead of Tier 2 or Tier 2 instead of Tier 3) for specific violations and situations listed in this Appendix, as authorized under § 141.202(a) and § 141.203(a).
2. MCL—Maximum contaminant level, MRDL—Maximum residual disinfectant level, TT—Treatment technique
3. The term Violations of National Primary Drinking Water Regulations (NPDWR) is used here to include violations of MCL, MRDL, treatment technique, monitoring, and testing procedure requirements.
4. Failure to test for fecal coliform or E. coli is a Tier 1 violation if testing is not done after any repeat sample tests positive for coliform. All other total coliform monitoring and testing procedure violations are Tier 3.
† Until March 31, 2016.
‡ Beginning April 1, 2016.
1. MCLG—Maximum contaminant level goal
2. MCL—Maximum contaminant level
3. For water systems analyzing at least 40 samples per month, no more than 5.0 percent of the monthly samples may be positive for total coliforms. For systems analyzing fewer than 40 samples per month, no more than one sample per month may be positive for total coliforms.
(a)
(1)
(i) The system does not provide at least 4-log treatment of viruses (using inactivation, removal, or a State-approved combination of 4-log virus inactivation and removal) before or at the first customer for each ground water source; and either
(ii) The system is notified that a sample collected under § 141.21(a) is total coliform-positive and the sample is not invalidated under § 141.21(c) until March 31, 2016, or
(iii) The system is notified that a sample collected under §§ 141.854 through 141.857 is total coliform-positive and the sample is not invalidated under § 141.853(c) beginning April 1, 2016.
(2)
(i) The State may extend the 24-hour time limit on a case-by-case basis if the system cannot collect the ground water source water sample within 24 hours due to circumstances beyond its control. In the case of an extension, the State must specify how much time the system has to collect the sample.
(ii) If approved by the State, systems with more than one ground water source may meet the requirements of this paragraph (a)(2) by sampling a representative ground water source or sources. If directed by the State, systems must submit for State approval a triggered source water monitoring plan that identifies one or more ground water sources that are representative of each monitoring site in the system's sample siting plan under § 141.21(a) until March 31, 2016, or under § 141.853 beginning April 1, 2016, and that the system intends to use for representative sampling under this paragraph.
(iii) Until March 31, 2016, a ground water system serving 1,000 or fewer people may use a repeat sample collected from a ground water source to meet both the requirements of § 141.21(b) and to satisfy the monitoring requirements of paragraph (a)(2) of this section for that ground water source only if the State approves the use of
(iv) Beginning April 1, 2016, a ground water system serving 1,000 or fewer people may use a repeat sample collected from a ground water source to meet both the requirements of subpart Y and to satisfy the monitoring requirements of paragraph (a)(2) of this section for that ground water source only if the State approves the use of
(3)
(4)
(ii) In addition to the other requirements of this paragraph (a), a wholesale ground water system must comply with paragraphs (a)(4)(ii)(A) and (a)(4)(ii)(B) of this section.
(A) A wholesale ground water system that receives notice from a consecutive system it serves that a sample collected under § 141.21(a) until March 31, 2016, or collected under §§ 141.854 through 141.857 beginning April 1, 2016, is total coliform-positive must, within 24 hours of being notified, collect a sample from its ground water source(s) under paragraph (a)(2) of this section and analyze it for a fecal indicator under paragraph (c) of this section.
(B) If the sample collected under paragraph (a)(4)(ii)(A) of this section is fecal indicator-positive, the wholesale ground water system must notify all consecutive systems served by that ground water source of the fecal indicator source water positive within 24 hours of being notified of the ground water source sample monitoring result and must meet the requirements of paragraph (a)(3) of this section.
(5)
(i) The State determines, and documents in writing, that the total coliform-positive sample collected under § 141.21(a) until March 31, 2016, or under §§ 141.854 through 141.857 beginning April 1, 2016, is caused by a distribution system deficiency; or
(ii) The total coliform-positive sample collected under § 141.21(a) until March 31, 2016, or under §§ 141.854 through 141.857 beginning April 1, 2016, is collected at a location that meets State criteria for distribution system conditions that will cause total coliform-positive samples.
(b) * * *
(4) For consecutive systems, documentation of notification to the wholesale system(s) of total coliform-positive samples that are not invalidated under § 141.21(c) until March 31, 2016, or under § 141.853 beginning April 1,
(a) * * *
(3) Air carriers must conduct analyses for total coliform and
(5) The invalidation of a total coliform sample result can be made only by the Administrator in accordance with § 141.21(c)(1)(i), (ii), or (iii) or by the certified laboratory in accordance with § 141.21(c)(2) until March 31, 2016, or in accordance with § 141.853(c) beginning April 1, 2016, with the Administrator acting as the State.
(a)
(b)
(c)
(d)
(e)
(a)
(2) Systems need only determine the presence or absence of total coliforms and
(3) The time from sample collection to initiation of test medium incubation may not exceed 30 hours. Systems are encouraged but not required to hold samples below 10 deg. C during transit.
(4) If water having residual chlorine (measured as free, combined, or total chlorine) is to be analyzed, sufficient sodium thiosulfate (Na
(5) Systems must conduct total coliform and
(b)
(c)
(1) American Public Health Association, 800 I Street, NW., Washington, DC 20001.
(i) “Standard Methods for the Examination of Water and Wastewater,” 20th edition (1998):
(A) Standard Methods 9221, “Multiple-Tube Fermentation Technique for Members of the Coliform Group,” B.1, B.2, “Standard Total Coliform Fermentation Technique.”
(B) Standard Methods 9221, “Multiple-Tube Fermentation Technique for Members of the Coliform Group,” D.1, D.2, “Presence-Absence (P–A) Coliform Test.”
(C) Standard Methods 9222, “Membrane Filter Technique for Members of the Coliform Group,” B, “Standard Total Coliform Membrane Filter Procedure.”
(D) Standard Methods 9222, “Membrane Filter Technique for Members of the Coliform Group,” C,
(E) Standard Methods 9223, “Enzyme Substrate Coliform Test,” B, “Enzyme Substrate Test,” Colilert® and Colisure®.
(F) Standard Methods 9221, “Multiple Tube Fermentation Technique for Members of the Coliform Group,” F.1, “
(G) Standard Methods 9222, “Membrane Filter Technique for Members of the Coliform Group,” G.1.
(H) Standard Methods 9222, “Membrane Filter Technique for Members of the Coliform Group,” G.1.
(ii) “Standard Methods for the Examination of Water and Wastewater,” 21st edition (2005):
(A) Standard Methods 9221, “Multiple-Tube Fermentation Technique for Members of the Coliform Group,” B.1, B.2, “Standard Total Coliform Fermentation Technique.”
(B) Standard Methods 9221, “Multiple-Tube Fermentation Technique for Members of the Coliform Group,” D.1, D.2, “Presence-Absence (P–A) Coliform Test.”
(C) Standard Methods 9222, “Membrane Filter Technique for Members of the Coliform Group,” B, “Standard Total Coliform Membrane Filter Procedure.”
(D) Standard Methods 9222, “Membrane Filter Technique for Members of the Coliform Group,” C, “Delayed-Incubation Total Coliform Procedure.”
(E) Standard Methods 9223, “Enzyme Substrate Coliform Test,” B, “Enzyme Substrate Test,” Colilert® and Colisure®.
(F) Standard Methods 9221, “Multiple Tube Fermentation Technique for Members of the Coliform Group,” F.1, “
(G) Standard Methods 9222, “Membrane Filter Technique for Members of the Coliform Group,” G.1.
(H) Standard Methods 9222, “Membrane Filter Technique for Members of the Coliform Group,” G.1.
(iii) “Standard Methods Online” available at
(A) Standard Methods Online 9221, “Multiple-Tube Fermentation Technique for Members of the Coliform Group” (1999), B.1, B.2–99, “Standard Total Coliform Fermentation Technique.”
(B) Standard Methods Online 9221, “Multiple-Tube Fermentation Technique for Members of the Coliform Group” (1999), D.1, D.2–99, “Presence-Absence (P–A) Coliform Test.”
(C) Standard Methods Online 9222, “Membrane Filter Technique for Members of the Coliform Group” (1997), B–97, “Standard Total Coliform Membrane Filter Procedure.”
(D) Standard Methods Online 9222, “Membrane Filter Technique for Members of the Coliform Group” (1997), C–97, “Delayed-Incubation Total Coliform Procedure.”
(E) Standard Methods Online 9223, “Enzyme Substrate Coliform Test” (1997), B–97, “Enzyme Substrate Test”, Colilert® and Colisure®.
(2) Charm Sciences, Inc., 659 Andover Street, Lawrence, MA 01843–1032, telephone 1–800–343–2170:
(i) E*Colite®—“Charm E*Colite
(ii) [Reserved]
(3) CPI International, Inc., 5580 Skylane Blvd., Santa Rosa, CA, 95403, telephone 1–800–878–7654:
(i) modified Colitag®, ATP D05–0035—“Modified Colitag
(ii) [Reserved]
(4) EMD Millipore (a division of Merck KGaA, Darmstadt Germany), 290 Concord Road, Billerica, MA 01821, telephone 1–800–645–5476:
(i) Chromocult—“Chromocult® Coliform Agar Presence/Absence Membrane Filter Test Method for Detection and Identification of Coliform Bacteria and
(ii) Readycult®—“Readycult® Coliforms 100 Presence/Absence Test for Detection and Identification of Coliform Bacteria and
(5) EPA's Water Resource Center (MC–4100T), 1200 Pennsylvania Avenue NW., Washington, DC 20460, telephone 1–202–566–1729:
(i) EPA Method 1604, EPA 821–R–02–024—“EPA Method 1604: Total Coliforms and
(ii) [Reserved]
(6) Hach Company, P.O. Box 389, Loveland, CO 80539, telephone 1–800–604–3493:
(i) m-ColiBlue24®—“Membrane Filtration Method m-ColiBlue24® Broth,” Revision 2, August 17, 1999.
(ii) [Reserved]
(a)
(2) Systems must collect samples at regular time intervals throughout the month, except that systems that use only ground water and serve 4,900 or fewer people may collect all required samples on a single day if they are taken from different sites.
(3) Systems must take at least the minimum number of required samples even if the system has had an
(4) A system may conduct more compliance monitoring than is required by this subpart to investigate potential problems in the distribution system and use monitoring as a tool to assist in uncovering problems. A system may take more than the minimum number of required routine samples and must include the results in calculating whether the coliform treatment technique trigger in § 141.859(a)(1)(i) and (ii) has been exceeded only if the samples are taken in accordance with the existing sample siting plan and are representative of water throughout the distribution system.
(5) Systems must identify repeat monitoring locations in the sample siting plan. Unless the provisions of paragraphs (a)(5)(i) or (a)(5)(ii) of this section are met, the system must collect at least one repeat sample from the sampling tap where the original total coliform-positive sample was taken, and at least one repeat sample at a tap within five service connections upstream and at least one repeat sample
(i) Systems may propose repeat monitoring locations to the State that the system believes to be representative of a pathway for contamination of the distribution system. A system may elect to specify either alternative fixed locations or criteria for selecting repeat sampling sites on a situational basis in a standard operating procedure (SOP) in its sample siting plan. The system must design its SOP to focus the repeat samples at locations that best verify and determine the extent of potential contamination of the distribution system area based on specific situations. The State may modify the SOP or require alternative monitoring locations as needed.
(ii) Ground water systems serving 1,000 or fewer people may propose repeat sampling locations to the State that differentiate potential source water and distribution system contamination (e.g., by sampling at entry points to the distribution system). A ground water system with a single well required to conduct triggered source water monitoring may, with written State approval, take one of its repeat samples at the monitoring location required for triggered source water monitoring under § 141.402(a) if the system demonstrates to the State's satisfaction that the sample siting plan remains representative of water quality in the distribution system. If approved by the State, the system may use that sample result to meet the monitoring requirements in both § 141.402(a) and this section.
(A) If a repeat sample taken at the monitoring location required for triggered source water monitoring is
(B) If a system takes more than one repeat sample at the monitoring location required for triggered source water monitoring under § 141.402(a), and more than one repeat sample is
(C) If all repeat samples taken at the monitoring location required for triggered source water monitoring are
(6) States may review, revise, and approve, as appropriate, repeat sampling proposed by systems under paragraphs (a)(5)(i) and (ii) of this section. The system must demonstrate that the sample siting plan remains representative of the water quality in the distribution system. The State may determine that monitoring at the entry point to the distribution system (especially for undisinfected ground water systems) is effective to differentiate between potential source water and distribution system problems.
(b)
(c)
(1) The State may invalidate a total coliform-positive sample only if the conditions of paragraph (c)(1)(i), (ii), or (iii) of this section are met.
(i) The laboratory establishes that improper sample analysis caused the total coliform-positive result.
(ii) The State, on the basis of the results of repeat samples collected as required under § 141.858(a), determines that the total coliform-positive sample resulted from a domestic or other non-distribution system plumbing problem. The State cannot invalidate a sample on the basis of repeat sample results unless all repeat sample(s) collected at the same tap as the original total coliform-positive sample are also total coliform-positive, and all repeat samples collected at a location other than the original tap are total coliform-negative (e.g., a State cannot invalidate a total coliform-positive sample on the basis of repeat samples if all the repeat samples are total coliform-negative, or if the system has only one service connection).
(iii) The State has substantial grounds to believe that a total coliform-positive result is due to a circumstance or condition that does not reflect water quality in the distribution system. In this case, the system must still collect all repeat samples required under § 141.858(a), and use them to determine whether a coliform treatment technique trigger in § 141.859 has been exceeded. To invalidate a total coliform-positive sample under this paragraph, the decision and supporting rationale must be documented in writing, and approved and signed by the supervisor of the State official who recommended the decision. The State must make this document available to EPA and the public. The written documentation must state the specific cause of the total coliform-positive sample, and what action the system has taken, or will take, to correct this problem. The State may not invalidate a total coliform-positive sample solely on the grounds that all repeat samples are total coliform-negative.
(2) A laboratory must invalidate a total coliform sample (unless total coliforms are detected) if the sample produces a turbid culture in the absence of gas production using an analytical method where gas formation is examined (e.g., the Multiple-Tube Fermentation Technique), produces a turbid culture in the absence of an acid reaction in the Presence-Absence (P–A) Coliform Test, or exhibits confluent growth or produces colonies too numerous to count with an analytical method using a membrane filter (e.g., Membrane Filter Technique). If a laboratory invalidates a sample because of such interference, the system must collect another sample from the same location as the original sample within 24 hours of being notified of the interference problem, and have it analyzed for the presence of total coliforms. The system must continue to re-sample within 24 hours and have the samples analyzed until it obtains a valid result. The State may waive the 24-hour time limit on a case-by-case basis. Alternatively, the State may implement criteria for waiving the 24-hour
(a)
(2) Following any total coliform-positive sample taken under the provisions of this section, systems must comply with the repeat monitoring requirements and
(3) Once all monitoring required by this section and § 141.858 for a calendar month has been completed, systems must determine whether any coliform treatment technique triggers specified in § 141.859 have been exceeded. If any trigger has been exceeded, systems must complete assessments as required by § 141.859.
(4) For the purpose of determining eligibility for remaining on or qualifying for quarterly monitoring under the provisions of paragraphs (f)(4) and (g)(2), respectively, of this section for transient non-community water systems, the State may elect to not count monitoring violations under § 141.860(c)(1) of this part if the missed sample is collected no later than the end of the monitoring period following the monitoring period in which the sample was missed. The system must collect the make-up sample in a different week than the routine sample for that monitoring period and should collect the sample as soon as possible during the monitoring period. The State may not use this provision under paragraph (h) of this section. This authority does not affect the provisions of §§ 141.860(c)(1) and 141.861(a)(4) of this part.
(b)
(c)
(2) Beginning April 1, 2016, the State must perform a special monitoring evaluation during each sanitary survey to review the status of the system, including the distribution system, to determine whether the system is on an appropriate monitoring schedule. After the State has performed the special monitoring evaluation during each sanitary survey, the State may modify the system's monitoring schedule, as necessary, or it may allow the system to stay on its existing monitoring schedule, consistent with the provisions of this section. The State may not allow systems to begin less frequent monitoring under the special monitoring evaluation unless the system has already met the applicable criteria for less frequent monitoring in this section. For seasonal systems on quarterly or annual monitoring, this evaluation must include review of the approved sample siting plan, which must designate the time period(s) for monitoring based on site-specific considerations (e.g., during periods of highest demand or highest vulnerability to contamination). The seasonal system must collect compliance samples during these time periods.
(d)
(e)
(1) The system has a clean compliance history for a minimum of 12 months;
(2) The most recent sanitary survey shows that the system is free of sanitary defects or has corrected all identified sanitary defects, has a protected water source, and meets approved construction standards; and
(3) The State has conducted an annual site visit within the last 12 months and the system has corrected all identified sanitary defects. The system may substitute a Level 2 assessment that meets the criteria in § 141.859(b) for the State annual site visit.
(f)
(1) The system triggers a Level 2 assessment or two Level 1 assessments under the provisions of § 141.859 in a rolling 12-month period.
(2) The system has an
(3) The system has a coliform treatment technique violation.
(4) The system has two subpart Y monitoring violations or one subpart Y monitoring violation and one Level 1 assessment under the provisions of § 141.859 in a rolling 12-month period for a system on quarterly monitoring.
(5) The system has one subpart Y monitoring violation for a system on annual monitoring.
(g)
(1) Within the last 12 months, the system must have a completed sanitary survey or a site visit by the State or a voluntary Level 2 assessment by a party approved by the State, be free of sanitary defects, and have a protected water source; and
(2) The system must have a clean compliance history for a minimum of 12 months.
(h)
(1) An annual site visit by the State and correction of all identified sanitary defects. The system may substitute a voluntary Level 2 assessment by a party approved by the State for the State annual site visit in any given year.
(2) The system must have in place or adopt one or more additional enhancements to the water system barriers to contamination in paragraphs (h)(2)(i) through (h)(2)(v) of this section.
(i) Cross connection control, as approved by the State.
(ii) An operator certified by an appropriate State certification program or regular visits by a circuit rider certified by an appropriate State certification program.
(iii) Continuous disinfection entering the distribution system and a residual in the distribution system in accordance with criteria specified by the State.
(iv) Demonstration of maintenance of at least a 4-log removal or inactivation of viruses as provided for under § 141.403(b)(3).
(v) Other equivalent enhancements to water system barriers as approved by the State.
(i)
(2) A seasonal system must monitor every month that it is in operation unless it meets the criteria in paragraphs (i)(2)(i) through (iii) of this section to be eligible for monitoring less frequently than monthly beginning April 1, 2016, except as provided under paragraph (c) of this section.
(i) Seasonal systems monitoring less frequently than monthly must have an approved sample siting plan that designates the time period for monitoring based on site-specific considerations (e.g., during periods of highest demand or highest vulnerability to contamination). Seasonal systems must collect compliance samples during this time period.
(ii) To be eligible for quarterly monitoring, the system must meet the criteria in paragraph (g) of this section.
(iii) To be eligible for annual monitoring, the system must meet the criteria under paragraph (h) of this section.
(3) The State may exempt any seasonal system from some or all of the requirements for seasonal systems if the entire distribution system remains pressurized during the entire period that the system is not operating, except that systems that monitor less frequently than monthly must still monitor during the vulnerable period designated by the State.
(j)
(1) The State may waive the requirement to collect three routine samples the next month in which the system provides water to the public if the State, or an agent approved by the State, performs a site visit before the end of the next month in which the system provides water to the public. Although a sanitary survey need not be performed, the site visit must be sufficiently detailed to allow the State to determine whether additional monitoring and/or any corrective action is needed. The State cannot approve an employee of the system to perform this site visit, even if the employee is an agent approved by the State to perform sanitary surveys.
(2) The State may waive the requirement to collect three routine samples the next month in which the system provides water to the public if the State has determined why the sample was total coliform-positive and has established that the system has corrected the problem or will correct the problem before the end of the next month in which the system serves water to the public. In this case, the State must document this decision to waive the following month's additional monitoring requirement in writing, have it approved and signed by the supervisor of the State official who recommends such a decision, and make this document available to the EPA and public. The written documentation must describe the specific cause of the total coliform-positive sample and what action the system has taken and/or will take to correct this problem.
(3) The State may not waive the requirement to collect three additional routine samples the next month in which the system provides water to the public solely on the grounds that all repeat samples are total coliform-negative. If the State determines that the system has corrected the contamination problem before the system takes the set of repeat samples required in § 141.858, and all repeat samples were total coliform-negative, the State may waive the requirement for additional routine monitoring the next month.
(a)
(2) Following any total coliform-positive sample taken under the provisions of this section, systems must comply with the repeat monitoring requirements and
(3) Once all monitoring required by this section and § 141.858 for a calendar month has been completed, systems must determine whether any coliform treatment technique triggers specified in § 141.859 have been exceeded. If any trigger has been exceeded, systems must complete assessments as required by § 141.859.
(b)
(c)
(2) Beginning April 1, 2016, the State must perform a special monitoring
(d)
(i) The system has a clean compliance history for a minimum of 12 months.
(ii) The most recent sanitary survey shows the system is free of sanitary defects (or has an approved plan and schedule to correct them and is in compliance with the plan and the schedule), has a protected water source and meets approved construction standards.
(iii) The system meets at least one of the following criteria:
(A) An annual site visit by the State that is equivalent to a Level 2 assessment or an annual Level 2 assessment by a party approved by the State and correction of all identified sanitary defects (or an approved plan and schedule to correct them and is in compliance with the plan and schedule).
(B) Cross connection control, as approved by the State.
(C) Continuous disinfection entering the distribution system and a residual in the distribution system in accordance with criteria specified by the State.
(D) Demonstration of maintenance of at least a 4-log removal or inactivation of viruses as provided for under § 141.403(b)(3).
(E) Other equivalent enhancements to water system barriers as approved by the State.
(e)
(1) The system triggers a Level 2 assessment or two Level 1 assessments in a rolling 12-month period.
(2) The system has an
(3) The system has a coliform treatment technique violation.
(4) The system has two subpart Y monitoring violations in a rolling 12-month period.
(f)
(1) The State may waive the requirement to collect three routine samples the next month in which the system provides water to the public if the State, or an agent approved by the State, performs a site visit before the end of the next month in which the system provides water to the public. Although a sanitary survey need not be performed, the site visit must be sufficiently detailed to allow the State to determine whether additional monitoring and/or any corrective action is needed. The State cannot approve an employee of the system to perform this site visit, even if the employee is an agent approved by the State to perform sanitary surveys.
(2) The State may waive the requirement to collect three routine samples the next month in which the system provides water to the public if the State has determined why the sample was total coliform-positive and has established that the system has corrected the problem or will correct the problem before the end of the next month in which the system serves water to the public. In this case, the State must document this decision to waive the following month's additional monitoring requirement in writing, have it approved and signed by the supervisor of the State official who recommends such a decision, and make this document available to the EPA and the public. The written documentation must describe the specific cause of the total coliform-positive sample and what action the system has taken and/or will take to correct this problem.
(3) The State may not waive the requirement to collect three additional routine samples the next month in which the system provides water to the public solely on the grounds that all repeat samples are total coliform-negative. If the State determines that the system has corrected the contamination problem before the system takes the set of repeat samples required in § 141.858, and all repeat samples were total coliform-negative, the State may waive the requirement for additional routine monitoring the next month.
(a)
(2) Following any total coliform-positive sample taken under the provisions of this section, systems must comply with the repeat monitoring requirements and
(3) Once all monitoring required by this section and § 141.858 for a calendar month has been completed, systems must determine whether any coliform treatment technique triggers specified in § 141.859 have been exceeded. If any trigger has been exceeded, systems must complete assessments as required by § 141.859.
(4) Seasonal systems. (i) Beginning April 1, 2016, all seasonal systems must demonstrate completion of a State-approved start-up procedure, which may include a requirement for start-up sampling prior to serving water to the public.
(ii) The State may exempt any seasonal system from some or all of the requirements for seasonal systems if the entire distribution system remains pressurized during the entire period that the system is not operating.
(b)
(c)
(a)
(2) Following any total coliform-positive sample taken under the provisions of this section, systems must comply with the repeat monitoring requirements and
(3) Once all monitoring required by this section and § 141.858 for a calendar month has been completed, systems must determine whether any coliform treatment technique triggers specified in § 141.859 have been exceeded. If any trigger has been exceeded, systems must complete assessments as required by § 141.859.
(4) Seasonal systems. (i) Beginning April 1, 2016, all seasonal systems must demonstrate completion of a State-approved start-up procedure, which may include a requirement for start-up sampling prior to serving water to the public.
(ii) The State may exempt any seasonal system from some or all of the requirements for seasonal systems if the entire distribution system remains pressurized during the entire period that the system is not operating.
(b)
(c)
(d)
(a)
(2) The system must collect all repeat samples on the same day, except that the State may allow a system with a single service connection to collect the required set of repeat samples over a three-day period or to collect a larger volume repeat sample(s) in one or more sample containers of any size, as long as the total volume collected is at least 300 ml.
(3) The system must collect an additional set of repeat samples in the manner specified in paragraphs (a)(1) through (a)(3) of this section if one or more repeat samples in the current set of repeat samples is total coliform-positive. The system must collect the additional set of repeat samples within 24 hours of being notified of the positive result, unless the State extends the limit as provided in paragraph (a)(1) of this section. The system must continue to collect additional sets of repeat samples until either total coliforms are not detected in one complete set of repeat samples or the system determines that a coliform treatment technique trigger specified in § 141.859(a) has been exceeded as a result of a repeat sample being total coliform-positive and notifies the State. If a trigger identified
(4) After a system collects a routine sample and before it learns the results of the analysis of that sample, if it collects another routine sample(s) from within five adjacent service connections of the initial sample, and the initial sample, after analysis, is found to contain total coliforms, then the system may count the subsequent sample(s) as a repeat sample instead of as a routine sample.
(5) Results of all routine and repeat samples taken under §§ 141.854 through 141.858 not invalidated by the State must be used to determine whether a coliform treatment technique trigger specified in § 141.859 has been exceeded.
(b)
(2) The State has the discretion to allow a system, on a case-by-case basis, to forgo
(a)
(1) Level 1 treatment technique triggers.
(i) For systems taking 40 or more samples per month, the system exceeds 5.0% total coliform-positive samples for the month.
(ii) For systems taking fewer than 40 samples per month, the system has two or more total coliform-positive samples in the same month.
(iii) The system fails to take every required repeat sample after any single total coliform-positive sample.
(2) Level 2 treatment technique triggers.
(i) An
(ii) A second Level 1 trigger as defined in paragraph (a)(1) of this section, within a rolling 12-month period, unless the State has determined a likely reason that the samples that caused the first Level 1 treatment technique trigger were total coliform-positive and has established that the system has corrected the problem.
(iii) For systems with approved annual monitoring, a Level 1 trigger in two consecutive years.
(b)
(2) When conducting assessments, systems must ensure that the assessor evaluates minimum elements that include review and identification of inadequacies in sample sites; sampling protocol; sample processing; atypical events that could affect distributed water quality or indicate that distributed water quality was impaired; changes in distribution system maintenance and operation that could affect distributed water quality (including water storage); source and treatment considerations that bear on distributed water quality, where appropriate (e.g., small ground water systems); and existing water quality monitoring data. The system must conduct the assessment consistent with any State directives that tailor specific assessment elements with respect to the size and type of the system and the size, type, and characteristics of the distribution system.
(3) Level 1 Assessments. A system must conduct a Level 1 assessment consistent with State requirements if the system exceeds one of the treatment technique triggers in paragraph (a)(1) of this section.
(i) The system must complete a Level 1 assessment as soon as practical after any trigger in paragraph (a)(1) of this section. In the completed assessment form, the system must describe sanitary defects detected, corrective actions completed, and a proposed timetable for any corrective actions not already completed. The assessment form may also note that no sanitary defects were identified. The system must submit the completed Level 1 assessment form to the State within 30 days after the system learns that it has exceeded a trigger.
(ii) If the State reviews the completed Level 1 assessment and determines that the assessment is not sufficient (including any proposed timetable for any corrective actions not already completed), the State must consult with the system. If the State requires revisions after consultation, the system must submit a revised assessment form to the State on an agreed-upon schedule not to exceed 30 days from the date of the consultation.
(iii) Upon completion and submission of the assessment form by the system, the State must determine if the system has identified a likely cause for the Level 1 trigger and, if so, establish that the system has corrected the problem, or has included a schedule acceptable to the State for correcting the problem.
(4) Level 2 Assessments. A system must ensure that a Level 2 assessment consistent with State requirements is conducted if the system exceeds one of the treatment technique triggers in paragraph (a)(2) of this section. The system must comply with any expedited actions or additional actions required by the State in the case of an
(i) The system must ensure that a Level 2 assessment is completed by the State or by a party approved by the State as soon as practical after any trigger in paragraph (a)(2) of this section. The system must submit a completed Level 2 assessment form to the State within 30 days after the system learns that it has exceeded a trigger. The assessment form must describe sanitary defects detected, corrective actions completed, and a proposed timetable for any corrective actions not already completed. The assessment form may also note that no sanitary defects were identified.
(ii) The system may conduct Level 2 assessments if the system has staff or management with the certification or qualifications specified by the State unless otherwise directed by the State.
(iii) If the State reviews the completed Level 2 assessment and determines that the assessment is not sufficient (including any proposed timetable for any corrective actions not already completed), the State must consult with the system. If the State requires revisions after consultation, the system must submit a revised assessment form to the State on an agreed-upon schedule not to exceed 30 days.
(iv) Upon completion and submission of the assessment form by the system, the State must determine if the system
(c)
(d)
(a)
(1) The system has an
(2) The system has a total coliform-positive repeat sample following an
(3) The system fails to take all required repeat samples following an
(4) The system fails to test for
(b)
(2) A treatment technique violation occurs when a seasonal system fails to complete a State-approved start-up procedure prior to serving water to the public.
(c)
(2) Failure to analyze for
(d)
(2) Failure to notify the State following an
(3) Failure to submit certification of completion of State-approved start-up procedure by a seasonal system is a reporting violation.
(a)
(i) A system must notify the State by the end of the day when the system learns of an
(ii) A system must notify the State by the end of the day when the system is notified of an
(2) A system that has violated the treatment technique for coliforms in § 141.859 must report the violation to the State no later than the end of the next business day after it learns of the violation, and notify the public in accordance with subpart Q of this part.
(3) A system required to conduct an assessment under the provisions of § 141.859 of this part must submit the assessment report within 30 days. The system must notify the State in accordance with § 141.859(c) when each scheduled corrective action is completed for corrections not completed by the time of submission of the assessment form.
(4) A system that has failed to comply with a coliform monitoring requirement must report the monitoring violation to the State within 10 days after the system discovers the violation, and notify the public in accordance with subpart Q of this part.
(5) A seasonal system must certify, prior to serving water to the public, that it has complied with the State-approved start-up procedure.
(b)
(2) The system must maintain a record of any repeat sample taken that meets State criteria for an extension of the 24-hour period for collecting repeat samples as provided for under § 141.858(a)(1) of this part.
42 U.S.C. 300f, 300g–1, 300g–2, 300g–3, 300g–4, 300g–5, 300g–6, 300j–4, 300j–9, and 300j–11.
(a) * * *
(1) * * *
(iii) The analytical results, set forth in a form that makes possible comparison with the limits specified in §§ 141.63, 141.71, and 141.72 of this chapter and with the limits specified in subpart Y of this chapter.
(10) Records of each of the following decisions made pursuant to the provisions of subpart Y of part 141 must be made in writing and retained by the State.
(i) Records of the following decisions or activities must be retained for five years.
(A) Sections 141.858(a), 141.853(c)(2), 141.856(c), and 141.857(c) of this chapter—Any case-by-case decision to waive the 24-hour time limit for collecting repeat samples after a total coliform-positive routine sample, or to extend the 24-hour limit for collection of samples following invalidation, or for an unfiltered subpart H system of this part to collect a total coliform sample following a turbidity measurement exceeding 1 NTU.
(B) Sections 141.854(j) and 141.855(f) of this chapter—Any decision to allow a system to waive the requirement for
(C) Section 141.853(c) of this chapter—Any decision to invalidate a total coliform-positive sample. If the decision to invalidate a total coliform-positive sample as provided in § 141.853(c)(1) of this chapter is made, the record of the decision must contain all the items listed in that section.
(D) Section 141.859 of this chapter—Completed and approved subpart Y assessments, including reports from the system that corrective action has been completed as required by § 141.861(a)(2) of this chapter.
(ii) Records of each of the following decisions must be retained in such a manner so that each system's current status may be determined:
(A) Section 141.854(e) of this chapter—Any decision to reduce the total coliform monitoring frequency for a non-community water system using only ground water and serving 1,000 or fewer people to less than once per quarter, as provided in § 141.854(e) of this chapter, including what the reduced monitoring frequency is. A copy of the reduced monitoring frequency must be provided to the system.
(B) Section 141.855(d) of this chapter—Any decision to reduce the total coliform monitoring frequency for a community water system serving 1,000 or fewer people to less than once per month, as provided in § 141.855(d) of this chapter, including what the reduced monitoring frequency is. A copy of the reduced monitoring frequency must be provided to the system.
(C) Section 141.857(d) of this chapter—Any decision to reduce the total coliform monitoring frequency for a non-community water system using only ground water and serving more than 1,000 persons during any month the system serves 1,000 or fewer people, as provided in § 141.857(d) of this chapter. A copy of the reduced monitoring frequency must be provided to the system.
(D) Section 141.858(b)(2) of this chapter—Any decision to allow a system to forgo
(c) * * *
(3)
(q)
(1) In their application to EPA for approval to implement the federal requirements, the primacy application must indicate what baseline and reduced monitoring provisions of 40 CFR part 141, subpart Y the State will adopt and must describe how they will implement 40 CFR part 141, subpart Y in these areas so that EPA can be assured that implementation plans meet the minimum requirements of the rule.
(2) The State's application for primacy for subpart Y must include a written description for each provision included in paragraphs (q)(2)(i) through (viii) of this section.
(i) Sample Siting Plans—The frequency and process used to review and revise sample siting plans in accordance with 40 CFR part 141, subpart Y to determine adequacy.
(ii) Reduced Monitoring Criteria—An indication of whether the State will adopt the reduced monitoring provisions of 40 CFR part 141, subpart Y. If the State adopts the reduced monitoring provisions, it must describe the specific types or categories of water systems that will be covered by reduced monitoring and whether the State will use all or a reduced set of the optional criteria. For each of the reduced monitoring criteria, both mandatory and optional, the State must describe how the criteria will be evaluated to determine when systems qualify.
(iii) Assessments and Corrective Actions—The process for implementing the new assessment and corrective action phase of the rule, including the elements in paragraphs (q)(2)(iii)(A) through (D) of this section.
(A) Elements of Level 1 and Level 2 assessments. This must include an explanation of how the State will ensure that Level 2 assessments provide a more detailed examination of the system (including the system's monitoring and operational practices) than do Level 1 assessments through the use of more comprehensive investigation and review of available information, additional internal and external resources, and other relevant practices.
(B) Examples of sanitary defects.
(C) Examples of assessment forms or formats.
(D) Methods that systems may use to consult with the State on appropriate corrective actions.
(iv) Invalidation of routine and repeat samples collected under 40 CFR part 141, subpart Y—The criteria and process for invalidating total coliform and
(v) Approval of individuals allowed to conduct Level 2 assessments under 40 CFR part 141, subpart Y—The criteria and process for approval of individuals allowed to conduct Level 2 assessments under 40 CFR part 141, subpart Y.
(vi) Special monitoring evaluation—The procedure for performing special monitoring evaluations during sanitary surveys for ground water systems serving 1,000 or fewer people to determine whether systems are on an appropriate monitoring schedule.
(vii) Seasonal systems—How the State will identify seasonal systems, how the State will determine when systems on less than monthly monitoring must monitor, and what start-up provisions seasonal system must meet under 40 CFR part 141, subpart Y.
(viii) Additional criteria for reduced monitoring—How the State will require systems on reduced monitoring to demonstrate:
(A) Continuous disinfection entering the distribution system and a residual in the distribution system.
(B) Cross connection control.
(C) Other enhancements to water system barriers.
(ix) Criteria for extending the 24-hour period for collecting repeat samples.—Under §§ 141.858(a) and 141.853(c)(2) of this chapter, criteria for systems to use in lieu of case-by-case decisions to waive the 24-hour time limit for collecting repeat samples after a total coliform-positive routine sample, or to extend the 24-hour limit for collection of samples following invalidation. If the State elects to use only case-by-case waivers, the State does not need to develop and submit criteria.
(b) EPA has stayed this section as it relates to the total coliform MCL of § 141.63(a) of this chapter for systems that demonstrate to the State that the violation of the total coliform MCL is due to a persistent growth of total coliforms in the distribution system rather than fecal or pathogenic contamination, a treatment lapse or deficiency, or a problem in the operation or maintenance of the distribution system. This stay is applicable until March 31, 2016, at which time the total coliform MCL is no longer applicable.
Board of Governors of the Federal Reserve System (Board); Bureau of Consumer Financial Protection (Bureau); Federal Deposit Insurance Corporation (FDIC); Federal Housing Finance Agency (FHFA); National Credit Union Administration (NCUA); and Office of the Comptroller of the Currency, Treasury (OCC).
Final rule; official staff commentary.
The Board, Bureau, FDIC, FHFA, NCUA, and OCC (collectively, the Agencies) are issuing a final rule to amend Regulation Z, which implements the Truth in Lending Act (TILA), and the official interpretation to the regulation. The revisions to Regulation Z implement a new provision requiring appraisals for “higher-risk mortgages” that was added to TILA by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act or Act). For mortgages with an annual percentage rate that exceeds the average prime offer rate by a specified percentage, the final rule requires creditors to obtain an appraisal or appraisals meeting certain specified standards, provide applicants with a notification regarding the use of the appraisals, and give applicants a copy of the written appraisals used.
This final rule is effective on January 18, 2014.
In general, the Truth in Lending Act (TILA), 15 U.S.C. 1601
The Dodd-Frank Act
• Obtaining a written appraisal performed by a certified or licensed appraiser who conducts a physical property visit of the interior of the property.
• Obtaining an additional appraisal from a different certified or licensed appraiser if the higher-risk mortgage finances the purchase or acquisition of a property from a seller at a higher price than the seller paid, within 180 days of the seller's purchase or acquisition. The additional appraisal must include an analysis of the difference in sale prices, changes in market conditions, and any improvements made to the property between the date of the previous sale and the current sale.
A creditor of a “higher-risk mortgage” must also:
• Provide the applicant, at the time of the initial mortgage application, with a statement that any appraisal prepared for the mortgage is for the sole use of the creditor, and that the applicant may choose to have a separate appraisal conducted at the applicant's expense.
• Provide the applicant with one copy of each appraisal conducted in accordance with TILA section 129H without charge, at least three (3) days prior to the transaction closing date.
New TILA section 129H(f) defines a “higher-risk mortgage” with reference to the annual percentage rate (APR) for the transaction. A higher-risk mortgage is a “residential mortgage loan”
• By 1.5 or more percentage points, for a first lien residential mortgage loan with an original principal obligation amount that does not exceed the amount for the maximum limitation on the original principal obligation of a mortgage in effect for a residence of the applicable size, as of the date of the interest rate set, pursuant to the sixth sentence of section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454);
• By 2.5 or more percentage points, for a first lien residential mortgage loan having an original principal obligation amount that exceeds the amount for the maximum limitation on the original principal obligation of a mortgage in effect for a residence of the applicable size, as of the date of the interest rate set, pursuant to the sixth sentence of section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454); or
• By 3.5 or more percentage points, for a subordinate lien residential mortgage loan.
The definition of “higher-risk mortgage” expressly excludes “qualified mortgages,” as defined in TILA section 129C, and “reverse mortgage loans that are qualified mortgages,” as defined in TILA section 129C. 15 U.S.C. 1639c.
New TILA section 103(cc)(5) defines the term “residential mortgage loan” as any consumer credit transaction that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling or on residential real property that includes a dwelling, other than a consumer credit transaction under an open-end credit plan. 15 U.S.C. 1602(cc)(5).
New TILA section 129H(b)(4)(A) requires the Agencies jointly to prescribe regulations to implement the property appraisal requirements for higher-risk mortgages. 15 U.S.C. 1639h(b)(4)(A). The Dodd-Frank Act requires that final regulations to implement these provisions be issued within 18 months of the transfer of functions to the Bureau pursuant to section 1062 of the Act, or January 21, 2013.
The Agencies published proposed regulations on September 5, 2012, that would implement these higher-risk mortgage appraisal provisions. 77 FR 54722 (Sept. 5, 2012). The comment period closed on October 15, 2012. The Agencies received more than 200 comment letters regarding the proposal from banks, credit unions, other creditors, appraisers, appraisal management companies, industry trade associations, consumer groups, and others.
To implement the statutory definition of “higher-risk mortgage,” the final rule uses the term “higher-priced mortgage loan” (HPML), a term already in use under the Bureau's Regulation Z with a meaning substantially similar to the meaning of “higher-risk mortgage” in the Dodd-Frank Act. In response to commenters, the Agencies are using the term HPML to refer generally to the loans that could be subject to this final rule because they are closed-end credit and meet the statutory rate triggers, but the Agencies are separately exempting several types of HPML transactions from the rule. The term “higher-risk mortgage” encompasses a closed-end consumer credit transaction secured by a principal dwelling with an APR exceeding certain statutory thresholds. These rate thresholds are substantially similar to rate triggers that have been in use under Regulation Z for HPMLs.
Consistent with the statute, the final rule exempts “qualified mortgages” from the requirements of the rule. Qualified mortgages are defined in § 1026.43(e) of the Bureau's final rule implementing the Dodd-Frank Act's ability-to-repay requirements in TILA section 129C (2013 ATR Final Rule).
In addition, the final rule excludes the following classes of loans from coverage of the higher-risk mortgage appraisal rule:
(1) Transactions secured by a new manufactured home;
(2) transactions secured by a mobile home, boat, or trailer;
(3) transactions to finance the initial construction of a dwelling;
(4) loans with maturities of 12 months or less, if the purpose of the loan is a “bridge” loan connected with the acquisition of a dwelling intended to become the consumer's principal dwelling; and
(5) reverse mortgage loans.
For reasons discussed more fully in the section-by-section analysis of
As explained more fully in the section-by-section analysis of § 1026.35(a)(1), below, the final rule requires creditors to determine whether a loan is an HPML by comparing the APR to the APOR. The Agencies are not at this time adopting the proposed alternative of replacing the APR with the TCR and comparing the TCR to the APOR. The Agencies will consider the merits of any modifications to this approach and public comments on this matter if and when the Bureau adopts the more inclusive definition of finance charge proposed in the 2012 TILA–RESPA Proposal.
Finally, based on public comments, the Agencies intend to publish a supplemental proposal to request comment on possible exemptions for “streamlined” refinance programs and small dollar loans, as well as to seek comment on whether application of the HPML appraisal rule to loans secured by certain other property types, such as existing manufactured homes, is appropriate.
Consistent with the statute, the final rule allows a creditor to originate an HPML that is not otherwise exempt from the appraisal rules only if the following conditions are met:
• The creditor obtains a written appraisal;
• The appraisal is performed by a certified or licensed appraiser; and
• The appraiser conducts a physical property visit of the interior of the property.
Also consistent with the statute, the following requirements also apply with respect to HPMLs subject to the final rule:
• At application, the consumer must be provided with a statement regarding the purpose of the appraisal, that the creditor will provide the applicant a copy of any written appraisal, and that the applicant may choose to have a separate appraisal conducted for the applicant's own use at his or her own expense; and
• The consumer must be provided with a free copy of any written appraisals obtained for the transaction at least three (3) business days before consummation.
In addition, the final rule implements the Act's requirement that the creditor of a “higher-risk mortgage” obtain an additional written appraisal, at no cost to the borrower, when the “higher-risk mortgage” will finance the purchase of the consumer's principal dwelling and there has been an increase in the purchase price from a prior sale that took place within 180 days of the current sale. TILA section 129H(b)(2)(A), 15 U.S.C. 1639(b)(2)(A). In the final rule, using their exemption authority, the Agencies are setting thresholds for the increase that will trigger an additional appraisal. An additional appraisal will be required for an HPML (that is not otherwise exempt) if either:
• The seller is reselling the property within 90 days of acquiring it and the resale price exceeds the seller's acquisition price by more than 10 percent; or
• The seller is reselling the property within 91 to 180 days of acquiring it and the resale price exceeds the seller's acquisition price by more than 20 percent.
The additional written appraisal, from a different licensed or certified appraiser, generally must include the following information: an analysis of the difference in sale prices (
As noted above, TILA section 129H(b)(4)(A), added by the Dodd-Frank Act, requires the Agencies jointly to prescribe regulations implementing section 129H. 15 U.S.C. 1639h(b)(4)(A). In addition, TILA section 129H(b)(4)(B) grants the Agencies the authority jointly to exempt, by rule, a class of loans from the requirements of TILA section 129H(a) or section 129H(b) if the Agencies determine that the exemption is in the public interest and promotes the safety and soundness of creditors. 15 U.S.C. 1639h(b)(4)(B).
For ease of reference, unless otherwise noted, the
The final rule is incorporated into Regulation Z's existing section on prohibited acts or practices in connection with HPMLs, § 1026.35. As revised, § 1026.35 will consist of four subsections—(a) Definitions; (b) Escrows for higher-priced mortgage loans; (c) Appraisals for higher-priced mortgage loans; and (d) Evasion; open-end credit. As explained in more detail in the Bureau's final rule on escrow requirements for HPMLs (2013 Escrows Final Rule)
TILA section 129H(f) defines a “higher-risk mortgage” as a residential mortgage loan secured by a principal dwelling with an APR that exceeds the APOR for a comparable transaction by a specified percentage as of the date the interest rate is set. 15 U.S.C. 1639(f). New TILA section 103(cc)(5) defines the term “residential mortgage loan” as “any consumer credit transaction that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling or on residential real property that includes a dwelling, other than a consumer credit transaction under an open-end credit plan.” 15 U.S.C. 1602(cc)(5).
Consistent with TILA sections 129H(f) and 103(cc)(5), the proposal provided that a “higher-risk mortgage loan” is a closed-end consumer credit transaction secured by the consumer's principal dwelling with an APR that exceeds the APOR for a comparable transaction as of the date the interest rate is set by 1.5 percentage points for first-lien conventional mortgages, 2.5 percentage points for first-lien jumbo mortgages, and 3.5 percentage points for subordinate-lien mortgages.
The Agencies noted in the proposal that the statutory definition of higher-risk mortgage, though similar to that of the regulatory term “higher-priced mortgage loan,” differs from the existing regulatory definition of higher-priced mortgage loan in some important respects. First, the statutory definition of higher-risk mortgage expressly excludes loans that meet the definition of a “qualified mortgage” under TILA section 129C. In addition, the statutory definition of higher-risk mortgage includes an additional 2.5 percentage point threshold for first-lien jumbo mortgage loans, while the definition of higher-priced mortgage loan has contained this threshold only for purposes of applying the requirement to establish escrow accounts for higher-priced mortgage loans.
The final rule adopts the proposed definition, but replaces the term “higher-risk mortgage loan” with the term “higher-priced mortgage loan” or HPML.
Several credit unions, banks, and an individual commenter believed that the definition of “higher-risk mortgage loan” did not adequately capture loans that were truly “high risk.” Several of these commenters stated that the definition should account not only for the cost of the loan, but also for other risk factors, such as debt to income ratio, loan amounts, and credit scores and other measures of a consumer's creditworthiness. A bank commenter believed that the interest rate thresholds in the definition were ambiguous and arbitrary and asserted that, for example, 1.5 percent was not an exceptionally high interest margin in comparison with interest margins for credit cards and other financing. A credit union commenter believed the rule would apply to consumers who were in fact a low credit risk.
Most commenters on the definition expressly supported using the existing term HPML rather than the new term “higher-risk mortgage loan.” Commenters including, among others, a mortgage company, bank, credit union, financial holding company, credit union trade association, and banking trade association, asserted that the use of two terms with similar meanings would be confusing to the mortgage credit industry. Some asserted that consumers would be confused by this as well. Some of these commenters noted that Regulation Z also already used the term “high-cost mortgage” with different requirements and believed this third term would further compound consumer and industry confusion. Of commenters who expressed a preference for the term that should be used, most recommended using the term HPML because this term has been used by industry for some time.
Some commenters on this issue also advocated making the rate triggers and overall definition the same for existing HPMLs and “higher-risk mortgages” regardless of the terms used. They argued that this would reduce compliance burdens and confusion and ease costs associated with developing and managing systems. One commenter believed that developing a single standard would also avoid creating unnecessary delay and additional cost for consumers in the origination process.
A few commenters acknowledged key differences between the statutory meaning of “higher-risk mortgage” and the regulatory term HPML, and suggested ways of harmonizing the two definitions. For example, these commenters noted that “higher-risk mortgages” do not include qualified mortgages, whereas HPMLs do. To address this difference, one commenter suggested, for example, that the appraisal requirements should apply to HPMLs as currently defined, except for qualified mortgages. Other commenters suggested that the basic definition of HPML be understood to refer solely to the rate thresholds and suggested that the exemption for qualified mortgages from the appraisal rules be inserted as a separate provision. They did not discuss how to address additional variances in the types of transactions excluded from HPML and “higher-risk mortgage,” respectively, such as the exclusion from the meaning of HPML but not the statutory definition of “higher-risk mortgage” for construction-only and bridge loans.
Other commenters also acknowledged that the current definition of HPML includes only two rate thresholds—one for first-lien mortgages (APR exceeds APOR by 1.5 percentage points) and the other for subordinate-lien mortgages (APR exceeds APOR by 3.5 percentage points). By contrast, the statutory definition of “higher-risk mortgage” has an additional rate tier for first-lien jumbo mortgages (APR exceeds APOR by 2.5 percentage points). The HPML requirements in Regulation Z apply a rate threshold of 2.5 percentage points above APOR to jumbo loans only for purposes of the requirement to escrow. The commenters who noted this distinction held the view that the “middle tier” threshold would not have a practical advantage for lenders or consumers. Instead, they recommended adopting a final rule with a single APR trigger of 1.5 percentage points above APOR for all first-lien loans.
In the final rule, the Agencies use the term HPML rather than the proposed term “higher-risk mortgage loan” to refer generally to the loans covered by the appraisal rules. In a separate
On January 10, 2013, the Bureau published the 2013 Escrows Final Rule, its final rule to implement Dodd-Frank Act amendments to TILA regarding the requirement to escrow for certain consumer mortgages.
Thus, consistent with TILA sections 129H(f) and 103(cc)(5) and the proposal, the final rule in § 1026.35(a)(1) follows the Bureau's 2013 Escrows Final Rule in defining an HPML as a closed-end consumer credit transaction secured by the consumer's principal dwelling with an annual percentage rate that exceeds the average prime offer rate for a comparable transaction as of the date the interest rate is set:
• By 1.5 or more percentage points, for a loan secured by a first lien with a principal obligation at consummation that does not exceed the limit in effect as of the date the transaction's interest rate is set for the maximum principal obligation eligible for purchase by Freddie Mac;
• By 2.5 or more percentage points, for a loan secured by a first lien with a principal obligation at consummation that exceeds the limit in effect as of the date the transaction's interest rate is set for the maximum principal obligation eligible for purchase by Freddie Mac; and
• By 3.5 or more percentage points, for a loan secured by a subordinate lien.
The Agencies acknowledge that some commenters have concerns about the rate thresholds; however, these rate thresholds are prescribed by statute.
The Bureau in the 2013 Escrows Final Rule adopted a definition of HPML that is consistent for both TILA's escrow requirement and TILA's appraisal requirements for “higher-risk mortgages.” TILA sections 129D and 129H, 15 U.S.C. 1639d and 1639h. This definition incorporates the APR thresholds for loans covered by these rules as prescribed by Dodd-Frank Act amendments to TILA and also reflects that both sets of rules apply only to closed-end mortgage transactions. TILA sections 129D(b)(3) and 129H(f), 15 U.S.C. 1639d(b)(3) and 1639h(f). Overall, the revised definition of HPML adopted in the 2013 Escrows Final Rule reflects only minor changes from the current definition of HPML in existing 12 CFR 1026.35(a). For clarity, the Agencies are re-publishing the definition published earlier in the 2013 Escrows Final Rule.
Consistent with the proposal, the final rule uses the phrase “a closed-end consumer credit transaction secured by the consumer's principal dwelling” in place of the statutory term “residential mortgage loan” throughout § 1026.35(a)(1). As also proposed, the Agencies have elected to incorporate the substantive elements of the statutory definition of “residential mortgage loan” into the definition of HPML rather than using the term itself to avoid inadvertent confusion of the term “residential mortgage loan” with the term “residential mortgage transaction,” which is an established term used throughout Regulation Z and defined in § 1026.2(a)(24).
The Agencies are not at this time adopting an alternative method of determining coverage based on the “transaction coverage rate” or TCR. The proposal included a request for comments on a proposed amendment to the method of calculating the APR that was proposed as part of other mortgage-related proposals issued for comment by the Bureau. In the Bureau's proposal to integrate mortgage disclosures (2012 TILA–RESPA Proposal), the Bureau proposed to adopt a more simple and inclusive finance charge calculation for closed-end credit secured by real property or a dwelling.
The new rate triggers for both “high-cost mortgages” and “higher-risk mortgages” under the Dodd-Frank Act are based on the percentage by which the APR exceeds APOR. Given this similarity, the Agencies sought comment in the higher-risk mortgage proposal on whether a modification should be considered for this final rule as well and, if so, what type of modification. Accordingly, the proposal defined “higher-risk mortgage loan” (termed HPML in this final rule) in the alternative as calculated by either the TCR or APR, with comment sought on both approaches. The Agencies relied on their exemption authority under section 1471 of the Dodd-Frank Act to propose this alternative definition of higher-risk mortgage. TILA section 129H(b)(4)(B), 15 U.S.C. 1639h(b)(4)(B).
On September 6, 2012, the Bureau published notice in the
For this reason, this final rule requires creditors to determine whether a loan is an HPML by comparing the APR to the APOR and is not at this time finalizing the proposed alternative of replacing the APR with the TCR and comparing the TCR to the APOR. The Agencies will consider the merits of any modifications to this approach that might be necessary and public comments on this matter if and when the Bureau adopts the more inclusive definition of finance charge proposed in the 2012 TILA–RESPA Proposal.
The new definition of HPML differs from the definition of HPML in existing § 1026.35(a)(1) in several respects.
First, the new definition of HPML incorporates an additional rate threshold for determining coverage for first-lien loans—an APR trigger of 2.5 percentage points above APOR for first-lien jumbo mortgage loans. The definition retains the APR triggers of 1.5 percentage points above APOR for first-lien conforming mortgages and 3.5 percentage points above APOR for subordinate-lien loans.
By statute, this additional APR threshold of 2.5 percentage points above APOR applies in determining coverage of both the escrow requirements in revised § 1026.35(b) and the appraisal requirements in revised § 1026.35(c).
Under the existing HPML rules in § 1026.35, the APR threshold of 2.5 percentage points above APOR applies only to the requirement to escrow HPMLs in § 1026.35(b)(3).
Thus, as revised, § 1026.35 will have only two sets of rules for HPMLs—the escrow requirements in revised § 1026.35(b) and the appraisal requirements in new § 1026.35(c). The APR test of 2.5 percentage points above APOR applies, as noted, to both sets of rules, so is now folded into the general definition of HPML in § 1026.35(a)(1). Accordingly, the definition of “jumbo” loans in preexisting § 1026.35(b)(3)(v) is being removed.
A second change is that the revised HPML definition adds the qualification that an HPML is a “closed-end” consumer credit transaction. This change is not substantive; instead, it merely replaces text previously in § 1026.35(a)(3), that excludes from the definition of HPML “a home-equity line of credit subject to section 1026.5b.” Other exemptions from the current definition of HPML listed in existing § 1026.35(a)(3) are moved into the specific provisions setting forth exemptions for certain types of HPMLs from coverage of the escrow rules and appraisal rules, respectively.
Third, with no substantive change intended, the language used to describe the HPML rate triggers has been revised from preexisting § 1026.35(a)(1) to conform to the language used in the proposed “higher-risk mortgage” appraisal rule, which in turn conforms more closely to the statutory language used to describe the rate triggers for “higher-risk mortgages” and similar statutory rate triggers for application of the escrow requirements.
Finally, the Official Staff Interpretations are reorganized with no substantive change intended. Specifically, comments 35(a)(2)–1 and –3, clarifying the terms “comparable transaction” and “rate set,” respectively, are moved to comments 35(a)(1)–1 and 35(a)(1)–2. This modification reflects that the terms “comparable transaction” and “rate set” occur in the definition of “higher-priced mortgage loan” in § 1026.35(a)(1).
As comment 35(a)(1)–1 indicates, the table of APORs published by the Bureau will provide guidance to creditors in determining how to use the table to identify which APOR is applicable to a particular mortgage transaction. The Bureau publishes on the internet, currently at
Comment 35(a)(1)–2 clarifies that a transaction's APR is compared to the APOR as of the date the transaction's interest rate is set (or “locked”) before consummation. The comment notes that sometimes a creditor sets the interest rate initially and then re-sets it at a different level before consummation. Accordingly, under the final rule, for purposes of § 1026.35(a)(1), the creditor should use the last date the interest rate for the mortgage is set before consummation.
The Agencies are not separately publishing the definition of the term “average prime offer rate” in § 1026.35(a)(2). The meaning of this term is determined by the Bureau and is published and explained in the Bureau's 2013 Escrows Final Rule. Consistent with the proposal, in the Board's publication of this final rule, the term APOR is defined to have the same
As in the proposal, the final versions of the OCC's and the Board's publication of the definition of “higher-priced mortgage loan” rules cross-reference the Bureau's Regulation Z and Official Staff Interpretations for the meanings of “principal dwelling,” “average prime offer rate,” “comparable transaction,” and “rate set.”
Comment 35(a)(1)–3 explains that § 1026.35(a)(1)(ii) provides a separate threshold for determining whether a transaction is a higher-priced mortgage loan subject to § 1026.35 when the principal balance exceeds the limit in effect as of the date the transaction's rate is set for the maximum principal obligation eligible for purchase by Freddie Mac (a “jumbo” loan). The comment further explains that FHFA establishes and adjusts the maximum principal obligation pursuant to rules under 12 U.S.C. 1454(a)(2) and other provisions of Federal law. The comment clarifies that adjustments to the maximum principal obligation made by FHFA apply in determining whether a mortgage loan is a “jumbo” loan to which the separate coverage threshold in § 1026.35(a)(1)(ii) applies.
The Board's publication of the definition of “higher-priced mortgage loan” rule in this final rule cross-references this comment in the Bureau's Official Staff Interpretations.
New § 1026.35(c) implements the substantive appraisal requirements for “higher-risk mortgages” in TILA section 129H. 15 U.S.C. 1639h. The OCC's and the Board's versions of these rules are substantively identical to the rules in § 1026.35(c).
As discussed above, revised § 1026.35(a) contains the definitions of HPML and APOR, which are used in both the HPML escrow rules in § 1026.35(b) and the HPML appraisal rules in new § 1026.35(c). Definitions specific to the substantive appraisal requirements of § 1026.35(c) are segregated in new § 1026.35(c)(1) and described below, along with applicable public comments.
TILA section 129H(b)(3) defines “certified or licensed appraiser” as a person who “(A) is, at a minimum, certified or licensed by the State in which the property to be appraised is located; and (B) performs each appraisal in conformity with the Uniform Standards of Professional Appraisal Practice and title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, and the regulations prescribed under such title, as in effect on the date of the appraisal.” 15 U.S.C. 1639h(b)(3). Consistent with the statute, the Agencies proposed to define “certified or licensed appraiser” as a person who is certified or licensed by the State agency in the State in which the property that secures the transaction is located, and who performs the appraisal in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP) and the requirements applicable to appraisers in title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended (FIRREA title XI) (12 U.S.C. 3331
The proposed definition of “certified or licensed appraiser” generally mirrors the statutory language in TILA section 129H(b)(3) regarding State licensing and certification. However, the Agencies proposed to use the defined term “State agency” to clarify that the appraiser must be certified or licensed by a State agency that meets the standards of FIRREA title XI. The proposal defined the term “State agency” to mean a “State appraiser certifying and licensing agency” recognized in accordance with section 1118(b) of FIRREA title XI (12 U.S.C. 3347(b)) and any implementing
As discussed below, the Agencies are adopting the proposed definition of “certified or licensed appraiser” without change.
In addition, TILA section 129H(b)(3) requires that the appraisal be performed in conformity with USPAP “as in effect on the date of the appraisal.” 15 U.S.C. 1639h(b)(3). The Agencies proposed to incorporate this concept in the definition of “certified or licensed appraiser” and to include a comment clarifying that the “date of the appraisal” is the date on which the appraiser signs the appraiser's certification. Again, the Agencies adopt the definition and comment as proposed.
The Dodd-Frank Act added a third requirement—that real estate appraisals be subject to appropriate review for compliance with USPAP—for which the Federal financial institutions regulatory agencies must prescribe implementing regulations. FIRREA section 1110(3), 12 U.S.C. 3339(3). FIRREA section 1110 also provides that each Federal banking agency may require compliance with additional standards if the agency determines in writing that additional standards are required to properly carry out its statutory responsibilities. 12 U.S.C. 3339. Accordingly, the Federal financial institutions regulatory agencies have prescribed appraisal regulations implementing FIRREA title XI that set forth, among other requirements, minimum standards for the performance of real estate appraisals in connection with “federally related transactions,” which are defined as real estate-related financial transactions that a Federal banking agency engages in, contracts for, or regulates, and that require the services of an appraiser.
The Agencies' proposal provided that the relevant provisions of FIRREA title XI and its implementing regulations are those selected portions of FIRREA title XI requirements “applicable to appraisers,” in effect at the time the appraiser signs the appraiser's certification. While the Federal financial institutions regulatory agencies' requirements in FIRREA also apply to an institution's ordering and review of an appraisal, the Agencies proposed that the definition of “certified or licensed appraiser” incorporate only FIRREA title XI's minimum standards related to the appraiser's performance of the appraisal. Accordingly, a proposed comment clarified that the relevant standards “applicable to appraisers” are found in regulations prescribed under FIRREA section 1110 (12 U.S.C. 3339) “that relate to an appraiser's development and reporting of the appraisal,” and that paragraph (3) of FIRREA, which relates to the review of appraisals, is not relevant. The Agencies are adopting these proposals as § 1026.35(c)(1)(i) and comment 35(c)(1)(i)–3.
The Agencies also noted that FIRREA title XI applies by its terms to “federally related transactions” involving a narrower category of loans and institutions than the group of loans and lenders that fall within TILA's definition of “creditor.”
In the proposed rule, the Agencies did not identify specific FIRREA regulations that relate to the appraiser's development and reporting of the appraisal. The Agencies requested
Appraiser trade associations, a housing advocate, and a credit union commenter agreed that the rule should apply to all qualifying mortgage loans, and not only the subset of the higher-risk mortgage loans already covered by FIRREA, including those loans with a transaction value of $250,000 or less. The appraiser trade associations and the housing advocate commenters believed that all higher-risk mortgages must be included in the rule to ensure that consumers receive the protections offered by appraisals. The housing advocate commenter also believed that including all higher-risk mortgages would reduce risk to all parties involved in the financing and servicing of mortgages and would ensure equal access to credit. This commenter specifically requested that the Agencies at least require an interior appraisal by licensed appraisers for all residential mortgages above $50,000, regardless of whether they are originated or insured by the private sector, Fannie Mae, Freddie Mac, or the Federal Housing Administration (FHA).
A banking trade association and a credit union commenter, however, believed that Congress intended the FIRREA requirements to apply only to a subset of higher-risk mortgages that are already covered by FIRREA. The banking trade association commenter believed the Agencies should not require the rule to apply to loans held in portfolio or loans with a value of $250,000 or less, because a bank holding a loan in portfolio has strong incentive to ensure that the property sale is legitimate and the property is properly valued. The commenter also believed the statute intended to apply the rules only to the subset of higher-risk mortgages with a value of over $250,000, as is provided in the Federal financial institutions regulatory agencies' regulations implementing FIRREA. The banking trade association and a bank commenter noted that many community banks, particularly in rural areas, limit costs to consumers by not requiring appraisals on mortgages held in portfolio of $250,000 or less as permitted under FIRREA title XI or by performing cheaper, in-house evaluations of property.
On whether the final rule should identify specific FIRREA regulations that relate to the development and reporting of the appraisal, the Agencies received one comment letter from appraiser trade associations. These commenters requested that the Agencies specify that creditors must use certified rather than licensed appraisers. The comment is discussed in more detail in the discussion of the use of “certified” versus “licensed” appraisers, below.
As discussed in the proposal, the Agencies believe that, by referencing FIRREA requirements in the context of defining “certified or licensed appraiser,” the statute intended to limit FIRREA's requirements to those that apply to the
At the same time and in light of public comments, the Agencies reviewed the relevant statutory provisions and confirmed their conclusion that applying the FIRREA requirements related to an appraiser's performance of an appraisal broadly—to transactions originated by creditors and transaction types not necessarily subject to FIRREA (such as loans of $250,000 or less)—is wholly consistent with the consumer protection purpose of title XIV of the Dodd-Frank Act, as well as specific language of the appraisal provisions. For example, the Agencies believe that if Congress intended to limit application of the FIRREA requirements to mortgage loans covered by FIRREA, such as loans of over $250,000 made by Federally-regulated depositories, Congress would have expressly done so. Instead, Congress placed the appraisal requirements, including the definition of “certified and licensed appraiser” referencing FIRREA, in TILA, which applies to loans made by all types of creditors. Moreover, limiting coverage of the Dodd-Frank Act higher-risk mortgage appraisal rules to loans of over $250,000 would eliminate protections for most higher-risk mortgage consumers.
Consistent with the proposal, the final rule does not separately define “certified” appraiser or “licensed” appraiser, or specify when a creditor
Several national and State credit union trade associations believed that the Agencies should not specify when a creditor must use a certified appraiser rather than a licensed appraiser and requested that the Agencies provide creditors with flexibility to make that determination. Some of these commenters noted that State requirements for certified or licensed appraisers may vary significantly; some states may not issue licenses for appraisers, and some may issue different certified appraiser credentials based on the type of property. A financial holding company commenter, on the other hand, requested that the Agencies clarify circumstances under which a lender must use a certified or a licensed appraiser to facilitate compliance.
On the other hand, appraiser trade association commenters believed that creditors should be required to use only certified appraisers, because the certification is more rigorous than licensure. These commenters stated that the FHA requires newly-eligible appraisers to be certified, and noted that many states have phased out, or are in the process of phasing out, the licensing of appraisers rather than certification. The commenters further stated that when collateral property is complex, the Agencies should require a certified appraiser who is also credentialed by a recognized professional appraisal organization. Similarly, a realtor trade association commenter believed that using certified appraisers was preferable. The commenter believed that the rule should define appraisals for higher-risk mortgages as “complex,” thus requiring that only certified appraisers may perform the appraisals.
As noted above, several commenters confirmed the Agencies' concerns that State requirements for certified or licensed appraisers may vary significantly and are evolving. Overall, the Agencies believe that imposing specific requirements in this rule about when a certified or licensed appraiser is required goes beyond the scope of the statutory “higher-risk mortgage” appraisal provisions in TILA section 129h. 15 U.S.C. 1639h. The Agencies do not believe that this rule is an appropriate vehicle for guidance on standards for use of a State certified or licensed appraiser that may change over time and vary by jurisdiction. Although the FIRREA appraisal regulations specifically require a “certified” appraiser for certain types of mortgage transactions, the Agencies do not believe that these FIRREA rules are incorporated into the higher-risk mortgage appraisal rules applicable to all creditors.
A realtor trade association commenter suggested that the rule incorporate guidance from the Interagency Appraisal and Evaluation Guidelines
Appraiser trade association commenters suggested that instead of setting forth competency standards, the Agencies should require a creditor to ensure that the engagement letter properly lays out the required scope of work, that the appraiser is independent, and that the appraiser possesses the appropriate experience to perform the assignment including, when necessary, geographic competency. The financial holding company commenter suggested that the rule should reference FIRREA and require creditors to ensure that appraisers are in good standing. The banking trade association commenter believed that the Agencies should include a reference to USPAP to create a uniform competency standard. One State credit union association believed that the Agencies should permit creditors to rely on appraisers' representations regarding licensing and certification.
The Agencies believe that the many aspects of appraiser competency are beyond the scope of TILA's “higher-risk mortgage” provisions defining “certified or licensed appraiser,” which do not mention competency. Appraiser competency is addressed in a number of regulations and guidelines for Federally-regulated depositories, which are expected to know and follow rules and guidance under FIRREA regarding appraiser competency.
As discussed in in the section-by-section analysis of § 1026.35(c)(2)(ii), below, the final rule exempts a transaction secured by a new manufactured home from the appraisal requirements of § 1026.35(c). Accordingly, § 1026.35(c)(1)(ii) adds a definition of manufactured home, clarifying that, for the purposes of this section, the term manufactured home has the same meaning as in HUD regulation 24 CFR 3280.2.
As discussed in § 1026.35(c)(3)(ii)(B) below, to qualify for the safe harbor provided in the final rule, a creditor must verify through the “National Registry” that the appraiser is a certified or licensed appraiser in the State in which the property is located as of the date the appraiser signs the appraiser's certification. Under FIRREA section 1109, the Appraisal Subcommittee of the FFIEC is required to maintain a registry of State certified and licensed appraisers eligible to perform appraisals in connection with federally related
TILA section 129H(b)(3)(A) provides that, among other things, a certified or licensed appraiser means a person who is certified or licensed by the “State” in which the property to be appraised is located. 15 U.S.C. 1639h(b)(3)(A). As discussed above, a certified or licensed appraiser means a person certified or licensed by the “State agency” in the State in which the property that secures the transaction is located. Under FIRREA section 1118, the Appraisal Subcommittee of the FFIEC is responsible for recognizing each State's appraiser certifying and licensing agency for the purpose of determining whether the agency is in compliance with the appraiser certifying and licensing requirements of FIRREA title XI. 12 U.S.C. 3347. In addition, FIRREA section 1120(a) prohibits a financial institution from obtaining an appraisal from a person the financial institution knows is not a State certified or licensed appraiser in connection with a federally related transaction. 12 U.S.C. 3349(a). Accordingly, as proposed, § 1026.35(c)(1)(iv) in the final rule defines the term “State agency” as a “State appraiser certifying and licensing agency” recognized in accordance with section 1118(b) of FIRREA and any implementing regulations.
The Agencies proposed to exclude from the definition of “higher-risk mortgage loan,” and thus from coverage of TILA's “higher-risk mortgage” appraisal rules entirely, the following types of loans: (1) Qualified mortgage loans as defined in § 1026.43(e); (2) reverse-mortgage transactions subject to § 1026.33(a); and (3) loans secured solely by a residential structure. These exclusions were proposed consistent with the express language of TILA section 129H(f) and pursuant to the Agencies' exemption authority in TILA section 129H(b)(4)(B), which authorizes the Agencies to exempt from coverage of the appraisal rules a class of loans if the Agencies determine that the exemption is in the public interest and promotes the safety and soundness of creditors. 15 U.S.C. 1639h(b)(4)(B) and (f).
The Agencies requested comment on these proposed exemptions. In addition, the Agencies requested comment on whether the final rule should exempt the following types of loans:
• Loans to finance new construction of a dwelling;
• Temporary or “bridge” loans, typically used to purchase a new dwelling where the consumer plans to sell the consumer's current dwelling; and
• Loans secured by properties in “rural” areas. For this last exemption, the Agencies requested comment on how to define “rural”; specifically, whether to define it as the Board did in its proposal to implement Dodd-Frank Act ability-to-repay requirements under TILA section 129C.
Finally, the Agencies requested comment on whether commenters believed that any other types of loans should be exempt from the final rule.
The final rule adopts two of the proposed exemptions: qualified mortgages and reverse mortgages.
In addition, based on public comments, the Agencies intend to publish a supplemental proposal to request comment on possible exemptions for “streamlined” refinance programs and small dollar loans, as well as to seek comment on whether application of the HPML appraisal rule to loans secured by certain other property types, such as existing manufactured homes, is appropriate.
Exemptions from the HPML appraisal rules of § 1026.35(c) are set out in new § 1026.35(c)(2). The structure of the final rule differs from that of the proposed rule. The proposed rule excluded certain loan types from the definition of “higher-risk mortgage loan” and thereby excluded these loan types from coverage of all of the “higher-risk mortgage” appraisal rules. By contrast, the final rule defines a general term—HPML—and incorporates exemptions from the appraisal rules in a separate subsection, § 1026.35(c)(2). As discussed, the general term HPML applies also to loans covered by the revised escrow rules in § 1026.35(b), with exemptions specific to those rules enumerated separately in § 1026.35(b)(2).
Thus, exemptions that are the same in both the escrow rules in § 1026.35(b) and the appraisal rules in § 1026.35(c) are stated separately in the “exemptions” sections for each set of rules.
These exemptions and related public comments are discussed in detail below.
TILA section 129H(f) expressly excludes from the definition of higher-risk mortgage any loan that is a qualified mortgage as defined in TILA section 129C and a reverse mortgage loan that is a qualified mortgage as defined in TILA section 129C. 15 U.S.C. 1639(f). Rather than implement one exclusion for qualified mortgages and a separate exclusion for any reverse mortgage loans that may be defined by the Bureau as qualified mortgages, the Agencies proposed to provide a single exclusion for a qualified mortgage as that term would be defined in the Bureau's final rule implementing TILA section 129C. 15 U.S.C. 1639c.
Before authority regarding TILA section 129C transferred to the Bureau under the Dodd-Frank Act, the Board issued the 2011 ATR Proposal, which, among other things, would have defined a “qualified mortgage” in a new subsection of Regulation Z. 12 CFR 226.43(e).
The Agencies adopt the exemption for “qualified mortgages” as proposed, with a cross-reference to the Bureau's final rules defining this class of loans in 12 CFR 1026.43(e).
All commenters—including national and State credit union trade associations, as well as national and State banking trade associations—supported this exemption. Some banking trade associations believed the exemption was appropriate because qualified mortgages, by definition, are safe and sound transactions. Other banking and credit union trade associations expressed concern that they could not comment specifically on the exemption, because the term was not yet defined by the Bureau.
The final rule incorporates the exemption for “qualified mortgages” as proposed because the exemption is prescribed by statute and widely supported by commenters. The Agencies note that some commenters requested that the final rule also exempt “qualified residential mortgages,” which the Dodd-Frank Act exempts from the risk retention rules prescribed by the Act.
The Agencies proposed to exclude from coverage of the higher-risk mortgage appraisal rules any loan secured solely by a residential structure, such as a manufactured home.
The Agencies requested comment on whether the proposed exclusion was appropriate, and if not, reasonable methods by which creditors could comply with the requirements of this proposed rule when providing loans secured solely by a residential structure. The Agencies also requested comment on whether some alternative standards for valuing residential structures securing higher-risk mortgage loans might be feasible and appropriate to include as part of the final rule, in lieu of an appraisal performed by a certified or licensed appraiser.
Commenters, including national and State credit union trade associations, a manufactured housing industry consultant, manufactured housing trade associations, a realtor trade association, a lender specializing in manufactured housing financing, and national and State banking trade associations, submitted comments regarding the exemption for loans secured “solely by a residential structure,” but limited their comments to the exemption as applied to manufactured homes. The commenters supported exempting loans secured solely by manufactured homes. Banking trade association commenters believed that the statute was intended to apply only to loans secured at least in part by real property. A manufactured housing industry consultant, a manufactured housing lender, and manufactured housing trade association commenters concurred that traditional appraisals were not appropriate for these transactions for a variety of reasons, including: (1) A lack of qualified and trained appraisers to appraise such transactions, especially in rural areas; (2) a lack of comparable sales and limited sales volume; (3) the high expense of appraisals relative to the cost of the transaction; and (4) inaccurate valuations resulting from traditional appraisals. The manufactured housing industry consultant suggested that an exemption was necessary in part because these loans were unlikely to qualify for the qualified mortgage exemption due to their small size, which would in turn increase the likelihood that they would exceed the points and fees thresholds defining qualified mortgages.
Some of the commenters believed the Agencies should expand the exemption to include financing for both real estate and manufactured homes, known as “land home” financing. Manufactured housing trade association commenters argued that traditional appraisals are not appropriate for these transactions for many of the same reasons cited for excluding loans secured solely by a residential structure. One of these manufactured housing trade associations also expressed the view that appraisals are not appropriate because the cost of the home itself is readily known to consumers through other means. In addition, the commenter stated that in rural areas, the cost of the land is small compared to the overall value of the transaction.
One commenter also questioned the feasibility of appraisals for such transactions. A lender specializing in manufactured housing financing stated that, in land home transactions, the land on which manufactured homes will be located is often not identified until well after the time appraisals are typically ordered. Moreover, the commenter stated that manufactured homes are typically not available for an interior visit until after closing, regardless of whether the transaction is secured solely by the home itself or by land and home together. As an alternative, the commenter suggested different regulatory language for the exclusion, which would expand the exemption to
Public commenters generally confirmed Agencies' concerns regarding the application of the appraisal rules to loans secured by certain manufactured homes. Accordingly, the Agencies are excluding certain manufactured homes from coverage under the final rule. However, in the final rule, the Agencies are modifying the exemption. The proposed rule would have exempted loans “secured solely by a residential structure,” which was intended to exempt manufactured homes and other types of dwellings when the loan was not secured at least in part by land. The language in the final rule is tailored to exempt transactions secured by specific types of dwellings. Accordingly, the final rule exempts transactions secured by a new manufactured home, regardless of whether the structure is attached to land or considered real property, and also exempts transactions secured by a mobile home, boat, or trailer.
The Agencies believe that the manufactured home exemption should be based on whether the manufactured home securing the transaction is a new home, regardless of whether land also secures the transaction. Upon further consideration, the Agencies believe that TILA section 129H is intended to apply to certain transactions without regard to whether a transaction is secured by land.
The Agencies believe that an exemption for new manufactured homes regardless of whether the loan for such a home is also secured by land more precisely excludes from the rule those transactions that should not be subject to the new appraisal requirements. Based on further outreach, the Agencies understand that for loans secured by both new manufactured homes and land, a valuation is often performed by combining the manufactured home invoice price with the value of the land, rather than by a traditional appraisal that is based on the collective value of the structure and the land on which it is sited.
The Agencies believe that requiring traditional appraisals with interior inspections for transactions secured by a new manufactured home would add very little value to the consumer beyond existing valuation methods. Moreover, because it may be difficult or impossible to retain qualified appraisers to perform such appraisals, the rule could result in some creditors declining to extend loans for manufactured homes. Exempting new manufactured homes from the rule is, therefore, in the public interest. The Agencies believe that such an exemption also promotes the safety and soundness of creditors, because creditors will be able to continue relying on standardized valuations that are more conducive to pricing new manufactured homes than are appraisals performed by a certified or licensed appraiser.
Accordingly, in § 1026.35(c)(2)(ii), the Agencies are exempting from the appraisal requirements of § 1026.35(c) a transaction secured by a new manufactured home. Comment 35(c)(2)(ii)–1 in the final rule clarifies that a transaction secured by a new manufactured home, regardless of whether the transaction is also secured by the land on which it is sited, is not a “higher-priced mortgage loan” subject to the appraisal requirements of § 1026.35(c).
Section 1026.35(c)(2)(iii) of the final rule also specifically exempts transactions secured by a mobile home, boat, or trailer. This is consistent with the proposal, which would have exempted these transactions because they are secured “solely by a residential structure.” The Agencies note that this exemption applies even if the transaction is also secured by land. Comment 35(c)(2)(iii)–1 clarifies that, for purposes of the exemption in § 1026.35(c)(2)(iii), a mobile home does not include a manufactured home, as defined in § 1026.35(c)(1)(ii).
The Agencies believe the exemption is in the public interest, because requiring an appraisal with an interior property visit for these transactions would offer limited value due to existing pricing tools, such as new product invoices and publicly-available pricing guides. The Agencies further believe, for purposes of safety and soundness, that creditors would be better served by using other valuation methods geared specifically for mobile homes, boats, and trailers.
In the proposal, the Agencies asked for comment on whether to exempt from the higher-risk mortgage appraisal rules transactions that finance the construction of a new home. The Agencies recognized that for loans that finance the construction of a new home, an interior visit of the property securing the loan is generally not feasible because the homes are proposed to be built or are in the process of being built. At the same time, the Agencies recognized that construction loans that meet the pricing thresholds for higher-risk mortgage loans could pose many of the same risks to consumers as other types of loans meeting those thresholds. The Agencies therefore requested comment on whether to exclude construction loans from the definition of higher-risk mortgage loan. The Agencies also sought comment on whether, if an exemption for initial construction loans were not adopted in the final rule, creditors needed any additional compliance guidance for applying TILA's “higher-risk mortgage” appraisal rules to construction loans. Alternatively, the Agencies requested comment on whether construction loans should be exempt only from the requirement to conduct an interior visit of the property, and be subject to all other appraisal requirements under the proposed rule.
The final rule adopts an exemption from all of the HPML appraisal requirements for a “transaction that finances the initial construction of a dwelling.” This exemption mirrors an existing exemption from the current HPML rules.
Appraiser trade association commenters believed that new construction loans should not be exempted because consumers needed the protection of the appraisal rules. However, all other commenters—including national and State credit union trade associations, national and State banking trade associations, banks,
Commenters that supported an exemption for new construction loans had varying views on the risks associated with these loans, all supporting the commenters' request for an exemption for such loans. A loan origination software company and a bank commenter asserted that new construction loan interest rates and fees are often high because the loans, which are short-term, have inherently greater risk. Thus, the appraisal rules would be over-inclusive because they would apply even when extended to prime borrowers. Similarly, a banking association commenter argued that new construction loans are not those that Congress intended to target in the appraisal rules, which the commenter viewed as loans priced higher due to the relative credit risk of the borrower. The home builder trade association, however, supported an exemption because the commenter believed that new construction loans are not as risky as the loans targeted by Congress in the “higher-risk mortgage” appraisal rules because these loans require close coordination between a bank, home builder, and consumer.
The financial holding company, mortgage company, banking association, and loan origination software company commenters supported an exemption for new construction loans because they are temporary. One of these commenters noted that most mortgage-related regulations, such as those in Regulation X and Z, make accommodations for temporary loans. Others noted that the property securing the new construction loan ultimately will be subject to an appraisal under TILA's “higher-risk mortgage” appraisal rules if the permanent financing replacing the new construction loan is a “higher-risk mortgage.”
Several commenters supporting an exemption cited concerns about the feasibility and utility of performing interior inspection appraisals during the construction phase. A bank commenter stated that an exemption was needed because a home under construction is not available for a physical inspection. Similarly, credit union association and banking association commenters stated that an interior visit would not be feasible during the construction phase. Moreover, the commenter believed an appraisal was unlikely to yield sufficient information about the condition of the property to justify the expense to the consumer. A banking association commenter further asserted that the usual value of a new construction loan is the value “at completion,” so an appraisal performed during construction would not assess the value of a completed home.
A State banking association commenter asserted that failing to exempt new construction loans from the final rule would result in operational difficulties and that an interior inspection appraisal would be of little value to consumers in these circumstances. A bank commenter requested guidance on how to comply with the rules for these loans, if the Agencies did not exempt them from the rule.
In § 1026.35(c)(2)(iv), the Agencies are using their exemption authority to exempt from the final rule a “transaction to finance the initial construction of a dwelling.” Unlike the exemption for “bridge” loans that the Agencies are also adopting (
The Agencies' decision to exempt these types of transactions is consistent with wide support for this exemption received from commenters, which largely confirmed the Agencies' concerns about the drawbacks of subjecting these transactions to the new HPML appraisal requirements, particularly the requirement for an interior inspection, USPAP-compliant appraisal. The Agencies also believe that this exemption is important to ensure consistency across mortgage rules, and thus to facilitate compliance. In addition to noting the existing exemption for new construction loans from the current HPML requirements, the Agencies also note the exemption for these loans from the new Dodd-Frank Act ability-to-repay and “high-cost” mortgage rules issued by the Bureau.
Due to their temporary nature and for other reasons, these loans tend to have higher rates and thus more of them would be subject to the HPML appraisal rules without an exemption. Applying the HPML appraisal rules to these products might subject them to rules with which creditors might not in fact be able to comply. The Agencies therefore believe that this exemption will help ensure that a useful credit vehicle for consumers remains available to build and revitalize communities. The Agencies also recognize that new construction loans can be an important product for many creditors, enabling them to strengthen and diversify their lending portfolios. The Agencies are also not aware of, and commenters did not offer, evidence of widespread valuation abuses in loans to finance new construction. Thus, the Agencies find that the exemption is both in the public interest and promotes the safety and soundness of creditors.
The Agencies also wished to clarify in the final rule the treatment of “construction to permanent” loans, consisting of a single loan that transforms into permanent financing at the end of the construction phase. For this reason, the commentary of the final rule includes guidance on the application of various rules in Regulation Z to these loans that parallels guidance provided in commentary for the new “high-cost” mortgage rules.
The comment also provides guidance on the application of Regulation Z's general closed-end mortgage loan disclosure requirements to construction-to-permanent loans. To this end, the comment states that, when a construction loan may be permanently financed by the same creditor, the general disclosure requirements for closed-end credit (§ 1026.17) provide that the creditor may give either one combined disclosure for both the construction financing and the permanent financing, or a separate set of disclosures for each of the two phases
In the proposal, the Agencies also requested comment on whether the appraisal rules of TILA section 129H should apply to temporary or “bridge” loans with a term of 12 months or less. 15 U.S.C. 1639h. If such an exemption were not adopted, the Agencies sought comment on whether any additional compliance guidance would be needed for applying the new appraisal rules to bridge loans. The Agencies stated concerns about the burden to both creditors and consumers of imposing the rule's requirements on such loans and questioned whether such requirements would be useful for many consumers.
As explained in the proposal, bridge loans are short-term loans typically used when a consumer is buying a new home before selling the consumer's existing home. Usually secured by the existing home, a bridge loan provides financing for the new home (often in the form of the down payment) or mortgage payment assistance until the consumer can sell the existing home and secure permanent financing. Bridge loans normally carry higher interest rates, points and fees than conventional mortgages, regardless of the consumer's creditworthiness.
In § 1026.35(c)(2)(v), the final rule adopts an exemption from the new HPML appraisal rules for a “loan with a maturity of 12 months or less, if the purpose of the loan is a `bridge' loan connected with the acquisition of a dwelling intended to become the consumer's principal dwelling.”
Almost all commenters—including national and State banking associations, national and State credit union associations, a mortgage company, a financial holding company, a loan origination software company, a home builder trade association, and a bank—supported an exemption for bridge loans for many of the same reasons that commenters supported exempting construction loans. Several commenters emphasized that these loans are temporary, and some further pointed out that imposing appraisal requirements was unnecessary because bridge loans are ultimately converted to permanent financing that will be subject to the appraisal rules. Other commenters argued that the protections of the appraisal rules were not needed because bridge loans' higher rates are generally unrelated to a consumer's creditworthiness; they argued that TILA's new “higher-risk mortgage” appraisal rules were intended for loans made to more vulnerable, less creditworthy consumers without other credit options.
Some commenters asserted that failing to exempt these loans would result in operational difficulties and would be of little value to consumers. In this regard, one commenter discussed the difficulties of comparing an APR to a “comparable” APOR for these loans. One credit union association commenter believed that without an exemption, consumers' access to bridge loans would be reduced. Some commenters requested that the Agencies exempt all types of temporary loans. Appraiser trade association commenters believed that the Agencies should not allow an exemption unless there was a compelling policy reason to do so.
The Agencies are adopting an exemption for “bridge” loans of 12 months or less that are connected with the acquisition of a dwelling intended to become the consumer's principal dwelling for several reasons. First, the Agencies believe that with this exemption, the consumer would still be afforded the protection of the appraisal rules. This is because bridge loans used in connection with the acquisition of a new home are typically secured by the consumer's existing home to facilitate the purchase of a new home. Thus, the consumer would be afforded the protections of the appraisal rules on the permanent financing secured by the new home. This would include the protections of § 1026.35(c)(4)(i) regarding properties that are potentially fraudulent flips.
Second, commenters generally confirmed the Agencies' concerns expressed in the proposal about the burden to both creditors and consumers of imposing TILA section 129H's heightened appraisal requirements on short-term financing of this nature. As noted in the proposal, the Agencies recognize that rates on short-term bridge loans are often higher than on long-term home mortgages, so these loans may be more likely to meet the “higher-risk mortgage loan” triggers. As also noted in the proposal and echoed by commenters, “higher-risk mortgages” under TILA section 129H would generally be a credit option for less creditworthy consumers, who may be more vulnerable than others and in need of enhanced consumer protections, such as TILA section 129H's special appraisal requirements. However, a bridge loan consumer could be subject to rates that would exceed the higher-risk mortgage loan thresholds even if the consumer would qualify for a non-higher-risk mortgage loan when seeking permanent financing. The Agencies do not believe that Congress intended TILA section 129H to apply to loans simply because they have higher rates, regardless of the consumer's creditworthiness or the purpose of the loan.
Further, the Agencies recognize that the exemption can help facilitate compliance by generally ensuring consistency across residential mortgage rules. Such consistency can reduce compliance-related burdens and risks, thereby promoting the safety and soundness of creditors. The Agencies also believe that consistency across the rules can reduce operational risk and support a creditor's ability to offer these loans, which can enable creditors to strengthen and diversify their lending portfolios.
In particular, the Agencies note the current exemption for “temporary or `bridge' loans of twelve months or less from the existing HPML rules (retained in the 2013 Escrows Final Rule, § 1026.35(b)(2)(i)(C)), but also a similar exemption from TILA's new ability-to-repay requirements.
Like the HOEPA exception from the balloon payment prohibition, the final HPML appraisal rule does not exempt all loans with terms of 12 months or less. Only bridge loans of 12 months or less that are made in connection with the acquisition of a consumer's principal dwelling are exempted. (Construction loans are separately exempted under § 1026.35(c)(2)(iv), discussed in the corresponding section-by-section analysis above.) The Agencies believe that the HPML appraisal rule might be appropriately applied to other types of temporary financing, particularly temporary financing that does not result in the consumer ultimately obtaining permanent financing covered by the appraisal rule.
Finally, as with new construction loans, the Agencies are not aware of, and commenters did not offer, evidence of widespread valuation abuses in bridge loans of twelve months or less used in connection with the acquisition of a consumer's principal dwelling. For all these reasons, the Agencies find that the exemption is both in the public interest and promotes the safety and soundness of creditors.
The Agencies proposed to exempt reverse mortgage transactions subject to § 1026.33(a) from the definition of “higher-risk mortgage loan.” The Agencies proposed this exemption in part because the proprietary (private) reverse mortgage market is effectively nonexistent, thus the vast majority of reverse mortgage transactions made in the United States today are insured by FHA as part of the U.S. Department of Housing and Urban Development's (HUD) Home Equity Conversion Mortgage (HECM) Program.
At the same time, the Agencies expressed concern that providing a permanent exemption for all reverse mortgage transactions, both private and HECM products, could deny key protections to consumers who rely on reverse mortgages. However, the Agencies proposed the exemption on at least a temporary basis, asserting that avoiding any potential disruption of this segment of the mortgage market in the near term would be in the public interest and promote the safety and soundness of creditors.
The Agencies requested comment on the appropriateness of this exemption. The Agencies also sought comment on whether available indices exist that track the APR for reverse mortgages and could be used by the Bureau to develop and publish an APOR for these transactions, or whether such an index could be developed, noting, for example, information published by HUD on HECMs, including the contract rate.
As discussed further below, in § 1026.35(c)(2)(vi) of the final rule, the Agencies are adopting the proposed exemption for a “reverse-mortgage transaction subject to § 1026.33(a).”
National and State credit union trade associations, as well as a State banking trade association, supported the proposed exemption. However, appraiser trade association commenters generally believed that excluding appraisal protections would harm consumers, particularly senior citizens, and is contrary to public policy. Appraiser trade association, realtor trade association, and reverse mortgage lending trade association commenters suggested that any exemption should be limited to reverse mortgages under the FHA HECM program and not extended to proprietary products, because HECM consumers are afforded a comprehensive and mandatory set of appraisal protections. The reverse mortgage lending trade association also suggested circumstances under which reverse mortgages should be deemed qualified mortgages and, thus, qualify for an exemption on that basis.
No commenters offered suggestions on an appropriate approach for developing an APOR for reverse mortgages. Appraiser trade associations, who only supported an exemption for HECMs, believed that the rules should apply to reverse mortgages even though indices do not currently exist. A reverse mortgage lending trade association believed that benchmark indices for reverse mortgages could be developed, but, supporting the proposed exemption, questioned whether one should be.
The Agencies are adopting the proposed exemption for a “reverse-mortgage transaction subject to § 1026.33” for the same basic reasons discussed in the proposal, which were affirmed by most commenters. The Agencies share concerns expressed by some commenters about the risks to consumers of reverse mortgages generally, and of proprietary reverse mortgage loans in particular. Proprietary reverse mortgage loans are not insured by FHA or any other government entity, so payments are not guaranteed by the U.S. government to either consumers or creditors. By contrast, HECMs are insured by FHA and subject to a number of rules and restrictions designed to reduce risk to both consumers and creditors, including appraisal rules.
As noted in the proposal, however, there is little to no market for proprietary reverse mortgages, and prospects for the reemergence of this market in the near-term are remote.
In reevaluating the proposed exemption, the Agencies also focused more attention on the fact that TILA's “higher-risk mortgage” appraisal rules apply only to closed-end products. Many (and historically most) reverse mortgages are open-end products. The Agencies are concerned about creating anomalies in the market and compliance confusion among creditors by applying one set of rules to closed-end reverse mortgages and another to open-end reverse mortgages. The Agencies note that compliance confusion among creditors can create burden and operational risk that can have a negative impact on the safety and soundness of the creditors. The Agencies are concerned that this bifurcation of the rule's application could also hinder creditors from offering a range of reverse mortgage product choices that support the creditors' loan portfolios while also benefitting consumers. In short, questions remain for the Agencies about whether this rule is the appropriate vehicle for addressing appraisal issues in the reverse mortgage market.
The Agencies remain concerned about the potential for abuse related to appraisals even with HECMs, which are subject to appraisal rules. Indeed, evidence exists that problems of property value inflation and fraudulent flipping occur even in the HECM market.
For all these reasons, the Agencies have concluded that an exemption for all reverse mortgages at this time from this rule is in the public interest and promotes the safety and soundness of creditors.
Consistent with TILA section 129H(a) and (b)(1), the proposal provided that a creditor shall not extend a higher-risk mortgage loan to a consumer without obtaining, prior to consummation, a written appraisal performed by a certified or licensed appraiser who conducts a physical visit of the interior of the property that will secure the transaction. 15 U.S.C. 1639h(a) and (b)(1). In new § 1026.35(c)(3)(i), the final rule adopts this proposal without change.
In the proposed rule, the Agencies proposed a safe harbor that would establish affirmative steps creditors can follow to ensure that they satisfy statutory obligations under TILA section 129H(a) and (b)(1). 15 U.S.C. 1639h(a) and (b)(1). This was done to address compliance uncertainties, which are discussed in more detail below.
The Agencies are adopting the final rule substantially as proposed. Specifically, under new § 1026.35(c)(3)(ii), a creditor would be deemed to have obtained a written appraisal that meets the general appraisal requirements now adopted in § 1026.35(c)(3)(i) if the creditor:
• Orders the appraiser to perform the appraisal in conformity with USPAP and FIRREA title XI, and any implementing regulations, in effect at the time the appraiser signs the appraiser's certification (§ 1026.35(c)(3)(ii)(A));
• Verifies through the National Registry that the appraiser who signed the appraiser's certification holds a valid appraisal license or certification in the State in which the appraised property is located as of the date the appraisal is signed (§ 1026.35(c)(3)(ii)(B));
• Confirms that the elements set forth in appendix N to part 1026 are addressed in the written appraisal (§ 1026.35(c)(3)(ii)(C)); and
• Has no actual knowledge to the contrary of facts or certifications contained in the written appraisal (§ 1026.35(c)(3)(ii)(D)).
The Agencies are also adopting proposed comments to the safe harbor. In particular, comment 35(c)(3)(ii)–1 clarifies that a creditor that satisfies the safe harbor conditions in § 1026.35(c)(3)(ii)(A)–(D) will be deemed to have complied with the general appraisal requirements of § 1026.35(c)(3)(i). This comment further clarifies that a creditor that does not satisfy the safe harbor conditions in § 1026.35(c)(3)(ii)(A)–(D) does not necessarily violate the appraisal requirements of § 1026.35(c)(3)(i).
Consistent with the proposal, appendix N to part 1026 provides that, to qualify for the safe harbor, a creditor must check to confirm that the written appraisal:
• Identifies the creditor who ordered the appraisal and the property and the interest being appraised.
• Indicates whether the contract price was analyzed.
• Addresses conditions in the property's neighborhood.
• Addresses the condition of the property and any improvements to the property.
• Indicates which valuation approaches were used, and included a reconciliation if more than one valuation approach was used.
• Provides an opinion of the property's market value and an effective date for the opinion.
• Indicates that a physical property visit of the interior of the property was performed.
• Includes a certification signed by the appraiser that the appraisal was prepared in accordance with the requirements of USPAP.
• Includes a certification signed by the appraiser that the appraisal was prepared in accordance with the requirements of FIRREA title XI, as amended, and any implementing regulations.
As discussed in the proposal, other than the certification for compliance with FIRREA title XI, the items in appendix N were derived from the Uniform Residential Appraisal Report (URAR) form used as a matter of practice in the residential mortgage industry. The final rule incorporates without change a proposed comment clarifying that a creditor need not look beyond the face of the written appraisal and the appraiser's certification to confirm that the elements in appendix N are included in the written appraisal.
The Agencies collectively received 17 comments from 13 trade groups, three financial institutions, and one bank holding company that addressed the proposed safe harbor. Of these, 14 commenters unequivocally supported the safe harbor. Several commenters requested clarification of certain issues. Two commenters recommended that the Agencies clarify that a lender has not necessarily violated the appraisal requirements when an appraisal does not meet the safe harbor's requirements. Another commenter recommended the final rule provide that a creditor may outsource the safe harbor requirements to a third party and that the creditor would be permitted to rely upon the third party's certification. The commenter also requested confirmation that creditors could use automated processes for checking whether the safe harbor's criteria were met.
The same commenter stated that the safe harbor did not indicate whether the creditor could rely on the face of the written appraisal report and the appraiser's certification. One commenter stated that the safe harbor was not clear regarding the scope and type of information that was required for some of the criteria. One commenter requested that the Agencies eliminate the certification for compliance with FIRREA.
Two commenters questioned implementation of the safe harbor and the creditor's responsibility under the safe harbor standard. These commenters recommended that the Agencies should use the same appraisal review standards that exist in FIRREA and the Interagency Appraisal and Evaluation Guidelines. One of the commenters questioned whether a creditor was being tasked under the safe harbor with adequate responsibility for review of an appraisal. This commenter noted that the proposal appeared to lower the bar for creditors in connection with appraisal review responsibilities. The commenter strongly opposed allowing creditors to perform appraisal review functions without necessarily using licensed or certified appraisers and recommended requiring lenders to use certified or licensed appraisers to perform any substantive appraisal review functions.
As noted, the safe harbor is being adopted to address compliance uncertainties for creditors raised by the general appraisal requirements. Specifically, TILA section 129H(b)(1) requires that appraisals mandated by section 129H be performed by “a certified or licensed appraiser” who conducts a physical property visit of the interior of the mortgaged property. 15 U.S.C. 1639h(b)(1). The statute goes on to define a “certified or licensed” appraiser in some detail. TILA section 129H(b)(3), 15 U.S.C. 1639h(b)(3). The statute, however, is silent on how creditors should determine whether the written appraisals they have obtained comply with these statutory requirements.
TILA section 129H(b)(3) defines a “certified or licensed appraiser” as a person who is (1) certified or licensed by the State in which the property to be appraised is located, and (2) performs each appraisal in conformity with USPAP and the requirements applicable to appraisers in FIRREA title XI, and the regulations prescribed under such title, as in effect on the date of the appraisal. 15 U.S.C. 1639h(b)(3). These two elements of the definition of “certified or licensed appraiser” are discussed in more detail below.
FIRREA title XI and the regulations prescribed thereunder regulate entities engaging in real estate-related financial transactions that are engaged in, contracted for, or regulated by the Federal financial institutions regulatory agencies.
The statute does not specifically address Congress's intent in referencing USPAP and FIRREA title XI. Congress could have amended FIRREA title XI directly to expand the scope of the statute to subject all creditors to its requirements. Instead, Congress inserted language into TILA requiring that the appraisers who perform appraisals in connection with higher-risk mortgage loans comply with USPAP and FIRREA title XI. The statute is silent, however, as to the extent of creditors' obligations under the statute to evaluate appraisers' compliance.
The Agencies remain concerned that, practically speaking, a creditor might not be able to determine with certainty whether an appraiser complied with USPAP for a residential appraisal. An appraisal performed in accordance with USPAP represents an expert opinion of value. Not only does USPAP require extensive application of professional judgment, it also establishes standards for the scope of inquiry and analysis to be performed that cannot be verified absent substantially re-performing the appraisal. Conclusive verification of FIRREA title XI compliance (which itself incorporates USPAP) poses similar problems. On an even more basic level,
As discussed in the proposal, the Agencies continue to be of the opinion that the safe harbor will be particularly useful to consumers, industry, and courts with regard to the statutory requirement that the appraisal be obtained from a “certified or licensed appraiser” who conducts each appraisal in compliance with USPAP and FIRREA title XI. While determining whether an appraiser is licensed or certified by a particular State is straightforward, USPAP and FIRREA provide a broad set of professional standards and requirements. The appraisal process involves the application of subjective judgment to a variety of information points about individual properties; thus, application of these professional standards is often highly context-specific. (The Agencies noted in the proposed rule, however, that a certification of USPAP compliance, one of the required safe harbor elements, is already an element of the URAR form used as a matter of practice in the industry.)
Regarding the first element of the safe harbor, that the creditor “order” that the appraiser perform the appraisal in conformity with USPAP and FIRREA, the Agencies generally understand that creditors seeking the safe harbor would include this assignment requirement in the engagement letter with the appraiser.
Some commenters sought clarification on whether the creditor could rely on the face of the appraisal report, and what scope and type of information is required for the appendix N criteria. As the Agencies discussed in the proposal, compliance with the appendix N safe harbor review requires the creditor to check certain elements of the written appraisal and the appraiser's certification on its face for completeness and internal consistency. The final rule, consistent with the proposed rule, does not require the creditor to make an independent judgment about or perform an independent analysis of the conclusions and factual statements in the written appraisal. As discussed above, the Agencies believe that imposing such obligations on the creditor could effectively require it to re-appraise the property. The Agencies also are retaining the requirement for the safe harbor that the appraiser certify, in the appraisal report, the appraiser's compliance with both USPAP and applicable FIRREA title XI regulations, although one commenter requested eliminating the certification of compliance with FIRREA.
In response to comments about using third parties for the review of appendix N elements, the Agencies realize that some creditors may want to outsource the appraisal review function to confirm that the elements in appendix N are addressed in the written appraisal. Nonetheless, the Agencies emphasize that while a creditor may outsource this function to a third party as the creditor's agent, the creditor remains responsible for its agent's compliance with these requirements, just as if the creditor had performed the function itself, and the creditor cannot simply rely on the agent's certification. The same principle applies regarding a public comment seeking clarification about the use of automated review processes for the safe harbor; use of automated processes can be appropriate, but the creditor remains responsible for their effectiveness.
As stated in the proposed rule, the Agencies are of the opinion that the safe harbor requirements would provide reasonable protections to consumers and compliance guidance to creditors. For the reasons previously provided and in light of commenters' general support, the Agencies have adopted the safe harbor provision as proposed.
Under TILA section 129H(b)(2), a creditor must obtain a “second appraisal” from a “different” certified or licensed appraiser if the higher-risk mortgage loan will “finance the purchase or acquisition of the mortgaged property from a seller within 180 days of the purchase or acquisition of such property by the seller at a price that was lower than the current sale price of the property.” 15 U.S.C. 1639h(b)(2)(A). In the proposal, the Agencies interpreted this requirement to obtain a “second appraisal” to mean that the creditor must obtain an appraisal in addition to the one required under the general “higher-risk mortgage” appraisal rules in TILA section 129H(a) and (b)(1).
The Agencies proposed to implement the basic statutory requirement without material change. Thus, in “higher-risk mortgage loan” transactions under the proposal, creditors would have to apply additional scrutiny to properties being resold for a higher price within a 180-day period.
Using the exemption authority under TILA section 129H(b)(4)(B), the final rule adopts the proposal, but with substantive changes. 15 U.S.C. 1639h(b)(4)(B). Specifically, under new § 1026.35(c)(4)(i), a creditor may not extend an HPML that is not otherwise
• The seller is reselling the property within 90 days of acquiring it and the resale price exceeds the seller's acquisition price by more than 10 percent; or
• The seller is reselling the property within 91 to 180 days of acquiring it and the resale price exceeds the seller's acquisition price by more than 20 percent.
The Agencies are adopting a proposed comment to clarify that an appraisal that was previously obtained in connection with the seller's acquisition or the financing of the seller's acquisition of the property does not satisfy the requirements to obtain two written appraisals under § 1026.35(c)(4)(i). As discussed in more detail below, the Agencies are also adopting several other proposed comments to this rule without substantive change.
The Agencies received over 50 comments concerning the proposal to implement the “second” appraisal requirement under TILA section 129H(b)(2) from trade associations, banks, credit unions, mortgage lending corporations, non-profit organizations, government-sponsored enterprises (GSEs), and individuals. The commenters offered responses to some of the questions the Agencies posed in the proposal and made suggestions for exemptions from the additional appraisal requirement. Exemptions and related public comments are discussed in the section-by-section analysis of § 1026.35(c)(4)(vi), below.
In the proposal, the Agencies requested comment on thirteen separate questions concerning the general requirement to obtain an additional appraisal and appropriate exemptions from this requirement. Public comments on proposals related to more specific rules for the additional appraisal are discussed in the section-by-section analysis of § 1026.35(c)(ii)–(v), below. On the general requirements adopted in § 1026.35(c)(4)(i), the Agencies received substantive comments on the following two questions.
Three commenters requested clarification on how to distinguish between appraisals of different valuations in a lending decision, noting that the proposal did not specify which of the two required appraisals a creditor must rely on in extending a higher-risk mortgage loan if the appraisals provide different opinions of value.
Consistent with the statute and the proposal, new § 1026.35(c)(4)(i) requires a creditor to apply additional scrutiny to the value of properties securing HPMLs when they are being resold for a higher price within a 180-day period. The Agencies believe that the intent of TILA section 129H(b)(2), as implemented in § 1026.35(c)(4)(i), is to discourage fraudulent property “flipping,” a practice in which a seller resells a property at an artificially inflated price within a short time period after purchasing it, typically after some minor renovations and frequently relying on an inflated appraisal to support the increase in value.
In the proposal, the Agencies noted that this approach is generally consistent with rules promulgated by HUD to address property flipping in single-family mortgage insurance programs of the FHA.
However, under temporary rules in effect until December 31, 2013, that waive the existing HUD anti-flipping regulations during the first 90-day period described above, FHA insurance may be obtained for a mortgage secured by a property resold within 90 days if certain conditions are met.
Regarding concerns expressed by commenters about which appraisal to use for the credit decision when the two appraisals show different values, the Agencies acknowledge that the introduction of a second appraisal will sometimes place creditors in the position of exercising judgment as to which appraisal reflects the more robust analysis and opinion of property value. The Agencies recognize that creditors ordering two appraisals from different certified or licensed appraisers may likely receive appraisals providing different opinions. The Agencies decline to provide additional guidance on this matter in the final rule, however, because other rules and regulatory guidance address the issue and are more appropriate vehicles for this purpose. TILA section 129H does not require that the creditor use any particular appraisal, and the Agencies believe that a creditor should retain the discretion to select the most reliable valuation, consistent with applicable safety and soundness obligations and prudential regulatory guidance. 15 U.S.C. 1639h.
In particular, the Agencies noted in the proposal that TILA's valuation independence rules permit a creditor to obtain multiple valuations for the consumer's principal dwelling
Section 1026.35(c)(4)(i) is consistent with the proposal in requiring the creditor to obtain the additional appraisal before consummating the HPML. TILA section 129H(b)(2) does not specifically require that the additional appraisal be obtained prior to consummation of the “higher-risk mortgage,” but the Agencies believe that this timing requirement is necessary to effectuate the statute's policy of requiring creditors to apply greater scrutiny to potentially flipped properties that will secure the transaction. 15 U.S.C. 1639h(b)(2).
Section 1026.35(c)(4)(i) is consistent with the proposal in several other respects as well. First, the statute requires an additional appraisal “if the
In addition, the final rule replaces the statutory term “mortgaged property” with the term “principal dwelling.” TILA section 129H(b)(2)(A), 15 U.S.C. 1639h(b)(2)(A). The Agencies have made this change to be consistent with Regulation Z, which elsewhere uses the term “principal dwelling,” most notably in the existing definition of HPML.
As noted, the final rule requires a creditor to obtain two appraisals in two sets of circumstances: first, the seller is reselling the property within 90 days of acquiring it and the resale price exceeds the seller's acquisition price by more than 10 percent (new § 1026.35(c)(4)(i)(A)); and second, the seller is reselling the property within 91 to 180 days of acquiring it and the resale price exceeds the seller's acquisition price by more than 20 percent (new § 1026.35(c)(4)(i)(B)). To determine whether either set of circumstances exists and which price threshold applies, a creditor must determine the date on which the seller acquired the property and the date on which the consumer became obligated to acquire the property from the seller. These aspects of the final rule are discussed below.
The Agencies asked for public comment on several questions regarding the first of these conditions, § 1026.35(c)(4)(i)(A).
In the proposal, the Agencies asked for comment on whether an additional appraisal should be required for consumer acquisitions where the property had been conveyed to the seller in a non-purchase transaction and where, arguably in the consumer's purchase, that seller may not have the same motive to earn a quick, unreasonable profit on a short-term investment. The Agencies also requested comment on how a creditor should calculate the seller's “acquisition price” in non-purchase scenarios. The Agencies offered the example of a case where the seller acquired the property by inheritance. In such a case, the seller's acquisition price could be considered “zero,” which could make a subsequent sale offered at any price within 180 days subject to the additional appraisal requirement.
The Agencies also invited comment on whether the term “acquisition” might be over-inclusive in describing the consumer's transaction because non-purchase acquisitions by the consumer do not readily appear to trigger the additional appraisal requirement. For example, if the consumer acquired the property by means other than a purchase, he or she likely would not seek a mortgage loan to “finance” the acquisition.
Two commenters, national trade associations for appraisers, stated that they had no objections to excluding non-purchase transactions by either the seller or consumer from the additional appraisal requirement. A third commenter, a bank, affirmatively supported an exemption for non-purchase acquisitions, suggesting that such transactions are less likely to involve fraudulent flipping schemes.
The Agencies also asked for comment on whether the term “acquisition” is the appropriate term to use in connection with both the seller and mortgage consumer. In addition, the Agencies asked whether the term “acquisition” should be clarified to address situations in which a consumer previously held a partial interest in the property, and is acquiring the remainder of the interest from the seller. As noted in the proposal, the Agencies do not expect that fraudulent property flipping schemes would likely occur in this context. The Agencies also noted that existing commentary in Regulation Z clarifies that a “residential mortgage transaction” does not include transactions involving the consumer's principal dwelling when the consumer had previously purchased and acquired some interest in the dwelling, even though the consumer had not acquired full legal title, such as when one joint owner purchases the other owner's joint interest.
The Agencies received three comments as well on the appropriateness of using term “acquisition” rather than another term such as “purchase.” Two commenters endorsed use of this term, without elaboration. A third commenter, a mortgage lending corporation, objected to the term “acquisition” and proposed the phrase “purchase acquisition” instead. The commenter suggested that consumers who acquire property through inheritance, divorce or other non-purchase means frequently want to sell the property quickly; therefore, application of the additional appraisal requirement is not appropriate and will needlessly delay such transactions.
The Agencies received three comments as well on the question of whether the additional appraisal should apply to partial interests in a transaction. One commenter, a regional trade association for credit unions, supported an exemption to cover a situation in which a consumer holds a partial interest in property and is acquiring the remainder of the interest from the seller. In support of its position, the commenter cited the commentary to Regulation Z mentioned in the proposal (comments 2(a)(24)–5(i) and –5(ii)), which clarifies that a “residential mortgage transaction” does not include transactions involving the consumer's principal dwelling when the consumer has a partial interest in the dwelling, such as when one joint owner purchases the other's joint interest. The other two commenters, national trade associations for appraisers, opposed exemptions for partial interest transactions, given what the commenters described as the inherent riskiness of higher-priced loans.
For a creditor to determine whether the first condition is met, the creditor has to compare two dates: the date of the consumer's acquisition and the date of the seller's acquisition. However, the statute does not provide specific guidance regarding the dates that a creditor must use to perform this comparison. TILA section 129H(b)(2)(A), 15 U.S.C. 1639h(b)(2)(A). To implement this provision, the Agencies proposed to require that the creditor compare (1) the date on which the consumer entered into the agreement to acquire the property from the seller, and (2) the date on which the seller acquired the property. A proposed comment provided an illustration in which the creditor determines the seller acquired the property on April 17, 2012, and the consumer's acquisition agreement is dated October 15, 2012; an additional appraisal would not be required because 181 days would have elapsed between the two dates.
The Agencies did not receive public comment on these aspects of the proposal and adopt them without change in § 1026.35(c)(4)(i)(A) and (B), and comment 35(c)(4)(i)(A)–2.
To assist creditors in identifying the date on which the seller acquired title to the property, comment 35(c)(4)(i)–3 is intended to clarify that the creditor may rely on records that provide information as to the date on which the seller became vested as the legal owner of the property pursuant to applicable State law. As provided in § 1026.35(c)(4)(vi)(A) and explained in comments 35(c)(4)(vi)(A)–1 through –3, the creditor may determine this date through reasonable diligence, requiring reliance on a written source document. The reasonable diligence standard is discussed further below under the section-by-section analysis of § 1026.35(c)(4)(vi)(A).
This comment is incorporated into the final rule without change as comment 35(c)(4)(i)–4. As explained in the proposal, the Agencies believe that use of the date on which the consumer and the seller agreed on the purchase transaction best accomplishes the purposes of the statute. This approach is substantially similar to existing creditor practice under the FHA Anti-Flipping Rule, which uses the date of execution of the consumer's sales contract to determine whether the restrictions on FHA insurance applicable to property resales are triggered.
Comment 35(c)(4)(i)–4 also clarifies that the date on which the consumer and the seller agreed on the purchase transaction, as evidenced by the date the last party signed the agreement, may not necessarily be the date on which the consumer became contractually
TILA section 129H(b)(2)(A) requires creditors to obtain an additional appraisal if the seller had acquired the property “at a price that was lower than the current sale price of the property” within the past 180 days. 15 U.S.C. 1639h(b)(2)(A). To determine whether this statutory condition has been met, a creditor would have to compare the current sale price with the price at which the seller had acquired the property. Accordingly, the Agencies proposed to implement this requirement by requiring the creditor to compare the price paid by the seller to acquire the property with the price that the consumer is obligated to pay to acquire the property, as specified in the consumer's agreement to acquire the property. Thus, if the price paid by the seller to acquire the property is lower than the price in the consumer's acquisition agreement by a certain amount or percentage to be determined by the Agencies in the final rule, and the seller had acquired the property 180 or fewer days prior to the date of the consumer's acquisition agreement, the creditor would be required to obtain an additional appraisal before extending a higher-risk mortgage loan to finance the consumer's acquisition of the property.
As noted above, the Agencies are adopting the general approach proposed of setting a particular price increase threshold that triggers the additional appraisal requirement, and are specifying the price increase thresholds as follows: A creditor is required to obtain two appraisals in two sets of circumstances—first, when the seller is reselling the property within 90 days of acquiring it at a price that exceeds the seller's acquisition price by more than 10 percent (new § 1026.35(c)(4)(i)(A)); and second, when the seller is reselling the property within 91 to 180 days of acquiring it at a price that exceeds the seller's acquisition price by more than 20 percent (new § 1026.35(c)(4)(i)(B)). This aspect of the final rule and related comments are discussed in greater detail below.
The Agencies are adopting these aspects of the proposal without substantive change in § 1026.35(c)(4)(i)(A) and (B), and comment 35(c)(4)(i)–5.
The Agencies asked for comment on whether additional clarification was needed regarding how a creditor should identify the price at which the seller acquired the property. In particular, the Agencies also requested comment on how a creditor would calculate the price paid by a seller to acquire a property as part of a bulk sale that is later resold to a higher-risk mortgage consumer. The Agencies understand that, in bulk sales, a sales price might be assigned to individual properties for tax or accounting reasons, but asked for public input on whether guidance may be needed for determining the sales price of a property for purposes of determining whether an additional appraisal is required. The Agencies also asked for comment on any operational challenges that might arise for creditors in determining purchase prices for homes purchased as part of a bulk sale transaction, as well as for views on whether any challenges presented could impede neighborhood revitalization in any way, and, if so, whether the Agencies should consider an exemption from the additional appraisal requirement for these types of transactions altogether.
An appraiser trade association stated that an appraiser's expertise is important in valuing properties that are part of a bulk sale. No other commenters commented on this question. In view of the value that appraisers can add in valuing properties as part of a bulk sale, and in the absence of requests or suggestions for additional guidance, the Agencies are adopting the rule as proposed with no additional provisions or clarifications regarding the purchase price of properties purchased in bulk sales.
In addition, the comment refers to comment 35(c)(4)(i)–4 (providing guidance on the “date of the consumer's agreement to acquire the property,” as discussed above). The intention of this cross-reference is to indicate that the document on which the creditor may rely to determine the consumer's acquisition price will be the same document on which a creditor may rely to determine the date of the consumer's agreement to acquire the property. Also tracking the proposal, comment 35(c)(4)(i)–6 further explains that the creditor is not obligated to determine whether and to what extent the agreement is legally binding on both parties. The Agencies expect that the price the consumer is obligated to pay to acquire the property will be apparent from the consumer's acquisition agreement.
The Agencies requested comment on whether the price at which the consumer is obligated to pay to acquire the property, as reflected in the consumer's acquisition agreement, provides sufficient clarity to creditors on how to comply while providing consumers adequate protection. The Agencies did not receive comments on this issue, and is adopting the proposal's use of the phrase “the price the consumer is obligated to pay to acquire the property, as specified in the consumer's agreement to acquire the property from the seller.”
TILA section 129H(b)(2)(A) provides that an additional appraisal is required when the price at which the seller had purchased or acquired the property was “lower” than the current sale price and the resale occurs within 180 days of the seller's acquisition. 15 U.S.C. 1639h(b)(2)(A). TILA does not define the term “lower.” Thus, as written, the statute would require an additional appraisal for any price increase above the seller's acquisition price, if the resale occurred within 180 days of the seller's acquisition. As discussed in more detail below, the Agencies do not believe that the public interest or the safety and soundness of creditors would be served if the law is implemented to require an additional appraisal for any increase in price. Accordingly, the Agencies proposed an exemption to the additional appraisal requirement for some threshold increase in the price. As described above, the proposal contained a placeholder for the amount by which the resale price would have to have exceeded the price at which the seller had acquired the property.
In § 1026.35(c)(4)(i)(A) and (B), the Agencies are adopting a tiered approach to the proposed exemption for certain price increases. Specifically:
• Section 1026.35(c)(4)(i)(A) exempts from the additional appraisal requirement HPMLs that finance the consumer's purchase of a property within 90 days of the seller's acquisition of the property at a price that does not exceed 10 percent of the seller's acquisition purchase price.
• Section 1026.35(c)(4)(i)(B), exempts from the additional appraisal requirement HPMLs that finance the consumer's purchase of a property within 91 to 180 days of the seller's acquisition of the property at a price that does not exceed 20 percent of the seller's acquisition price.
The Agencies solicited comment on potential exemptions for mortgage transactions that have a sale price that exceeds the seller's purchase price by a relatively small amount or by a certain percentage. The Agencies requested comment on whether a fixed dollar amount, a fixed percentage, or some alternate approach should be used to determine an exempt price increase, and what specific price threshold would be appropriate.
The Agencies received a large number of comments on these questions. The commenters generally endorsed the proposed exemption, based either on a dollar amount, or a percentage of the seller's acquisition price. Four commenters (a bank holding company, two national trade associations for mortgage lending companies and consumer and small-business lenders, and a large mortgage lending company) suggested that a 10 percent price increase exception would be appropriate. One of these commenters argued that 10 percent is a customary standard in the industry because it represents typical realtor and other closing costs.
A national trade association for community banks suggested a minimum of 15 percent. Two commenters, a regional trade association for credit unions and a community bank, argued that the exception should be at least 25 percent. One large national bank suggested a threshold of 5 percent. Another commenter, a credit union, suggested that an exemption be for the greater of three percent or a $10,000 increase in the price. A GSE suggested that the Agencies exempt from the second appraisal requirement sales that are subject to an “anti-flipping” clause. When an investor purchases a property in short sales from the GSEs, for example, certain clauses in the sales contract prohibit the investor from reselling that property for the first 30 days after the short sale purchase. The investor is then prohibited from reselling the property without justification and permission from the GSE for the next 31 to 90 days for a price that exceeds the seller's price by more than 20 percent.
As noted, the Agencies are adopting a tiered approach to the proposed exemption from the additional appraisal requirement of TILA section § 1026.35(c)(4)(i) for HPMLs that finance the resale of properties that do not exceed certain price increases from the prior sale. Specifically, § 1026.35(c)(4)(i)(A) exempts from the additional appraisal requirement HPMLs that finance the consumer's purchase of a property within 90 days of the seller's acquisition of the property where the resale price does not exceed 10 percent of the seller's acquisition price. Section 1026.35(c)(4)(i)(B), exempts from the additional appraisal requirement HPMLs that finance the consumer's purchase of a property within 91 to 180 days of the seller's acquisition of the property where the resale price does not exceed 20 percent of the seller's acquisition price. In developing this approach, the Agencies reviewed public comments as well as other government standards and rules designed to curb harmful flipping in residential mortgage transactions. These included short sale reselling restrictions imposed by Fannie Mae, Freddie Mac and the U.S. Treasury Department,
The Agencies believe that short sale reselling restrictions of the GSEs and Treasury are instructive. Like these rules, the final rule incorporates a bifurcated approach to addressing fraudulent flipping, based on the number of days between the seller's purchase and the consumer's purchase.
If an exemption for HPMLs financing sales subject to an anti-flipping clause covered loans subject to anti-flipping clauses more generally, the Agencies would be concerned about more HPML consumers not receiving the protections of the statute. Moreover, if creditors were concerned that the additional appraisal requirement might impede disposal of their distressed properties, they could devise “anti-flipping” clauses that would impose only minimal restrictions on the resale of those properties, simply to take advantage of the exemption. The Agencies recognize the importance to creditors and investors of being able to sell distressed properties in a timely manner to decrease losses. The Agencies further understand that restrictions on the resale of distressed properties purchased from creditors and investors can affect how quickly creditors and investors can dispose of these properties, and that creditors and investors design resale restrictions accordingly. However, the appraisal requirement under this final rule is not a restriction on resale by the seller; it is a requirement for additional documentation regarding the value of homes purchased by a certain subset of consumers who finance the transaction with an HPML.
The Agencies view the FHA Anti-Flipping Rules as also instructive for the final rule. In the preamble to its original Anti-Flipping Final Rule and waiver notices after it, HUD states that “fraudulent property flipping involves the rapid re-sale, often within days, of a recently acquired property.”
HUD has also stated that a 180-day ban on eligibility for FHA insurance would have provided a disincentive to legitimate contractors who improve houses—thus increasing the stock of affordable housing.
The Agencies believe that HUD's basic approach—the use of more restrictive conditions for 90 days, followed by somewhat lesser restrictions for the next 90 days—has merit as an approach to combatting the kind of flipping with which Congress seemed concerned.
At the same time, the Agencies believe that the approach adopted with respect to the additional appraisal requirement resembles the FHA waiver rules in some important ways that mitigate concerns about chilling investment. Like the FHA waiver rules, the final rule does not prohibit HPML financing of resales within 90 days (by contrast, the existing FHA regulations ban FHA insurance on resales within 90 days). Rather, the final rule imposes an additional condition on the transaction—namely, that the creditor must obtain a second appraisal for the creditor's use in considering the loan application and, more specifically, the collateral value of the dwelling that will secure the mortgage. The Agencies believe that this protection is consistent with congressional intent to provide additional protections for borrowers of loans considered by Congress to pose higher risks to those borrowers. Consistent with the views expressed by some commenters, however, the Agencies have determined that consumer protection is not served by requiring a second appraisal in circumstances where the increase generally is not indicative of a seller attempting to profit on a flip. The Agencies believe it is reasonable to expect a seller, faced with circumstances dictating resale of a dwelling that the seller very recently acquired, to seek to recoup the seller's transaction costs on the purchase and resale, in addition to the seller's acquisition price. These costs may include fees from the seller's acquisition, such as mortgage application fees, origination points, escrow and attorney's fees, transfer taxes and recording fees, title search charges and title insurance premiums, as well as fees incurred in the resale, such as real estate commissions, seller-
Regarding HPMLs that occur within 91 to 180 days, the final rule provides that an additional appraisal is required only if the property price increased by more than 20 percent of the seller's acquisition price.
The Agencies believe that requiring an additional appraisal for HPMLs financing the purchase of a home being resold within a 180-day period, regardless of the amount of the price increase, could restrict home sales to HPML consumers, because investors might be less likely to sell properties to them. The additional appraisal rules could potentially affect the safety and soundness of creditors holding properties as a result of foreclosure or deed-in-lieu of foreclosure. This might arise if potential application of the two-appraisal requirement makes the properties less desirable for investors to purchase from financial institutions and rehabilitate for resale, out of investor concerns about the potential scope of the HPML requirement as applied to the pool of likely purchasers for their investment properties. This could create additional losses for creditors holding these properties. The Agencies do not believe that these potential negative impacts would be outweighed by consumer protections afforded by the additional appraisal requirement. The Agencies believe that the approach adopted by the final rule strikes the appropriate balance between allowing legitimate resales without undue restrictions and providing HPML consumers with additional protections from fraudulent flipping. For these reasons, the Agencies have concluded that the exemptions from the additional appraisal requirement reflected in § 1026.35(c)(4)(i)(A) and (B) are in the public interest and promote the safety and soundness of creditors.
Under the proposed rule, the two appraisals required under the proposed paragraph now adopted as § 1026.35(c)(4)(i) could not be performed by the same certified or licensed appraiser. This proposal was consistent with TILA section 129H(b)(2)(A), which expressly requires that the additional appraisal must be performed by a “different” certified or licensed appraiser than the appraiser who performed the other appraisal for the “higher-risk mortgage” transaction. 15 U.S.C. 1639h(b)(2)(A).
As discussed in the proposal, during informal outreach conducted by the Agencies, some participants suggested that the Agencies impose additional requirements regarding the appraiser performing the second appraisal for the higher-risk mortgage loan, such as a requirement that the second appraiser not have knowledge of the first appraisal. Outreach participants indicated that this requirement would minimize undue pressure to value the property at a price similar to the value assigned by the first appraiser.
The Agencies explained that they did not propose any additional conditions on what it means to obtain an appraisal from a “different” certified or licensed appraiser because the Agencies expect that existing valuation independence requirements would be sufficient to ensure that the second appraiser performs an independent valuation. Rules to ensure that appraisers exercise their independent judgment in conducting appraisals exist under TILA (§ 1026.42), as well as FIRREA title XI.
The final rule follows the proposal and the statute in requiring that the additional appraisal must be performed by a “different” certified or licensed appraiser than the appraiser who performed the other appraisal for the HPML transaction.
The Agencies received approximately 36 comments relating to requirements that (1) the additional appraisal be performed by a “different” certified or licensed appraiser, discussed immediately below; (2) the additional appraisal include analysis of the sales price differences between the prior and current home sale transaction (
Of the commenters addressing the requests for comment on whether additional conditions should apply regarding the requirement that a “different” appraiser perform the additional appraisal, most urged that the rule allow a creditor to obtain two appraisals from the same appraisal firm or AMC, provided that they are performed by separate appraisers. Commenters favoring this approach suggested that allowing a creditor to use a single appraisal firm or AMC would reduce costs, ease compliance burdens, and mitigate concerns regarding the availability of appraisers, particularly in rural or sparsely populated areas. Several commenters noted that the use of a single appraisal firm or AMC would not weaken the different appraiser requirement since each appraisal is subject to USPAP and appraisal independence requirements. One commenter, however, stated the rule
Consistent with the proposal, new § 1026.35(c)(4)(ii) provides that the two appraisals required under § 1026.35(c)(4)(i) may not be performed by the same certified or licensed appraiser. The Agencies are also adopting new comment 35(c)(4)(ii)–1, clarifying that the requirements that a creditor obtain two separate appraisals (§ 1026.35(c)(4)(i)), and that each appraisal be conducted by a “different” licensed or certified appraiser (§ 1026.35(c)(4)(ii)), indicate that the two appraisals must be conducted independently of each other. The comment explains that, if the two certified or licensed appraisers are affiliated, such as by being employed by the same appraisal firm, then whether they have conducted the appraisal independently of each other must be determined based on the facts and circumstances of the particular case known to the creditor.
As discussed in the proposal, the Agencies believe that the appraisal independence requirements of TILA (implemented at § 1026.42) help ensure that the two appraisals reflect valuation judgments that are independent of the creditor's loan origination interests and not biased by an appraiser's personal or business interest in the property or the transaction. TILA section 129E, 15 U.S.C. 1639e. In addition, FIRREA title XI includes rules to ensure that appraisers exercise their independent judgment in conducting appraisals, such as requirements that federally-regulated depositories separate appraisers from the lending, investment, and collection functions of the institution, and that the appraiser have “no direct or indirect interest, financial or otherwise, in the property.”
Requirements for valuation independence for consumer credit transactions secured by the consumer's principal dwelling were adopted under amendments to TILA in the Dodd-Frank Act in 2010 and have been in effect since April of 2011.
Existing appraisal independence requirements expressly prohibit appraisers, AMCs, or appraisal firms (all providers of settlement services) from having an interest in the property or transaction or from causing the value assigned to a consumer's principal dwelling to be based on any factor other than the independent judgment of the person preparing the appraisal. Material misstatements of the value are also prohibited for these parties, as is having a direct or indirect interest in the transaction, which prohibits these parties from being compensated based on the outcome of the transaction.
The Agencies understand that, in light of these rules, a principal reason that creditors contract with third-party AMCs and appraisal firms is to ensure that the appraisal function is independent from the loan origination function, as required by law. In addition, the creditor remains responsible for compliance with the appraisal requirements of § 1026.35(c), and both the creditor and the creditor's third party agent risk liability for violations of TILA's appraisal independence requirements.
At the same time, the Agencies have concerns about whether the unbiased appraiser independence will always be fully realized if, for example, the two appraisals are performed by appraisers employed by the same company. The Agencies recognize that in some cases, obtaining two appraisals from different appraisal firms might not be feasible, and moreover that appraisers working for the same company are cognizant of their independence, and indeed might not even interact at all. Thus, the rule is intended to allow flexibility in ordering the two appraisals from the same entity. However, as underscored in comment 35(c)(4)(ii)–1, in all cases the two appraisers should function independently of each other to ensure that in fact two separate and independent judgments of the property value are reflected in the required appraisals. If the creditor knows of facts or circumstances about the performance of the additional appraisal by the same firm indicating that the additional appraisal was not performed independently, the creditor should refrain from extending credit, unless the creditor obtains another appraisal.
The proposed rule required that the additional appraisal meet the requirements of the first appraisal, including the requirements that the appraisal be performed by a certified or licensed appraiser who conducts a physical visit of the interior of the mortgaged property.
In addition, under TILA section 129H(b)(2)(A), the additional appraisal must analyze several elements, including “any improvements made to the property between the date of the previous sale and the current sale.” 15 U.S.C. 1639h(b)(2)(A). The Agencies believe that the purposes of the statute would be best implemented by requiring the second appraiser to perform a physical interior property visit to analyze any improvements made to the property. Without an on-site visit, the second appraiser would have difficulty confirming that any improvements
In § 1026.35(c)(4)(iii), the Agencies are adopting the proposed requirement that, if the conditions requiring an additional appraisal are present (
The proposed rule required that the additional appraisal include an analysis of the difference between the price at which the seller acquired the property and the price the consumer is obligated to pay to acquire the property, as specified in the consumer's acquisition agreement. The proposal specified that the changes in market conditions and improvements made to the property must be analyzed between the date of the seller's acquisition of the property and the date of the consumer's agreement to acquire the property. These proposed requirements are consistent with the statute, which requires that the additional appraisal “include an analysis of the difference in sale prices, changes in market conditions, and any improvements made to the property between the date of the previous sale and the current sale.” TILA section 129H(b)(2)(A), 15 U.S.C. 1639h(b)(2)(A).
A proposed comment clarified that guidance on identifying the date the seller acquired the property could be found in the proposed comment now adopted as comment 35(c)(4)(i)(A)–3. This comment further stated that guidance on identifying the date of the consumer's agreement to acquire the property could be found in the proposed comment adopted as comment 35(c)(4)(i)(A)–2. The comment also stated that guidance on identifying the price at which the seller acquired the property could be found in the proposed comment adopted as comment 35(c)(4)(i)(B)–1 and that guidance on identifying the price the consumer is obligated to pay to acquire the property could be found in the proposed comment adopted as comment 35(c)(4)(i)(B)–2.
The Agencies requested comment on these proposed requirements for the additional appraisal, including the appropriateness of listing the requirement to analyze the difference in sales prices separately from the other two analytical requirements.
In § 1026.35(c)(4)(iii) and comment 35(c)(4)(iii)–1, the final rule adopts the proposed regulation text and comment with only one non-substantive change: for clarification about the subject of this subsection of the rule, the title of the subsection has been changed from “Requirements for the additional appraisal” to “Required analysis in the additional appraisal.”
Two commenters addressed this issue. Of these, one commenter fully supported the proposed requirements for the additional appraisal, noting they are consistent with USPAP. The other commenter, however, suggested that the additional appraisal should not be required to include an analysis of the sale price paid by the seller and the acquisition price as set forth in the borrower's purchase agreement and improvements made to the property by the seller. The commenter argued that value should be based solely on the current market value of the property at the time of the appraisal and sale, of which the first appraisal should be determinative.
The Agencies also requested comment on the appropriateness of using, as prices that the additional appraisal must analyze, the terms “price at which seller acquired property” and “price consumer is obligated to pay to acquire property, as specified in consumer's agreement to acquire property from seller.” Further, the Agencies asked for comment on the appropriateness of using, as the dates the additional appraisal must analyze in considering changes in market conditions and improvements to property, the terms “date seller acquired property” and “date of consumer's agreement to acquire property.” No comments were received on this issue.
After consideration of public comments, the Agencies believe that the proposal is appropriate to adopt without substantive change, as discussed above. Regarding the comment that the additional appraisal should not include an analysis of the property price increase between the seller's price and the consumer's price, but that market value as reflected in the first appraisal should be determinative, the Agencies point out that the analysis in the additional appraisal required under new § 1026.35(c)(4)(iii) is mandated by statute. Moreover, the Agencies believe that the intent of these requirements is to ensure that creditor, in considering the value of the collateral in connection with its lending decision, is presented with information focused specifically on factors that reasonably increase collateral value in a relatively short period, such as market changes and property improvements. These statutory requirements are designed to serve as a backstop for consumers against fraud in flipped transactions and thus are implemented largely unchanged in the final rule.
Under the proposed rule, if a creditor must obtain a second appraisal, it may charge the consumer for only one of the appraisals. The Agencies proposed a comment clarifying that this rule means that the creditor would be prohibited from imposing a fee specifically for that appraisal or by marking up the interest rate or any other fees payable by the consumer in connection with the higher-risk mortgage loan. The proposal was designed to implement TILA section 129H(b)(2)(B), which provides that “[t]he cost of the second appraisal required under subparagraph (A) may not be charged to the applicant.” 15 U.S.C. 1639h(b)(2)(B).
The Agencies requested comment on this proposed approach, and whether there might be particular ways that the creditor could identify the appraisal for which the consumer may not be charged in cases where, for example, the appraisals are ordered simultaneously.
The proposed rule and clarifying comment are adopted without change in § 1026.35(c)(4)(v) and comment 35(c)(4)(v)–1.
Most commenters were strongly opposed to requiring the additional appraisal to be obtained at the creditor's expense. While a number of commenters acknowledged that the requirement is statutorily mandated under Dodd-Frank they were nevertheless critical of it, cautioning that the requirement would ultimately limit the availability of credit to
As noted, TILA section 129H(b)(2)(B) provides that “[t]he cost of the second appraisal required under subparagraph (A) may not be charged to the applicant.” 15 U.S.C. 1639h(b)(2)(B). Consistent with the statute and the proposal, § 1026.35(c)(4)(v) provides that “[i]f the creditor must obtain two appraisals under paragraph (c)(4)(i) of this section, the creditor may charge the consumer for only one of the appraisals.” As clarified in comment 35(c)(4)(v)–1, adopted without change from the proposal, the creditor would be prohibited from imposing a fee specifically for that appraisal or by marking up the interest rate or any other fees payable by the consumer in connection with the higher-risk mortgage loan (now HPML).
The proposed comment adopted in the final rule also explains that the creditor would be prohibited from charging the consumer for the “performance of one of the two appraisals required under § 1026.35(c)(4)(i).” This comment is intended to clarify that the prohibition on charging the consumer under § 1026.35(b)(4)(v) applies to the cost of providing the consumer with a copy of the appraisal, not to charges for the cost of performing the appraisal. As implemented by new § 1026.35(c)(6)(iv), TILA section 129H(c) prohibits the creditor from charging the consumer for one copy of each appraisal conducted pursuant to the higher-risk mortgage rule. 15 U.S.C. 1639h(c);
In addition, the final rule also tracks the proposal in prohibiting the creditor from charging “the consumer,” rather than, as in the statute, the “applicant.” The Agencies believe that use of the broader term “consumer” is necessary to clarify that the creditor may not charge the consumer for the cost of the additional appraisal after consummation of the loan.
Regarding commenters' requests that creditors be permitted to charge the consumer for the additional appraisal, the Agencies point out that they do not jointly have authority to provide for adjustments and exceptions to TILA under TILA section 105(a), which belongs to the Bureau alone. 15 U.S.C. 1604(a). The prohibition on charging the consumer for the additional appraisal is mandated by statute. The Agencies have implemented this statutory prohibition with certain clarifications appropriate to carry out the statutory mandate consistently with their general authority to interpret the statute—specifically clarifying in commentary that the creditor is prohibited from imposing a fee specifically for that appraisal or by marking up the interest rate or any other fees payable by the consumer in connection with the higher-risk mortgage loan.
The Agencies recognize that neither the statute's plain language nor the final rule precludes a creditor from spreading costs of additional appraisals over a large number of loans and products. The Agencies believe, however, that Congress clearly intended to ensure that the consumer offered an HPML, who may have limited credit options, not be exclusively affected by having to bear this cost in full. The Agencies further believe that the final rule is consistent with this statutory purpose.
The Agencies proposed to require that the creditor have exercised reasonable diligence to support any determination that an additional appraisal under § 1026.35(c)(4)(i) is not required. (For a discussion of the factors triggering the requirement, see the section-by-section analysis of § 1026.35(c)(4)(i)(A) and (B), above.) Absent an exemption (
To help creditors meet the proposed reasonable diligence standard, the Agencies proposed that creditors be able to rely on written source documents that are generally available in the normal course of business. Accordingly, a proposed comment clarified that a creditor has acted with reasonable diligence to determine when the seller acquired the property and whether the price at which the seller acquired the property is lower than the price reflected in the consumer's acquisition agreement if, for example, the creditor bases its determination on information contained in written source documents, as discussed below.
The proposed comment provided a list of written source documents, not intended to be exhaustive, that the creditor could use to perform reasonable diligence as follows: A copy of the recorded deed from the seller; a copy of a property tax bill; a copy of any owner's title insurance policy obtained by the seller; a copy of the RESPA settlement statement from the seller's acquisition (
The proposed comment contained a footnote explaining that a “title commitment report” is a document from a title insurance company describing the property interest and status of its title, parties with interests in the title and the nature of their claims, issues with the title that must be resolved prior to closing of the transaction between the parties to the transfer, amount and disposition of the premiums, and endorsements on the title policy. The footnote also explained that the document is issued by the title insurance company prior to the company's issuance of an actual title insurance policy to the property's transferee and/or creditor financing the transaction. In different jurisdictions, this instrument may be referred to by different terms, such as a title commitment, title binder, title opinion, or title report.
An additional proposed comment explained that reliance on oral statements of interested parties, such as the consumer, seller, or mortgage broker, do not constitute reasonable diligence. The Agencies explained in the proposal that they do not believe that creditors should be permitted to rely on oral statements offered by parties to the transaction because they may be engaged in the type of fraud the statutory provision was designed to prevent.
In new § 1026.35(c)(4)(vi) and Appendix O, the Agencies are adopting the reasonable diligence standard and proposed comments discussed above without material change. Certain technical changes to the regulation text and corresponding comments have been made for clarity, without substantive change intended. The Agencies are also adding a new comment providing guidance on written source documents that show only an estimated or assumed value for the seller's acquisition price. Specifically, this new comment clarifies that, if a written source document describes the seller's acquisition price in a manner that indicates that the price described is an estimated or assumed amount and not the actual price, the creditor should look at an alternative document to satisfy the reasonable diligence standard in determining the price at which the seller acquired the property.
The reasons for the final rule and revisions to the proposal are discussed in more detail below.
The Agencies requested comment on a number of aspects of the reasonable diligence standard and accompanying comments. Specifically, comment was requested on whether the list of written source documents now adopted in comment 35(c)(4)(vi)–1 would provide reliable information about a property's sales history and could be relied on in making the additional appraisal determination, provided they indicate the seller's acquisition date or the seller's acquisition price.
The Agencies also requested comment on whether a creditor should be permitted to rely on a signed USPAP-compliant written appraisal prepared for the transaction to determine the seller's acquisition date and price, and whether a creditor could take any specific measures to ensure that the appraiser is reporting prior sales accurately. The Agencies indicated particular interest in commenters' view on whether, for creditors that are required to select an independent appraiser, such as creditors subject to the Federal financial institutions regulatory agencies' FIRREA title XI rules, the creditor's selection of an independent appraiser is sufficient to address the concern that the appraiser may be colluding with a seller in perpetrating a fraudulent flipping scheme.
Noting that public documents listed might not include the requisite information and that there might be risks inherent in allowing reliance on seller-provided documents, the Agencies also asked whether non-public information sources are likely to be more easily available or more accurate than public ones.
Finally, the Agencies requested comment on the proposed clarification that reliance on oral statements alone would not be sufficient to satisfy the reasonable diligence standard, specifically on whether circumstances exist in which oral statements offered by parties to the transaction could be considered reliable if documented appropriately, and how such statements should be documented to ensure greater reliability.
One commenter suggested that the seller be required to provide the source documents rather than the creditor having to obtain them from the public records, although recognizing the possibility that the seller may intentionally alter the documents to his needs. Appraiser trade associations concurred with the proposal's “flexible approach” to due diligence sources in allowing use of seller-provided documents. This commenter believed that this approach would mitigate the possibility that a lack of access to or availability of source documents would result in a “chilling effect” on mortgage lending. Another commenter noted that the borrower's creditor would have difficulty obtaining copies of documents from the seller. This commenter recommended that the rule provide that, where none of the source documents provides the required information, the creditor may provide a certified or attested document signed by the parties as sufficient evidence of “reasonable diligence.”
Additional comments from appraiser trade associations agreed with allowing creditors to rely on appraisal information relating to sellers' acquisition dates but only so far as that information is available to the appraiser in the normal course of business, which is all that is required of an appraiser under USPAP. These commenters urged the Agencies to be careful not to impose requirements on appraisers relating to information, data, and analysis that are not required of appraisers in a typical USPAP-compliant report.
As noted, the Agencies are adopting the proposed reasonable diligence standard and associated comments without material change. The Agencies believe that this standard is important to facilitate compliance because it may be difficult in some cases for a creditor to know with absolute certainty that the criteria triggering the additional appraisal requirement have been met.
Regarding the proposed list of source documents on which creditors may appropriately rely, now adopted in Appendix O, the Agencies note that the first four listed items would be voluntarily provided directly or indirectly by the seller, rather than collected from publicly available sources. As did commenters, the Agencies recognize that permitting the use of these documents presents the risk that the creditor would be presented with altered copies. Balanced against this risk, however, is the concern that no information sources are publicly available in non-disclosure jurisdictions and jurisdictions with significant lag times before public land records are updated to reflect new transactions.
As noted, new comment 35(c)(4)(vi)(A)–1 clarifies that, if a written source document describes the seller's acquisition price in a manner that indicates that the price described is an estimated or assumed amount and not the actual price, the creditor should look at an alternative document to satisfy the reasonable diligence standard in determining the price at which the seller acquired the property.
Regarding a commenter's recommendation that a creditor be permitted to provide a certified or attested document signed by the parties as sufficient evidence of “reasonable diligence,” the Agencies believe that this allowance could easily be abused and would not constitute sufficient diligence. Instead, as discussed in the section-by-section analysis of § 1026.35(c)(4)(vi)(B) below, the Agencies believe that the consumer protection purposes of the statute are better served by simply requiring two appraisals where reliable written documentation of the sales price and date are unavailable. Similarly, regarding questions about multiple listing documents that have different sales price data, the Agencies believe that in cases of conflicting listing price information, the consumer protection purposes of the statute are best served if the creditor obtains better information from other sources through the exercise of reasonable diligence and, failing that, obtains a second appraisal.
On the recommendation that the Agencies consider a “good-faith” exception that would allow creditors to rely on non-traditional sources of information, the Agencies believe that the “reasonable diligence” standard alone is more appropriate and addresses the commenters' concerns. Under this standard, a broad array of widely used public and non-public documents, set forth in the non-exhaustive list under comment 35(c)(4)(vi)–1, could be relied on by creditors. In short, the Agencies expect that, with the parameters established in this comment, the rule will appropriately balance the need to assure access to HPML credit against the risk that creditors will rely on bad information.
Regarding reliance on another USPAP-compliant appraisal to satisfy the reasonable diligence standard, the Agencies are revising the proposed list to clarify that a creditor would not be permitted to rely on an appraisal other than the one prepared for the creditor for the subject HPML. Specifically, the Agencies are revising Item 8, which, in the proposal read as follows: “A written appraisal signed by an appraiser who certifies that the appraisal has been performed in conformity with USPAP that shows any prior transactions for the subject property.” In the final rule, this comment has been revised to read as follows: “A written appraisal performed in compliance with § 1026.35(c)(3)(i) for the same transaction that shows any prior transactions for the subject property.” The Agencies are concerned that, as proposed, this item in the written source document list could lead creditors to believe that appraisals performed for the seller's acquisition or other appraisals that might otherwise be considered “stale” could be relied on. As revised, the list item allows reliance specifically on an appraisal performed in compliance with the HPML appraisal requirements for the same HPML transaction. That means that the appraisal would have to have been performed by a state-certified or -licensed appraiser in conformity with USPAP and FIRREA.
On a related issue, the Agencies emphasize that allowing the creditor to rely on the first appraisal for prior sales information does not require more of appraisers than does USPAP. Again, the first appraisal must be performed in compliance with USPAP and FIRREA. The Agencies understand that USPAP Standards Rule 1–5 requires appraisers to “analyze all sales of the subject property that occurred within the three (3) years prior to the effective date of the appraisal” if that information is available to the appraiser “in the normal
Overall, due to the many requirements to which the first appraisal is subject, including independence requirements under TILA (implemented by § 1026.42), and in the absence of public comments to the contrary, the Agencies expect that, in cases where the appraiser has provided a price, a creditor generally could rely on the first appraisal prepared for the HPML transaction to satisfy the reasonable diligence standard under § 1026.35(c)(4)(vi)(A). The exception would be circumstances under which other information obtained by the creditor makes reliance on the price unreasonable.
Comment 35(c)(4)(vi)(A)–2 clarifies that reliance on oral statements of interested parties, such as the consumer, seller, or mortgage broker, does not constitute reasonable diligence under § 1026.35(c)(4)(vi)(A). This comment is adopted from the proposal without change.
Comment 35(c)(4)(vi)(A)–3, discussed further below, gives two examples of how the rule applies. This comment was moved from its placement in the proposal with no substantive change to the requirements of the reasonable diligence standard intended.
The Agencies requested comment on whether the enhanced protections for consumers afforded by requiring an additional appraisal whenever the seller's acquisition date or price cannot be determined merit the potential restraint on the availability of higher-risk mortgage loans. The Agencies also requested comment on whether concerns about these potential restraints on credit availability make it particularly important to include the first four source documents listed in the proposed commentary, even though they would be seller-provided, and whether these concerns warrant further expanding the sources of information creditors may rely on to satisfy the reasonable diligence standard under the proposed rule.
The Agencies did not receive comments directly responsive to these questions.
In general, the Agencies believe that, based on recent data provided by FHFA discussed in the proposal, most property resales would not trigger the proposal's conditions requiring an additional appraisal.
Comment 35(c)(4)(vi)(A)–3 provides two examples of how the rule would apply: one in which a creditor is unable to obtain information on the seller's acquisition price or date and the other in which a creditor obtains conflicting information about the seller's acquisition price or date. In the first example, comment 35(c)(4)(vi)(A)–3.i assumes that a creditor orders and reviews the results of a title search showing the seller's acquisition date occurred between 91 and 180 days ago, but the seller's acquisition price was not included. In this case, the creditor would not be able to determine whether the price the consumer is obligated to pay under the consumer's acquisition agreement exceeded the seller's acquisition price by more than 20 percent. Before extending an HPML subject to the appraisal requirements of § 1026.35(c), the creditor must either: (1) Perform additional diligence to obtain information showing the seller's acquisition price and determine whether two written appraisals in compliance with § 1026.35(c)(4) would be required based on that information; or (2) obtain two written appraisals in compliance with § 1026.35(c)(4). This comment also contains a cross-reference to comment 35(c)(4)(vi)(B)–1, which explains the modified requirements for the analysis that must be included in the additional appraisal.
In the second example, comment 35(c)(4)(vi)(A)–3.ii assumes that a creditor reviews the results of a title search indicating that the last recorded purchase was more than 180 days before the consumer's agreement to acquire the property. This comment also assumes that the creditor subsequently receives a written appraisal indicating that the seller acquired the property fewer than 180 days before the consumer's agreement to acquire the property. In this case, unless one of these sources is clearly wrong on its face, the creditor would not be able to determine whether the seller acquired the property within 180 days of the date of the consumer's agreement to acquire the property from the seller, pursuant to § 1026.35(c)(4)(i)(A). Before extending an HPML subject to the appraisal requirements of § 1026.35(c), the creditor must either: (1) Perform additional diligence to obtain information confirming the seller's acquisition date (and price, if within 180 days) and determine whether two written appraisals in compliance with § 1026.35(c)(4) would be required based on that information; or (2) obtain two written appraisals in compliance with § 1026.35(c)(4). This comment also contains a cross-reference to comment 35(c)(4)(vi)(B)–1, which explains the modified requirements for the analysis that must be included in the additional appraisal.
As under the proposal, in the final rule, when information about a property is not available from written source
As expressed in the proposal, however, the Agencies believe that requiring an additional appraisal where creditors are unable to obtain the seller's acquisition price and date is necessary to prevent circumvention of the statute. In particular, the Agencies are concerned that not requiring an additional appraisal in cases of limited information may inadequately address the problem of fraudulent property flipping to borrowers of HPMLs in “non-disclosure” jurisdictions, where prior sales data is routinely unavailable through public sources. Similarly, the Agencies are concerned that sellers that acquire and sell properties within a short timeframe could take advantage of delays in the public recording of property sales to engage in fraudulent flipping transactions. The Agencies believe that, where the seller's acquisition date in particular is not in the public record due to recording delays, it is more reasonable to assume that the seller's transaction was sufficiently recent to be covered by the rule than not.
Section 35(c)(4)(vi)(B) provides that if, after exercising reasonable diligence, a creditor cannot determine whether the conditions in § 1026.35(c)(4)(i)(A) and (B) are present and therefore must obtain two written appraisals under § 1026.35(c)(4), the additional appraisal must include an analysis of the factors in § 1026.35(c)(4)(iv) (difference in sales price, changes in market conditions, and property improvements) only to the extent that the information necessary for the appraiser to perform the analysis can be determined.
For the reasons discussed above, the Agencies believe that an HPML creditor should be required to obtain an additional appraisal if the creditor cannot determine the seller's acquisition date, or if it can determine the date is within 180 days but cannot determine the price, based on written source documents. However, in keeping with the proposal, § 1026.35(c)(4)(vi)(B) also provides that the additional appraisal in this situation would not have to contain the full analysis required for additional appraisals of flipping transactions under TILA section 129H(b)(2)(A), implemented in the final rule as § 1026.35(c)(4)(iv)(A)–(C). 15 U.S.C. 1639h(b)(2)(A).
The Agencies requested comment on whether an appraiser would be unable to analyze the difference in the price the consumer is obligated to pay to acquire the property and the price at which the seller acquired the property without knowing when the seller acquired the property. If such an analysis is not possible without information about when the seller acquired the property, the Agencies requested comment on whether the rule should assume the seller acquired the property 180 days prior to the date of the consumer's agreement to acquire the property. The Agencies also requested comment generally on the proposed approach to situations in which the creditor cannot obtain the necessary information and whether the rule should address information gaps about the flipping transaction in other ways.
The Agencies did not receive comments directly responsive to these questions.
Under the proposal, now adopted in § 1026.35(c)(4)(vi)(B), the additional appraisal must include an analysis of the elements that would be required in proposed § 1026.35(c)(4)(iv)(A)–(C) only to the extent that the creditor knows the seller's purchase price and acquisition date. As discussed in the section-by-section analysis of § 1026.35(c)(4)(iv), TILA section 129H(b)(2)(A) requires that the additional appraisal analyze the difference in sales prices, changes in market conditions, and improvements to the property between the date of the previous sale and the current sale. 15 U.S.C. 1639h(b)(2)(A). An appraiser could not perform this analysis if efforts to obtain the seller's acquisition date and price were not successful.
Consistent with the proposal, comment 35(c)(4)(vi)(B)–1 confirms that, in general, the additional appraisal required under § 1026.35(c)(4)(i) should include an analysis of the factors listed in § 1026.35(c)(4)(iv)(A)–(C). However, the comment also confirms that if, following reasonable diligence, a creditor cannot determine whether the conditions in § 1026.35(c)(4)(i) are present due to a lack of information or conflicting information, the required additional appraisal must include the analyses required under § 1026.35(c)(4)(iv)(A)–(C) only to the extent that the information necessary to perform the analysis is known. As an example, comment 35(c)(4)(vi)(B)–1 assumes that a creditor is able, following reasonable diligence, to determine that the date on which the seller acquired the property occurred between 91 and 180 days prior to the date of the consumer's agreement to acquire the property, but cannot determine the sale price. In this case, the creditor is required to obtain an additional written appraisal that includes an analysis under § 1026.35(c)(4)(iv)(B) and (c)(4)(iv)(C) of the changes in market conditions and any improvements made to the property between the date the seller acquired the property and the date of the consumer's agreement to acquire the property. However, the creditor is not required to obtain an additional written appraisal that includes analysis under § 1026.35(c)(4)(iv)(A) of the difference between the price at which the seller acquired the property and the price that the consumer is obligated to pay to acquire the property.
The Agencies note that the proposed rule does not provide commentary with guidance on the modified requirements for the additional analysis in a situation in which the creditor is unable to determine the date the seller acquired the property but is able to determine the price at which the seller acquired the property. As noted, the Agencies requested but did not receive public comments on this aspect of the proposal. The Agencies are unaware of situations in which the seller's acquisition price, but not the acquisition date, would be known. In the absence of public comment on the issue, the Agencies are not adopting additional guidance on this theoretical situation.
The Agencies believe that allowing creditors to comply with a modified form of the full analysis where a creditor cannot determine information about a property based on its reasonable diligence is a reasonable interpretation of the statute. If a creditor could not determine when or for how much the prior sale occurred, it would be impossible for a creditor to obtain an appraisal that complies with the full analysis requirement of TILA section 129H(b)(2)(A) concerning the change in price, market conditions, and improvements to the property. 15 U.S.C. 1639h(b)(2)(A).
The Agencies' approach to situations in which the creditor cannot obtain the necessary information, either due to a lack of information or conflicting
• An additional appraisal is required.
• However, to account for missing or conflicting information, only a modified version of the full additional analysis required under TILA section 129H(b)(2)(A), as implemented by § 1026.35(c)(4)(iv) is required. 15 U.S.C. 1639h(b)(2)(A).
Alternative approaches not chosen by the Agencies include prohibiting creditors from extending the HPML altogether under these circumstances. As stated in the proposal, however, the Agencies believe that a flat prohibition would unduly limit the availability of higher-risk mortgage loans to consumers.
TILA section 129H(b)(4)(B) permits the Agencies to exempt jointly a class of loans from the additional appraisal requirement if the Agencies determine the exemption “is in the public interest and promotes the safety and soundness of creditors.” 15 U.S.C. 1639h(b)(4)(B). The Agencies did not expressly propose any exemptions from the additional appraisal requirement, but invited comment on whether exempting any classes of higher-risk mortgage loans from the additional appraisal requirement (beyond the exemptions in § 1026.35(c)(2)) would be in the public interest and promote the safety and soundness of creditors. The Agencies offered a number of examples of potential exemptions, such as loans made in rural areas, and transactions that are currently exempt from the restrictions on FHA insurance applicable to property resales in the FHA Anti-Flipping Rule, including, among others, sales by government agencies of certain properties, sales of properties acquired by inheritance, and sales by State- and federally-chartered financial institutions.
(1) Sales by HUD of Real Estate-Owned (REO) properties under 24 CFR part 291 and of single family assets in revitalization areas pursuant to section 204 of the National Housing Act (12 U.S.C. 1710);
(2) Sales by another agency of the United States Government of REO single family properties pursuant to programs operated by these agencies;
(3) Sales of properties by nonprofit organizations approved to purchase HUD REO single family properties at a discount with resale restrictions;
(4) Sales of properties that were acquired by the sellers by inheritance;
(5) Sales of properties purchased by an employer or relocation agency in connection with the relocation of an employee;
(6) Sales of properties by state- and federally-chartered financial institutions and government-sponsored enterprises (GSEs);
(7) Sales of properties by local and state government agencies; and
(8) Only upon announcement by HUD through issuance of a notice, sales of properties located in areas designated by the President as federal disaster areas. The notice will specify how long the exception will be in effect.
24 CFR 203.37a(c).
In the final rule, the Agencies are adopting exemptions from the additional appraisal requirement under § 1026.35(c)(4)(i) for extensions of credit that finance the consumer's acquisition of a property:
(1) From a local, State or Federal government agency (§ 1026.35(c)(4)(vii)(A));
(2) From a person that acquired the property through foreclosure, deed-in-lieu of foreclosure or other similar judicial or non-judicial procedures as a result of exercising the person's rights as a holder of a defaulted mortgage loan (§ 1026.35(c)(4)(vii)(B));
(3) From a non-profit entity as part of a local, State or Federal government program under which the non-profit entity is permitted to acquire single-family properties for resale from a seller who acquired title to the property through the process of foreclosure, deed-in-lieu of foreclosure, or other similar judicial or non-judicial procedure (§ 1026.35(c)(4)(vii)(C));
(4) From a person who acquired title to the property by inheritance or pursuant to a court order of dissolution of marriage, civil union, or domestic partnership, or of partition of joint or marital assets to which the seller was a party (§ 1026.35(c)(4)(vii)(D));
(5) From an employer or relocation agency in connection with the relocation of an employee (§ 1026.35(c)(4)(vii)(E));
(6) From a servicemember, as defined in 50 U.S.C. Appx. 511(1), who received deployment or permanent change of station orders after the servicemember acquired the property (§ 1026.35(c)(4)(vii)(G));
(7) Located in an area designated by the President as a federal disaster area, if and for as long as the Federal financial institutions regulatory agencies, as defined in 12 U.S.C. 3350(6), waive the requirements in title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended (12 U.S.C. 3331
(8) Located in a “rural” county, as defined in the Bureau's 2013 Escrows Final Rule, § 1026.35(b)(2)(iv)(A) (which is the same definition used in the 2013 ATR Final Rule, § 1026.43(f)(2)(vi) and comment 43(f)(2)(vi–1) (§ 1026.35(c)(4)(vii)(H)).
The Agencies received over fifty comments concerning the questions asked by the Agencies about appropriate exemptions from the additional appraisal requirement. Several commenters opposed requiring two appraisals under any circumstances. However, the Agencies note that the additional appraisal requirement is mandated by statute. TILA section 129H(b)(2), 15 U.S.C. 1639h(b)(2). Commenters in general strongly supported an exemption for loans made in rural areas. The commenters stated that there are limited numbers of licensed and certified appraisers in rural areas, which would make the additional appraisal requirement (requiring appraisals by two independent appraisers) particularly burdensome in these areas. In addition, commenters argued that lenders in rural areas may be forced to hire appraisers from far outside the geographic area, which would increase the time and cost associated with the transaction. Several commenters also stated that rural areas have not historically been sources of fraudulent real estate flipping activity. A number of commenters noted that property prices in rural areas tend to be lower, so the cost of the second appraisal is higher as a percentage of the overall transaction. Two commenters, national trade associations for appraisers, opposed the exemption for rural loans, suggesting that it is not difficult to find two appraisers to value rural properties.
As for how to define “rural,” one commenter, a national trade association for community banks, suggested that the agencies use a definition of “rural” that is consistent with the definition used in rules addressing the use of escrow accounts.
A large number of commenters also supported an exemption for transactions that are currently exempted from the restrictions on FHA insurance applicable to property resales in the FHA Anti-Flipping Rule. The commenters argued that these categories of transactions do not present the same risk to consumers and therefore do not require the additional anti-flipping consumer protections.
Two commenters, national trade associations for appraisers, objected to adding any exemptions to the additional appraisal requirement, and suggested that there should be a strong presumption that an additional appraisal is necessary to protect consumers and to promote the safety and soundness of financial institutions.
A number of commenters suggested other exemptions or endorsed exemptions from the entire rule already in the proposal. These are as follows.
• Three commenters (a national trade association for the banking industry, a State trade association for the banking industry, and a bank holding company) suggested an exemption from the second appraisal requirement in cases when the initial appraisal is performed by an appraiser who was selected from the creditor's list of qualified appraisers. The commenters stated that eliminating the seller's ability to influence the selection of the appraiser in this fashion would be sufficient to protect the borrower from the risk of an artificially-inflated appraisal, thereby addressing the fraudulent “flipping” concern the statute seeks to address.
• Two commenters (a nonprofit organization and State credit union association) suggested an exemption for active duty military personnel who receive permanent change of duty station orders.
• A number of commenters (including national trade associations for the mortgage finance and retail banking industry) suggested exemptions for certain non-purchase transactions, such as gifts, transfers in connection with trusts, transfers that do not generate capital gains, and intra-family transfers for estate planning purposes, on grounds that these transactions are not “profit seeking.” Several commenters suggested that transfers in connection with a divorce decree be included in this category as an exemption.
• Many commenters (including two national trade associations for the mortgage finance and retail banking industry, a national trade association for the banking industry, a national trade association for community banks, a national trade association for credit unions, four regional associations for credit unions, a large national bank, a financial holding company, and a community bank) endorsed exemptions for construction and bridge loans, on grounds that these are temporary loans and that consumers are not exposed to risk at the level comparable to other residential loans that Congress targeted in the statute. These commenters also argued that the additional appraisal requirement would be impractical for construction loans, given the inability to conduct interior inspections.
• Two commenters (a community bank and a credit union) suggested an exemption for non-purchase acquisitions and transfers where the consumer previously held a partial interest in the property and cited to Regulation Z (commentary on the definition of residential mortgage transaction) as support.
In response to widespread support for adopting exemptions consistent with exemptions from the restrictions on FHA financing in the FHA Anti-Flipping Rule, the Agencies are adopting several exemptions from the additional appraisal requirement generally consistent with exemptions in the FHA Anti-Flipping Rule under 24 CFR 203.37a(c). These are extensions of credit that finance the consumer's acquisition of a property:
• From a local, State or Federal government agency (§ 1026.35(c)(4)(vii)(A);
• From an entity that acquired the property through foreclosure, deed-in-lieu of foreclosure or other similar judicial or non-judicial procedures as a result of exercising the person's rights as a holder of a defaulted mortgage loan (§ 1026.35(c)(4)(vii)(B);
• From a non-profit entity as part of a local, State or Federal government program under which the non-profit entity is permitted to acquire single-family properties for resale from a seller who acquired the property through foreclosure, deed-in-lieu of foreclosure, or other similar judicial or non-judicial procedure (§ 1026.35(c)(4)(vii)(C);
• From a seller who acquired the property pursuant to a court order of dissolution of marriage, civil union or domestic partnership, or of partition of joint or marital assets to which the seller was a party (§ 1026.35(c)(4)(vii)(D);
• From an employer or relocation agency in connection with the relocation of an employee (§ 1026.35(c)(4)(vii)(E);
• Located in an area designated by the President as a federal disaster area, if and for as long as the Federal financial institutions regulatory agencies, as defined in 12 U.S.C. 3350(6), waive the requirements in title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended (12 U.S.C. 3331
In addition, the Agencies are adopting an exemption for extensions of credit to finance the consumer's purchase of property being sold by a servicemember, as defined in 50 U.S.C. Appx. 511(1), if the servicemember receives deployment or permanent change of station orders after the servicemember purchased the property (§ 1026.35(c)(4)(vii)(G)).
Finally, the Agencies are adopting an exemption for HPMLs in rural areas (§ 1026.35(c)(4)(vii)(H)). The exemption would apply to HPMLs secured by properties in counties considered “rural” under definitions promulgated by the Bureau in the 2013 ATR Final Rule and 2013 Escrows Final Rule—specifically, properties located within the following Urban Influence Codes (UICs), established by the United States Department of Agriculture's Economic Research Services (USDA–ERS): 4, 6, 7, 8, 9, 10, 11, or 12. These UICs generally correspond with areas outside of metropolitan statistical areas (MSAs) and Micropolitan Statistical Areas, defined by the Office of Management and Budget (OMB). For reasons discussed in more detail in the section-by-section analysis of § 1026.35(c)(4)(vii)(H) and the Dodd-Frank Act Section 1022(b)(2) analysis in the
Each of these exemptions is discussed in turn below.
In § 1026.35(c)(4)(vii)(A), the Agencies are adopting an exemption for HPMLs financing consumer acquisitions of property being sold by a local, State or Federal government agency. This exemption generally corresponds with exemptions in the FHA Anti-Flipping Rule for loans financing the purchase of an “REO” (real estate owned) property being sold by HUD or another U.S. government agency (
Typically, these types of sales are in connection with government programs involving the sale of property obtained through foreclosure or by deed-in-lieu of foreclosure, which can promote affordable housing and neighborhood revitalization. Government agency sales may also be related to foreclosures due to tax liability or related reasons. Without an exemption, most consumer acquisitions involving these types of sales would be subject to the additional appraisal requirement because the government agency typically would have “acquired” the property (for example, in a foreclosure or by deed-in-lieu of foreclosure) for the outstanding balance of the government's lien (plus costs), which is generally less than the value of the property; thus, the price paid to the government agency by the consumer would typically be substantially higher than the government agency's acquisition “price.” In addition, these sales might occur relatively soon after the government agency acquired the property, particularly if the acquisition resulted from a foreclosure or tax sale.
The Agencies believe that requiring an HPML creditor to obtain two appraisals to finance transactions involving the purchase of property from government agencies could interfere with beneficial government programs. The Agencies further do not believe that this interference is warranted for these transactions, which do not involve a profit-motivated seller and thus do not present the kinds of flipping concerns that the statute is intended to address. The Agencies believe that an exemption for HPMLs financing the sale of property by a local, State, or Federal government agency is in the public interest because it allows beneficial government programs to go forward as intended. By reducing costs for creditors that might offer HPMLs to finance these transactions, the exemption helps creditors to strengthen and diversify their lending portfolios, thereby promoting the safety and soundness of creditors as well.
In § 1026.35(c)(4)(vii)(B), the Agencies are adopting an exemption for HPMLs financing the purchase of a property from a person that had acquired the property through foreclosure, deed-in-lieu of foreclosure, or other similar judicial or non-judicial procedures as a result of exercising the person's rights as a holder of a defaulted mortgage loan. This exemption generally corresponds with an exemption from the FHA Anti-Flipping Rule for loans financing the purchase of properties sold by State- and Federally-chartered financial institutions and GSEs (
The exemption covers HPMLs that finance the acquisition of a home from a “person” who has acquired title of the property through foreclosure and related means. “Person” is defined in Regulation Z to mean “a natural person or an organization, including a corporation, partnership, proprietorship, association, cooperative, estate, trust, or government unit.” § 1026.2(a)(22). Thus, consistent with the FHA Anti-Flipping Rule exemptions, the exemption in § 1026.35(c)(4)(vii)(B) covers purchases of properties being sold by State- and Federally-chartered financial institutions, as well as by GSEs such as Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. In addition, the exemption covers HPML loans financing property acquisitions from non-bank mortgage companies, servicers that administer loans held in the portfolios of financial institutions or in pools of mortgages that underlie private and government or GSE asset-backed securitizations, and, less commonly, private individuals. The Agencies believe that a more inclusive exemption for foreclosures better reflects the way that mortgage loans are held and serviced in today's market.
Several commenters pointed out that the sale of REO properties to consumers and potential investors contributes significantly to revitalizing neighborhoods and stabilizing communities. They expressed concerns that the additional appraisal requirement might unduly interfere with these sales, which could have a number of negative effects. First, holders of the mortgages might be forced to hold properties after foreclosure longer than is financially optimal, increasing losses; some public commenters indicated that waiting six months so that the additional appraisal requirement would not apply would be far too long. Second, holders who want or need to clear these properties off of their books might be forced to accept lower prices offered by investors, which would also increase losses. When the holder in this situation is a creditor such as a bank or other financial institution, increased losses can have a negative effect on its safety and soundness. Third, incentives for investors to buy and rehabilitate properties could be reduced, which could be counterproductive to community development and the revitalization of the housing market. Finally, more consumers might have to forego opportunities for homeownership.
For all of these reasons, the Agencies believe that the exemption in § 1026.35(c)(4)(vii)(B) is in the public interest and promotes the safety and soundness of creditors.
In § 1026.35(c)(4)(vii)(C), the Agencies are adopting an exemption for HPMLs financing the purchase of a property from a non-profit entity as part of a local, State, or Federal government program under which the non-profit entity is permitted to acquire single-family properties for resale from a seller who acquired the property through foreclosure or similar means. Comment 35(c)(4)(vii)(C)–1 clarifies that, for purposes of 1026.35(c)(4)(vii)(C), a
Consistent with the FHA Anti-Flipping Rule exemptions, the exemption in § 1026.35(c)(4)(vii)(C) would cover nonprofit organizations approved to purchase HUD REO single-family properties. In addition, the exemption would cover purchases of these types of properties from nonprofit organizations as part of other local, State or Federal government programs under which the non-profit entity is permitted to acquire title to REO single family properties for resale.
For reasons similar to those discussed under the exemption for loan holders selling a property acquired through liquidating a mortgage (§ 1026.35(c)(4)(vii)(B)), the Agencies believe that the exemption for HPMLs financing the acquisitions described in § 1026.35(c)(4)(vii)(C) is in the public interest and promotes the safety and soundness of creditors. The exemption is intended in part to help holders such as banks and other financial institutions sell properties held as a result of foreclosure or deed-in-lieu of foreclosure, thereby removing them from their books. This can minimize losses, which improves institutions' safety and soundness. The exemption is also intended to facilitate neighborhood revitalization for the benefit of communities and individual consumers. Government programs involving purchases and sales of REO property by non-profits can foster positive community investment and help investors dispense with loss-generating properties efficiently and in a manner that maximizes public benefit. The Agencies do not believe that these types of sales to consumers by non-profits involve serious risks of fraudulent flipping, and thus do not believe that TILA's additional appraisal requirement was intended to apply to these transactions. For these reasons, the Agencies believe that the exemption in § 1026.35(c)(4)(vii)(C) is in the public interest and promotes the safety and soundness of creditors.
In § 1026.35(c)(4)(vii)(D), the Agencies are adopting an exemption for HPMLs financing the purchase of a property that was acquired by the seller by inheritance or pursuant to a court order of dissolution of marriage, civil union, or domestic partnership, or of partition of joint or marital assets to which the seller was a party. The exemption would include HPMLs financing the acquisition by a joint owner of the property of a residual interest in that property, if the joint owner acquired that interest by inheritance or dissolution of a marriage, civil union, or domestic partnership. This exemption generally corresponds with an exemption from the FHA Anti-Flipping Rule for purchases of properties that had been acquired by the seller by inheritance (
In response to comments, the Agencies have decided to expand the FHA Anti-Flipping Rule exemption for loans financing the purchase of a property from a seller who had acquired it by inheritance, to include properties acquired as the result of a dissolution of a marriage, civil union, or domestic partnership. The Agencies are not aware that sales of properties so acquired have been the source of fraudulent flipping activity and note that no commenters suggested that this type of flipping occurs. In addition, the Agencies do not believe that Congress intended to cover purchases of property acquired by sellers in this manner with the “higher-risk mortgage” additional appraisal requirement. The Agencies believe that consumer protection from fraudulent flipping is aided by the requirement that the acquisition of property through dissolution of a marriage or civil union must be part of a court order, which can be easily confirmed and helps ensure that the original transfer was for legitimate purposes and not merely to defraud a subsequent purchaser.
As for the exemption for HPMLs financing the purchase of a property acquired by the seller as an inheritance, the Agencies similarly do not see the risk of fraudulent flipping that Congress intended to address occurring in these transactions. Finally, in both the case of inheritance and that of divorce or dissolution, the seller has acquired the property (or full ownership of the property) under adverse circumstances; the Agencies see no reason as a public policy matter to impose further burden on the seller attempting to sell property obtained in this manner. With respect to promoting the safety and soundness of creditors, the Agencies note that a seller attempting to sell property obtained via inheritance or dissolution of marriage may not be in a position to satisfy the mortgage obligation associated with the property. As a result, creditors could be subject to losses, which can negatively affect the safety and soundness of the creditors.
For these reasons, the Agencies believe that the exemptions in § 1026.35(c)(4)(vii)(D) are in the public interest and promote the safety and soundness of creditors.
In § 1026.35(c)(4)(vii)(E), the Agencies are adopting an exemption for HPMLs financing the purchase of a property from an employer or relocation agency that had acquired the property in connection with the relocation of an employee. This exemption mirrors an identical exemption from the FHA Anti-Flipping Rule.
The Agencies believe that these transactions benefit both employees and employers by helping to ensure that employees can relocate as needed for business reasons in an efficient manner. The Agencies also believe that the exemption can benefit HPML consumers and creditors by reducing costs otherwise associated with purchasing and extending credit to finance the purchase of these properties. In addition, due to reduced burden involved with the sale of the home, the Agencies believe the exemption will promote the purchase of homes by employers. This, in turn, promotes the safety and soundness of the employees'
For these reasons, the Agencies believe that the exemption in § 1026.35(c)(4)(vii)(E) is in the public interest and promotes the safety and soundness of creditors.
In § 1026.35(c)(4)(vii)(F), the Agencies are adopting an exemption from the additional appraisal requirement for HPMLs financing the purchase of a property being sold by a servicemember, as defined in 50 U.S.C. Appx. 511(1), who received a deployment or permanent change of station order after acquiring the property. This exemption is not in the FHA Anti-Flipping Rule. The exemption was suggested by some commenters in response to a request for recommendations for other appropriate exemptions, however. The Agencies believe that many of the reasons for the exemptions in the final rule based on the FHA Anti-Flipping Rule support a servicemember exemption as well. For example, as with the exemption for HPMLs financing the sale of a property by an employer or relocation agency in connection with the relocation of an employee, the exemption for HPMLs financing the sale of a property by a servicemember with permanent relocation orders facilitates the efficient transfer of servicemembers.
Without this exemption, servicemembers might have more limited options for eligible buyers. For reasons discussed earlier, some creditors might be reticent about lending to an HPML consumer in a transaction that would trigger the additional appraisal requirement. This could result in servicemembers being forced to retain mortgages that are difficult for them to afford when they must also support themselves and their families in a new living arrangement elsewhere. In turn, the positions of creditors and investors on those existing mortgages could be compromised by servicemembers not being able to meet their mortgage obligations.
The Agencies do not believe that this exemption would be used frequently. Regardless, the Agencies believe that an exemption for HPMLs financing the purchase of the property in that instance is in the public interest and promotes the safety and soundness of creditors.
In § 1026.35(c)(4)(vii)(G), the Agencies are adopting an exemption for HPMLs financing the purchase of a property located in an area designated by the President as a federal disaster area, if and for as long as the Federal financial institutions regulatory agencies, as defined in 12 U.S.C. 3350(6), waive the requirements in title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended (12 U.S.C. 3331
The Agencies believe that this exemption appropriately facilitates the repair and restoration of disaster areas to the benefit of individual consumers, communities, and credit markets. The Agencies also recognize that disasters might result in some consumers being unable to meet their mortgage obligations. As a result, creditors could be subject to losses, which could negatively affect the safety and soundness of the creditors. The Agencies believe that this exemption would help creditors extend HPMLs that finance the purchase of properties in disaster areas without undue burden, thus enabling the creditors to improve their lending positions more effectively.
As noted, the Agencies specified that the exemption would take effect only if and for as long as the Federal financial institutions regulatory agencies also waive application of the FIRREA title XI appraisal rules for properties in the disaster area. The Agencies believe that this provision helps protect consumers from fraudulent flipping by giving the Federal financial institutions regulatory agencies, all of which are parties to this final rule, authority to monitor the area and determine when appraisal requirements should be reinstated.
For these reasons, the Agencies have concluded that the exemption in § 1026.35(c)(4)(vii)(G) for the purchase of properties in disaster areas is in the public interest and promotes the safety and soundness of creditors.
In § 1026.35(c)(4)(vii)(H), the Agencies are adopting an exemption from the additional appraisal requirement for HPMLs that finance the purchase of a property in a “rural” county, as defined in § 1026.35(b)(iv)(A), which is a county assigned one of the following Urban Influence Codes (UICs), established by the United States Department of Agriculture's Economic Research Services (USDA–ERS): 4, 6, 7, 8, 9, 10, 11, or 12. These UICs correspond to areas outside of MSAs as well as most micropolitan statistical areas; the definition would also include properties located in micropolitan statistical areas that are not adjacent to an MSA. This rural county exemption is not an exemption in the FHA Anti-Flipping Rule. However, the Agencies received requests to consider an exemption for loans in rural areas during informal outreach for the proposal, as well as from public commenters.
In the proposal, the Agencies did not propose an exemption for loans secured by properties in “rural” areas from all of the Dodd-Frank Act “higher-risk mortgage” appraisal rules, but requested comment on an exemption for these loans from the additional appraisal requirement. As discussed earlier, commenters widely supported an exemption for loans secured by properties in rural areas, citing several reasons: a lack of appraisers; the disproportionate cost of an extra appraisal, based on commenters' view that property values tend to be lower in rural areas than in non-rural areas; the assertion that many lenders in rural areas hold the loans in portfolio and therefore are more mindful of ensuring that properties securing their loans are valued properly; the assertion that lenders in rural areas tend to need to price loans higher for legitimate reasons, so a disproportionate amount of their loans (compared to those of larger lenders) will be subject to the appraisal rules and thus these lenders will bear an unfair burden that they are less equipped than larger lenders to bear; and the assertion that property flipping is rare in rural areas.
The analysis in the proposal of the impact of the proposed rule in rural areas corroborated commenters' concern that a larger share of loans in rural areas tend to be HPMLs than in non-rural areas.
Regarding appraiser availability, analysis conducted for the proposal indicated that more than two appraisers are located in all but 22 counties nationwide (13 of which are in Alaska).
Other than the commenters who suggested a “radius” or low-density approach for the rural exemption, only one other commenter offered suggestions on how to define rural. This commenter recommended that the Agencies adopt a definition of “rural” that is consistent with the definition used in rules addressing the use of escrow accounts.
Among other amendments, one new section of TILA authorizes the Board (now, the Bureau) to create an exemption from the requirement to establish escrow accounts for transactions originated by creditors meeting certain criteria, including that the creditor “operates predominantly in rural or underserved areas.” 15 U.S.C. 1639d(c).
Accordingly, the 2011 Escrows Proposal proposed to create an exemption for any loan extended by a creditor that makes most of its first-lien HPMLs in counties designated by the Board as “rural or underserved,” has annual originations of 100 or fewer first-lien mortgage loans, and does not escrow for any mortgage transaction it services.
In the 2011 Escrows Proposal, the Board proposed to define “area” as “county” and to provide that a county would be designated as “rural” during a calendar year if:
Further, the Board proposed to clarify in Official Staff Commentary to this provision that, on an annual basis, the Board would “determine[] whether each county is `rural' by reference to the currently applicable Urban Influence Codes (UICs), established by the United States Department of Agriculture's Economic Research Service (USDA–ERS). Specifically the Board classifies a county as “rural” if the USDA–ERS categorizes the county under UIC 7, 10, 11, or 12.”
The Board explained its proposed definition of “rural” in the
The Board is proposing to limit the definition of “rural” areas to those areas most likely to have only limited sources of mortgage credit. The test for “rural” in proposed § 226.45(b)(2)(iv)(A), described above, is based on the “urban influence codes” numbered 7, 10, 11, and 12, maintained by the Economic Research Service (ERS) of the United States Department of Agriculture. The ERS devised the urban influence codes to reflect such factors as counties' relative population sizes, degrees of “urbanization,” access to larger communities, and commuting patterns. The four codes captured in the proposed “rural” definition represent the most remote rural areas, where ready access to the resources of larger, more urban communities and mobility are most limited. Proposed comment 45(b)(2)(iv)–1 would state that the Board classifies a county as “rural” if it is categorized under ERS urban influence code 7, 10, 11, or 12.
In May 2011, the Board issued the 2011 ATR Proposal to implement these provisions.
In the ATR Proposal, the Board's proposed definition of “rural” and accompanying explanation in the Official Staff Commentary and
As discussed in more detail in the 2013 ATR Final Rule and 2013 Escrows Final Rule, most commenters on the proposals for those rulemakings objected to this definition of “rural” as too narrow (it covers approximately 2 percent of the U.S. population). The narrow scope of the definition of “rural” was viewed as especially onerous because the scope was narrowed even further by a number of additional conditions on the exemption imposed by the statute.
The Bureau is defining “rural” as UICs 4, 6, 7, 8, 9, 10, 11, or 12. These codes comprise all areas outside of MSAs and outside of all micropolitan statistical areas except micropolitan statistical areas that are not adjacent to MSAs. According to current U.S. Census data, approximately 10 percent of the U.S. population lives in these areas.
First, the Agencies believe that creditors must be readily able to determine whether a particular transaction qualifies for the exemption. This will be possible because the Bureau will annually publish on its Web site a table of the counties in which properties would qualify for this exemption. Comment 35(c)(4)(vii)(H)–1 cross-references comment 35(b)(2)(iv)–1, which clarifies that the Bureau will publish on its Web site the applicable table of counties for each calendar year by the end of that calendar year. The comment further clarifies that a property securing an HPML subject to § 1026.35(c) is in a rural county under § 1026(c)(4)(vii)(H) if the county in which the property is located is on the table of rural counties most recently published by the Bureau. The comment provides the following example: for a transaction occurring in 2015, assume that the Bureau most recently published a table of rural counties at the end of 2014. The property securing the transaction would be located in a rural county for purposes of § 1026(c)(4)(vii)(H) if the county is on the table of rural counties published by the Bureau at the end of 2014. The Agencies anticipate that loan officers and others will be able to look on the Bureau Web site to identify whether the county in which the subject property is located is on the list.
Second, the Agencies endeavored to create an exemption tailored to address key concerns raised by commenters requesting a rural exemption, based on data findings by the Agencies. The principal concerns that the Agencies identified among commenters were that: first, adequate numbers of appraisers might not be available in rural areas for creditors to comply with the additional appraisal requirement and; second, the cost of obtaining the additional appraisal might deter some creditors from making HPMLs in these areas, many of which might already be underserved, reducing credit access for rural consumers. As noted in the proposed rule and discussed below, the potential reduction in credit access might be disproportionally greater in rural areas than in non-rural areas because the proportion of HPMLs is higher in rural as opposed to non-rural areas.
For the reasons explained below, the Agencies believe that the exemption for loans in rural areas as defined in the final rule is appropriately tailored to address these and related concerns. By better ensuring credit access and lowering costs among creditors extending HPMLs in rural areas, including small community banks, the exemption is expected to benefit the public and promote the safety and soundness of creditors.
For the final rule, the Bureau computed how many appraisers showed that they had a home or business address within a 50-mile radius of the center of each census tract in which an HPML loan was reported in the 2011 HMDA data.
On this basis, the Bureau found that, of 262,989 HMDA-reported HPMLs in 2011, 603 had fewer than five appraisers within a 50-mile radius of the center of the tract in which the securing property was located; 484 of these loans were in areas covered by the final rule's rural exclusion. Based on FHFA data, the Bureau estimates that 5 percent of these HPMLs were potentially covered by the statute's additional appraisal
On this basis, the Agencies have concluded that the exemption is reasonably tailored to exclude from coverage of the additional appraisal requirement the loans for which appraiser availability might be an issue.
The additional appraisal requirement entails several compliance steps. After identifying that a loan is an HPML under § 1026.35(a), a creditor will need to assess whether the HPML is exempt from the appraisal requirements entirely under § 1026.35(c)(2). If the loan is not exempt as a qualified mortgage or other type of transaction exempt under § 1026.35(c)(2), the creditor will need to determine whether the HPML is one of the transactions that is exempt from the additional appraisal requirement under § 1026.35(c)(4)(vii). If the HPML is not exempt from the additional appraisal requirement, the creditor will need to determine whether the requirement to obtain an additional appraisal is triggered based on the date and, if necessary, price of the seller's acquisition of the property securing the HPML.
If these compliance obligations would deter some creditors from extending HPMLs, the impact on credit access might be greater in rural areas as defined in the final rule than in non-rural areas, because a significantly larger proportion of residential mortgage loans made in rural areas are HPMLs than in non-rural areas. Again, based on 2011 HMDA data, 12 percent of rural first-lien, purchase-money loans were HPMLs compared to four percent of non-rural first-lien, purchase-money loan.
Thus, an important consideration for the Agencies in determining the scope of the exemption was the comparative number of creditors extending HPMLs in various geographic areas. To this end, the Agencies considered, based on HMDA data, the number of creditors reported to have extended HPML credit in the geographic units defined by the 12 UICs. (For more details, see the Section 1022(b)(2) cost-benefit analysis in the
HMDA data for 2011 show that a sharp drop-off in the number of creditors reporting to extend HPML credit occurs in micropolitan statistical areas not adjacent to MSAs (UIC 8), compared to MSAs and micropolitan statistical areas that are adjacent to MSAs.
The Agencies also looked at the estimated number of flips in areas encompassed by the rural exemption of the final rule to determine whether the consumer protections lost might outweigh the benefits of the exemption. As explained in greater detail in the Section 1022(b)(2) analysis, the Bureau estimates that, based on HMDA data, 122,806 purchase-money HPMLs were made in 2011; 21,370 of those were in the areas covered by the rural exclusion. As noted, the Bureau estimates that the proportion of purchase-money HPMLs involving properties sold within 180 days is 5 percent.
The Agencies believe that the exemption for HPMLs secured by rural properties appropriately balances credit access and consumer protection. As the data above suggests, the estimated number of HPML consumers that would not receive the protections of an additional appraisal due to this exemption is very small. Moreover, the Agencies note that affected HPML consumers would still receive the consumer protections afforded by the general requirement for an interior-inspection appraisal performed by a certified or licensed appraiser.
In sum, the Agencies believe that the exemption in § 1026.35(c)(4)(vii)(G) will help ensure that creditors in rural areas are able to extend HPML credit without undue burden, which will in turn mitigate any detrimental impacts on access to credit in rural areas that might result absent the exemption. The Agencies further believe that the exemption is appropriately tailored to ensure that needed consumer protections regarding appraisals are in place in areas where they are needed. For all of the reasons explained above, the Agencies have concluded that the exemption in § 1026.35(c)(4)(vii)(H) is in the public interest and promotes the safety and soundness of creditors.
Title XIV of the Dodd-Frank Act added two new appraisal-related notification requirements for consumers. First, TILA section 129H(d) states that, at the time of the initial mortgage application for a higher-risk mortgage loan, the applicant shall be “provided with a statement by the creditor that any appraisal prepared for the mortgage is for the sole use of the creditor, and that the applicant may choose to have a separate appraisal conducted at the expense of the applicant.” 15 U.S.C. 1639h(d). The Agencies interpret TILA section 129H(d) to provide the elements that a disclosure imposed by regulation should address. In addition, new section 701(e)(5) of the Equal Credit Opportunity Act (ECOA) similarly requires a creditor to notify an applicant in writing, at the time of application, of the “right to receive a copy of each written appraisal and valuation” subject to ECOA section 701(e). 15 U.S.C. 1691(e)(5);
The Agencies proposed text for the notice required by TILA section 129H that was intended to incorporate the statutory elements, using language honed through consumer testing designed to minimize confusion both with respect to the language on its face, as well as when read in conjunction with appraisal notices required under the ECOA. Under the proposal, the TILA section 129H notice stated: “We may order an appraisal to determine the property's value and charge you for this appraisal. We will promptly give you a copy of any appraisal, even if your loan does not close. You can pay for an additional appraisal for your own use at your own cost.”
As explained more fully below, in § 1026.35(c)(5), the Agencies are adopting the proposed disclosure provision with one change—in effect, including the word “promptly” in the disclosure is optional.
The Agencies received approximately 20 comments pertaining to the proposal on the text, timing, and form of the HRM appraisal notice. The comments came from banks and bank holding companies, credit unions, bank and credit union trade associations, an appraisal industry trade association, GSEs, consumer advocates, and an industry service provider. Regarding the text of the disclosure, the Agencies requested comment on the proposed language and whether additional changes should be made to the language to further enhance consumer comprehension.
• Three commenters suggested that the notice clarify that the borrower-ordered appraisal would not be used by the creditor. One of these commenters stated that Federal guidelines prohibited use of the borrower-ordered appraisal as the appraisal for the transaction. The bank trade associations argued that the creditor is prohibited by law from “considering” the borrower-ordered appraisal (pointing, for example, to the Appraisal and Evaluation Interagency Guidelines
• By contrast, another State bank trade association suggested a less categorical clarification, that the lender
Section 1026.35(c)(5) of the final rule provides that, unless an exemption from the HPML appraisal rules applies under § 1026.35(c)(2) (discussed in the corresponding section-by-section analysis above), a creditor shall disclose the following statement, in writing, to a consumer who applies for an HPML: “We may order an appraisal to determine the property's value and charge you for this appraisal. We will give you a copy of any appraisal, even if your loan does not close. You can pay for an additional appraisal for your own use at your own cost.” Section 1026.35(c)(5) further provides that compliance with the disclosure requirement in Regulation B, 12 CFR § 1002.14(a)(2) satisfies the requirements of this paragraph. Under § 1026.35(c)(5)(ii) in the final rule, this disclosure shall be delivered or placed in the mail no later than the third business day after the creditor receives the consumer's application for a higher-priced mortgage loan subject to § 1026.35(c). In the case of a loan that is not a higher-priced mortgage loan subject to § 1026.35(c) at the time of application, but becomes a higher-priced mortgage loan subject to § 1026.35(c) after application, the disclosure shall be delivered or placed in the mail not later than the third business day after the creditor determines that the loan is a higher-priced mortgage loan subject to § 1026.35(c).
In the final rule, the Agencies are not requiring HPML creditors to include “promptly” in the HPML appraisal notice under § 1026.35(c)(5)(i) because “promptly” is not the legal standard for providing a copy of the appraisal in TILA section 129H(c). 15 U.S.C. 1639h(c).
At the same time, the Agencies recognize that all first-lien dwelling-secured mortgages, including first-lien HPMLs, are subject to the ECOA disclosure and appraisal copy requirements. Therefore, under the final rule, first-lien HPML creditors who wish to provide a single notice to comply with both TILA and ECOA can do so by using the ECOA notice with the word “promptly” into the disclosure. Subordinate-lien HPMLs are subject only to TILA's rules on appraisal copies, not ECOA's, so the timing requirement of “promptly” does not apply to creditors of subordinate-lien HPMLs. Therefore, under the final rule, subordinate-lien HPML creditors have the option of providing a disclosure without the word “promptly;” however, the final rule also makes it clear that any creditor, whether of a first- or subordinate-lien HPML, complies with the HPML appraisal disclosure requirement by complying with the disclosure requirement under ECOA's Regulation B. As noted, the model language for the ECOA/Regulation B disclosure includes the word “promptly.”
The Agencies also note that, as discussed more fully in the Bureau's 2013 ECOA Appraisals Final Rule, consumer comprehension would not necessarily be enhanced by use of the term “valuation.” In consumer testing by the Bureau, for example, a settlement statement whose “appraisal” section did not refer to valuations generally was viewed as less confusing than one that did refer to valuations. Including the term “valuations” in the HPML appraisal notice also might confuse subordinate-lien borrowers and creditors, because neither TILA nor ECOA requires disclosure of valuations for subordinate-lien loans.
The Agencies decline to add a qualifier suggested in public comments explaining that the creditor might not order an appraisal if the creditor determines that the applicant will not qualify for a loan before the appraisal is ordered. The Agencies do not believe that this clarification, while true, is necessary for the disclosure. The proposed notice, now adopted, states that the creditor “may” order an appraisal. This language indicates that the creditor is not always required to order an appraisal. Further, the proposed text, now adopted, states that the creditor will provide a copy of “any appraisal.” This additional language also underscores the possibility that in some situations (such as if the loan will not close), an appraisal might not be ordered.
The Agencies also decline to revise the appraisal notice to state that the creditor may charge the consumer for additional copies. The proposed notice, as adopted, refers to the obligation to provide “a copy,” singular. Consumer testing did not suggest consumers were likely to believe that they had a right to multiple free copies, and it is unclear that borrowers frequently or even regularly request multiple copies of the appraisals. The Agencies believe that consumer understanding is best enhanced by keeping the disclosure as simple as possible, in part by excluding nonessential information.
The Agencies are not adopting additional language for the disclosure on this issue. Consumer testing on iterations of the disclosure language did not indicate that the proposed notice would mislead borrowers into believing that creditors are required to consider borrower-ordered appraisals. The language concerning use of a borrower-ordered appraisal evolved during the consumer testing, to reduce confusion. One version of language the Bureau tested contained no suggestion as to the use of borrower-ordered appraisals: “You can choose to pay for your own appraisal of the property.”
In addition, the Agencies do not wish to include language in a disclosure that might inadvertently discourage consumers from questioning the appraisal report ordered by the creditor and providing the creditor with any supporting information that may be relevant to the question of the property's value.
The Agencies also recognize that creditors are subject to existing Federal regulatory and supervisory regulations and requirements that provide additional guidance to creditors about appropriate and inappropriate use of borrower-ordered appraisals. To affirm these existing requirements, the final rule states in comment 35(c)(5)(i)–2 that nothing in the text of the consumer notice required by § 1026.35(c)(5) should be construed to affect, modify, limit, or supersede the operation of any legal, regulatory, or other requirements or standards relating to independence in the conduct of appraisers or the prohibitions against use of borrower-ordered appraisals by creditors.
Finally, comment 35(c)(5)(i)–1 reflects without change a proposed comment clarifying that when two or more consumers apply for a loan subject to this section, the creditor is required to give the disclosure to only one of the consumers. This interpretation is consistent with the statutory language requiring the creditor to provide a disclosure to “the applicant.” This interpretation is also consistent with comment 14(a)(2)(i)–1 in Regulation B, which interprets the requirement in § 1002.14(a)(2)(i) that creditors notify applicants of the right to receive copies of appraisals. 12 CFR 1002.14(a)(2) and comment 14(a)(2)(i)–1. This aspect of existing Regulation B is retained in the Bureau's 2013 ECOA Appraisals Final Rule, in § 1002.14(a)(1) and comment 14(a)–1.
TILA section 129H(d) requires that the appraisal notice be provided at the time of the application. 15 U.S.C. 1639h(d). Consistent with this requirement, and recognizing that the “higher-risk” status of the proposed loan would not necessarily be determined at the precise moment of the application, the Agencies proposed to require that the TILA section 129H notice “be mailed or delivered not later than the third business day after the creditor receives the consumer's application.” The proposed requirement also stated that, if the notice is not provided to the consumer in person, the consumer is presumed to have received the notice three days after its mailing or delivery.
The final rule adopts this provision with two changes. First, the final rule omits the proposed language providing that “[i]f the disclosure is not provided to the consumer in person, the consumer is presumed to have received the disclosure three business days after they are mailed or delivered.” While commenters did not address the issue, the Agencies have concluded that the date of consumer receipt in this context is not relevant. By contrast, as discussed in the section-by-section analysis for § 1026.35(c)(6), below, the Agencies emphasize in the final rule the relevance of the date that a consumer receives the copy of the appraisal. Second, the final rule provides that, in the case of an application for a loan that is not an HPML at the time of application, but whose rate is set at an HPML level after application, the disclosure must be delivered or placed in the mail not later than the third business day after the creditor determines that the loan is an HPML.
In the proposal, the Agencies asked for comment on whether providing the notification at some other time would be more beneficial to consumers, and how the notification should be provided when an application is submitted by telephone, facsimile, or electronically.
• The trade associations and the service provider noted that the lender cannot charge an appraisal fee before the TILA Good Faith Estimate (GFE) is disclosed and the consumer elects to proceed.
• One of the banks asserted that it would be difficult for a creditor to comply with a deadline for the notice that is any earlier than the TILA GFE disclosure deadline, because the rate and therefore “higher-risk mortgage” status of a loan is not typically known earlier. Similarly, the service provider also added that it would be unrealistic to expect the creditor to determine the status while the applicant is submitting the application.
• The service provider also noted that consumers prefer integrated disclosures.
Two community banks and a State bank trade association submitted substantially identical comments opposing the three-business-day deadline, however. These commenters argued that complying with the notice requirement in the first few days after the application will slow the loan approval process and increase loan costs. These commenters called instead for a 10 business day deadline.
No commenters responded to the question in the proposed rule of whether the notice should be provided at the time the application is received, or as part of the application.
Again, under § 1026.35(c)(5)(ii) of the final rule, the disclosure required under § 1026.35(c)(5)(i) shall be delivered or placed in the mail no later than the third business day after the creditor receives the consumer's application for a higher-priced mortgage loan subject to § 1026.35(c). In the case of a loan that is not a higher-priced mortgage loan subject to § 1026.35(c) at the time of application, but becomes a higher-priced mortgage loan subject to § 1026.35(c) after application, the disclosure must be delivered or placed in the mail not later than the third business day after the creditor determines that the loan is a higher-priced mortgage loan subject to § 1026.35(c).
The Agencies decline to adopt a timing requirement of more than three business days after application, as some commenters suggested. The statute requires that the disclosure be provided “at application,” and a three-business-day timing requirement implementing this would be consistent with the application-related disclosure requirements of other residential mortgage rules, most notably the current GFE and proposed TILA-RESPA Loan Estimate discussed above.
By contrast, the ECOA appraisal notice requirement does not apply to subordinate-lien loans. Thus, for subordinate-lien mortgage creditors, a rate increase that occurs more than three business days after application (
Consistent with TILA section 129H(c), the proposal required that a creditor must provide a copy of any written appraisal performed in connection with a higher-risk mortgage loan (now HPML) to the applicant. 15 U.S.C. 1639h(c). A proposed comment clarified that when two or more consumers apply for a loan subject to this section, the creditor is required to give the copy of required appraisals to only one of the consumers.
The Agencies received no comments on these aspects of the proposal and, in § 1026.35(c)(6)(i) and comment 35(c)(6)(i)–1, adopt them without change.
TILA section 129H(c) requires that the appraisal copy must be provided to the consumer at least three days prior to the transaction closing date. 15 U.S.C. 1639h(c). The proposal required creditors to provide copies of written appraisals no later than “three business days” prior to consummation of the higher-risk mortgage loan (now HPML). The Agencies did not receive public comment on this aspect of the proposal, but are making certain changes to the proposal, explained below. Specifically, the Agencies have revised the proposed timing requirement to include a timing rule for loans that are not consummated. Thus, under new § 1026.35(c)(6)(ii), creditors must provide a copy of an appraisal required under § 1026.35(c)(6)(i):
• No later than three business days prior to consummation of the higher-priced mortgage loan; or
• In the case of a loan that is not consummated, no later than 30 days after the creditor determines that the loan will not be consummated.
For consistency with the other provisions of Regulation Z, the proposal also used the term “consummation” instead of the statutory term “closing” that is used in TILA section 129H(c). 15 U.S.C. 1639h(c). The term “consummation” is defined in § 1026.2(a)(13) as the time that a consumer becomes contractually obligated on a credit transaction. The Agencies have interpreted the two terms as having the same meaning for the purpose of implementing TILA section 129H. 15 U.S.C. 1639h. The Agencies did not receive comment on this aspect of the proposal, and adopt the proposed term “consummation” in § 1026.35(c)(6)(ii).
As noted, TILA's requirement for when a creditor must give a copy of the appraisal to the consumer is “at least 3 days prior to the transaction closing date.” TILA section 129H(c), 15 U.S.C. 1639h(c). Thus, the timing requirement is clear for consummated loans.
The Agencies interpret the statute, however, to require that a copy of the appraisal also be given to HPML applicants when their loans do not close because they are denied or withdrawn, or for any other reason. In reaching this interpretation, the Agencies note that TILA section 129H specifies that the appraisal copy shall be provided “to the applicant,” without suggesting that only applicants whose loans are closed are entitled to a copy. In addition, the requirement refers to appraisals that are “conducted,” a term whose meaning is independent of whether the loan closes. In the case of applicants' loans that do not close, the Agencies are adopting a requirement that the appraisal be provided “no later than 30 days after the creditor determines that the loan will not be consummated.” § 1026.35(c)(6)(ii)(A). The Agencies believe that this timing requirement is a reasonable interpretation of the statute, which is silent on the matter. The timing requirement is clear, which the Agencies believe will reduce compliance burden and risks for creditors, and generally consistent with longstanding timing requirements for providing copies of appraisals under existing Regulation B, 12 CFR 1002.14(a)(2)(ii). The approach is also reflected in the Bureau's 2013 ECOA Appraisals Final Rule in § 1002.14(a)(1).
In addition, as stated in the proposal, the Agencies believe that requiring that the appraisal be provided three “business” days in advance of consummation is a reasonable interpretation of the statute and is consistent with the Agencies' interpretation of the statutory term “days” used in the Bureau's 2013 ECOA Appraisals Final Rule, which implements the appraisal requirements of new ECOA section 701(e)(1).
To ensure that the consumer actually receives the appraisal in advance of consummation so that the consumer can use it to inform the consumer's credit decision, comment 35(c)(6)(ii)–1 explains that, for purposes of the requirement to provide a copy of the appraisal three days before consummation, “provide” means “deliver.” This comment further explains that delivery occurs three business days after mailing or delivering the copies to the last-known address of the applicant, or when evidence indicates actual receipt by the applicant (which, in the case of electronic receipt must be based upon consent that complies with the Electronic Signatures in Global and National Commerce Act (E-Sign Act) (15 U.S.C. 7001
Finally, comment 35(c)(6)(ii)–3 clarifies that the ECOA provision allowing a consumer to waive the requirement that the appraisal copy be provided three business days before consummation, does not apply to higher-priced mortgage loans subject to § 1026.35(c). ECOA section 701(e)(2), 15 U.S.C. 1691(e)(2), implemented in the 2013 ECOA Appraisals Final Rule, Regulation B § 1002.14(a)(1). The comment further clarifies that a consumer of a higher-priced mortgage loan subject to § 1026.35(c) may not waive the timing requirement to receive a copy of the appraisal under § 1026.35(c)(6)(i).
Section 1026.31(b) currently provides that the disclosures required under subpart E of Regulation Z may be provided to the consumer in electronic form, subject to compliance with the consumer consent and other applicable provisions of the E-Sign Act. In the proposal, the Agencies stated their belief that it is also appropriate to allow creditors to provide applicants with copies of written appraisals in electronic form if the applicant consents to receiving the copies in this form. Accordingly, the proposal provided that any copy of a written appraisal may be provided to the applicant in electronic form, subject to compliance with the consumer consent and other applicable provisions of the E-Sign Act.
Two commenters—a bank holding company and a credit union—requested that the final rule not impose the E-Sign Act requirement of consumer consent to receiving HPML appraisals electronically. The first commenter
The E-Sign Act generally requires that, before written consumer disclosures are made electronically, the consumer receive certain prescribed notices and consent to the electronic disclosures in a manner that reasonably demonstrates the ability to access the information that will be disclosed electronically. The E-Sign Act generally applies to statutes that require consumer disclosures “in writing.” 15 U.S.C. 7001(c)(1). It is unclear from the comments whether this E-Sign consent requirement would place a significant burden on creditors. The Agencies continue to believe that the proposed clarification that the E-Sign Act applies to providing copies of the appraisal is appropriate and notes that it is consistent with the Bureau's approach in the 2013 ECOA Appraisals Final Rule. Thus, in § 1026.35(c)(6)(iii), this clarification is adopted as proposed.
TILA section 129H(c) provides that a creditor shall provide one copy of each appraisal conducted in accordance with this section in connection with a higher-risk mortgage to the applicant without charge. 15 U.S.C. 1639h(c). In the proposal, the Agencies interpreted this provision to prohibit creditors from charging consumers for providing a copy of written appraisals required for higher-risk mortgage loans. Accordingly, the proposal provided that a creditor must not charge the consumer for a copy of a written appraisal required to be provided to the consumer pursuant to new § 1026.35(c)(6)(i).
A proposed comment clarified that the creditor is prohibited from charging the consumer for any copy of a required appraisal, including by imposing a fee specifically for a required copy of an appraisal or by marking up the interest rate or any other fees payable by the consumer in connection with the higher-risk mortgage loan.
The Agencies received no comments on this aspect of the proposal and adopt the proposed regulation text and comment without change in § 1026.35(c)(6)(iv) and comment 35(c)(6)(iv)–1.
Section 1026.35(c)(7) clarifies that the final rule was adopted jointly by the Agencies. This provision states that the Board is codifying the HPML appraisal rules at 12 CFR 226.43
The NCUA and FHFA are adopting the rules as published in the Bureau's Regulation Z at 12 CFR 1026.35(a) and (c), by cross-referencing these rules in 12 CFR 722.3 and 12 CFR Part 1222, respectively. The FDIC is adopting the Bureau's Regulation Z at 12 CFR 1026.35(a) and (c) without a cross-reference.
As noted above at the beginning of the section-by-section analysis, § 1026.35(a) is re-published in the final rule for ease of reference, and the joint rulemaking authority extends to § 1026.35(c).
In developing the final rule, the Bureau has considered potential benefits, costs, and impacts to consumers and covered persons.
As discussed above, the final rule implements section 1471 of the Dodd-Frank Act, which establishes appraisal requirements for certain HPMLs. Consistent with the statute, the final rule allows a creditor to originate a covered HPML transaction only if the following conditions are met:
• The creditor obtains a written appraisal;
• The appraisal is performed by a certified or licensed appraiser; and
• The appraiser conducts a physical property visit of the interior of the property.
In addition, as required by the Act, the final rule requires a creditor in a covered HPML transaction to obtain an additional written appraisal, at no cost to the borrower, if the transaction has each of the following characteristics (subject to certain exemptions, as discussed below):
• The HPML will finance the acquisition of the consumer's principal dwelling;
• The seller acquired the property within 180 days prior to the consumer's purchase agreement (measured from the date of the consumer's purchase agreement); and
• The consumer is acquiring the home for a price that exceeds the price at which the seller acquired the home by more than 10 percent (if the seller acquisition was within 90 days of the consumer's purchase agreement) or by more than 20 percent (if the seller acquisition was within the past 91 to 180 days of the consumer's purchase agreement).
The additional written appraisal, from a different licensed or certified appraiser, generally must include the following information: an analysis of the difference in sale prices (
The final rule also requires that within three days of the application, the creditor provide the applicant with a brief disclosure statement that the creditor may charge the applicant for an appraisal, that the creditor will provide the applicant a copy of any appraisal, and that the applicant may choose to have a separate appraisal conducted at the expense of the applicant. Finally, the final rule requires that the creditor provide the consumer with a free copy of any written appraisals obtained for the transaction at least three (3) business days before consummation, or within 30 days of determining the transaction will not be consummated.
In many respects, the final rule codifies mortgage lenders' current practices. In outreach calls to industry,
The Bureau notes that many of the provisions in the final rule implement self-effectuating amendments to TILA. The costs and benefits of these provisions arise largely or in some cases entirely from the statute and not from the rule that implements them. This rule provides benefits compared to allowing these TILA amendments to take effect without implementing regulations, however, by clarifying parts of the statute that are ambiguous. Greater clarity on these issues covered by the rule should reduce the compliance burdens on covered persons by reducing costs for attorneys and compliance officers as well as potential costs of over-compliance and unnecessary litigation.
Section 1022 permits the Bureau to consider the benefits, costs, and impacts of the final rule solely compared to the state of the world in which the statute takes effect without an implementing regulation. To provide the public better information about the benefits and costs of the statute, however, the Bureau has chosen to consider the benefits, costs, and impacts of the major provisions of the final rule against a pre-statutory baseline (
The Bureau has relied on a variety of data sources to analyze the potential benefits, costs, and impacts of the final rule.
The primary source of data used in this analysis is data collected under the Home Mortgage Disclosure Act (HMDA).
Other portions of the analysis rely on property-level data regarding parcels and their related financing from DataQuick
In a mortgage transaction, the appraisal helps the creditor avoid lending based on an inflated valuation of the property, and similarly helps consumers avoid borrowing based upon an inflated valuation. Assuming that full-interior appraisals conducted by a certified or licensed appraiser are more accurate than other valuation methods, the rule would improve the quality of home valuations for those transactions where such an appraisal would not be performed currently. While the appraisal is used by the creditor, the improved valuation also can prevent inflated valuations that would lead consumers to borrowing that would not be supported by their true home value, as well as deflated valuations (such as those that do not value an interior which is of different than average quality) that can lead consumers to be eligible for a narrower class of loan products that are priced less advantageously. The requirement that a second appraisal be conducted in certain circumstances would further reduce the likelihood of an inflated sales price for those transactions.
Individual consumers engage in real estate transactions infrequently, so developing the expertise to value real estate is costly and consumers often rely on experts, such as real estate agents, as well as on list prices, to make price determinations. These methods may not lead a consumer to an accurate valuation of a property they intend to purchase. For example, there is evidence that real estate agents sell their own homes for significantly more than other similar homes, which suggests that consumers may not be able to accurately price the homes that they are selling.
While the consumer can order an appraisal voluntarily at any time, an especially valuable time for the consumer to receive a copy of an appraisal is before closing an HPML—whether it is for a home purchase, a refinance, or a home improvement. Undoubtedly, some consumers are aware of the benefits of an appraisal, and could have decided for themselves whether they want to pay for it if one was not required or otherwise prepared and provided under standard industry practice. However, other consumers may be unaware of the benefits of an appraisal in terms of improving accuracy of a home valuation, and to these consumers the rule is especially valuable in an HPML transaction that would not otherwise include an appraisal. Moreover, even the consumers who are aware of the benefits would not be able to use the self-ordered appraisal for any transactions with creditors, since those require creditor-ordered valuations.
The Bureau believes that ensuring HPML borrowers receive appraisals ensures that they will have more accurate information about the value of their dwelling, and therefore about their net worth and whether they have any equity in their dwelling. For transactions that would already include the appraisal, the rule ensures that in similar transactions consumers will continue to have an appraisal; for other transactions, the rule will result in the appraisal. In either case, more accurate information leads to better decisions and can lead to more investment in the property in some cases by removing the uncertainty over the value of the dwelling. The appraisal may also help to inform the consumer of whether they may be overpaying for the property with a new home purchase, about to invest more into a property that might be valued at less than they think with a home improvement loan, or about to pay the refinance cost on a property that they should sell instead. The latter two points are especially valuable for consumers who are in negative equity, or “underwater” situations (where the loan amount exceeds the value of the dwelling). A consumer who finds out that she is not underwater, when she thought that she might have been, has an incentive to continue investing in the property and make sure that she does not lose it in foreclosure or otherwise default. Conversely, a consumer who finds out that he is underwater, when he thought that he might not have been, might have second thoughts about any investments, and will potentially want to pursue loss mitigation options or, if they do not succeed and the consumer is facing financial difficulties or default, agree on a short-sale or on a deed-in-lieu of foreclosure with the creditor.
Aside from the aforementioned decisions, depending on the alternative valuation, an appraisal can help the consumer to lower their property tax, to forgo private mortgage insurance (PMI), and to choose the correct property value for insurance purposes. A lower loan-to-value (LTV) ratio might also result in a lower interest rate on the loan, all else equal, as discussed further below. Again, the final rule ensures these benefits are available to consumers in
If a borrower is prepared to pay an inflated price for a property, then an appraisal that reflects its value more accurately may prevent the transaction from being completed at the inflated price and consequently, at a higher loan amount, which would be more costly to the consumer who, in the case of an HPML borrower, also may have fewer resources to repay the loan. This is particularly true when considering that transactions subject to the rule will be those HPMLs that are not qualified mortgages, and which therefore may involve higher points, greater fees, or a higher debt-to-income ratio, among other differences. In addition to the direct costs of paying more than the true value for a property, buying an overvalued property is associated with higher risk of default. If a property that is sold shortly after its previous sale is more likely to have an inflated price, since it may have been purchased the first time with the intention to improve the property quickly and resell it for a profit, the additional appraisal requirement also would help ensure an accurate estimate of the value of the property. This would be particularly true in transactions involving fraudulent flipping using an inadequate or improperly performed first appraisal.
At the same time, if a borrower is prepared to take out an HPML based upon the creditor's use of a valuation other than an interior appraisal, that valuation may be less likely to take into account unique characteristics of the subject property, such as its setting in the immediate neighborhood, its views, the quality of the exterior or the residential structure, or its interior condition. For borrowers where direct assessments of those characteristics would have improved the valuation, the price of the loan may be based upon an LTV ratio that is overstated, and the loan may be overpriced to the extent that higher LTVs correlate with higher-priced loans.
The final rule also may support greater consumer choice in HPML transactions, to the extent new creditors treat the appraisals required as portable. For example, the FHA has taken steps to ensure appraisal portability in the situation of an “applicant who has gotten to the appraisal stage of the home loan process, but” the applicant decides he or she is “dissatisfied with [the] lender and decide[s] to find a new one.”
Codifying HPML valuation standards across the industry likely would simplify the shopping process for consumers who receive HPML offers. First, for consumers in HPML transactions that would not have otherwise included an appraisal, the appraisals required by the rule may help to improve consumers' understanding of the determinants of the value of the property that they intend to purchase. In cases where a loan is denied due to an appraiser valuing the property at less than the contract price, the appraisal will include support for its findings of the lower value, which may help the consumer in future negotiations or property searches. Second, codifying appraisal standards across the industry would simplify the shopping process for consumers by making the process of applying for HPMLs more consistent between lenders. Full-interior appraisals typically cost more than other valuation methods, and appraisal costs are often passed on to consumers. Consumers may not understand the differences between different valuation methods or know that different creditors will use different methods, and therefore may benefit from the standardization the rule can be expected to promote.
The final rule also will ensure that borrowers in covered HPML transactions involving subordinate liens receive a notice informing them about the appraisal process, of their ability to order their own appraisal, and that they will receive copies of any appraisals at least three business days prior to the consummation. Under ECOA section 701(e) and its implementing rules, applicants in transactions secured by a first lien on a dwelling will receive this notice and a copy of an appraisal; under this provision in the statute and the Bureau's 2013 ECOA Appraisals Final Rule, which takes effect on January 18, 2014, these requirements do not apply to subordinate lien transactions, however. The final rule fills this gap for borrowers on covered HPMLs, ensuring they are better informed prior to entering into subordinate lien loans, such as for home improvement purposes and other common purposes.
The costs of the rule, which are predominantly related to compliance, are more readily quantifiable than the benefits and can be calculated based on the mix of loans originated by an entity and the number of employees at that entity. These compliance costs may be considered as the discrete tasks that would be required by the rule. These can be separated into costs that are associated with the origination of a single HPML and the costs of reviewing and implementing the regulation.
The calculation of costs for IMBs uses a slightly different approach.
Based on these data sources, the Bureau estimates that there were approximately 292,000 HPMLs in 2011. Of these, the Bureau estimates that 146,000 were purchase-money mortgages, 116,000 were first-lien refinancings, and 30,000 were closed-end subordinate lien mortgages that were not part of a purchase transaction.
The Bureau estimates that the probability that full-interior appraisals are conducted as part of current practice is 95 percent for purchase-money transactions, 90 percent for refinance transactions, and 5 percent for subordinate lien mortgage transactions.
The following discussion considers estimated compliance costs in the order in which they arise in the mortgage origination process. First, the rule requires that the creditor furnish the applicant with the disclosure required by § 1026.35(c)(5)(i).
Second, the rule requires the creditor to verify whether a loan is a HPML. However, the Bureau believes this activity does not to introduce any significant costs beyond the regular cost of business because creditors already must compare APRs to APOR for a variety of compliance purposes under existing Regulation Z
The third step is an optional one. If a creditor decides to seek to be eligible for the safe harbor provided for in § 1026.35(c)(3)(ii), the creditor likely would take certain steps in the process of ordering and reviewing a full-interior appraisal as prescribed by the rule. The review process is described in the Appendix N of the rule, and the Bureau assumes it will be performed by a loan officer and to take 15 minutes on average (including the very brief time needed to send a copy to the applicant, as discussed below).
In purchase transactions financed by a covered HPML, creditors also will need to determine whether a second appraisal would be required based upon prior sales or acquisitions involving the property that would secure the loan. This would require labor costs to determine, through reasonable diligence, whether the seller acquired the property in the past 180 days, and if so, at a price that is sufficiently lower than the contract sale price for the current transaction to trigger the second appraisal requirement. The rule provides that reasonable diligence can be performed through reliance on written source documents, which may include, among others, the 10 types of documents listed in new Appendix O to Part 1026. The Bureau believes creditors typically already obtain many of the common source documents for other purposes during the application process for a purchase-money HPML. The Bureau estimates that reasonable diligence would take, on average, 15 minutes of staff time. Because an estimated 95 percent of covered HPML transactions are not flips at all, in many cases this may be determined from the available documentation more quickly than 15 minutes, simply by determining that the seller's acquisition occurred more than 180 days before the borrower's purchase agreement. Of the 5 percent that are flips, creditors may take more time to analyze price differences versus the thresholds in the rule. Thus the 15 minute estimation is an average. The dollar cost per covered HPML loan is therefore $12.07.
The Bureau believes based on outreach that the direct costs of conducting appraisals would be passed through to consumers, except in the case of an additional appraisal that would be required by § 1026.35(c)(4)(i) (requiring an additional appraisal for properties that are the subject of certain 180-day resales).
Finally, the rule also requires that free copies of appraisals be provided to borrowers at least three business days before the loan is consummated (or within 30 days of determining the loan will not be consummated). In outreach prior to the proposal stage, market participants, including a large bank, representatives from a national community banking trade association, and a large independent mortgage bank
As noted above, the Bureau assumes that costs of many of the new first appraisals would be borne directly by the consumers. This increase in costs charged to HPML borrowers could deter some consumers from agreeing to HPMLs. In these cases, however, creditors could agree to fold the appraisal cost into the cost of the loan. To the extent consumers would still be deterred from borrowing, creditors also could waive the cost of the appraisal and absorb it, or otherwise reduce origination fees.
The direct pecuniary costs to consumers that would be imposed by the rule can be calculated as the incremental cost of having a full interior appraisal instead of using another valuation method for the relatively small subset of covered HPML transactions (a few thousand annually as discussed above) where an appraisal is not currently performed. As described above, the Bureau believes that consumers would pay directly for all new first appraisals—but not the new second appraisals that would be required because of a recent resale of the property—for a total of 3,794 new first appraisals per year. Assuming the consumer pays $350 for an appraisal that would not otherwise have been conducted, versus $5 for an alternative valuation, gives a total direct costs to consumers of 3,794 * ($350-$5) = $1,308,930 (rounded to the nearest thousand).
Incremental costs in covered HPML transactions that would not otherwise have a full-interior appraisal could reduce consumers' access to non-QM HPMLs. However, the impact on access to credit is probably negligible. Any costs that derive from the additional underwriting requirements incurred under the rule are likely to be very small. What matters, for both first and subordinate lien loans, are the incremental costs from the difference between the full-interior appraisal and alternative valuation method costs. These only arise in the fraction of HPMLs where use of the interior appraisal is not already accepted practice. For first liens, full interior inspection appraisals are common industry practice: passing the cost of appraisals on to consumers is current industry practice, and consumers appear to accept the appraisal fee. The interior appraisal requirement therefore is unlikely to cause a significant adverse effect on consumers' access to this kind of credit. Furthermore, these costs may also be rolled into the loan, up to LTV ratio limits, so buyers are unlikely to face short-term liquidity constraints that prevent purchasing the home. The impact of the rule on the volume of non-QM HPMLs originated may be relatively greater for subordinate liens because in these transactions the rule would impose an interior appraisal practice that is not as widespread currently, and also because the cost of a full interior appraisal is a larger proportion of the loan amount (because subordinate lien loans are typically lower in amount than first lien loans). However, the number of subordinate lien HPMLs that will be covered by the rule will be small to begin with, excluding qualified mortgages; any changes in non-QM HPML subordinate lien transaction volume may be mitigated by consumers rolling the appraisal costs into the loan or the consumer and the creditor splitting the incremental cost of the full-interior appraisal if it is profitable for the creditor to do so.
In determining what level of review by creditors should be required for full interior appraisals related to HPMLs, two alternatives were considered in developing the proposed rule. One alternative considered was to require a full technical review of the appraisal that would comply with USPAP Standard 3 (USPAP3). Such a requirement, however, would add substantially to the cost of each appraisal, as a USPAP3-compliant review can cost nearly as much as a full interior appraisal. Another alternative was to require creditors to have USPAP3-compliant reviews conducted on a sample of the appraisals carried out on properties related to an HPML. Reviewing a sample of appraisals, however, would be most useful for creditors making a large number of HPMLs and employing the same appraisers for a large number of those loans. Given the small number of HPMLs made each year, the value of sampling appraisals for full USPAP3 review is likely to be small.
In addition to the exemptions that were adopted in the final rule, based upon its review of comments discussed in the section-by-section analysis above, the Agencies also considered possible exemptions from the final rule for “streamlined” refinance programs (such as programs designed by certain government agencies and government-sponsored enterprises that do not require appraisals), and loans of lower dollar amounts, and clarification on application of the rule to loans secured by certain property types. As discussed in the section-by-section analysis, however, the Agencies did not adopt these exemptions or clarifications in the final rule and instead intend to publish a supplemental proposal to request additional comment on these issues.
Finally, the Agencies considered alternatives to the scope of the second appraisal requirement for HPMLs on properties being resold within 180 days. With respect to what price increase would trigger this requirement, in addition to the approach adopted in the final rule, the Agencies also considered whether the trigger should be any amount greater than zero, an increase of 10 percent regardless of the number of days between 0 and 180 days since the acquisition, or an increase of 20 percent regardless of the number of days between 0 and 180 days since the acquisition. For the reasons outlined in the section-by-section analysis above, the Agencies determined that setting staggered price increase thresholds—more than 10 percent for properties acquired within 90 days and more than 20 percent for properties acquired within 91 and 180 days—was more appropriate. In addition, the Agencies considered providing no exemption from the second appraisal requirement for loans on properties located in rural areas (as proposed), or providing an exemption for loans on properties in rural areas defined using combinations of urban influence codes (UICs). For the reasons outlined in the section-by-section analysis above, the Agencies determined that an exemption was appropriate for HPMLs secured by properties located in certain UICs, as discussed in the section-by-section analysis of § 1026.35(c)(4)(vii)(H) above.
Depository institutions and credit unions with $10 billion or less in assets would experience the same types of impacts as those described above. The impact on individual institutions would depend on the mix of mortgages that these institutions originate, the number of loan officers that would need to be trained, and the cost of reviewing the regulation. The Bureau estimates that these institutions originated 151,000 HPML loans in 2011. Assuming the mix of purchase money, refinancings, and subordinate lien mortgages, and the proportion of loans exempt as qualified mortgages, was the same at these institutions as for the industry as a whole, the Bureau estimates that the rule will require these institutions to have 1,966 full interior appraisals conducted for transactions that would otherwise not have a full-interior appraisal, and 252 new second full-interior appraisal (as is be required by § 1026.35(c)(4)), for a total of 2,218 appraisals. As noted above, these estimates are derived without subtracting some of the loans that are exempt from the overall rule. These estimates therefore are conservative, given that these exemptions collectively apply to a significant number of loans. The Bureau believes that the impact on each creditor under $10 billion is substantially the same as for the broader group of creditors described above. In particular, based upon analysis of the same data sources described above, the Bureau has determined the under $10 billion creditors have the same cost per loan and similar one-time and ongoing burdens, with the specific differences described above.
The Bureau does not anticipate that the final rule will have a unique impact on consumers in rural areas. The Bureau does not believe that requiring one interior USPAP-compliant appraisal for a covered HPML on a rural property will have a significantly greater impact than the same requirement for a covered HPML on a non-rural property.
As in the section 1022 analysis in the proposal, the Bureau continues to conclude that there would be no unique impact on rural consumers of the requirement to obtain the first appraisal. For first lien transactions, conditional on taking out a mortgage, rural consumers may take out first lien HPMLs at a higher rate than non-rural consumers. Such a difference between rural and non-rural rates of first lien HPMLs does not have a unique impact on rural consumers, however, because the rule does not alter existing industry practice with respect to appraisals for most first lien transactions. For subordinate lien transactions, conditional on taking out a mortgage, in 2010 the proportion of subordinate liens that were HPMLs were roughly the same for consumers in rural areas as in non-rural areas, as illustrated in Table 2 of the proposal. In addition, HMDA data for 2011 indicates the proportion of subordinate liens in rural areas that were HPMLs (6.77 percent) was lower than the proportion for non-rural areas (8.53 percent). Thus, even though the rule may have a greater impact on subordinate lien HPML transactions because appraisals are less common currently for these transactions, rural consumers' subordinate liens appear no more likely to be HPMLs than non-rural consumers, based upon the recent HMDA data. As a result, there is no unique or disproportionate impact on rural consumers in subordinate lien transactions either.
With respect to the second appraisal requirement for certain transactions involving flips, the Bureau believes that flips occur at the same rate in rural areas as in non-rural areas. The second appraisal requirement will not have any impact on consumers engaging in transactions on properties in rural areas, however, because they are exempt from the second appraisal requirement.
The Board prepared an initial regulatory flexibility analysis as required by the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) (RFA) in connection with the proposed rule. The regulatory flexibility analysis otherwise required under section 604 of the RFA is not required if an agency certifies, along with a statement providing the factual basis for such certification, that the rule will not have a significant economic impact on a substantial number of small entities. 5 U.S.C. 604, 605(b). The final rule covers certain banks, other depository institutions, and non-bank entities that extend higher-risk mortgage loans to consumers. The Small Business Administration (SBA) establishes size standards that define which entities are small businesses for purposes of the RFA.
Section 1471 of the Dodd-Frank Act establishes a new TILA section 129H, which sets forth appraisal requirements applicable to “higher-risk mortgages.” The Act generally defines “higher-risk mortgage” as a closed-end consumer loan secured by a principal dwelling with an APR that exceeds the APOR by 1.5 percent for first-lien loans, 2.5 percent for first-lien jumbo loans, or 3.5 percent for subordinate-liens. The definition of higher-risk mortgage in new TILA section 129H expressly excludes qualified mortgages, as defined in TILA section 129C, as well as reverse mortgage loans that are qualified mortgages as defined in TILA section 129C.
Specifically, new TILA section 129H does not permit a creditor to extend credit in the form of a “higher-risk mortgage” to any consumer without first:
• Obtaining a written appraisal performed by a certified or licensed appraiser who conducts a physical property visit of the interior of the property.
• Obtaining an additional appraisal from a different certified or licensed appraiser if the purpose of the higher-risk mortgage loan is to finance the purchase or acquisition of a mortgaged property from a seller within 180 days of the purchase or acquisition of the property by that seller at a price that was lower than the current sale price of the property. The additional appraisal must include an analysis of the difference in sale prices, changes in market conditions, and any improvements made to the property between the date of the previous sale and the current sale.
• Providing the applicant, at the time of the initial mortgage application, with a statement that any appraisal prepared for the mortgage is for the sole use of the creditor, and that the applicant may choose to have a separate appraisal conducted at the applicant's expense.
• Providing the applicant with one copy of each appraisal conducted in accordance with TILA section 129H without charge, at least three (3) days prior to the transaction closing date.
Section 1400 of the Dodd-Frank Act requires that final regulations to implement these provisions be issued no later than January 21, 2013. The Agencies are issuing the final rule to fulfill their statutory duty to implement the appraisal provisions added in new TILA section 129H.
The
In the proposed rule to implement the appraisal provisions in new TILA section 129H, the Board sought information and comment on any costs, compliance requirements, or changes in operating procedures arising from the application of the rule to small institutions. The Board received comments from various industry representatives, including banks, credit unions, and the trade associations that represent them. As discussed in the
In general, the commenters discussed the impact of statutory requirements rather than any impact that the proposed rules themselves would generate. Moreover, the Agencies have reduced the compliance burden in the final rule by adding exemptions from both the written appraisal and the additional written appraisal requirements. Thus, the Board continues to believe that the final rule will not have a significant impact on a substantial number of small entities.
The final rule applies to creditors that make HPMLs subject to 12 CFR 1026.35(c).
Data currently available to the Board are not sufficient to estimate how many small entities that extend mortgages will be subject to 12 CFR 1026.35(c), given the range of exemptions from the rules, including the exemption for qualified mortgages. Further, the number of these small entities that will make HPMLs subject to 12 CFR 1026.35(c) in the future is unknown.
The compliance requirements of the final rule are described in detail in the
The final rule generally applies to creditors that make HPMLs subject to 12 CFR 1026.35(c), which are generally mortgages with an APR that exceeds the APOR by a specified percentage, subject to certain exceptions. The final rule generally requires creditors to obtain an appraisal or appraisals meeting certain specified standards, provide applicants with a notification regarding the use of the appraisals, and give applicants a copy of the written appraisals used.
A creditor is required to determine whether it extends HPMLs subject to 12 CFR 1026.35(c); if so, the creditor must analyze the regulations. The creditor must establish procedures for identifying mortgages subject to the new appraisal requirements. A creditor making a HPML subject to 12 CFR 1026.35(c) must obtain a written appraisal performed by a certified or licensed appraiser who conducts a physical property visit of the interior of the property. Creditors seeking a safe harbor for compliance with this requirement must:
• Order that the appraiser perform the written appraisal in conformity with the USPAP and title XI of the FIRREA, and any implementing regulations, in effect at the time the appraiser signs the appraiser's certification;
• Verify through the National Registry that the appraiser who signed the appraiser's certification was a certified or licensed appraiser in the State in which the appraised property is located as of the date the appraiser signed the appraiser's certification;
• Confirm that the elements set forth in appendix N to this part are addressed in the written appraisal; and
• Have no actual knowledge to the contrary of facts or certifications contained in the written appraisal.
A creditor must also determine whether it is financing the purchase or acquisition of a mortgaged property by a consumer from a seller (1) within 90 days of the seller's acquisition of the property for a resale price that exceeds the seller's acquisition price by more than 10 percent; or (2) 91 to 180 days of the seller's acquisition of the property for a resale price that exceeds the seller's acquisition price by more than 20 percent. If so, the creditor must obtain an additional appraisal of the property and confirm that the additional appraisal meets the requirements of the first appraisal. The creditor also must ensure that the additional appraisal includes an analysis of the difference in sale prices, changes in market conditions, and any improvements made to the property between the date of the previous sale and the current sale.
Creditors extending HPMLs subject to 12 CFR 1026.35(c) also must design, generate, and provide a new notice to applicants. Specifically, within three business days of application, a creditor must provide a disclosure that informs consumers of the purpose of the appraisal, that the creditor will provide the consumer with a copy of any appraisal, and that the consumer may choose to have a separate appraisal conducted at the expense of the consumer. In addition, creditors making HPMLs subject to 12 CFR 1026.35(c) must provide the consumer with a copy of each appraisal conducted at least three business days prior to closing and develop systems for that purpose.
The Board believes that certain factors will mitigate the economic impact of the final rule. First, the Board believes that only a small number of loans will be affected by the final rule. For example, according to HMDA data, less than four percent of first-lien home purchase mortgage loans in 2010 or 2011 would potentially be subject to the appraisal requirements of 12 CFR 1026.35(c).
Because of the small number of transactions affected, the Board believes that the final rule is unlikely to have a significant economic impact on a substantial number of small entities.
The Board has not identified any Federal statutes or regulations that would duplicate, overlap, or conflict with the final rule. The final rule will work in conjunction with the existing requirements of FIRREA title XI and its implementing regulations.
As described in the
The Regulatory Flexibility Act (RFA) generally requires an agency to conduct an initial regulatory flexibility analysis (IRFA) and a final regulatory flexibility analysis (FRFA) of any rule subject to notice-and-comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities.
The empirical approach to calculating the impact that the regulation has on small entities subject to the final rule follows the methodology, and uses the same data, as the above analysis conducted under Section 1022 of the Dodd-Frank Act. The impact analysis focuses on the economic impact of the final rule, relative to a pre-statute baseline, for small depository institutions (DIs) and non-depository independent mortgage banks (IMBs), also described in this impact analysis as non-DIs. The Small Business Administration classifies DIs (commercial banks, savings institutions, credit unions, and other depository institutions) as small if they have no more than $175 million in assets, and classifies other real estate credit firms (including non-DIs) as small if they have no more than $7 million in annual revenues.
The final rule implements section 1471 of the Dodd-Frank Act, which establishes appraisal requirements for HPMLs that are not otherwise exempt under the final rule. Under the exemptions in the final rule, the final rule does not apply qualified mortgages as defined in the Bureau's 2013 ATR Final Rule, transactions secured by a new manufactured home, transactions secured by a mobile home, boat, or trailer, transactions to finance the initial construction of a dwelling, temporary bridge loans with a term of 12 months or less, or reverse mortgages.
Consistent with the statute, the final rule allows a creditor to make a covered HPML only if the following conditions are met:
• The creditor obtains a written appraisal;
• The appraisal is performed by a certified or licensed appraiser; and
• The appraiser conducts a physical property visit of the interior of the property.
In addition, as required by the Act, the final rule requires a creditor originating a covered HPML to obtain an additional written appraisal, at no cost to the borrower, if certain conditions are met, unless a transaction falls into one of the exemptions from this requirement in the rule (exemptions are described in § 1026.35(c)(4)(vii). The following conditions trigger this requirement:
• The HPML will finance the acquisition of the consumer's principal dwelling;
• The seller selling what will become the consumer's principal dwelling acquired the home within 180 days prior to the consumer's purchase agreement (measured from the date of the consumer's purchase agreement); and
• The consumer is acquiring the home for a price that is more than 10 percent higher than the price at which the seller acquired the property (if the seller acquired the property within 90 days of the consumer's purchase agreement) or more than 20 percent higher than the price at which the seller acquired the property (if the seller acquired the property within 91 to 180 days of the consumer's purchase agreements).
Finally, the rule requires creditors in covered HPML transactions to provide a standardized notice to consumers regarding the appraisal process within three days of the application, as well as a free copy of any written appraisal obtained for the transaction no later than three business days prior to consummation of the transaction (or within 30 days of determining the transaction will not be consummated).
Of the roughly 17,462 depository institutions (including credit unions) and IMBs, 12,568 are below the relevant small entity thresholds. Of the small institutions, 9,094 are estimated to have originated mortgaged loans in 2011. While loan counts exist for credit unions and HMDA-reporting DIs and IMBs, they must be projected for non-HMDA reporters. For IMBs, an accepted statistical method (“nearest neighbor matching”) is used to estimate the number of these institutions that have no more than $7 million in revenues from the MCR.
Although most DIs and non-DIs are affected by the final rule, the final rule does not have a significant impact on a substantial number of small entities, as is demonstrated by the burden estimates for small institutions calculated below. For each institution the cost of compliance is calculated and then divided by a measure of revenue. For DIs, revenue is obtained from the appropriate call report. For non-DIs, the frequency of HPMLs is not available in the MCR. However, data available in HMDA shows that the proportion of HPMLs in a non-DI's originations does not vary by origination volume. As such, HMDA data is used in lieu of the MCR data to calculate costs of compliance with the final rule.
The creditors will incur one-time costs of review, as described in the analysis under section 1022 above, and ongoing costs, proportional to the volume of HPMLs originated, and also as described in the section 1022 analysis above.
The Bureau estimates that 85 percent of the creditors affected are going to have one-time costs of less than $300.
For small DIs, Table 2 reports various statistics for the estimated annual cost of compliance with the final rule as a percentage of revenues using conservative assumptions. The assumptions underlying the Bureau's estimates are explained in the table and are generally discussed in more detail in the Section 1022(b)(2) analysis. The table shows that 85 percent of the small DIs and credit unions that originate any HPMLs have costs of significantly less than one percent of the revenue. This stays the same when the creditors are separated into types.
The Bureau also has analyzed the data for IMBs separately. Most IMBs are small, and the Bureau does not possess the data on the revenues of approximately 700 of those. As with the DIs and credit unions, the effects of the rule are insignificant. Out of the 1,325 small IMBs that originate any HPMLs, and for whom the Bureau possesses revenue information, 85 percent of the IMBs have costs below 0.30 percent of the revenue, using the same cost assumptions as for the depository institutions and credit unions.
A more likely impact—albeit significantly reduced by the scope of exemptions adopted in the final rule—would be on the volume of non-QM HPMLs secured by subordinate liens because, in practice, these are the transactions on which final rule imposes a change from the status quo, and also because the cost of a full interior appraisal is a larger proportion of the loan amount to the extent subordinate lien loan amounts generally are lower than first lien loan amounts. However, changes in the volume of subordinate lien non-QM HPMLs may be mitigated by consumers rolling the appraisal costs into the loan or the consumer and the creditor splitting the incremental cost of the full-interior appraisal if it is profitable for the creditor to do so. In addition, many creditors originating subordinate lien non-QM HPMLs can offer alternative products that are not subject to the rule, such as qualified mortgages or home equity lines of credit (HELOCs). Similarly, the costs imposed on creditors are sufficiently small that they are unlikely to result in a decrease in the supply of credit.
Accordingly, the Director of the Consumer Financial Protection Bureau certifies that this rule will not have a significant economic impact on a substantial number of small entities.
The RFA generally requires that, in connection with a final rulemaking, an agency prepare a final regulatory flexibility analysis that describes the impact of the final rule on small entities.
As of March 31, 2012, there were approximately 2,571 small FDIC-supervised banks, which include 2,410 state nonmember banks and 161 state-chartered savings banks. The FDIC analyzed the 2010 Home Mortgage Disclosure Act
The three requirements
1. Requiring an appraisal in connection with real estate financial transactions that previously did not require an appraisal,
2. mandating that the appraiser conduct a physical visit to the interior of the property, and
3. requiring a second appraisal at the lender's expense in certain situations.
As for the first potential impact, the FDIC notes that Part 323 of the FDIC Rules and Regulations
As for the second potential impact, the final rule's requirement affects a lender only to the extent that a lender must instruct the appraiser to conduct a physical visit of the interior of the mortgaged property. USPAP and title XI of FIRREA, and the regulations prescribed thereunder, do not require appraisers to perform on-site visits. Instead, USPAP requires appraisers to include a certification which clearly states whether the appraiser has or has not personally inspected the subject property. During informal outreach conducted by the Agencies, outreach participants indicated that many creditors require appraisers to perform a physical inspection of the mortgaged property. This requirement is documented in the
As for the third potential impact, the final rule's requirement to conduct a second appraisal for certain transactions should not affect many FDIC-supervised banks. As previously indicated, FDIC-supervised banks that meet the definition of a small entity originated an average of less than eight HPMLs each in 2010. According to estimates provided by FHFA, about 5 percent of single-family property sales in 2010 reflected situations in which the same property had been sold within a 180-day period. This information shows that most small FDIC-supervised banks will have to obtain a second appraisal for a nominal number of transactions at the bank's expense. The estimated cost of a second appraisal is between $350 to $600.
In sum, the FDIC believes that the final rule will not have a significant economic impact on a substantial number of small entities that it regulates in light of the fact that: (1) Part 323 already requires FDIC-supervised depository institutions to obtain some type of valuation for real estate-related financial transactions; (2) the
The final rule applies only to institutions in the primary mortgage market that originate mortgage loans. FHFA's regulated entities—Fannie Mae, Freddie Mac, and the Federal Home Loan Banks—operate in the secondary mortgage markets. In addition, these entities do not come within the meaning of small entities as defined in the Regulatory Flexibility Act.
The RFA generally requires that, in connection with a final rule, an agency prepare and make available for public comment a final regulatory flexibility analysis that describes the impact of the final rule on small entities.
NCUA staff analyzed the 2010 Home Mortgage Disclosure Act (HMDA) dataset to determine how many loans by federally insured credit unions (FICUs) might qualify as HPMLs under section 129H of TILA.
As previously discussed, section 1471 of the Dodd-Frank Act
• Obtaining a written appraisal performed by a certified or licensed appraiser who conducts a physical property visit of the interior of the property.
• Obtaining an additional appraisal from a different certified or licensed appraiser if the HPML finances the purchase or acquisition of a property from a seller at a higher price than the seller paid, within 180 days of the seller's purchase or acquisition. The additional appraisal must include an analysis of the difference in sale prices, changes in market conditions, and any improvements made to the property between the date of the previous sale and the current sale.
• Providing the applicant, at the time of the initial mortgage application, with a statement that any appraisal prepared for the mortgage is for the sole use of the creditor, and that the applicant may choose to have a separate appraisal conducted at the applicant's expense.
• Providing the applicant with one copy of each appraisal conducted in accordance with TILA section 129H without charge, at least three (3) days prior to the transaction closing date.
The final rule implements the appraisal requirements of section 1471 of the Dodd-Frank Act. Part 722 of NCUA's regulations
The final rule will supersede this exemption, resulting in FICUs having to obtain an appraisal for a HPML transaction regardless of the transaction amount. The requirement to obtain an appraisal rather than an evaluation does not pose a new burden to financial institutions, as they are required by part 722 to obtain some type of valuation of the mortgaged property. The final rule merely limits the type of permissible valuations to an appraisal for HPMLs.
The final rule's requirement to conduct a physical visit of the interior of the mortgaged property potentially adds an additional burden to the appraiser. The USPAP and title XI of FIRREA and the regulations prescribed thereunder do not require appraisers to perform on-site visits. Instead, USPAP requires appraisers to include a certification which clearly states whether the appraiser has or has not personally inspected the subject property. During informal outreach conducted by the Agencies, outreach participants indicated that many creditors require appraisers to perform a physical inspection of the mortgaged property. This requirement is documented in the
In light of the fact that few loans made by FICUs would qualify as HPMLs, the fact that many creditors already require that an appraiser conduct an interior inspection of mortgage collateral property in connection with an appraisal; the fact that requiring an interior inspection would add a relatively small amount to the cost of an appraisal; and the various exemptions and exclusions from the requirements provided in the rule, NCUA believes the final rule will not have a significant economic impact on small FICUs.
For the reasons provided above, NCUA certifies that the final rule will
Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order to adhere to fundamental federalism principles. This final rule applies to Federally insured credit unions and will not have a substantial direct effect on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. NCUA has determined that this final rule does not constitute a policy that has federalism implications for purposes of the Executive Order.
NCUA has determined this final rule will not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, 1999, Public Law 105–277, 112 Stat. 2681 (1998).
The Small Business Regulatory Enforcement Fairness Act of 1996
Pursuant to section 605(b) of the Regulatory Flexibility Act, 5 U.S.C. 605(b) (RFA), the regulatory flexibility analysis otherwise required under section 603 of the RFA is not required if the agency certifies that the final rule will not, if promulgated, have a significant economic impact on a substantial number of small entities (defined for purposes of the RFA to include banks, savings institutions and other depository credit intermediaries with assets less than or equal to $175 million
Section 1471 of the Dodd-Frank Act establishes a new TILA section 129H, which sets forth appraisal requirements applicable to higher-priced mortgage loans. A “higher-priced mortgage” generally is a closed-end consumer loan secured by a principal dwelling with an APR that exceeds the APOR by 1.5 percent for first-lien loans with a principal amount below the conforming loan limit, 2.5 percent for first-lien jumbo loans, or 3.5 percent for subordinate-liens. The definition of higher-priced mortgage loan expressly excludes qualified mortgages, as defined in TILA section 129C, as well as reverse mortgage loans that are qualified mortgages as defined in TILA section 129C.
Specifically, section 129H does not permit a creditor to extend credit in the form of a higher-priced mortgage loan to any consumer without first:
• Obtaining a written appraisal performed by a certified or licensed appraiser who conducts a physical property visit of the interior of the property.
• Obtaining an additional written appraisal from a different certified or licensed appraiser if the purpose of the higher-risk mortgage loan is to finance the purchase or acquisition of a mortgaged property from a seller within 180 days of the purchase or acquisition of the property by that seller at a price that was lower than the current sale price of the property. The additional written appraisal must include an analysis of the difference in sale prices, changes in market conditions, and any improvements made to the property between the date of the previous sale and the current sale.
• Providing the applicant, at the time of the initial mortgage application, with a statement that any written appraisal prepared for the mortgage is for the sole use of the creditor, and that the applicant may choose to have a separate appraisal conducted at the applicant's expense.
• Providing the applicant with one copy of each appraisal conducted in accordance with TILA section 129H without charge, at least three (3) days prior to the transaction closing date.
The OCC currently supervises 1,926 banks (1,262 commercial banks, 65 trust companies, 552 federal savings associations, and 47 branches or agencies of foreign banks). We estimate that less than 1,400 of the banks supervised by the OCC are currently originating one- to four-family residential mortgage loans. Approximately 772 OCC supervised banks are small entities based on the SBA's definition of small entities for RFA purposes. Of these, the OCC estimates that 465 banks originate mortgages and therefore may be impacted by the final rule.
The OCC classifies the economic impact of total costs on a bank as significant if the total costs in a single year are greater than 5 percent of total salaries and benefits, or greater than 2.5 percent of total non-interest expense. The OCC estimates that the average cost per small bank will range from a lower bound of approximately $10,000 to an upper bound of approximately $18,000. Using the upper bound cost estimate, we believe the final rule will have a significant economic impact on three small banks, which is not a substantial number.
Therefore, we believe the final rule will not have a significant economic impact on a substantial number of small entities. The OCC certifies that the Final Rule would not, if promulgated, have a significant economic impact on a substantial number of small entities.
Section 202 of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532), requires the OCC to prepare a budgetary impact statement before promulgating a rule that includes a Federal mandate that may result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year (adjusted annually for inflation). The OCC has determined that this final rule will not result in expenditures by state, local, and tribal governments, or the private sector, of $100 million or more in any one year. Accordingly, the OCC has not prepared a budgetary impact statement.
Certain provisions of this final rule contain “collection of information” requirements within the meaning of the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501
The collection of information requirements in this final rule are found in paragraphs (c)(3)(i), (c)(3)(ii), (c)(4), (c)(5), and (c)(6) of 12 CFR 1026.35. This information is required to protect consumers and promote the safety and soundness of creditors making HPMLs subject to 12 CFR 1026.35(c). This information is used by creditors to evaluate real estate collateral securing HPMLs subject to 12 CFR 1026.35(c) and by consumers entering these transactions. The collections of information are mandatory for creditors making HPMLs subject to 12 CFR 1026.35(c). The final rule requires that, within three business days of application, a creditor provide a disclosure that informs consumers of the purpose of the appraisal, that the creditor will provide the consumer a copy of any appraisal, and that the consumer may choose to have a separate appraisal conducted at the expense of the consumer (Initial Appraisal Disclosure).
A creditor is required to obtain an additional appraisal (Additional Written Appraisal) for a HPML that is subject to 12 CFR 1026.35(c) if (1) the seller acquired the property securing the loan 90 or fewer days prior to the date of the consumer's agreement to acquire the property and the resale price exceeds the seller's acquisition price by more than 10 percent; or (2) the seller acquired the property securing the loan 91 to 180 days prior to the date of the consumer's agreement to acquire the property and the resale price exceeds the seller's acquisition price by more than 20 percent.
In the proposal, the Agencies proposed a Calculation of Estimated Burden based on the proposed requirements. The Agencies received one comment from a bank in response to the PRA estimate in the proposed rule. The commenter asserted that the Agencies' proposed PRA estimates to comply with the new requirements were understated, but the commenter did not provide alternative estimates. The Agencies recognize that the amount of time required of institutions to comply with the requirements may vary; however, the Agencies continue to believe that estimates provided are reasonable averages.
The requirements provided in the final rule are substantially similar to those provided in the proposed rule. Based upon data available to the Bureau as described in its section 1022 analysis above and in the table below, the estimated burdens allocated to the Bureau are revised from the proposal to reflect an institution count based upon updated data and reduced to reflect those exemptions in the final rule for which the Bureau has identified data. Because these data were unavailable to the other Agencies before finalizing this PRA section, the other Agencies did not adjust the calculations to account for the exempted transactions provided in the final rule. Accordingly, the estimated burden calculations in the table below are overstated.
For the Initial Appraisal Disclosure, the creditor is required to provide a short, written disclosure within three days of application. Because the disclosure is classified as a warning label supplied by the Federal government, the Agencies are assigning it no burden for purposes of this PRA analysis.
The estimated burden for the Written Appraisal requirements includes the creditor's burden of reviewing the Written Appraisal in order to satisfy the safe harbor criteria set forth in the rule and providing a copy of the Written Appraisal to the consumer. Additionally, as discussed above, an Additional Written Appraisal containing additional analyses is required in certain circumstances. The Additional Written Appraisal must meet the standards of the Written Appraisal. The Additional Written Appraisal is also required to be prepared by a certified or licensed appraiser different from the appraiser performing the Written Appraisal, and a copy of the Additional Written Appraisal must be provided to the consumer. The creditor must separately review the Additional Written Appraisal in order to qualify for
The Agencies estimate that respondents will take, on average, 15 minutes for each HPML that is subject to 12 CFR 1026.35(c) to review the Written Appraisal and to provide a copy of the Written Appraisal. The Agencies estimate further that respondents will take, on average, 15 minutes for each HPML that is subject to 12 CFR 1026.35(c) to investigate and verify the need for an Additional Written Appraisal and, where necessary, an additional 15 minutes to review the Additional Written Appraisal and to provide a copy of the Additional Written Appraisal. For the small fraction of loans requiring an Additional Written Appraisal, the burden is similar to that of the Written Appraisal. The following table summarizes these burden estimates.
Finally, respondents
The Agencies have a continuing interest in the public's opinions of our collections of information. At any time, comments regarding the burden estimate, or any other aspect of this collection of information, including suggestions for reducing the burden, may be sent to the OMB desk officer for the Agencies by mail to U.S. Office of Management and Budget, Office of Information and Regulatory Affairs, Washington, DC 20503, or by the internet to
The final rule does not contain any collections of information applicable to the FHFA, requiring review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501,
Section 1400 of the Dodd Frank Act requires this rule to take effect not later than 12 months after the date of issuance of the final rule. This rule is issued on January 18, 2013 and will become effective on January 18, 2014. Section 302 of the Riegle Community Development and Regulatory Improvement Act of 1994 (“RCDRIA”) requires that, subject to certain exceptions, regulations issued by the OCC, the Board and the FDIC that impose additional reporting, disclosure, or other requirements on insured depository institutions, shall take effect on the first day of a calendar quarter which begins on or after the date on which the regulations are published in final form. This effective date requirement does not apply if the issuing agency finds for good cause that the regulation should become effective before such time. 12 U.S.C. 4802.
The OCC, the Board and the FDIC find that good cause exists to establish an effective date for this rule other than the first date of a calendar quarter, specifically January 18, 2014. This rule incorporates key definitions from, and is designed to accommodate combined disclosures with, other new mortgage-related rules being issued by the Bureau that also have effective dates on and around January 18, 2014. The consistent application of these rules will permit depository institutions to implement the systems, policies and procedures required to comply with this group of regulations in a coordinated and efficient way. In addition, insured depository institutions wishing to comply at the beginning of a calendar quarter prior to the effective date retain the flexibility to do so.
Appraisal, Appraiser, Banks, Banking, Consumer protection, Credit, Mortgages, National banks, Reporting and recordkeeping requirements, Savings associations, Truth in Lending.
Appraisals, Mortgages, Reporting and recordkeeping requirements, Savings associations, Truth in Lending.
Advertising, Appraisal, Appraiser, Consumer protection, Credit, Federal Reserve System, Mortgages, Reporting and recordkeeping requirements, Truth in lending.
Appraisal, Credit, Credit unions, Mortgages, Reporting and recordkeeping requirements.
Advertising, Appraisal, Appraiser, Banking, Banks, Consumer protection, Credit, Credit unions, Mortgages, National banks, Reporting and recordkeeping requirements, Savings associations, Truth in lending.
Government sponsored enterprises, Mortgages, Appraisals.
For the reasons set forth in the preamble, the OCC amends 12 CFR parts 34 and 164, as follows:
12 U.S.C. 1
(a)
(b)
(1) By 1.5 or more percentage points, for a loan secured by a first lien with a principal obligation at consummation that does not exceed the limit in effect as of the date the transaction's interest rate is set for the maximum principal obligation eligible for purchase by Freddie Mac;
(2) By 2.5 or more percentage points, for a loan secured by a first lien with a principal obligation at consummation that exceeds the limit in effect as of the date the transaction's interest rate is set for the maximum principal obligation eligible for purchase by Freddie Mac; or
(3) By 3.5 or more percentage points, for a loan secured by a subordinate lien.
(c)
(d)
(a) Creditor has the same meaning as in 12 CFR 1026.2(a)(17).
(b) Higher-priced mortgage loan has the same meaning as in 12 CFR 1026.35(a)(1).
(c) Reverse mortgage has the same meaning as in 12 CFR 1026.33(a).
(a)
(1)
(2)
(3)
(4)
(b)
(1) A qualified mortgage as defined in 12 CFR 1026.43(e).
(2) A transaction secured by a new manufactured home.
(3) A transaction secured by a mobile home, boat, or trailer.
(4) A transaction to finance the initial construction of a dwelling.
(5) A loan with a maturity of 12 months or less, if the purpose of the loan is a “bridge” loan connected with the acquisition of a dwelling intended to become the consumer's principal dwelling.
(6) A reverse-mortgage transaction subject to 12 CFR 1026.33(a).
(c)
(2)
(i) Orders that the appraiser perform the appraisal in conformity with the Uniform Standards of Professional Appraisal Practice and title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended (12 U.S.C. 3331
(ii) Verifies through the National Registry that the appraiser who signed the appraiser's certification was a certified or licensed appraiser in the State in which the appraised property is located as of the date the appraiser signed the appraiser's certification;
(iii) Confirms that the elements set forth in appendix A to this subpart are addressed in the written appraisal; and
(iv) Has no actual knowledge contrary to the facts or certifications contained in the written appraisal.
(d)
(i) The seller acquired the property 90 or fewer days prior to the date of the consumer's agreement to acquire the property and the price in the consumer's agreement to acquire the property exceeds the seller's acquisition price by more than 10 percent; or
(ii) The seller acquired the property 91 to 180 days prior to the date of the consumer's agreement to acquire the property and the price in the consumer's agreement to acquire the property exceeds the seller's acquisition price by more than 20 percent.
(2)
(3)
(4)
(i) The difference between the price at which the seller acquired the property and the price that the consumer is obligated to pay to acquire the property, as specified in the consumer's agreement to acquire the property from the seller;
(ii) Changes in market conditions between the date the seller acquired the property and the date of the consumer's agreement to acquire the property; and
(iii) Any improvements made to the property between the date the seller acquired the property and the date of the consumer's agreement to acquire the property.
(5)
(6)
(ii)
(7)
(i) From a local, State or Federal government agency;
(ii) From a person who acquired title to the property through foreclosure, deed-in-lieu of foreclosure, or other similar judicial or non-judicial procedure as a result of the person's exercise of rights as the holder of a defaulted mortgage loan;
(iii) From a non-profit entity as part of a local, State, or Federal government program under which the non-profit entity is permitted to acquire title to single-family properties for resale from a seller who acquired title to the property through the process of foreclosure, deed-in-lieu of foreclosure, or other similar judicial or non-judicial procedure;
(iv) From a person who acquired title to the property by inheritance or pursuant to a court order of dissolution of marriage, civil union, or domestic partnership, or of partition of joint or marital assets to which the seller was a party;
(v) From an employer or relocation agency in connection with the relocation of an employee;
(vi) From a servicemember, as defined in 50 U.S.C. App. 511(1), who received a deployment or permanent change of station order after the servicemember purchased the property;
(vii) Located in an area designated by the President as a federal disaster area, if and for as long as the Federal financial institutions regulatory agencies, as defined in 12 U.S.C. 3350(6), waive the requirements in title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended (12 U.S.C. 3331
(viii) Located in a rural county, as defined in 12 CFR 1026.35(b)(2)(iv)(A).
(e)
(2)
(f)
(2)
(i) No later than three business days prior to consummation of the loan; or
(ii) In the case of a loan that is not consummated, no later than 30 days after the creditor determines that the loan will not be consummated.
(3)
(4)
(g)
To qualify for the safe harbor provided in § 34.203(c)(2), a creditor must confirm that the written appraisal:
1. Identifies the creditor who ordered the appraisal and the property and the interest being appraised.
2. Indicates whether the contract price was analyzed.
3. Addresses conditions in the property's neighborhood.
4. Addresses the condition of the property and any improvements to the property.
5. Indicates which valuation approaches were used, and includes a reconciliation if more than one valuation approach was used.
6. Provides an opinion of the property's market value and an effective date for the opinion.
7. Indicates that a physical property visit of the interior of the property was performed.
8. Includes a certification signed by the appraiser that the appraisal was prepared in accordance with the requirements of the Uniform Standards of Professional Appraisal Practice.
9. Includes a certification signed by the appraiser that the appraisal was prepared in accordance with the requirements of title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended (12 U.S.C. 3331
A creditor acts with reasonable diligence under § 34.203(d)(6)(i) if the creditor bases its determination on information contained in written source documents, such as:
1. A copy of the recorded deed from the seller.
2. A copy of a property tax bill.
3. A copy of any owner's title insurance policy obtained by the seller.
4. A copy of the RESPA settlement statement from the seller's acquisition (
5. A property sales history report or title report from a third-party reporting service.
6. Sales price data recorded in multiple listing services.
7. Tax assessment records or transfer tax records obtained from local governments.
8. A written appraisal performed in compliance with § 34.203(c)(1) for the same transaction.
9. A copy of a title commitment report detailing the seller's ownership of the property, the date it was acquired, or the price at which the seller acquired the property.
10. A property abstract.
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1.
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3.
1.
1.
1.
1.
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2.
1.
1.
1.
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3.
i. Assume a creditor orders and reviews the results of a title search, which shows that a prior sale occurred between 91 and 180 days ago, but not the price paid in that sale. Thus, based on the title search, the creditor would not be able to determine whether the price the consumer is obligated to pay under the consumer's acquisition agreement is more than 20 percent higher than the seller's acquisition price, pursuant to § 34.203(d)(1)(ii). Before extending a higher-priced mortgage loan subject to the appraisal requirements of § 34.203, the creditor must either: perform additional diligence to ascertain the seller's acquisition price and, based on this information, determine whether two written appraisals are required; or obtain two written appraisals in compliance with § 34.203(d)(6).
ii. Assume a creditor reviews the results of a title search indicating that the last recorded purchase was more than 180 days before the consumer's agreement to acquire the property. Assume also that the creditor subsequently receives a written appraisal indicating that the seller acquired the property between 91 and 180 days before the consumer's agreement to acquire the property. In this case, unless one of these sources is clearly wrong on its face, the creditor would not be able to determine whether the seller acquired the property within 180 days of the date of the consumer's agreement to acquire the property from the seller, pursuant to § 34.203(d)(1)(ii). Before extending a higher-priced mortgage loan subject to the appraisal requirements of § 34.203, the creditor must either: perform additional diligence to ascertain the seller's acquisition date and, based on this information, determine whether two written appraisals are required; or obtain two written appraisals in compliance with § 34.203(d)(6).
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12 U.S.C.1462, 1462a, 1463,1464, 1828(m), 3331
(a)
(b)
(c)
Federal savings associations and their operating subsidiaries may not extend credit in the form of a higher-priced mortgage loan without complying with the requirements of Section 129H of the Truth in Lending Act (15 U.S.C. 1639h) and the implementing regulations adopted by the OCC at 12 CFR part 34, subpart G.
For the reasons stated above, the Board of Governors of the Federal Reserve System amends Regulation Z, 12 CFR part 226, as follows:
12 U.S.C. 3806; 15 U.S.C. 1604, 1637(c)(5), 1639(l), and 1639h; Pub. L. 111–24, section 2, 123 Stat. 1734; Pub. L. 111–203, 124 Stat. 1376.
(a)
(1)
(2)
(3)
(i) By 1.5 or more percentage points, for a loan secured by a first lien with a principal obligation at consummation that does not exceed the limit in effect as of the date the transaction's interest rate is set for the maximum principal obligation eligible for purchase by Freddie Mac;
(ii) By 2.5 or more percentage points, for a loan secured by a first lien with a principal obligation at consummation that exceeds the limit in effect as of the date the transaction's interest rate is set for the maximum principal obligation eligible for purchase by Freddie Mac; or
(iii) By 3.5 or more percentage points, for a loan secured by a subordinate lien.
(4)
(5)
(6)
(b)
(1) A qualified mortgage as defined in 12 CFR 1026.43(e).
(2) A transaction secured by a new manufactured home.
(3) A transaction secured by a mobile home, boat, or trailer.
(4) A transaction to finance the initial construction of a dwelling.
(5) A loan with maturity of 12 months or less, if the purpose of the loan is a “bridge” loan connected with the acquisition of a dwelling intended to become the consumer's principal dwelling.
(6) A reverse-mortgage transaction subject to 12 CFR 1026.33(a).
(c)
(2)
(i) Orders that the appraiser perform the appraisal in conformity with the Uniform Standards of Professional Appraisal Practice and title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended (12 U.S.C. 3331
(ii) Verifies through the National Registry that the appraiser who signed the appraiser's certification was a certified or licensed appraiser in the State in which the appraised property is located as of the date the appraiser signed the appraiser's certification;
(iii) Confirms that the elements set forth in appendix N to this part are addressed in the written appraisal; and
(iv) Has no actual knowledge contrary to the facts or certifications contained in the written appraisal.
(d)
(i) The seller acquired the property 90 or fewer days prior to the date of the consumer's agreement to acquire the property and the price in the consumer's agreement to acquire the property exceeds the seller's acquisition price by more than 10 percent; or
(ii) The seller acquired the property 91 to 180 days prior to the date of the consumer's agreement to acquire the property and the price in the consumer's agreement to acquire the property exceeds the seller's acquisition price by more than 20 percent.
(2)
(3)
(4)
(i) The difference between the price at which the seller acquired the property and the price that the consumer is obligated to pay to acquire the property, as specified in the consumer's agreement to acquire the property from the seller;
(ii) Changes in market conditions between the date the seller acquired the property and the date of the consumer's agreement to acquire the property; and
(iii) Any improvements made to the property between the date the seller acquired the property and the date of the consumer's agreement to acquire the property.
(5)
(6)
(ii)
(7)
(i) From a local, State or Federal government agency;
(ii) From a person who acquired title to the property through foreclosure, deed-in-lieu of foreclosure, or other similar judicial or non-judicial procedure as a result of the person's exercise of rights as the holder of a defaulted mortgage loan;
(iii) From a non-profit entity as part of a local, State, or Federal government program under which the non-profit entity is permitted to acquire title to single-family properties for resale from a seller who acquired title to the property through the process of foreclosure, deed-in-lieu of foreclosure, or other similar judicial or non-judicial procedure;
(iv) From a person who acquired title to the property by inheritance or pursuant to a court order of dissolution of marriage, civil union, or domestic partnership, or of partition of joint or marital assets to which the seller was a party;
(v) From an employer or relocation agency in connection with the relocation of an employee;
(vi) From a servicemember, as defined in 50 U.S.C. App. 511(1), who received a deployment or permanent change of station order after the servicemember purchased the property;
(vii) Located in an area designated by the President as a federal disaster area, if and for as long as the Federal financial institutions regulatory agencies, as defined in 12 U.S.C. 3350(6), waive the requirements in title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended (12 U.S.C. 3331
(viii) Located in a rural county, as defined in 12 CFR 1026.35(b)(2)(iv)(A).
(e)
(2)
(f)
(2)
(i) No later than three business days prior to consummation of the loan; or
(ii) In the case of a loan that is not consummated, no later than 30 days after the creditor determines that the loan will not be consummated.
(3)
(4)
(g)
To qualify for the safe harbor provided in § 226.43(c)(2), a creditor must confirm that the written appraisal:
1. Identifies the creditor who ordered the appraisal and the property and the interest being appraised.
2. Indicates whether the contract price was analyzed.
3. Addresses conditions in the property's neighborhood.
4. Addresses the condition of the property and any improvements to the property.
5. Indicates which valuation approaches were used, and includes a reconciliation if more than one valuation approach was used.
6. Provides an opinion of the property's market value and an effective date for the opinion.
7. Indicates that a physical property visit of the interior of the property was performed.
8. Includes a certification signed by the appraiser that the appraisal was prepared in accordance with the requirements of the Uniform Standards of Professional Appraisal Practice.
9. Includes a certification signed by the appraiser that the appraisal was prepared in accordance with the requirements of title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended (12 U.S.C. 3331
A creditor acts with reasonable diligence under § 226.43(d)(6)(i) if the creditor bases its determination on information contained in written source documents, such as:
1. A copy of the recorded deed from the seller.
2. A copy of a property tax bill.
3. A copy of any owner's title insurance policy obtained by the seller.
4. A copy of the RESPA settlement statement from the seller's acquisition (
5. A property sales history report or title report from a third-party reporting service.
6. Sales price data recorded in multiple listing services.
7. Tax assessment records or transfer tax records obtained from local governments.
8. A written appraisal performed in compliance with § 226.43(c)(1) for the same transaction.
9. A copy of a title commitment report detailing the seller's ownership of the property, the date it was acquired, or the price at which the seller acquired the property.
10. A property abstract.
The additions read as follows:
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i. Assume a creditor orders and reviews the results of a title search, which shows that a prior sale occurred between 91 and 180 days ago, but not the price paid in that sale. Thus, based on the title search, the creditor would not be able to determine whether the price the consumer is obligated to pay under the consumer's acquisition agreement is more than 20 percent higher than the seller's acquisition price, pursuant to § 226.43(d)(1)(ii). Before extending a higher-priced mortgage loan subject to the appraisal requirements of § 226.43, the creditor must either: perform additional diligence to ascertain the seller's acquisition price and, based on this information, determine whether two written appraisals are required; or obtain two written appraisals in compliance with § 226.43(d).
ii. Assume a creditor reviews the results of a title search indicating that the last recorded purchase was more than 180 days before the consumer's agreement to acquire the property. Assume also that the creditor subsequently receives a written appraisal indicating that the seller acquired the property between 91 and 180 days before the consumer's agreement to acquire the property. In this case, unless one of these sources is clearly wrong on its face, the creditor would not be able to determine whether the seller acquired the property within 180 days of the date of the consumer's agreement to acquire the property from the seller, pursuant to § 226.43(d)(1)(ii). Before extending a higher-priced mortgage loan subject to the appraisal requirements of § 226.43, the creditor must either: (1) Perform additional diligence to ascertain the seller's acquisition date and, based on this information, determine whether two written appraisals are required; or (2) obtain two written appraisals in compliance with § 226.43(d).
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For the reasons discussed above, NCUA amends 12 CFR part 722 as follows:
12 U.S.C. 1766, 1789 and 3339. Section 722.3(f) is also issued under 15 U.S.C. 1639h.
(f)
For the reasons set forth in the preamble, the Bureau amends Regulation Z, 12 CFR part 1026, as follows:
12 U.S.C. 2601; 2603–2605, 2607, 2609, 2617, 5511, 5512, 5532, 5581; 15 U.S.C. 1601 et seq.
(a)
(1) “Higher-priced mortgage loan”
(i) By 1.5 or more percentage points, for a loan secured by a first lien with a principal obligation at consummation that does not exceed the limit in effect as of the date the transaction's interest rate is set for the maximum principal obligation eligible for purchase by Freddie Mac;
(ii) By 2.5 or more percentage points, for a loan secured by a first lien with a principal obligation at consummation that exceeds the limit in effect as of the date the transaction's interest rate is set for the maximum principal obligation eligible for purchase by Freddie Mac; or
(iii) By 3.5 or more percentage points, for a loan secured by a subordinate lien.
(c)
(i)
(ii)
(iii)
(iv)
(2)
(i) A qualified mortgage as defined in 12 CFR 1026.43(e).
(ii) A transaction secured by a new manufactured home.
(iii) A transaction secured by a mobile home, boat, or trailer.
(iv) A transaction to finance the initial construction of a dwelling.
(v) A loan with maturity of 12 months or less, if the purpose of the loan is a “bridge” loan connected with the acquisition of a dwelling intended to become the consumer's principal dwelling.
(vi) A reverse-mortgage transaction subject to 12 CFR 1026.33(a).
(3)
(ii)
(A) Orders that the appraiser perform the appraisal in conformity with the Uniform Standards of Professional Appraisal Practice and title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended (12 U.S.C. 3331
(B) Verifies through the National Registry that the appraiser who signed the appraiser's certification was a certified or licensed appraiser in the State in which the appraised property is located as of the date the appraiser signed the appraiser's certification;
(C) Confirms that the elements set forth in appendix N to this part are addressed in the written appraisal; and
(D) Has no actual knowledge contrary to the facts or certifications contained in the written appraisal.
(4)
(A) The seller acquired the property 90 or fewer days prior to the date of the consumer's agreement to acquire the property and the price in the consumer's agreement to acquire the property exceeds the seller's acquisition price by more than 10 percent; or
(B) The seller acquired the property 91 to 180 days prior to the date of the consumer's agreement to acquire the property and the price in the consumer's agreement to acquire the
(ii)
(iii)
(iv)
(A) The difference between the price at which the seller acquired the property and the price that the consumer is obligated to pay to acquire the property, as specified in the consumer's agreement to acquire the property from the seller;
(B) Changes in market conditions between the date the seller acquired the property and the date of the consumer's agreement to acquire the property; and
(C) Any improvements made to the property between the date the seller acquired the property and the date of the consumer's agreement to acquire the property.
(v)
(vi)
(B)
(vii)
(A) From a local, State or Federal government agency;
(B) From a person who acquired title to the property through foreclosure, deed-in-lieu of foreclosure, or other similar judicial or non-judicial procedure as a result of the person's exercise of rights as the holder of a defaulted mortgage loan;
(C) From a non-profit entity as part of a local, State, or Federal government program under which the non-profit entity is permitted to acquire title to single-family properties for resale from a seller who acquired title to the property through the process of foreclosure, deed-in-lieu of foreclosure, or other similar judicial or non-judicial procedure;
(D) From a person who acquired title to the property by inheritance or pursuant to a court order of dissolution of marriage, civil union, or domestic partnership, or of partition of joint or marital assets to which the seller was a party;
(E) From an employer or relocation agency in connection with the relocation of an employee;
(F) From a servicemember, as defined in 50 U.S.C. App. 511(1), who received a deployment or permanent change of station order after the servicemember purchased the property;
(G) Located in an area designated by the President as a federal disaster area, if and for as long as the Federal financial institutions regulatory agencies, as defined in 12 U.S.C. 3350(6), waive the requirements in title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended (12 U.S.C. 3331
(H) Located in a rural county, as defined in 12 CFR 1026.35(b)(2)(iv)(A).
(5)
(ii)
(6)
(ii)
(A) No later than three business days prior to consummation of the loan; or
(B) In the case of a loan that is not consummated, no later than 30 days after the creditor determines that the loan will not be consummated.
(iii)
(iv)
(7)
To qualify for the safe harbor provided in § 1026.35(c)(3)(ii), a creditor must confirm that the written appraisal:
1. Identifies the creditor who ordered the appraisal and the property and the interest being appraised.
2. Indicates whether the contract price was analyzed.
3. Addresses conditions in the property's neighborhood.
4. Addresses the condition of the property and any improvements to the property.
5. Indicates which valuation approaches were used, and includes a reconciliation if more than one valuation approach was used.
6. Provides an opinion of the property's market value and an effective date for the opinion.
7. Indicates that a physical property visit of the interior of the property was performed.
8. Includes a certification signed by the appraiser that the appraisal was prepared in accordance with the requirements of the Uniform Standards of Professional Appraisal Practice.
9. Includes a certification signed by the appraiser that the appraisal was prepared in accordance with the requirements of title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended (12 U.S.C. 3331
A creditor acts with reasonable diligence under § 1026.35(c)(4)(vi)(A) if the creditor bases its determination on information contained in written source documents, such as:
1. A copy of the recorded deed from the seller.
2. A copy of a property tax bill.
3. A copy of any owner's title insurance policy obtained by the seller.
4. A copy of the RESPA settlement statement from the seller's acquisition (
5. A property sales history report or title report from a third-party reporting service.
6. Sales price data recorded in multiple listing services.
7. Tax assessment records or transfer tax records obtained from local governments.
8. A written appraisal performed in compliance with § 1026.35(c)(3)(i) for the same transaction.
9. A copy of a title commitment report detailing the seller's ownership of the property, the date it was acquired, or the price at which the seller acquired the property.
10. A property abstract.
The revisions, additions, and removals read as follows:
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35(c)(3)(ii) Safe Harbor.
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i. Assume a creditor orders and reviews the results of a title search, which shows that a prior sale occurred between 91 and 180 days ago, but not the price paid in that sale. Thus, based on the title search, the creditor would not be able to determine whether the price the consumer is obligated to pay under the consumer's acquisition agreement is more than 20 percent higher than the seller's acquisition price, pursuant to § 1026.35(c)(4)(i)(B). Before extending a higher-priced mortgage loan subject to the appraisal requirements of § 1026.35(c), the creditor must either: (1) Perform additional diligence to ascertain the seller's acquisition price and, based on this information,
ii. Assume a creditor reviews the results of a title search indicating that the last recorded purchase was more than 180 days before the consumer's agreement to acquire the property. Assume also that the creditor subsequently receives a written appraisal indicating that the seller acquired the property between 91 and 180 days before the consumer's agreement to acquire the property. In this case, unless one of these sources is clearly wrong on its face, the creditor would not be able to determine whether the seller acquired the property within 180 days of the date of the consumer's agreement to acquire the property from the seller, pursuant to § 1026.35(c)(4)(i)(B). Before extending a higher-priced mortgage loan subject to the appraisal requirements of § 1026.35(c), the creditor must either: perform additional diligence to ascertain the seller's acquisition date and, based on this information, determine whether two written appraisals are required; or obtain two written appraisals in compliance with § 1026.35(c)(4).
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For the reasons stated in the
12 U.S.C. 4511(b), 4526, and 4617; 15 U.S.C. 1639h (TILA).
This subpart cross-references the requirement that creditors extending
Nothing in this subpart A shall be read to limit the authority of the Director of the Federal Housing Finance Agency to take supervisory or enforcement action, including action to address unsafe and unsound practices or conditions, or violations of law. In addition, nothing in this subpart A shall be read to limit the authority of the Director to impose requirements for any purchase of higher-priced mortgage loans by an Enterprise or a Federal Home Loan Bank, or acceptance of higher-priced mortgage loans as collateral to secure advances by a Federal Home Loan Bank.
This rule is being adopted by the FDIC jointly with the other agencies as mandated by section 129H of the Truth in Lending Act as added by section 1471 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
By order of the Board of Directors.
Fish and Wildlife Service, Interior.
Final rule.
We, the U.S. Fish and Wildlife Service (Service), designate critical habitat for
This rule becomes effective on March 15, 2013.
This final rule and the associated final economic analysis are available on the Internet at
The coordinates or plot points or both from which the maps included in the regulation are generated are included in the administrative record for this critical habitat designation and are available at
Jim Bartel, Field Supervisor, U.S. Fish and Wildlife Service, Carlsbad Fish and Wildlife Office, 6010 Hidden Valley Road, Suite 101, Carlsbad, CA 92011; telephone 760–431–9440; facsimile 760–431–5901. If you use a telecommunications device for the deaf (TDD), call the Federal Information Relay Service (FIRS) at 800–877–8339.
Why we need to publish a rule. This is a final rule to designate critical habitat for
We listed
The critical habitat areas we are designating in this rule constitute our current best assessment of the areas that meet the definition of critical habitat for
We have prepared an economic analysis of the designation of critical habitat. In order to consider economic impacts, we have prepared an analysis of the economic impacts of the critical habitat designation. We announced the availability of the draft economic analysis (DEA) in the
Peer review and public comment. We sought comments from independent specialists to ensure that our designation is based on scientifically sound data and analyses. We invited three knowledgeable individuals with scientific expertise to review our technical assumptions, analysis, and whether or not we had used the best available information. We received responses from two peer reviewers, who generally concurred with our methods and conclusions and provided additional information, clarifications, and suggestions to improve this final rule. Information we received from peer review is incorporated in this final revised designation. We also considered all comments and information received from the public during the comment period.
The following section summarizes the previous Federal actions since
At the time of listing, we determined that designation of critical habitat was “not prudent” (63 FR 53596). On November 15, 2001, the Center for Biological Diversity and the California Native Plant Society filed a lawsuit against the Secretary of the Interior and the Service challenging our not prudent determinations for eight plant taxa, including
The Center for Biological Diversity filed a lawsuit on January 14, 2009,
It is our intent to discuss in this final rule only those topics directly relevant to the revision of critical habitat for
Except when referencing statutory language, we refer to
To ensure clarity of habitat discussions in the remainder of this rule, in the following paragraphs we have included a description of the sand transport system that sustains the sand formations that form the basis of
Most of the sand in the northern Coachella Valley is derived from drainages within the Indio Hills, the San Bernardino Mountains, the Little San Bernardino Mountains, and the San Jacinto Mountains. This sand is moved into and through the valley by the sand transport system. The sand transport system consists of two main parts: (1) The fluvial (water) portion (headwaters, tributaries, and the stream channels within the various drainages surrounding Coachella Valley) and (2) the aeolian (wind) portion (predominantly westerly and northwesterly winds moving through the valley) (Griffiths
The water that forms the basis of the fluvial portion of the sand transport system in the Coachella Valley enters the system as precipitation during storm events (Griffiths
Fluvial sand transport areas are stream channels that convey sediment downstream to fluvial sand depositional areas. In the portions of the Coachella Valley containing Units 1, 2, and 3, very little erosion of parent rock or sediment deposits takes place in fluvial transport areas compared to areas upstream where the sediment is generated. In Unit 4, sediment is generated in the same area where fluvial sand transport occurs. Fluvial transport channels include portions of the lower reaches of San Gorgonio River and Snow Creek (Unit 1), Whitewater River (Unit 2), Mission Creek and Morongo Wash (Unit 3), and unnamed channels through the alluvial valley floor deposits (relatively flat areas (< 10 percent slope)) at the base of the Indio Hills (Unit 4). Fluvial sand transport areas do not provide habitat for
Fluvial sand depositional areas are broad, flat, depositional plains or channel terraces where sediment carried by fluvial sand transport channels is deposited (Griffiths
The aeolian portion of the sand transport system begins where the fluvial portion of the system ends. Northerly and northwesterly winds pick up sand-sized grains of sediment accumulated in fluvial sand depositional areas, and carry them south/southeast through the valley and into aeolian depositional areas where they form sand fields and dunes (Griffiths
Aeolian sand source areas are the portions of the fluvial depositional areas that are subject to wind erosion. Winds erode these sediment accumulations and carry sand across aeolian sand transport areas. Between flooding events, which replenish the sediment in fluvial sand depositional areas, sand available for aeolian transport can be depleted by wind erosion. Aeolian sand source areas provide habitat for
Sand eroded from the aeolian sand source areas is blown into and across the aeolian sand transport areas. Sand may accumulate in aeolian transport areas when ample sand is available in upwind source areas; conversely, aeolian transport areas may be depleted of sand when sand is lacking upwind. Aeolian sand transport areas provide habitat for
Sand carried by wind through the aeolian sand transport areas is deposited when the velocity of the wind decreases sufficiently. This occurs mainly where wind is slowed by vegetation (for example, honey mesquite in the Willow Hole area), other objects, or geological features. In general, sand formations (for example, sand dunes and sand fields) persist in aeolian sand depositional areas, whereas sand accumulations in transport areas are more ephemeral. Aeolian sand depositional areas provide habitat for
The fluvial and aeolian processes discussed above have been disrupted in many areas by development, alteration of stream flow, and the proliferation of nonnative plants. These threats to the persistence of
The sandy substrates suitable for
Dynamics of sandy substrates in the Coachella Valley are controlled by two main factors: (1) The supply of sand-sized sediment released, transported, and deposited by the fluvial system (water-transported); and (2) the rate of aeolian (windblown) transport (Griffiths
As discussed above, most of the suitable sandy habitats in the Coachella Valley are generated from several drainage basins in the San Bernardino, Little San Bernardino, and San Jacinto Mountains and the Indio Hills (Lancaster
The San Gorgonio Pass is between the two highest peaks in southern California: San Gorgonio Mountain (11,510 feet (ft) (3,508 meters (m))) to the north and San Jacinto Mountain (10,837 ft (3,303 m)) to the south. Westerly winds funneling through San Gorgonio Pass are the dominant mechanism by which aeolian sands are transported from bajadas and fluvial sand depositional areas to aeolian sand deposits in the Coachella Valley (Sharp and Saunders 1978, p. 12; Griffiths
In the notice announcing the availability of the draft economic analysis for public review (77 FR 28846, May 16, 2012), we made a correction to the proposed revised critical habitat for
Since publication of the proposed revised critical habitat rule for
Critical habitat is defined in section 3(5)(A) of the Act as:
(1) The specific areas within the geographical area occupied by the species, at the time it is listed in accordance with the Act, on which are found those physical or biological features
(a) Essential to the conservation of the species, and
(b) Which may require special management considerations or protection; and
(2) Specific areas outside the geographical area occupied by the species at the time it is listed, upon a determination that such areas are essential for the conservation of the species.
Conservation, as defined under section 3 of the Act, means to use and
Critical habitat receives protection under section 7 of the Act through the requirement that Federal agencies ensure, in consultation with the Service, that any action they authorize, fund, or carry out is not likely to result in the destruction or adverse modification of critical habitat. The designation of critical habitat does not affect land ownership or establish a refuge, wilderness, reserve, preserve, or other conservation area. Such designation does not allow the government or public to access private lands. Such designation does not require implementation of restoration, recovery, or enhancement measures by non-Federal landowners. Where a landowner requests Federal agency funding or authorization for an action that may affect a listed species or critical habitat, the consultation requirements of section 7(a)(2) of the Act would apply, but even in the event of a destruction or adverse modification finding, the obligation of the Federal action agency and the landowner is not to restore or recover the species, but to implement a reasonable and prudent alternative to avoid destruction or adverse modification of critical habitat.
Under section 3(5)(A)(i) of the Act's definition of critical habitat, areas within the geographical area occupied by the species at the time it was listed are included in a critical habitat designation if they contain physical or biological features (1) which are essential to the conservation of the species and (2) which may require special management considerations or protection. For these areas, critical habitat designations identify, to the extent known using the best scientific and commercial data available, those physical or biological features that are essential to the conservation of the species (such as space, food, cover, and protected habitat). In identifying those physical and biological features within an area, we focus on the principal biological or physical constituent elements (primary constituent elements such as roost sites, nesting grounds, seasonal wetlands, water quality, tide, soil type) that are essential to the conservation of the species. Primary constituent elements are those specific elements of the physical or biological features that provide for a species' life-history processes and are essential to the conservation of the species.
Under section 3(5)(A)(ii) of the Act's definition of critical habitat, we can designate critical habitat in areas outside the geographical area occupied by the species at the time it is listed, upon a determination that such areas are essential for the conservation of the species. For example, an area currently occupied by the species but that was not occupied at the time of listing may be essential for the conservation of the species and may be included in the critical habitat designation. We designate critical habitat in areas outside the geographical area occupied by a species only when a designation limited to its range would be inadequate to ensure the conservation of the species.
The geographical area occupied by
Section 4 of the Act requires that we designate critical habitat on the basis of the best scientific and commercial data available. Further, our Policy on Information Standards Under the Endangered Species Act (published in the
When we are determining which areas should be designated as critical habitat, our primary source of information is generally the information developed during the listing process for the species. Additional information sources may include the recovery plan for the species, articles in peer-reviewed journals, conservation plans developed by States and counties, scientific status surveys and studies, biological assessments, other unpublished materials, or experts' opinions or personal knowledge.
Habitat is dynamic, and species may move from one area to another over time. We recognize that critical habitat designated at a particular point in time may not include all of the habitat areas that we may later determine are necessary for the recovery of the species. For these reasons, a critical habitat designation does not signal that habitat outside the designated area is unimportant or may not be needed for recovery of the species. Areas that are important to the conservation of the species, both inside and outside the critical habitat designation, will continue to be subject to: (1) Conservation actions implemented under section 7(a)(1) of the Act, (2) regulatory protections afforded by the requirement in section 7(a)(2) of the Act for Federal agencies to insure their actions are not likely to jeopardize the continued existence of any endangered or threatened species, and (3) prohibitions described in section 9 of the Act. Federally funded or permitted projects affecting listed species outside their designated critical habitat areas may still result in jeopardy findings in some cases. These protections and conservation tools will continue to contribute to recovery of this species. Similarly, critical habitat designations made on the basis of the best available information at the time of designation will not control the direction and substance of future recovery plans, habitat conservation plans (HCPs), or other species conservation planning efforts if new information available at the time of these planning efforts calls for a different outcome.
In accordance with sections 3(5)(A)(i) and 4(b)(1)(A) of the Act and regulations
(1) Space for individual and population growth and for normal behavior;
(2) Food, water, air, light, minerals, or other nutritional or physiological requirements;
(3) Cover or shelter;
(4) Sites for breeding, reproduction, or rearing (or development) of offspring; and
(5) Habitats that are protected from disturbance or are representative of the historical, geographical, and ecological distributions of a species.
We derive the specific physical or biological features essential to
The specific physiological and soil nutritional needs of
Additionally, the taxon does not grow in some areas that appear to contain suitable habitat. For example,
The primary visitors of
Native solitary bees, which may be the natural pollinators of
In order to maintain adequate replenishment of sands into aeolian sand depositional areas, it is important that sand-transport corridors between fluvial and aeolian sand depositional areas remain unobstructed for wind passage. The strong wind energy in this region can also erode sands from wash margins and suitable
Under the Act and its implementing regulations, we are required to identify the physical or biological features essential to the conservation of
Based on our current knowledge of the physical or biological features and habitat characteristics required to sustain the taxon's life-history processes, we determine that the primary constituent element specific to
Sand formations associated with the sand transport system in Coachella Valley, California. These sand formations have the following features:
(a) They are active sand dunes, stabilized or partially stabilized sand dunes, active or stabilized sand fields (including hummocks forming on leeward sides of shrubs), ephemeral sand fields or dunes, and fluvial sand deposits on floodplain terraces of active washes.
(b) They are found within the fluvial sand depositional areas, and the aeolian sand source, transport, and depositional areas of the sand transport system.
(c) They comprise sand originating in the hills surrounding Coachella Valley and alluvial deposits at the base of the Indio Hills, which is moved into the valley by water (fluvial transport) and through the valley by wind (aeolian transport).
We consider the fluvial sand depositional areas and the aeolian sand source, transport, and depositional areas of the sand transport system described in (b) to be within the geographical area occupied by
With this designation of critical habitat, we identify the physical or biological features essential to the conservation of the taxon, focusing on the identification of the features' primary constituent element sufficient to support the life-history processes of the taxon.
When designating critical habitat, we assess whether the specific areas within the geographical area occupied by the species at the time of listing contain features that are essential to the conservation of the species and that may require special management considerations or protection. The features essential to the conservation of this taxon may require special management considerations or protection to reduce the following threats: direct and indirect effects of development (urban and recreational), nonnative plant species, unauthorized off-highway vehicle (OHV) impacts, mining and other activities or structures that may cause alteration of stream flow, and groundwater pumping.
The Coachella Valley continues to attract increasing numbers of people and associated urban development. Urban and recreational development can impact
Special management considerations or protection of the essential physical or biological features within critical habitat areas are needed to address the threats posed to
Preserving large areas of suitable habitat with intact wind and depositional regimes and preserving areas vital to the maintenance of the sand transport system are important to maintain existing habitat and prevent further habitat loss. Preserving a variety of different habitat types (for example, sand dunes, sand fields) throughout the range of the taxon should help maintain the genetic and demographic diversity (individuals in different age classes at any given time) of
Designing and orienting structures, infrastructure, and landscaping such that they minimize the blockage of sand movement will also help to prevent the disruption of the sand transport system and further habitat loss. For example, orienting a building so that the face of the building is at an oblique angle with the prevailing wind direction may allow more sand to move around the building than would occur if the face of the building were at a right angle with the direction of windblown sand movement. Planning development such that structures and landscaping are located outside of areas vital to sand transport will also help lessen the degradation of
Invasive nonnative plant species, such as
Management activities that could ameliorate these threats include, but are not limited to: Active removal of nonnative plant species and targeted herbicide application (provided herbicides can be shown not to negatively impact
Unauthorized OHV use may impact
The construction and operation of water percolation ponds, sand and gravel mines, and, to a lesser degree, dikes and debris dams can negatively impact
Management activities that could ameliorate the threats posed to
Hummocks (local accumulations of sand that form when sand accumulates around, and is held in place by, shrubs or clumps of vegetation) formed by
Management activities that could ameliorate the threats posed to
In summary, threats to
As required by section 4(b)(2) of the Act, we use the best scientific and commercial data available to designate critical habitat. We reviewed available information pertaining to the habitat requirements of the species. In accordance with the Act and its implementing regulation at 50 CFR 424.12(e), we considered whether designating additional areas—outside those currently occupied as well as those occupied at the time of listing—are necessary to ensure the conservation of the species. We relied on information in articles in peer-reviewed journals, the Coachella Valley MSHCP/NCCP, survey reports and other unpublished materials, and expert opinion or personal knowledge. We also used the model developed by the Coachella Valley Mountains Conservancy (CVMC) to help identify
We are designating critical habitat in areas within the geographical area occupied by the species at the time of listing in 1998. We also are designating specific areas outside the geographical area occupied by
Our use of a habitat model to help identify
“Because
Suitable habitat may be occupied by the taxon even if no plants appear above-ground for several years.
We also determined which areas outside the geographical area occupied by the taxon at the time of listing that provide for the fluvial transport of sand from areas where sediment is generated to fluvial depositional areas occupied by
We defined the boundaries of each unit using the steps outlined below:
(1) Potential suitable habitat for
(2) We analyzed lands covered by the Coachella Valley MSHCP/NCCP, and determined that
The modeled
(3) We added areas not covered under the Coachella Valley MSHCP/NCCP, but that have been determined by biologists familiar with the taxon, its habitat, and its distribution, to contain the physical or biological features essential to the conservation of the taxon (see the 2011 proposed critical habitat rule (76 FR 53224 (August 25, 2011)) for further discussion regarding these areas). The biologists used aerial map coverages, Service GIS data, and personal knowledge to determine these areas.
We determined that designating only those areas within the geographical area occupied at the time of listing (also identified as the occupied fluvial and aeolian depositional areas and intervening areas needed for aeolian sand transport, pollen and seed dispersal, and pollinator movement) would not sufficiently provide for the conservation of
(1) We used aerial imagery to determine where the main stream channels conveying sand to the fluvial sand depositional areas in Units 1, 2, and 3 (San Gorgonio River, Whitewater River, Snow Creek, Mission Creek, and Morongo Wash) are located, and used GIS software to draw polygons that define the extent of these streams.
We considered only the lower reaches of main stream channels (fluvial sand transport areas) that move sediment from the base of the surrounding mountains and hills into the fluvial depositional areas on the valley floor to be essential for the conservation of the taxon. If the lower reaches of any of these main stream channels are lost, sand transport to portions of the occupied
To determine the upstream extent of the fluvial sand transport areas, we used GIS data to determine where the ground slope of the main stream channels becomes greater than 10 percent. Griffiths
(2) The sand transport system moving sand into and through the Thousand Palms area (which contains Unit 4) differs from the system moving sand into and through Units 1, 2, and 3. In Unit 4, water moving through unnamed
In this revised critical habitat designation for
The critical habitat designation is defined by the map or maps, as modified by any accompanying regulatory text, presented at the end of this document in the rule portion. We include more detailed information on the boundaries of the critical habitat designation in the preamble of this document. We will make the coordinates or plot points or both on which each map is based available to the public on
We are designating as critical habitat lands that we have determined are within the geographical area occupied at the time of listing and contain sufficient elements of the physical or biological features to support life-history processes essential to the conservation of the taxon, and lands outside of the geographical area occupied at the time of listing that we have determined are essential for the conservation of
We are designating four units as critical habitat for
We present brief descriptions of all units, and reasons why they meet the definition of critical habitat, for
Unit 1 consists of 1,172 ac (474 ha) of Federal land, 61 ac (25 ha) of private land, and 102 ac (41 ha) of local government-owned land in the Coachella Valley, Riverside County. Unit 1 contains approximately 238 ac (96 ha) of unoccupied fluvial sand transport area associated with the San Gorgonio River and Snow Creek drainages. These areas are being designated under section 3(5)(A)(ii) of the Act, because they are specific areas outside the geographical area occupied by the species at the time of listing and are essential for the conservation of the species. The remainder of Unit 1 consists of approximately 1,097 ac (444 ha) of occupied suitable habitat extending approximately from the eastern edge of the community of Cabazon to just west of Whitewater River, and is approximately bound by State Route 111 to the north and the foot of the San Jacinto Mountains to the south. These areas are being designated under section 3(5)(A)(i) of the Act, because they are within the geographical area occupied by the species at the time of listing and contain those physical or biological features essential to the conservation of the species. In total, Unit 1 consists of 1,335 ac (540 ha) of land.
Unoccupied fluvial sand transport areas in this unit contain active washes associated with San Gorgonio River and Snow Creek, which carry substrates created by fluvial erosion of the surrounding hills to occupied fluvial deposition areas in Unit 1 on the valley floor (Griffiths
Occupied habitat areas of Unit 1 constitute one of the four main habitat areas supporting
The physical or biological features in the occupied areas in Unit 1 are also essential to the conservation of
Unit 2 consists of 1,955 ac (791 ha) of Federal land; 19 ac (8 ha) of private land; and 176 ac (71 ha) of local government-owned land in the Coachella Valley, Riverside County. Unit 2 contains approximately 554 ac (224 ha) of unoccupied fluvial sand transport areas associated with the Whitewater River watershed. These areas are being designated under section 3(5)(A)(ii) of the Act because they are specific areas outside the geographical area occupied by the species at the time of listing and are essential for the conservation of the taxon. The remainder of Unit 2 consists of approximately 1,596 ac (646 ha) of occupied suitable habitat and is approximately bound by State Route 111 to the west, the Southern Pacific Railroad to the north and east, and dense urban development in the cities of Palm Springs and Cathedral City to the south. These areas are being designated under section 3(5)(A)(i) of the Act because they are within the geographical area occupied by the species at the time of listing and contain those physical or biological features essential to the conservation of the species. In total, Unit 2 consists of 2,150 ac (870 ha) of land.
Unoccupied fluvial sand transport areas in this unit contain active washes associated with Whitewater River, which carry substrates created by fluvial erosion of the surrounding hills to occupied fluvial deposition areas in Unit 2 on the valley floor (Griffiths
Occupied habitat areas of Unit 2 constitute one of the four main habitat areas supporting
The physical or biological features in the occupied areas in Unit 2 are also essential to the conservation of
Unit 3 consists of 502 ac (203 ha) of Federal land, 1,497 ac (606 ha) of private land, and 268 ac (108 ha) of local government-owned land in the Coachella Valley, Riverside County. Unit 3 contains approximately 1,055 ac (427 ha) of unoccupied fluvial sand transport area associated with the Mission Creek watershed and a portion of the Morongo Wash watershed (north of Pierson Boulevard). These areas are being designated under section 3(5)(A)(ii) of the Act because they are specific areas outside the geographical area occupied by the species at the time of listing and are essential for the conservation of the taxon. The remainder of Unit 3 consists of approximately 1,211 ac (490 ha) of occupied habitat and includes sand deposits on the floodplain terraces of Morongo Wash south of Pierson Boulevard, and fluvial depositional areas and aeolian transport and depositional areas approximately bound (clockwise from the western boundary) by Little Morongo Road, 18th Avenue, Palm Drive, 20th Avenue, Artesia Road, and Mihalyo Road, in or near the City of Desert Hot Springs. These areas are being designated under section 3(5)(A)(i) of the Act, because they are within the geographical area occupied by the species at the time of listing. In total, Unit 3 consists of 2,313 ac (936 ha) of land.
Unoccupied fluvial sand transport areas in this unit contain active washes associated with Mission Creek and Morongo Wash (north of Pierson Boulevard), which carry substrates created by fluvial erosion of the surrounding hills to occupied fluvial deposition areas in Unit 3 on the valley floor (Griffiths
Occupied habitat areas of Unit 3 constitute one of the four main habitat areas supporting
The physical or biological features in occupied areas in Unit 3 are also essential to the conservation of
Unit 4 consists of 3,670 ac (1,485 ha) of Federal land, and 182 ac (74 ha) of private land in the Coachella Valley, Riverside County. Unit 4 contains approximately 206 ac (83 ha) of unoccupied lands supporting fluvial sand transport and fluvial deposition (this unit contains alluvial sand deposition areas that are not occupied) associated with drainages originating in the Indio Hills. These areas are being designated under section 3(5)(A)(ii) of the Act because they are specific areas outside the geographical area occupied by the species at the time of listing and are essential for the conservation of the species. The remainder of Unit 4 consists of approximately 3,646 ac (1,475 ha) of occupied habitat area in the Thousand Palms Preserve along Ramon Road. These areas are being designated under section 3(5)(A)(i) of the Act because they are within the geographical area occupied by the
Unoccupied areas in this unit contain active ephemeral washes that carry substrates from alluvial deposits to alluvial fan areas where they can be transported to occupied habitat areas via wind (Lancaster
Occupied habitat areas of Unit 4 constitute one of the four main habitat areas supporting
The physical or biological features in the occupied areas of Unit 4 are also essential to the conservation of the species because they support occurrences containing large numbers of the taxon that contribute to the overall genetic diversity of
Section 7(a)(2) of the Act requires Federal agencies, including the Service, to ensure that any action they fund, authorize, or carry out is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of designated critical habitat of such species. In addition, section 7(a)(4) of the Act requires Federal agencies to confer with the Service on any agency action which is likely to jeopardize the continued existence of any species proposed to be listed under the Act or result in the destruction or adverse modification of proposed critical habitat.
Decisions by the 5th and 9th Circuit Courts of Appeals have invalidated our regulatory definition of “destruction or adverse modification” (50 CFR 402.02) (see
If a Federal action may affect a listed species or its critical habitat, the responsible Federal agency (action agency) must enter into consultation with us. Examples of actions that are subject to the section 7 consultation process are actions on State, tribal, local, or private lands that require a Federal permit (such as a permit from the U.S. Army Corps of Engineers under section 404 of the Clean Water Act (33 U.S.C. 1251
As a result of section 7 consultation, we document compliance with the requirements of section 7(a)(2) through our issuance of:
(1) A concurrence letter for Federal actions that may affect, but are not likely to adversely affect, listed species or critical habitat; or
(2) A biological opinion for Federal actions that may affect, or are likely to adversely affect, listed species or critical habitat.
When we issue a biological opinion concluding that a project is likely to jeopardize the continued existence of a listed species and/or destroy or adversely modify critical habitat, we provide reasonable and prudent alternatives to the project, if any are identifiable, that would avoid the likelihood of jeopardy and/or destruction or adverse modification of critical habitat. We define “reasonable and prudent alternatives” (at 50 CFR 402.02) as alternative actions identified during consultation that:
(1) Can be implemented in a manner consistent with the intended purpose of the action,
(2) Can be implemented consistent with the scope of the Federal agency's legal authority and jurisdiction,
(3) Are economically and technologically feasible, and
(4) Would, in the Director's opinion, avoid the likelihood of jeopardizing the continued existence of the listed species and/or avoid the likelihood of destroying or adversely modifying critical habitat.
Reasonable and prudent alternatives can vary from slight project modifications to extensive redesign or relocation of the project. Costs associated with implementing a reasonable and prudent alternative are similarly variable.
Regulations at 50 CFR 402.16 require Federal agencies to reinitiate consultation on previously reviewed actions in instances where we have listed a new species or subsequently designated critical habitat that may be affected and the Federal agency has retained discretionary involvement or
The key factor related to the adverse modification determination is whether, with implementation of the proposed Federal action, the affected critical habitat would continue to serve its intended conservation role for the species. Activities that may destroy or adversely modify critical habitat are those that alter the physical or biological features to an extent that appreciably reduces the conservation value of critical habitat for
Section 4(b)(8) of the Act requires us to briefly evaluate and describe, in any proposed or final regulation that designates critical habitat, activities involving a Federal action that may destroy or adversely modify such habitat, or that may be affected by such designation.
Activities that may affect critical habitat, when carried out, funded, or authorized by a Federal agency, should result in consultation for
(1) Actions that would interrupt the fluvial or aeolian transport of sand to areas occupied by
(2) Actions that would damage or kill plants that trap sand and create sand formations that support
(3) Actions that alter waterways. Such actions could decrease the amount or alter the deposition location of sand entering the sand transport system, and thus reduce the amount of sand available for
(4) Actions that contribute to the introduction or proliferation of nonnative plants, such as
(5) Actions such as development and landscaping that cover or remove substrate. Such actions convert suitable
(6) Actions such as OHV use that disrupt substrates. Such actions can cause sufficient alteration of sand formations supporting
The Sikes Act Improvement Act of 1997 (Sikes Act) (16 U.S.C. 670a) required each military installation that includes land and water suitable for the conservation and management of natural resources to complete an integrated natural resources management plan (INRMP) by November 17, 2001. An INRMP integrates implementation of the military mission of the installation with stewardship of the natural resources found on the base. Each INRMP includes:
(1) An assessment of the ecological needs on the installation, including the need to provide for the conservation of listed species;
(2) A statement of goals and priorities;
(3) A detailed description of management actions to be implemented to provide for these ecological needs; and
(4) A monitoring and adaptive management plan.
Among other things, each INRMP must, to the extent appropriate and applicable, provide for fish and wildlife management; fish and wildlife habitat enhancement or modification; wetland protection, enhancement, and restoration where necessary to support fish and wildlife; and enforcement of applicable natural resource laws.
The National Defense Authorization Act for Fiscal Year 2004 (Pub. L. 108–136) amended the Act to limit areas eligible for designation as critical habitat. Specifically, section 4(a)(3)(B)(i) of the Act (16 U.S.C. 1533(a)(3)(B)(i)) now provides: “The Secretary shall not designate as critical habitat any lands or other geographical areas owned or controlled by the Department of Defense, or designated for its use, that are subject to an integrated natural resources management plan prepared under section 101 of the Sikes Act (16 U.S.C. 670a), if the Secretary determines in writing that such plan provides a benefit to the species for which critical habitat is proposed for designation.”
There are no Department of Defense lands that meet the definition of critical habitat and, as a result, no lands have been exempted under section 4(a)(3)(B)(i) of the Act.
Section 4(b)(2) of the Act states that the Secretary shall designate and make revisions to critical habitat on the basis of the best available scientific data after taking into consideration the economic impact, national security impact, and any other relevant impact of specifying any particular area as critical habitat. The Secretary may exclude an area from critical habitat if he determines that the benefits of such exclusion outweigh the benefits of specifying such area as part of the critical habitat, unless he determines, based on the best scientific data available, that the failure to designate such area as critical habitat will result in the extinction of the species. In making that determination, the statute on its face, as well as the legislative history, are clear that the Secretary has broad discretion regarding which factor(s) to use and how much weight to give to any factor.
In considering whether to exclude a particular area from the designation, we identify the benefits of including the area in the designation, identify the benefits of excluding the area from the designation, and evaluate whether the benefits of exclusion outweigh the benefits of inclusion. If the analysis indicates that the benefits of exclusion outweigh the benefits of inclusion, the Secretary may exercise his discretion to exclude the area only if such exclusion would not result in the extinction of the species.
When identifying the benefits of inclusion for an area, we consider the additional regulatory benefits that area
When identifying the benefits of exclusion, we consider, among other things, whether exclusion of a specific area is likely to result in conservation; the continuation, strengthening, or encouragement of partnerships; or implementation of a management plan that provides equal to or more conservation than a critical habitat designation would provide.
In the case of
When we evaluate the existence of a conservation plan, we consider a variety of factors, including but not limited to, whether the plan is finalized; how it provides for the conservation of the essential physical or biological features; whether there is a reasonable expectation that the conservation management strategies and actions contained in a management plan will be implemented into the future; whether the conservation strategies in the plan are likely to be effective; and whether the plan contains a monitoring program or adaptive management to ensure that the conservation measures are effective and can be adapted in the future in response to new information.
After identifying the benefits of inclusion and the benefits of exclusion, we carefully weigh the two sides to evaluate whether the benefits of exclusion outweigh those of inclusion. If our analysis indicates that the benefits of exclusion outweigh the benefits of inclusion, we then determine whether exclusion would result in extinction. If exclusion of an area from critical habitat will result in extinction, we will not exclude it from the designation.
Based on the information provided by entities seeking exclusion, as well as any additional public comments received, we evaluated whether certain lands in critical habitat Units 1 through 4 were appropriate for exclusion from this final designation pursuant to section 4(b)(2) of the Act. The Secretary is exercising his discretion to exclude several areas from critical habitat designation for
We believe these areas are appropriate for exclusion under the “other relevant factor” provisions of section 4(b)(2) of the Act because:
(1) Their value for conservation will be preserved into the future by existing protective actions.
(2) Exclusion of these areas could help preserve the partnerships we developed with local stakeholders and encourage the establishment of future conservation and management of habitat for
(3) Exclusion of these areas could help preserve our partnerships with tribes and foster future dialog and cooperative actions as well as development of habitat management plans on tribal lands.
Under section 4(b)(2) of the Act, we consider the economic impacts of specifying any particular area as critical habitat. In order to consider economic impacts, we prepared a draft economic analysis of the proposed critical habitat designation (Industrial Economics, Inc. (IEc) 2012). The draft analysis, dated May 11, 2012, was made available for public review and comment from May 16 through June 15, 2012 (77 FR 28846; May 16, 2011). Following the close of the comment period, a final economic analysis (FEA) (dated January 29, 2013) of the potential economic effects of the designation was developed taking into consideration the public comments and any new information (IEc 2013).
The intent of the FEA is to quantify the economic impacts of all potential conservation efforts for
The FEA also addresses how potential economic impacts are likely to be distributed, including an assessment of any local or regional impacts of habitat conservation and the potential effects of conservation activities on government agencies, private businesses, and individuals. The FEA measures lost economic efficiency associated with residential and commercial development and public projects and activities, such as economic impacts on water management and transportation projects, Federal lands, small entities, and the energy industry. Decisionmakers can use this information to assess whether the effects of the designation might unduly burden a particular group or economic sector. Finally, the FEA looks retrospectively at costs that have been incurred since 1998 (63 FR 53596, October 6, 1998), and considers those costs that may occur in the 20 years following the designation of critical habitat, which was determined to be the appropriate period for analysis because a 20-year analysis period reflects the maximum amount of time under which future activities and economic impacts associated with the designation can be reliably projected, given available data and information. The FEA quantifies economic impacts of
The economic analysis includes high- and low-end estimates of incremental costs. Both estimates include the incremental impacts associated with addressing adverse modification in section 7 consultation. The high-end estimate also includes project modification costs associated with development in the City of Desert Hot Springs and railroad upgrades not covered by the Coachella Valley MSHCP/NCCP, as well as potential administrative costs incurred by the Agua Caliente Band of Cahuilla Indians. These costs are only included in the high estimate because of uncertainty over whether Desert Hot Springs will develop within the 100-year floodplain and whether railroad upgrades are likely, and because a public comment submitted by the Agua Caliente Band of Cahuilla Indians suggests that development may not occur within proposed revised critical habitat. As a result, the low-end impacts consist solely of administrative costs, except those that may be incurred by the Agua Caliente Band of Cahuilla Indians (IEc 2013, p. 4–2).
Implementation of conservation activities for residential, commercial, and industrial development is the largest cost category in the high-end estimate of incremental impacts. All of these costs are projected to occur in the unoccupied portion of Unit 3, within the City of Desert Hot Springs. Proponents of transportation activities, such as road and bridge construction and maintenance, are likely to experience the next largest impacts after residential, commercial, and industrial development. No incremental project modification costs are estimated for water management activities. Although two water districts, Metropolitan Water District of Southern California and the Desert Water Agency, may experience incremental impacts for projects occurring in unoccupied, fluvial habitat, characteristics of potential projects and specific project modifications that could be recommended for projects are uncertain. Project modification costs therefore could not be estimated. The FEA does not estimate any incremental project modification costs for energy projects, because these projects are located within occupied habitat, where we cannot reasonably differentiate between actions that avoid jeopardy to the species and actions needed solely to avoid destruction or adverse modification of critical habitat, and because the construction and development of new wind energy facilities is a covered activity under the MSHCP/NCCP. No incremental project modification costs are anticipated for mining activities.
The FEA also does not anticipate any incremental project modification costs on Agua Caliente Band of Cahuilla Indians lands because the proposed revised critical habitat on those lands is occupied habitat, where we cannot reasonably differentiate between actions that avoid jeopardy to the species and actions needed solely to avoid destruction or adverse modification of critical habitat. The Morongo Band of Mission Indians do not anticipate economic activity within proposed revised critical habitat on Morongo Band of Mission Indians lands, because these areas are located entirely within the floodplain; therefore, the FEA does not estimate any incremental project modification costs for Tribal activities. The total incremental impacts are estimated to be $270,000 to $880,000 ($24,000 to $77,000 annualized) in present-value terms using a 7 percent discount rate over the next 20 years (2012 to 2032) in areas proposed as revised critical habitat (IEc 2012, pp. ES–2–ES–3, ES–7–ES–9).
Our economic analysis did not identify any disproportionate costs that are likely to result from the designation. Consequently, the Secretary has determined not to exercise his discretion to exclude any areas from this designation of critical habitat for
A copy of the FEA with supporting documents is available at
Under section 4(b)(2) of the Act, we consider whether there are lands owned or managed by the Department of Defense (DOD) where a national security impact might exist. In preparing this final rule, we have determined that the lands meeting the definition of critical habitat for
Under section 4(b)(2) of the Act, we consider any other relevant impacts, in addition to economic impacts and impacts on national security. We consider a number of factors, including whether the landowners have developed any HCPs or other management plans for the area, or whether there are conservation partnerships that would be encouraged by designation of, or exclusion from, critical habitat. In addition, we look at any tribal issues, and consider the government-to-government relationship of the United States with tribal entities. We also
When we evaluate whether a current land management or conservation plan (HCPs as well as other types) provides adequate management or protection, we consider a variety of factors, including but not limited to, whether the plan is finalized; how it provides for the conservation of the essential physical or biological features; whether there is a reasonable expectation that the conservation management strategies and actions contained in a management plan will be implemented into the future; whether the conservation strategies in the plan are likely to be effective; and whether the plan contains a monitoring program or adaptive management to ensure that the conservation measures are effective and can be adapted in the future in response to new information.
We believe that the Coachella Valley Multiple Species Habitat Conservation Plan and Natural Community Conservation Plan (Coachella Valley MSHCP/NCCP) provides adequate management or protection for the taxon, and, to continue and strengthen our conservation partnerships with the plan's participants and to foster additional partnerships, the Secretary is exercising his discretion to exclude lands covered by this plan that provide for the conservation of
The Coachella Valley MSHCP/NCCP is a large-scale, multijurisdictional habitat conservation plan encompassing about 1.1 million ac (445,156 ha) in the Coachella Valley of central Riverside County. The Coachella Valley MSHCP/NCCP is also a “Subregional Plan” under the State of California's Natural Community Conservation Planning (NCCP) Act, as amended. An additional 69,000 ac (27,923 ha) of tribal reservation lands distributed within the plan area boundary are not included in the Coachella Valley MSHCP/NCCP. The Coachella Valley MSHCP/NCCP addresses 27 listed and unlisted “covered species,” including
The permit covers incidental take resulting from habitat loss and disturbance associated with urban development and other proposed covered activities. These activities include public and private development within the plan area that requires discretionary and ministerial actions by permittees subject to consistency with the Coachella Valley MSHCP/NCCP policies. An associated Management and Monitoring Program is also included in the Coachella Valley MSHCP/NCCP and identifies specific management actions for the conservation of
Approximately 36,398 ac (14,730 ha) of modeled habitat for
As habitat areas are acquired under the Coachella Valley MSHCP/NCCP, they are legally protected within the Reserve System and the direct impacts of development are precluded. All areas covered under the Coachella Valley MSHCP/NCCP that meet the definition of critical habitat for
The principal benefit of including an area in a critical habitat designation is the requirement of Federal agencies to ensure actions they fund, authorize, or carry out are not likely to result in the destruction or adverse modification of any designated critical habitat, the regulatory standard of section 7(a)(2) of the Act under which consultation is completed. Federal agencies must consult with the Service on actions that may affect critical habitat and must avoid destroying or adversely modifying critical habitat. Federal agencies must also consult with us on actions that may affect a listed species and refrain from undertaking actions that are likely to jeopardize the continued existence of such species. The analysis of effects to critical habitat is a separate and different analysis from that of the effects to the species. Therefore, the difference in outcomes of these two analyses represents the regulatory benefit of critical habitat. The regulatory standards are different, as the jeopardy analysis
For some species (including
Critical habitat may provide a regulatory benefit for
The potential for a Federal nexus for activities proposed on non-Federal lands varies widely and depends on the particular circumstances of each case. Nevertheless, because the breadth of potential Federal actions that may trigger a duty to consult under section 7 is quite broad, we cannot say with certainty that future development of, or activities on, non-Federal lands will always lack a Federal nexus. In some portions of the lands identified as critical habitat for
If protections provided by critical habitat designation are redundant with protections already in place on lands identified as areas that meet the definition of critical habitat for
Protective measures required by the Coachella Valley MSHCP/NCCP for the conservation of
Designating critical habitat also can be beneficial because the process of proposing critical habitat provides the opportunity for peer review and public comment on lands we propose to designate as critical habitat, our criteria used to identify those lands, potential impacts from the proposal, and information on the taxon itself. The designation of critical habitat may generally provide previously unavailable information to the public. Public education regarding the potential conservation value of an area may also help focus conservation and management efforts on areas of high conservation value for certain species. Information about
However, the educational benefits of designating critical habitat for
Educational benefits of designating critical habitat for
The designation of critical habitat for some species may also strengthen or reinforce some of the provisions in other State and Federal laws, such as the California Environmental Quality Act (CEQA). These laws analyze the potential for projects to significantly affect the environment. To date, the local jurisdictions have not required additional measures associated with critical habitat for any species in their discretionary approval processes (for example, pursuant to CEQA), and are unlikely to do so in the future. This potential benefit is, therefore, negligible in the Coachella Valley.
In summary, we believe that the regulatory benefit through section 7(a)(2) of the Act of designating critical habitat is small on non-Federal lands covered under the Coachella Valley MSHCP/NCCP and occupied by
We believe conservation benefits would be realized by forgoing designation of critical habitat for
In the case of
We developed a close partnership with the permittees of the Coachella Valley MSHCP/NCCP through the development of the HCP, which incorporates protections (conserved lands) and management for
The Coachella Valley MSHCP/NCCP provides substantial protection and management for
In summary, we believe excluding land covered by the Coachella Valley MSHCP/NCCP from critical habitat will
We reviewed and evaluated the exclusion of approximately 15,140 ac (6,127 ha) of land within the boundaries of the Coachella Valley MSHCP/NCCP from our revised designation of critical habitat, and we determined the benefits of excluding these lands outweigh the benefits of including them. The regulatory benefits of including the portion of these lands occupied by
We believe the benefits of excluding lands covered by the Coachella Valley MSHCP/NCCP from critical habitat are more significant. Exclusion of these lands from critical habitat will help preserve the partnerships we have developed with local jurisdictions and project proponents through the development and ongoing implementation of the Coachella Valley MSHCP/NCCP and aid in fostering future partnerships for the benefit of listed species. Designation of lands covered by the Coachella Valley MSHCP/NCCP may discourage other partners from seeking, amending, or completing HCCP/NCCP plans that cover
We determined that the exclusion of 15,140 ac (6,127 ha) of land within the boundaries of the Coachella Valley MSHCP/NCCP from the designation of critical habitat for
In accordance with the Secretarial Order 3206, “American Indian Tribal Rights, Federal-Tribal Trust Responsibilities, and the Endangered Species Act” (June 5, 1997); the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951); Executive Order 13175; and the relevant provision of the Departmental Manual of the Department of the Interior (512 DM 2), we believe that fish, wildlife, and other natural resources on tribal lands are better managed under tribal authorities, policies, and programs than through Federal regulation wherever possible and practicable. Based on this philosophy, we believe that, in most cases, designation of tribal lands as critical habitat provides very little additional benefit to federally listed species. Conversely, such designation is often viewed by tribes as an unwarranted and unwanted intrusion into tribal self-governance, thus compromising the government-to-government relationship essential to achieving our mutual goals of managing for healthy ecosystems upon which the viability of threatened and endangered species populations depend. We take into consideration our partnerships and existing conservation actions that tribes have implemented or are currently implementing when conducting our analysis under section 4(b)(2) of the Act in this final revised critical habitat designation. We also take into consideration conservation actions that are planned as part of our ongoing commitment to the government-to-government relationship with tribes. Section 4(b)(2) of the Act allows the Secretary to exclude areas from critical habitat based on economic impacts, impacts to National security, or other relevant impacts if the Secretary determines that the benefits of such exclusion outweigh the benefits of designating the area as critical habitat. However, an exclusion cannot occur if it will result in the extinction of the species concerned.
We determined approximately 893 ac (361 ha) of lands owned by or under the jurisdiction of two Tribes meet the definition of critical habitat under the Act. These tribal lands are found within Units 1 and 2, and are owned by or under the jurisdiction of the Morongo Band of Mission Indians and the Agua Caliente Band of Cahuilla Indians. In making our final decision with regard to these tribal lands, we considered the factors listed above. Under section 4(b)(2) of the Act, the Secretary is exercising his discretion to exclude approximately 893 ac (361 ha) of land comprised of all reservation lands from this final revised critical habitat designation (this is all of the tribal land proposed as critical habitat for
For our 4(b)(2) balancing analysis we considered our partnership with the Agua Caliente Band of Cahuilla Indians and analyzed the benefits of including and excluding those lands within the Agua Caliente Band of Cahuilla Indians Reservation boundary that meet the definition of critical habitat. The Agua Caliente Indian Reservation consists of approximately 31,500 acres of land in a checkerboard of parcels found primarily in the City of Palm Springs, and the Cities of Cathedral City and Rancho Mirage, and unincorporated Riverside County, California. This area includes approximately 579 ac (234 ha) that meet the definition of
The Tribe is implementing numerous provisions aimed specifically at protecting
We determined approximately 313 ac (127 ha) of lands owned by or under the jurisdiction of the Morongo Band of Mission Indians meet the definition of critical habitat under the Act for
The Morongo Band of Mission Indians (formerly the Morongo Band of Cahuilla Mission Indians of the Morongo Reservation) Reservation consists of over 35,000 ac of land on the western end of the Coachella Valley. This area includes approximately 313 ac (12 ha) that meet the definition of
For example, human impacts will be limited in the areas meeting the definition of critical habitat due to their significant value to the Tribe in their natural state, and because they are subject to natural hazards, minimizing their development value. Also, the Morongo Band of Mission Indians have instituted an ordinance limiting recreational OHV use to areas where such activities will not impact fluvial sand transport or habitat areas. Additionally, the Morongo Environmental Protection Department—Resource Conservation program has implemented nonnative species removal projects throughout Morongo Band of Mission Indians lands with consultation from the Inland Empire Resource Conservation District and the Natural Resources Conservation Service (U.S. Department of Agriculture). Over 65 percent of the Morongo Band of Mission Indians lands are listed as “Open Space/Conservation element areas” in the Morongo Band of Mission Indians General Plan, including active ephemeral washes that contribute to the San Gorgonio River fluvial sand transport system and large areas unobstructed by development, that contain suitable habitat with intact wind and depositional regimes. We anticipate that the Morongo Band of Mission Indians' dedication to maintaining natural resources and minimizing impacts to those resources on their lands will contribute greatly to the conservation of
Most of the lands that meet the definition of critical habitat within the Morongo Band of Mission Indians Reservation are areas supporting the fluvial transport of sand carried by the San Gorgonio River into areas occupied by major occurrences of
The principal benefit of including an area in a critical habitat designation is the requirement of Federal agencies to ensure actions they fund, authorize, or carry out are not likely to result in the destruction or adverse modification of any designated critical habitat, the regulatory standard of section 7(a)(2) of the Act under which consultation is completed. Federal agencies must consult with the Service on actions that may affect critical habitat and must avoid destroying or adversely modifying critical habitat. Federal agencies must also consult with us on actions that may affect a listed species and refrain from undertaking actions that are likely to jeopardize the continued existence of such species. The analysis of effects to critical habitat is a separate and different analysis from that of the effects to the species. Therefore, the difference in outcomes of these two analyses represents the regulatory benefit of critical habitat. The regulatory standards are different, as the jeopardy analysis investigates the action's impact on the survival and recovery of the species, while the adverse modification analysis focuses on the action's effects on the designated habitat's contribution to
Critical habitat may provide a regulatory benefit for
However, if protections provided by critical habitat are redundant with protections already in place, the benefits of inclusion in critical habitat are reduced. As discussed above, although the Agua Caliente Band of Cahuilla Indians are no longer pursuing a Section 10(a) permit for their draft HCP (ACBCI 2010a, p. 1), the Tribe is continuing to implement the conservation strategies outlined in the document, and plans to continue doing so (Park 2011, p. 1; pers. com. J. McBride, 2012). The protections afforded sand transport processes and
Designating critical habitat also can be beneficial because the process of proposing critical habitat provides the opportunity for peer review and public comment on lands we propose to designate as critical habitat, our criteria used to identify those lands, potential impacts from the proposal, and information on the taxon itself. We believe the designation of critical habitat may generally provide previously unavailable information to the public. Public education regarding the potential conservation value of an area may also help focus conservation and management efforts on areas of high conservation value for certain species. Information about
Due to the existence of survey data and development of the Agua Caliente Band of Cahuilla Indians' draft HCP, stakeholders in the region are likely aware of the existence of
Educational benefits of designating critical habitat for
The designation of critical habitat for some species may also strengthen or reinforce some of the provisions in other State and Federal laws, such as the California Environmental Quality Act (CEQA). These laws analyze the potential for projects to significantly affect the environment. To date, the local jurisdictions have not required additional measures associated with critical habitat in their discretionary approval processes (for example, pursuant to the California Environmental Quality Act), and are unlikely to do so in the future. This potential benefit is, therefore, negligible in the Coachella Valley.
In summary, we believe there would likely only be a minimal regulatory benefit of
We believe significant benefits would be realized by forgoing designation of critical habitat on reservation lands managed by the Agua Caliente Band of Cahuilla Indians and the Morongo Band of Mission Indians. These benefits include:
(1) Continuance and strengthening of our effective working relationships with all tribes to promote conservation of
(2) Allowance for continued meaningful collaboration and cooperation in working toward recovering this species, including conservation benefits that might not otherwise occur; and
(3) Encouragement of this and other tribes to complete management plans for this and other federally listed and sensitive species and habitats, and engage in collaboration and cooperation with the Service and other organizations and individuals interested in conservation of the taxon, its habitat, and other biota of mutual interest.
We believe that fish, wildlife, and other natural resources on tribal lands are better managed under tribal authorities, policies, and programs than through Federal regulation wherever possible and practicable. We are committed to ongoing meaningful collaboration and cooperation with all the affected tribes. For land on the Morongo Band of Mission Indians Reservation, which is not currently covered by an HCP, we will continue to work with BIA and the Tribe to develop species and habitat management plans to promote
Critical habitat designation is often viewed by tribes as an unwarranted and unwanted intrusion into tribal self-governance, thus compromising the government-to-government relationship essential to achieving our mutual goals of managing for healthy ecosystems upon which the viability of threatened and endangered species populations depend. For example, in comments submitted during the public comment periods, the Morongo Band of Mission Indians, the Agua Caliente Band of Cahuilla Indians, and the U.S. Bureau of Indian Affairs indicated designation of critical habitat for
We reviewed and evaluated the benefits of inclusion and the benefits of exclusion of Agua Caliente Band of Cahuilla Indians reservation lands and Morongo Band of Mission Indians reservation lands as critical habitat for
The benefits of excluding Agua Caliente Band of Cahuilla Indians reservation lands and Morongo Band of Mission Indians reservation lands from critical habitat are significant. Exclusion of these lands from critical habitat will help preserve the partnerships we have developed and reinforce those we are building with the Tribes, and exclusion will foster future partnerships and development of management plans. As discussed above, both Tribes are implementing measures that further the conservation of
In summary, we find that the exclusion of Agua Caliente Band of Cahuilla Indians and Morongo Band of Mission Indians reservation lands from this final critical habitat designation will preserve our partnerships with tribes and foster future dialog and cooperative actions as well as development of habitat management plans. These partnership benefits are significant and outweigh the potential regulatory benefits and any small educational benefits of including these portions of Unit 1 and Unit 2 in critical habitat for
We determined that the exclusion of 893 ac (361 ha) of Agua Caliente Band of Cahuilla Indians and Morongo Band of Mission Indians reservation land from the revised designation of
We requested comments or information from the public on the proposed revised designation of critical habitat for
During the first comment period, we received 17 comment letters directly addressing the proposed revised critical habitat designation. During the second comment period, we received three comment letters addressing the proposed revised critical habitat designation or the draft economic analysis. All substantive information provided during comment periods has either been incorporated directly into this designation or addressed below. Comments received were grouped into five general issues specifically relating to the proposed revised critical habitat designation for
In accordance with our peer review policy published on July 1, 1994 (59 FR 34270), we solicited expert opinions from two experts in plant biology and one expert in the geomorphology of the Coachella Valley, all of whom are knowledgeable individuals with scientific expertise that included familiarity with the geographic region in which
We reviewed all comments received from the two peer reviewers for substantive issues and new information regarding critical habitat for
Another peer reviewer expressed support of our use of modeled habitat to identify critical habitat for
This peer reviewer also requested we clarify the fact that all Tribal lands that were proposed as critical habitat for
In the Exclusions section above, we have clarified the fact that all Tribal lands that were proposed as critical habitat for
This peer reviewer also asserted that we were incorrect when we stated in the proposed critical habitat rule that Mazer and Travers found
The reviewer also stated that percentages and sample sizes would better summarize data from the pollinator exclusion study of Meinke
This peer reviewer suggested the proposed critical habitat rule could also be improved by providing better maps. In these maps, the reviewer feels it would be very valuable to include the considered exclusions and land ownership, particularly Federal lands because of the differences in protection provided to plants by the Act on Federal versus non-Federal lands.
The Agua Caliente Band of Cahuilla Indians also described their relationship with the Service by stating, “The Tribe has, for the past 14 years, been a consistent partner with the Service to develop and implement a series of increasingly detailed and sophisticated Tribal HCPs that provide protection to endangered and sensitive species on the Reservation. It is important to note that the Tribe has always acted in good faith and chose to develop these plans which include strict provisions for conservation.” According to the Agua Caliente Band of Cahuilla Indians, the Secretary's decision to include or exclude tribal lands from the critical habitat designation should be based on the adequacy and value of the tribal/Federal partnership, not on the formal approval of the draft Tribal Habitat Conservation Plan. They state that this position is supported by the Secretary's exclusion of Agua Caliente Band of Cahuilla Indians lands from the critical habitat designation for Peninsular bighorn sheep.
Further, Agua Caliente Band of Cahuilla Indians state they would have a disincentive to continue enforcing the draft 2010 Tribal HCP with respect to
Although they have not finalized the draft 2010 Tribal HCP and secured a permit under section 10(a)(1)(B) of the Act, Agua Caliente Band of Cahuilla Indians state that because they have been enforcing the terms of the draft 2010 Tribal HCP and continue to maintain their relationship with the Service, Agua Caliente Band of Cahuilla Indians lands should be excluded from the critical habitat designation for
Additionally, Agua Caliente Band of Cahuilla Indians expressed support for exclusion of tribal lands from the designation under section 4(b)(2) of the Act, because such an exclusion would be in keeping with Secretarial Order 3206 (June 5, 1997) entitled, “American Indian Tribal Rights, Federal-Tribal Trust responsibilities, and the Endangered Species Act” (discussed in the Exclusions Under Section 4(b)(2) of the Act—Tribal Lands section above).
In summary, Agua Caliente Band of Cahuilla Indians supports exclusion of tribal lands from this critical habitat designation and reliance on the draft 2010 Tribal HCP to avoid “additional, unnecessary regulatory burden” they feel would result from designation of critical habitat on their lands.
The Morongo Band of Mission Indians also provided a discussion of tribal self-governance and the protocols of a government-to-government relationship under Secretarial Order 3206, stating that “* * * Congressional and Administrative policies should continue to promote tribal self-government, self-sufficiency, and self-determination, recognizing and endorsing the fundamental rights of Morongo to set our own priorities and make decisions affecting our resources and distinctive ways of life. Morongo Band of Mission Indians has the ability and resources to manage [Morongo Band of Mission Indians lands proposed as critical habitat for
The BIA also asserted that Agua Caliente Band of Cahuilla Indians and Morongo Band of Mission Indians lands should be excluded because designating critical habitat on these lands would jeopardize partnerships between the Service and both tribes. According to the BIA, excluding Agua Caliente Band of Cahuilla Indians and Morongo Band of Mission Indians lands from the critical habitat designation would allow voluntary partnerships to continue, which they feel would have a long-term benefit for
We recognize and value our relationships with both tribes and will continue to work cooperatively with them to conserve federally listed species on their lands.
The commenter asserted that any designation of critical habitat on land under the jurisdiction of Coachella Valley MSHCP/NCCP permittees is unnecessary and counterproductive to the goal of implementing a comprehensive, landscape-level approach to conservation in the region. The commenter stated that critical habitat designations represent a species-by-species and project-by-project implementation of the Act that fails to provide the landscape-level conservation, with attendant management and monitoring, that is necessary to preserve sensitive species and the natural systems upon which they depend.
The commenter asserted that the Coachella Valley MSHCP/NCCP stakeholders have demonstrated the depth of their commitment to the success of the MSHCP and stated that the addition of another layer of regulation through this critical habitat designation after the stakeholders have demonstrated their dedication to the MSHCP would damage the Service's partnership with MSHCP stakeholders and create a disincentive for participation in the MSHCP.
This commenter's recommendation that lands covered under the Coachella Valley MSHCP/NCCP be excluded from the critical habitat designation for
Additionally, the second commenter stated that, as a Coachella Valley MSHCP/NCCP permittee, the Riverside County Flood Control and Water Conservation District is subject to applicable MSHCP provisions including the requirement to contribute mitigation to assist in achieving the regional conservation objectives identified in the MSHCP, which includes a number of specific regional objectives to ensure long-term conservation of
Two more commenters also supported the recommendation that lands covered by the Coachella Valley MSHCP/NCCP should be excluded from the critical habitat designation for
Both the third and fourth commenters expressed concern with the proposed designation of critical habitat on lands covered under the Coachella Valley MSHCP/NCCP, particularly those lands owned and managed by the Riverside County Flood Control and Water Conservation District and the Coachella Valley Water District. The third commenter's issues included their belief that designating critical habitat on lands covered under the Coachella Valley MSHCP/NCCP will—
• Provide negligible, if any, benefits to
• Negate any benefits to the MSHCP permittees from their efforts to provide regional conservation for
• Run counter to statements made in the Implementing Agreement for the Coachella Valley MSHCP/NCCP (commenter cited Section 14.11 of the Coachella Valley MSHCP/NCCP Implementing Agreement and Section 6.8 of the Coachella Valley MSHCP/NCCP).
The fourth commenter stated that the Coachella Valley Water District, another permittee of the Coachella Valley MSHCP/NCCP, has provided a commitment to the success of the MSHCP, including establishing constructed habitat, restoring and enhancing existing habitat, conserving 7,000 ac of Coachella Valley Water District lands (including over 1,800 ac of its land within the Whitewater River floodplain that provides habitat for
The fourth commenter expressed concern that the proposed critical habitat designation puts in question the Service's commitment to the Coachella Valley MSHCP/NCCP objectives and implementation, and that designating critical habitat on lands covered under the Coachella Valley MSHCP/NCCP will jeopardize the ultimate success of the MSHCP.
Designating critical habitat on lands covered by the Coachella Valley MSHCP/NCCP would create duplicative and redundant regulatory efforts, according to both the third and fourth commenters (this issue is discussed further in
The third and fourth commenters also asserted that designating critical habitat on lands covered by the Coachella Valley MSHCP/NCCP would create a duplicative and redundant regulatory burden, which they suggest could delay efficient and timely operation and maintenance of water and flood control infrastructure on lands covered by the Coachella Valley MSHCP/NCCP.
The third commenter stated that these potential delays could jeopardize public health and safety. This commenter stated that the inclusion of existing flood control facilities within the final critical habitat area would trigger the section 7 consultation process for any Riverside County Flood Control and Water Conservation District maintenance, repair, replacement, and rehabilitation activities. The commenter expressed concern that this may prevent or delay maintenance of these flood control facilities and thereby pose a potential threat to public health and safety. Therefore, the commenter stated that the existing Cabazon Channel, Chino Canyon Levee, Whitewater River Levee, Mission Creek Channel, and Desert Hot Springs Channel Line E facilities should be excluded from the final revised critical habitat designation for
The fourth commenter asserted that this critical habitat designation is unwarranted, redundant, and counterproductive considering the success they assert has already been achieved conserving critical habitat for
This commenter's recommendation that Federal lands be excluded from the critical habitat designation for
The Secretary has the discretion to exclude an area from critical habitat under section 4(b)(2) of the Act after taking into consideration the economic impact, the impact on national security, and any other relevant impact if he determines that the benefits of such exclusion outweigh the benefits of designating such area as critical habitat, unless he determines that the exclusion would result in the extinction of the species concerned. Based on the record before us, the Secretary is not exercising his discretion to exclude the BLM lands, and we are designating these lands as critical habitat for
Of these five commenters, four also stated that suitable
These four commenters also describe how measures in place to protect wind power facilities from vandalism also provide protection for
For the above reasons, these five commenters asserted that lands containing wind energy facilities should be excluded from the final critical habitat designation for
The area the commenters referred to in their comment, bounded by Interstate 10 to the west and Indian Canyon Road to the east, has multiple landowners. Some of these landowners are permittees of the Coachella Valley MSHCP/NCCP, others, such as the BLM (a Federal agency), are not. The Secretary has the discretion to exclude an area from critical habitat under section 4(b)(2) of the Act after taking into consideration the economic impact, the impact on national security, and any other relevant impact if he determines that the benefits of such exclusion outweigh the benefits of designating such area as critical habitat, unless he determines that the exclusion would result in the extinction of the species concerned. In exercising his discretion to exclude areas from critical habitat under section 4(b)(2) of the Act, the Secretary weighed the benefits of exclusion against the benefits of inclusion, and is exercising his discretion to exclude all lands covered under the Coachella Valley MSHCP/NCCP from this final revised critical habitat designation (see
Based on the record before us, the Secretary is not exercising his discretion to exclude lands in the area in question that are not covered by the Coachella Valley MSHCP/NCCP, such as BLM lands, and we are designating these lands as critical habitat for
However, when determining critical habitat boundaries within this final rule, despite our efforts to avoid including developed areas such as lands covered by buildings, pavement, and other structures because such lands lack the physical or biological features for
Because the areas in question are occupied by
This commenter went on to observe that the proposed critical habitat appears to include most of the extant locations for
The PECE Policy outlines specific criteria by which conservation or management actions and programs are evaluated for use in making listing determinations under the Act. However, the PECE Policy explicitly states that the Policy is not to be used for evaluating conservation or management actions for critical habitat designations. More appropriately, with regard to critical habitat, these actions and programs should be considered under section 4(b)(2) of the Act, and, if the Secretary wants to exercise his discretion to exclude an area from a critical habitat designation, evaluated through the balancing analysis under section 4(b)(2) of the Act to determine if the benefits of excluding the specific areas covered by them from critical habitat outweigh the benefits of including them in the designation.
The commenter goes on to state that:
“In invalidating a 1986 regulation that collapsed the definition of adverse modification with jeopardy, the Ninth Circuit concluded that the regulation `finds that adverse modification to critical habitat can only occur when there is so much critical habitat lost that a species' very survival is threatened,' which would `drastically narrow the scope of protection commanded by Congress under the ESA.' (
*(The commenter refers to `flycatcher' here; we presume the commenter intended to refer to
We found the benefits of excluding lands that are covered under the Coachella Valley MSHCP/NCCP to be greater than the benefits of including these lands. Please see the Exclusions under Section 4(b)(2) of the Act—Coachella Valley MSHCP/NCCP section above for a detailed discussion. The Service views the partnerships we share with permittees of the HCP and local landowners and managers as having greater potential to provide for the recovery of the taxon than designation of critical habitat in areas covered under the HCP, which could damage these partnerships and thus reduce potential for recovery.
In particular, the commenter asked that we consider adding areas where numerous plants have been documented to occur between Units 2, 3, and 4 between Rancho Mirage and Thousand Palms and in Indian Wells near Highway 111, and elsewhere.
The commenter also stated that because the Morongo Band of Mission Indians has not completed a management plan, there are no assured protections or management actions in place, and the partnerships' effectiveness is questionable.
The commenter goes on to assert that exclusion of these Tribal lands from this critical habitat designation would set a precedent that is unfair to Tribes that actually have plans in place that are either HCPs or functional equivalents, and incentivize inaction rather than encouraging Tribes to actually work with the Service on tangible conservation benefits. Balancing in favor of exclusion of Tribal lands from critical habitat designations appears to the commenter to be politically
The exclusion of Agua Caliente Band of Cahuilla Indians and Morongo Band of Mission Indians reservation lands is likewise based on the importance of the government-to-government relationship with these Tribes, our conservation partnership with the Tribes, and their current management of tribal lands, as described in Martin (2011, pp. 1–2), Park (2011, pp. 1–11) and ACBCI (2010b).
Please see the Exclusions Under Section 4(b)(2) of the Act—Tribal Lands section of this final rule for additional discussion.
Other ancillary benefits of the designation may include: Increased residential property values adjacent to preserved habitat; increased recreational opportunities; preservation of habitat for other species; and improvements in water quality, among others. Although economic literature does exist that monetizes similar benefits, these studies are necessarily site-specific. For example, using benefits transfer techniques to estimate changes in residential property value based on the existing economic literature would require knowledge of the characteristics of the specific lands preserved as a result of the designation of critical habitat, including proximity to residential properties and the amount of existing open space in the area. Without knowing where lands will be preserved (for example, through mitigation fees) as a result of this designation, it is impossible to estimate such benefits. Similarly, quantifying benefits associated with improved water quality would require information regarding baseline water quality, hydrologic and chemical modeling to estimate changes in water quality, and risk analysis to determine avoided human health risk based on changes to water quality. These types of analyses are beyond the scope of the DEA. As a result, benefits associated with the designation of critical habitat are discussed qualitatively.
Executive Order 12866 provides that the Office of Information and Regulatory Affairs (OIRA) will review all significant rules. The Office of Information and Regulatory Affairs has determined that this rule is not significant.
Executive Order 13563 reaffirms the principles of E.O. 12866 while calling for improvements in the nation's regulatory system to promote predictability, to reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory ends. The executive order directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. E.O. 13563 emphasizes further that regulations must be based on the best available science and that the rulemaking process must allow for public participation and an open exchange of ideas. We have developed this rule in a manner consistent with these requirements.
Under the Regulatory Flexibility Act (RFA; 5 U.S.C. 601
According to the Small Business Administration, small entities include small organizations, such as independent nonprofit organizations; small governmental jurisdictions, including school boards and city and town governments that serve fewer than 50,000 residents; as well as small businesses. Small businesses include manufacturing and mining concerns with fewer than 500 employees, wholesale trade entities with fewer than 100 employees, retail and service businesses with less than $5 million in annual sales, general and heavy construction businesses with less than
To determine if the rule could significantly affect a substantial number of small entities, we consider the number of small entities affected within particular types of economic activities (e.g., residential, commercial, and industrial development; water management and use; transportation activities; energy development; sand and gravel mining; and Tribal activities). We apply the “substantial number” test individually to each industry to determine if certification is appropriate. However, the SBREFA does not explicitly define “substantial number” or “significant economic impact.” Consequently, to assess whether a “substantial number” of small entities is affected by this designation, this analysis considers the relative number of small entities likely to be impacted in an area. In some circumstances, especially with critical habitat designations of limited extent, we may aggregate across all industries and consider whether the total number of small entities affected is substantial. In estimating the number of small entities potentially affected, we also consider whether their activities have any Federal involvement.
Designation of critical habitat only affects activities authorized, funded, or carried out by Federal agencies. Some activities are unlikely to have any Federal involvement and so will not be affected by critical habitat designation. In areas where the species is present, Federal agencies already are required to consult with us under section 7 of the Act on activities they authorize, fund, or carry out that may affect
In our final economic analysis of the critical habitat designation, we evaluated the potential economic effects on small business entities resulting from conservation actions related to the listing of
Estimated incremental impacts of this critical habitat designation consist primarily of additional administrative cost of considering adverse modification during section 7 consultation and incremental project modification costs resulting from activities not covered under the Coachella Valley MSHCP/NCCP. The Service and the action agency are the only entities with direct compliance costs associated with this critical habitat designation, although small entities may participate in section 7 consultation as a third party. It is, therefore, possible that the small entities may spend additional time considering critical habitat during section 7 consultation for
The FEA estimates annualized project modification costs of approximately $52,000 in Unit 3, and annualized third party administrative costs ranging from $156 to $263, depending on whether a consultation is formal or informal and whether the project location is considered occupied or unoccupied, distributed across all four units. Because information on the number of projects or developers likely to be affected is not available, the FEA assumes that a single developer bears all costs associated with growth in proposed revised critical habitat. Under this assumption, $52,260 in incremental costs would accrue to one developer per year. Assuming the average small entity has annual revenues of approximately $5.1 million, this annualized impact represents approximately one percent of annual revenues. The assumption that all costs accrue to one developer likely overstates the impact significantly; thus, we estimate incremental impacts to small developers of less than one percent of annual revenues.
The FEA also concludes that none of the governmental entities with which the Service might consult on
In summary, we considered whether this designation would result in a significant economic effect on a substantial number of small entities. Based on the above reasoning and currently available information, we concluded that this rule would not result in a significant economic impact on a substantial number of small entities. Therefore, we are certifying that the designation of critical habitat for
Executive Order 13211 (Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use) requires agencies to prepare Statements of Energy Effects when undertaking certain actions. OMB has provided guidance for implementing this Executive Order that outlines nine outcomes that may constitute “a significant adverse effect” when compared to not taking the regulatory action under consideration.
The economic analysis finds that none of these criteria are relevant to this analysis. Thus, based on information in the economic analysis, energy-related impacts associated with
In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501
(1) This rule will not produce a Federal mandate. In general, a Federal mandate is a provision in legislation, statute, or regulation that would impose an enforceable duty upon State, local, or tribal governments, or the private sector, and includes both “Federal
The designation of critical habitat does not impose a legally binding duty on non-Federal Government entities or private parties. Under the Act, the only regulatory effect is that Federal agencies must ensure that their actions do not destroy or adversely modify critical habitat under section 7. While non-Federal entities that receive Federal funding, assistance, or permits, or that otherwise require approval or authorization from a Federal agency for an action, may be indirectly impacted by the designation of critical habitat, the legally binding duty to avoid destruction or adverse modification of critical habitat rests squarely on the Federal agency. Furthermore, to the extent that non-Federal entities are indirectly impacted because they receive Federal assistance or participate in a voluntary Federal aid program, the Unfunded Mandates Reform Act would not apply, nor would critical habitat shift the costs of the large entitlement programs listed above onto State governments.
(2) We do not believe that this rule will significantly or uniquely affect small governments because it would not produce a Federal mandate of $100 million or greater in any year; that is, it is not a “significant regulatory action” under the Unfunded Mandates Reform Act. The FEA concludes incremental impacts may occur due to administrative costs of section 7 consultations for development, transportation, and flood control projects activities; however, these are not expected to significantly affect small governments. Incremental impacts stemming from various species conservation and development control activities are expected to be borne by the Federal Government, State agencies, local water and flood control districts, and wind energy and mining companies that are not considered small governments. Consequently, we do not believe that the critical habitat designation would significantly or uniquely affect small government entities. As such, a Small Government Agency Plan is not required.
In accordance with E.O. 12630 (“Government Actions and Interference with Constitutionally Protected Private Property Rights”), we analyzed the potential takings implications of designating critical habitat for
In accordance with Executive Order 13132 (Federalism), this rule does not have significant Federalism effects. A federalism impact summary statement is not required. In keeping with Department of the Interior and Department of Commerce policy, we requested information from, and coordinated development of, this critical habitat designation with appropriate State resource agencies in California. We did not receive comments from State agencies. The designation of critical habitat in areas currently occupied by
Where State and local governments require approval or authorization from a Federal agency for actions that may affect critical habitat, consultation under section 7(a)(2) would be required. While non-Federal entities that receive Federal funding, assistance, or permits, or that otherwise require approval or authorization from a Federal agency for an action, may be indirectly impacted by the designation of critical habitat, the legally binding duty to avoid destruction or adverse modification of critical habitat rests squarely on the Federal agency.
In accordance with Executive Order 12988 (Civil Justice Reform), the Office of the Solicitor has determined that the rule does not unduly burden the judicial system and that it meets the applicable standards set forth in sections 3(a) and 3(b)(2) of the Order. We are designating critical habitat in accordance with the provisions of the Act. This final rule identifies the elements of physical or biological features essential to the conservation of the
This rule does not contain any new collections of information that require approval by OMB under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
It is our position that, outside the jurisdiction of the U.S. Court of Appeals for the Tenth Circuit, we do not need to prepare environmental analyses pursuant to the National Environmental Policy Act (NEPA; 42 U.S.C. 4321
In accordance with the President's memorandum of April 29, 1994, Government-to-Government Relations with Native American Tribal Governments (59 FR 22951), E.O. 13175, and the Department of the Interior's manual at 512 DM 2, we readily acknowledge our responsibility to communicate meaningfully with recognized Federal tribes on a government-to-government basis. In accordance with Secretarial Order 3206 of June 5, 1997 (American Indian Tribal Rights, Federal-Tribal Trust Responsibilities, and the Endangered Species Act), we readily acknowledge our responsibilities to work directly with tribes in developing programs for healthy ecosystems, to acknowledge that tribal lands are not subject to the same controls as Federal public lands, to remain sensitive to Indian culture, and to make information available to tribes.
In the proposed revisions to critical habitat published in the
A complete list of all references cited is available on the Internet at
The primary authors of this rulemaking are the staff members of the Carlsbad Fish and Wildlife Office.
Endangered and threatened species, Exports, Imports, Reporting and recordkeeping requirements, Transportation.
Accordingly, we amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as set forth below:
16 U.S.C. 1361–1407; 1531–1544; and 4201–4245, unless otherwise noted.
(h) * * *
(a)
(1) Critical habitat units are depicted for Riverside County, on the maps below.
(2) Within these areas, the primary constituent element of the physical or biological features essential to the conservation of
(i) They are active sand dunes, stabilized or partially stabilized sand dunes, active or stabilized sand fields (including hummocks forming on leeward sides of shrubs), ephemeral sand fields or dunes, and fluvial sand deposits on floodplain terraces of active washes.
(ii) They are found within the fluvial sand depositional areas, and the aeolian sand source, transport, and depositional areas of the sand transport system.
(iii) They comprise sand originating in the hills surrounding Coachella Valley and alluvial deposits at the base of the Indio Hills, which is moved into the valley by water (fluvial transport) and through the valley by wind (aeolian transport).
(3) Critical habitat does not include manmade structures (such as buildings, aqueducts, runways, roads, and other paved areas) and the land on which they are located existing within the legal boundaries on March 15, 2013.
(4)
(5)
(6) Unit 1: San Gorgonio River/Snow Creek System.
(i) Note: Map of Unit 1 follows:
(7) Unit 2: Whitewater River System.
(i) Note: Map of Unit 2 follows:
(8) Unit 3: Mission Creek/Morongo Wash System.
(i) Note: Map of Unit 3 follows:
(9) Unit 4: Thousand Palms System.
(i) Note: Map of Unit 4 follows: