National Foundation on the Arts and the Humanities
Committee for Purchase From People Who Are Blind or Severely Disabled
Census Bureau
International Trade Administration
National Oceanic and Atmospheric Administration
Army Department
Energy Information Administration
Federal Energy Regulatory Commission
Western Area Power Administration
Centers for Disease Control and Prevention
Centers for Medicare & Medicaid Services
Food and Drug Administration
Health Resources and Services Administration
National Institutes of Health
Coast Guard
National Park Service
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Labor Statistics Bureau
Occupational Safety and Health Administration
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Federal Highway Administration
Federal Motor Carrier Safety Administration
Surface Transportation Board
Foreign Assets Control Office
Internal Revenue Service
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U.S. Small Business Administration.
Correcting amendment.
The U.S. Small Business Administration (SBA) published a final rule in the
Effective May 23, 2014
Dean Koppel, Office of Government Contracting, U.S. Small Business Administration, 409 Third Street SW., 8th Floor, Washington, DC 20416, (202) 205–7322,
On June 28, 2013, SBA published a final rule to implement provisions in the Small Business Jobs Act of 2010 pertaining to small business size and status integrity. 78 FR 38811. That rule amended 13 CFR 121.411 by adding new paragraphs (d) through (h). On July 16, 2013, at 78 FR 42391, SBA published a second final rule to implement provisions, also in the Small Business Jobs Act of 2010, concerning subcontracting compliance. In pertinent part, this final rule amended 13 CFR 121.411. However, in so doing, SBA inadvertently failed to incorporate the new paragraphs added to § 121.411 by the final rule published on June 28, 2013. When SBA published the rule on July 16, 2013, the Agency should have amended § 121.411 by revising paragraph (a), redesignating paragraphs (b) through (h) as paragraphs (c) through (i), and adding a new paragraph (b). As a result of the Agency's oversight, the current regulations in § 121.411 contain two paragraphs (d). This correcting amendment is necessary to ensure the proper designation of the paragraphs in that section.
Government contracting programs, Small business subcontracting program.
Accordingly, 13 CFR part 121 is corrected by making the following correcting amendments:
15 U.S.C. 632, 634(b)(6), 662, and 694a(9).
Federal Aviation Administration (FAA), DOT.
Final rule.
This action establishes a new restricted area, designated R–4001C, within a part of the existing restricted areas R–4001A and R–4001B, at the U.S. Army's Aberdeen Proving Ground in Maryland. The purpose of the new area is to contain two moored balloons, called Aerostats, operating continuously at approximately 10,000 feet MSL. This action segregates nonparticipating aircraft from a hazard to navigation in Aberdeen Proving Ground airspace.
Effective date 0901 UTC, July 24, 2014.
Paul Gallant, Airspace Policy and Regulations Group, Office of Airspace Services, Federal Aviation Administration, 800 Independence Avenue SW., Washington, DC 20591; telephone: (202) 267–8783.
On October 1, 2013, the FAA published in the
Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal. No comments were received.
The FAA is amending 14 CFR part 73 by creating a new restricted area, designated R–4001C, within a part of existing restricted areas R–4001A and R–4001B at Aberdeen Proving Ground, MD. R–4001C is a rectangular area, approximately 4.5 nautical miles (NM) by 2 NM in size, that extends from the surface to 10,000 feet MSL. The time of designation for R–4001C is “continuous.” Because the moored balloons contained in the area will be airborne 24 hours per day (except for periods when maintenance is required, or the winds exceed 60 knots), R–4001C is not a joint-use restricted area. R–4001A and R–4001B continue to be joint-use areas, meaning that they may be released, in whole or in part, to the FAA controlling agency when the airspace is not needed by the using agency. During times when the airspace
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. Therefore, this regulation: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it modifies restricted area airspace to support military requirements at Aberdeen Proving Ground, MD.
In accordance with FAA Order 1050.1E, paragraphs 402 and 404d, the FAA has conducted an independent evaluation of the United States Army's Final Environmental Assessment for the Joint Land Attack Cruise Missile Defense Elevated Netted Sensor System (JLENS) at Army Garrison Aberdeen Proving Group, Maryland, dated February 2014 (hereinafter “the FEA”) regarding the construction of sites for the operational exercise of the JLENS at Aberdeen Proving Ground. The FAA adopted the FEA and prepared a Finding of No Significant Impact/Record of Decision dated May 2014. The FAA has determined that no significant impacts would occur as a result of the Federal action and therefore that preparation of an Environmental Impact Statement is not warranted and a Finding of No Significant Impact in accordance with 40 CFR Part 1501.4(e) is appropriate.
Airspace, Prohibited areas, Restricted areas.
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 73 as follows:
49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–1963 Comp., p. 389.
Boundaries. Beginning at lat. 39°30′30″ N., long. 76°09′59″ W.; to lat. 39°29′00″ N., long. 76°07′59″ W.; to lat. 39°29′30″ N., long. 76°04′59″ W.; to lat. 39°27′00″ N., long. 76°00′29″ W.; to lat. 39°19′47″ N., long. 76°11′33″ W.; to lat. 39°17′30″ N., long. 76°12′58″ W.; to lat. 39°16′24″ N., long. 76°16′17″ W.; to lat. 39°17′13″ N., long. 76°18′48″ W.; to lat. 39°18′42″ N., long. 76°18′48″ W.; to lat. 39°20′03″ N., long. 76°20′30″ W.; to lat. 39°19′56″ N., long. 76°21′02″ W.; to lat. 39°20′39″ N., long. 76°21′59″ W.; to lat. 39°22′00″ N., long. 76°21′59″ W.; to lat. 39°23′28″ N., long. 76°20′39″ W.; to lat. 39°26′10″ N., long. 76°14′49″ W.; to lat. 39°27′00″ N., long. 76°12′29″ W.; to the point of beginning, excluding R–4001C.
Using agency. U.S. Army, Commander, Aberdeen Proving Ground, MD.
Boundaries. Beginning at lat. 39°17′30″ N., long. 76°12′58″ W.; to lat. 39°12′10″ N., long. 76°16′29″ W.; to lat. 39°12′45″ N., long. 76°22′29″ W.; to lat. 39°17′30″ N., long. 76°19′44″ W.; to lat. 39°18′30″ N., long. 76°21′59″ W.; to lat. 39°20′39″ N., long. 76°21′59″ W.; to lat. 39°19′56″ N., long. 76°21′02″ W.; to lat. 39°20′03″ N., long. 76°20′30″ W.; to lat. 39°18′42″ N., long. 76°18′48″ W.; to lat. 39°17′13″ N., long. 76°18′48″ W.; to lat. 39°16′24″ N., long. 76°16′17″ W.; to the point of beginning.
Using agency. U.S. Army, Commander, Aberdeen Proving Ground, MD.
Boundaries. Beginning at lat. 39°21′50″ N., long. 76°21′59″ W.; to lat. 39°23′01″ N., long. 76°16′35″ W.; to lat. 39°21′04″ N., long. 76°15′52″ W.; to lat. 39°19′56″ N., long. 76°21′02″ W.; to lat. 39°20′39″ N., long. 76°21′59″ W.; to the point of beginning.
Designated altitudes. Surface to 10,000 feet MSL.
Time of designation. Continuous.
Controlling agency. FAA, Potomac TRACON.
Using agency. U.S. Army, Commander, Aberdeen Proving Ground, MD.
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 May 23, 2014. The compliance date for each
The incorporation by reference of certain publications listed in the regulations is approved by the Director of the Federal Register as of May 23, 2014.
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 part 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.
Federal Aviation Administration (FAA), DOT.
Final rule.
This rule 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 May 23, 2014. 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 May 23, 2014.
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 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 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.
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:
Office of the Assistant Secretary for Fair Housing and Equal Opportunity, HUD.
Instructions for use of alternative accessibility standard.
HUD is issuing this document to permit recipients of Federal financial assistance from HUD (HUD recipients) to use an alternative accessibility standard for purposes of complying with Section 504 of the Rehabilitation Act of 1973 (Section 504) and HUD's implementing regulation at 24 CFR part 8 (Section 504 regulation) until HUD formally revises its Section 504 regulation to adopt an updated accessibility standard. In March 2011, the Department of Justice (DOJ), pursuant to its coordination authority under Section 504, advised Federal agencies that they may permit covered entities to use the 2010 ADA Standards for Accessible Design (2010 Standards) as an acceptable alternative to the Uniform Federal Accessibility Standards (UFAS) until such time as they update their agency's regulation implementing the Federally assisted provisions of Section 504. Consistent with DOJ's advice, this document provides HUD recipients the option of using the 2010 Standards under title II of the ADA, except for certain specific provisions identified in this document, as an alternative accessibility standard to UFAS for purposes of complying with Section 504 and HUD's Section 504 regulation for new construction and alterations commenced on or after May 23, 2014. This document is in effect until HUD formally revises its Section 504 regulation to adopt an updated accessibility standard.
Cheryl Kent, Special Advisor for Disability Policy, Office of Program Compliance and Disability Rights, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410, telephone 202–402–7058 (this is not a toll-free number). Individuals who are deaf, are hard of hearing, or have speech impairments may access this number via TTY by calling the toll-free Federal Information Relay Service at 800–877–8339.
HUD's Section 504 regulation requires that programs or activities receiving Federal financial assistance be readily accessible to and usable by persons with disabilities. HUD's Section 504 regulation provides that the design, construction, or alteration of buildings and facilities in conformance with UFAS is deemed to be in compliance with the accessibility requirements of Section 504 (24 CFR 8.32). Many of the programs or activities that are subject to HUD's Section 504 regulation, however, are also subject to title II of the ADA, which applies to public entities, or title III of the ADA, which covers certain private entities, including public accommodations, and are therefore required to comply with the 2010 Standards. When more than one law and accessibility standard applies, it is currently necessary for the recipient to determine on a section-by-section basis which standard affords greater accessibility.
In March 2011, DOJ advised Federal agencies that they may provide covered entities the option of using the 2010 Standards as an acceptable alternative to UFAS (
HUD has identified certain provisions in the 2010 Standards that provide less accessibility than is currently required by UFAS and/or HUD's Section 504 regulation. As a result, HUD is not deeming use of those specific provisions of the 2010 Standards as a means of providing accessibility under Section 504 because HUD cannot decrease the level of accessibility currently required by its Section 504 regulation without engaging in notice and comment rulemaking. Those provisions are summarized in the Appendix of this document.
The option to utilize the 2010 Standards under title II of the ADA, except for certain provisions identified in this document, is available to all HUD recipients for purposes of complying with HUD's Section 504 regulation whether they are private or
Section 504 and HUD's Section 504 regulation prohibit discrimination on the basis of disability in any program or activity that receives Federal financial assistance from the Department.
Currently, pursuant to HUD's Section 504 regulation, the design, construction, or alteration of buildings in conformance with UFAS is deemed to be in compliance with the accessibility requirements of Section 504.
On July 23, 2004, the Access Board published updated minimum accessibility guidelines for both the ADA and the ABA known as the Americans with Disabilities Act and Architectural Barriers Act Accessibility Guidelines (2004 ADA and ABA Accessibility Guidelines). The 2004 ADA and ABA Accessibility Guidelines updated the accessibility provisions contained in UFAS and the 1991 ADA Accessibility Guidelines. The 2004 ADA and ABA Accessibility Guidelines contain three parts: application and scoping requirements for facilities covered by the ADA (ADA Chapters 1 and 2); application and scoping requirements for facilities covered by the ABA (ABA Chapters 1 and 2); and a common set of technical provisions (Chapters 3 through 10). The 2004 ABAAG refers to ABA scoping Chapters 1 and 2 and technical provisions in Chapters 3 through 10, and the 2004 ADAAG refers to ADA scoping Chapters 1 and 2 and technical provisions in Chapters 3 through 10.
HUD will engage in the rulemaking process in order to replace UFAS with a new accessibility standard based on the updated guidelines for purposes of both Section 504 and ABA compliance. Until HUD adopts a new accessibility standard, HUD recipients who undertake alterations or new construction of a project may continue to utilize UFAS and HUD's Section 504 or ABA regulations.
Title II of the ADA prohibits discrimination on the basis of disability by state and local government entities, including by requiring facilities designed, constructed, or altered by or on behalf of a public entity, or as part of a public entity's program, to be readily accessible to and usable by individuals with disabilities.
On September 15, 2010, DOJ published a final rule revising its title II regulation at 28 CFR part 35. Among other requirements, the revised regulation adopted a new accessibility standard referred to as the 2010 ADA Standards for Accessible Design (2010 Standards).
For title II entities, the 2010 Standards consist of the 2004 ADAAG and requirements contained in 28 CFR 35.151. Section 35.151 sets forth requirements that have the effect of modifying provisions in 2004 ADAAG and include scoping and technical requirements for social service center establishments, housing at places of education, assembly areas, medical care facilities, residential dwelling units for sale to individuals, and detention and correctional facilities. For example, social service center establishments, which include group homes, halfway houses, shelters, and similar facilities providing temporary sleeping accommodations, must comply with the 2010 Standards applicable to residential facilities including certain requirements specified at 28 CFR 35.151(e). Most housing at a place of education (defined in the title II and title III regulations) must comply with the 2010 Standards applicable to transient lodging including certain requirements specified at 28 CFR 35.151(f).
In March 2011, pursuant to its coordination authority under Section 504, DOJ advised Federal agencies that until such time as they update their agency's regulation implementing the Federally assisted provisions of Section 504, they may notify covered entities that they may use the 2010 Standards as an acceptable alternative to UFAS. Consistent with this guidance, HUD will permit, but not require HUD recipients to use the 2010 Standards under title II of the ADA, except for those provisions identified in this document, as an alternative accessibility standard to UFAS until HUD revises its Section 504 regulation to formally adopt an updated accessibility standard.
It is important to emphasize that HUD recipients electing to use the 2010 Standards must use the 2010 Standards applicable to public entities under title II of the ADA, with the exceptions noted below, to the entire project; they may not rely on some requirements contained in the 2010 Standards and some requirements contained in UFAS. For purposes of Section 504 compliance, this does not mean that existing buildings that are part of a project and which are not being altered must be brought up to the 2010 Standards. Rather, it means that when a HUD recipient undertakes new construction or alterations and chooses to use the 2010 Standards with the exceptions outlined in this document, the recipient must apply the 2010 Standards to all of the new construction or alterations. It should be noted that the 2010 Standards include a safe harbor for portions of a path of travel complying with UFAS or the 1991 Standards (28 CFR 35.151(b)(4)(ii)(C)). This safe harbor does not apply to existing elements that are altered. The 2010 Standards are available at
This option applies to all HUD recipients for purposes of compliance with HUD's Section 504 regulation, including private and public entities, and entities covered by Section 504 but not title II or III of the ADA. Most recipients covered by Section 504 based on the receipt of Federal financial assistance from HUD are state or local government entities or private entities covered by the ADA, and are therefore required to comply with ADA accessibility requirements.
This document makes no changes for entities that choose to use UFAS for purposes of Section 504 compliance along with HUD's Section 504 regulation when undertaking alterations or new construction. HUD recipients may continue to use HUD's Section 504 regulation and UFAS for Section 504 compliance until HUD formally adopts an updated accessibility standard through rulemaking. However, because UFAS is no longer an option for ensuring compliance with title II of the ADA, HUD recipients subject to both Section 504 and title II of the ADA must take an additional step in order to ensure compliance with the ADA if they use UFAS for purposes of Section 504. Specifically, in addition to complying with each scoping and technical provision of UFAS, they must also comply with each scoping and technical provision of the 2010 Standards that affords greater accessibility than UFAS.
As stated above, the 2010 Standards under title II consist of the 2004 ADAAG and requirements in 28 CFR 35.151. HUD is permitting use of the 2010 Standards as an alternative accessibility standard with the following exceptions. These exceptions are necessary to ensure that HUD recipients construct or alter buildings and facilities with at least the same degree of accessibility as is currently required under HUD's Section 504 regulation and UFAS. The Department lacks the authority to allow the use of an alternative standard that would reduce accessibility or usability for individuals with disabilities in housing
The 2010 Standards define some terms that are also defined in HUD's Section 504 regulation. In such cases, the definition in HUD's Section 504 regulation shall control.
The 2010 Standards generally defer to HUD on scoping of
Under § 35.151(a)(2) full compliance with the requirements of the 2010 Standards is not required in new construction where a public entity can demonstrate that it is structurally impracticable to do so. Full compliance is considered structurally impracticable “only in those rare circumstances when the unique characteristics of terrain prevent the incorporation of accessibility features.”
The 2010 Standards at 28 CFR 35.151(b) and section 202 contain criteria detailing when alterations of facilities must be made accessible. In certain situations, application of the 2010 Standards may result in fewer units containing accessibility features. Because HUD cannot use this document to permit the use of a lesser requirement than that required by its Section 504 regulation, HUD is not permitting use of § 35.151(b). Therefore, multifamily housing projects must continue to utilize the terms “substantial alterations” and “other alterations” as defined in HUD's Section 504 regulation to determine accessibility requirements.
Section 202.2 of the 2010 Standards contains scoping requirements which may, in certain situations, afford less accessibility for individuals with disabilities than is currently provided by HUD's rules at 24 CFR part 8 and UFAS. Because the Department is precluded from permitting the use of an alternative standard that might reduce accessibility for individuals with disabilities in housing settings without notice and comment rulemaking, HUD is not permitting use of the scoping requirements for additions at section 202.2 of the 2010 Standards.
Section 202.4 of the 2010 Standards includes a path of travel obligation when areas containing a primary function are altered. Under the Exception to Section 202.4, residential dwelling units are exempted from this requirement. Under HUD's Section 504 regulation, when accessible dwelling units are newly constructed or where alterations include the provision of accessible dwelling units, the dwelling units must be on an accessible route. HUD is not permitting use of the Exception to Section 202.4 because this may conflict with HUD's Section 504 regulation.
Section 203.8 of the 2010 Standards provides that, in residential facilities, common use areas that do not serve residential dwelling units required to provide mobility features are not required to be accessible or on an accessible route. By contrast, common use areas in residential facilities subject to the new construction requirements of the FHAct must comply with FHAct accessibility requirements, including the requirement to be on an accessible route, regardless of whether or not the common use areas serve units required to have mobility features pursuant to the ADA or Section 504. The only exception would be common use areas provided on upper stories of a non-elevator building provided the same common use areas are provided on the ground floor. In addition, this general exception for common use areas may result in less accessibility than is currently required under HUD's Section 504 regulation and UFAS. Accordingly, HUD is not permitting use of Section 203.8 under this document.
The 2010 Standards require a more limited level of access within employee work areas in ADA-covered facilities than UFAS, which requires employee work areas to be fully accessible. As stated above, the Department has no authority to allow the use of an alternative standard that may reduce accessibility for individuals with disabilities without notice and comment rulemaking. Section 203.9, as well as
The 2010 Standards contain an exception for accessibility at site arrival points which provides that an “
The 2010 Standards contain specific exceptions to the general provision requiring at least one accessible route to connect each story and mezzanine in multi-story buildings or facilities (Section 206.2.3). Exception 1 to Section 206.2.3 of the 2010 Standards contains an elevator exception for private buildings or facilities that are less than three stories or that have less than 3,000 square feet per story (unless the type of building is omitted in the standard from the exception,
UFAS requires front loading washing machines and clothes dryers in common use laundry rooms in facilities serving accessible residential dwelling units.
Section 215.1 includes a new exception for visible alarms in the alteration of existing facilities, providing that visible alarms must be installed only when an existing fire alarm system is upgraded or replaced, or a new fire alarm system is installed. Under this exception, visible alarms would not be required as part of alterations unless the alarm system is upgraded, replaced, or newly installed. HUD is not permitting use of this exception because its application may result in less accessibility than is currently required under HUD's Section 504 regulation. Instead, recipients engaged in alterations must refer to HUD's regulation at 24 CFR 8.22, 8.23, 8.24, and 8.25 to determine whether visible alarms must be installed. For recipients engaged in substantial alterations, the new construction requirements apply (with the exception that building alterations are not required that have little likelihood of being accomplished without removing or altering a load-bearing structural member) and visible alarms would be included in the alterations. For recipients engaged in other alterations not rising to the level of substantial alterations, any alterations (including alterations to dwelling units, common areas, or parts of facilities that affect accessibility of existing housing facilities) must, to the maximum extent feasible, be made to be readily accessible to and usable by individuals with disabilities. “To the maximum extent feasible” means recipients are not required to make alterations if doing so would impose undue financial and administrative burdens on the operation of the multifamily housing project, but must provide for accessibility up to the point of undue financial and administrative burdens. This is a high threshold to meet. Therefore, HUD recipients must continue to comply with the provisions in HUD's Section 504 regulation, and not utilize the exception in the 2010 Standards. If visible alarms are not provided, there must be an effective means of alerting individuals who are deaf or hard of hearing to fires and other emergencies in order to afford them an equal opportunity to evacuate to safety.
For the convenience of the reader, the Appendix to this document provides a table that lists in column one the exceptions contained in the document and in the second column, the UFAS and/or HUD Section 504 regulation provisions that would need to be complied with because the entity could not use that section of the ADA 2010 Standards. The table is provided so that it can be used by HUD recipients as a stand-alone chart that lists, in a single table, not only what the exceptions are, but what actions recipients must undertake in lieu of using the exceptions.
Recipients of HUD funding must be aware of and comply with the accessibility requirements of all
The FHAct design and construction requirements apply to “covered multifamily dwellings” designed and constructed for first occupancy after March 13, 1991. “Covered multifamily dwellings” means all buildings consisting of four or more dwelling units: In buildings without an elevator, all of the ground floor dwelling units are covered; in buildings with one or more elevators, all of the dwelling units are covered. HUD encourages entities to refer to HUD's FHAct regulation and technical guidance issued by HUD to ensure compliance with FHAct accessibility requirements.
This table is provided for HUD recipients that elect to use the 2010 Standards under title II of the Americans with Disabilities Act (ADA) as an alternative accessibility standard to UFAS for purposes of complying with Section 504 until HUD formally revises its Section 504 regulation. Please note that, for purposes of Section 504 compliance, the 2010 Standards may be used with the following exceptions.
The option to use the 2010 Standards under title II of the ADA, with identified exceptions, is available to all HUD recipients for purposes of complying with Section 504. HUD recipients must designate the accessibility standard they are using: The 2010 Standards with the identified exceptions outlined in this May 23, 2014 Notice, or UFAS. If HUD recipients choose to use the 2010 Standards, they must apply the 2010 Standards, with the identified exceptions, to the entire project. This option applies until HUD revises its Section 504 regulation to adopt an updated accessibility standard. This table provides a summary. Additional explanatory information is provided in other parts of the May 23, 2014 document.
Coast Guard, DHS.
Final rule.
The Coast Guard is removing the existing drawbridge operation regulation for the drawbridge across the Atlantic Intracoastal Waterway mile 878.9, Titusville, Florida. The drawbridge was replaced with a fixed bridge in 2011 and the operating regulation is no longer applicable or necessary.
This rule is effective May 23, 2014.
The docket for this final rule [USCG–2014–0279], is available at
If you have questions on this rule, call or email Mr. Michael Lieberum, Coast Guard; telephone 305–415–6744, 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), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because the SR 402/Max Brewer Bridge, that once required draw operations in 33 CFR 117.261(k), was removed from Atlantic Intracoastal Waterway mile 878.9 and replaced with a fixed bridge in 2011. Therefore, the regulation is no longer applicable and shall be removed from publication. It is unnecessary to publish an NPRM because this regulatory action does not place any restrictions on mariners. It removes a regulation that has no further use or value.
Under 5 U.S.C. 553(d)(1), a rule that relieves a restriction is not required to provide the 30 day notice period before its effective date. This rule removes the SR 402/Max Brewer Bridge draw operation requirements under 33 CFR 117.261(k), thus removing a regulatory restriction on the public. Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective in less than 30 days after publication in the
The SR 402/Max Brewer Bridge across the Atlantic Intracoastal Waterway mile 878.9 was removed and replaced with a fixed bridge in 2011. It has come to the attention of the Coast Guard that the governing regulation for this drawbridge was never removed subsequent to the completion of the fixed bridge that replaced it. The elimination of this drawbridge necessitates the removal of the drawbridge operation regulation, 33 CFR 117.261(k), that pertaining to the former drawbridge.
The purpose of this rule is to remove the section (k) of 33 CFR 117.261 that refers to the SR 402/Max Brewer Bridge at mile 878.9, from the Code of Federal Regulations because it governs a bridge that is no longer able to be opened.
The Coast Guard is changing the regulation in 33 CFR 117.261(k) by removing restrictions and the regulatory burden related to the draw operations for this bridge that no longer exists. The change removes the section (k) of the regulation governing the SR 402/Max Brewer Bridge because the bridge has been replaced with a fixed bridge and the old bascule bridge was removed from the waterway. This Final Rule seeks to update the Code of Federal Regulations by removing language that governs the operation of the SR 402/Max Brewer Bridge, which in fact no longer exists as a drawbridge. This change does not affect waterway or land traffic. This change does not affect nor does it alter the operating schedules in 33 CFR 117.261 that govern the remaining active drawbridges on the Atlantic Intracoastal Waterway.
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 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 does not consider this rule to be “significant” under that Order because it is an administrative change and does not affect the way vessels operate on the waterway.
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 have no effect on small entities since this drawbridge has been removed and replaced with a fixed bridge and the regulation governing draw operations for this bridge is no longer applicable. There is no new restriction or regulation being imposed by this rule; therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that this final rule will not have a significant economic impact on a substantial number of small entities
This rule calls for no new collection of information under the Paperwork
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it 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 might 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 guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321–4370f), and have concluded that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment because it removes a regulation that applied to a drawbridge that no longer exists. This rule is categorically excluded, under figure2–1, paragraph (32)(e), of the Instruction.
Under figure 2–1, paragraph (32)(e), of the Instruction, an environmental analysis checklist and a categorical exclusion determination are not required for this rule.
Bridges.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 117 as follows:
33 U.S.C. 491; 33 CFR 1.05–1; Department of Homeland Security Delegation No. 0170.1.
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a 300-foot-radius, temporary safety zone on Presque Isle Bay, Erie, PA for a fireworks display May 31, 2014. This temporary safety zone is necessary to protect mariners and vessels from the navigational hazards associated with this fireworks display. This safety zone will restrict vessels from a portion of Presque Isle Bay during the BMA Media Group Fireworks display.
The temporary final rule is effective from 9:30 p.m. until 10:30 p.m. on May 31, 2014.
Documents mentioned in this preamble are part of docket [USCG–2014–0258]. 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 LT Christopher Mercurio, Chief of Waterways Management, U.S. Coast Guard Sector Buffalo; telephone 716–843–9573, 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 (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 doing so would be impracticable and contrary to the public interest. The final details for this event were not known to the Coast Guard until there was insufficient time remaining before the event to publish an NPRM. Thus, delaying the effective date of this rule to wait for a comment period to run would be both impracticable and contrary to the public interest because it would inhibit the Coast Guard's ability to protect spectators and vessels from the hazards associated with a maritime fireworks display.
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this temporary rule effective less than 30 days after publication in the
Between 9:30 p.m. and 10:30 p.m. on May 31, 2014, a fireworks display will be held on Presque Isle Bay in Erie, PA. The Captain of the Port Buffalo has determined that fireworks launched in close proximity to a gathering of watercraft pose a significant risk to public safety and property. Such hazards include premature and accidental detonations, dangerous projectiles, explosions, ignition of flammable materials, burn injuries, and falling or burning debris.
With the aforementioned hazards in mind, the Captain of the Port Buffalo has determined that this temporary safety zone is necessary to ensure the safety of spectators. This zone will encompass all waters of Presque Isle Bay, Erie, PA within a 300-foot radius of position 42°08′19.082″ N and 080°05′28.903″ W (NAD 83). This zone will be effective and enforced from 9:30 p.m. until 10:30 p.m. on May 31, 2014.
Entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port Buffalo or his designated on-scene representative. The Captain of the Port or his designated on-scene representative may be contacted via VHF Channel 16.
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. It is not “significant” under the regulatory policies and procedures of the Department of Homeland Security (DHS).
We conclude that this rule is not a significant regulatory action because we anticipate that it will have minimal impact on the economy, will not interfere with other agencies, will not adversely alter the budget of any grant or loan recipients, and will not raise any novel legal or policy issues. The safety zone created by this rule will be relatively small and enforced for relatively short time. Also, the safety zone is designed to minimize its impact on navigable waters. Furthermore, the safety zone has been designed to allow vessels to transit around it. Thus, restrictions on vessel movement within that particular area are expected to be minimal. Under certain conditions, moreover, vessels may still transit through the safety zone when permitted by the Captain of the Port.
Under the Regulatory Flexibility Act (5 U.S.C. 601–612), we have considered the impact of this rule on small entities. 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. 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 might be small entities: The owners or operators of vessels intending to transit or anchor in a portion of Presque Isle Bay on the evening of May 31, 2014.
This safety zone will not have a significant economic impact on a substantial number of small entities for the following reasons: This safety zone will be effective, and thus subject to enforcement, for only 60 minutes late in the day. Traffic may be allowed to pass through the zone with the permission of the Captain of the Port. The Captain of the Port can be reached via VHF channel 16. Before this rule becomes effective, we will issue local Broadcast Notice to Mariners.
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
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 safety zone and, therefore it 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. Chapters 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.
(a)
(b)
(c)
(2) This safety zone is closed to all vessel traffic, except as may be permitted by the Captain of the Port Buffalo or his designated on-scene representative.
(3) The “on-scene representative” of the Captain of the Port Buffalo is any Coast Guard commissioned, warrant or petty officer who has been designated by the Captain of the Port Buffalo to act on his behalf.
(4) Vessel operators desiring to enter or operate within the safety zone shall contact the Captain of the Port Buffalo or his on-scene representative to obtain permission to do so. The Captain of the Port Buffalo or his on-scene representative may be contacted via VHF Channel 16. Vessel operators given permission to enter or operate in the safety zone must comply with all directions given to them by the Captain of the Port Buffalo, or his on-scene representative.
U.S. Environmental Protection Agency (EPA).
Interim Final Rule.
The Environmental Protection Agency (EPA) is making an interim final determination to defer the imposition of sanctions based on a proposed approval published elsewhere in this
This interim final determination is effective on May 23, 2014. However, comments will be accepted until June 23, 2014.
Submit comments, identified by docket number EPA–R09–OAR–2013–0823, by one of the following methods:
•
•
•
John Ungvarsky, Air Planning Office (AIR–2), U.S. Environmental Protection Agency, Region IX, (415) 972–3963,
Throughout this document, “we,” “us” and “our” refer to the EPA.
On March 28, 2013 (78 FR 18849), we published a final action to disapprove revisions to the state implementation plan (SIP) submitted by the State of California to demonstrate compliance with the vehicle miles traveled (VMT) emissions offset requirement under Clean Air Act (CAA) section 182(d)(1)(A) with respect to the 1-hour ozone and 8-hour ozone NAAQS in the South Coast nonattainment area. Under section 110(k) of the CAA, we disapproved these plan elements because they reflect an approach to showing compliance with section 182(d)(1)(A) that was rejected by the Ninth Circuit Court of Appeals in
On February 13, 2013, the State of California submitted, as a revision to the California SIP, the
In the Proposed Rules section of today's
EPA is providing the public with an opportunity to comment on this deferral of sanctions. If comments are submitted that change our assessment described in this interim final determination and the proposed full approval of the South Coast VMT Emissions Offset Demonstrations in Appendix VIII, we intend to take subsequent final action to reimpose sanctions pursuant to 40 CFR 52.31(d). If no comments are submitted that change our assessment, then all sanctions and sanction clocks will be permanently terminated on the effective date of a final rule approval.
We are making an interim final determination to defer the imposition of sanctions associated with our disapproval of revisions to the California SIP based on our concurrent proposal to approve the State's revision to the Los Angeles-South Coast portion of the California SIP as correcting the deficiency that initiated sanctions.
Because EPA has preliminarily determined that the State has corrected the deficiencies identified in EPA's disapproval action, relief from sanctions should be provided as quickly as possible. Therefore, EPA is invoking the good cause exception under the Administrative Procedure Act (APA) in not providing an opportunity for comment before this action takes effect (5 U.S.C. 553(b)(3)). However, by this action EPA is providing the public with a chance to comment on EPA's determination after the effective date, and EPA will consider any comments received in determining whether to reverse such action.
EPA believes that notice-and-comment rulemaking before the effective date of this action is impracticable and contrary to the public interest. EPA has reviewed the State's submittal and, through its proposed action, is indicating that it is more likely than not that the State has corrected the deficiencies that started the sanctions clocks. Therefore, it is not in the public interest to initially impose sanctions or to keep applied sanctions in place when the State has most likely done all it can to correct the deficiencies that triggered the sanctions clocks. Moreover, it would be impracticable to go through notice-and-comment rulemaking on a finding that the State has corrected the deficiencies prior to the rulemaking approving the State's submittal. Therefore, EPA believes that it is necessary to use the interim final rulemaking process to defer sanctions while EPA completes its rulemaking process on the approvability of the State's submittal. Moreover, with respect to the effective date of this action, EPA is invoking the good cause exception to the 30-day notice requirement of the APA because the
This action defers federal sanctions and imposes no additional requirements.
Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget.
This action is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not a significant regulatory action.
The administrator certifies that this action will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
This rule does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104–4).
This rule does not have tribal implications because it will 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, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
This action does not have Federalism implications because it does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999).
This rule is not subject to Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant.
The requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272) do not apply to this rule because it imposes no standards.
This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by July 22, 2014. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purpose of judicial review nor does it extend the time within which petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements (see section 307(b)(2)).
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental regulations, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA, the Agency) is amending the regulations promulgated as part of the National Recycling and Emission Reduction Program under section 608 of the Clean Air Act. EPA is amending those regulations to exempt certain refrigerant substitutes, listed as acceptable subject to use conditions in regulations promulgated as part of EPA's Significant New Alternative Policy program under section 612 of the Act, from the prohibition under section 608 on venting, release or disposal on the basis of current evidence that their venting, release or disposal does not pose a threat to the environment. Specifically, EPA is exempting from the venting prohibition isobutane (R–600a) and R–441A, as refrigerant substitutes in household refrigerators, freezers, and combination refrigerators and freezers, and propane (R–290), as a refrigerant substitute in retail food refrigerators and freezers (stand-alone units only).
This final rule is effective on June 23, 2014.
EPA has established a docket for this action under Docket ID No. EPA–HQ–OAR–2012–0580. All documents in the docket are listed on the
Sally Hamlin, Stratospheric Protection Division, Office of Air and Radiation, MC 6205J, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460; telephone number: (202) 343–9711; fax number: (202) 343–2338; email address:
This final action extends the exemption from the venting prohibition at 40 CFR 82.154(a)(1) to certain refrigerant substitutes in certain end-uses for which EPA has found the refrigerant substitutes acceptable subject to use conditions under CAA section 612 and the implementing regulations at 40 CFR Part 82, Subpart G. Specifically, EPA is exempting from the venting prohibition isobutane (R–600a) and R–441A as refrigerant substitutes in household refrigerators, freezers, and combination refrigerators and freezers, and propane (R–290), as a refrigerant substitute in retail food refrigerators and freezers (stand-alone units only).
Potentially regulated entities may include, but are not limited to, the following.
This table is not intended to be exhaustive, but rather provides a guide regarding entities likely to be regulated by this action. Other types of entities not listed in the table could also be affected. To determine whether your company is regulated by this action, you should carefully examine the applicability criteria contained in section 608 of the Clean Air Act (CAA, the Act) as amended, and relevant implementing regulations at 40 CFR Part 82, Subpart F. If you have any questions about whether this action applies to a particular entity, consult the person listed in the preceding section,
Section 608 of the Act as amended, titled
Section 608 is divided into three subsections. Briefly, section 608(a) requires EPA to promulgate regulations to reduce the use and the emissions of class I substances (e.g., CFCs and halons) and class II substances (HCFCs) to the lowest achievable level and to maximize the recapture and recycling of such substances. Section 608(b) requires that the regulations promulgated pursuant to subsection (a) contain standards and requirements for the safe disposal of class I and class II substances. Finally, section 608(c) contains self-effectuating provisions that prohibit any person from knowingly venting, releasing or disposing of any class I or class II substances, and their substitutes, used as refrigerants in appliances or IPR in a manner which permits such substances to enter the environment during maintenance, repairing, servicing, or disposal of appliances or IPR.
EPA's authority for the requirements in this action is based on section 608. As noted above, section 608(a) requires EPA to promulgate regulations regarding use and disposal of class I and II substances to “reduce the use and emission of such substances to the lowest achievable level” and “maximize the recapture and recycling of such substances.” Section 608(a) further provides that “[s]uch regulations may include requirements to use alternative substances (including substances which are not class I or class II substances) . . . or to promote the use of safe alternatives pursuant to section [612] or any combination of the foregoing.” Section 608(c)(1) provides that, effective July 1, 1992, it is “unlawful for any person, in the course of maintaining, servicing, repairing, or disposing of an appliance or industrial process refrigeration, to knowingly vent or otherwise knowingly release or dispose of any class I or class II substance used as a refrigerant in such appliance (or industrial process refrigeration) in a manner which permits such substance to enter the environment.” The statute exempts from this self-effectuating prohibition “[d]e minimis releases associated with good faith attempts to recapture and recycle or safely dispose” of such a substance. To implement and enforce the venting prohibition,
Effective November 15, 1995, section 608(c)(2) of the Act extends the prohibition in section 608(c)(1) to knowingly venting or otherwise knowingly releasing or disposing of any refrigerant substitute for class I or class II substances by any person maintaining, servicing, repairing, or disposing of appliances or IPR. This prohibition applies to any such substitute substance unless the Administrator determines that such venting, releasing, or disposing “does not pose a threat to the environment.” Thus, section 608(c) provides EPA authority to promulgate regulations to interpret, implement, and enforce this venting prohibition, including authority to implement section 608(c)(2) by exempting certain substitutes for class I or class II substances from the prohibition when the Administrator determines that such venting, release, or disposal does not pose a threat to the environment.
Final regulations promulgated under section 608 of the Act, published on May 14, 1993 (58 FR 28660), established a recycling program for ozone-depleting refrigerants recovered during the servicing and maintenance of air-conditioning and refrigeration appliances. In the same 1993 final rule, EPA also promulgated regulations implementing the section 608(c) prohibition on knowingly venting, releasing or disposing of class I or class II controlled substances.
On June 11, 1998, EPA proposed to implement and clarify the requirements of section 608(c)(2) of the Act by clarifying how the venting prohibition extends to substitutes for CFC and HCFC refrigerants (63 FR 32044). EPA issued a final rule March 12, 2004 (69 FR 11946) and a second rule on April 13, 2005 (70 FR 19273) clarifying how the venting prohibition in section 608(c) applies to refrigerant substitutes (e.g., hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs) in part or whole) during the maintenance, service, repair, or disposal of appliances. These regulations implementing section 608's recycling and emission reduction program were codified at 40 CFR part 82, subpart F. Before the amendments finalized in the present action, the regulation at 40 CFR 82.154(a) stated in part that:
i. Ammonia in commercial or industrial process refrigeration or in absorption units;
ii. Hydrocarbons in industrial process refrigeration (processing of hydrocarbons);
iii. Chlorine in industrial process refrigeration (processing of chlorine and chlorine compounds);
iv. Carbon dioxide in any application;
v. Nitrogen in any application; or
vi. Water in any application.
(2) The knowing release of a refrigerant or non-exempt substitute subsequent to its recovery from an appliance shall be considered a violation of this prohibition. De minimis releases associated with good faith attempts to recycle or recover refrigerants or non-exempt substitutes are not subject to this prohibition. . . . ”
As explained in EPA's earlier rulemaking concerning refrigerant substitutes, EPA has not promulgated regulations requiring certification of refrigerant recycling/recovery equipment intended for use with substitutes to date (70 FR 19275; April 13, 2005). However, as EPA has noted, the lack of a current regulatory provision should not be considered as an exemption from the venting prohibition for substitutes that are not expressly exempted in § 82.154(a).
Section 608(c)(2) extends the venting prohibition in section 608(c)(1) to substitutes for class I or class II substances, unless the Administrator determines that such venting, releasing, or disposing does not pose a threat to the environment.
For purposes of section 608(c)(2) of the CAA, EPA considers two factors in determining whether or not venting, release, or disposal of a refrigerant substitute during the maintenance, service, repair or disposing of appliances poses a threat to the environment. See 69 FR 11948 (March 12, 2004). First, EPA determines whether venting, release, or disposal of the refrigerant substitute poses a threat to the environment due to inherent characteristics of the refrigerant, such as global warming potential. Second, EPA determines whether and to what extent such venting, release, or disposal actually takes place during the maintenance, servicing, repairing, or disposing of appliances, and to what extent such venting, release, or disposal is controlled by other authorities, regulations, or practices. To the extent that such releases are adequately controlled by other authorities, EPA defers to those authorities.
In addressing the two factors mentioned in the paragraph above, the analysis in the proposed rulemaking published on April 12, 2012 (78 FR 21871) discussed the potential environmental impacts and existing authorities, practices, and controls for isobutane (R–600a) and R–441A as substitutes in household refrigerators, freezers, and combination refrigerators and freezers; and propane (R–290) as a substitute in retail food refrigerators and freezers (stand-alone units only). These refrigerant substitutes and end-uses were evaluated and determined to be acceptable subject to use conditions under SNAP in the December 20, 2011 final rule (76 FR 78838) (2011 SNAP rule).
EPA received comments on the revisions to the venting prohibition proposed on April 12, 2012, seeking clarification about the applicability of the exemption to the venting prohibition to various types of equipment not mentioned in the proposal. Three comments were received asking whether the determination of an exemption to the venting prohibition for isobutane (R–600a) and R–441A as substitutes in household refrigerators, freezers, and combination refrigerators and freezers would also apply to “household wine coolers” and “household beverage centers” and “stand-alone ice makers designed for household use.” This final action exempts isobutane (R–600a) and R–441A as refrigerant substitutes in household refrigerators, freezers, and combination refrigerators and freezers. The exemption under 608(c)(2), as proposed and as it is being finalized with this action, applies only to the uses that are acceptable subject to use conditions under the 2011 SNAP rule. The issue raised by the commenters concerns how the SNAP listing is interpreted and the issue of these end uses was not raised during the comment period for the 2011 SNAP rule. Under SNAP, we have explained that “household refrigerators, freezers and combination refrigerators and freezers” includes household refrigerators, freezers, and combination refrigerator/freezers intended primarily for residential use, although they may be used outside the home. Household freezers only offer storage space at freezing temperatures, unlike household refrigerators. See 76 FR at 78833. The 2011 SNAP rule also notes that the two hydrocarbon refrigerant substitutes can be used only in refrigerators or freezers that meet all requirements listed in Supplement SA to UL 250. Id. at 78837, codified at appendix R of subpart G to 40 CFR part 82. To the extent that household wine coolers, household beverage centers or stand-alone ice makers designed for household use meet these conditions, they would fit within the end use designed in the 2011 SNAP rule as “household refrigerators, freezers and combination refrigerators and freezers.”
Based on the analysis in the proposal for this action (April 12, 2012, 78 FR 21871), EPA finds that the venting, release, or disposal of isobutane (R–600a) and R–441A as substitutes in household refrigerators, freezers, and combination refrigerators and freezers and propane (R–290) as a substitute in retail food refrigerators and freezers (stand-alone units only) does not pose a threat to the environment based on the inherent characteristics of these substances, as well as the limited quantities used in the relevant applications.
In the proposal (April 12, 2012, 78 FR 21871), EPA provided an analysis that focused on the environmental impacts identified as a potential concern under SNAP (76 FR 78838) for these refrigerant substitutes: Ozone depletion potential, global warming potential, volatile organic compound (VOC) effects, and ecosystem risks. As discussed in the proposal, this analysis was based in part on the fact that the volume of hydrocarbons listed as acceptable with use conditions under the 2011 SNAP rule that could be released from the specific uses relevant to this exemption would be small. Based on this analysis, EPA determines that the venting, release, or disposal of isobutane (R–600a) and R–441A as substitutes in household refrigerators, freezers, and combination refrigerators and freezers and propane (R–290) as a substitute in retail food refrigerators and freezers (stand-alone units only) does not pose a significant threat to the environment with respect to the inherent characteristics of these substances.
The discussion in the proposal also noted that in prior rulemakings EPA evaluated the potential risks of fire from the use of hydrocarbons as refrigerant substitutes in certain appliances, and engineering approaches to avoid ignition sources from within the appliance. To address flammability risks of hydrocarbon refrigerant substitutes, EPA issued recommendations for their safe use in certain end-uses and specified use conditions for some end-uses through SNAP rulemakings (59 FR 13044; 76 FR 78832).
In support of EPA's proposed determination to exempt these hydrocarbon refrigerant substitutes from the venting prohibition in certain end uses, the proposal received comments from four commenters agreeing with EPA's cited reasons for determining that
Three commenters also stated that the overall greenhouse gas impact of all the activities involved in capture, transport, recycling or destruction would generate greater greenhouse gas emissions than would simply venting the small charge of hydrocarbon refrigerant substitutes in the appliances.
One commenter supported EPA's proposed determination to exempt venting, release, or disposal of these hydrocarbon refrigerant substitutes because “there are currently no commercially available reclaim devices [sic] available in the US rated for use with hydrocarbon or other flammable refrigerants” and because the commenter is unaware of facilities equipped to accept reclaimed hydrocarbon refrigerants from a service company. EPA notes, however, that it does not believe this commenter means “reclaim devices” and “reclaimed hydrocarbon refrigerants,” as the proposed rule focuses on the release of the three hydrocarbon refrigerant substitutes from appliances during the maintenance, service, repair, or disposal of appliances, and the reclamation of refrigerants is a purification process often involving a distillation column, to which refrigerant recovered from appliances is transported in bulk. We believe that the commenter means “recovery devices” and “recovered hydrocarbon refrigerants.”
Another commenter provided the following information in support of EPA's proposed determination to exempt from the venting prohibition the hydrocarbon refrigerant substitutes determined to be acceptable subject to use conditions under the 2011 SNAP rule. This commenter stated that the release of the amounts of hydrocarbon (HC) refrigerant approved for residential equipment (57g) and commercial stand-alone equipment (150g) is smaller than the amount contained in many individual aerosol cans that are used every day in the United States. The total release from the 2 billion aerosol cans sold in the U.S. each year “are several orders of magnitude higher than any releases of [the proposed] refrigerant charges.”
This same commenter also supports EPA's determination noting that there can be energy savings of 12 to 55 percent from a unit using HC refrigerants as compared to a unit using HFC refrigerants, with a much greater reduction in greenhouse gas emissions than the amount that might be released during maintenance, servicing or repair.
Finally, another commenter “agrees that the release of HC based refrigerants during the maintenance, service or repair would have a negligible environmental impact.”
EPA received two comments that question the determination that the venting, release, or disposal of isobutane (R–600a) and R–441A as substitutes in household refrigerators, freezers, and combination refrigerators and freezers; and propane (R–290) as a substitute in retail food refrigerators and freezers (stand-alone units only) does not pose a significant threat to the environment based on the inherent characteristics of these substances. One commenter believes it is necessary to have recapture or recycling requirements for HCs, because safety risk still exists at end of life, recovery equipment designed for flammable refrigerants is available, and recovered flammable refrigerants can be re-used. EPA agrees that proper safe handling practices should be followed for hydrocarbon refrigerant substitutes, both for disposal of appliances at the end-of-life and for the repair and maintenance of appliances. EPA included recommendations on the safe use and handling of hydrocarbons in the 2011 SNAP rule, and there are also recommendations at 40 CFR part 82, subpart G, appendix R.
The Agency supports the safe, economical and environmentally beneficial recovery, recycling and reclamation (re-use) of all hydrocarbon refrigerant substitutes. However, at this time, EPA does not agree that recovery equipment designed specifically to handle the three hydrocarbon refrigerant substitutes in this action is readily available in the United States. Further, at this time, there are not applicable standards in the U.S. for certification of recovery equipment designed to handle these three hydrocarbon refrigerant substitutes. EPA is not creating a recovery requirement at this time, as it is not clear that it would be safer, economically practical or environmentally beneficial to require the use of recovery equipment. EPA further notes that the commenter did not identify an environmental threat that is posed by the venting of these three hydrocarbon refrigerant substitutes in the end-uses for which EPA has found them acceptable subject to use conditions in the 2011 SNAP rule.
Another commenter “does not believe that there is improved safety in venting flammable hydrocarbon refrigerants versus reclaiming flammable hydrocarbon refrigerants.” This commenter states “it may be more hazardous to vent flammable hydrocarbon refrigerants or flammable hydrocarbon refrigerant/lubricant mixture into an uncontrolled environment.” This commenter states that because of the very low minimum ignition energy (MIE) of hydrocarbon flammable refrigerants (class 3 flammable under ASHRAE 2010), these refrigerants are easily ignited by static electricity. EPA believes this concern about the ignition of hydrocarbon refrigerants for these three hydrocarbon refrigerant substitutes in the end uses at issue in this action was addressed in the 2011 SNAP rule in which these hydrocarbon refrigerant substitutes and end-uses were evaluated and determined to be acceptable subject to use conditions under SNAP. In section “B. Flammability” of part IV of that SNAP rule, titled “What is the basis for EPA's final action?” the Agency describes the evaluation and conclusion for approving these hydrocarbon refrigerant substitutes for the specific end-uses under the use conditions. The 2011 SNAP rule explains that, “when the concentration of a flammable refrigerant reaches or exceeds its [lower flammability limit] LFL in the presence of an ignition source (
The commenter also noted studies that “show atomized lubricant (lubricant that is released within refrigerant spray, such as under venting conditions), is more flammable than liquid lubricant.” EPA considered such studies and the influence of the
The commenter raised concerns that “venting hydrocarbon refrigerant may potentially carry lubricants dissolved with the refrigerant . . . into the atmosphere.” The commenter believes that an exemption for venting, release, or disposal of the three hydrocarbon refrigerant substitutes sends an incorrect message to the market on best practices, and that this message is counter to “responsible use and handling.” While EPA understands this perspective and agrees that product stewardship is an important overall goal, the very small amount of dissolved lubricant in the small hydrocarbon charge size established as a limit for each of the end-use categories in the 2011 SNAP rule will significantly mitigate the release into the environment and the impact of any release into the environment of lubricants dissolved in the hydrocarbon refrigerant substitutes that may result from any venting, release or disposal that may occur under this final action. EPA also notes that many of the lubricants used with hydrocarbon refrigerants, such as alkyl benzene and polyalkylene glycol, are considered environmentally acceptable because they biodegrade easily as noted in EPA's document on environmentally acceptable lubricants.
In the proposal (78 FR 21871), EPA explained that the limits and controls under other authorities, regulations or practices adequately control the release of and exposure to the three hydrocarbon refrigerant substitutes and mitigate risks from any possible release in the end-uses specified in the 2011 SNAP rule. This conclusion is relevant to the second factor mentioned above in the overall determination of whether venting, release, or disposal of a refrigerant substitute poses a threat to the environment—that is, a consideration of the extent that such venting, release, or disposal is adequately controlled by other authorities, regulations, or practices. As such, this conclusion is another part of the determination that the venting, release or disposal of these three hydrocarbon refrigerant substitutes in the specified end uses under the 2011 SNAP rule does not pose a threat to the environment.
EPA notes that other applicable environmental regulatory requirements still apply and are not affected by the determination made in this action. As one example, state and local air quality agencies may include VOC emissions reductions strategies in state implementation plans developed to meet and maintain the National Ambient Air Quality Standard (NAAQS) that would apply to hydrocarbon refrigerant substitutes. For instance, for those refrigerant substitutes that are VOCs as defined in 40 CFR 50.100(s), a State might adopt additional control strategies if necessary for an ozone nonattainment area to attain the NAAQS for ozone.
Several commenters supported the determination that the release of the hydrocarbon refrigerant substitutes determined to be acceptable subject to use conditions in specified end uses under the 2011 SNAP rule does not pose a threat to the environment because of limits under other authorities, such as OSHA requirements, as well as national and local building and fire codes. These commenters believe the three hydrocarbon refrigerant substitutes in today's action should be exempt from the venting prohibition because there are sufficient limits and controls under other authorities, regulations or practices that adequately control the release and exposure in the specific end-uses.
One commenter requested an explanation of how “knowingly venting propane . . . would not be disposal of a hazardous waste (see 40 CFR 261.21).” The commenter is correct that propane refrigerant could technically be characterized as a hazardous waste under 40 CFR 261.21 specifying the characteristic of ignitability. However, this rule would only allow for incidental releases of propane (R–290) found acceptable subject to use conditions under the 2011 SNAP rule for use in retail food refrigerators and freezers (stand-alone units only). These releases would not be subject to RCRA requirements for the disposal of hazardous waste as the release would occur incidentally during the maintenance, service and repair of the equipment, and this would not constitute disposal of the refrigerant charge as a solid waste, per se. The Agency further notes that it discussed potential human health risks from the release of propane in this end use in the 2011 SNAP rule, and it provided information from that rule in the proposal for this rule. See 76 FR at 78839 and 78 FR at 21874–75. In the 2011 SNAP rule, the Agency considered the risk of asphyxiation to workers (store employees and consumers), and evaluated a worst-case scenario and determined that the charge size at issue was much smaller than the charge size that would result in the no observable adverse effect level (NOAEL) for hypoxia. 76 FR at 78839. The Agency also evaluated toxicity impacts from the propane end use to workers, consumers, and the general public, and found that propane in this end use did not pose a toxicity threat based on either occupational exposures, as the time-weighted average exposures were well below the industry and government exposure limits, or on consumer exposures, as the time-weighted average exposures were significantly lower than the NOAEL and/or the acute exposure guideline level (AEGL). Id. Further, for the 2011 SNAP Rule EPA modeled exposure risk to the general population for propane in this end use and concluded that it was unlikely to pose a toxicity risk to the general population when used according to the applicable use conditions or regulations because modeled exposures were significantly lower than the reference concentration. Id. In addition, in this action the Agency is determining that these releases do not pose a threat to the environment, as described elsewhere in this preamble.
EPA received several comments that support the determination that, in the words of one of the commenters,
One commenter suggested that, “disposal of units containing HC charges is vastly different than maintenance, service or repair.” This commenter went on to say that “HC refrigerants should be recovered by Certified Technicians prior to disposal to protect the recyling industry and eliminate confusion to technicians and other personnel who are not required to obtain EPA Certification to handle refrigerants.” The Agency notes that certification of a technician is not required for recovery of refrigerant during disposal of small appliances (see 40 CFR 82.156(a)), such as the household refrigerators, freezers and refrigerator/freezer combinations addressed in this rule. At this time, the regulatory requirements for technician certification at 40 CFR 82.156(a) are limited to recovery of ODS and ODS blends. However, EPA believes employees at disposal facilities are very often certified technicians or aware of EPA requirements regarding recovery of the refrigerants from equipment during disposal. While a technician certification is not required in order to use the exemption from the venting prohibition in today's action, EPA encourages disposal facilities to ensure that employees are familiar with how to safely handle and vent the three hydrocarbon refrigerant substitutes in the specified end uses addressed by today's rule. In addition, the commenter provides no reason to believe that there is any potential environmental threat from venting during disposal that would differ from any potential environmental threat from venting during maintenance, service or repair. In fact, today's action could reduce the number of appliances that are disposed of while still charged with these three hydrocarbon refrigerant substitutes because it will no longer be prohibited to vent those refrigerant substitutes in the specified end uses during maintenance, service, and repair. Thus, EPA does not believe that it needs to address disposal separately in the regulations finalized in this action.
As a suggestion for protecting workers in the appliance recycling industry the commenter proposed that “units using flammable refrigerants be marked in a manner that an end of life processing or recycling facility can easily identify the hazard from a distance of 36 inches while looking at the back of the unit.” With respect to the comment regarding risks to workers during the disposal of equipment at end-of-life, EPA agrees that flammability is a reason for caution during disposal of appliances containing hydrocarbon refrigerant substitutes. EPA notes that some of the use conditions in the 2011 SNAP rule were required in order to address this potential risk. For example, the labeling requirements and the requirement for coloring of tubing will serve as notification to servicing and disposal personnel that the appliance contains a flammable refrigerant substitute. The labeling requirements in the 2011 SNAP final rule require an increased lettering size as compared to the UL standards effective when that final rule was issued (UL 2000, UL 2010) for the cautionary statement about flammability that must be attached to the appliance to provide even better notification to those involved in appliance recycling.
For the reasons explained in this action and in the proposal (78 FR 21871), EPA concludes that release of and exposure to the three hydrocarbon refrigerants during the maintenance, repair, servicing or disposal of appliances is controlled by limits and controls under other authorities, regulations or practices. EPA further concludes that those limits and controls help mitigate risks to the environment that may be posed by the venting, release or disposal of these three hydrocarbon refrigerants during the maintaining, servicing, repairing, or disposing of appliances.
Today EPA is finalizing a decision to exempt from the venting prohibition three hydrocarbon refrigerant substitutes that EPA listed as acceptable subject to use conditions in the specified end uses under the 2011 SNAP rule, as the EPA is determining that the venting, release, or disposal of these substitutes does not pose a threat to the environment. Specifically, EPA is exempting from the venting prohibition isobutane (R–600a) and R–441A, as refrigerant substitutes in household refrigerators, freezers, and combination refrigerators and freezers, and propane (R–290), as a refrigerant substitute in retail food refrigerators and freezers (stand-alone units only). EPA received seven comments supporting this decision. EPA addressed in this action commenters' concerns regarding the release of the three hydrocarbon refrigerant substitutes into the environment. The exemption to the venting prohibition in this action does not apply to refrigerants that are blends containing hydrocarbons and any amount of any CFC, HCFC, HFC,
EPA reviewed the potential environmental impacts of these three hydrocarbon refrigerant substitutes in the end uses for which they are listed as acceptable subject to use conditions under the 2011 SNAP rule, as well as the authorities, controls and practices in place for these three hydrocarbon refrigerant substitutes. EPA also considered the public comments on the proposal for this action. Based on this review, EPA concludes that the release of these three hydrocarbon refrigerant substitutes in these end uses is not expected to pose a significant threat to the environment based on the inherent characteristics of these substances and the limited quantities used in the relevant applications. EPA additionally concludes that existing authorities, controls, and practices help mitigate
This rule exempts from the prohibition under section 608 of the Act against knowing venting, releasing, or disposal of refrigerant substitutes during the maintenance, servicing, repair or disposal of appliances the three hydrocarbon refrigerant substitutes in the end uses for which they were listed as acceptable subject to use conditions under the 2011 SNAP rule: Propane, isobutane, and the hydrocarbon blend R–441A.
In this action the regulatory text is presented differently from what appeared in the proposed rulemaking published on April 12, 2012 (78 FR 21871). These differences reflect modifications that EPA is making in this action to the numbering and organization of the regulations at 40 CFR 82.154(a)(1) to clarify the effective dates for the exemptions under 82.154(a)(1). In particular, EPA is creating sub-sections under 82.154(a)(1), to reflect the effective dates of individual regulatory actions. The first sub-section, 82.154(a)(1)(i), will preserve the effective date of June 13, 2005, reflecting the Agency's prior action to create an exemption to the venting prohibition. This action will be in the next sub-section, 82.154(a)(1)(ii), reflecting the Agency's decision regarding the three hydrocarbon refrigerant substitutes for the specific end-uses listed as acceptable subject to use conditions under the 2011 SNAP rule. These revisions to the numbering and organization of the regulatory text do not change the text of the regulatory provisions that were previously codified at 82.154(a)(1) and are not intended to reopen or to change the substance or effect of those regulations in any way, although the text of those provisions is reprinted for clarity.
This action is not a “significant regulatory action” under the terms of Executive Order (E.O.) 12866 (58 FR 5135; October 4, 1993) and is therefore not subject to review under E.O. 12866 and E.O. 13563 (76 FR 3821; January 21, 2011).
This action does not impose any new information collection burden under the Paperwork Reduction Act (44 U.S.C. 3501
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.
For purposes of assessing the impacts of today's rule on small entities, small entity is defined as: (1) A small business that is primarily engaged in the repair and maintenance of appliances and defined by NAIC code 811412 with annual receipts of less than 14 million dollars, or engaged in separating and sorting recyclable materials from non-hazardous waste streams (e.g., scrap yards) and defined by NAIC code 562920 and fewer than 100 employees, or merchant wholesale distribution of industrial scrap and other recyclable materials and defined by NAIC code 423930 with annual receipts of less than 12.5 million dollars (based on Small Business Administration size standards), (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.
After considering the economic impacts of today's final rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. In determining whether a rule has a significant economic impact on a substantial number of small entities, the impact of concern is any significant adverse economic impact on small entities, since the primary purpose of the regulatory flexibility analyses is to identify and address regulatory alternatives “which minimize any significant economic impact of the rule on small entities.” 5 U.S.C. 603 and 604. Thus, an agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a positive economic effect on all of the small entities subject to the rule.
This final rule is primarily deregulatory as it would exempt persons from the prohibition under section 608(c)(2) of the Clean Air Act, and as implemented by regulations at 40 CFR 82.154(a)(1), against knowingly venting or otherwise knowingly releasing or disposing of refrigerant substitutes during the maintenance, servicing, repair or disposal of appliances for three specific hydrocarbon refrigerant substitutes in specific end uses. We have therefore concluded that today's final rule will relieve regulatory burden for all affected small entities.
This action contains no Federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531–1538 for State, local, or tribal governments or the private sector. The action imposes no enforceable duty on any State, local or tribal governments or the private sector. Thus, this action is not subject to the requirements of sections 202 or 205 of the UMRA. This action 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. This action is deregulatory in nature and creates an exemption under section 608(c)(2) of the Act from a statutory and regulatory requirement.
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 EO 13132 (64 FR 43255, August 10, 1999). This action is deregulatory in nature and creates an exemption under section 608(c)(2) of the Act from a statutory and regulatory requirement, which would benefit any state, local, or tribal government to the extent that they are affected. Thus, EO 13132 does not apply to this final rule.
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.
This action does not have tribal implications, as specified in EO 13175 (65 FR 67249, November 6, 2000). This final rule is deregulatory in nature and would create an exemption under section 608(c)(2) of the Act that could be available for the tribal communities or Indian tribal governments. Thus, EO 13175 does not apply to this action.
This action is not subject to the EO 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 are contained in section III in the preamble.
This action is not subject to Executive Order 13211 (66 FR 28355 (May 22, 2001)), because it is not a significant regulatory action under Executive Order 12866.
Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104–113, Section 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 the Agency decides not to use available and applicable voluntary consensus standards.
This rule does not involve technical standards. Therefore, EPA did not consider the use of any voluntary consensus standards.
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 by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States.
EPA has determined that this final rule exempting under section 608(c)(2) of the Act certain hydrocarbons from the venting prohibition in certain end uses listed as acceptable subject to use conditions will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because the release of these three hydrocarbon refrigerant substitutes would not pose a threat to the environment. This final action would not have any disproportionately high and adverse human health or environmental effects on any population, including any minority or low-income population.
The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the
The documents referenced in the final rule in which the three hydrocarbon refrigerant substitutes in specific end-uses were evaluated and determined to be acceptable subject to use conditions under SNAP in the December 20, 2011 final rule (76 FR 78832), were also referenced in the preamble of the proposed rule published on April 12, 2012 (78 FR 21871). All documents for these two previously published rules are located in the Air Docket at the address listed in section titled
EPA, 2011, “Environmentally Acceptable Lubricants,” United States Environmental Protection Agency, Office of Wastewater Management, November 2011, EPA 800–R–11–002
Environmental protection, Administrative practice and procedure, Air pollution control, Recycling, Reporting and recordkeeping requirements, Stratospheric ozone layer.
For the reasons set out in the preamble, 40 CFR Part 82 is to be amended as follows:
42 U.S.C. 7414, 7601, 7671–7671g.
(a)(1) No person maintaining, servicing, repairing, or disposing of
(i) Effective June 13, 2005,
(A) Ammonia in commercial or industrial process refrigeration or in absorption units;
(B) Hydrocarbons in industrial process refrigeration (processing of hydrocarbons);
(C) Chlorine in industrial process refrigeration (processing of chlorine and chlorine compounds);
(D) Carbon dioxide in any application;
(E) Nitrogen in any application; or
(F) Water in any application.
(ii) Effective June 23, 2014:
(A) Isobutane (R–600a) and R–441A in household refrigerators, freezers, and combination refrigerators and freezers; or
(B) Propane (R–290) in retail food refrigerators and freezers (stand-alone units only).
Department of Energy, Office of Energy Efficiency and Renewable Energy.
Notice of open meetings; update.
The Department of Energy (DOE) published in the
The last two meeting series announced in the
The meeting on June 17 will take place at 950 L'Enfant Plaza, Washington, DC 20024 in room 8037 A&B. All other meetings will be held in the U.S. Department of Energy, Forrestal Building, 1000 Independence Avenue SW., Washington, DC 20585. Individuals will also have the opportunity to participate by Webinar. To register for the Webinars and receive call-in information, please register at
John Cymbalsky, ASRAC Designated Federal Officer, U.S. Department of Energy (DOE), Office of Energy Efficiency and Renewable Energy, 950 L'Enfant Plaza SW., Washington, DC 20024. Email:
Members of the public will be heard in the order in which they sign up for the Public Comment Period. Time allotted per speaker will depend on the number of individuals who wish to speak but will not exceed five minutes. Reasonable provision will be made to include the scheduled oral statements on the agenda. A third-party neutral facilitator will make every effort to allow the presentations of views of all interested parties and to facilitate the orderly conduct of business.
Participation in the meeting is not a prerequisite for submission of written comments. ASRAC invites written comments from all interested parties. Any comments submitted must identify the ASRAC, and provide docket number EERE–2013–BT–NOC–0039. Comments may be submitted using any of the following methods:
1.
2.
3.
4.
No telefacsimilies (faxes) will be accepted.
The Secretary of Energy has approved publication of today's notice of proposed rulemaking.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for certain Technify Motors GmbH (type certificate previously held by Thielert Aircraft Engines GmbH) TAE 125–02–99 and TAE 125–02–114 reciprocating engines. This proposed AD was prompted by in-flight shutdowns on airplanes with TAE 125–02 engines. This proposed AD would require removal of each high-pressure (HP) fuel pump before 300 flight hours (FHs) in service or within 55 FHs after the effective date of the AD, whichever occurs later. We are proposing this AD to prevent failure of the HP fuel pump, which could result in damage to the engine and damage to the airplane.
We must receive comments on this proposed AD by July 22, 2014.
You may send comments by any of the following methods:
•
•
•
•
For service information identified in this proposed AD, contact Technify Motors GmbH, Platanenstrasse 14, D–09356 Sankt Egidien, Germany, phone: +49–37204–696–0; fax: +49–37204–696- 55; email:
You may examine the AD docket on the Internet at
Kevin Donovan, Aerospace Engineer, Engine Certification Office, FAA, Engine & Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803; phone: (781) 238–7743; fax: (781) 238–7199; email:
We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA AD 2013–0279, dated November 26, 2013 (referred to hereinafter as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:
In-flight shut down occurrences have been reported on aeroplanes equipped with TAE 125–02 engines. The initial results of the investigations showed that abnormal high wear of the high pressure fuel pumps was the probable cause of the engine failure.
This condition, if not corrected, could result in further cases of engine power loss events and consequent potential loss of control of the aeroplane.
We are proposing this AD to prevent damage to the engine and damage to the aircraft. You may obtain further information by examining the MCAI in the AD docket on the Internet at
Technify Motors GmbH has issued Service Bulletin No. TM TAE 125–1017 P1, Revision 1, dated September 20, 2013. The service information describes procedures for removing and replacing the HP fuel pump.
This product has been approved by the aviation authority of Germany, and is approved for operation in the United States. Pursuant to our bilateral agreement with the European Community, EASA has notified us of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all information provided by EASA and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design. This proposed AD would require removal of each affected HP fuel pump.
We estimate that this proposed AD affects 160 engines installed on airplanes of U.S. registry. We also estimate that it would take about 1 hour per engine to comply with this proposed AD. The average labor rate is $85 per hour. Based on these figures, we estimate the cost of the proposed AD on U.S. operators to be $13,600.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that
We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
We must receive comments by July 22, 2014.
None.
This AD applies to TAE 125–02–99 and TAE 125–02–114 reciprocating engines with a high-pressure (HP) fuel pump, part number (P/N) 05–7312–K005301 or P/N 05–7312–K005302.
This AD was prompted by in-flight shutdowns on airplanes with TAE 125–02 engines. We are issuing this AD to prevent failure of the HP fuel pump, which could result in damage to the engine and damage to the airplane.
Comply with this AD within the compliance times specified, unless already done. Remove each HP fuel pump, P/N 05–7312–K005301 and P/N 05–7312–K005302, before 300 flight hours (FHs) in service or within 55 FHs after the effective date of this AD, whichever occurs later.
After the effective date of this AD, do not install a TAE 125–02–99 or TAE 125–02–114 engine with HP fuel pump, P/N 05–7312–K005301 or P/N 05–7312–K005302, onto any airplane.
The Manager, Engine Certification Office, FAA, may approve AMOCs to this AD. Use the procedures found in 14 CFR 39.19 to make your request.
(1) For more information about this AD, contact Kevin Donovan, Aerospace Engineer, Engine Certification Office, FAA, Engine & Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803; phone: (781) 238–7743; fax: (781) 238–7199; email:
(2) Refer to MCAI European Aviation Safety Agency AD 2013–0279, dated November 26, 2013, for related information. You may examine the MCAI in the AD docket on the Internet at
(3) Technify Motors GmbH Service Bulletin No. TM TAE 125–1017 P1, Revision 1, dated September 20, 2013, pertains to the subject of this AD and can be obtained from Technify Motors GmbH using the contact information in paragraph (h)(4) of this proposed AD.
(4) For service information identified in this proposed AD, contact Technify Motors GmbH, Platanenstrasse 14, D–09356 Sankt Egidien, Germany, phone: +49–37204–696–0; fax: +49–37204–696–55; email:
(5) You may view this service information at the FAA, Engine & Propeller Directorate, 12 New England Executive Park, Burlington, MA. For information on the availability of this material at the FAA, call 781–238–7125.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to supersede airworthiness directive (AD) 2013–12–01 that applies to all Rolls-Royce plc (RR) model RB211 Trent 768–60, 772–60, and 772B–60 turbofan engines. AD 2013–12–01 requires a one-time ultrasonic inspection (UI) of low-pressure (LP) compressor blades with more than 2,500 flight cycles since new or last inspection. Since we issued AD 2013–12–01, RR determined that repetitive UIs of the LP compressor blades are needed. This proposed AD would require initial and repetitive UIs of the affected LP compressor blades. We are proposing this AD to prevent LP compressor blade airfoil separations, damage to the engine, and damage to the airplane.
We must receive comments on this proposed AD by July 22, 2014.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
For service information identified in this AD, contact Rolls-Royce plc, P.O. Box 31, Derby DE24 8BJ, UK; phone: 44
You may examine the AD docket on the Internet at
Robert Green, Aerospace Engineer, Engine Certification Office, FAA, Engine & Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803; phone: (781) 238–7754; fax: (781) 238–7199; email:
We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
On June 5, 2013, we issued AD 2013–12–01, Amendment 39–17478 (78 FR 37703, June 24, 2013), (“AD 2013–12–01”), for all RR model RB211 Trent 768–60, 772–60, and 772B–60 turbofan engines. AD 2013–12–01 requires a one-time UI of LP compressor blades that have accumulated more than 2,500 flight cycles since new. AD 2013–12–01 resulted from LP compressor blade partial airfoil release events. We issued AD 2013–12–01 to prevent LP compressor blade airfoil separations, engine damage, and damage to the airplane.
Since we issued AD 2013–12–01, RR's service experience and updated analysis has determined the need for repetitive inspections of the LP compressor blades. Also since we issued AD 2013–12–01, the European Aviation Safety Agency (EASA) has issued EASA AD 2014–0031, dated February 4, 2014, which requires repetitive inspection of the LP compressor blades.
We reviewed RR Alert Non-Modification Service Bulletin No. RB.211–72–AH465, dated July 15, 2013. The service information describes procedures for an initial UI followed by repetitive UIs of the affected LP compressor blades.
We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.
This proposed AD would require an initial UI of LP compressor blades at 3,600 cycles since new or before further flight. For LP compressor blades that exceed 2,200 cycles since last inspection (CSLI), the AD would require a UI before exceeding 3,000 CSLI or before further flight. This proposed AD would also require repetitive UIs of the affected LP compressor blades every 2,400 CSLI thereafter.
We estimate that this proposed AD would affect 56 engines installed on airplanes of U.S. registry. We also estimate that it would take about 44 hours per engine to comply with the intial inspection requirements in this proposed AD. The average labor rate is $85 per hour. Based on these figures, we estimate the cost of the proposed AD on U.S. operators to be $209,440.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This proposed regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We have determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this AD action by July 22, 2014.
This AD supersedes AD 2013–12–01, Amendment 39–17478 (78 FR 37703, June 24, 2013.
This AD applies to Rolls-Royce plc (RR) model RB211 Trent 768–60, 772–60, and 772B–60 turbofan engines, with low-pressure (LP) compressor blade, part numbers (P/Ns) FK23411, FK25441, FK25968, FW11901, FW15393, FW23643, FW23741, FW23744, KH23403, or KH23404, installed.
This AD was prompted by LP compressor blade partial airfoil release events. We are issuing this AD to prevent LP compressor blade airfoil separations, engine damage, and damage to the airplane.
Unless already done, do the following actions.
(i) After the effective date of this AD, ultrasonically inspect each LP compressor blade before the blade exceeds 3,600 cycles since new (CSN) or before further flight, whichever occurs later. Repeat the UI of the blade every 2,400 cycles since last inspection (CSLI).
(ii) For any LP compressor blade that exceeds 2,200 CSLI on the effective date of this AD, inspect the blade before exceeding 3,000 CSLI or before further flight, whichever occurs later. Thereafter, perform the repetitive inspections required by this AD.
(iii) Use paragraph 3, excluding subparagraphs 3.A.(9), 3.B.(5), 3.C.(4), 3.D.(3), 3.E.(5), 3.F.(10), and 3.G.(7), of RR Alert Non-Modification Service Bulletin (NMSB) RB.211–72–AH465, dated July 15, 2013, to perform the inspections required by this AD.
LP compressor blades, P/Ns FK23411, FK25441, FK25968, FW11901, FW15393, FW23643, FW23741, FW23744, KH23403, or KH23404, that have accumulated at least 3,600 CSN or 2,400 CSLI are eligible for installation if the blade has passed the UI required by this AD.
If you performed a UI of an affected LP compressor blade before the effective date of this AD using RR NMSB No. RB.211–72–G702, dated May 23, 2011; or RR NMSB No. RB.211–72–G872, Revision 2, dated March 8, 2013, or earlier revisions; or RR NMSB No. RB.211–72–H311, dated March 8, 2013; or Engine Manual E-Trent-1RR, Task 72–31–11–200–806, you have met the initial inspection requirements of this AD. However, you must still comply with the repetitive 2,400 CSLI requirement of this AD.
The Manager, Engine Certification Office, may approve AMOCs for this AD. Use the procedures found in 14 CFR 39.19 to make your request.
(1) For more information about this AD, contact Robert Green, Aerospace Engineer, Engine Certification Office, FAA, Engine & Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803; phone: (781) 238–7754; fax: (781) 238–7199; email:
(2) Refer to MCAI European Aviation Safety Agency AD 2014–0031, dated February 4, 2014, for more information. You may examine the MCAI in the AD docket on the Internet at
(3) RR Alert NMSB No. RB.211–72–AH465, dated July 15, 2013, pertains to the subject of this AD and can be obtained from Rolls-Royce plc, using the contact information in paragraph (h)(4) of this AD.
(4) For service information identified in this AD, contact Rolls-Royce plc, P.O. Box 31, Derby DE24 8BJ, UK; phone: 44 (0) 1332 242424; fax: 44 (0) 1332 249936.
(5) You may view this service information at the FAA, Engine & Propeller Directorate, 12 New England Executive Park, Burlington, MA. For information on the availability of this material at the FAA, call 781–238–7125.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to establish Class D airspace and amend existing Class E airspace at Blackstone, VA, to accommodate the new air traffic control tower at Allen C. Perkinson Blackstone Army Airfield. Controlled airspace is necessary for the safety and management of instrument flight rules (IFR) operations at the airfield. This action also would update the geographic coordinates of the airfield's existing Class E airspace.
0901 UTC. Comments must be received on or before July 7, 2014.
Send comments on this rule to: U. S. Department of Transportation, Docket Operations, West Building Ground Floor, Room W12–140, 1200 New Jersey SE., Washington, DC 20590–0001; Telephone: 1–800–647–5527; Fax: 202–493–2251. You must identify the Docket Number FAA–2014–0220; Airspace Docket No. 14–AEA–5, at the beginning of your comments. You may also submit and review received comments through the Internet at
John Fornito, Airspace Specialist, Operations Support Group, Eastern Service Center, Air Traffic Organization, Federal Aviation Administration, P. O. Box 20636, Atlanta, Georgia 30320; telephone (404) 305–6364.
Interested persons are invited to comment on this rule by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers (FAA docket number. FAA–2014–0220; Airspace Docket No. 14–AEA–5) and be submitted in triplicate to the Docket Management System (see
Those wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA–2014–0220; Airspace Docket No. 14–AEA–5.” The postcard will be date/time stamped and returned to the commenter.
All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel
An electronic copy of this document may be downloaded from and comments submitted through
You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the
Persons interested in being placed on a mailing list for future NPRM's should contact the FAA's Office of Rulemaking, (202) 267–9677, to request a copy of Advisory circular No. 11–2A, Notice of Proposed Rulemaking distribution System, which describes the application procedure.
The FAA is considering an amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 to establish Class D airspace within a 4.2-mile radius of Allen C Perkinson Blackstone Army Airfield, Blackstone, VA, and amend existing Class E airspace extending upward from 700 feet above the surface to within a 6.7-mile radius of the airfield, as well as adjust the geographic coordinates of the airfield to be in concert with the FAAs aeronautical database. This action is necessary to support the operation of the new air traffic control tower, and would enhance the safety and management of IFR operations at the airfield.
Class D and E airspace designations are published in Paragraphs 5000 and 6005 respectively, of FAA Order 7400.9X, dated August 7, 2013, and effective September 15, 2013, which is incorporated by reference in 14 CFR 71.1. The Class D and E airspace designations listed in this document will be published subsequently in the Order.
The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore, (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority.
This proposed rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This proposed regulation is within the scope of that authority as it would establish Class D and amend Class E airspace at Allen C Perkinson Blackstone Army Airfield, Blackstone, VA.
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1E, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
49 U.S.C. 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–1963 Comp., p. 389.
That airspace extending upward from the surface up to and including 2,500 feet MSL within a 4.2-mile radius of Allen C Perkinson Blackstone Army Airfield. This Class D airspace area is effective during specific dates and times established in advance by a Notice to Airmen. The effective date and time will thereafter be continuously published in the Airport/Facility Directory.
That airspace extending upward from 700 feet above the surface within a 6.7-mile radius of Allen C Perkinson Blackstone Army Airfield.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This action proposes to establish Class E Airspace at Cynthiana, KY, to accommodate a new Area Navigation (RNAV) Global Positioning System (GPS) Standard Instrument Approach Procedures (SIAP) serving Cynthiana-Harrison County Airport.
Comments must be received on or before July 7, 2014.
Send comments on this rule to: U. S. Department of Transportation, Docket Operations, West Building Ground Floor, Room W12–140, 1200 New Jersey SE., Washington, DC 20590–0001; Telephone: 1–800–647–5527; Fax: 202–493–2251. You must identify the Docket Number FAA–2013–1074; Airspace Docket No. 13–ASO–26, at the beginning of your comments. You may also submit and review received comments through the Internet at
John Fornito, Operations Support Group, Eastern Service Center, Federal Aviation Administration, P.O. Box 20636, Atlanta, Georgia 30320; telephone (404) 305–6364.
Interested persons are invited to comment on this rule by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal.
Communications should identify both docket numbers (FAA Docket No. FAA–2013–1074; Airspace Docket No. 13–ASO–26) and be submitted in triplicate to the Docket Management System (see
Persons wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed stamped postcard on which the following statement is made: “Comments to Docket No. FAA–2013–1074; Airspace Docket No. 13–ASO–26.” The postcard will be date/time stamped and returned to the commenter.
All communications received before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this notice may be changed in light of the comments received. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.
An electronic copy of this document may be downloaded from and comments submitted through
You may review the public docket containing the proposal, any comments received and any final disposition in person in the Dockets Office (see the
Persons interested in being placed on a mailing list for future NPRM's should contact the FAA's Office of Rulemaking, (202) 267–9677, to request a copy of Advisory circular No. 11–2A, Notice of Proposed Rulemaking distribution System, which describes the application procedure.
The FAA is considering an amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 to establish Class E airspace at Cynthiana, KY, providing the controlled airspace required to support the new RNAV (GPS) standard instrument approach procedures for Cynthiana-Harrison County Airport. Controlled airspace extending upward from 700 feet above the surface is required for IFR operations within a 7.8-mile radius of the airport.
Class E airspace designations are published in Paragraph 6005 of FAA order 7400.9X, dated August 7, 2013, and effective September 15, 2013, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.
The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore, (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This proposed rulemaking is promulgated under the authority described in Subtitle VII, Part, A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This proposed regulation is within the scope of that authority as it would establish Class E airspace at Cynthiana-Harrison County Airport, Cynthiana, KY.
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1E, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:
49 U.S.C. 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 7.8-mile radius of Cynthiana-Harrison County Airport.
Food and Drug Administration, HHS.
Proposed rule; Extension of Comment Period.
The Food and Drug Administration (FDA or we) is extending the comment period for the notice of proposed rulemaking that appeared in the
FDA is extending the comment period on the proposed rule published February 5, 2014 (79 FR 7005), and its information collection provisions. Submit either electronic or written comments on the proposed rule and the information collection by July 30, 2014.
You may submit comments by any of the following methods, except that comments on information collection issues under the Paperwork Reduction Act of 1995 must be submitted to the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB) (see the “Paperwork Reduction Act of 1995” section of this document).
Submit electronic comments in the following way:
•
Submit written submissions in the following ways:
•
In the
FDA has received requests for an extension of the comment period on the proposed rule. The requests conveyed concern that the current 115-day comment period does not allow time to thoroughly analyze the proposed rule given that the regulations would apply to a diverse array of human foods, animal feed and feed ingredients, and pet food transported by rail and truck. The requests also stated an extended comment period would allow interested persons an opportunity to consider the complexities that affect the interrelated responsibilities of shippers, carriers, and receivers. Finally, the requests stated that additional time is needed to analyze the economic impact on the affected industry sectors and to provide FDA with pertinent information to assist in the economic analysis. FDA has considered the requests and is granting a 60-day extension of the comment period to July 30, 2014, for the “Sanitary Transportation of Human and Animal Food” proposed rule to allow interested persons additional time to submit comments. We also are extending the comment period for the information collection provisions to July 30, 2014, to make the comment period for the information collection provisions the same as the comment period for the provisions of the proposed rule. To clarify, FDA is requesting comment on all issues raised by the proposed rule.
Interested persons may either submit electronic comments regarding the information collection to
Interested persons may submit either electronic comments regarding the proposed rule to
Office of Assistant Secretary for Public and Indian Housing, HUD.
Notice of meetings of negotiated rulemaking committee.
This document announces the fourth, fifth, and sixth meetings of the negotiated rulemaking committee.
The fourth meeting will be held on Wednesday, June 11, 2014, Thursday, June 12, 2014, and Friday, June 13, 2014. The fifth meeting will be held on Tuesday, July 29, 2014, Wednesday, July 30, 2014, and Thursday, July 31, 2014. The sixth meeting will be held on Tuesday, August 26, 2014, Wednesday, August 27, 2014, and Thursday, August 28, 2014. On each day, the session will begin at approximately 8:30 a.m., and adjourn at approximately 5:30 p.m.
The fourth meeting will take place at the Hilton Scottsdale, 6333 North Scottsdale Road, Scottsdale, Arizona. The fifth meeting will take place at the Sheraton Denver Downtown Hotel, 1550 Court Place, Denver, Colorado. The sixth meeting will take place at the DoubleTree-Scottsdale, 5401 North Scottsdale Road, Scottsdale, Arizona.
Rodger J. Boyd, Deputy Assistant Secretary for Native American Programs, Office of Public and Indian Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 4126, Washington, DC 20410, telephone number 202–401–7914 (this is not a toll-free number). Hearing- or speech-impaired individuals may access this number via TTY by calling the toll-free Federal Relay Service at 1–800–877–8339.
The Native American Housing and Assistance and Self-Determination Act of 1996 (25 U.S.C. 4101
Under the IHBG program, HUD makes assistance available to eligible Indian tribes for affordable housing activities. The amount of assistance made available to each Indian tribe is determined using a formula that was developed as part of the NAHASDA negotiated process. Based on the amount of funding appropriated for the IHBG program, HUD calculates the annual grant for each Indian tribe and provides this information to the Indian tribes. An Indian Housing Plan for the Indian tribe is then submitted to HUD. If the Indian Housing Plan is found to be in compliance with statutory and regulatory requirements, the grant is made.
On July 3, 2012 at 77 FR 39452, HUD announced its intention to establish a negotiated rulemaking for the purpose of developing regulatory changes to the formula allocation for the IHBG program. On June 12, 2013 at 78 FR 35178, HUD announced in the
On August 27, 2013, and August 28, 2013, the first meeting of the negotiated rulemaking committee was held. The second meeting was held on Tuesday, September 17, 2013, Wednesday, September 18, 2013, and Thursday, September 19, 2013. The third meeting was held on Wednesday, April 23, 2014, Thursday, April 24, 2014, and Friday, April 25, 2014.
The fourth meeting of the Indian Housing Block Grant Allocation Formula Negotiation Rulemaking Committee will be held on Wednesday, June 11, 2014, Thursday, June 12, 2014, and Friday, June 13, 2014. On each day, the session will begin at approximately 8:30 a.m., and adjourn at approximately 5:30 p.m. The meeting will take place at the Hilton Scottsdale, 6333 North Scottsdale Road, Scottsdale, Arizona.
The fifth meeting will be held on Tuesday, July 29, 2014, Wednesday, July 30, 2014, and Thursday, July 31, 2014. On each day, the session will begin at approximately 8:30 a.m., and adjourn at approximately 5:30 p.m. The meeting will take place at the Sheraton Denver Downtown Hotel, 1550 Court Place, Denver, Colorado.
The sixth meeting will be held on Tuesday, August 26, 2014, Wednesday, August 27, 2014, and Thursday, August 28, 2014. On each day, the session will begin at approximately 8:30 a.m., and adjourn at approximately 5:30 p.m. The meeting will take place at the DoubleTree-Scottsdale, 5401 North Scottsdale Road, Scottsdale, Arizona.
These meetings will be open to the public without advance registration. Public attendance may be limited to the space available. Members of the public may make statements during the meetings, to the extent time permits, and file written statements with the committee for its consideration. Written statements should be submitted to the address listed in the
Notices of all future meetings will be published in the
Internal Revenue Service (IRS), Treasury.
Cancellation of a notice of public hearing on proposed rulemaking.
This document cancels a public hearing on proposed regulations providing guidance under chapter 4 of
The public hearing originally scheduled for June 24, 2014 at 10 a.m. is cancelled.
Oluwafunmilayo Taylor of the Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration) at (202) 317–6901 (not a toll-free number).
A notice of proposed rulemaking by cross-reference to temporary regulations and a notice of public hearing that appeared in the
The public comment period for these regulations expired on May 5, 2014. The notice of proposed rulemaking and notice of public hearing instructed those interested in testifying at the public hearing to submit a request to speak and an outline of the topics to be addressed. As of May 14, 2014, no one has requested to speak. Therefore, the public hearing scheduled for June 24, 2014 at 10 a.m. is cancelled.
In proposed rule document 2013–29420, appearing on pages 76092 through 76096 in the issue of Monday, December 16, 2013, make the following correction:
On page 76094, in the second column, on the tenth line, insert the following:
Section 1.752–4(b)(2)(iv) provides special rules for when an entity is structured to avoid related person status. The proposed regulations do not propose any changes to these rules. However, as a result of other changes made to simplify the organization of § 1.752–4, the rules in § 1.752–4(b)(2)(iv) are now in § 1.752–4(b)(4) of the proposed regulations. In addition, the example in § 1.752–4(b)(2)(iv)(C) is now
Internal Revenue Service (IRS), Treasury.
Cancellation of a notice of public hearing on proposed rulemaking.
This document cancels a public hearing on proposed regulations relating to the withholding of tax on certain U.S. source income paid to foreign persons, information reporting and backup withholding with respect to payments made to certain U.S. persons, portfolio interest treatment for nonresident alien individuals and foreign corporations, and requirements for certain claims for refund or credit of income tax made by foreign persons.
The public hearing originally scheduled for June 24, 2014 at 10 a.m. is cancelled.
Oluwafunmilayo Taylor of the Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration) at (202) 317–6901 (not a toll-free number).
A notice of proposed rulemaking by cross-reference to temporary regulations and a notice of public hearing that appeared in the
The public comment period for these regulations expired on May 5, 2014. The notice of proposed rulemaking by cross-reference to temporary regulations and notice of public hearing instructed those interested in testifying at the public hearing to submit a request to speak and an outline of the topics to be addressed. As of May 14, 2014, no one has requested to speak. Therefore, the public hearing scheduled for June 24, 2014 at 10 a.m. is cancelled.
Office of Special Education and Rehabilitative Services, Department of Education.
Proposed priority.
The Assistant Secretary for Special Education and Rehabilitative Services proposes a priority under the Disability and Rehabilitation Research Projects and Centers Program administered by the National Institute on Disability and Rehabilitation Research (NIDRR). Specifically, this notice proposes a priority for a Disability and Rehabilitation Research Project (DRRP) on Improving Methods of Evaluating Return on Investment for the State Vocational Rehabilitation (VR) Services Program. The Assistant Secretary may use this priority for competitions in fiscal year (FY) 2014 and later years. We take this action to focus research attention on areas of national need. We intend this priority to contribute to improved employment outcomes for individuals with disabilities.
We must receive your comments on or before June 23, 2014.
Submit your comments through the Federal eRulemaking Portal or via postal mail, commercial delivery, or hand delivery. We will not accept comments submitted by fax or by email or those submitted after the comment period. To ensure that we do not receive duplicate copies, please submit your comments only once. In addition, please include the Docket ID at the top of your comments.
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The Department's policy is to make all comments received from members of the public available for public viewing in their entirety on the Federal eRulemaking Portal at
Marlene Spencer. Telephone: (202) 245–7532 or by email:
If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1–800–877–8339.
This notice of proposed priority is in concert with NIDRR's Long-Range Plan (Plan). The Plan, which was published in the
Through the implementation of the currently approved Plan, NIDRR seeks to: Identify a need for research and training in a number of areas. To address this need, NIDRR seeks to:(1) Improve the quality and utility of disability and rehabilitation research; (2) foster an exchange of research findings, expertise, and other information to advance knowledge and understanding of the needs of individuals with disabilities and their family members, including those from among traditionally underserved populations; (3) determine effective practices, programs, and policies to improve community living and participation, employment, and health and function outcomes for individuals with disabilities of all ages; (4) identify research gaps and areas for promising research investments; (5) identify and promote effective mechanisms for integrating research and practice; and (6) disseminate research findings to all major stakeholder groups, including individuals with disabilities and their families in formats that are appropriate and meaningful to them.
This notice proposes a priority that NIDRR intends to use for a DRRP competition in FY 2014 and possibly later years. However, nothing precludes NIDRR from publishing additional priorities, if needed. Furthermore, NIDRR is under no obligation to make an award using this priority. The decision to make an award will be based on the quality of applications received and available funding.
We invite you to assist us in complying with the specific requirements of Executive Orders 12866 and 13563 and their overall requirement of reducing regulatory burden that might result from this proposed priority. Please let us know of any further ways we could reduce potential costs or increase potential benefits while preserving the effective and efficient administration of the program.
During and after the comment period, you may inspect all public comments about this notice in Room 5133, 550 12th Street SW., PCP, Washington, DC, between the hours of 8:30 a.m. and 4:00 p.m., Washington, DC time, Monday through Friday of each week, except Federal holidays.
The purpose of NIDRR's DRRPs, which are funded through the Disability and Rehabilitation Research Projects and Centers Program, is to improve the effectiveness of services authorized under the Rehabilitation Act by developing methods, procedures, and rehabilitation technologies that advance a wide range of independent living and employment outcomes for individuals with disabilities, especially individuals with the most significant disabilities. DRRPs carry out one or more of the following types of activities, as specified and defined in 34 CFR 350.13 through 350.19: Research, training, demonstration, development, utilization, dissemination, and technical assistance.
An applicant for assistance under this program must demonstrate in its application how it will address, in whole or in part, the needs of individuals with disabilities from minority backgrounds (34 CFR 350.40(a)). The approaches an applicant may take to meet this requirement are found in 34 CFR 350.40(b). Additional information on the DRRP program can be found at:
This notice contains one proposed priority.
Under title I of the Rehabilitation Act of 1973, as amended (Rehabilitation Act), States receive Federal grants for 78.7 percent of the cost to operate a comprehensive VR program. This State-operated program is designed to assess, plan, develop, and provide VR services
Program services are tailored to the specific needs of the individual through an individualized plan for employment (IPE) in order to achieve his or her employment outcome. The VR Program may provide a variety of services, including, but not limited to, counseling, assessment, career development that includes job readiness training, vocational training, job coaching, on-the-job training and supports, assistive technology, transportation, and job placement.
In FY 2013, $3.029 billion in Federal funds were allocated to State VR agencies to administer the VR Program. Nationally, there are about 1 million individuals in various phases of the VR process within the VR system and about 580,000 individuals exit the program annually. Of the approximately 323,300 who exited the program after receiving services under an IPE in FY 2012, 180,216 exited with an employment outcome, 91 percent of whom were individuals with significant disabilities. The extent to which programs and services lead to effective results is important both in terms of improving employment outcomes for individuals with disabilities and justifying current and future investments.
Return-on-investment (ROI) is a performance measure used to evaluate the efficiency of an investment program, and it is calculated by dividing the benefits by the costs of the investment. Models investigating Federal and State investments and results are important given current and future budget conditions. Over the years, ROI studies have examined outcomes of the VR Program in relation to expended Federal and State funds. However, there are limitations in the use of findings from previous studies on VR Program effectiveness because they did not take into account all of the factors that may have an impact on ROI results. For example, previous studies did not account for specific services and disability subpopulations, potential selection bias (e.g., limiting the analysis to individuals who received services rather than all who enter the VR system), long-term outcomes and employment retention, recurring episodes of VR participation, and relevant demographic, service, and benefit program factors. In addition, the full range of costs, including Federal administrative costs, have not been taken into account in most VR ROI models. Changing economic conditions and their relative impacts on VR Program effectiveness are also not reflected in current ROI research.
While recent methodological research has included some of the important elements missing from earlier studies (Dean, 2013a and 2013b), there is a need to build on these advances to improve ROI measurement of the VR Program and to create a standard approach for applying the ROI tool in VR settings. Expanding what is known about the effectiveness of the VR Program will provide policymakers, administrators, counselors, and consumers with information necessary to better allocate resources for individuals within specific disability subpopulations. The proposed priority aims at addressing this need.
The Assistant Secretary for Special Education and Rehabilitative Services proposes a priority under NIDRR's Disability and Rehabilitation Research Projects (DRRPs) program on Improving Methods of Evaluating Return on Investment for the State VR Services Program.
The DRRP must contribute to improving the ROI methodologies available to assess the impact of the VR Program on employment outcomes of individuals with disabilities by:
(a) Developing or expanding valid, innovative, and replicable ROI model(s) for assessing the VR Program and the services it provides. These model(s) must include variables such as costs associated with individuals who enter the agency but leave without receiving services, costs related to specific services so VR agencies can better consider ROI when determining services that lead to better outcomes, estimates of State and Federal expenditures incurred as part of the VR Program administration and service delivery system, characteristics of disability subpopulations, long-term outcomes extending years after exit from the VR Program, and information on general economic conditions. These models must use rigorous methods, including the use of a comparison group to determine the effect of the VR program.
(b) Testing the model(s) in at least eight State VR agencies with varying characteristics (e.g., urban/rural, with/without waitlists) to determine its replicability, including determining what data are necessary to make the model(s) successful and evaluating the data quality and data availability in selected sites. The final number of sites must be approved by NIDRR. In carrying out this requirement, we want the successful applicant to clarify a process for ensuring access to Social Security data and earnings data as required to assess long-term impact of the VR program.
(c) Developing and disseminating recommended standards for conducting ROI studies of the VR Program.
(d) Producing and disseminating training materials to support the VR Program in using the model(s).
(e) Making the underlying data available so others can learn from and replicate the findings, without compromising personally identifiable information. Data availability will conform to all security requirements of identified sources.
(f) Working with an advisory board made up of ROI, VR, and research methodology experts to ensure the findings are relevant, replicable, and sound.
When inviting applications for a competition using one or more priorities, we designate the type of each
We will announce the final priority in a notice in the
This notice does not solicit applications. In any year in which we choose to use this priority, we invite applications through a notice in the
Under Executive Order 12866, the Secretary must determine whether this regulatory action is “significant” and, therefore, subject to the requirements of the Executive order and subject to review by the Office of Management and Budget (OMB). Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action likely to result in a rule that may—
(1) Have an annual effect on the economy of $100 million or more, or adversely affect a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities in a material way (also referred to as an “economically significant” rule);
(2) Create serious inconsistency or otherwise interfere with an action taken or planned by another agency;
(3) Materially alter the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or
(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles stated in the Executive order.
This proposed regulatory action is not a significant regulatory action subject to review by OMB under section 3(f) of Executive Order 12866.
We have also reviewed this regulatory action under Executive Order 13563, which supplements and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, Executive Order 13563 requires that an agency—
(1) Propose or adopt regulations only upon a reasoned determination that their benefits justify their costs (recognizing that some benefits and costs are difficult to quantify);
(2) Tailor its regulations to impose the least burden on society, consistent with obtaining regulatory objectives and taking into account—among other things and to the extent practicable—the costs of cumulative regulations;
(3) In choosing among alternative regulatory approaches, select those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity);
(4) To the extent feasible, specify performance objectives, rather than the behavior or manner of compliance a regulated entity must adopt; and
(5) Identify and assess available alternatives to direct regulation, including economic incentives—such as user fees or marketable permits—to encourage the desired behavior, or provide information that enables the public to make choices.
Executive Order 13563 also requires an agency “to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible.” The Office of Information and Regulatory Affairs of OMB has emphasized that these techniques may include “identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes.”
We are issuing this proposed priority only upon a reasoned determination that its benefits justify its costs. In choosing among alternative regulatory approaches, we selected those approaches that would maximize net benefits. Based on the analysis that follows, the Department believes that this proposed priority is consistent with the principles in Executive Order 13563.
We also have determined that this regulatory action would not unduly interfere with State, local, and tribal governments in the exercise of their governmental functions.
In accordance with both Executive orders, the Department has assessed the potential costs and benefits of this regulatory action. The potential costs are those resulting from statutory requirements and those we have determined as necessary for administering the Department's programs and activities.
The benefits of the Disability and Rehabilitation Research Projects and Centers Program have been well established over the years. Projects similar to the new DRRP have been completed successfully, and the new DRRP, established consistently with the proposed priority, is expected to improve the lives of individuals with disabilities and generate through research and development, disseminate, and promote the use of new information that would improve our understanding of how VR services improve the employment outcomes of individuals with disabilities.
You may also access documents of the Department published in the
U.S. Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve a state implementation plan (SIP) revision submitted by the State of California to meet the vehicle miles traveled emissions offset requirement under the Clean Air Act for the 1-hour ozone and 1997 8-hour ozone national ambient air quality standards (NAAQS) in the Los Angeles-South Coast Air Basin. The EPA is proposing to approve this revision because it demonstrates that California has put in place specific enforceable transportation control strategies and transportation control measures to offset the growth in emissions from the growth in vehicle miles traveled and vehicle trips in the South Coast, and thereby meets the applicable requirements of the Clean Air Act. The EPA is taking comments on this proposal and plans to follow with a final action.
Any comments must be submitted by June 23, 2014.
Submit comments, identified by docket number EPA–R09–OAR–2013–0823, by one of the following methods:
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John Ungvarsky, Air Planning Office (AIR–2), U.S. Environmental Protection Agency, Region IX, (415) 972–3963,
Throughout this document, “we,” “us” and “our” refer to the EPA.
Ground-level ozone is formed when oxides of nitrogen (NO
Scientific evidence indicates that adverse public health effects occur following exposure to ozone, particularly in children and adults with lung disease. Breathing air containing ozone can reduce lung function and inflame airways, which can increase respiratory symptoms and aggravate asthma or other lung diseases. Ozone exposure also has been associated with increased susceptibility to respiratory infections, medication use, doctor visits, and emergency department visits and hospital admissions for individuals with lung disease. Ozone exposure also increases the risk of premature death from heart or lung disease. Children are at increased risk from exposure to ozone because their lungs are still developing and they are more likely to be active outdoors, which increases their exposure.
In 1979, under section 109 of the Clean Air Act (CAA or Act), the EPA established primary and secondary national ambient air quality standards (NAAQS, standards, or standard) for ozone at 0.12 parts per million (ppm) averaged over a 1-hour period (referred to herein as the “1-hour ozone standard” or “1-hour ozone NAAQS”). See 44 FR 8202 (February 8, 1979).
In 1997, the EPA revised the ozone NAAQS to set the acceptable level of ozone in the ambient air at 0.08 ppm, averaged over an 8-hour period (referred to herein as the “1997 8-hour ozone standard” or “1997 8-hour ozone NAAQS”). See 62 FR 38856 (July 18, 1997). The EPA set the 8-hour ozone standard based on scientific evidence demonstrating that ozone causes adverse health effects at lower concentrations and over longer periods of time than was understood when the previous 1-hour ozone standard was set. The EPA determined that the 8-hour ozone standard would be more protective of human health, especially children and adults who are active outdoors, and individuals with a pre-
In 2008 (73 FR 16436, March 27, 2008), the EPA revised and further strengthened the primary and secondary NAAQS for ozone by setting the acceptable level of ozone in the ambient air at 0.075 ppm, averaged over an 8-hour period (“2008 8-hour ozone standard”). Today's proposed action relates only to the 1-hour and 1997 8-hour ozone standards and does not relate to the 2008 8-hour ozone standard.
Section 107 of the CAA requires the EPA to designate all areas of the country as nonattainment, attainment, or unclassifiable for each of the NAAQS, depending upon whether such areas experience violations of the NAAQS or contribute to violations in a nearby area. In the late 1970s, the EPA designated the Los Angeles-South Coast Air Basin Area (South Coast)
In 2004, the EPA designated areas of the country with respect to the 1997 8-hour ozone standard, 69 FR 23858 (April 30, 2004), and the EPA designated the South Coast as “Severe-17”
Once the EPA has promulgated a NAAQS, states are required to develop and submit plans that provide for the implementation, maintenance, and enforcement of the NAAQS under CAA section 110(a)(1). The content requirements for such plans, which are referred to as state implementation plans (SIPs) are found in CAA section 110(a)(2). The CAA further requires states with nonattainment areas to submit revisions to their SIPs that provide for, among other things, attainment of the relevant standard within certain prescribed periods.
In California, as a general matter, the California Air Resources Board (CARB) is responsible for adoption and submittal to the EPA of California SIPs and California SIP revisions and is the primary State agency responsible for regulation of mobile sources. Local and regional air pollution control districts are responsible for developing regional air quality plans and for regulation of stationary sources. For the South Coast, the South Coast Air Quality Management District (SCAQMD or District) develops and adopts air quality management plans (AQMPs) to address CAA SIP planning requirements applicable to that region. Generally, such AQMPs are then submitted to CARB for adoption and submittal to the EPA as revisions to the California SIP.
Under the CAA, as amended in 1990, the control requirements and date by which attainment of the 1-hour ozone standard was to be achieved varied with an area's classification. “Extreme” areas, such as the South Coast, were subject to the most stringent planning requirements but were provided the most time to attain the standard (i.e., until 2010). The various ozone planning requirements to which “Extreme” ozone nonattainment areas were subject are set forth in section 172(c) and section 182(a)–(e) of the CAA.
The specific ozone planning requirement that is relevant for the purposes of this action is CAA section 182(d)(1)(A), which, in relevant part, requires the state, if subject to its requirements, to “submit a revision that identifies and adopts specific enforceable transportation control strategies and transportation control measures to offset any growth in emissions from growth in vehicle miles traveled or numbers of vehicle trips in such area.”
As described above, in 1997, the EPA revised the ozone NAAQS and established the 1997 8-hour ozone NAAQS. Under the EPA's Phase I rules governing the transition from the 1-hour ozone standard to the 1997 8-hour ozone standard, the EPA revoked the 1-hour ozone standard effective June 2005 but also established “anti-backsliding” provisions that, in effect, carried forward most of the SIP requirements that had applied to an area by virtue of its 1-hour ozone classification to areas designated as nonattainment for the 1997 8-hour ozone standard. See 69 FR 23951 (April 30, 2004); 40 CFR 51.905(a)(1); and 40 CFR 51.900(f). The VMT emission offset requirement is one of the requirements carried forward; thus, the South Coast, which is designated nonattainment for the 1997 8-hour ozone standard, remains subject to the VMT emissions offset requirement for the 1-hour ozone standard, notwithstanding the revocation of that standard in 2005. Moreover, the South Coast is also subject to the VMT emissions offset requirement for the 1997 8-hour ozone standard by virtue of its classification, initially as “Severe-17” and later as “Extreme,” for the 1997 ozone standard. See 69 FR 23858 (April 30, 2004); 70 FR 71612 (November 29, 2005); 75 FR 24409 (May 5, 2010); and 40 CFR 51.902(a).
In 2008, to comply with the VMT emissions offset requirement for the 1-hour ozone standard, the SCAQMD submitted a demonstration showing decreases in aggregate year-over-year motor vehicle emissions in the South Coast from a base year (1990) through the applicable attainment year (2010).
In approving the South Coast VMT emissions offset demonstrations in 2009 and 2012, the EPA applied its then-longstanding interpretation of the VMT emissions offset requirement, first explained in guidance in the General Preamble to Title I of the Clean Air Act (see 57 FR 13498, at 13521–13523, April 16, 1992), that no transportation control measures are necessary if aggregate motor vehicle emissions are projected to decline each year from the base year of the plan to the attainment year. See 74 FR 10176, at 10179–10180 (March 10, 2009); 76 FR 57872, at 57889 (September 16, 2011). However, in response to a legal challenge brought in the U.S. Court of Appeals for the Ninth Circuit, the Court ruled against the EPA's approval of the South Coast VMT emissions offset demonstration for the 1-hour ozone standard, determining that the EPA incorrectly interpreted the statutory phrase “growth in emissions” in section 182(d)(1)(A) as meaning a growth in “aggregate motor vehicle emissions” versus a growth solely from VMT. Essentially, the Court ruled that additional transportation control measures are required whenever vehicle emissions are projected to be higher than they would have been had VMT not increased, even when aggregate vehicle emissions are actually decreasing. However, the Court acknowledged that “clean car technology” advances could result in there being no increase in emissions even in the face of VMT growth, which would then allow VMT to increase without triggering the requirement to adopt offsetting transportation control measures.
Based on this reasoning, the Court remanded the approval of the South Coast VMT emissions offset demonstration for the 1-hour ozone standard back to the EPA for further proceedings consistent with the opinion. In response, we withdrew our approval of the South Coast VMT emissions offset demonstration for the 1-hour ozone standard and disapproved it. See 78 FR 18849 (March 28, 2013). Furthermore, because our approval of the South Coast VMT emissions offset demonstration for the 1997 8-hour ozone standard was predicated on the same rationale as the corresponding South Coast demonstration for the 1-hour ozone standard that was rejected by the Ninth Circuit, we withdrew our approval of the South Coast VMT emissions offset demonstration for the 1997 8-hour ozone standard and disapproved it as well.
Specifically, we withdrew our previous approvals of the VMT emissions offset demonstrations and disapproved the same because we found that the submitted VMT emissions offset demonstrations were not consistent with the Court's ruling on the requirements of section 182(d)(1)(A) because they failed to identify, compared to a baseline assuming no VMT growth, the level of “increased” emissions, within the overall set of declining aggregate motor vehicle emissions, resulting solely from VMT growth and to show how such relatively higher emissions, compared to what they would have been had VMT held constant, have been offset through adoption and implementation of transportation control strategies and transportation control measures. See 77 FR 58067, at 58070 (September 19, 2012).
As described above, in March 2013, the EPA finalized the withdrawal of its previous approvals of SIP revisions submitted by the State of California to meet the VMT emissions offset requirement under the CAA for the South Coast 1-hour and 1997 8-hour ozone nonattainment areas. See 78 FR 18849 (March 28, 2013). In response, CARB and the SCAQMD (“State”) prepared and adopted revised South Coast VMT emissions offset demonstrations to show compliance with the VMT emissions offset requirement under section 182(d)(1)(A) for the 1-hour and 1997 8-hour ozone standards consistent with the Court's opinion in the
On February 13, 2013, CARB submitted, as a revision to the California SIP, the
The revised South Coast VMT emissions offset demonstrations address the requirement under CAA section 182(d)(1)(A) for a state with ozone nonattainment areas classified as “Severe” or “Extreme” to identify and adopt specific enforceable transportation control strategies and transportation control measures to offset any growth in emissions from growth in VMT or the numbers of vehicle trips. The demonstrations include analyses for the 1-hour ozone and 1997 8-hour ozone standards.
On April 3, 2014, CARB submitted a technical supplement to the revised South Coast VMT emissions offset demonstration submitted on February 13, 2013 (“technical supplement”). See letter and enclosures from Lynn Terry, Deputy Executive Officer, CARB, to Deborah Jordan, Director, Air Division, EPA Region 9. CARB's technical supplement includes a revised set of motor vehicle emissions estimates reflecting technical changes to the inputs used to develop the original set of calculations.
CAA section 110(a)(1) and (2) and CAA section 110(l) require a state to provide reasonable public notice and opportunity for public hearing prior to the adoption and submission of a SIP or SIP revision. To meet this requirement, every SIP submittal should include evidence that adequate public notice was given and an opportunity for a public hearing was provided consistent with the EPA's implementing regulations in 40 CFR 51.102.
CARB and the District have satisfied applicable statutory and regulatory requirements for reasonable public notice and hearing prior to adoption and submittal of the 2012 South Coast AQMP, which as noted above, included the revised South Coast VMT emissions offset demonstrations as appendix VIII to the plan. The District provided a public comment period and held a public hearing prior to the adoption of the 2012 South Coast AQMP on December 7, 2012.
The SIP submittal includes notices of the District and CARB public hearings as evidence that all hearings were properly noticed. We therefore find that the submittals meet the procedural requirements of CAA sections 110(a) and 110(l).
As noted previously, the first element of CAA section 182(d)(1)(A) requires that areas classified as “Severe” or “Extreme” submit a SIP revision that identifies and adopts transportation control strategies and transportation control measures sufficient to offset any growth in emissions from growth in VMT or the number of vehicle trips. In response to the Court's decision in
The August 2012 Guidance discusses the meaning of the terms, “transportation control strategies” (TCSs) and “transportation control measures” (TCMs), and recommends that both TCSs and TCMs be included in the calculations made for the purpose of determining the degree to which any hypothetical growth in emissions due to growth in VMT should be offset. Generally, TCSs is a broad term that encompasses many types of controls including, for example, motor vehicle emission limitations, inspection and maintenance (I/M) programs, alternative fuel programs, other technology-based measures, and TCMs, that would fit within the regulatory definition of “control strategy.” See, e.g., 40 CFR 51.100(n). TCMs are defined at 40 CFR 51.100(r) as meaning “any measure that is directed toward reducing emissions of air pollutants from transportation sources. Such measures include, but are not limited to those listed in section 108(f) of the Clean Air Act[,]” and generally refer to programs intended to reduce the VMT, the number of vehicle trips, or traffic congestion, such as programs for improved public transit, designation of certain lanes for passenger buses and high-occupancy vehicles (HOVs), trip reduction ordinances, and the like.
The August 2012 guidance explains how states may demonstrate that the VMT emissions offset requirement is satisfied in conformance with the Court's ruling. States are recommended to estimate emissions for the nonattainment area's base year and the attainment year. One emission inventory is developed for the base year, and three different emissions inventory scenarios are developed for the attainment year. For the attainment year, the state would present three emissions estimates, two of which would represent hypothetical emissions scenarios that would provide the basis to identify the “growth in emissions” due solely to the growth in VMT, and one that would represent projected actual motor vehicle emissions after fully accounting for projected VMT growth and offsetting emissions reductions obtained by all creditable TCSs and TCMs. See the August 2012 guidance for specific details on how states might conduct the calculations.
The base year on-road VOC emissions should be based on VMT in that year and it should reflect all enforceable TCSs and TCMs in place in the base year. This would include vehicle emissions standards, state and local control programs such as I/M programs or fuel rules, and any additional implemented TCSs and TCMs that were already required by or credited in the SIP as of that base year.
The first of the emissions calculations for the attainment year would be based on the projected VMT and trips for that year, and assume that no new TCSs or TCMs beyond those already credited in the base year inventory have been put in place since the base year. This calculation demonstrates how emissions would hypothetically change if no new TCSs or TCMs were implemented, and VMT and trips were allowed to grow at the projected rate from the base year. This estimate would show the potential for an increase in emissions due solely to growth in VMT and trips. This represents a “no action” taken scenario. Emissions in the attainment year in this scenario may be lower than those in the base year due to the fleet that was on the road in the base year gradually being replaced through fleet turnover; however, provided VMT and/or numbers of vehicle trips will in fact increase by the attainment year, they would still likely be higher than they would have been assuming VMT had held constant.
The second of the attainment year's emissions calculations would also assume that no new TCSs or TCMs beyond those already credited have been put in place since the base year, but would also assume that there was no growth in VMT and trips between the base year and attainment year. This estimate reflects the hypothetical emissions level that would have occurred if no further TCMs or TCSs had been put in place and if VMT and trip levels had held constant since the base year. Like the “no action” attainment year estimate described above, emissions in the attainment year may be lower than those in the base year due to the fleet that was on the road in the base year gradually being replaced by cleaner vehicles through fleet turnover, but in this case they would not be influenced by any growth in VMT or trips. This emissions estimate would reflect a ceiling on the attainment emissions that should be allowed to occur under the statute as interpreted by the Court because it shows what would happen under a scenario in which no offsetting TCSs or TCMs have yet been
Finally, the state would present the emissions that are actually expected to occur in the area's attainment year after taking into account reductions from all enforceable TCSs and TCMs that in reality were put in place after the baseline year. This estimate would be based on the VMT and trip levels expected to occur in the attainment year (i.e., the VMT and trip levels from the first estimate) and all of the TCSs and TCMs expected to be in place and for which the SIP will take credit in the area's attainment year, including any TCMs and TCSs put in place since the base year. This represents the “projected actual” attainment year scenario. If this emissions estimate is less than or equal to the emissions ceiling that was established in the second of the attainment year calculations, the TCSs or TCMs for the attainment year would be sufficient to fully offset the identified hypothetical growth in emissions.
If, instead, the estimated projected actual attainment year emissions are still greater than the ceiling which was established in the second of the attainment year emissions calculations, even after accounting for post-baseline year TCSs and TCMs, the state would need to adopt and implement additional TCSs or TCMs to further offset the growth in emissions and bring the actual emissions down to at least the “had VMT and trips held constant” ceiling estimated in the second of the attainment year calculations, in order to meet the VMT offset requirement of section 182(d)(1)(A) as interpreted by the Court.
For the revised South Coast VMT emissions offset demonstrations, the State used EMFAC2011, the latest EPA-approved motor vehicle emissions model for California.
Emissions from running exhaust, start exhaust, hot soak, and running losses are a function of how much a vehicle is driven. As such, emissions from these processes are directly related to VMT and vehicle trips, and the State included emissions from them in the calculations that provide the basis for the revised South Coast VMT emissions offset demonstrations. The State did not include emissions from resting loss and diurnal loss processes in the analysis because such emissions are related to vehicle population, not to VMT or vehicle trips, and thus are not part of “any growth in emissions from growth in vehicle miles traveled or numbers of vehicle trips in such area” (emphasis added) under CAA section 182(d)(1)(A).
The revised South Coast VMT emissions offset demonstrations address both the 1-hour ozone standard and the 1997 8-hour ozone standard and include two different “base year” scenarios: 1990, for the purposes of the VMT emissions offset demonstration for the 1-hour ozone standard, and 2002, for the purposes of the VMT emissions offset demonstration for the 1997 8-hour ozone standard. The “base year” for VMT emissions offset demonstration purposes should generally be the same “base year” used for nonattainment planning purposes. In 2012, the EPA approved the 2002 base year inventory for the South Coast for the purposes of the 1997 8-hour ozone standard, 77 FR 12674, at 12693 (March 1, 2012), and thus, the State's selection of 2002 as the base year for the revised South Coast VMT emissions offset demonstration for the 1997 8-hour ozone standard is appropriate. With respect to the 1-hour ozone standard, the revised South Coast attainment demonstration, submitted to the EPA on February 13, 2013, relies on a base year of 2008, rather than 1990; however, the State's selection of 1990 as the base year for the VMT offset demonstration is appropriate because 1990 was used as the base year for 1-hour ozone SIP planning purposes under the CAA Amendments of 1990, which established, among other requirements, the VMT emissions offset requirement in section 182(d)(1)(A).
The demonstrations also include the previously described three different attainment year scenarios (i.e., no action, VMT offset ceiling, and projected actual) but the attainment year differs between the two demonstrations. Year 2022 was selected as the attainment year for the revised VMT emissions offset demonstration for the 1-hour ozone standard, and year 2023 was selected as the attainment year for the revised demonstration for the 1997 8-hour ozone standard. For the 1997 8-hour ozone standard, the State's selection of 2023 is appropriate given that the approved South Coast 1997 8-hour ozone plan demonstrates attainment by the applicable attainment date of June 15, 2024 based on the 2023 controlled emissions inventory. See 76 FR 57872, at 57885 (September 16, 2011) and 77 FR 12674, at 12693 (March 1, 2012).
For the 1-hour ozone standard, in 2013, the EPA found the California SIP for the South Coast to be substantially inadequate to comply with the obligation to adopt and implement a plan providing for attainment of the 1-hour ozone standard. 78 FR 889 (January 7, 2013). Under this “SIP call,” effective February 6, 2013, the State was required to develop a revised South Coast plan demonstrating attainment of the 1-hour ozone standard as expeditiously as practicable, but no later than five years from the effective date of the SIP call, or, in this case, no later than February 6, 2018, unless the State can demonstrate that it needs up to an additional five years, i.e., up to February 6, 2023, to attain the standard in light of the severity of the nonattainment problem and the availability and feasibility of control measures.
The revised South Coast 1-hour ozone attainment demonstration, which was submitted along with the revised VMT emissions offset demonstrations and the rest of the 2012 South Coast AQMP on February 13, 2013, provides a justification for the full five years beyond the statutory five-year attainment date. The revised South Coast 1-hour ozone attainment demonstration thus provides a demonstration of attainment of the 1-hour ozone standard in the South Coast by 2023 based on the controlled 2022 emissions inventory. In a separate rulemaking action published elsewhere
Tables 1 and 2 summarize the relevant distinguishing parameters for each of the emissions scenarios and show the State's corresponding VOC emissions estimates. Table 1 provides the parameters and emissions estimates for the revised VMT emissions offset demonstration for the 1-hour ozone standard, and table 2 provides the corresponding values for the revised demonstration for the 1997 8-hour ozone standard.
For the two “base year” scenarios, the State ran the EMFAC2011 model for the applicable base year (i.e., 1990 for the 1-hour ozone standard and 2002 for the 1997 8-hour ozone standard) using VMT and starts data corresponding to those years. As shown in tables 1 and 2, the State estimates South Coast VOC emissions at 873 tons per day (tpd) in 1990 and 280 tpd in 2002.
For the two “no action” scenarios, the State first identified the on-road motor vehicle control programs (i.e., TCSs or TCMs) put in place since the base years and incorporated into EMFAC2011 and then ran EMFAC2011 with the VMT and starts data corresponding to the applicable attainment year (i.e., 2022 for the 1-hour ozone standard and 2023 for the 1997 8-hour ozone standard) without the emissions reductions from the on-road motor vehicle control programs put in place after the base year. Thus, the “no action” scenarios reflect the hypothetical VOC emissions that would occur in the attainment years in the South Coast if the State had not put in place any additional TCSs or TCMs after 1990 (for the 1-hour ozone VMT emissions offset demonstration) or after 2002 (for the 8-hour ozone demonstration). As shown in tables 1 and 2, the State estimates “no action” South Coast VOC emissions at 488 tons per day (tpd) in 2022 and 115 tpd in 2023. The principal difference between the two estimates is that the latter value (used for the revised VMT emissions offset demonstration for the 8-hour ozone standard) reflects the emissions reductions from TCSs and TCMs put in place by the end of 2002 whereas the former value (used for the revised demonstration for the 1-hour ozone standard) reflects only the emissions reductions from TCSs and TCMs put in place by the end of 1990. The most significant of the measures adopted since 1990 and relied upon for the 1-hour ozone VMT emissions offset demonstration include tiered (series of increasingly stringent limits) emissions standards for new motor vehicles (i.e., Low Emissions Vehicles I, II, and III standards), content specifications for gasoline (i.e., California Reformulated Gasoline Phases 1, 2, and 3), and enhancements to the State's I/M program (i.e., Smog Check II). See attachments 1 and 2 of Appendix VIII to the 2012 South Coast AQMP (i.e., the revised South Coast VMT emissions offset demonstrations) for the entire list of TCSs and TCMs adopted by the State since 1990.
For the “VMT offset ceiling” scenarios, the State ran the EMFAC2011 model for the attainment years but with VMT and starts data corresponding to base year values. Like the “no action” scenarios, the EMFAC2011 model was adjusted to reflect the VOC emissions levels in the attainment years without the benefits of the post-base-year on-road motor vehicle control programs. Thus, the “VMT offset ceiling” scenarios reflect hypothetical VOC emissions in the South Coast if the State had not put in place any TCSs or TCMs after the base years and if there had been no growth in VMT or vehicle trips between the base years and the attainment years.
The hypothetical growth in emissions due to growth in VMT and trips can be determined from the difference between the VOC emissions estimates under the “no action” scenarios and the corresponding estimates under the “VMT offset ceiling” scenarios. Based on the values in tables 1 and 2, the hypothetical growth in emissions due to growth in VMT and trips in the South Coast would have been 176 tpd (i.e., 488 tpd minus 312 tpd) for the purposes of the revised VMT emissions offset demonstration for the 1-hour ozone standard, and 26 tpd (i.e., 115 tpd minus 89 tpd) for the purposes of the corresponding demonstration for the 8-hour ozone standard. These hypothetical differences establish the levels of VMT growth-caused emissions that need to be offset by the combination of post-baseline year TCMs and TCSs and any necessary additional TCMs and TCSs.
For the “projected actual” scenario calculations, the State ran the EMFAC2011 model for the attainment years with VMT and starts data at attainment year values and with the full benefits of the relevant post-baseline year motor vehicle control programs. For this scenario, the State included the emissions benefits from TCSs and TCMs put in place since the base year. The most significant measures put in place during the 2002 to 2023 time frame, relied upon for the 8-hour ozone demonstration, include Low Emission Vehicles II and III standards, Zero Emissions Vehicle standards, and California Reformulated Gasoline Phase 3. Again, see attachments 1 and 2 of the Appendix VIII to the 2012 South Coast AQMP. These measures are also relied upon in the approved South Coast 8-hour ozone attainment demonstration and the revised South Coast 1-hour ozone attainment demonstration.
As shown in tables 1 and 2, the results from these calculations establish projected actual attainment-year VOC emissions of 65 tpd for the 1-hour standard demonstration and 62 tpd for the 1997 8-hour standard demonstration. The State then compared these values against the corresponding VMT offset ceiling values to determine whether additional TCMs or TCSs would need to be adopted and implemented in order to offset any increase in emissions due solely to VMT and trips. Because the “projected actual” emissions are less than the corresponding “VMT Offset Ceiling” emissions, the State concluded that the demonstration shows compliance with the VMT emissions offset requirement and that there are sufficient adopted TCSs and TCMs to offset the growth in emissions from the growth in VMT and vehicle trips in the South Coast for both the 1-hour and 1997 8-hour standards. In fact, taking into account of the creditable post-baseline year TCMs and TCSs, the State showed that they offset the hypothetical differences by 423 tpd for the 1-hour standard and by 53 tpd for the 1997 8-hour standards, rather than merely the required 176 tpd and 26 tpd, respectively.
Based on our review of the State's submittal, including the technical supplement, we find the State's analysis to be acceptable and agree that the State has adopted sufficient TCSs and TCMs to offset the growth in emissions from growth in VMT and vehicle trips in the South Coast for the purposes of the 1-hour ozone and 1997 8-hour ozone standard. As such, we find that the revised South Coast VMT emissions offset demonstrations, comply with the VMT emissions offset requirement in CAA section 182(d)(1)(A), and therefore, we propose approval of the revised South Coast VMT emissions offset demonstrations for the 1-hour ozone and 1997 8-hour ozone standards as a revision to the California SIP.
Under CAA section 110(k)(3), and for the reasons set forth above, EPA is proposing to approve CARB's submittal dated February 13, 2013 of the revised South Coast VMT emissions offset demonstrations for the 1-hour ozone and 1997 8-hour ozone standards, as supplemented by CARB on April 3, 2014, as a revision to the California SIP. We are proposing to approve this SIP revision because we believe that it demonstrates that California has put in place specific enforceable transportation control strategies and transportation control measures to offset the growth in emissions from the growth in VMT and vehicle trips in the South Coast for both the 1-hour ozone and 1997 8-hour ozone standards, and thereby meets the applicable requirements in section 182(d)(1)(A) of the Clean Air Act.
EPA is soliciting public comments on the issues discussed in this document or on other relevant matters. We will accept comments from the public on this proposal for the next 30 days. We will consider these comments before taking final action.
The Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve State choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this action merely proposes to approve a State plan revision as meeting federal requirements and does not impose additional requirements beyond those imposed by state law. For these reasons, this proposed action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement
• Does not provide EPA with the discretionary authority to address disproportionate human health or environmental effects with practical, appropriate, and legally permissible methods under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, this proposed rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the State, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental regulations, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.
42 U.S.C. 7401
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve the portions of a State implementation plan (SIP) revision submitted by the State of California on February 13, 2013 that relate to attainment of the 1-hour and 1997 8-hour ozone national ambient air quality standards in the Los Angeles-South Coast area. Specifically, the EPA is proposing to approve the portions of the South Coast Air Quality Management District's
Any comments must arrive by June 23, 2014.
Submit comments, identified by docket number EPA–R09–OAR–2014–0185, by one of the following methods:
•
•
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Wienke Tax, Air Planning Office (AIR–2), U.S. Environmental Protection Agency, Region IX, (415) 947–4192,
Throughout this document, “we,” “us” and “our” refer to the EPA.
Ground-level ozone is an oxidant that is formed from photochemical reactions in the atmosphere between volatile organic compounds (VOC) and oxides of nitrogen (NO
Under section 109 of the Clean Air Act (CAA or Act), EPA promulgates national ambient air quality standards (NAAQS or standards) for pervasive air pollutants, such as ozone. The NAAQS are concentration levels that, the attainment and maintenance of which, EPA has determined to be requisite to protect public health and welfare. In 1979, EPA established the 1-hour ozone NAAQS of 0.12 parts per million (ppm).
Under the Clean Air Act, as amended in 1977, EPA designated all areas of the country as “nonattainment,” “attainment,” or “unclassifiable” with respect to each NAAQS, and in so doing, designated the South Coast
In the wake of the classification of the South Coast nonattainment area as “extreme” for the 1-hour ozone standard, CARB submitted a number of SIP revisions for the South Coast that contained attainment demonstrations for the 1-hour ozone standard and that relied on a combination of mobile source control measures adopted by CARB and stationary source control measures adopted by South Coast Air Quality Management District (SCAQMD). In connection with these submittals, EPA took the following actions:
• 1994 South Coast Air Quality Management Plan (AQMP) and related state strategy (“1994 AQMP”)—EPA approved the 1-hour ozone attainment demonstration at 62 FR 1150 (January 8, 1997);
• 1997 AQMP, as revised in 1999 (“1997/1999 AQMP”)—EPA approved the revised 1-hour ozone demonstration at 65 FR 18903 (April 10, 2000); and
• 2003 AQMP and related state strategy (“2003 AQMP”)—EPA disapproved the revised 1-hour ozone attainment demonstration at 74 FR 10176 (March 10, 2009).
Each of these plans rely on a regulatory foundation of regulations adopted and implemented by the SCAQMD, CARB, and EPA for stationary and mobile sources, and also include commitments for new or more stringent regulations to achieve additional emissions reductions necessary for attainment. Each subsequent ozone plan then builds upon the foundation of the new or strengthened regulations that were adopted to support the previous plan. While the emissions reduction measures implemented under these South Coast ozone plans have been successful in reducing ozone concentrations in the South Coast,
Meanwhile, in 1997, EPA revised the NAAQS for ozone, setting it at 0.08 ppm averaged over an 8-hour timeframe (referred to herein as the “1997 8-hour ozone standard”) to replace the existing 1-hour ozone standard of 0.12 ppm.
• 2007 AQMP and 2007 State Strategy, as amended in 2009 and 2011—EPA approved the attainment demonstration for the 1997 8-hour ozone standard at 77 FR 12674 (March 1, 2012), amended at 77 FR 70707 (November 27, 2012).
The 8-hour ozone control strategy in the 2007 AQMP builds upon the control strategy established under the previous 1-hour ozone plans. In connection with EPA's 2012 approval of the South Coast attainment demonstration for the 1997 8-hour ozone standard in the 2007 AQMP, EPA approved a number of commitments by CARB and the SCAQMD as part of the California SIP, including commitments to bring certain defined measures before their respective boards by certain dates, commitments to achieve certain aggregate emissions reductions by certain milestone years, and a commitment to achieve emissions reductions from development and implementation of advanced control technologies under CAA section 182(e)(5). Of particular relevance for this proposed action, EPA approved CARB's commitment to achieve aggregate emissions reductions (beyond those already accounted for in the baseline) of 52 tons per day (tpd) of VOC and 144 tpd of NO
As noted above, the last South Coast 1-hour ozone attainment demonstration on which EPA took action was the one included in the 2003 AQMP. The 2003 AQMP revised the 1-hour ozone attainment demonstration approved as part of the 1997/1999 AQMP in light of new modeling results that showed that the approved strategy from the 1997/1999 AQMP would not provide for attainment of the 1-hour ozone standard by the 2010 attainment deadline.
EPA disapproved the revised 1-hour ozone attainment demonstration in the 2003 AQMP because a number of state control measures upon which the demonstration relied had been withdrawn from consideration. EPA's action on the 2003 AQMP was successfully challenged. In response to the court's decision
Under our SIP call, California was required to submit a SIP revision that meets the requirements of CAA section 182(c)(2)(A)
The subject of today's proposed action is a SIP revision that was submitted in part to respond to EPA's SIP call for a revised attainment demonstration for the 1-hour ozone standard. As discussed later in this document, the submitted 1-hour ozone attainment demonstration relies heavily on the approved control strategy for the 1997 8-hour ozone standard that is discussed above in connection with EPA's approval of the 2007 AQMP.
On December 7, 2012, SCAQMD adopted the
On January 25, 2013, CARB adopted the 2012 AQMP as a revision to the California SIP. On February 13, 2013, CARB submitted the 2012 AQMP to EPA along with the relevant CARB and SCAQMD board resolutions and other supporting material. In adopting the 2012 AQMP, CARB committed to develop, adopt, and submit contingency measures by 2019 if advanced control technology measures do not achieve planned reductions as required by CAA section 182(e)(5).
• CARB's resolution of adoption (Resolution 13–3);
• SCAQMD's resolution of adoption (Resolution 12–19);
• The ozone-related portions of chapter 4 of the 2012 AQMP (“Control Strategy and Implementation”);
• Appendices IV–A (“District's Stationary Source Control Measures”), IV–B (“Proposed Section 182(e)(5) Implementation Measures”), and IV–C (“Regional Transportation Strategy and Control Measures”); and
• Appendix VII (“South Coast 2012 1-hour ozone attainment demonstration”), which includes 4 attachments, one of which includes a demonstration of reasonably available control measures (RACM).
• Letter from Barry R. Wallerstein, D.Env, SCAQMD Executive Officer, to Jared Blumenfeld, Regional Administrator, EPA Region IX, May 1, 2014 (“Wallerstein Letter”); and
• Letter from Richard W. Corey, Executive Officer, CARB, to Jared Blumenfeld, Regional Administrator, EPA Region IX, May 2, 2014 (“Corey Letter”).
For simplicity, in referring to the elements on which we are acting, we are using the term “2012 AQMP” even though we recognize that the 2012 AQMP includes other elements in addition to those covered in this proposed action.
The 1-hour ozone attainment demonstration includes base year and future year emissions inventory estimates, a control strategy and RACM demonstrations, and an attainment demonstration based on photochemical modeling. The control strategy for the revised 1-hour ozone demonstration relies on the same SCAQMD measures referred to by SCAQMD as new measures that update the approved 1997 8-hour ozone control strategy.
CAA sections 110(a)(1) and (2) and 110(l) require a state to provide reasonable public notice and opportunity for public hearing prior to
The SCAQMD provided a public comment period and held a public hearing prior to its December 7, 2012 adoption of the 2012 AQMP. CARB provided the required public notice and opportunity for public comment prior to its January 25, 2013 public hearing on the 2012 AQMP. CARB's February 13, 2013 SIP submittal package includes notices of the SCAQMD and CARB public hearings, as evidence that all hearings were properly noticed. We therefore find that CARB's February 13, 2013 SIP revision submittal meets the procedural requirements of CAA sections 110(a) and 110(l).
CAA section 182(c)(2)(A) requires states with ozone nonattainment areas classified as serious, severe or extreme to submit plans that demonstrate attainment of the 1-hour ozone standard as expeditiously as practicable but no later than the outside date established in the CAA. The attainment demonstration should include technical analyses that locate and identify sources of emissions that are contributing to violations of the 1-hour ozone standard within the nonattainment area and adopted measures with schedules for implementation and other means and techniques necessary and appropriate for attainment. In order to determine whether the area has demonstrated attainment “as expeditiously as practicable,” the area must provide a demonstration that all RACM are implemented. CAA 172(c)(1). In addition, the “. . . attainment demonstration must be based on photochemical grid modeling or any other analytical method determined by the Administrator . . . to be at least as effective.” CAA section 182(c)(2)(A).
Attainment demonstrations rely upon emissions inventories that reflect different scenarios, including existing conditions (“base year”) and future “baseline” conditions. The base year emission inventory must be a comprehensive, accurate, current inventory of actual emissions from all sources of the relevant pollutant. Future baseline emissions inventories must reflect the most recent population, employment, travel and congestion estimates for the area. In this context, “baseline” emissions represent an estimate of the emissions that would occur in an area if no additional controls other than those already adopted are implemented.
The 2012 AQMP includes a 2008 base year and a 2022 baseline emissions inventory for the South Coast 1-hour nonattainment area. Documentation for these inventories is found in appendix III (“Base and Future Year Emission Inventory”), and section 3 of appendix VII, of the 2012 AQMP. The 2008 base year ozone precursor inventory provides the basis for the control measure analysis and the attainment demonstration in the South Coast 2012 1-hour ozone attainment demonstration.
VOC and NO
The emissions inventories in the 2012 AQMP were developed using data provided by CARB, the California Department of Transportation, and SCAG. These agencies collect data (industry growth factors, socio-economic projections, travel activity levels, emission factors, emission speciation profiles, and emissions) and developing methodologies (for example, model and demographic forecast improvements) used to generate comprehensive emissions inventories. CARB maintains statewide inventories in its California Emissions Inventory Development and Reporting System (CEIDARS) and California Emission Forecasting and Planning Inventory (CEFIS).
Area source inventories are developed by CARB and the District for approximately 400 area source categories. For the 2008 base year inventory, a number of area source category emissions inventories used existing methodologies with updated activity data such as fuel or sales data. Both CARB and the District are continuously updating and improving emissions inventory methodologies; for this plan, five new categories were added to the inventory, other methodologies were refined, and some area source categories were expanded.
CARB prepares on-road and most of the off-road inventories from its Emission FACtor (EMFAC) 2011 model and 2011 In-Use Fleet Off-Road models.
Table 1 depicts a summary of the 2008 VOC and NO
Table 2 presents a summary of future baseline emissions in the South Coast in 2022. In this instance, future baseline emissions reflect SCAQMD regulations adopted as of June 2012 and CARB rules adopted by August 2011
Table 3 lists the SCAQMD regulations for which specific emissions reduction credit was taken in the future baseline emissions estimates for the 2012 AQMP. See 2012 AQMP, appendix III, table III–2–2B. As shown in table 3, EPA has approved all of these regulations into the SIP. Most of these regulations have been amended a number of times by SCAQMD, and, with three exceptions, EPA has approved the most recently amended versions of the regulations into the SIP. As to the three exceptions (Rules 1146, 1146.1, and 1147), EPA anticipates taking final action on the most recently amended versions of the regulations prior to taking final action on the revised 1-hour ozone attainment demonstration.
With respect to mobile sources, we have placed a table in the docket that shows, among other things, the CARB regulations adopted through August 2011. In general, CARB regulations adopted through August 2011 and included in the future baseline are approved into the SIP, waived or authorized and thus emissions reduction credit for them in the future baseline is warranted. For example, EPA approved CARB's Truck and Bus Rule at 77 FR 20308 (April 4, 2012); EPA authorized CARB's Cleaner In-Use Off-Road Equipment Regulation at 78 FR 58090 (September 20, 2013); EPA authorized CARB's At-Berth Regulation, which reduces emissions from diesel auxiliary engines on contained ships, passenger ships and refrigerated cargo ships while berthing at a California port, at 76 FR 77515 (December 13, 2011); and EPA waived preemption for CARB's Truck Idling Regulation at 77 FR 9239 (February 16, 2012). EPA is anticipating final action on CARB's amended Consumer Products Regulation prior to taking final action on the revised 1-hour ozone attainment demonstration.
Emissions in table 2 are also broken down by the major source categories described above. A comparison between future baseline emissions in table 2 with the corresponding base year (2008) emissions in table 1 shows that, assuming current controls, there will be only modest changes in emissions from stationary and area sources but substantial decreases in emissions from mobile sources. However, even with the substantial decrease in mobile sources emissions relative to 2008, mobile sources will still account for 40 percent of the VOC, and 80 percent of the NO
We have reviewed the emissions inventories developed for the 2012 South Coast 1-hour ozone attainment demonstration, and the inventory methodologies used by the SCAQMD for consistency with CAA requirements and EPA's guidance. We find that the 2008 base year inventory is a comprehensive, accurate, and current inventory of ozone precursor emissions in the South Coast 1-hour ozone nonattainment area, and that 2008 is an appropriate base year for the revised 1-hour ozone attainment demonstration, and that the future baseline emissions projections for 2022 reflect appropriate emissions calculation methods and the latest planning assumptions. Therefore, we find the base year and future baseline emissions inventories to be acceptable for the purposes of developing a 1-hour ozone attainment demonstration.
EPA's SIP call required California to submit a SIP revision that meets the requirements of CAA section 182(c)(2)(A), which requires a demonstration that the SIP, as revised, will provide for attainment of the 1-hour ozone standard by the applicable attainment date. 78 FR 889, at 890 (January 7, 2013). In this case, the applicable attainment date is prescribed by CAA section 172(a)(2)(A), which is the date by which attainment can be achieved as expeditiously as practicable, but no later than February 6, 2018 (five years from the effective date of the SIP call). However, EPA may extend the attainment date to the extent EPA determines appropriate, for a period of no greater than February 6, 2023 (ten years from the effective date of the SIP call), considering the severity of nonattainment and the availability and feasibility of pollution control measures.
The 2012 AQMP includes a demonstration of attainment for the 1-hour ozone standard by December 31, 2022 and thus relies on an extension beyond the five-year deadline under CAA section 172(a)(2)(A). In section II.B.3 of this document, we provide our rationale for proposing approval of the extension in the attainment date to December 31, 2022. Our proposed approval of December 31, 2022 as the applicable attainment date depends in part upon California's showing that the 2012 AQMP provides for implementation of all RACM as
In addition to RACM, to meet the requirements of CAA section 182(c)(2)(A), a 1-hour ozone attainment demonstration must include other “enforceable emission limitations, and such other control measures, means or techniques * * *, as well as schedules and timetables for compliance, as may be necessary or appropriate to provide for attainment * * * by the applicable attainment date * * *.” CAA section 172(c)(6). The CAA allows ozone nonattainment areas classified as “extreme,” such as the South Coast, to include “provisions * * * which anticipate development of new control techniques or improvement of existing control technologies, * * * if the State demonstrates * * * that—(A) such provisions are not necessary to achieve the incremental emission reductions required during the first 10 years after the date of the enactment of the Clean Air Act Amendments of 1990; and (B) the State has submitted enforceable commitments to develop and adopt contingency measures to be implemented * * * if the anticipated technologies do not achieve planned reductions.” CAA section 182(e)(5). The measures included in the plan that describe the mechanisms for developing and implementing new control techniques or improvements in existing control technologies and achieving the planned emissions reductions are referred to as “new technology” measures.
The control strategy for the 1-hour ozone attainment demonstration in the 2012 AQMP relies on all three types of strategies to reduce basin-wide emissions to the extent necessary to demonstrate attainment of the 1-hour ozone standard (i.e., reduce emissions to 410 tpd of VOC and 150 tpd of NO
With respect to commitments, the 1-hour ozone attainment demonstration in the 2012 AQMP includes certain new commitments adopted by SCAQMD and relies on existing commitments by CARB that were approved by EPA through approval of the attainment demonstration for the 1997 8-hour ozone standard in the 2007 AQMP. The “new technology” provision in the 2012 AQMP updates the corresponding provision in the 2007 AQMP by proving greater specificity in the description of the actions that are or will be taken to achieve emissions reductions from development or deployment of advanced control technologies or techniques. The focus of the “new technology” provisions is the mobile source category of emissions in light of the extent to which such sources contribute to the overall inventory of ozone precursors.
CAA section 172(c)(1) requires that each attainment plan “provide for the implementation of all reasonably available control measures as expeditiously as practicable (including such reductions in emissions from existing sources in the area as may be obtained through the adoption, at a minimum, of reasonably available control technology), and shall provide for attainment of the national primary ambient air quality standards.”
EPA has previously provided guidance interpreting the RACM requirement in the General Preamble at 13560
First, as noted above, EPA approved the 2007 AQMP for the 1997 8-hour ozone NAAQS in 2012. As part of that
To update the RACM demonstration for the 2012 AQMP, the SCAQMD followed a similar process as it had used for the 2007 AQMP. That is, the SCAQMD conducted a process to identify RACM for the South Coast that involved public meetings to solicit input, evaluation of EPA's suggested RACM, and evaluation of other air agencies' regulations. See 2012 AQMP, appendix VII, attachment 4. As part of this process, the SCAQMD evaluated measures implemented in other nonattainment areas based on the severity of the nonattainment situation as well as attainment dates (including the San Joaquin Valley, the San Francisco Bay Area, Ventura, Dallas-Fort Worth, the New York Metro area, and the Houston-Galveston area) and measures identified by the Lake Michigan Air Directors Consortium (LADCO). The SCAQMD also held meetings with CARB, technical experts, local government representatives, and the public during development of the 2012 AQMP, and sponsored an air quality technology symposium in September of 2011, which generated additional potential control measures. In addition, the SCAQMD reevaluated existing SIP-approved SCAQMD rules and regulations.
From the set of identified potential controls, the SCAQMD then screened the identified measures and rejected those that would not individually or collectively advance attainment in the area, had already been adopted as rules, or were in the process of being adopted. The remaining measures were evaluated taking into account baseline inventories, available control technologies, and potential emission reductions as well as whether the measure could be implemented on a schedule that would advance attainment of the 1-hour ozone standard by at least a year, assuming a 2022 attainment deadline. In addition, to capture all improvements in innovative control technologies and identify areas for improvement in its regulations, SCAQMD staff reevaluated all the SCAQMD's source-specific rules and regulations and compared these requirements to more than 100 rules that had recently been adopted in four other California air districts (San Joaquin Valley, Sacramento, Ventura, and San Francisco Bay Area).
Based on its RACM analysis summarized above, SCAQMD concluded that, in general, its existing rules and regulations are equivalent to, or more stringent than, other Districts' rules. In the few areas where this was not the case, SCAQMD staff have developed one or more control measures for inclusion in the 2012 AQMP. In adopting the 2012 AQMP, the SCAQMD committed to develop, adopt, submit and implement 15 new measures, including measures at least as stringent as those identified in other California districts' SIPs, and several innovative measures. Table 5 lists these measures along with the related adoption and implementation date, and estimated emissions reductions. For a detailed description of the measures to which the SCAQMD has committed, please see appendix VI–A of the 2012 AQMP.
More specifically, the SCAQMD has committed to develop, adopt, submit and implement the 15 new measures listed in table 5 to achieve, in aggregate, emission reductions of 5.8 tpd of VOC and 10.7 tpd of NO
As to the few remaining measures that the SCAQMD rejected from its RACM analysis, the SCAQMD determined that these measures would not advance the attainment date due to the insignificant or unquantifiable emissions reductions they would potentially generate. See 2012 AQMP, appendix VII, attachment 2, page VII–10. Based on our review of the SCAQMD's latest RACM review process and the SCAQMD's proposed commitment to new measures (listed in table 5), we find that the 2012 AQMP demonstrates RACM for stationary sources in the South Coast.
With respect to transportation sources, SCAG's RACM analysis focused on transportation control measures (TCMs). TCMs are, in general, measures designed to reduce emissions from on-road motor vehicles through reductions in vehicle miles traveled or traffic congestion. SCAG's analysis is described in appendix VII, pages VII–20 to VII–23 of the 2012 AQMP. The TCMs in the 2012 AQMP are derived from TCM projects in the 2012–2035 SCAG Regional Transportation Plan/Sustainable Communities Strategy (RTP/SCS).
In so doing, SCAG evaluated a wide variety of TCMs, including those measures listed in CAA section 108(f) and relevant measures adopted in other nonattainment areas in the country, and determined that there was no combinations of reasonable measures that would advance attainment of the 1-hour ozone standard in the South Coast. See 2012 AQMP, appendix VII and appendix IV–C. Based on our review of appendix IV–C of the 2012 AQMP, we agree with the conclusion in the 2012 AQMP that the TCMs being implemented in the South Coast are inclusive of all TCM RACM for the area.
As to the mobile source component of the RACM demonstration, in 2007, CARB adopted the “California Air Resources Board's Proposed State Strategy for California's 2007 State Implementation Plan” (“2007 State Strategy”) through which CARB identified and committed to propose new defined measures for on-road and off-road sources and the fuels that power them.
Given the need for significant emissions reductions in California nonattainment areas, CARB has been a leader in the development and adoption of stringent mobile source control measures nationwide and has unique authority under CAA section 209 (subject to a waiver or authorization by EPA) to adopt and implement new emission standards for many categories of on-road vehicles and engines and new and in-use off-road vehicles and engines. We have also noted that many if not most of these particular measures are being proposed for adoption for the first time anywhere in the nation. Like the 2007 AQMP, the 2012 AQMP relies on the defined measures adopted by CARB in the 2007 State Strategy approved by EPA in 2012, and we agree with the 2012 AQMP's conclusion that CARB's mobile source program, approved as RACM in connection with the 2007 AQMP, continues to be RACM as it expands and further reduces emissions.
Therefore, for the reasons discussed above, we conclude that the 2012 AQMP provides for RACM for ozone precursor emissions from stationary, transportation, and mobile sources in the South Coast.
As described in the previous section of this document, through adoption of the 2012 AQMP, the SCAQMD has committed to achieve specific aggregate emissions reductions from VOC and NO
EPA believes that, with respect to the 2012 AQMP 1-hour ozone attainment demonstration, circumstances warrant the consideration of enforceable commitments as part of the attainment demonstration for the South Coast. As shown in table 4 above, the majority of the VOC reductions and a substantial portion of NO
In the 2012 AQMP, the SCAQMD identified potential control measures that could provide many of the additional emissions reductions needed for attainment. See 2012 1-hour ozone attainment demonstration, appendix VII, section 4. However, the timeline needed to develop, adopt, and implement these measures went beyond the February 2013 submittal date of the South Coast 2012 1-hour ozone attainment demonstration. These circumstances warrant the SCAQMD's and CARB's reliance on enforceable commitments as part of the attainment demonstration in the South Coast 2012 1-hour ozone attainment demonstration.
Given the State's demonstrated need for reliance on enforceable commitments, we now consider the three factors EPA uses to determine whether the use of enforceable commitments in lieu of adopted measures to meet a CAA planning requirements is approvable: (1) Does the commitment address a limited portion of the statutorily-required program; (2) is the state capable of fulfilling its commitment; and (3) is the commitment for a reasonable and appropriate period of time.
For the first factor, we look to see if the commitment addresses a limited portion of a statutory requirement, such as the amount of emissions reductions needed to demonstrate attainment in a nonattainment area. For this calculation, reductions assigned to the new technology provision (CAA section 182(e)(5)) are not counted as commitments.
As shown in table 4 above, the remaining portions of the emission reductions needed to demonstrate attainment of the 1-hour ozone standard in the South Coast nonattainment area (
For the second factor, we consider whether the SCAQMD and CARB are capable of fulfilling their commitments. The 2012 AQMP includes a specific list of regulatory initiatives from which emissions reductions are estimated to fulfill that agency's aggregate emissions reduction commitment. See table VII–4–2, and control measure OFFRD–01 (i.e., extension of the SOON provision) in table VII–4–4 of appendix VII of the 2012 AQMP. With respect to CARB's existing aggregate commitment from the 2007 AQMP, table VII–4–1 of the 2012 AQMP lists the types of measures included in the 2007 AQMP that the State of California could implement to meet CARB's existing 2020 aggregate commitment and thereby provide the planned emissions reductions for 1-hour ozone attainment purposes in 2022. Given the State's and SCAQMD's efforts to date to reduce emissions and the proposed stationary and mobile source strategies found in the 2012 AQMP, we believe that the State and SCAQMD are capable of fulfilling their aggregate emissions reductions commitments.
For the third and last factor, we consider whether the commitment is for a reasonable and appropriate period of time. First, we note SCAQMD's commitment is to achieve the specified aggregate emission reductions by January 1, 2022 (see Wallerstein Letter), for the purpose of providing for attainment of the 1-hour ozone standard by December 31, 2022, an attainment date that we are proposing to approve herein. Second, to meet the aggregate reduction commitment by January 1, 2022, SCAQMD is relying on emissions reductions from the SOON program. Reductions from the SOON program involve accelerating fleet turnover of off-road diesel engines through equipment replacement and engine repowers that in turn rely on available funds. The SCAQMD's expectation of emissions reductions from the SOON program by January 1, 2022 is based on the reasonable assumption of continued funding at current levels to achieve similar annual reductions in the emissions as have been achieved over the past four years. As such, we find that SCAQMD's aggregate emissions reduction commitment is for a reasonable and appropriate period of time. CARB's emissions reduction commitment from the 2007 AQMP is for year 2020, and so long as the commitment is fulfilled by January 1, 2022, it will provide the necessary reductions to attain the 1-hour ozone standard in the South Coast by December 31, 2022. Thus, SCAQMD's new commitment and CARB's existing commitment are for a reasonable and appropriate period of time.
For ozone nonattainment areas classified as extreme, the CAA recognizes that an attainment demonstration may need to rely to a certain extent on new or evolving technologies (referred to herein as “new
The General Preamble further provides that the new technology measures contemplated by section 182(e)(5) may include those that anticipate future technological developments as well as those that require complex analyses, decision making and coordination among a number of government agencies.
SCAQMD and CARB have demonstrated a clear need for emissions reductions from new and improved control technologies to reduce air pollution in the South Coast. As shown in table 4, above, baseline measures, and enforceable commitments provide the majority, but not all, of the emissions reductions needed by 2022 to attain the emissions target for 1-hour ozone attainment in the South Coast of 410 tpd of VOC and 150 tpd of NO
To cover the difference, which amounts to 17 tpd of VOC and 150 tpd of NO
Table 6 below lists the 2012 AQMP's new technology measures along with a brief summary of each measure. See 2012 AQMP, appendix IV–B for a detailed description of the measures. In support of these measures, CARB adopted a commitment to “develop, adopt, and submit contingency measures by 2019 if advanced technology measures do not achieve planned reductions as required by section 182(e)(5)(B).” CARB Resolution 13–3, page 9.
We have evaluated the reliance on the new technology provision of section 182(e)(5) in the 2012 AQMP and have found it to be acceptable. First, the SIP call to which the 2012 AQMP responds is for an attainment demonstration plan for an area classified as “extreme” for the 1-hour ozone standard. As such, the attainment demonstration can rely on the new technology provision under CAA section 182(e)(5) if attainment cannot be demonstrated through implementation of RACM and enforceable commitments and if the specific criteria and requirements of section 182(e)(5) are met. As noted above, attainment by meeting the emissions targets for the 1-hour ozone standard in the South Coast (410 tpd of VOC and 150 tpd of NO
• The 2012 AQMP relies on new technology measures for reductions from a base year of 2008 to an attainment year of 2022, a period of 14 years, and thus does not rely on new technologies to achieve incremental emission reductions required during the first 10 years of the plan; and
• CARB has submitted an enforceable commitment to develop, adopt, and submit contingency measures by 2019
Thus, based on the above discussion and evaluation, we find that the reliance on new technology measures as part of the attainment demonstration for the 1-hour ozone standard in the 2012 AQMP satisfies the requirements of CAA section 182(e)(5). As such, we are proposing to approve the new technology measures summarized in table 6 and further described in the 2012 AQMP, appendix IV–B, for 1-hour ozone attainment demonstration purposes and as an update to the new technology provision in the 2007 AQMP for the 1997 8-hour ozone standard.
As noted previously, in our final SIP call, we indicated that the applicable attainment date for the 1-hour ozone standard in the South Coast is as expeditiously as practicable, but no later than 5 years from the effective date of the final SIP call (i.e., February 6, 2018) but that EPA is authorized to extend the applicable attainment date for a period no greater than 10 years from the effective date of the SIP call (i.e., February 6, 2023) if appropriate given the severity of nonattainment and the availability and feasibility of pollution control measures.
The 2012 AQMP demonstrates attainment of the 1-hour ozone standard by December 31, 2022. To evaluate whether to approve an attainment date of December 31, 2022 for the 1-hour ozone standard in the South Coast, we reviewed the severity of nonattainment and the availability and feasibility of pollution control measures.
First, despite significant progress over the years, for urban areas nationwide, the South Coast nonattainment area has both the highest 1-hour ozone design value concentration and the highest annual maximum ozone concentrations in the United States. For instance, while the 1-hour design value has decreased from over 0.30 ppm in 1990 to less than 0.15 ppm in 2011 (see figure VII–2–2 in appendix VII of the 2012 AQMP), maximum ozone concentrations still are significantly higher than other metropolitan areas of the United States (see figures VII–2–3 and VII–2–4 in appendix VII) and remain over 20% higher than the standard. The 1-hour ozone problem in the South Coast is complex, the design value monitor has shifted over time, and the problem is compounded by the topographical and meteorological conditions for the area that are very conducive to the formation and concentration of ozone. 2012 AQMP, appendix VII, section 5.
As discussed in the section of this document on control strategies and RACM, the South Coast nonattainment area needs significant reductions in VOC and NO
The SCAQMD has a long history of adopting new measures and revising existing measures that provide emissions reductions of VOC and to a lesser extent, NO
As provided above, EPA agrees that the implementation schedule for enhanced stationary source controls is expeditious, taking into account the time necessary for purchase and installation of the required control technologies. We believe that it is not feasible at this time to accelerate the emission reduction schedule for the state and federal mobile source requirements, which set aggressive compliance dates for new emission standards and which must rely on fleet turnover over the years to deliver the ultimate emission reductions. In addition, the State has adopted standards for many categories of on-road and off-road vehicles and engines, and gasoline and diesel fuels, and is relying on existing, approved commitments to continue developing rules for Smog Check Improvements, Expanded Passenger Vehicle Retirement Program, Cleaner Main Ship Engines and Fuel, Cleaner Line-Haul Locomotives, and Off-Road Recreational Vehicle Equipment. EPA believes that the SCAQMD and CARB are implementing these rules and programs as expeditiously as practicable. EPA also expects that SCAQMD and CARB will continue to investigate opportunities to accelerate progress as new control opportunities arise, and that the agencies will promptly adopt and expeditiously implement any new measures found to be feasible in the future. For these reasons and also the need to conduct significant public outreach if applicable control approaches are to be effective, EPA agrees with the SCAQMD and CARB that a December 31, 2022 attainment date for the South Coast for the 1-hour ozone standard is as expeditious as practicable.
In this section of the document, we discuss the applicable statutory and regulatory requirements for modeled attainment demonstrations, EPA guidance on air quality modeling for ozone standards, the air quality modeling analysis supporting the attainment demonstration in the State's submittal, and our evaluation of these modeling analyses as part of the attainment demonstration SIP.
For any ozone nonattainment area classified as serious or above, section 182(c)(2)(A) of the CAA specifically requires the State to submit a modeled attainment demonstration based on a photochemical grid modeling evaluation or any other analytical method determined by the Administrator to be at least as effective as photochemical modeling. In addition, 40 CFR section 51.112 requires that attainment must be demonstrated using applicable air quality models, data bases, and other requirements specified in Appendix W to 40 CFR part 51, as interpreted in EPA guidance.
As with any predictive tool, inherent uncertainties are associated with photochemical grid modeling. EPA's guidance recognizes these limitations and provides recommended approaches for considering other analytical evidence to help assess whether attainment of the NAAQS is likely. This process is called a weight of evidence (WOE) analysis. EPA's modeling guidance (updated in 1996, 1999, and 2002) discusses various WOE analyses. This guidance recommends that all attainment demonstrations include supplemental analyses beyond the recommended modeling. These supplemental analyses provide additional information such as data analyses, and emissions and air quality trends, which would help strengthen the conclusion based on the photochemical grid modeling.
Photochemical model simulations were conducted for the base year 2008 emissions and future-year 2022 baseline and controlled emissions. The 1-hour ozone attainment demonstration was based on the deterministic approach outlined in the “Guidance on Use of Modeled Results to Demonstrate Attainment of the Ozone NAAQS,” EPA–454/B–95–007 (June 1996). In addition, the weight of evidence analysis uses the model in a relative sense, using the relative response factor (RRF) technique described in the “Guidance on the Use of Models and Other Analyses for Air Quality Goals in Attainment Demonstrations for Ozone, PM
Our evaluation of the air quality modeling analyses and supporting information provided in the South Coast 2012 1-hour ozone attainment demonstration indicate that the South Coast area will attain the 1-hour ozone standard by its December 31, 2022. In addition to the attainment demonstration provided in the South Coast 2012 1-hour ozone attainment demonstration, we have considered supplemental technical information, including ambient air quality monitoring data, which was not available at the time the attainment modeling was performed by SCAQMD. This information is discussed in more detail in the “Review of the Modeling for the Attainment Demonstration for the Proposed Rulemaking Action on the South Coast 2012 AQMP for the One Hour Ozone Standard” memorandum in the docket. The most recent ambient air quality data that we have reviewed indicate that the area is on track to attain the 1-hour ozone standard by December 31, 2022. The 1-hour ozone design value has decreased from 23.4 expected exceedance days in 2000–2002 (average each year) to 5.5 expected exceedance days in 2010–2012. The peak 1-hour concentration has decreased from 0.169 ppm in 2002 to 0.147 ppm in 2012.
Based on the analysis above and in the technical memorandum in the docket, EPA proposes to find that the air quality modeling provides an adequate basis for the 1-hour ozone attainment demonstration in the 2012 AQMP.
For the reasons discussed above, under section 110(k) of the CAA, the EPA is proposing to approve certain ozone-related portions of the 2012 South Coast AQMP as a revision to the California SIP. The relevant portions of the 2012 AQMP that are proposed for approval include the updated control strategy for the 1997 8-hour ozone standard and the demonstration of attainment of the 1-hour ozone standard in the South Coast by December 31, 2022. In so doing, we are proposing to approve the following commitments or measures upon which the 1-hour ozone attainment demonstration relies and that support update the approved control strategy for the 1997 8-hour ozone standard:
• SCAQMD's commitments to develop, adopt, submit and implement the measures as listed in table 5, above, subject to findings of infeasibility and measure substitution, and a commitment to meet aggregate emissions reductions targets of 5.8 tpd of VOC and 10.7 tpd of NO
• The new technology measures listed in table 6, above to achieve emissions reductions of 17 tpd of VOC and 150 tpd of NO
• CARB's commitment to submit contingency measures by January 1, 2019 as necessary to ensure that the emissions reductions from new technology measures are achieved.
In proposing approval, EPA finds that an attainment date of December 31, 2022 is appropriate in light of the severity of the 1-hour ozone problem in the South Coast and given the extent to which emissions sources in the South Coast have already been controlled and the difficulty of developing regulations and controlling additional emissions. EPA also finds that the South Coast 1-hour ozone attainment demonstration is based on reasonable estimates and forecasts of ozone precursor emissions and appropriate photochemical modeling techniques and assumptions and an acceptable control strategy.
We are taking public comments for thirty days following the publication of this proposed rule in the
Under the CAA, the Administrator is required to approve a SIP submittal that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this proposed action merely approves a state plan as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, October 7, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen oxides, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.
42 U.S.C. 7401
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve revisions to the Texas State Implementation Plan (SIP) submitted by the Texas Commission on Environmental Quality (TCEQ) for Control of Air Pollution from Nitrogen Compounds. Specifically, three separate revisions were submitted to EPA with letters dated April 13, 2012, May 8, 2013, and May 14, 2013, respectively. We are proposing to approve these three submittals in accordance with the federal Clean Air Act (the Act, CAA).
Comments must be received on or before June 23, 2014.
Submit your comments identified by Docket No. EPA–R06–OAR–2013–0400 by one of the following methods:
•
•
•
Mr. Alan Shar (6PD–L), Air Planning Section, (214) 665–6691,
Throughout this document “we,” “us,” and “our” refer to EPA.
We are proposing to approve three separate revisions to the Texas SIP submitted to EPA for review and evaluation with three letters dated April 13, 2012, May 8, 2013, and May 14, 2013, from the TCEQ. These three separate submittals are described below.
In a letter dated October 25, 2010, EPA requested that the TCEQ withdraw and revise its System Cap Trading (SCT) rules under 30 TAC Chapter 101 from SIP consideration. The EPA proposed disapproval of the TCEQ's SCT program on November 18, 2010, (75 FR 70654); and consequently, the TCEQ repealed and withdrew its SCT program rules from EPA's consideration as a SIP revision. Because of the TCEQ's repeal and withdrawal of the SCT program rule from the Texas SIP, on April 8, 2011, (76 FR 19739) EPA withdrew its proposed disapproval of the Texas SCT program rules. The 30 TAC Chapter 117 rules of NO
The revisions to 30 TAC Chapter 117 remove references to the term “system cap trading” for utility electric generation sources operating in major ozone nonattainment areas and the East and Central Texas Counties. The revisions concern sections 117.1020, 117.1120, 117.1220, 117.3020, and 117.9800. The State's adopted rule was published on April 13, 2012, at 37 Texas Register 2655.
The intended effect of this removal is that the April 13, 2012, revisions to 30 TAC Chapter 117 and their corresponding provisions of 30 TAC Chapter 101 will become consistent. See section 1 of the Technical Support Document (TSD) prepared in conjunction with this rulemaking action for more information.
With a letter dated May 8, 2013, the TCEQ submitted revisions to the 30 TAC Chapter 117, Subchapter D, Division 2, Dallas Fort Worth (DFW) Eight-Hour Ozone Nonattainment Area, Minor Sources. The revisions specifically concern sections 117.2103, 117.2130, 117.2135, and 117.2145. Halliburton Energy Services, Inc., located in Carrollton, Texas 75006 petitioned the TCEQ to be allowed an additional exemption in the rules in 30 TAC Chapter 117, Subchapter D, Division 2 that limit NO
With a letter dated May 14, 2013, the TCEQ submitted revisions to the 30 TAC Chapter 117 to update references to Electric Reliability Council of Texas, Incorporated (ERCOT) protocols and reflect changes to ERCOT's new Emergency Service Response (ERS) program. The ERCOT manages the electrical grid within the ERCOT region of Texas, with oversight by the Public Utility Commission of Texas.
Our evaluation of these three submittals is as follows:
The SCT program was created to provide additional flexibility to facilities subject to emission limits specified in 30 TAC Chapter 117. Through use of emission credits generated from each affected source one could determine the compliance of these sources with their applicable NO
The TCEQ later repealed and withdrew its SCT program rules from 30 TAC Chapter 101. The April 13, 2012, revisions to Chapter 117 remove references to SCT from sections 117.1020, 117.1120, 117.1220, 117.3020, and 117.9800. The removal of references to SCT from Chapter 117 rules will make both the trading rules of Chapter 101 and the NO
In response to a petition from Haliburton, the TCEQ adopted a revision to their SIP that exempts stationary diesel engines that are used exclusively for product testing and personnel training, operate less than 1,000 hours per year on a rolling 12-month basis, and meet applicable EPA's Tier emission standards for non-road engines listed in 40 CFR 89.112(a), Table 1 (October 23, 1998) in effect at the time of installation, modification, reconstruction, or relocation. In addition, they have included monitoring and recordkeeping requirements for demonstrating compliance. We have included a section by section review of the affected provisions of Chapter 117 (sections 117.2103, 117.2130, 117.2135, 117.2145) of the May 8, 2013, submittal in the TSD. See section 2, and Appendix A of the TSD.
Halliburton operates a stationary, reciprocating internal combustion engine (the drawworks engine) for the purposes of employee training and product testing at its Carrollton, Texas Plant. The drawworks engine is used for lifting and lowering casing into the test well at this plant. The test well is used solely for purposes of employee training and down-hole product testing, and is not associated with the actual oil or gas production operations. Engines used to raise and lower down-hole equipment in actual oil and gas operations in the field, which the drawworks engine is designed to simulate, are typically not subject to similar Chapter 117 testing requirements because they are not installed at one location long enough to trigger the definition of a stationary internal combustion engine in section 117.10. According to the records, the drawworks engine was installed in 2010, and the emissions testing results are compliant with the federal Tier 3 emission standards for non-road engines listed in 40 CFR 89.112(a), Table 1.
According to section 110(l) of the Act, each revision to an implementation plan submitted by a State under this chapter shall be adopted by such State after reasonable notice and public hearing. The Administrator shall not approve a revision of a plan if the revision would interfere with any applicable requirement concerning attainment and reasonable further progress, or any other applicable requirement of this chapter. The TCEQ submitted a 110(l) analysis and additional information as a part of the May 8, 2013, submittal. Also, see the April 26, 2013, issue of Texas Register at 38 TexReg 2634.
As a part of this analysis we are considering the following factors: (a) The engine has been shown to meet the Tier 3 emission standards for non-road engines listed in 40 CFR 89.112(a), Table 1; (b) NO
The May 14, 2013, revisions to the 30 TAC Chapter 117 update references to ERCOT's definition of “emergency situation” and its new ERS program that replaced the former Emergency Interruptible Load Service Program. The changes made by ERCOT are intended to promote electric power reliability during energy emergencies by allowing operation of generators for the purpose of selling power to the electric grid under limited circumstances. The revision to the definition of “emergency situation” in section 117.10(15) will make the 30 TAC Chapter 117 definitions of “emergency situation” consistent with the ERCOT's Nodal Protocols Section 2 (Definitions and Acronyms) of June 1, 2012. The adopted amendment does not increase the number of sources that could qualify for exemption under the Chapter 117 rules, or increase the frequency or duration of the operation during an emergency situation as compared to the approved SIP. Therefore, the adopted rulemaking will not contribute to nonattainment with the ozone NAAQS and is therefore consistent with section 110(l) of the Act. Therefore, we are proposing to approve the May 14, 2013 revisions to Chapter 117 into Texas SIP.
Today, we are proposing to approve the April 13, 2012, revisions to 30 TAC Chapter 117 sections 117.1020, 117.1120, 117.1220, 117.3020, and 117.9800 to remove reference to SCT program rule from these sections. We are proposing to approve the May 8, 2013, revisions to 30 TAC Chapter 117 sections 117.2103, 117.2130, 117.2135, and 117.2145, to allow for partial exemption of oil and gas drawworks engines used for personnel training and product testing from NO
Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. If a portion of the plan revision meets all the applicable requirements of this chapter and Federal regulations, the Administrator may approve the plan revision in part. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices that meet the criteria of the Act, and to disapprove state choices that do not meet the criteria of the Act. Accordingly, this proposed action approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);
• does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
• is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);
• does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4);
• does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act;
• does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994); and
• this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.
42 U.S.C. 7401 et seq.
Environmental protection, Air pollution control, Hydrocarbons, Incorporation by reference, Intergovernmental relations, Nitrogen oxides, Reporting and recordkeeping requirements.
Environmental Protection Agency (EPA).
Notice of filing of petitions and request for comment.
This document announces the Agency's receipt of several initial filings of pesticide petitions requesting the establishment or modification of regulations for residues of pesticide chemicals in or on various commodities.
Comments must be received on or before June 23, 2014.
Submit your comments, identified by docket identification (ID) number and the pesticide petition number (PP) of interest as shown in the body of this document, by one of the following methods:
•
•
•
Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
Lois Rossi, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460–0001; telephone number: (703) 305–7090; email address:
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).
If you have any questions regarding the applicability of this action to a particular entity, consult the person listed at the end of the pesticide petition summary of interest.
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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.
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EPA is announcing its receipt of several pesticide petitions filed under section 408 of the Federal Food, Drug, and Cosmetic Act (FFDCA), (21 U.S.C. 346a), requesting the establishment or modification of regulations in 40 CFR part 180 for residues of pesticide chemicals in or on various food commodities. The Agency is taking public comment on the requests before responding to the petitioners. EPA is not proposing any particular action at this time. EPA has determined that the pesticide petitions described in this document contain the data or information prescribed in FFDCA section 408(d)(2); however, EPA has not fully evaluated the sufficiency of the submitted data at this time or whether the data support granting of the pesticide petitions. After considering the public comments, EPA intends to evaluate whether and what action may be warranted. Additional data may be needed before EPA can make a final determination on these pesticide petitions.
Pursuant to 40 CFR 180.7(f), a summary of each of the petitions that are the subject of this document, prepared by the petitioner, is included in a docket EPA has created for each rulemaking. The docket for each of the petitions is available online at
As specified in FFDCA section 408(d)(3), (21 U.S.C. 346a(d)(3)), EPA is publishing notice of the petition so that the public has an opportunity to comment on this request for the establishment or modification of regulations for residues of pesticides in or on food commodities. Further information on the petition may be obtained through the petition summary referenced in this unit.
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Environmental protection, Agricultural commodities, Feed additives, Food additives, Pesticides and pests, Reporting and recordkeeping requirements.
Centers for Medicare & Medicaid Services (CMS), and Office of the National Coordinator for Health Information Technology (ONC), HHS.
Proposed rule.
This proposed rule would change the meaningful use stage timeline and the definition of certified electronic health record technology (CEHRT). It would also change the requirements for the reporting of clinical quality measures for 2014.
To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on July 21, 2014.
In commenting, please refer to file code CMS–0052–P. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.
You may submit comments in one of four ways (please choose only one of the ways listed):
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Please allow sufficient time for mailed comments to be received before the close of the comment period.
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a. For delivery in Washington, DC—Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445–G, Hubert H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 20201.
(Because access to the interior of the Hubert H. Humphrey Building is not readily available to persons without Federal government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.)
b. For delivery in Baltimore, MD—Centers for Medicare & Medicaid Services, Department of Health and
If you intend to deliver your comments to the Baltimore address, call telephone number (410) 786–7195 in advance to schedule your arrival with one of our staff members.
Comments erroneously mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period.
For information on viewing public comments, see the beginning of the
Comments received timely will also be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, phone 1–800–743–3951.
The American Recovery and Reinvestment Act of 2009 (ARRA) (Pub. L. 111–5) amended Titles XVIII and XIX of the Social Security Act (the Act) to authorize incentive payments to eligible professionals (EPs), eligible hospitals, critical access hospitals (CAHs), and Medicare Advantage (MA) organizations to promote the adoption and meaningful use of certified electronic health record (EHR) technology. Sections 1848(o), 1853(l) and (m), 1886(n), and 1814(l) of the Act provide the statutory basis for the Medicare incentive payments made to meaningful EHR users. These statutory provisions govern EPs, MA organizations (for certain qualifying EPs and hospitals that meaningfully use certified EHR technology (CEHRT), subsection (d) hospitals, and CAHs, respectively. Sections 1848(a)(7), 1853(l) and (m), 1886(b)(3)(B), and 1814(l) of the Act also establish downward payment adjustments, beginning with calendar or fiscal year 2015, for EPs, MA organizations, subsection (d) hospitals, and CAHs that are not meaningful users of CEHRT for certain associated reporting periods. Sections 1903(a)(3)(F) and 1903(t) of the Act provide the statutory basis for Medicaid incentive payments.
In sections 1848(o)(2)(A) and 1886(n)(3)(A) of the Act, the Congress identified the broad goal of expanding the use of EHRs through the concept of meaningful use. Section 1903(t)(6)(C) of the Act also requires that Medicaid providers adopt, implement, upgrade, or meaningfully use CEHRT if they are to receive incentives under Title XIX of the Act. CEHRT used in a meaningful way is one piece of the broader health information technology (HIT) infrastructure needed to reform the health care system and improve health care quality, efficiency, and patient safety. This vision of reforming the health care system and improving health care quality, efficiency, and patient safety should inform the definition of meaningful use.
Certified EHR technology is defined for the Medicare and Medicaid EHR Incentive Programs at 42 CFR 495.4, which references the Office of the National Coordinator for Health Information Technology's (ONC) definition of CEHRT under 45 CFR 170.102. For Stages 1 and 2 of meaningful use, CMS and ONC worked closely to ensure that the definition of meaningful use of CEHRT and the standards and certification criteria for CEHRT were coordinated. The definition of CEHRT under 45 CFR 170.102 requires, beginning with Federal fiscal year (FY) and calendar year (CY) 2014, EHR technology certified to the 2014 Edition EHR certification criteria. Therefore, all EPs, eligible hospitals, and CAHs must use 2014 Edition CEHRT to meet meaningful use under the Medicare and Medicaid EHR Incentive Programs beginning with FY 2014 and CY 2014.
On September 4, 2012, we published in the
EPs, eligible hospitals, and CAHs that attest to meaningful use for 2014 for their first year of Stage 2 or their second year of Stage 1 have a 3-month quarter EHR reporting period in CY 2014 (EPs) or FY 2014 (eligible hospitals and CAHs). For the Medicaid incentive payments for meaningful use, EPs have an EHR reporting period of any continuous 90-day period in CY 2014 as defined by the State Medicaid program, or, if the State so chooses, any 3-month
We are revisiting some of the requirements for the Medicare and Medicaid EHR Incentive Programs for 2014. Many EHR vendors have indicated, through letters to CMS, public forums and listening sessions, survey data, and information related to the certification and testing process, that the amount of time available after the publication of the Stage 2 final rule in which to make the required coding changes to enable their EHR products to be certified to the 2014 Edition of EHR certification criteria was much too short. We understand, based on information gained from EHR technology developers and ONC-Authorized Certification Bodies on timing, backlogs, and the certification case load, many EHR products were certified later than anticipated, which has impacted the corresponding time available to providers—especially hospitals—to effectively deploy 2014 Edition CEHRT and to make the necessary patient safety, staff training, and workflow investments in order to be prepared to demonstrate meaningful use in 2014. The availability of 2014 Edition CEHRT is further limited by the large number of providers needing to upgrade to 2014 Edition CEHRT. By the end of February 2014, over 350,000 providers had received an EHR incentive payment for adopting, implementing, or upgrading, or for successfully demonstrating meaningful use using 2011 Edition CEHRT. All providers need 2014 Edition CEHRT to adopt, implement, or upgrade, or to successfully demonstrate meaningful use for Stage 1 or Stage 2 in 2014. Through letters to CMS, public forums, listening sessions, and public comment at CMS meetings, many provider associations have expressed concern that, although 2014 Edition CEHRT may be available for adoption, there is a backlog of many months for the updated version to be installed and implemented so that providers can successfully attest for 2014. We also understand that the delay in availability may limit a provider's ability to fully implement 2014 Edition CEHRT across the facility. For example, (1) a hospital may have different systems in multiple settings, which all require an update and integration or (2) a provider may have certain 2014 Edition CEHRT functionality that, once implemented in a live setting, requires software patches or workflow changes.
In an effort to grant more flexibility to providers who have experienced 2014 Edition CEHRT product availability issues that impact the ability to fully implement 2014 Edition CEHRT to attest to meaningful use using 2014 Edition CEHRT, we are proposing the following changes for the Medicare and Medicaid EHR Incentive Programs for 2014 for providers that are not able to fully implement 2014 Edition CEHRT for a full EHR reporting period in 2014. We are proposing to allow these EPs, eligible hospitals, and CAHs that could not fully implement 2014 Edition CEHRT for the 2014 reporting year due to delays in 2014 Edition CEHRT availability to continue to use 2011 Edition CEHRT or a combination of 2011 Edition and 2014 Edition CEHRT for the EHR reporting periods in CY 2014 and FY 2014, respectively. These proposed alternatives are for providers that could not fully implement 2014 Edition CEHRT to meet meaningful use for the duration of an EHR reporting period in 2014 due to delays in 2014 Edition CEHRT availability.
We are proposing this change for 2014 only. We will maintain the existing policy that all providers must use 2014 Edition CEHRT for the EHR reporting periods in CY 2015, FY 2015, and in subsequent years or until new certification requirements are adopted in subsequent rulemaking.
We strongly recommend eligible professionals, eligible hospitals, and CAHs that have not yet purchased EHR technology to obtain 2014 Edition CEHRT as these providers will still need to use 2014 Edition CEHRT for their EHR reporting period in 2015 as stated earlier.
In order to avoid inadvertently incentivizing the purchase of an outdated product that cannot be used to demonstrate meaningful use in a subsequent year, we are proposing that to qualify for an incentive payment under Medicaid for 2014 for adopting, implementing, or upgrading CEHRT, a provider must adopt, implement, or upgrade to 2014 Edition CEHRT only. A provider would not be able to qualify for a Medicaid incentive payment for 2014 for adopting, implementing, or upgrading to 2011 Edition CEHRT or a combination of 2011 and 2014 Edition CEHRT. We are proposing to revise the definition of “Adopt, Implement or Upgrade” under 42 CFR 495.302 to reflect this proposal.
The edition of certified EHR technology which is available to a provider dictates the stage and version of the meaningful use objectives and measures to which the provider will be able to attest. For example, 2011 Edition CEHRT alone does not have the necessary functionality required to meet the Stage 2 objectives and measures. In addition, the edition of CEHRT determines which clinical quality measures a provider can calculate and report because the calculations are part of the software programming within the CEHRT system.
The three options for the use of CEHRT editions and the available Stage of meaningful use objectives and measures associated with each option are as follows:
We are proposing that all EPs, eligible hospitals, and CAHs that use only 2011 Edition CEHRT for their EHR reporting period in 2014 must meet the meaningful use objectives and associated measures for Stage 1 under 42 CFR 495.6 that were applicable for the 2013 payment year, regardless of their current stage of meaningful use. We note that in the Stage 2 final rule (77 FR 53975 through 53979), we finalized certain changes to the Stage 1 objectives and associated measures, and some of those changes were applicable beginning with 2013 while other changes were applicable beginning with 2014. For ease of reference, we will refer to the Stage 1 objectives and associated measures under 42 CFR 495.6 that were applicable for 2013 as the “2013 Stage 1 objectives and measures,” and we will refer to the Stage 1 objectives and associated measures under 42 CFR 495.6 that are applicable for 2014 as the “2014 Stage 1 objectives and measures.” Providers who choose this option must attest that they are unable to fully implement 2014 Edition CEHRT because of issues related to 2014 Edition CEHRT availability delays when they attest to the meaningful use objectives and measures.
We are proposing that all EPs, eligible hospitals, and CAHs using a combination of 2011 Edition CEHRT and 2014 Edition CEHRT for their EHR reporting period in 2014 may choose to meet the 2013 Stage 1 objectives and measures or the 2014 Stage 1 objectives and measures, or if they are scheduled to begin Stage 2 in 2014 under the timeline shown in Table 1, they may choose to meet the Stage 2 objectives and associated measures under 42 CFR
A provider's ability to fully implement all of the functionality of 2014 Edition CEHRT may be limited by the availability and timing of product installation, deployment of new processes and workflows, and employee training. This effect is compounded for providers in Stage 2 as some providers may not be able to fully implement all of the functions included in 2014 Edition CEHRT that are necessary to meet the Stage 2 objectives and measures in time to complete their EHR reporting period in 2014. Therefore, under our proposal, providers who are scheduled to begin Stage 2 for the 2014 EHR reporting period but are unable to fully implement all the functions of their 2014 Edition CEHRT required for Stage 2 objectives and measures due to delays in 2014 Edition CEHRT availability would have the option of using 2014 Edition CEHRT to attest to the 2014 Stage 1 objectives and measures for the 2014 EHR reporting period. Providers who are scheduled to begin Stage 2 in 2014 who choose this option must attest that they are unable to fully implement 2014 Edition CEHRT because of issues related to 2014 Edition CEHRT availability delays when they attest to the meaningful use objectives and measures.
The EHR reporting periods in 2014 already have been established, and we are not proposing any changes. Under the current timeline shown in Table 1, providers that first demonstrated meaningful use Stage 1 in 2011 or 2012 are required to begin Stage 2 in 2014. We are proposing that the flexibility regarding use of the various editions of CEHRT as outlined earlier would apply only to the EHR reporting periods in 2014 for the EHR Incentive Program. Providers that were scheduled to begin Stage 2 in 2014 that instead meet the Stage 1 criteria in 2014 will be required to begin Stage 2 in 2015 as noted in Table 3. In 2015, all providers, except those in their first year of demonstrating meaningful use, are required to have a full year EHR reporting period. In addition, in 2015, all providers are required to have 2014 Edition CEHRT in order to successfully demonstrate meaningful use.
The following are example scenarios under our proposal.
• Attest to the Stage 2 objectives and measures of meaningful use using 2014 Edition CEHRT in 2014 as scheduled.
• Attest to the Stage 2 objectives and measures of meaningful use using a combination of 2011 and 2014 Edition CEHRT in 2014 if they are unable to fully implement 2014 Edition CEHRT due to delays in 2014 Edition CEHRT availability.
• Attest to the 2014 Stage 1 objectives and measures using 2014 Edition CEHRT or a combination of 2011 and 2014 Edition CEHRT in 2014 if they are unable to fully implement 2014 Edition CEHRT due to delays in 2014 Edition CEHRT availability.
• Attest to the 2013 Stage 1 objectives and measures using 2011 Edition CEHRT or a combination of 2011 and 2014 Edition CEHRT in 2014 if they are unable to fully implement 2014 Edition CEHRT due to delays in 2014 Edition CEHRT availability. Clinical quality measures must be submitted through attestation if attesting to the 2013 Stage 1 objectives and measures as discussed below in section B of this proposal.
• Attest using 2014 Edition CEHRT to the 2014 Stage 1 objectives and measures of meaningful use in 2014 as scheduled.
• Attest using a combination of 2011 and 2014 Edition CEHRT and meet the 2014 Stage 1 objectives and measures of meaningful use in 2014 if they are unable to fully implement 2014 Edition CEHRT due to delays in 2014 Edition CEHRT availability.
• Attest using 2011 Edition CEHRT or a combination of 2011 and 2014 Edition CEHRT and meet the 2013 Stage 1
Under the current timeline shown in Table 1, an EP, eligible hospital or CAH that first became a meaningful user in 2011 or 2012 would be required to begin Stage 3 on January 1, 2016 (the first day of CY 2016 for EPs) or October 1, 2015 (the first day of FY 2016 for eligible hospitals or CAHs), respectively. However, because we intend to analyze the meaningful use Stage 2 data to inform our development of the criteria for Stage 3 of meaningful use, we are proposing a 1-year extension of Stage 2 for those providers as is reflected in Table 3. We are proposing that Stage 3 would begin in CY 2017 for EPs and FY 2017 for eligible hospitals and CAHs that first became meaningful users in 2011 or 2012. The goal of this proposed change is two-fold: First, to allow CMS and ONC to focus efforts on the successful implementation of the enhanced patient engagement, interoperability, and health information exchange requirements in Stage 2; and second, to utilize data from Stage 2 participation to inform policy decisions for Stage 3.
This proposed change would allow EPs, eligible hospitals, and CAHs that first became meaningful users in 2011 or 2012 to begin Stage 3 on January 1, 2017 (EPs) and October 1, 2016 (eligible hospitals and CAHs). We will maintain the existing timeline for providers that first became meaningful users in 2013 and for those that begin in 2014 and subsequent years or until new certification requirements are adopted in subsequent rulemaking, as shown in Table 3.
We invite public comment on our proposals.
In 2014, as part of the definition of “meaningful EHR user” under 42 CFR 495.4, all providers are required to select and report on clinical quality measures (CQMs) from the relevant sets adopted in the Stage 2 final rule (77 FR 54069 through 54075, and 77 FR 54081 through 54089 and further specified as noted in the December 7, 2012 interim final rule with comment period (77 FR 72985) and published on the CMS eCQM Library [
Due to limitations in the Registration and Attestation System for the EHR Incentive Program and other CMS data systems, the reporting options and methods for CQMs for 2014 would depend upon the edition of CEHRT that a provider uses for its EHR reporting period in 2014. If a provider elects to use only 2011 Edition CEHRT for its EHR reporting period in 2014, the provider would be required to report CQMs by attestation as follows:
• EPs would report from the set of 44 measures and according to the reporting criteria finalized in the Stage 1 final rule (75 FR 44386 through 44411)—
• Eligible hospitals and CAHs would report all 15 measures finalized in the Stage 1 final rule (75 FR 44411 through 44422).
• The reporting period would be any continuous 90 days within FY 2014 for hospitals that are demonstrating meaningful use for the first time or a 3-month FY quarter for hospitals that have previously demonstrated meaningful use.
If a provider elects to use a combination of 2011 Edition and 2014 Edition CEHRT and chooses to attest to the 2013 Stage 1 objectives and measures for its EHR reporting period in 2014, the provider would be required to report CQMs by attestation using the same measure sets and reporting criteria outlined earlier for providers who elect to use only 2011 Edition CEHRT for their EHR reporting periods in 2014. Because of the differences in how CQMs are calculated and tested between the 2011 and the 2014 Editions of CEHRT, we are further proposing that a provider may attest to data for the CQMs derived exclusively from the 2011 Edition CEHRT for the portion of the reporting period in which 2011 Edition CEHRT was in place.
If a provider elects to use a combination of 2011 Edition and 2014 Edition CEHRT and chooses to attest to the 2014 Stage 1 objectives and measures or the Stage 2 objectives and measures, the provider would be required to submit CQMs in accordance with the requirements and policies established for clinical quality measure reporting for 2014 in the Stage 2 final rule and subsequent rulemakings. For further explanation, we refer readers to
For the Medicaid EHR Incentive Program, the method of reporting CQMs for EPs and eligible hospitals will continue to be at the state's discretion subject to our prior approval, as established in the Stage 2 final rule (77 FR 54075 through 54078, and 54087 through 54089).
We invite public comment on our proposal.
To support the CMS proposals to provide additional flexibility in the Medicare and Medicaid EHR Incentive Programs during 2014, ONC is proposing to make a minor, but necessary, corresponding revision to the CEHRT definition at 45 CFR 170.102.
ONC is proposing to revise the CEHRT definition to change certain Federal fiscal year (FY)/calendar year (CY) cutoffs in paragraphs (1) and (2) of the CEHRT definition under 45 CFR 170.102. These FY/CY cutoffs were finalized in ONC's 2014 Edition final rule (77 FR 54257 through 54260). The policy in paragraph (1) of the definition applies to any fiscal year/calendar year up to and including 2013. The policy in paragraph (2) of the definition applies to FY 2014/CY 2014 and all subsequent years.
Paragraph (1) sets forth policy that permitted the use of 2011 Edition certified Complete EHRs and EHR Modules, a combination of 2011 and 2014 Edition certified Complete EHRs and EHR Modules, and 2014 Edition certified Complete EHRs and EHR Modules to be used to meet the CEHRT definition through the end of FY 2013/CY 2013. However, paragraph (2) establishes policy that, starting with FY 2014/CY 2014, only the use of 2014 Edition certified Complete EHRs and EHR Modules could be used to meet the CEHRT definition.
The following specific proposed revisions to the CEHRT definition are necessary to support the added flexibility we proposed for 2014. The effect of these proposed revisions would be to allow EPs, eligible hospitals, and CAHs to use either 2011 Edition or a combination of 2011 and 2014 Edition certified Complete EHRs and EHR Modules to meet the CEHRT definition and to demonstrate meaningful use Stage 1 for 2014.
Specifically, ONC is proposing to modify the CEHRT definition at 45 CFR 170.102 to replace the following
• “2013” with “2014” in the first sentence of paragraph (1).
• “FY and CY 2014” with “FY and CY 2015” in paragraph (1)(i) and (1)(iii).
• “2014” with “2015” in the first sentence of paragraph (2).
Overall, this proposed revision would make the first day of FY 2015 (for eligible hospitals and CAHs) and CY 2015 (for eligible professionals) the new required start date for exclusive use of 2014 Edition certified Complete EHRs and EHR Modules to meet the CEHRT definition.
We invite public comment on our proposals.
This document does not impose any new information collection requirements, that is, reporting, recordkeeping or third-party disclosure requirements, as defined under the Paperwork Reduction Act of 1995 (5 CFR 1320). However, it does make reference to the currently approved information collection request associated with the Electronic Health Record Incentive Program. The information collection requirements for the program are currently approved under OMB control number 0938–1158 with an expiration date of April 30, 2015.
Because of the large number of public comments we normally receive on
We have examined the impact of this rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96–354), section 1102(b) of the Social Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104–4), Executive Order 13132 on Federalism (August 4, 1999) and the Congressional Review Act (5 U.S.C. 804(2)).
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). A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). This rule does not reach the economic threshold and thus is not considered a major rule.
The RFA requires agencies to analyze options for regulatory relief of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of less than $7.0 million to $35.5 million in any 1 year. Individuals and States are not included in the definition of a small entity. We are not preparing an analysis for the RFA because we have determined, and the Secretary certifies, that this proposed rule would not have a significant economic impact on a substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 603 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a Metropolitan Statistical Area for Medicare payment regulations and has fewer than 100 beds. We are not preparing an analysis for section 1102(b) of the Act because we have determined, and the Secretary certifies, that this proposed rule would not have a significant impact on the operations of a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2014, that threshold is approximately
Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. Since this rule does not impose any costs on State or local governments, the requirements of Executive Order 13132 are not applicable.
CMS is proposing, for 2014 only, that EPs, eligible hospitals, and CAHs would be able to use either 2011 Edition, 2014 Edition or a combination of 2011 and 2014 Edition certified Complete EHRs and EHR Modules to meet the CEHRT definition and to demonstrate meaningful use during 2014.
To support the CMS proposals to provide added flexibility in the Medicare and Medicaid EHR Incentive Programs during 2014, ONC is proposing to make a minor, but necessary, corresponding revision to the CEHRT definition specified at 45 CFR 170.102, to change certain FY/CY cutoffs in paragraphs (1) and (2) of the CEHRT definition. These FY/CY cutoffs were finalized in ONC's 2014 Edition final rule (77 FR 54257 through 54260).
With respect to our proposal to allow the flexibility to use 2011 Edition Certified EHR Technology, a combination of 2011 Edition and 2014 Edition Certified EHR Technology, or solely 2014 Edition Certified EHR Technology in 2014, we do not believe that this proposal will have a significant impact as it merely gives providers the flexibility to choose to retain and use their 2011 Edition CEHRT, a combination of 2011 and 2014 Edition CEHRT, or 2014 Edition CEHRT in 2014. We are making this proposal in response to concerns that the availability of 2014 Edition CEHRT is quite limited. We refer readers to the impact analyses included in the final rule titled “Medicare and Medicaid Programs; Electronic Health Record Incentive Program—Stage 2” (77 FR 53698 through 54162). Similarly, the ONC proposal to revise the CEHRT definition merely provides additional flexibility in support of the CMS proposals and ONC does not believe that it will have a significant impact (see “Health Information Technology: Standards, Implementation Specifications, and Certification Criteria for Electronic Health Record Technology, 2014 Edition; Revisions to the Permanent Certification Program for Health Information Technology” (77 FR 54163 through 54292)).
In accordance with the provisions of Executive Order 12866, this rule was reviewed by the Office of Management and Budget.
Administrative practice and procedure, Health facilities, Health maintenance, organizations (HMO), Medicare, Penalties, Privacy, Reporting and recordkeeping requirements.
Computer technology, Electronic health record, Electronic information system, Electronic transactions, Health, Health care, Health information technology, Health insurance, Health records, Hospitals, Incorporation by reference, Laboratories, Medicaid, Medicare, Privacy, Reporting and recordkeeping requirements, Public health, Security.
For the reasons stated in the preamble of this proposed rule, the Centers for Medicare & Medicaid Services is proposing to amend 42 CFR Part 495 and the Department is proposing to amend 45 CFR Part 170 as set forth below:
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
(4) For payment year 2014, the references to “certified EHR technology” in paragraphs (1) through (3) of this definition are deemed to be references to paragraph (2) of the definition of “Certified EHR Technology” under 45 CFR 170.102 (that is, the definition of “Certified EHR Technology” for FY and CY 2015 and subsequent years).
42 U.S.C. 300jj–11; 42 U.S.C. 300jj–14; 5 U.S.C. 552.
United States Commission on Civil Rights.
Amended Notice of Business Meeting.
Friday, May 16, 2014; 9:30 a.m. E.S.T.
1331 Pennsylvania Ave. NW., Suite 1150, Washington, DC 20425.
Lenore Ostrowsky, Acting Chief, Public Affairs Unit (202) 376–8591.
Hearing-impaired persons who will attend the meeting and require the services of a sign language interpreter should contact Pamela Dunston at (202) 376–8105 or at
U.S. Census Bureau, Commerce.
Notice.
The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995.
To ensure consideration, written comments must be submitted on or before July 22, 2014.
Direct all written comments to Jennifer Jessup, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6616, 14th and Constitution Avenue NW., Washington, DC 20230 (or via the Internet at
Requests for additional information or copies of the information collection instrument(s) and instructions should be directed to Erica Filipek, U.S. Census Bureau, MCD, CENHQ Room 7K057, 4600 Silver Hill Road, Washington, DC 20233, telephone (301)763–5161 (or via the Internet at
The U.S. Census Bureau plans to request a three-year extension of the current Office of Management and Budget (OMB) clearance of the Survey of Housing Starts, Sales and Completions, also known as the Survey of Construction (SOC). The SOC collects monthly data on new residential construction from a sample of owners or builders. The Census Bureau uses the Computer-Assisted Personal Interviewing (CAPI) electronic questionnaires SOC–QI/SF.1 and SOC–QI/MF.1 to collect data on start and completion dates of construction, physical characteristics of the structure (floor area, number of bathrooms, type of heating system, etc), and if applicable, date of sale, sales price, and type of financing. The SOC provides widely used measures of construction activity, including the economic indicators Housing Starts and Housing Completions, which are from the New Residential Construction series, and New Residential Sales.
The current clearance for this survey is scheduled to expire on October 31, 2014. No changes are planned to the questionnaire.
We sample about 1,700 new buildings each month (20,400 per year). We inquire about the progress of each building multiple times until it is completed (and a sales contract is signed, if it is a single-family house that is built for sale). For single-family buildings, we conduct an average of 8.17 interviews and for multifamily buildings, we conduct an average of 7.0 interviews. The total number of interviews conducted each year for single-family buildings is about 107,844 and for multifamily buildings is about 50,400. Each interview takes 5 minutes on average. Therefore, the total annual burden is 13,187 hours.
The Census Bureau uses its field representatives to collect the data. The field representatives conduct interviews to obtain data.
Title 13 U.S.C. Section 182.
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they also will become a matter of public record.
International Trade Administration, Commerce.
Notice.
The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995.
Written comments must be submitted on or before July 22, 2014.
Direct all written comments to Jennifer Jessup, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6616, 14th and Constitution Avenue NW., Washington, DC 20230 (or via the Internet at
Requests for additional information or copies of the information collection instrument and instructions should be directed to Tracy M. Rollins, SABIT, (202) 482–0073,
The Special American Business Internship Training (SABIT) Program of the Department of Commerce's International Trade Administration (ITA), is a key element in the U.S. Government's efforts to support the economic transition of Eurasia (the former Soviet Union) and to support economic growth in other regions of the world, including Pakistan and the Middle East, et al. SABIT develops and implements two to three week training programs for groups of up to 20 business and government professionals from Eurasia and other regions. These professionals meet with U.S. government agencies, non-governmental organizations and companies in order to learn about various business practices and principles. This unique private sector-U.S. Government partnership was created in order to tap into the U.S. private sector's expertise and to assist developing regions in their transition to market-based economies while simultaneously boosting trade between the United States and other countries. Participant applications are needed to enable SABIT to find the most qualified participants for the training programs. Participant exit questionnaires provide insight as to what the participants have learned, and they are used to improve the content and administration of future programs. Alumni success story reports track the success of the program as regards to business ties between the U.S. and the countries SABIT covers.
The closing date for participant applications is based upon the starting date of the program and is published with the application, on the program's English-language Web site at
The SABIT Program propose to revise the collection instruments. The instruments are very similar to those used by SABIT in past years. However, some wording has been changed to reflect the changing needs of SABIT over time. The changes are relatively minor and most of them are rephrasing of wording. Two questions have been added to the Participant Exit Questionnaire; and instructions for filling out the form, methods of submission, and the order of questions have been revised on the Participant Application. These revisions are not expected to increase the response time to complete the instruments.
Participant applications are available for download from the SABIT English and Russian language Web sites at
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they also will become a matter of public record.
National Oceanic and Atmospheric Administration, Commerce.
Notice.
The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995.
Written comments must be submitted on or before July 22, 2014.
Direct all written comments to Jennifer Jessup, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6616, 14th and Constitution Avenue NW., Washington, DC 20230 (or via the Internet at
Requests for additional information or copies of the information collection instrument and instructions should be directed to Walter Ikehara, (808) 725–5175, or
Regulations at 50 CFR 665, Subpart C, require that all participants (including vessel owners, operators, and crew) in the boat-based non-commercial bottomfish fishery in the Exclusive Economic Zone around the main Hawaiian Islands obtain a federal bottomfish permit. This collection of information is needed for permit issuance, to identify actual or potential participants in the fishery, determine qualifications for permits, and to help measure the impacts of management controls on the participants in the fishery. The permit program is also an effective tool in the enforcement of fishery regulations and serves as a link between the National Marine Fisheries Service (NMFS) and fishermen.
Regulations at 50 CFR 665 require that all vessel owners or operators in this fishery are required to submit a completed logbook form at the completion of each fishing trip. These logbook reporting sheets document the species and amount of species caught during the trip. The reporting requirements are crucial to ensure that NMFS and the Western Pacific Fishery Management Council (Council) will be able to monitor the fishery and have fishery-dependent information to develop an Annual Catch Limit for the fishery, evaluate the effectiveness of management measures, determine whether changes in fishery management programs are necessary, and estimate the impacts and implications of alternative management measures.
Documents may be submitted by mail or online.
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they also will become a matter of public record.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public comment on an application for exempted fishing permit.
This notice announces receipt of an application and the public comment period for an exempted fishing permit (EFP) from Mr. John Gauvin of Gauvin and Associates, LLC. If granted, this permit would allow the applicant to continue the development and testing of a salmon excluder device for the Bering Sea pollock trawl fishery. This activity is intended to promote the objectives of the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area (FMP) by reducing salmon bycatch in the Bering Sea pollock trawl fishery.
Submit comments on or before June 23, 2014. Interested persons may comment on the EFP application and on the environmental assessment (EA) during the North Pacific Fishery Management Council (Council) meeting June 2 through June 10, 2014, in Nome, AK.
You may submit comments on this document, identified by FDMS Docket Number NOAA–NMFS–2014–0050, by any of the following methods:
• Electronic Submission: Submit all electronic public comments via the Federal e-Rulemaking Portal. Go to
• Mail: Submit written comments to Glenn Merrill, Assistant Regional Administrator, Sustainable Fisheries Division, Alaska Region NMFS, Attn: Ellen Sebastian. Mail comments to P.O. Box 21668, Juneau, AK 99802–1668.
Instructions: Comments sent by any other method, to any other address or individual, or received after the end of the comment period, may not be considered by NMFS. All comments received are a part of the public record and will generally be posted for public viewing on
Electronic copies of the Secretarial Review Draft Environmental Assessment For Issuing an Exempted Fishing Permit for the Purpose of Testing a Salmon Excluder Device in the Eastern Bering Sea Pollock Fishery, May 2014, prepared for this action are available from
Jeff Hartman, 907–586–7442.
NMFS manages the domestic groundfish fisheries in the Bering Sea and Aleutian Islands Management Area (BSAI) under the FMP. The Council prepared the FMP under the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing the groundfish fisheries of the BSAI appear at 50 CFR parts 600 and 679. The FMP and the implementing regulations at §§ 600.745(b) and 679.6 authorize issuance of EFPs to allow fishing that would otherwise be prohibited. Procedures for issuing EFPs are contained in the implementing regulations.
NMFS received an application for an EFP from Mr. Gauvin in December 2013. The purposes of the EFP project would be to improve the performance of the salmon excluder device developed under EFP 11–01 from 2011 to 2012, and to validate the performance of this device for pollock trawl gear used in the BSAI. The EFP project would focus on testing a redesigned excluder device to reduce chum salmon and Chinook salmon bycatch and refine the device for use on trawl vessels fishing for groundfish. The goal is to develop a device for pollock trawl gear that reduces salmon bycatch without significantly lowering pollock catch rates. Salmon are prohibited species that are incidentally caught in the pollock fishery (§ 679.21(e) and (f)).
The EFP would allow for testing of the salmon excluder device from January 2015 through June 2016, for several weeks in each pollock A and B season. Testing in each season would allow the device to be used under salmon occurrence and pollock fishing practices specific to each season. Testing in the A season would catch primarily Chinook salmon and roe-bearing pollock, while testing in the B season would catch Chinook and chum salmon and pollock that are not likely to be roe-bearing. EFP fishing would be conducted by one to two vessels in each season.
To test the salmon excluder device, exemptions would be necessary from regulations for salmon bycatch management, observer requirements, closure areas, total allowable catch amounts (TACs) for groundfish, and prohibited species catch (PSC) limits for the pollock fishery. Taking salmon during the experiment is crucial for determining the effectiveness of the device. Salmon taken during the experiment would not be counted toward the Chinook and chum salmon PSC limits under § 679.21(e)(1)(vii), (e)(3)(i)(A)(
Approximately 2,500 chum salmon and 250 Chinook salmon for the 2015 B season and 500 chum salmon and 1,200 Chinook salmon for the 2015 and 2016 A seasons would be required to support the project. In total, the applicant would be limited to harvesting 3,000 chum salmon and 1,450 Chinook salmon during the EFP period. The experimental design requires this quantity of salmon to ensure statistically valid results.
The applicant also has requested an exemption from the Chum Salmon Savings Area (§§ 679.21(e)(7)(vii) and 679.22(a)(10)), the Bering Sea Pollock Restriction Area (§ 679.22(a)(7)(ii)), and the Steller Sea Lion Conservation Area (§ 679.22(a)(7)(vii)). These overlapping areas occur in locations of salmon concentration. The experiment must be conducted in areas of salmon concentration sufficient to ensure a statistically adequate sample size. These locations are ideal for conducting the experiment and ensuring that the vessel encounters sufficient concentrations of salmon and pollock for meeting the experimental design.
Groundfish taken under the EFP would be exempt from the TACs specified in the annual harvest specifications (§ 679.20). A total of 2,500 metric tons (mt) of groundfish (primarily pollock) would be taken during each A season of 2015 and 2016, and 2,500 mt of groundfish would be taken in the B season of 2016 for a total of 7,500 mt over the duration of the EFP. Approximately 96 percent of the groundfish harvested is expected to be pollock. The experimental design requires this quantity of pollock to ensure a statistically adequate sample size for measuring pollock escapement through the salmon excluder device.
The EFP groundfish harvest would not be included in the harvest applied against the Bering Sea groundfish TACs. The preliminary 2015 TAC for Bering Sea pollock is equal to the acceptable biological catch (ABC) at 1,258,000 mt, but the TAC is likely to be adjusted during the 2015/2016 harvest specifications process and may result in a TAC less than ABC (79 FR 12108, March 4, 2014). TAC and ABC have not been specified for the 2016 fishing year at this time. The EFP fishing will be permitted for this proposed action if the ABC for Bering Sea pollock exceeds the TAC by at least 5,000 mt in 2015 and 2,500 mt in 2016. Because of very little groundfish incidental catch in the pollock fishery, the harvest of other fish species during the EFP fishing is expected to be 50 mt to 80 mt per season. The majority of these other species harvested under the EFP likely would be Pacific cod, skates, flatfish, halibut, and jellyfish. The amount of groundfish harvest under the EFP and by the commercial groundfish fisheries is not expected to cause ABCs for groundfish species to be exceeded in either 2015 or 2016 because other BSAI
The EFP is expected to take approximately 12 mt of halibut per season for a total of 12 mt of halibut in 2015 and 24 mt of halibut in 2016. The EFP would require an exemption from halibut PSC limits under § 679.21(e)(3)(ii)(C). The halibut taken under the EFP in combination with the groundfish fisheries is not expected to exceed the halibut PSC harvest specifications in 2015 or 2016.
Using a catcher/processor for the EFP study would require exemption from the Catcher Vessel Operational Area (CVOA) restriction (§ 679.22(a)(5)) because of the location of the Chinook salmon concentration in the CVOA. Catcher/processors are prohibited from operating in the CVOA during the B season. The EFP fishing may be done by either a catcher vessel or a catcher/processor. It may be necessary for the EFP applicant to use a catcher/processor to conduct tows in this area to ensure encountering sufficient pollock and salmon concentrations to meet the experimental design.
The EFP would exempt vessels that are EFP fishing from closures of the Chum Salmon Savings Area. This is necessary because the experimental design for this EFP is based on testing in areas with high incidental catch rates of salmon that may occur in the Chum Salmon Savings Area.
The EFP would include an exemption from selected observer requirements at §§ 679.50, 679.51, and 679.55. Participating vessels would use “sea samplers” who are NMFS-trained observers. They would not be deployed as NMFS observers, however, at the time of the EFP fishing. The “sea samplers” would conduct the EFP data collection and perform other observer duties that normally would be required for vessels directed fishing for pollock. EFP fishing trips also would be exempted from observer requirements for trip selection and fee collection.
The activities under the EFP are not expected to have a significant impact on the human environment as analyzed in the EA for this action (see
In accordance with 50 CFR 679.6 and 600 CFR 745(b)(3)(ii), NMFS has determined that the proposal warrants further consideration and has forwarded the application to the Council to initiate consultation. The Council will consider the EFP application during its meeting June 2 through June 10, 2014, which will be held at the Nome Mini Convention Center, 409 River St., Nome, AK. The applicant has been invited to appear in support of the application.
Public comments are being solicited on the application and the EA through the end of the comment period stated in this notice. To be considered, comments must be received on or before the last day of the comment period; that does not mean postmarked or otherwise transmitted by that date. Copies of the application and EA are available for review from NMFS (see
Information regarding the meeting is available at the Council's Web site at
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; request for comments.
NOAA Fisheries has made a preliminary determination that an exempted fishing permit application contains all of the required information and warrants further consideration. This request was submitted by the Gulf of Maine Research Institute and would allow commercial fishing vessels to evaluate if whiting can be caught in commercially viable quantities with minimal bycatch in the Gulf of Maine Grate Raised Footrope Trawl Exemption Area using a small-mesh trawl that has a standard cookie sweep, prior to the start of the current season that begins July 1. The exempted fishing permit would exempt the vessels from the Northeast multispecies minimum mesh size and seasonal restrictions at 50 CFR 648.80(a)(3) and 648.80 (a)(16).
Regulations under the Magnuson-Stevens Fishery Conservation and Management Act require publication of this notification to provide interested parties the opportunity to comment on applications for proposed exempted fishing permits.
Comments must be received on or before June 9, 2014.
You may submit written comments by any of the following methods:
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•
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Jason Berthiaume, Fishery Management Specialist, 978–281–9177,
The Gulf of Maine Research Institute (GMRI) has submitted an application for an exempted fishing permit (EFP) to conduct commercial fishing activities that the regulations would otherwise restrict. The EFP would exempt three federally permitted commercial fishing vessels from the minimum mesh size requirements for the purpose of testing a small-mesh trawl fitted with an excluder grate for harvesting silver hake. The applicant states that there has been poor performance of the raised footrope trawl in this area due to the rocky habitat, and that removing the raised footrope could allow for increased catch rates while maintaining low bycatch rates. In addition, the applicant has requested authorization to test the trawl prior to the July 1–November 30 season in the Gulf of Maine Grate Raised Footrope Trawl Exemption Area.
The applicant would evaluate the performance of a small-mesh trawl that has a regulation compliant excluder grate and is fitted with a cookie sweep. The trawl would not have a raised footrope as required by the Gulf of Maine Grate Raised Footrope Trawl regulations. Participating vessels would complete up to 25 days of experimental fishing with five 1-hour tows per day with a target whiting catch of 5,000 lb (2,268 kg) per day. A research technician would accompany all trips under the EFP, and sort and weigh all
Whiting catch would be landed and sold and all catch of stocks allocated to Northeast multispecies sectors will be deducted from the sector's annual catch entitlement for each stock. Discards would be identified, weighed, measured, and returned to the sea as quickly as possible. The participating vessels would be required to comply with all other applicable requirements and restrictions specified at 50 CFR part 648, unless specifically exempted in this EFP.
If approved, the applicant may request minor modifications and extensions to the EFP throughout the year. EFP modifications and extensions may be granted without further notice if they are deemed essential to facilitate completion of the proposed research and have minimal impacts that do not change the scope or impact of the initially approved EFP request. Any fishing activity conducted outside the scope of the exempted fishing activity would be prohibited.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting.
The Pacific Fishery Management Council's (Pacific Council) Groundfish Management Team (GMT) will hold a webinar to discuss items on the June Pacific Council meeting agenda (see
The webinar will be held Tuesday, June 10, 2014 from 1 p.m. until 5 p.m., or when business for the day has been completed.
The meeting will be held via webinar. Join the meeting by visiting this link:
Ms. Kelly Ames, Staff Officer, Pacific Council; telephone: (503) 820–2426.
The GMT will hold a webinar to discuss items on the June Council meeting agenda (see
Although non-emergency issues not contained in the meeting agenda may come before the GMT for discussion, those issues may not be the subject of formal GMT action during this meeting. GMT action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the GMT's intent to take final action to address the emergency.
PC-based attendees must use Windows 7, Vista, or XP. Mac-based attendees must use Mac OS X 10.5 or newer. Mobile attendees must use an iPhone, iPad, Android phone, or Android tablet. You may also send an email to Mr. Kris Kleinschmidt or contact him at (503) 820–2425 for technical assistance.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Mr. Kris Kleinschmidt at (503) 820–2425 at least 5 days prior to the meeting date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meetings.
The Mid-Atlantic Fishery Management Council (Council) will hold public meetings.
The meeting will be held Tuesday, June 10, 2014 through Thursday, June 12, 2014. See
The meetings will be held at the Radisson Hotel Freehold, 50 Gibson Place, Freehold, NJ 07728; telephone: (732) 780–3400.
Christopher M. Moore, Ph.D. Executive Director, Mid-Atlantic Fishery Management Council; telephone: (302) 526–5255.
Agenda items by day for the Council's Committees and the Council itself are:
On Tuesday, June 10- The Surfclam and Ocean Quahog Committee with review the most recent information to determine if adjustments are needed for the 2015–16 fishing year and review draft alternatives for Amendment 17 (Cost Recovery Amendment) and provide input to the Fishery Management Action Team for continued Amendment development. The Ecosystems and Ocean Planning Committee will receive presentations on National and Regional habitat initiatives and discuss developing/enhancing the role of the Committee under the 2014–18 Strategic Plan.
On Wednesday, June 11—Surfclam and Ocean Quahog Specifications will be reviewed for 2015–16. Framework Meeting 1 to open the recreational black sea bass fishery in Wave 1 options will be reviewed. The River Herring and Shad Committee will meet as a Committee of the Whole to review and develop recommendations for the river herring/shad cap and review the progress on river herring/shad conservation. The Mackerel, Squid, and Butterfish Committee will meet as a Committee of the Whole to review the Scientific and Statistical Committee recommendations for the 2015 specifications, develop 2015 specifications and related management measures, and review the slippage provisions in Framework 9 relative to the slippage provision in Framework 4 of the Herring Fishery Management Plan. The Listening Session will focus on NOAA Recreational Policy.
On Thursday, June 12—Framework Meeting 2 of the Omnibus ABC Framework will be held to review suggested modifications to the ABC Omnibus Framework and take action as appropriate (multiyear ABC's, assessment level designations, reference points). The Research Set-Aside Program Review will discuss the timing of RSA quota availability (potential for availability in January—March), progress on the implementation of Council recommendations to improve the RSA program, recent enforcement activities, and the future direction of the RSA Program. The Council will hold its regular Business Session to receive Organizational Reports, the New England and South Atlantic Council Liaison Reports, the Executive Director's Report, Science Report, Committee Reports, and conduct any continuing and/or new business.
Although non-emergency issues not contained in this agenda may come before this group for discussion, those issues may not be the subject of formal action during these meetings. Action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the Council's intent to take final action to address the emergency.
These meetings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aid should be directed to M. Jan Saunders, (302) 526–5251, at least 5 days prior to the meeting date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; request for nominations.
Nominations are being sought for appointment by the Secretary of Commerce to fill vacancies on the Marine Fisheries Advisory Committee (MAFAC or Committee) beginning in the fall of 2014. MAFAC is the only Federal advisory committee with the responsibility to advise the Secretary of Commerce (Secretary) on all matters concerning living marine resources that are the responsibility of the Department of Commerce. The Committee makes recommendations to the Secretary to assist in the development and implementation of Departmental regulations, policies, and programs critical to the mission and goals of NMFS. Nominations are encouraged from all interested parties involved with or representing interests affected by NMFS actions in managing living marine resources. Nominees should possess demonstrable expertise in a field related to the management of living marine resources and be able to fulfill the time commitments required for two annual meetings and subcommittee work. Individuals serve for a term of three years for no more than two consecutive terms if re-appointed. NMFS is seeking qualified nominees to fill upcoming vacancies being created by term limits.
Nominations must be postmarked or have an email date stamp on or before July 7, 2014.
Nominations should be sent to Heidi Lovett, Executive Director (Acting), MAFAC, Office of Policy, NMFS F–14438, 1315 East-West Highway, Silver Spring, MD 20910.
Heidi Lovett, MAFAC Executive Director (Acting); (301) 427–8004; email:
The establishment of MAFAC was approved by the Secretary on December 28, 1970, and subsequently chartered under the Federal Advisory Committee Act, 5 U.S.C. App. 2, on February 17, 1971. The Committee meets twice a year with supplementary subcommittee meetings
A MAFAC member cannot be a Federal employee, a member of a Regional Fishery Management Council, a registered Federal lobbyist, or a State employee. The selected candidate must pass a security check and submit a financial disclosure form. Membership is voluntary, and except for reimbursable travel and related expenses, service is without pay.
Each nomination submission should include the nominee's name, a cover letter describing the nominee's qualifications and interest in serving on the Committee, curriculum vitae or resume of the nominee, and no more than three supporting letters describing the nominee's qualifications and interest in serving on the Committee. Self-nominations are acceptable. The following contact information should accompany each nominee's submission: name, address, telephone number, fax number, and email address (if available).
Nominations should be sent to (see
Committee for Purchase From People Who Are Blind or Severely Disabled.
Addition to and deletions from the Procurement List.
This action adds a service to the Procurement List that will be provided by a nonprofit agency employing persons who are blind or have other severe disabilities, and deletes products from the Procurement List previously furnished by such agencies.
Committee for Purchase From People Who Are Blind or Severely Disabled, 1401 S. Clark Street, Suite 10800, Arlington, Virginia, 22202–4149.
Barry S. Lineback, Telephone: (703) 603–7740, Fax: (703) 603–0655, or email
On 2/28/2014 (79 FR 11422–11423), the Committee for Purchase From People Who Are Blind or Severely Disabled published notice of proposed addition to the Procurement List.
After consideration of the material presented to it concerning capability of qualified nonprofit agency to provide the service and impact of the addition on the current or most recent contractor, the Committee has determined that the service listed below is suitable for procurement by the Federal Government under 41 U.S.C. 8501–8506 and 41 CFR 51–2.4.
I certify that the following action will not have a significant impact on a substantial number of small entities. The major factors considered for this certification were:
1. The action will not result in any additional reporting, recordkeeping or other compliance requirements for small entities other than the small organization that will provide the service to the Government.
2. The action will result in authorizing a small entity to provide the service to the Government.
3. There are no known regulatory alternatives which would accomplish the objectives of the Javits-Wagner-O'Day Act (41 U.S.C. 8501–8506) in connection with the service proposed for addition to the Procurement List.
Accordingly, the following service is added to the Procurement List:
On 3/28/2014 (79 FR 17509–17510) and 4/4/2014 (79 FR 18891–18892), the Committee for Purchase From People Who Are Blind or Severely Disabled published notices of proposed deletions from the Procurement List.
After consideration of the relevant matter presented, the Committee has determined that the products listed below are no longer suitable for procurement by the Federal Government under 41 U.S.C. 8501–8506 and 41 CFR 51–2.4.
I certify that the following action will not have a significant impact on a substantial number of small entities. The major factors considered for this certification were:
1. The action will not result in additional reporting, recordkeeping or other compliance requirements for small entities.
2. The action may result in authorizing small entities to furnish the products to the Government.
3. There are no known regulatory alternatives which would accomplish the objectives of the Javits-Wagner-O'Day Act (41 U.S.C. 8501–8506) in connection with the products deleted from the Procurement List.
Accordingly, the following products are deleted from the Procurement List:
Committee for Purchase From People Who Are Blind or Severely Disabled.
Proposed Additions to and Deletions from the Procurement List.
The Committee is proposing to add products and a service to the Procurement List that will be furnished by nonprofit agencies employing persons who are blind or have other severe disabilities, and deletes products previously furnished by such agencies.
Committee for Purchase From People Who Are Blind or Severely Disabled, 1401 S. Clark Street, Suite 10800, Arlington, Virginia, 22202–4149.
Barry S. Lineback, Telephone: (703) 603–7740, Fax: (703) 603–0655, or email
This notice is published pursuant to 41 U.S.C. 8503 (a)(2) and 41 CFR 51–2.3. Its purpose is to provide interested persons an opportunity to submit comments on the proposed actions.
If the Committee approves the proposed additions, the entities of the Federal Government identified in this notice will be required to procure the products and service listed below from nonprofit agencies employing persons who are blind or have other severe disabilities.
The following products and service are proposed for addition to the Procurement List for production by the nonprofit agencies listed:
The following products are proposed for deletion from the Procurement List:
Notice.
The Department of Defense has submitted to OMB for clearance, the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35).
Consideration will be given to all comments received by June 23, 2014.
Fred Licari, 571–372–0493.
Written comments and recommendations on the proposed information collection should be sent to Ms. Jasmeet Seehra at the Office of Management and Budget, Desk Officer for DoD, Room 10236, New Executive Office Building, Washington, DC 20503.
You may also submit comments, identified by docket number and title, by the following method:
•
Written requests for copies of the information collection proposal should be sent to Ms. Toppings at WHS/ESD Information Management Division, 4800 Mark Center Drive, East Tower, Suite 02G09, Alexandria, VA 22350–3100.
Department of the Army, DoD.
Notice to delete a System of Records.
The Department of the Army is deleting a system of records notice in its existing inventory of record systems subject to the Privacy Act of 1974, as amended. The notice is A0350–1e TRADOC, Life Long Learning Center (November 15, 2010, 75 FR 69651).
Comments will be accepted on or before June 23, 2014. This proposed action will be effective the date following the end of the comment period unless comments are received which result in a contrary determination.
You may submit comments, identified by docket number and title, by any of the following methods:
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Mr. Leroy Jones, Department of the Army, Privacy Office, U.S. Army Records Management and Declassification Agency, 7701 Telegraph Road, Casey Building, Suite 144, Alexandria, VA 22325–3905 or by calling (703) 428–6185.
The Department of the Army systems of records notices subject to the Privacy Act of 1974 (5 U.S.C. 552a), as amended, have been published in the
The Department of the Army proposes to delete a system of records notice from its inventory of record systems subject to the Privacy Act of 1974 (5 U.S.C. 552a), as amended. The proposed deletion is not within the purview of subsection (r) of the Privacy Act of 1974 (5 U.S.C. 552a), as amended, which requires the submission of a new or altered system report.
The program using this system of records notice never implemented the collection of personally identifiable information; therefore, A0350–1e TRADOC, Life Long Learning Center can be deleted.
Office of Elementary and Secondary Education, Department of Education.
Notice.
Grants to States for School Emergency Management Program Notice inviting applications for new awards for fiscal year (FY) 2014.
A 2007 report from the Government Accountability Office (GAO) notes that while 85 percent of LEAs have requirements for emergency management planning and 95 percent have written emergency management plans, the content within these plans varies.
In 2013, President Obama proposed a comprehensive plan, “Now is the Time,” to protect our children and communities by reducing gun violence, making schools safer, and increasing access to mental health services, including grants to States to help their school districts develop and implement emergency management plans.
The elements of the Now is the Time (NITT) plan to make our schools safer include a focus on improving emergency operations plans, to which this program responds, as well as proposals for new comprehensive school safety programs, more nurturing school climates, and new investments to help schools address pervasive violence. High-quality school EOPs make our schools safer by supporting efforts to prevent, protect against, mitigate, respond to, and recover from all hazards, both natural and man-made.
In order to develop and implement high-quality EOPs, LEA staff must have access to training and technical assistance on developing, implementing, and refining their plans. SEAs can play a critical role in providing the necessary training and technical assistance to LEAs.
Generally SEAs share with their LEAs information about applicable laws and mandates about school emergency management planning; and make resources available so that LEAs can fulfill their obligations. For example, SEAs may provide training, resources, tools, and information to support school safety and security, including emergency management planning. SEAs may also work with other State agencies or organizations to provide emergency management services to LEAs.
This priority is:
Under this priority, those SEAs that currently have limited internal capacity regarding the development and implementation of high-quality EOPs must propose to first expand their internal SEA capacity before providing such training and technical assistance to LEAs.
SEAs that provide evidence of current internal capacity (e.g. currently have EOP subject matter experts on staff and comprehensive and up-to-date state EOP resources) may propose to immediately provide or expand such training and technical assistance to LEAs.
(1) Provide an established point of contact (e.g., person or office) for school emergency management issues and submit that information to the U.S. Department of Education (Department) no later than the project start date;
(2) Provide training and technical assistance to LEAs that result in adoption of best practices for developing and implementing school EOPs including, but not necessarily limited to, those provided in the Guide for Developing High-Quality School Emergency Operations Plans)
(3) Provide training and technical assistance to LEAs on developing or enhancing memoranda of understanding with community partners (e.g., local government, law enforcement, public safety or emergency management, public health, and mental health agencies); and
(4) Provide training and technical assistance to LEAs on the implementation of the National Incident Management System (NIMS). Information about current NIMS requirements for States may be accessed at:
(1) Information on: (a) Training, technical assistance, and resources the applicant currently provides to LEAs on emergency management; and (b) the proposed number of LEAs, including rural LEAs that might not otherwise have full access to school emergency management training and resources, that would receive training and technical assistance resulting in the development and implementation of high-quality school EOPs under the applicant's proposal.
(2) A strategy for improving the applicant's: (a) Capacity to provide training and technical assistance to
(3) Identification of a process for the coordination and sustainability of support that will be provided to LEAs so that they can continue to improve their schools' EOPs beyond the period of Federal financial assistance.
These definitions are:
• Incorporates all courses of action to be accomplished for all selected threats and hazards and identified functions;
• Integrates the needs of the whole school community;
• Provides a complete picture of what should happen, when, and at whose direction;
• Estimates time for achieving objectives, with safety remaining as the utmost priority;
• Identifies success criteria and a desired end state; and
• Conforms with the planning principles outlined in the Guide for Developing High-Quality School Emergency Operations Plans.
This is the first grant competition for this program under the appropriation for Safe Schools and Citizenship Education in the Department of Education Appropriations Act, 2014, Title III of Division H of Public Law 113–76, and section 4121 of the ESEA (20 U.S.C. 7131) and therefore qualifies for this exemption.
In order to ensure timely grant awards, the Secretary has decided to forgo public comment on the priority, requirements, and definitions in this notice under section 437(d)(1) of GEPA. This priority, these requirements, and these definitions will apply to the FY 2014 grant competition and any subsequent year in which we make awards from the list of unfunded applicants from this competition.
20 U.S.C. 7131; the Department of Education Appropriations Act, 2014, Title III of Division H of Public Law 113–76.
The Department is not bound by any estimates in this notice.
1.
Consistent with the definitions in this notice, eligible applicants include SEAs in the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of Palau, the Federated States of Micronesia, and the Republic of the Marshall Islands. Eligible applicants may collaborate informally or contract with other agencies to provide services to LEAs, including agencies such as:
• A State school safety center;
• The State Emergency Management Agency; and
• The State Homeland Security Department.
2.
3.
a.
In order to ensure equitable participation of nonpublic school students, teachers, and other educational personnel, an applicant must consult with private school officials on school emergency management issues such as: threats and hazards unique to nonpublic schools in the State, training needs, and existing EOPs and school emergency management resources already available to the nonpublic schools.
b.
c.
1.
To obtain a copy via the Internet, use the following address:
You can contact ED Pubs at its Web site, also:
If you request an application from ED Pubs, be sure to identify this competition as follows: CFDA number 84.184Q.
Individuals with disabilities can obtain a copy of the application package in an accessible format (e.g., braille, large print, audiotape, or computer disc) by contacting the person listed under
2.
• A “page” is 8.5″ x 11″, on one side only, with 1″ margins at the top, bottom, and both sides.
• Double space (no more than three lines per vertical inch) all text in the application narrative, including titles, headings, footnotes, quotations, references, and captions, as well as all text in charts, tables, figures, and graphs.
• Use a font that is either 12 point or larger or no smaller than 10 pitch (characters per inch).
• Use one of the following fonts: Times New Roman, Courier, Courier New, or Arial.
The page limit does not apply to the cover sheet; the budget section, including the narrative budget justification; the assurances and certifications; or the one-page abstract, the resumes, the bibliography, or the letters of support. However, the page limit does apply to all of the application narrative section.
Our reviewers will not read any pages of your application that exceed the page limit.
3.
Applications for grants under this competition must be submitted electronically using the Grants.gov Apply site (Grants.gov). For information (including dates and times) about how to submit your application electronically, or in paper format by mail or hand delivery if you qualify for an exception to the electronic submission requirement, please refer to section IV. 7.
We do not consider an application that does not comply with the deadline requirements.
Individuals with disabilities who need an accommodation or auxiliary aid in connection with the application process should contact the person listed under
4.
5.
6.
a. Have a Data Universal Numbering System (DUNS) number and a Taxpayer Identification Number (TIN);
b. Register both your DUNS number and TIN with the System for Award Management (SAM) (formerly the Central Contractor Registry (CCR)), the Government's primary registrant database;
c. Provide your DUNS number and TIN on the application; and
d. Maintain an active SAM registration with current information while your application is under review by the Department and, if you are awarded a grant, during the project period.
You can obtain a DUNS number from Dun and Bradstreet. A DUNS number can be created within one-to-two business days.
If you are a corporate entity, agency, institution, or organization, you can obtain a TIN from the Internal Revenue Service. If you are an individual, you can obtain a TIN from the Internal Revenue Service or the Social Security Administration. If you need a new TIN, please allow 2–5 weeks for your TIN to become active.
The SAM registration process can take approximately seven business days, but may take upwards of several weeks, depending on the completeness and accuracy of the data entered into SAM database by an entity. Thus, if you think you might want to apply for Federal financial assistance under a program administered by the Department, please allow sufficient time to obtain and register your DUNS number and TIN. We strongly recommend that you register early.
Once your SAM registration is active, you will need to allow 24 to 48 hours for the information to be available in Grants.gov before you can submit an application through Grants.gov.
If you are currently registered with SAM, you may not need to make any changes. However, please make certain that the TIN associated with your DUNS number is correct. Also, note that you will need to update your registration annually. This may take three or more business days.
Information about SAM is available at
In addition, if you are submitting your application via Grants.gov, you must (1) be designated by your organization as an Authorized Organization Representative (AOR); and (2) register yourself with Grants.gov as an AOR. Details on these steps are outlined at the following Grants.gov Web page:
7.
Applications for grants under this competition must be submitted electronically unless you qualify for an exception to this requirement in accordance with the instructions in this section.
Applications for grants under the Grants to States for School Emergency Management Program, CFDA number 84.184Q, must be submitted electronically using the Governmentwide Grants.gov Apply site. Through this site, you will be able to download a copy of the application package, complete it offline, and then
We will reject your application if you submit it in paper format unless, as described elsewhere in this section, you qualify for one of the exceptions to the electronic submission requirement
You may access the electronic grant application for Grants to States for School Emergency Management competition at
Please note the following:
• When you enter the Grants.gov site, you will find information about submitting an application electronically through the site, as well as the hours of operation.
• Applications received by Grants.gov are date and time stamped. Your application must be fully uploaded and submitted and must be date and time stamped by the Grants.gov system no later than 4:30:00 p.m., Washington, DC time, on the application deadline date. Except as otherwise noted in this section, we will not accept your application if it is received—that is, date and time stamped by the Grants.gov system—after 4:30:00 p.m., Washington, DC time, on the application deadline date. Except as otherwise noted in this section, will not accept your application if it is received—that is, date and time stamped by the Grants.gov system—after 4:30:00 p.m., Washington, DC time, on the application deadline date. We do not consider an application that does not comply with the deadline requirements. When we retrieve your application from Grants.gov, we will notify you if we are rejecting your application because it was date and time stamped by the Grants.gov system after 4:30:00 p.m., Washington, DC time, on the application deadline date.
• The amount of time it can take to upload an application will vary depending on a variety of factors, including the size of the application and the speed of your Internet connection. Therefore, we strongly recommend that you do not wait until the application deadline date to begin the submission process through Grants.gov.
• You should review and follow the Education Submission Procedures for submitting an application through Grants.gov that are included in the application package for this competition to ensure that you submit your application in a timely manner to the Grants.gov system. You also can find the Education Submission Procedures pertaining to Grants.gov under News and Events on the Department's G5 system home page at
• You will not receive additional point value because you submit your application in electronic format, nor will we penalize you if you qualify for an exception to the electronic submission requirement, as described elsewhere in this section, and submit your application in paper format.
• You must submit all documents electronically, including all information you typically provide on the following forms: the Application for Federal Assistance (SF 424), the Department of Education Supplemental Information for SF 424, Budget Information—Non-Construction Programs (ED 524), and all necessary assurances and certifications.
• You must upload any narrative section and all other attachments to your application as files in a PDF (Portable Document) read-only, non-modifiable format. Do not upload an interactive or fillable PDF file. If you upload a file type other than a read-only, non-modifiable PDF or submit a password-protected file, we will not review that material. Additional, detailed information on how to attach files is in the application instructions.
• Your electronic application must comply with any page-limit requirements described in this notice.
• After you electronically submit your application, you will receive from Grants.gov an automatic notification of receipt that contains a Grants.gov tracking number. (This notification indicates receipt by Grants.gov only, not receipt by the Department.) The Department then will retrieve your application from Grants.gov and send a second notification to you by email. This second notification indicates that the Department has received your application and has assigned your application a PR/Award number (an ED-specified identifying number unique to your application).
• We may request that you provide us original signatures on forms at a later date.
If you are prevented from electronically submitting your application on the application deadline date because of technical problems with the Grants.gov system, we will grant you an extension until 4:30:00 p.m., Washington, DC time, the following business day to enable you to transmit your application electronically or by hand delivery. You also may mail your application by following the mailing instructions described elsewhere in this notice.
If you submit an application after 4:30:00 p.m., Washington, DC time, on the application deadline date, please contact the person listed under
The extensions to which we refer in this section apply only to the unavailability of, or technical problems with, the Grants.gov system. We will not grant you an extension if you failed to fully register to submit your application to Grants.gov before the application deadline date and time or if the technical problem you experienced is unrelated to the Grants.gov system.
• You do not have access to the Internet; or
• You do not have the capacity to upload large documents to the Grants.gov system;
• No later than two weeks before the application deadline date (14 calendar days or, if the fourteenth calendar day before the application deadline date falls on a Federal holiday, the next business day following the Federal holiday), you mail or fax a written statement to the Department, explaining
If you mail your written statement to the Department, it must be postmarked no later than two weeks before the application deadline date. If you fax your written statement to the Department, we must receive the faxed statement no later than two weeks before the application deadline date.
Address and email or fax your statement to: Amy Banks, U.S. Department of Education, 400 Maryland Avenue SW., Room 3E117, Washington, DC 20202–6450. FAX: (202) 453–6716.
Your paper application must be submitted in accordance with the mail or hand delivery instructions described in this notice.
If you qualify for an exception to the electronic submission requirement, you may mail (through the U.S. Postal Service or a commercial carrier) your application to the Department. You must mail the original and two copies of your application, on or before the application deadline date, to the Department at the following address:
You must show proof of mailing consisting of one of the following:
(1) A legibly dated U.S. Postal Service postmark.
(2) A legible mail receipt with the date of mailing stamped by the U.S. Postal Service.
(3) A dated shipping label, invoice, or receipt from a commercial carrier.
(4) Any other proof of mailing acceptable to the Secretary of the U.S. Department of Education.
If you mail your application through the U.S. Postal Service, we do not accept either of the following as proof of mailing:
(1) A private metered postmark.
(2) A mail receipt that is not dated by the U.S. Postal Service.
If your application is postmarked after the application deadline date, we will not consider your application.
The U.S. Postal Service does not uniformly provide a dated postmark. Before relying on this method, you should check with your local post office.
If you qualify for an exception to the electronic submission requirement, you (or a courier service) may deliver your paper application to the Department by hand. You must deliver the original and two copies of your application by hand, on or before the application deadline date, to the Department at the following address:
The Application Control Center accepts hand deliveries daily between 8:00 a.m. and 4:30:00 p.m., Washington, DC time, except Saturdays, Sundays, and Federal holidays.
If you mail or hand deliver your applications to the Department—
(1) You must indicate on the envelope and—if not provided by the Department—in Item 11 of the SF 424 the CFDA number, including suffix letter, if any, of the competition under which you are submitting your application; and
(2) The Application Control Center will mail to you a notification of receipt of your grant application. If you do not receive this notification within 15 business days from the application deadline date, you should call the U.S. Department of Education Application Control Center at (202) 245–6288.
1.
2.
In addition, in making a competitive grant award, the Secretary also requires various assurances including those applicable to Federal civil rights laws that prohibit discrimination in programs or activities receiving Federal financial assistance from the Department of Education (34 CFR 100.4, 104.5, 106.4, 108.8, and 110.23).
3.
1.
If your application is not evaluated or not selected for funding, we notify you.
2.
We reference the regulations outlining the terms and conditions of an award in the
3.
(b) At the end of your project period, you must submit a final performance report, including financial information, as directed by the Secretary. If you receive a multi-year award, you must submit an annual performance report that provides the most current performance and financial expenditure information as directed by the Secretary under 34 CFR 75.118. The Secretary may also require more frequent performance reports under 34 CFR 75.720(c). For specific requirements on reporting, please go to
4.
1. The number of LEAs with high-quality EOPs at the start of the grant compared to the number of LEAs with
Amy Banks, U.S. Department of Education, 400 Maryland Avenue SW., Room 3E117, Washington, DC 20202–6450. Telephone: (202) 453–6704 or by email:
If you use a TDD or a TTY, call the Federal Relay Service, toll free, at 1–800–877–8339.
You may also access documents of the Department published in the
Office of Nonproliferation and International Security, Department of Energy.
Proposed subsequent arrangement.
This document is being issued under the authority of the Atomic Energy Act of 1954, as amended. The Department is providing notice of a proposed subsequent arrangement to be carried out in the Republic of Korea under the Agreement for Cooperation between the Government of the United States of America and the Government of the Republic of Korea Concerning Civil Uses of Atomic Energy, signed November 24, 1972, as amended (the “Agreement”).
This subsequent arrangement will take effect no sooner than June 9, 2014
Ms. Katie Strangis, Office of Nonproliferation and International Security, National Nuclear Security Administration, Department of Energy. Telephone: 202–586–8623 or email:
This subsequent arrangement concerns a proposed Joint Determination by the Government of the United States of America and the Government of the Republic of Korea pursuant to Article VIII(C) of the Agreement, that the provisions of Article XI of the Agreement may be effectively applied for the alteration in form or content of U.S.-origin nuclear material irradiated in pressurized water reactors, CANDU reactors, and a research reactor, at the Post Irradiation Examination Facility (PIEF), the Irradiated Material Examination Facility (IMEF), the Radio Isotope Production Area (RIPA), and the DUPIC Fuel Development Facility (DFDF), along with identified analytical laboratories, at the Headquarters of the Korea Atomic Energy Research Institute (KAERI), in accordance with the plans contained in the documents KAERI/AR–1003/2013, “Post-Irradiation Examination and R&D Programs Using Irradiated Fuels at KAERI,” dated August 2013, and KAERI/AR–1004/2013, “DUPIC Fuel Fabrication Using Spent PWR Fuel at KAERI,” dated August 2013. These facilities are found acceptable to both parties pursuant to Article VIII(C) of the Agreement for the sole purpose of alteration in form or content of irradiated U.S.-origin nuclear material for post-irradiation examination and for research, development and manufacture of DUPIC fuel powders, pellets and elements for the period beginning on the date of entry into force of an agreement extending the terms of the Agreement beyond March 19, 2014, and ending on the earlier of March 19, 2016, or the date of entry into force of a successor agreement to the Agreement, unless terminated earlier by written agreement of the Parties to the Agreement. Any activities additional to the plans or changes in the equipment in these facilities will be reviewed by both parties to ensure the general consistency with the scope and objectives of the Joint Determination.
In accordance with section 131a. of the Atomic Energy Act of 1954, as amended, it has been determined that this subsequent arrangement will not be inimical to the common defense and security of the United States of America.
For the Department of Energy.
Office of Nonproliferation and International Security, Department of Energy.
Proposed subsequent arrangement.
This document is being issued under the authority of the Atomic Energy Act of 1954, as amended. The Department is providing notice of a proposed subsequent arrangement under the Agreement for Cooperation Concerning Civil Uses of Nuclear Energy Between the Government of the United States of America and the Government of Canada and the Agreement for Cooperation in the Peaceful Uses of Nuclear Energy Between the United States of America and the European Atomic Energy Community.
This subsequent arrangement will take effect no sooner than June 9, 2014.
Ms. Katie Strangis, Office of Nonproliferation and International Security, National Nuclear Security Administration, Department of Energy. Telephone: 202–586–8623 or email:
This subsequent arrangement concerns the retransfer of 423,063 kg of U.S.-origin natural uranium trioxide (UO3) (82.73% U), 350,000 kg of which is uranium, from Cameco Corporation (Cameco) in Saskatoon, Saskatchewan, to Springfields Fuels Ltd. in Lancashire, United Kingdom. The material, which is currently located at Cameco in Blind River, Ontario, will be converted to uranium hexafluoride (UF6) by Springfields Fuels, Ltd. in Lancashire,
In accordance with section 131a. of the Atomic Energy Act of 1954, as amended, it has been determined that this subsequent arrangement concerning the retransfer of nuclear material of United States origin will not be inimical to the common defense and security of the United States of America.
For the Department of Energy.
U.S. Energy Information Administration (EIA), Department of Energy.
Agency Information Collection Activities: Information Collection Extension; Notice and Request for Comments.
The EIA, pursuant to the Paperwork Reduction Act of 1995, intends to extend for three years with the Office of Management and Budget (OMB), Form EIA–846, “Manufacturing Energy Consumption Survey.” Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden 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 respondents, including through the use of automated collection techniques or other forms of information technology.
Comments regarding this proposed information collection must be received on or before July 22, 2014. If you anticipate difficulty in submitting comments within that period, contact the person listed in
Written comments may be sent to Tom Lorenz, Office of Energy Consumption and Efficiency Statistics, EI–22, Forrestal Building, U.S. Department of Energy, 1000 Independence Ave. SW., Washington, DC 20585 or by fax at (202) 586–9753, or by email at
Requests for additional information or copies of the information collection instrument and instructions should be directed to Tom Lorenz at the address listed above. To view the form online please go to:
This information collection request contains:
(1)
(2)
(3)
(4)
The Federal Energy Administration Act of 1974 (15 U.S.C. 761
The Manufacturing Energy Consumption Survey (MECS) is a self-administered sample survey designed to collect energy consumption and expenditures data from establishments in the manufacturing sector; i.e., North American Industry Classification System (NAICS) codes 31–33. Previous MECS required multiple collection forms depending on an establishment's primary business activity classification under NAICS. The increased use of technology by means of an Internet data collection system however, has allowed the MECS to eliminate the need to have multiple forms.
The 2014 MECS will collect information during 2015 for business activities in calendar year 2014, and the 2016 MECS, if implemented, will collect information during 2017 for business activities in calendar year 2016. For the 2014 and 2016 MECS, as in the past, EIA proposes to collect the following data from each MECS establishment: (1) For each energy source consumed—consumption (total, fuel and nonfuel uses) and the expenditures for each energy source, energy storage (as applicable), energy produced onsite, and shipments (as applicable); (2) energy end uses; (3) fuel-switching capabilities (4) general energy-saving technologies; (5) energy management activities; and (6) square footage, and number of buildings in the establishment.
The MECS has been conducted eight times previously, covering the years 1985, 1988, 1991, 1994, 1998, 2002, 2006, and 2010. In all eight survey years, the MECS has collected baseline data on manufacturers' energy consumption and expenditures. The MECS collected data on fuel-switching capabilities in all years except 1998. In the 1991, 1994, 1998, 2002, 2006, and 2010 surveys, the MECS also collected data on end-uses, energy management activities, building square footage, and energy-saving technologies.
The MECS information is the basis for data and analytic products that can be found at
The proposed 2014 and 2016 MECS uses experience gained from the administration and processing of the seven previous surveys and past consultations with respondents, trade association representatives, and data users to improve the survey.
Please refer to the forms and instructions for more information about the purpose, who must report, when to report, where to submit, the elements to be reported, detailed instructions, provisions for confidentiality, and uses of the information. For instructions on obtaining materials, see the “For Further Information Contact” section;
(4a)
EIA proposes making several changes from the 2010 MECS for use in the 2014 and 2016 MECS. The first substantial change for the 2014 and 2016 MECS is shortening the collection time frame. The past MECS cycles, going back to 1988, have been quadrennial surveys; however with the increased importance of relevant energy data, EIA is proposing to shorten the collection time frame from a quadrennial to a biennial survey.
In the past EIA has calculated the amount of petrochemical feedstocks and asphalt that are produced by a refinery and used elsewhere in manufacturing. To obtain more accurate estimates of these two energy sources EIA proposes collecting data about petrochemical feedstocks and asphalt. The data collected about petrochemical feedstocks and asphalt will be largely what the MECS collects about other energy sources; purchases, expenditures, transfers in, produced on-site, used as fuel and nonfuel, and shipments data. Petrochemical feedstocks and asphalt are used in a few industries, so the MECS will collect data about these energy sources from those NAICS codes that use this type of energy; namely, petrochemical manufacturing (NAICS 325110), asphalt paving mixture and block manufacturing (NAICS 324121), and asphalt shingle and coating materials manufacturing (NAICS 324122). The response burden will be kept to a minimum because the data collected about petrochemical feedstocks and asphalt will only be collected from the industries listed above.
EIA is working with the Advanced Manufacturing Office (AMO) at DOE to reform the questions in the Energy Management and General Technologies sections on the MECS. The data collected would help EIA and DOE to develop manufacturing energy efficiency improvements. These will be “Yes”/“No” questions that will not significantly affect response burden.
Further, EIA plans to ask iron and steel mills (NAICS 331111) about their use of blast furnaces and electric arc furnaces (EAF) at the establishment. This will help EIA identify whether an iron and steel mill is an integrated or a mini mill, and help determine if all the essential energy data has been collected from the establishment. These will be “Yes”/“No” questions that will not significantly affect response burden.
Besides the changes already discussed, the content of the 2014 and 2016 MECS will be largely unchanged from the 2010 survey. Most respondents will submit their data electronically in a question-answer format as opposed to the spreadsheet format used in the past. The MECS information products will continue to present industry-by-Census Region level data as well as national data;
(5)
(6)
(7)
(8)
Section 13(b) of the Federal Energy Administration Act of 1974, Pub. L. 93–275, codified at 15 U.S.C. 772(b).
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following electric rate filings:
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
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 of 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, service, and qualifying facilities filings can be found at:
This is a supplemental notice in the above-referenced proceeding of RTO Energy Trading, LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR Part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR Part 34, of future issuances of securities and assumptions of liability, is June 5, 2014.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
Western Area Power Administration, DOE.
Notice of Cancellation of Environmental Impact Statement.
The U.S. Department of Energy (DOE), Western Area Power Administration (Western) is issuing this notice to advise the public that it is cancelling the preparation of an environmental impact statement (EIS) under the National Environmental Policy Act (NEPA) on an interconnection request by Shell WindEnergy, Inc. (SWE).
This cancellation is effective on May 23, 2014.
For additional information on the cancellation of this EIS process, contact Mark Wieringa, NEPA Document Manager, Western Area Power Administration, P.O. Box 281213, Lakewood, CO 80228–8213, email
SWE proposed to design, construct, operate, and maintain an up to 300-megawatt Hermosa West Wind Energy Project (Project) in Albany County, Wyoming, and interconnect that Project with Western's transmission system. SWE's interconnection request caused Western to initiate a NEPA review of its Federal action to allow the interconnection. Western published a Notice of Intent for the EIS in the
On November 16, 2011, the DOE General Counsel re-delegated all EIS authorities to Western's Administrator. Under the authority granted by that memorandum, I have terminated the NEPA process for SWE's proposed Hermosa West Wind Energy Project with the publication of this notice.
Responsible Agency: Office of Federal Activities, General Information (202) 564–7146 or
Notice: Section 309(a) of the Clean Air Act requires that EPA make public its comments on EISs issued by other Federal agencies. EPA's comment letters on EISs are available at:
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA) Science Advisory Board (SAB) Staff Office announces a public teleconference of the SAB Panel to discuss its draft advisory report concerning the EPA document titled
The public teleconference will be held on Thursday, June 19, 2014 from 1 p.m. to 5 p.m. (Eastern Time).
Any member of the public wishing to obtain information concerning the public teleconference may contact Dr. Thomas Armitage, Designated Federal Officer (DFO), EPA Science Advisory Board Staff Office (1400R), U.S. Environmental Protection Agency, 1200 Pennsylvania Avenue NW., Washington, DC 20460; via telephone at (202) 564–2155 or via email at
The SAB was established pursuant to the Environmental Research, Development, and Demonstration Authorization Act (ERDDAA), codified at 42 U.S.C. 4365, to provide independent scientific and technical advice to the Administrator on the technical basis for Agency positions and regulations. The SAB is a Federal Advisory Committee chartered under the Federal Advisory Committee Act (FACA), 5 U.S.C., App. 2. The SAB will comply with the provisions of FACA and all appropriate SAB Staff Office procedural policies. Pursuant to FACA and EPA policy, notice is hereby given that the SAB Panel for the Review of the EPA Water Body Connectivity Report will hold a public teleconference to discuss its draft advisory report concerning the EPA document titled
Federal advisory committees and panels, including scientific advisory committees, provide independent advice to EPA. Members of the public can submit comments for a federal advisory committee to consider as it develops advice for EPA. Input from the public to the SAB will have the most impact if it provides specific scientific or technical information or analysis for SAB panels to consider or if it relates to the clarity or accuracy of the technical information. Members of the public wishing to provide oral statements to the SAB Panel should contact the DFO directly.
June 16, 2014 to be placed on the list of public speakers.
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Direct your comments to Docket ID No. EPA–HQ–OA–2013–0582. Please ensure that your comments are submitted by June 16, 2014. Comments received after that date will be marked late and may not be provided to the SAB Panel for consideration before the June 19, 2014 teleconference. It is EPA's policy to include all comments received in the public docket without change and to make the comments available on-line at
Documents in the docket are listed in the
Environmental Protection Agency.
Notice.
The Environmental Protection Agency's (EPA) Office of Air and Radiation, Office of Transportation and Air Quality, is giving notice that it proposes to create a new system of records pursuant to the provisions of the Privacy Act of 1974 (5 USC 552a). This system of records contains personally identifiable information (PII) collected from owners of motor vehicles who wish to temporarily import their vehicle into the United States for personal use and who are not residents of the United States.
Persons wishing to comment on this new system of records notice must do so by July 2, 2014.
Submit your comments, identified by Docket ID No. EPA–HQ–OEI–2013–0807, by one of the following methods:
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Holly Pugliese, Compliance Division, Office of Transportation and Air Quality, U.S. Environmental Protection Agency, 2000 Traverwood, Ann Arbor,
The U.S. Environmental Protection Agency (EPA) plans to create a Privacy Act system of records for the Engine and Vehicle Exemptions System (EV–ES). The information collected in this system supports the Imports Exemptions program under the Clean Air Act (CAA) and implementing regulations codified in 40 CFR Parts 85 and 1068. The CAA requires manufacturers of motor vehicles and engines to design and build vehicles that will comply with emissions standards throughout the vehicle's life span. EPA and Customs and Border Protection (CBP) regulations allow for individuals who are not residents of the United States and who reside outside of the United States to import nonconforming on-highway vehicles (e.g., cars, motorcycles or motor homes) for a period of up to one year for personal use. Applicants are required to provide their name, address, phone number or email and the vehicle identification number (VIN) as part of the application process in order for EPA to provide approval or denial letters to the requestors. The information that will be maintained regarding program participants includes the vehicle owner's name, address, phone number, email address and vehicle identification number (VIN).
The information is contained in computer and paper files at EPA's National Vehicle and Fuel Emissions Laboratory in Ann Arbor, Michigan. Only contractor employees (governed by Privacy Act compliance terms in their contract) and EPA employees administering the program have access to the information contained in the database. Files containing personal information are kept in locked filing cabinets. Physical access to the filing cabinets is limited to authorized personnel employees with building key cards.
Engine and Vehicle Exemptions System (EV–ES)
US EPA, 109 T.W. Alexander Drive, Research Triangle Park, NC 27711
Individuals who apply to the EPA for a nonresident exemption to import a nonconforming on-highway vehicle (e.g., cars, motorcycles or motor homes) for a period of up to one year for personal use.
The vehicle owner's name, address, phone number, email address and vehicle identification number (VIN).
Title II of the Clean Air Act, (42 U.S.C. 7521 et seq.) provides that the EPA may issue exemptions and exclusions for nonconforming vehicles to enter into the United States.
The primary purpose of the system is to collect and maintain the information necessary for EPA to determine if the request for a nonresident exemption meets the criteria established in the regulations implementing this program codified in 40 CFR Parts 85 and 1068. In addition, the information collected is used to contact the requestor if there are questions regarding the request and to subsequently issue an approval or denial letter regarding the request. The information may also be used by CBP and EPA's Office of Enforcement and Compliance Assurance (OECA) to validate that the shipment at the port is valid.
General routine uses A, F, H, K and L apply to this system. (A detailed description of these routine uses can be found in the Agency's Systems of Records Web site at
Records are maintained on computer disks and tapes at the National Computer Center, Research Triangle Park, North Carolina and at EPA's Office of Transportation and Air Quality (OTAQ), Ann Arbor, MI.
Records are retrievable by all or part of the person's name, phone number, physical address, or email address.
—Computer-stored information is protected in accordance with the Agency's security requirements.
—Access to the information in the system is limited to authorized Agency and contractor personnel who administer the program. No external access to the system is provided.
—Any contractor is subject to the Federal Acquisition Regulations (FAR) Privacy Act clauses in its contract with EPA.
Records stored in this system are subject to Schedule 483.
Holly Pugliese, Compliance Division, Office of Transportation and Air Quality, U.S. Environmental Protection Agency, 2000 Traverwood, Ann Arbor, Michigan 48105; telephone number: 734–214–4288; fax number: 734–214–4869; email address:
Any individual who wants to know whether this system of records contains a record about him or her, who wants access to his or her record, or who wants to contest the contents of a record, should make a written request to the EPA FOIA Office, Attn: Privacy Act Officer, MC 2822T, 1200 Pennsylvania Avenue NW., Washington, DC 20460.
Request for access must be made in accordance with the procedures described in EPA's Privacy Act regulations at 40 CFR part 16. Requesters will be required to provide adequate identification, such as a driver's license, employee identification card, or other identifying document. Additional identification procedures may be required in some instances.
Requests for correction or amendment must identify the record to be changed and the corrective action sought. Complete EPA Privacy Act procedures are described in EPA's Privacy Act regulations at 40 CFR part 16.
There are two sources of information for records stored in the system:
(1) Vehicle Identification Numbers (VINs) provided to EPA by the requestor of the exemption.
(2) Information on the vehicles provided by their owners from potential and actual participants in the program.
None.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, and as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501–3520), the Federal Communication Commission (FCC or Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collections. Comments are requested concerning: 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; the accuracy of the Commission's burden estimate; ways to enhance the quality, utility, and clarity of the information collected; ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and ways to further reduce the information collection burden on small business concerns with fewer than 25 employees.
The FCC 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.
Written comments should be submitted on or before June 23, 2014. If you anticipate that you will be submitting comments, but find it difficult to do so within the period of time allowed by this notice, you should advise the contacts below as soon as possible.
Direct all PRA comments to Nicholas A. Fraser, OMB, via email
For additional information or copies of the information collection, contact Cathy Williams at (202) 418–2918. To view a copy of this information collection request (ICR) submitted to OMB: (1) Go to the Web page
These information collection requirements are also a part of this collection and have not changed since last approved by the Office of Management and Budget (OMB): 47 CFR 76.1205(b)(1) states a multichannel video programming provider that is subject to the requirements of Section 76.1204(a)(1) must provide the means to allow subscribers to self-install the CableCARD in a CableCARD-reliant device purchased at retail and inform a subscriber of this option when the subscriber requests a CableCARD. This requirement shall be effective August 1, 2011, if the MVPD allows its subscribers to self-install any cable modems or operator-leased set-top boxes and November 1, 2011 if the MVPD does not allow its subscribers to self-install any cable modems or operator-leased set-top boxes.
47 CFR 76.1205(b)(1)(A) states that this requirement shall not apply to cases in which neither the manufacturer nor the vendor of the CableCARD-reliant device furnishes to purchasers appropriate instructions for self-installation of a CableCARD, and a manned toll-free telephone number to answer consumer questions regarding CableCARD installation but only for so long as such instructions are not furnished and the call center is not offered.
The requirements contained in Section 76.1205 are intended to ensure that consumers are able to install CableCARDs in the devices that they purchase at retail, which the Commission determined is essential to a functioning retail market.
47 CFR 76.1205(b)(2) states effective August 1, 2011, provide multi-stream CableCARDs to subscribers, unless the subscriber requests a single-stream CableCARD.This requirement will ensure that consumers have access to CableCARDs that are compatible with their retail devices, and can request such devices from their cable operators.
47 CFR 76.1205(b)(5) requires to separately disclose to consumers in a conspicuous manner with written information provided to customers in accordance with Section 76.1602, with written or oral information at consumer request, and on Web sites or billing inserts. This requirement is intended to ensure that consumers understand that retail options are available and that cable operators are not subsidizing their own devices with service fees in violation of Section 629 of the Act.
47 CFR 15.123(c)(3) states subsequent to the testing of its initial unidirectional digital cable product model, a
47 CFR15.123(c)(5)(iii) states subsequent to the successful testing of its initial M–UDCP, a manufacturer or importer is not required to have other M–UDCP models tested at a qualified test facility for compliance with M-Host UNI–DIR–PICS–IOI–061101 (incorporated by reference, see § 15.38) unless the first model tested was not a television, in which event the first television shall be tested as provided in § 15.123(c)(5)(i). The manufacturer or importer shall ensure that all subsequent models of M–UDCPs comply with M-Host UNI–DIR–PICS–IOI–061101 (incorporated by reference, see § 15.38) and all other applicable rules and standards. The manufacturer or importer shall maintain records indicating such compliance in accordance with the verification procedure requirements in part 2, subpart J of this chapter. For each M–UDCP model, the manufacturer or importer shall further submit documentation verifying compliance with M-Host UNI–DIR–PICS–IOI–061101 to the testing laboratory representing cable television system operators serving a majority of the cable television subscribers in the United States.
47 CFR 76.1203 provides that a multichannel video programming distributor may restrict the attachment or use of navigation devices with its system in those circumstances where electronic or physical harm would be caused by the attachment or operation of such devices or such devices that assist or are intended or designed to assist in the unauthorized receipt of service. Such restrictions may be accomplished by publishing and providing to subscribers standards and descriptions of devices that may not be used with or attached to its system. Such standards shall foreclose the attachment or use only of such devices as raise reasonable and legitimate concerns of electronic or physical harm or theft of service.
47 CFR 76.1205 states that technical information concerning interface parameters which are needed to permit navigation devices to operate with multichannel video programming systems shall be provided by the system operator upon request.
47 CFR 76.1207 states that the Commission may waive a regulation adopted under this Part for a limited time, upon an appropriate showing by a provider of multichannel video programming and other services offered over multichannel video programming systems, or an equipment provider that such a waiver is necessary to assist the development or introduction of a new or improved multichannel video programming or other service offered over multichannel video programming systems, technology, or products. Such waiver requests are to be made pursuant to 47 CFR 76.7. 47 CFR 76.1208 states that any interested party may file a petition to the Commission for a determination to provide for a sunset of the navigation devices regulations on the basis that (1) the market for multichannel video distributors is fully competitive; (2) the market for converter boxes, and interactive communications equipment, used in conjunction with that service is fully competitive; and (3) elimination of the regulations would promote competition and the public interest.
47 CFR 15.118(a) and 47 CFR 15.19(d) (label and information disclosure)—The U.S. Bureau of the Census reports that, at the end of 2002, there were 571 U.S. establishments that manufacture audio and visual equipment. These manufacturers already have in place mechanisms for labeling equipment and including consumer disclosures in the form of owners' manuals and brochures in equipment packaging. We estimate that manufacturers who voluntarily decide to label their equipment will need no more than 5 hours to develop a label or to develop wording for a consumer disclosure for owners' manuals/brochures to be included with the device. Once developed, we do not anticipate any ongoing burden associated with the revision/modification of the label, if used, or the disclosure.
Status Reports—Periodic reports are required from large cable multiple system operators detailing CableCARD deployment/support for navigation devices. (This requirement is specified in FCC 05–76, CS Docket No. 97–80).
47 CFR 76.66(b)(1) states each satellite carrier providing, under section 122 of title 17, United States Code, secondary transmissions to subscribers located within the local market of a television broadcast station of a primary transmission made by that station, shall carry upon request the signals of all television broadcast stations located within that local market, subject to section 325(b) of title 47, United States Code, and other paragraphs in this section. Satellite carriers are required to carry digital-only stations upon request
47 CFR 76.66(b)(2) requires a satellite carrier that offers multichannel video programming distribution service in the United States to more than 5,000,000 subscribers shall, no later than December 8, 2005, carry upon request the signal originating as an analog signal of each television broadcast station that is located in a local market in Alaska or Hawaii; and shall, no later than June 8, 2007, carry upon request the signals originating as digital signals of each television broadcast station that is located in a local market in Alaska or Hawaii. Such satellite carrier is not required to carry the signal originating as analog after commencing carriage of digital signals on June 8, 2007. Carriage of signals originating as digital signals of each television broadcast station that is located in a local market in Alaska or Hawaii shall include the entire free over-the-air signal, including multicast and high definition digital signals.
47 CFR 76.66(c)(3) requires that a commercial television station notify a satellite carrier in writing whether it elects to be carried pursuant to retransmission consent or mandatory consent in accordance with the established election cycle.
47 CFR 76.66(c)(5) requires that a noncommercial television station must request carriage by notifying a satellite carrier in writing in accordance with the established election cycle.
47 CFR 76.66(c)(6) requires a commercial television broadcast station located in a local market in a noncontiguous state to make its retransmission consent-mandatory carriage election by October 1, 2005, for carriage of its signals that originate as analog signals for carriage commencing on December 8, 2005 and ending on December 31, 2008, and by April 1, 2007 for its signals that originate as digital signals for carriage commencing on June 8, 2007 and ending on December 31, 2008. For analog and digital signal carriage cycles commencing after December 31, 2008, such stations shall follow the election cycle in 47 CFR 76.66(c)(2) and 47 CFR 76.66(c)(4). A noncommercial television broadcast station located in a local market in Alaska or Hawaii must request carriage by October 1, 2005, for carriage of its signals that originate as an analog signal for carriage commencing on December 8, 2005 and ending on December 31, 2008, and by April 1, 2007 for its signals that originate as digital signals for carriage commencing on June 8, 2007 and ending on December 31, 2008. Moreover, Section 76.66(c) requires a commercial television station located in a local market in a noncontiguous state to provide notification to a satellite carrier whether it elects to be carried pursuant to retransmission consent or mandatory consent.
47 CFR 76.66(d)(1)(ii) states an election request made by a television station must be in writing and sent to the satellite carrier's principal place of business, by certified mail, return receipt requested.
47 CFR 76.66(d)(1)(iii) states a television station's written notification shall include the:
(A) Station's call sign;
(B) Name of the appropriate station contact person;
(C) Station's address for purposes of receiving official correspondence;
(D) Station's community of license;
(E) Station's DMA assignment; and
(F) For commercial television stations, its election of mandatory carriage or retransmission consent.
47 CFR 76.66(d)(1)(iv)—Within 30 days of receiving a television station's carriage request, a satellite carrier shall notify in writing: (A) Those local television stations it will not carry, along with the reasons for such a decision; and (B) those local television stations it intends to carry.
47 CFR 76.66(d)(2)(i) states a new satellite carrier or a satellite carrier providing local service in a market for the first time after July 1, 2001, shall inform each television broadcast station licensee within any local market in which a satellite carrier proposes to commence carriage of signals of stations from that market, not later than 60 days prior to the commencement of such carriage:
(A) Of the carrier's intention to launch local-into-local service under this section in a local market, the identity of that local market, and the location of the carrier's proposed local receive facility for that local market;
(B) Of the right of such licensee to elect carriage under this section or grant retransmission consent under section 325(b);
(C) That such licensee has 30 days from the date of the receipt of such notice to make such election; and
(D) That failure to make such election will result in the loss of the right to demand carriage under this section for the remainder of the 3-year cycle of carriage under section 325.
47 CFR 76.66(d)(2)(ii) states satellite carriers shall transmit the notices required by paragraph (d)(2)(i) of this section via certified mail to the address for such television station licensee listed in the consolidated database system maintained by the Commission.
47 CFR 76.66(d)(2)(iii) requires a satellite carrier with more than five million subscribers to provide a notice as required by 47 CFR 76.66(d)(2)(i) and 47 CFR 76.66(d)(2)(ii) to each television broadcast station located in a local market in a noncontiguous state, not later than September 1, 2005 with respect to analog signals and a notice not later than April 1, 2007 with respect to digital signals; provided, however, that the notice shall also describe the carriage requirements pursuant to Section 338(a)(4) of Title 47, United States Code, and 47 CFR 76.66(b)(2).
47 CFR 76.66(d)(2)(iv) requires that a satellite carrier shall commence carriage of a local station by the later of 90 days from receipt of an election of mandatory carriage or upon commencing local-into-local service in the new television market.
47 CFR 76.66(d)(2)(v) states within 30 days of receiving a local television station's election of mandatory carriage in a new television market, a satellite carrier shall notify in writing: Those local television stations it will not carry, along with the reasons for such decision, and those local television stations it intends to carry.
47 CFR 76.66(d)(2)(vi) requires satellite carriers to notify all local stations in a market of their intent to launch HD carry-one, carry-all in that market at least 60 days before commencing such carriage.
47 CFR 76.66(d)(3)(ii) states a new television station shall make its election request, in writing, sent to the satellite carrier's principal place of business by certified mail, return receipt requested, between 60 days prior to commencing broadcasting and 30 days after commencing broadcasting. This written notification shall include the information required by paragraph (d)(1)(iii) of this section.
47 CFR 76.66(d)(3)(iv) states within 30 days of receiving a new television station's election of mandatory carriage, a satellite carrier shall notify the station in writing that it will not carry the station, along with the *14511 reasons for such decision, or that it intends to carry the station.
47 CFR 76.66(d)(5)(i) states beginning with the election cycle described in § 76.66(c)(2), the retransmission of significantly viewed signals pursuant to § 76.54 by a satellite carrier that provides local-into-local service is subject to providing the notifications to stations in the market pursuant to paragraphs (d)(5)(i)(A) and (B) of this section, unless the satellite carrier was
(A) In any local market in which a satellite carrier provided local-into-local service on December 8, 2004, at least 60 days prior to any date on which a station must make an election under paragraph (c) of this section, identify each affiliate of the same television network that the carrier reserves the right to retransmit into that station's local market during the next election cycle and the communities into which the satellite carrier reserves the right to make such retransmissions;
(B) In any local market in which a satellite carrier commences local-into-local service after December 8, 2004, at least 60 days prior to the commencement of service in that market, and thereafter at least 60 days prior to any date on which the station must thereafter make an election under § 76.66(c) or (d)(2), identify each affiliate of the same television network that the carrier reserves the right to retransmit into that station's local market during the next election cycle.
47 CFR 76.66(f)(3) states except as provided in 76.66(d)(2), a satellite carrier providing local-into-local service must notify local television stations of the location of the receive facility by June 1, 2001 for the first election cycle and at least 120 days prior to the commencement of all election cycles thereafter.
47 CFR 76.66(f)(4) states a satellite carrier may relocate its local receive facility at the commencement of each election cycle. A satellite carrier is also permitted to relocate its local receive facility during the course of an election cycle, if it bears the signal delivery costs of the television stations affected by such a move. A satellite carrier relocating its local receive facility must provide 60 days notice to all local television stations carried in the affected television market.
47 CFR 76.66(h)(5) states a satellite carrier shall provide notice to its subscribers, and to the affected television station, whenever it adds or deletes a station's signal in a particular local market pursuant to this paragraph.
47 CFR 76.66(m)(1) states whenever a local television broadcast station believes that a satellite carrier has failed to meet its obligations under this section, such station shall notify the carrier, in writing, of the alleged failure and identify its reasons for believing that the satellite carrier failed to comply with such obligations.
47 CFR 76.66(m)(2) states the satellite carrier shall, within 30 days after such written notification, respond in writing to such notification and comply with such obligations or state its reasons for believing that it is in compliance with such obligations.
47 CFR 76.66(m)(3) states a local television broadcast station that disputes a response by a satellite carrier that it is in compliance with such obligations may obtain review of such denial or response by filing a complaint with the Commission, in accordance with § 76.7 of title 47, Code of Federal Regulations. Such complaint shall allege the manner in which such satellite carrier has failed to meet its obligations and the basis for such allegations.
47 CFR 76.66(m)(4) states the satellite carrier against which a complaint is filed is permitted to present data and arguments to establish that there has been no failure to meet its obligations under this section.
Non-rule requirement: Satellite carriers must immediately commence carriage of the digital signal of a television station that ceases analog broadcasting prior to the February 17, 2009 transition deadline provided that the broadcaster notifies the satellite carrier on or before October 1, 2008 of the date on which they anticipate termination of their analog signal.
47 CFR 73.673 states each commercial television broadcast station licensee must provide information identifying programming specifically designed to educate and inform children to publishers of program guides. Such information must include an indication of the age group for which the program is intended.
These requirements are intended to provide greater clarity about broadcasters' obligations under the Children's Television Act (CTA) of 1990 to air programming “specifically designed” to serve the educational and informational needs of children and to improve public access to information about the availability of these programs. These requirements provide better information to the public about the shows broadcasters' air to satisfy their obligation to provide educational and informational programming under the CTA.
The Fourth Report and Order modified the information collection requirements contained in 64.1120(c)(3)(iii) to provide for verifications to elicit “confirmation that the person on the call understands that a carrier change, not an upgrade to existing service, bill consolidation, or any other misleading description of the transaction, is being authorized.”
The reporting requirements for which the Commission is seeking a three year approval from the Office of Management and Budget (OMB) are as follows:
47 CFR 43.61: Reports of international telecommunications traffic.
(a) Each common carrier engaged in providing international telecommunications service between the United States (as defined in the Communications Act, as amended, 47 U.S.C. 153) and any country or point outside that area shall file a report with the Commission not later than July 31 of each year for service actually provided in the preceding calendar year.
(1) The information contained in the reports shall include actual traffic and revenue data for each and every service provided by a common carrier, divided among service billed in the United States, service billed outside the United States, and service transiting the United States.
(2) Each common carrier shall submit a revised report by October 31 identifying any inaccuracies included in the annual report exceeding five percent of the reported figure.
(3) The information required under this section shall be furnished in conformance with the instructions and reporting requirements prepared under the direction of the Chief, Wireline Competition Bureau, prepared and published as a manual, in consultation and coordination with the Chief, International Bureau.
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. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than June 9, 2014.
A. Federal Reserve Bank of Minneapolis (Jacquelyn K. Brunmeier, Assistant Vice President) 90 Hennepin Avenue, Minneapolis, Minnesota 55480–0291:
1.
In addition,
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the standards enumerated in the BHC Act (12 U.S.C. 1842(c)). If the proposal also involves the acquisition of a nonbanking company, the review also includes whether the acquisition of the nonbanking company complies with the standards in section 4 of the BHC Act (12 U.S.C. 1843). Unless otherwise noted, nonbanking activities will be conducted throughout the United States.
Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than June 19, 2014.
A. Federal Reserve Bank of Dallas (E. Ann Worthy, Vice President) 2200 North Pearl Street, Dallas, Texas 75201–2272:
1.
The companies listed in this notice have given notice under section 4 of the Bank Holding Company Act (12 U.S.C. 1843) (BHC Act) and Regulation Y, (12 CFR Part 225) to engage
Each notice is available for inspection at the Federal Reserve Bank indicated. The notice also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing on the question whether the proposal complies with the standards of section 4 of the BHC Act.
Unless otherwise noted, comments regarding the applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than June 19, 2014.
A. Federal Reserve Bank of Dallas (E. Ann Worthy, Vice President) 2200 North Pearl Street, Dallas, Texas 75201–2272:
Pursuant to the Federal Advisory Committee Act, the Department of Health and Human Services (HHS) announces the following advisory committee meeting.
The objectives of this hearing will be to receive a regulatory update, review and discuss the annual Designated Standards Maintenance Organization (DSMO) Report; discuss the status of development of Operating Rules; review the status of the Coordination of Benefits transaction; discuss new developments in the use of credit cards (including virtual cards) for claim payment; review the status of standards development of Health Care Attachments; discuss the planning and preparation of Health Plan ID; review and discuss the incorporation and use of a Unique Device Identifier (UDI) in administrative transactions; and discuss the status of ICD–10 delay.
Should you require reasonable accommodation, please contact the CDC Office of Equal Employment Opportunity on (301) 458–4EEO (4336) as soon as possible.
National Vaccine Program Office, Office of the Assistant Secretary for Health, Office of the Secretary, Department of Health and Human Services.
Notice.
As stipulated by the Federal Advisory Committee Act, the Department of Health and Human Services (HHS) is hereby giving notice that the National Vaccine Advisory Committee (NVAC) will hold a meeting June 10–11, 2014. The meeting is open to the public. However, pre-registration is required for both public attendance and public comment. Individuals who wish to attend the meeting and/or participate in the public comment session should register at
The meeting will be held on June 10–11, 2014. The meeting times and agenda will be posted on the NVAC Web site at
U.S. Department of Health and Human Services, Hubert H. Humphrey Building, Room 800, 200 Independence Avenue SW., Washington, DC 20201.
The meeting can also be accessed through a live webcast the day of the meeting. For more information, visit
National Vaccine Program Office, U.S. Department of Health and Human Services, Room 715–H, Hubert H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 20201.
Pursuant to Section 2101 of the Public Health Service Act (42 U.S.C. 300aa–1), the Secretary of Health and Human Services was mandated to establish the National Vaccine Program to achieve optimal prevention of human infectious diseases through immunization and to achieve optimal prevention against adverse reactions to vaccines. The NVAC was established to provide advice and make recommendations to the Director of the National Vaccine Program on matters related to the Program's responsibilities. The Assistant Secretary for Health serves as Director of the National Vaccine Program.
The topics to be discussed at the NVAC meeting will include presentations addressing immunization infrastructure needs at the state and federal levels; an update on successes and remaining challenges for increasing influenza vaccination among healthcare personnel; a discussion of how HHS has supported vaccine innovation and research and development using universal influenza vaccines as an example; updates from the National Vaccine Program Office; and a discussion of on-going community actions to increase human papilloma virus (HPV) vaccination coverage among adolescents. In addition, NVAC working groups on HPV Vaccination and Maternal Immunization will present their recommendations and findings for NVAC consideration and vote. The NVAC Vaccine Confidence Working Group will also provide an update on its progress. The meeting agenda will be posted on the NVAC Web site:
Public attendance at the meeting is limited to the available space. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the National Vaccine Program Office at the address/phone listed above at least one week prior to the meeting. For those unable to attend in person, a live webcast will be available. More information on registration and accessing the Web cast can be found at
Members of the public will have the opportunity to provide comments at the NVAC meeting during the public comment periods designated on the agenda. Individuals who would like to submit written statements should email their comments to the National Vaccine Program Office (
Pursuant to the Federal Advisory Committee Act, the Department of Health and Human Services (HHS) announces the following advisory committee meeting.
The purpose of this meeting is to review NCVHS Status of Activities, continue to plan for 2014 objectives and deliverables, and review and approve at least one action item: The Eleventh HIPAA Report to Congress. The Committee will also review the deliberative process for the letters submitted for action at the May 15th Conference call—Electronic Standards for Public Health Information Exchange; Findings from the February 2014 hearing; and the ICD 10 delay, and take any follow-up action needed. The Committee will receive a briefing on Data Segmentation initiatives and also an update from the recently conducted June 2014 DataPalooza. Finally, the Working Group on HHS Data Access and Use will continue strategic discussions on usability, use, and usefulness of HHS open data.
The times shown above are for the full Committee meeting. Subcommittee issues will be included as part of the Full Committee schedule and identified as “blocks” on the afternoon of the first day and morning the second day. Agendas for these block sessions will be developed later and posted on the NCVHS Web site (URL below) when available.
Should you require reasonable accommodation, please contact the CDC Office of Equal Employment Opportunity on (301) 458–4EEO (4336) as soon as possible.
Department of Health and Human Services, Office of the Secretary, Office of the Assistant Secretary for Health; and U.S. Department of Agriculture, Food, Nutrition and Consumer Services and Research, Education, and Economics.
Notice.
As stipulated by the Federal Advisory Committee Act (FACA), the U.S. Department of Health and Human Services (HHS), in collaboration with the U.S. Department of Agriculture (USDA), is hereby giving notice that a meeting of the 2015 Dietary Guidelines Advisory Committee (DGAC) will be held and will be open to the public.
This meeting will be held on July 17, 2014, from 1:15–5:15 p.m. E.D.T. and July 18, 2014 from 8:00 a.m.–3:45 p.m. E.D.T.
This will not be an in-person meeting. Virtual technology will be utilized to conduct this meeting. The meeting will be accessible by webcast on the Internet.
Designated Federal Officer (DFO), 2015 DGAC, Richard D. Olson, M.D., M.P.H.; Office of Disease Prevention and Health Promotion, OASH/HHS; 1101 Wootton Parkway, Suite LL100 Tower Building; Rockville, MD 20852: Telephone: (240) 453–8280; Fax: (240) 453–8281; Alternate DFO, 2015 DGAC, Kellie (O'Connell) Casavale, Ph.D., R.D., Nutrition Advisor; Office of Disease Prevention and Health Promotion, OASH/HHS; 1101 Wootton Parkway, Suite LL100 Tower Building; Rockville, MD 20852: Telephone: (240) 453–8280; Fax: (240) 453–8281; Lead USDA Co-
Under Section 301 of Public Law 101–445 (7 U.S.C. 5341, the National Nutrition Monitoring and Related Research Act of 1990, Title III) the Secretaries of Health and Human Services (HHS) and Agriculture (USDA) are directed to issue at least every five years a report titled
Special Emphasis Panel (SEP): Initial Review
The meeting announced below concerns NIOSH Member Conflict Review, PA 07–318, initial review.
In accordance with Section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92–463), the Centers for Disease
The Director, Management Analysis and Services Office, has been delegated the authority to sign
In accordance with Presidential Executive Order No. 13175, November 6, 2000, and the Presidential Memorandum of November 5, 2009, and September 23, 2004, Consultation and Coordination with Indian Tribal Governments, CDC/Agency for Toxic Substances and Disease Registry (ATSDR), announces the following meeting and Tribal Consultation Session:
During the 11th Biannual Tribal Consultation Session, tribes and CDC leaders will engage in consultation on Native specimens and the National Tribal Environmental Health Think Tank, and tribes will have an opportunity to present formal testimony on tribal health issues.
Tribal leaders are encouraged to submit written testimony by 11:59 p.m., EDT, on July 16, 2014, to April R. Taylor, Public Health Analyst, Tribal Support Unit, or CAPT Craig Wilkins, Acting Director for the Tribal Support Unit, CDC/OSTLTS, by mail to 4770 Buford Highway NE., MS E–70, Atlanta, Georgia 30341, or by email to
Depending on the time available, it may be necessary to limit the presentation time of each presenter.
The agenda is subject to change as priorities dictate.
Information about the TAC, CDC's Tribal Consultation Policy, and previous meetings may be referenced on the following Web link:
Contact Person for More Information: April R. Taylor, Public Health Analyst, CDC/OSTLTS, by mail to 4770 Buford Highway NE., MS E–70, Atlanta, Georgia 30341, or by email to
The Director, Management Analysis and Services Office, has been delegated the authority to sign
In accordance with section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92–463), the Centers for Disease Control and Prevention (CDC), announces the following committee meeting:
In December 2000, the President delegated responsibility for funding, staffing, and operating the Advisory Board to HHS, which subsequently delegated this authority to the
The agenda is subject to change as priorities dictate.
The Director, Management Analysis and Services Office, has been delegated the authority to sign
The meeting announced below concerns Reducing Youth Exposure to Alcohol Marketing, Special Interest Projects (SIP)14–009, Panel A, initial review.
This document corrects a notice that was published in the
M. Chris Langub, Ph.D., Scientific Review Officer, CDC, 4770 Buford Highway, NE., Mailstop F46, Atlanta, Georgia 30341, Telephone: (770) 488–3585,
The Director, Management Analysis and Services Office, has been delegated the authority to sign
In accordance with section 10(a) (2) of the Federal Advisory Committee Act (Pub. L. 92–463), the Centers for Disease Control and Prevention (CDC) announces the following meeting of the aforementioned committee:
Agenda items are subject to change as priorities dictate. An agenda is also posted on the NIOSH Web site (
The Director, Management Analysis and Services Office, has been delegated the authority to sign
The meeting announced below concerns Nutrition and Obesity Policy Research and Evaluation Network (NOPREN) Coordinating Center, Special Interest Projects (SIP)14–026, and Nutrition and Obesity Policy Research and Evaluation Network (NOPREN) Collaborating Center, SIP14–027, Panel M, initial review.
In accordance with Section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92–463), the Centers for Disease Control and Prevention (CDC) announces the aforementioned meeting:
The Director, Management Analysis and Services Office, has been delegated the authority to sign
The meeting announced below concerns Miner Safety and Health Training Program—Western United States (U60) RFA–OH–14–004, initial review.
In accordance with Section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92–463), the Centers for Disease Control and Prevention (CDC) announces the aforementioned meeting:
The Director, Management Analysis and Services Office, has been delegated the authority to sign
Centers for Medicare & Medicaid Services (CMS), HHS.
Notice.
This notice announces the application of AABB for approval as an accreditation organization for clinical laboratories under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) program. We have determined that AABB meets or exceeds the applicable CLIA requirements. In this notice, we announce the approval and grant AABB deeming authority for a period of 6 years. This deeming authority is granted to AABB for the Blood Bank and Transfusion Service (BB/TS) program, the Immunohematology Reference Laboratory (IRL) program, the Molecular Testing (MT) program, and the Cellular Therapy (CT) program.
Daralyn Hassan, 410–786–9360.
On October 31, 1988, the Congress enacted the Clinical Laboratory Improvement Amendments of 1988 (CLIA) (Pub. L. 100–578). CLIA amended section 353 of the Public Health Service Act. We issued a final rule implementing the accreditation provisions of CLIA on July 31, 1992 (57 FR 33992). Under those provisions, we may grant deeming authority to an accreditation organization if its requirements for laboratories accredited under its program are equal to or more stringent than the applicable CLIA program requirements in 42 CFR part 493 (Laboratory Requirements). Subpart E of part 493 (Accreditation by a Private, Nonprofit Accreditation Organization or Exemption Under an Approved State Laboratory Program) specifies the requirements an accreditation organization must meet to be approved by CMS as an accreditation organization under CLIA.
In this notice, we approve AABB as an organization that may accredit laboratories for purposes of establishing their compliance with CLIA requirements for the following specialty and subspecialty areas under CLIA:
• Microbiology, including Bacteriology, Mycology, and Virology.
• Diagnostic Immunology, including Syphilis Serology, General Immunology.
• Chemistry, including Routine Chemistry, Urinalysis, Toxicology.
• Hematology.
• Immunohematology, including ABO Group & Rh Group, Antibody Detection, Antibody Identification, Compatibility Testing.
We have examined the initial AABB application and all subsequent submissions to determine its accreditation program's equivalency with the requirements for approval of an accreditation organization under subpart E of part 493. We have determined that AABB meets or exceeds the applicable CLIA requirements. We have also determined that AABB will ensure that its accredited laboratories will meet or exceed the applicable requirements in subparts H, I, J, K, M, Q, and the applicable sections of R. Therefore, we grant AABB approval as an accreditation organization under subpart E of part 493, for the period stated in the
The following describes the process used to determine that the AABB accreditation program meets the necessary requirements to be approved by CMS as an accreditation program with deeming authority under the CLIA program. AABB formally applied to CMS for approval as an accreditation organization under CLIA for the following specialties and subspecialties:
• Microbiology, including Bacteriology, Mycology, Virology.
• Diagnostic Immunology, including Syphilis Serology, General Immunology.
• Chemistry, including Routine Chemistry, Urinalysis, Toxicology.
• Hematology.
• Immunohematology, including ABO Group & Rh Group, Antibody Detection, Antibody Identification, Compatibility Testing.
In reviewing these materials, we reached the following determinations for each applicable part of the CLIA regulations:
AABB submitted its mechanism for monitoring compliance with all requirements equivalent to condition-level requirements, a list of all its current laboratories and the expiration date of their accreditation, and a detailed comparison of the individual accreditation requirements with the comparable condition-level requirements. We have determined that AABB policies and procedures for oversight of laboratories performing laboratory testing for the submitted CLIA specialties and subspecialties are equivalent to those required by our CLIA regulations in the matters of inspection, monitoring proficiency testing (PT) performance, investigating complaints, and making PT information available. AABB submitted documentation regarding its requirements for monitoring and inspecting laboratories, and describing its own standards regarding accreditation organization data management, inspection processes, procedures for removal or withdrawal of accreditation, notification requirements, and accreditation organization resources. We have determined that the requirements of the accreditation programs submitted for approval are equal to or more stringent than the requirements of the CLIA regulations.
We have determined that the AABB's requirements are equal to the CLIA requirements at § 493.801 through § 493.865. Like CLIA, all of AABB's accredited laboratories are required to participate in an HHS-approved PT program for tests listed in subpart I. Additionally, AABB administers a non-regulated PT program to challenge the ability of the laboratories in the IRL program to resolve complex serological problems. Laboratories in the MT program are required to participate in a graded PT program or a sample exchange program.
We have determined that the AABB's requirements are equal to the CLIA requirements at § 493.1100 through § 493.1105.
We have determined that the AABB requirements are equal to or more stringent than the CLIA requirements at § 493.1200 through § 493.1299.
We have determined that the AABB requirements are equal to the CLIA requirements at § 493.1403 through § 493.1495 for laboratories that perform moderate and high complexity testing.
We have determined that the AABB requirements are equal to the CLIA requirements at § 493.1771 through § 493.1780. AABB will continue to conduct biennial onsite inspections.
We have determined that the AABB meets the requirements of subpart R to the extent that such requirements are utilized by accreditation organizations. AABB policy sets forth the actions the organization takes when laboratories it accredits do not comply with its requirements and standards for accreditation. When appropriate, AABB will deny, suspend, or revoke accreditation in a laboratory accredited by AABB and report that action to us within 30 days. AABB also provides an appeals process for laboratories that have had accreditation denied, suspended, or revoked.
We have determined that AABB's laboratory enforcement and appeal policies are equal to or more stringent than the requirements of part 493 subpart R as they apply to accreditation organizations.
The federal validation inspections of laboratories accredited by AABB may be conducted on a representative sample basis or in response to substantial allegations of noncompliance (that is, complaint inspections). The outcome of those validation inspections, performed by CMS or our agents, or the state survey agencies, will be our principal means for verifying that the laboratories accredited by AABB remain in compliance with CLIA requirements. This federal monitoring is an ongoing process.
Our regulations provide that we may rescind the approval of an accreditation organization, such as that of AABB, for cause, before the end of the effective date of approval. If we determine that AABB has failed to adopt, maintain and enforce requirements that are equal to, or more stringent than, the CLIA requirements, or that systemic problems exist in its monitoring, inspection or enforcement processes, we may impose a probationary period, not to exceed 1 year, in which AABB would be allowed to address any identified issues. Should AABB be unable to address the identified issues within that timeframe, CMS may, in accordance with the applicable regulations, revoke AABB's deeming authority under CLIA.
Should circumstances result in our withdrawal of AABB's approval, we will publish a notice in the
This notice does not impose any information collection and record keeping requirements subject to the Paperwork Reduction Act (PRA). Consequently, it does not need to be reviewed by the Office of Management and Budget (OMB) under the authority of the PRA. The requirements associated
In accordance with the provisions of Executive Order 12866, this notice was not reviewed by the Office of Management and Budget.
Centers for Medicare & Medicaid Services, Department of Health and Human Services (HHS).
Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (the PRA), federal agencies are required to publish notice in the
Comments must be received by
When commenting, please reference the document identifier or OMB control number (OCN). To be assured consideration, comments and recommendations must be submitted in any one of the following ways:
1.
2.
To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, you may make your request using one of following:
1. Access CMS' Web site address at
2. Email your request, including your address, phone number, OMB number, and CMS document identifier, to
3. Call the Reports Clearance Office at (410) 786–1326.
Reports Clearance Office at (410) 786–1326.
This notice sets out a summary of the use and burden associated with the following information collections. More detailed information can be found in each collection's supporting statement and associated materials (see
Under the PRA (44 U.S.C. 3501–3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA requires federal agencies to publish a 60-day notice in the
1.
Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (PRA), federal agencies are required to publish notice in the
Comments on the collection(s) of information must be received by the OMB desk officer by June 23, 2014:
When commenting on the proposed information collections, please reference the document identifier or OMB control number. To be assured consideration, comments and recommendations must be received by the OMB desk officer via one of the following transmissions: OMB, Office of Information and Regulatory Affairs, Attention: CMS Desk Officer, Fax Number: (202) 395–5806
To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, you may make your request using one of following:
1. Access CMS' Web site address at
2. Email your request, including your address, phone number, OMB number, and CMS document identifier, to
3. Call the Reports Clearance Office at (410) 786–1326.
Reports Clearance Office at (410) 786–1326
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501–3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires federal agencies to publish a 30-day notice in the
1.
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 June 23, 2014.
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
FDA PRA Staff, Office of Operations, Food and Drug Administration, 8455 Colesville Rd., COLE–14526, Silver Spring, MD 20993–0002,
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
The United States exports a large volume and variety of foods in international trade. For certain food products, foreign governments may require assurances from the responsible authority of the country of origin of an imported food that the processor of the food is in compliance with applicable country of origin regulatory requirements. With regard to U.S. milk products, FDA is the competent U.S. food safety authority to provide this information to foreign governments. We provide the requested information about processors in the form of lists. The lists are provided to the foreign governments and also posted online at
We currently provide Chile a list of U.S. milk product manufacturers/processors that have expressed interest in exporting their products to Chile, are subject to our jurisdiction, and are not the subject of a pending judicial enforcement action (i.e., an injunction or seizure) or a pending warning letter. In the
FDA was asked to provide a list to China in response to China's State General Administration of the People's Republic of China for Quality Supervision and Inspection and Quarantine (AQSIQ) issuance of Administrative Measures for Registration of Overseas Manufacturers, known as AQSIQ Decree 145. Accordingly, we established and maintain for China a list that identifies U.S. milk product manufacturers/processors that have expressed interest to us in exporting milk products to China, are subject to our jurisdiction, and are not the subject of a pending judicial enforcement action (i.e., an injunction or seizure) or a pending warning letter. On January 9, 2014, we issued a guidance document entitled “Establishing and Maintaining a List of U.S. Milk Product Manufacturers/Processors with Interest in Exporting to China.” The guidance can be found at
As noted, we provided the new list to China in response to AQSIQ Decree 145. In accordance with 5 CFR 1320.13, FDA requested emergency OMB review and approval of the collections of information found in the guidance document. The routine course of OMB approval would not have been in the best interest of the public health because it would have delayed our ability to collect the information from firms and, thus, would have been disruptive in our efforts to facilitate services that have been requested by China in AQSIQ Decree 145. OMB granted the approval under the emergency clearance procedures on November 7, 2013.
The guidance documents are published under the authority of section 701(h) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 371(h)), which authorizes the Secretary to develop guidance documents with public participation presenting the views of the Secretary on matters under the jurisdiction of FDA.
The guidance documents explain what information firms should submit to us in order to be considered for inclusion on the lists and what criteria we intend to use to determine eligibility for placement on the lists. The guidance documents also explain how we intend to update the list and how we intend to communicate any new information to the government that requested the list. Finally, the guidance documents note that the information is provided voluntarily by firms with the understanding that it will be posted on our Web site and communicated to, and possibly further disseminated by, the government that requested the list; thus, we consider the information on the lists to be information that is not protected from disclosure under 5 U.S.C. 552(b)(4).
Application for inclusion on each list is voluntary. In the guidance documents, we recommend that U.S. firms that want to be placed on either list send the following information to us: Name and address of the firm and the manufacturing plant; name, telephone number, and email address (if available) of the contact person; a list of products presently shipped and expected to be shipped in the next 3 years; identities of agencies that inspect the plant and the date of last inspection; plant number and copy of last inspection notice; and, if other than an FDA inspection, copy of last inspection report. We request that this information be updated every 2 years.
We use the information submitted by firms to determine their eligibility for placement on the list, which is published on our Web site. The purpose of the list is to help the governments of Chile and China in their determination of which U.S. milk product manufacturers are eligible to export to their respective countries.
In the
FDA estimates the burden of this collection of information as follows:
The estimate of the number of firms that will submit new written requests to be placed on the list, biennial updates, and occasional updates is based on the FDA's experience maintaining the list over the past 8 years. The estimate of the number of hours that it will take a firm to gather the information needed to be placed on the list or update its information is based on FDA's experience with firms submitting similar requests. FDA believes that the information to be submitted will be readily available to the firms.
Based on submissions received for the Chile list over the past 3 years and the China list over the past 3 months, we estimate that, annually, an average of 100 new firms will submit written requests to be placed on the China list and 25 new firms will seek to be placed on the Chile list, reported as 125 total respondents on line 1 of table 1. We estimate that a firm will require 1.5 hours to read the guidance, to gather the information needed, and to prepare a communication to FDA that contains the information and requests that the firm be placed on the list, for a total of 187.5 burden hours, rounded to 188, as reported on line 1 of table 1. Under the guidance, every 2 years each firm on the list must provide updated information in order to remain on the list.
There are approximately 250 firms on the 2 lists combined. We estimate that, each year, approximately half of the firms on the list, 125 firms, will resubmit the information to remain on the list. We estimate that a firm already on the list will require 1 hour to biennially update and resubmit the information to us, including time reviewing the information and corresponding with us, for a total of 125 hours. In addition, we expect that, each year, approximately 50 firms will need to submit an occasional update and each firm will require 0.5 hour to prepare a communication to us reporting the change, for a total of 125 hours.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Fax written comments on the collection of information by June 23, 2014.
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
FDA PRA Staff, Office of Operations, Food and Drug Administration, 8455 Colesville Rd., COLE–14526, Silver Spring, MD 20993–0002,
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
This information collection request collects information voluntarily submitted to the Center for Devices and Radiological Health (CDRH) on actual or potential health risk concerns about a medical device or radiological product or its use. Because there has been no established guidelines or instructions on how to submit an allegation to CDRH, allegations often contain minimal information and are received via phone calls, emails, or conversationally from any CDRH staff. CDRH seeks to establish a consistent format and process for the submission of device allegations that will enhance our timeliness in receiving, assessing and evaluating voluntary allegations. The information provided in the allegations received by CDRH may be used to clarify the recurrence or emergence of significant device-related risks to the general public and the need to initiate educational outreach or regulatory action to minimize or mitigate identified risks.
In the
FDA estimates the burden of this collection of information as follows:
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing the availability of grant funds for the support of the efforts of the Center for Drug Evaluation and Research/Office of Medical Policy to increase the quality and efficiency of clinical trials. The Food and Drug Administration (FDA), Center for Drug Evaluation and Research (CDER), Office of Medical Policy is announcing its intent to accept and consider a single-source application for the award of a grant to the Duke University's Duke Translational Medicine Institute (DTMI).
The application due date is June 30, 2014, by 11:59 p.m. Eastern Time. The expiration date is July 1, 2014.
Submit electronic applications to:
Mark Lauda, Office of Medical Policy, Center for Drug Evaluation and Research, Food and Drug Administration, 10990 New Hampshire Ave., Bldg. 51, Rm. 2212, Silver Spring, MD 20993, 301–796–0381, email:
For more information on this funding opportunity announcement (FOA) and to obtain detailed requirements, please refer to the full FOA located at
It has long been recognized that the clinical trial enterprise will need to evolve in order to meet the demand to provide data to support evidence-based decisionmaking. A memorandum of understanding (MOU) between FDA and Duke University published in the
CTTI membership is broad and includes stakeholders from government, industry, patient advocacy and consumer groups, professional societies, clinical research organizations, and academia. CTTI helps to effect change through the conduct of projects that identify existing inefficiencies, elucidate superior practices, and/or provide innovative approaches to evidence generation and medical product development. CTTI conducts projects that are either: (1) Proposed by its member organizations, including FDA, developed during review by its Steering Committee, and endorsed by its Executive Committee or (2) responsive to urgent needs of FDA.
The opportunity for meaningful interaction with a broad set of stakeholders committed to improving the clinical trial enterprise and also the ability to rapidly gather data to address emerging issues offer significant value to the clinical trial enterprise. Since its inception, CTTI has undertaken many projects that have direct relevance to FDA's mission, including investigational new drug (IND) safety reporting, clinical trial monitoring, use of central investigational review boards, and antibacterial drug development.
The goals of this program are to develop and maintain an administrative and scientific infrastructure to support the creation and execution of a series of projects under the auspices of CTTI that will increase the quality and efficiency of clinical trials. The following are examples of activities that could be supported by this grant:
• Maintaining an adequate administrative and scientific infrastructure to implement all related projects under this collaborative effort.
• Identifying and/or hiring a sufficient number of qualified personnel to conduct activities, including project management, such as review of project milestones for degree of completion, preparation/reporting of project findings, periodic and final reports, and for subsequent distribution in the public domain.
• Developing plans for the conduct of identified projects.
• Identifying, securing, and/or building, and effectively leveraging other resources for the conduct of identified projects.
• Upon completion of a given project, generating project results and recommendations and proposing related studies/projects, if needed, to build on the findings of the project and continuing to leverage established resources and personnel.
The following organization is eligible to apply: DTMI located within Duke University.
This is a multiyear grant. FDA/CDER intends to fund up to $7,500,000 in total costs (direct and indirect) in Fiscal Year 2014. Awards are contingent upon the availability of funds.
Subject to the availability of Federal funds and successful performance of the FOA's stated goals and objectives, four additional years of support may be
Application budgets need to reflect the actual needs of the proposed project and should not exceed the following in total costs (direct and indirect):
The scope of the proposed project should determine the project period. The maximum project period is 5 years.
Only electronic applications will be accepted. To submit an electronic application in response to this FOA, applicants should first review the full announcement located at
Steps 1 through 5, in detail, can be found at
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing the availability of a guidance entitled “Guidance for IRBs, Clinical Investigators, and Sponsors: Considerations When Transferring Clinical Investigation Oversight to Another IRB.” The guidance announced in this document discusses regulatory responsibilities of institutional review boards (IRBs), clinical investigators, and sponsors when oversight of a previously approved clinical investigation under FDA's jurisdiction is transferred from one IRB to another IRB. The guidance also addresses questions that have been previously raised concerning procedures and processes that are required and/or recommended by FDA when such oversight is transferred.
Submit either electronic or written comments on Agency guidances at any time.
Submit written requests for single copies of this guidance 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 (1–888–463–6332 or 301–796–3400); or the 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 (1–800–835–4709 or 301–827–1800); or the Division of Small Manufacturers, International, and Consumer Assistance, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, rm. 4622, Silver Spring, MD 20993 (1–800–638–2041 or 301–796–7100). Send one self-addressed adhesive label to assist the office in processing your requests. See the
Submit electronic comments on the guidance to
Bridget Foltz, Office of Good Clinical Practice, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 32, rm. 5174, Silver Spring, MD 20993, 301–796–8340.
FDA is announcing the availability of a guidance entitled, “Guidance for IRBs, Clinical Investigators, and Sponsors: Considerations When Transferring Clinical Investigation Oversight to Another IRB.” The guidance discusses the regulatory responsibilities of IRBs, clinical investigators, and sponsors when oversight of a previously approved clinical investigation under FDA's jurisdiction is transferred from one IRB to another IRB. In particular, the guidance discusses eight steps to be considered when transferring oversight of a previously approved clinical investigation from one IRB to another IRB. These include identifying those studies for which IRB oversight is being transferred; ensuring availability and retention of pertinent records; establishing an effective date for the transfer of oversight; conducting a review of the study(ies) by the receiving IRB, where appropriate; confirming or establishing the date for the next continuing review; determining whether the consent form needs to be revised; notifying the key parties; and updating IRB registration information. The IRB transfer process is expected to vary depending on the reasons for the transfer, the parties involved, and the number and risk of the studies being transferred.
To enhance human subject protections and reduce regulatory burden, FDA and the Office for Human Research Protections (OHRP) have been actively working to harmonize the agencies' regulatory requirements and guidance for human subjects research. This guidance document was developed as a part of these efforts and in consultation with OHRP.
In the
The guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The guidance represents FDA's current thinking on this topic. It does not create or confer any rights for or on any person and does not operate to bind FDA or the public. An alternative approach may be used if such approach satisfies the requirements of the applicable statutes and regulations.
This guidance refers to previously approved collections of information found in FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520). The collections of information in 21 CFR part 312 have been approved under OMB control number 0910–0014; the collections of information in 21 CFR part 812 have been approved under OMB control number 0910–0078; and the collections of information in 21 CFR part 56 have been approved under OMB control number 0910–0130.
Interested persons may submit either electronic comments regarding this document
Persons with access to the Internet may obtain the document at either
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) has determined the regulatory review period for LINZESS and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of an application to the Director of Patents and Trademarks, Department of Commerce, for the extension of a patent which claims that human drug product.
Submit electronic comments to
Beverly Friedman, Office of Management, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6257, Silver Spring, MD 20993–0002, 301–796–7900.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98–417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100–670) generally provide that a patent may be extended for a period of up to 5 years so long as the patented item (human drug product, animal drug product, medical device, food additive, or color additive) was subject to regulatory review by FDA before the item was marketed. Under these acts, a product's regulatory review period forms the basis for determining the amount of extension an applicant may receive.
A regulatory review period consists of two periods of time: A testing phase and an approval phase. For human drug products, the testing phase begins when the exemption to permit the clinical investigations of the drug becomes effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the human drug product and continues until FDA grants permission to market the drug product. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of Patents and Trademarks may award (for example, half the testing phase must be subtracted as well as any time that may have occurred before the patent was issued), FDA's determination of the length of a regulatory review period for a human drug product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(1)(B).
FDA has approved for marketing the human drug product LINZESS (linaclotide). LINZESS is indicated for treatment of irritable bowel syndrome with constipation and chronic idiopathic constipation. Subsequent to this approval, the Patent and Trademark Office received a patent term restoration application for LINZESS (U.S. Patent No. 7,304,036) from Ironwood Pharmaceuticals, Inc., and the Patent and Trademark Office requested FDA's assistance in determining this patent's eligibility for patent term restoration. In a letter dated July 10, 2013, FDA advised the Patent and Trademark Office that this human drug product had undergone a regulatory review period and that the approval of LINZESS represented the first permitted commercial marketing or use of the product. Thereafter, the Patent and Trademark Office requested that FDA determine the product's regulatory review period.
FDA has determined that the applicable regulatory review period for LINZESS is 2,863 days. Of this time, 2,475 days occurred during the testing phase of the regulatory review period, while 388 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the Patent and Trademark Office applies several statutory limitations in its calculations of the actual period for patent extension. In its application for patent extension, this applicant seeks 945 days of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit to the Division of Dockets Management (see
Interested persons may submit to the Division of Dockets Management (see
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) has determined the regulatory review period for INLYTA and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of an application to the Director of Patents and Trademarks, Department of Commerce, for the extension of a patent which claims that human drug product.
Submit electronic comments to
Beverly Friedman, Office of Management, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, rm. 6257, Silver Spring, MD 20993–0002, 301–796–7900.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98–417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100–670) generally provide that a patent may be extended for a period of up to 5 years so long as the patented item (human drug product, animal drug product, medical device, food additive, or color additive) was subject to regulatory review by FDA before the item was marketed. Under these acts, a product's regulatory review period forms the basis for determining the amount of extension an applicant may receive.
A regulatory review period consists of two periods of time: A testing phase and an approval phase. For human drug products, the testing phase begins when the exemption to permit the clinical investigations of the drug becomes effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the human drug product and continues until FDA grants permission to market the drug product. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of Patents and Trademarks may award (for example, half the testing phase must be subtracted as well as any time that may have occurred before the patent was issued), FDA's determination of the length of a regulatory review period for a human drug product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(1)(B).
FDA has approved for marketing the human drug product INLYTA (axitinib). INLYTA is indicated for treatment of advanced renal cell carcinoma after failure of one prior systemic therapy. Subsequent to this approval, the Patent and Trademark Office received a patent term restoration application for INLYTA (U.S. Patent No. 6,534,524) from Agouron Pharmaceuticals, Inc., and the Patent and Trademark Office requested FDA's assistance in determining this patent's eligibility for patent term restoration. In a letter dated February 19, 2013, FDA advised the Patent and Trademark Office that this human drug product had undergone a regulatory review period and that the approval of INLYTA represented the first permitted commercial marketing or use of the product. Thereafter, the Patent and Trademark Office requested that FDA determine the product's regulatory review period.
FDA has determined that the applicable regulatory review period for INLYTA is 3,699 days. Of this time, 3,410 days occurred during the testing phase of the regulatory review period, while 289 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the U.S. Patent and Trademark Office applies several statutory limitations in its calculations of the actual period for patent extension. In its application for patent extension, this applicant seeks 1,763 days of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit to the Division of Dockets Management (see
Interested persons may submit to the Division of Dockets Management (see
Health Resources and Services Administration, HHS.
Notice.
In compliance with Section 3507(a)(1)(D) of the Paperwork Reduction Act of 1995, the Health Resources and Services Administration (HRSA) has submitted an Information Collection Request (ICR) to the Office of Management and Budget (OMB) for review and approval. Comments submitted during the first public review of this ICR will be provided to OMB. OMB will accept further comments from the public during the review and approval period.
Comments on this ICR should be received no later than June 23, 2014.
Submit your comments, including the Information Collection Request Title, to the desk officer for HRSA, either by email to
To request a copy of the clearance requests submitted to OMB for review, email the HRSA Information Collection Clearance Officer at
When submitting comments or requesting information, please include the information request collection title for reference.
Health Resources and Services Administration, HHS.
Notice.
In compliance with Section 3507(a)(1)(D) of the Paperwork Reduction Act of 1995, the Health Resources and Services Administration (HRSA) has submitted an Information Collection Request (ICR) to the Office of Management and Budget (OMB) for review and approval. Comments submitted during the first public review of this ICR will be provided to OMB. OMB will accept further comments from the public during the review and approval period.
Comments on this ICR should be received no later than June 23, 2014.
Submit your comments, including the Information Collection Request Title, to the desk officer for HRSA, either by email to
To request a copy of the clearance requests submitted to OMB for review, email the HRSA Information Collection Clearance Officer at
When submitting comments or requesting information, please include the information request collection title for reference.
The purpose of the Small Health Care Provider Quality Improvement Grant (Rural Quality) Program is to provide support to rural primary care providers for implementation of quality improvement activities. The goal of the program is to promote the development of an evidence-based culture and delivery of coordinated care in the primary care setting. Additional objectives of the program include: Improved health outcomes for patients; enhanced chronic disease management; and better engagement of patients and their caregivers. Organizations participating in the program are required to utilize an evidence-based quality improvement model, perform tests of change focused on improvement, and use health information technology (HIT) to collect and report data. HIT may include an electronic patient registry (EPR) or an electronic health record (EHR), and is a critical component for improving quality and patient outcomes. With HIT it is possible to generate timely and meaningful data, which helps providers track and plan care.
Burden Statement: Burden in this context means the time expended by persons to generate, maintain, retain, disclose or provide the information requested. This includes the time needed to review instructions; to develop, acquire, install and utilize technology and systems for the purpose of collecting, validating and verifying information, processing and maintaining information, and disclosing and providing information; to train personnel and to be able to respond to a collection of information; to search data sources; to complete and review the collection of information; and to transmit or otherwise disclose the information. The total annual burden hours estimated for this ICR are summarized in the table below.
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.
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.
Information is also available on the Institute's/Center's home page:
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Coast Guard, DHS.
Notice of Federal Advisory Committee Meeting.
The Navigation Safety Advisory Council (NAVSAC) will meet on June 11–12, 2014 in Arlington,
NAVSAC will meet Wednesday, June 11, 2014, from 8 a.m. to 5 p.m., and Thursday, June 12, 2014, from 8 a.m. to 1 p.m. Please note that these meetings may close early if the Council has completed its business. Pre-registration, all submitted written materials, comments and request to make oral presentations at the meetings should reach Mr. Burt Lahn, NAVSAC meeting Coordinator no later than
May 28, 2014. For contact information, please see the
The meeting will be held at the Coast Guard Personnel Service Center, 9th floor conference room, 4200 Wilson Boulevard, Suite 900, Arlington, Virginia 20598.
For information on facilities or services for individuals with disabilities or to request special assistance at the meeting, contact Mr. Burt Lahn listed in the
To facilitate public participation, we are inviting public comment on the issues to be considered by the committee as listed in the “Agenda” section below. You may submit written comments no later than May 28, 2014 and must be identified by USCG–2014–0405 using one of the following methods:
•
•
•
•
A public comment period will be held during the meeting on June 11, 2014, from 3:00 p.m. to 4:00 p.m. and June 12, 2014 prior to the close of the meeting. Public presentations may also be given. Speakers are requested to limit their presentation and comments to 10 minutes. Please note that the public comment period may end before the time indicated, following the last call for comments. To register as a speaker, contact Mr. Burt Lahn listed in the
If you have questions about these meetings, please contact Mr. Mike Sollosi, the NAVSAC Alternate Designated Federal Officer (ADFO), Commandant (CG–NAV–3), U.S. Coast Guard, 2703 Martin Luther King Jr. Avenue SE., Stop 7418, Washington, DC 20593, telephone 202–372–1545 or email
Notice of this meeting is given under the Federal Advisory Committee Act (FACA), 5 U.S.C. Appendix, Public Law 92–463, 86 Stat, 770, as amended.
The NAVSAC is an advisory committee authorized in 33 U.S.C. 2073 and chartered under the provisions of the FACA. NAVSAC provides advice and recommendations to the Secretary, through the Commandant of the U.S. Coast Guard, on matters relating to prevention of maritime collisions, rammings, and groundings, Inland and International Rules of the Road, navigation regulations and equipment, routing measures, marine information, diving safety, and aids to navigation systems.
A copy of all meeting documentation is available at
The meeting will be held at the Coast Guard Personnel Service Center, 9th floor conference room, 4200 Wilson Boulevard, Suite 900, Arlington, Virginia 20598.
Wednesday, June 11, 2014:
(1) Update on all past resolutions to the Council.
(2) The Coast Guard's
(3) Atlantic Coast Ports Access Route Study (ACPARS). The ACPARS was initiated to study the navigational users and industrial development off the Atlantic Coast. The Coast Guard will provide an update on the results of this ongoing effort.
Following the above presentations, the Council will form working groups to discuss and provide recommendations on the following tasks as appropriate:
Public comments or questions will be taken during the meeting as the Council discusses each issue and prior to the Council formulating recommendations
Thursday, June 12, 2014:
A public comment period will be held after the discussion of new tasks. Speakers' comments are limited to 10 minutes each. Public comments or questions will be taken at the discretion of the Designated Federal Official (DFO) during the discussion and recommendations, and new business portion of the meeting.
Office of General Counsel, HUD.
Notice; Correction.
HUD published a notice in the
Arlene Nunes, (202) 402–2532, about this notice.
In the May 15, 2014
Email specific program questions to
Office of the Assistant Secretary for Community Planning and Development, HUD.
Notice.
This Notice identifies unutilized, underutilized, excess, and surplus Federal property reviewed by HUD for suitability for use to assist the homeless.
Juanita Perry, Department of Housing and Urban Development, 451 Seventh Street SW., Room 7266, Washington, DC 20410; telephone (202) 402–3970; TTY number for the hearing- and speech-impaired (202) 708–2565 (these telephone numbers are not toll-free), or call the toll-free Title V information line at 800–927–7588.
In accordance with 24 CFR part 581 and section 501 of the Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 11411), as amended, HUD is publishing this Notice to identify Federal buildings and other real property that HUD has reviewed for suitability for use to assist the homeless. The properties were reviewed using information provided to HUD by Federal landholding agencies regarding unutilized and underutilized buildings and real property controlled by such agencies or by GSA regarding its inventory of excess or surplus Federal property. This Notice is also published in order to comply with the December 12, 1988 Court Order in
Properties reviewed are listed in this Notice according to the following categories: Suitable/available, suitable/unavailable, and suitable/to be excess, and unsuitable. The properties listed in the three suitable categories have been reviewed by the landholding agencies, and each agency has transmitted to HUD: (1) Its intention to make the property available for use to assist the homeless, (2) its intention to declare the property excess to the agency's needs, or (3) a statement of the reasons that the property cannot be declared excess or made available for use as facilities to assist the homeless.
Properties listed as suitable/available will be available exclusively for homeless use for a period of 60 days from the date of this Notice. Where property is described as for “off-site use only” recipients of the property will be required to relocate the building to their own site at their own expense. Homeless assistance providers interested in any such property should send a written expression of interest to HHS, addressed to Theresa Ritta, Ms. Theresa M. Ritta, Chief Real Property Branch, the Department of Health and Human Services, Room 5B–17, Parklawn Building, 5600 Fishers Lane, Rockville, MD 20857, (301) 443–2265 (This is not a toll-free number). HHS will mail to the interested provider an application packet, which will include instructions for completing the application. In order to maximize the opportunity to utilize a suitable property, providers should submit their written expressions of interest as soon as possible. For complete details concerning the processing of applications, the reader is encouraged to refer to the interim rule governing this program, 24 CFR part 581.
For properties listed as suitable/to be excess, that property may, if subsequently accepted as excess by GSA, be made available for use by the homeless in accordance with applicable law, subject to screening for other Federal use. At the appropriate time, HUD will publish the property in a Notice showing it as either suitable/available or suitable/unavailable.
For properties listed as suitable/unavailable, the landholding agency has decided that the property cannot be declared excess or made available for use to assist the homeless, and the property will not be available.
Properties listed as unsuitable will not be made available for any other purpose for 20 days from the date of this Notice. Homeless assistance providers
For more information regarding particular properties identified in this Notice (i.e., acreage, floor plan, existing sanitary facilities, exact street address), providers should contact the appropriate landholding agencies at the following addresses: AGRICULTURE: Ms. Debra Kerr, Department of Agriculture, Reporters Building, 300 7th Street SW., Room 300, Washington, DC 20024, (202) 720–887; COE: Mr. Scott Whiteford, Army Corps of Engineers, Real Estate, CEMP–CR, 441 G Street NW., Washington, DC 20314; (202) 761–5542; COAST GUARD: Commandant, United States Coast Guard, Attn: Jennifer Stomber, 2100 Second St. SW., Stop 7901, Washington, DC 20593–0001; (202) 475–5609; GSA: Mr. Flavio Peres, General Services Administration, Office of Real Property Utilization and Disposal, 1800 F Street NW., Room 7040 Washington, DC 20405, (202) 501–0084; NASA: Mr. Frank T. Bellinger, Facilities Engineering Division, National Aeronautics & Space Administration, Code JX, Washington, DC 20546, (202) 358–1124; NAVY: Mr. Steve Matteo, Department of the Navy, Asset Management Division, Naval Facilities Engineering Command, Washington Navy Yard, 1330 Patterson Ave. SW., Suite 1000, Washington, DC 20374; (202) 685–9426; (These are not toll-free numbers).
Office of Lead Hazard and Healthy Homes, Department of Housing and Urban Development (HUD).
Notice of Funding Availability (NOFA).
This notice announces that HUD has posted on
For programmatic questions, you may contact: Michelle Miller, Director, Programs Division, Office of Healthy Homes and Lead Hazard Control: Department of Housing and Urban Development; 451 Seventh Street SW., Room 8236, Washington, DC 20410–3000; telephone 202–402–5769 (this is not a toll-free number); facsimile 202–755–1000; or email
For administrative questions, you may contact Nadine L. Heath, Director, Grants Services Division, at the address above or by telephone at 202–402–7680 (this is not a toll-free number); facsimile 202–755–1000; or email
Today's
The application deadline date is June 27, 2014. Applications must be received by
Office of the General Counsel, HUD.
Notice.
Section 106 of the Department of Housing and Urban Development Reform Act of 1989 (the HUD Reform Act) requires HUD to publish quarterly
For general information about this notice, contact Camille E. Acevedo, Associate General Counsel for Legislation and Regulations, Department of Housing and Urban Development, 451 Seventh Street SW., Room 10282, Washington, DC 20410–0500, telephone 202–708–1793 (this is not a toll-free number). Persons with hearing- or speech-impairments may access this number through TTY by calling the toll-free Federal Relay Service at 800–877–8339.
For information concerning a particular waiver that was granted and for which public notice is provided in this document, contact the person whose name and address follow the description of the waiver granted in the accompanying list of waivers that have been granted in the first quarter of calendar year 2014.
Section 106 of the HUD Reform Act added a new section 7(q) to the Department of Housing and Urban Development Act (42 U.S.C. 3535(q)), which provides that:
1. Any waiver of a regulation must be in writing and must specify the grounds for approving the waiver;
2. Authority to approve a waiver of a regulation may be delegated by the Secretary only to an individual of Assistant Secretary or equivalent rank, and the person to whom authority to waive is delegated must also have authority to issue the particular regulation to be waived;
3. Not less than quarterly, the Secretary must notify the public of all waivers of regulations that HUD has approved, by publishing a notice in the
a. Identify the project, activity, or undertaking involved;
b. Describe the nature of the provision waived and the designation of the provision;
c. Indicate the name and title of the person who granted the waiver request;
d. Describe briefly the grounds for approval of the request; and
e. State how additional information about a particular waiver may be obtained.
Section 106 of the HUD Reform Act also contains requirements applicable to waivers of HUD handbook provisions that are not relevant to the purpose of this notice.
This notice follows procedures provided in HUD's Statement of Policy on Waiver of Regulations and Directives issued on April 22, 1991 (56 FR 16337). In accordance with those procedures and with the requirements of section 106 of the HUD Reform Act, waivers of regulations are granted by the Assistant Secretary with jurisdiction over the regulations for which a waiver was requested. In those cases in which a General Deputy Assistant Secretary granted the waiver, the General Deputy Assistant Secretary was serving in the absence of the Assistant Secretary in accordance with the office's Order of Succession.
This notice covers waivers of regulations granted by HUD from January 1, 2014 through March 31, 2014. For ease of reference, the waivers granted by HUD are listed by HUD program office (for example, the Office of Community Planning and Development, the Office of Fair Housing and Equal Opportunity, the Office of Housing, and the Office of Public and Indian Housing, etc.). Within each program office grouping, the waivers are listed sequentially by the regulatory section of title 24 of the Code of Federal Regulations (CFR) that is being waived. For example, a waiver of a provision in 24 CFR part 58 would be listed before a waiver of a provision in 24 CFR part 570.
Where more than one regulatory provision is involved in the grant of a particular waiver request, the action is listed under the section number of the first regulatory requirement that appears in 24 CFR and that is being waived. For example, a waiver of both § 58.73 and § 58.74 would appear sequentially in the listing under § 58.73.
Waiver of regulations that involve the same initial regulatory citation are in time sequence beginning with the earliest-dated regulatory waiver.
Should HUD receive additional information about waivers granted during the period covered by this report (the first quarter of calendar year 2014) before the next report is published (the second quarter of calendar year 2014), HUD will include any additional waivers granted for the first quarter in the next report.
Accordingly, information about approved waiver requests pertaining to HUD regulations is provided in the Appendix that follows this notice.
The regulatory waivers granted appear in the following order:
For further information about the following regulatory waivers, please see the name of the contact person that immediately follows the description of the waiver granted.
Project/Activity: Du Page County, IL and the State of West Virginia each requested a waiver of 24 CFR 576.106(d) to allow the use Emergency Solutions Grants (ESG) rapid re-housing and homelessness prevention funding for housing units with rents exceeding HUD's Fair Market Rent (FMR) requirements.
Nature of Requirement: Under 24 CFR 576.106(d)(1), rental assistance cannot be provided unless the rent is equal to or less than the FMR established by HUD, as provided under 24 CFR part 888, and complies with HUD's standard of rent reasonableness, as established under 24 CFR 982.507. This restriction is intended to ensure that program participants can remain in their housing after their ESG assistance ends. This restriction also helps ensure that the amount of ESG assistance provided for rental assistance is reasonable, while serving the greatest number of program participants possible.
Granted By: Mark Johnston, Deputy Assistant Secretary for Special Needs, Office of Community Planning and Development.
Date Granted: March 27, 2014.
Reason Waived: Du Page County, Illinois, and the State of West Virginia sufficiently demonstrated their requested waivers were necessary to ensure their program participants could find habitable units in which ESG rental assistance could be used. In addition, the waivers were sufficiently limited to permit Du Page County, IL and the State of West Virginia to assist with rents that are only slightly higher than the FMR and meet HUD's standard of rent reasonableness. HUD determined that the slightly higher rents would not prevent program participants from being able to retain the housing after the assistance ends.
Contact: Ann M. Oliva, Director, Office of Special Needs Assistance Programs, Office of Community Planning and Development, Department of Housing and Urban Development, 451 Seventh Street SW., Room 7262, Washington, DC 20410, telephone number (202) 708–4300.
Project/Activity: The Housing Authority of New Orleans (HANO, LA) requested a waiver of 24 CFR 882.410(a)(2) to allow a special rent adjustment to cover the costs of substantial increases in property insurance premiums for a Moderate Rehabilitation Single Room Occupancy (Mod Rehab SRO) project in the City of New Orleans.
Nature of Requirement: This regulation permits a special rent adjustment to reflect increases in the actual and necessary expenses of owning and maintaining the unit which have resulted from substantial general increases in real property taxes, assessments, utility rates and utilities not covered by regulated rates. The list of costs covered by special adjustments at this regulation does not include property insurance.
Granted By: Mark Johnston, Deputy Assistant Secretary for Special Needs, Office of Community Planning and Development.
Date Granted: March 20, 2014
Reason Waived: The granting of the waiver was based on the statutory authority for special adjustments at section 8(c)(2)(B) of the U.S. Housing Act of 1937,which provides for “similar costs.” The granting of the waiver recognized property insurance premiums as a similar cost.
Contact: Ann M. Oliva, Director, Office of Special Needs Assistance Programs, Office of Community Planning and Development, Department of Housing and Urban Development, 451 Seventh Street SW., Room 7262, Washington, DC 20410, telephone number (202) 708–4300.
Project/Activity: The city of Warren, MI requested a waiver of the 10 percent demolition cap under the Neighborhood Stabilization Program (NSP) which restricts grantees from spending more than 10 percent of total grant funds on demolition activities. The city requested a waiver to spend $277,701.28 or approximately 16 percent of its Neighborhood Stabilization Program 3 (NSP3) allocation on the demolition of blighted structures.
Nature of Requirement: Section II.H.3.F of the NSP3 Notice provides that a grantee may not use more than 10 percent of its grant for demolition activities.
Granted By: Mark Johnston, Deputy Assistant Secretary for Special Needs, Office of Community Planning and Development.
Date Granted: January 8, 2014.
Reason Waived: The city provided statistical data showing high vacancy and abandonment rates that resulted from significant population and job loss. The city explained that there are a high number of properties requiring immediate demolition to remove safety hazards and the destabilizing influence of the blighted properties. The city committed to link the targeted demolition units with the rehabilitation of several units in the same locality that would assist in restoring stability in the area. On the basis of this information, the waiver was granted.
Contact: Jessie Handforth Kome, Deputy Director, Office of Block Grant Assistance, Office of Community Planning and Development, Department of Housing and Urban Development, 451 Seventh Street SW., Room 7286, Washington, DC 20410, telephone (202) 402–5539.
Project/Activity: Lorain County, OH requested a waiver of the 10 percent demolition cap under the Neighborhood Stabilization Program (NSP) which restricts grantees from spending more than 10 percent of total grant funds on demolition activities. The county requested a waiver to spend $900,000.00 or approximately 55 percent of its NSP3 allocation on demolition of blighted structures.
Nature of Requirement: Section II.H.3.F of the NSP3 Notice provides that a grantee may not use more than 10 percent of its grant for demolition activities.
Granted By: Mark Johnston, Deputy Assistant Secretary for Special Needs, Office of Community Planning and Development.
Date Granted: February 26, 2014.
Reason Waived: The county provided statistical data showing high vacancy and abandonment rates due to significant population and job loss in the region. The county explained that there are 44 units in the city of Elyria and several units in the city of Lorain that require immediate demolition. The removal of these safety hazards and destabilizing influence would promote meaningful development to occur within a faster timeframe. On the basis of this information, the waiver was granted.
Contact: Jessie Handforth Kome, Deputy Director, Office of Block Grant Assistance, Office of Community Planning and Development, Department of Housing and Urban Development, 451 Seventh Street SW., Room 7286, Washington, DC 20410, telephone (202) 402–5539.
Project/Activity: Anderson, IN requested a waiver of the 10 percent demolition cap under the Neighborhood Stabilization Program (NSP) which restricts grantees from spending more than 10 percent of total grant funds on demolition activities. The city requested a waiver to spend $512,881 or approximately 42 percent of its NSP3 allocation on the demolition of blighted structures.
Nature of Requirement: Section II.H.3.F of the NSP3 Notice provides that a grantee may not use more than 10 percent of its grant for demolition activities.
Granted By: Mark Johnston, Deputy Assistant Secretary for Special Needs, Office of Community Planning and Development.
Date Granted: February 21, 2014.
Reason Waived: The city provided statistical data evidencing high vacancy and abandonment rates due to significant population and job loss. These demolition funds would remove and assist in stabilizing commercial sites that will in turn attract investments and jobs. On the basis of this information, the waiver was granted.
Contact: Jessie Handforth Kome, Deputy Director, Office of Block Grant Assistance, Office of Community Planning and Development, Department of Housing and Urban Development, 451 Seventh Street SW., Room 7286, Washington, DC 20410, telephone (202) 402–5539.
For further information about the following regulatory waivers, please see the name of the contact person that immediately follows the description of the waiver granted.
Project/Activity: Broadway Townhomes, Camden, N.J., Project Number: 035–35103.
Nature of Requirement: HUD's regulation at 24 CFR 200.73(c) requires that one site contains at least five rental dwelling units. HUD's Handbook 4425.1, Chapter 3, Part 3–7, elaborates on this regulation by stating that the project must be one site and the site may consist of two or more non-contiguous
Granted By: Carol J. Galante, Assistant Secretary for Housing-Federal Housing
Commissioner.
Date Granted: February 25, 2014.
Reason Waived: Each noncontiguous parcel in the project did not contain at least five units. The project demonstrated marketability and the capability of being managed as a single real estate entity. All of the properties continue to be professionally managed and maintained as a group, have existing housing assistance payment (HAP) contracts and have been allocated low-income housing tax credits. The applicable Internal Revenue Service (IRS) provisions related to the tax credits ended in December 2004; however, the partnership managing the project executed an extended low-income housing covenant for a total period of 30 years, which ends December 31, 2019. No physical or other changes to the property were identified which would impact its ongoing recognition as a single project constituting 157 sites containing 175 multifamily rental units. The combined total land area for the (157) parcels in 3.91 acres or 170,295 square feet contained within 10 square blocks.
Contact: Theodore K. Toon, Director, Office of Multifamily Housing Development, HTD, Office of Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 6134, Washington, DC 20410, telephone (202) 402–8386.
Project/Activity: Downpayment Assistance/Quicken Loans' Employee Down Payment Assistance Program in Detroit, Michigan. Quicken Loans requested authority to provide downpayment assistance loans with restrictions for an amount not to exceed $20,000 per loan to its employees who purchase principal residences with FHA-insured mortgages in downtown Detroit, Michigan, so long as no part of the downpayment assistance loan was used to fund the borrower's minimum required investment for the first mortgage. For each year that an employee maintains employment with Quicken Loans, continues to occupy the property as its principal residence, and does not sell or transfer the home during a five year period, 20 percent of the unpaid principal balance on the down payment assistance loan will be forgiven. Under this waiver Quicken Loans may provide no more than eighty down payment assistance loans over a two year period.
Nature of Requirement: HUD's regulation at 24 CFR 203.32(a) prohibits a contractual liability resulting in unpaid obligations in connection with an FHA-insured mortgage insured, and HUD's regulation at 24 CFR203.41(a)(3) prohibits any legal restriction on the conveyance of a property insured by the FHA.
Granted By: Carol J. Galante, Assistant Secretary for Housing—Federal Housing Commissioner.
Date Granted: January 31, 2014.
Reason Waived: A wavier of the regulation was granted because the Quicken
Loans program is aligned with HUD's focus on assisting Detroit, Michigan with its recovery from bankruptcy. The Quicken Loans program would support Detroit's local economy by encouraging investment in the Detroit housing market, thereby stimulating economic development, increasing tax revenues and renovating the housing stock in downtown Detroit. Furthermore, FHA determined that risk to the Mutual Mortgage Insurance Fund would be minimal due to the limited scope of the program targeting one metropolitan area.
Contact: Arlene Nunes, Office of the Deputy Assistant Secretary of Single Family Housing, Office of Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 9266, Washington, DC 20410, telephone (202) 708–3000.
Project/Activity: Pine Grove Apartments, FHA Project Number 023–027NI, Taunton, MA. The owners have requested deferral of repayment of the Flexible Subsidy Operating Assistance Loan on this project due to their inability to repay the loan in full upon prepayment of the 236 Loan.
Nature of Requirement: Section 219.220(b) which governs the repayment of operating assistance provided under the Flexible Subsidy Program for Troubled Projects prior to May 1, 1996 states: “Assistance that has been paid to a project owner under this subpart must be repaid at the earlier of the expiration of the term of the mortgage, termination of mortgage insurance, prepayment of the mortgage, or a sale of the project . . .” Either of these actions would typically terminate FHA involvement with the property, and the Flexible Subsidy Loan would be repaid, in whole, at that time.
Granted by: Carol J. Galante, Assistant Secretary for Housing-Federal Housing Commissioner.
Date Granted: January 13, 2014.
Reason Waived: The owner requested and was granted waiver of the requirement to defer repayment of the Flexible Subsidy Operating Assistance Loan to allow the much needed preservation and moderate rehabilitation of the project. The project will be preserved as an affordable housing resource of Taunton, MA.
Contact: Minnie Monroe-Baldwin, Director of Preservation, Office of Affordable Housing Preservation, Office of Housing, Department of Housing and Urban Development, 451 7th Street SW., Room 6222, Washington, DC 20410, telephone (202) 402–2636.
Project/Activity: Garfield Park Village Apartments, FHA Project Number 121–SH022 and 121–SH072, Santa Cruz, CA. The owners have requested deferral of repayment of the Flexible Subsidy Operating Assistance Loan on this project due to their inability to repay the loan in full upon prepayment of the 202 Loan.
Nature of Requirement: Section 219.220(b) which governs the repayment of operating assistance provided under the Flexible Subsidy Program for Troubled Projects prior to May 1, 1996 states: “Assistance that has been paid to a project owner under this subpart must be repaid at the earlier of the expiration of the term of the mortgage, termination of mortgage insurance, prepayment of the mortgage, or a sale of the project . . .” Either of these actions would typically terminate FHA involvement with the property, and the Flexible Subsidy Loan would be repaid, in whole, at that time.
Granted by: Carol J. Galante, Assistant Secretary for Housing-Federal Housing Commissioner.
Date Granted: March 25, 2014.
Reason Waived: The owner requested and was granted waiver of the requirement to defer repayment of the Flexible Subsidy Operating Assistance Loan to allow the much needed preservation and moderate rehabilitation of the project. The project will be preserved as a senior affordable housing resource of Santa Cruz, CA.
Contact: Minnie Monroe-Baldwin, Director of Preservation, Office of Affordable Housing Preservation, Office of Housing, Department of Housing and Urban Development, 451 7th Street SW., Room 6222, Washington, DC 20410, telephone (202) 402–2636.
Project/Activity: Southwicke Square Cooperative 1–3, FHA Project Number 044–44057/44058/44059, Trenton, Michigan. The owners requested deferral of repayment of the Flexible Subsidy Operating Assistance Loan on this project due to their inability to repay the loan in full upon maturity.
Nature of Requirement: HUD's regulation at 24 CFR 219.220(b), which governs the repayment of operating assistance provided under the Flexible Subsidy Program for Troubled Projects prior to May 1, 1996, states: “Assistance that has been paid to a project owner under this subpart must be repaid at the earlier of the expiration of the term of the mortgage, termination of mortgage insurance, prepayment of the mortgage, or a sale of the project . . .” Either of these actions would typically terminate FHA involvement with the property, and the Flexible Subsidy Loan would be repaid, in whole, at that time.
Granted by: Carol J. Galante, Assistant Secretary for Housing-Federal Housing Commissioner.
Date Granted: February 21, 2014.
Reason Waived: The owner requested and was granted waiver of the requirement to defer repayment of the Flexible Subsidy Operating Assistance Loan. Deferral of repayment of the Flexible Subsidy Loan would allow for refinancing of the loan and for significant repairs/improvements to be made to the project, assuring its preservation as an affordable housing resource for an additional 35 years.
Contact: Mark B. Van Kirk, Director, Office of Asset Management, Office of Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 6160, Washington, DC 20410, telephone (202) 708–3730.
Project/Activity: Memorial Apartments, FHA Project Number 052–SH006, Baltimore, Maryland. The owner requested deferral of
Nature of Requirement: HUD's regulation at 24 CFR 219.220(b), which governs the repayment of operating assistance provided under the Flexible Subsidy Program for Troubled Projects prior to May 1, 1996, states: “Assistance that has been paid to a project owner under this subpart must be repaid at the earlier of the expiration of the term of the mortgage, termination of mortgage insurance, prepayment of the mortgage, or a sale of the project . . .” Either of these actions would typically terminate FHA involvement with the property, and the Flexible Subsidy Loan would be repaid, in whole, at that time.
Granted by: Carol J. Galante, Assistant Secretary for Housing-Federal Housing Commissioner.
Date Granted: February 18, 2014.
Reason Waived: The owner requested and was granted waiver of this regulation because it has been demonstrated that it is in the public's best interest to defer repayment of the Flexible Subsidy Operating Assistance Loan. The loan will be refinanced, facilitating the substantial rehabilitation of the aging project. Waiving the requirement will provide the long-term preservation of this property as an affordable housing resource for an additional term of 40 years.
Contact: Mark B. Van Kirk, Director, Office of Asset Management, Office of Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 6160, Washington, DC 20410, telephone (202) 708–3730.
Project/Activity: Holy Family Apartments, FHA Project Number 064–55043T, Lafayette, Louisiana. The owners requested deferral of repayment of the Flexible Subsidy Operating Assistance Loan on this project due to their inability to repay the loan in full upon maturity.
Nature of Requirement: HUD's regulation at 24 CFR 219.220(b), which governs the repayment of operating assistance provided under the Flexible Subsidy Program for Troubled Projects prior to May 1, 1996, states: “Assistance that has been paid to a project owner under this subpart must be repaid at the earlier of the expiration of the term of the mortgage, termination of mortgage insurance, prepayment of the mortgage, or a sale of the project . . .” Either of these actions would typically terminate FHA involvement with the property, and the Flexible Subsidy Loan would be repaid, in whole, at that time.
Granted by: Carol J. Galante, Assistant Secretary for Housing-Federal Housing Commissioner.
Date Granted: January 16, 2014.
Reason Waived: The owner requested and was granted approval to defer repayment of the Flexible Subsidy Operating Assistance Loan for this project as good cause has been shown that it is in the public's best interest. The owner committed to refinance the loan and use the proceeds to complete urgently needed rehabilitation, building code changes and updates of the project. The funding sources will enable the owner to maintain the project as affordable housing for low-income families for 40 years.
Project/Activity: VIP Care Pavilion (VIP) serves memory care residents. The facility is licensed for 111 residents. The facility does not meet the requirements of 24 CFR § 232.7 “Bathroom” of FHA's regulations. The building is located in Margate, FL.
Nature of Requirement: HUD's regulation at 24 CFR 232.7 mandates in a board and care home or assisted living facility that not less than one full bathroom be provided for every four residents. Also, the bathroom cannot be accessed from a public corridor or area.
Granted By: Carol J. Galante, Assistant Secretary for Housing—Federal Housing Commissioner.
Date Granted: February 3, 2014.
Reason Waived: The memory care residents of VIP all need assistance with bathing and toileting. The bathrooms/shower rooms provide enough space for staff to safely assist the residents. VIP concluded that this arrangement is safer for the residents.
Contact: Vance T. Morris, Special Assistant, Office of Healthcare Programs, Office of Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 9172, Washington, DC 20410, telephone (202) 402–2419.
Project/Activity: Trinity Shores of Port Lavaca (Trinity) is a licensed assisted living facility in Port Lavaca, Texas. The facility has 62 units of which 13 are Memory Care in a secured wing. The 49 assisted living units are fully compliant with 24 CFR 232.7 “Bathroom.”
Nature of Requirement: HUD's regulation at 24 CFR 232.7 mandates in a board and care home or assisted living facility that not less than one full bathroom be provided for every four residents. Also, the bathroom cannot be accessed from a public corridor or area.
Granted By: Carol J. Galante, Assistant Secretary for Housing—Federal Housing Commissioner.
Date Granted: March 18, 2014.
Reason Waived: The memory care residents of Trinity all need assistance with bathing and toileting. The bathrooms/shower rooms provide enough space for staff to safely assist the residents. Trinity concluded that this arrangement is safer for the residents.
Contact: Vance T. Morris, Special Assistant, Office of Healthcare Programs, Office of Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 9172, Washington, DC 20410, telephone (202) 402–2419.
Project/Activity: Independence Oaks Apartments, Cleveland, TX, Project Number: 114–HD048/TX24–Q101–002.
Nature of Requirement: Section 891.100(d) prohibits amendment of the amount of the approved capital advance funds prior to closing.
Granted by: Carol J. Galante, Assistant Secretary for Housing-Federal Housing Commissioner.
Date Granted: January 28, 2014.
Reason Waived: The project is economically designed and comparable in cost to similar projects in the area, and the sponsor/owner exhausted all efforts to obtain additional funding from other sources.
Contact: Catherine M. Brennan, Director, Office of Housing Assistance and Grant Administration, Office of Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 6134, Washington, DC 20410, telephone (202) 708–3000.
Project/Activity: Stephenson 202, Stephenson, MI, Project Number: 047–EE052/MI33–S101–002.
Nature of Requirement: Section 891.100(d) prohibits amendment of the amount of the approved capital advance funds prior to closing.
Granted by: Carol J. Galante, Assistant Secretary for Housing-Federal Housing Commissioner.
Date Granted: January 28, 2014.
Reason Waived: The project is economically designed and comparable in cost to similar projects in the area, and the sponsor/owner exhausted all efforts to obtain additional funding from other sources.
Contact: Catherine M. Brennan, Director, Office of Housing Assistance and Grant Administration, Office of Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 6134, Washington, DC 20410, telephone (202) 708–3000.
Project/Activity: InReach Apartments, Charlotte, NC, Project Number: 053–HD257/NC19–Q101–006.
Nature of Requirement: Section 891.100(d) prohibits amendment of the amount of the approved capital advance funds prior to closing.
Granted by: Carol J. Galante, Assistant Secretary for Housing-Federal Housing Commissioner.
Date Granted: January 28, 2014.
Reason Waived: The project is economically designed and comparable in cost to similar projects in the area, and the sponsor/owner exhausted all efforts to obtain additional funding from other sources.
Contact: Catherine M. Brennan, Director, Office of Housing Assistance and Grant Administration, Office of Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 6134, Washington, DC 20410, telephone (202) 708–3000.
Project/Activity: Options Supportive Housing Project XV, Lake Grove, NY,
Project Number: 012–HD144/NY36–Q101–001.
Nature of Requirement: Section 891.100(d) prohibits amendment of the amount of the approved capital advance funds prior to closing.
Granted by: Carol J. Galante, Assistant Secretary for Housing-Federal Housing Commissioner.
Date Granted: January 28, 2014.
Reason Waived: The project is economically designed and comparable in cost to similar projects in the area, and the sponsor/owner exhausted all efforts to obtain additional funding from other sources.
Contact: Catherine M. Brennan, Director, Office of Housing Assistance and Grant Administration, Office of Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 6134, Washington, DC 20410, telephone (202) 708–3000.
Project/Activity: Focus Manor, Louisville, MS, Project Number: 065–HD045/MS26–Q101–001.
Nature of Requirement: Section 891.100(d) prohibits amendment of the amount of the approved capital advance funds prior to closing.
Granted by: Carol J. Galante, Assistant Secretary for Housing-Federal Housing Commissioner.
Date Granted: March 26, 2014.
Reason Waived: The project is economically designed and comparable in cost to similar projects in the area, and the sponsor/owner exhausted all efforts to obtain additional funding from other sources.
Contact: Catherine M. Brennan, Director, Office of Housing Assistance and Grant Administration, Office of Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 6134, Washington, DC 20410, telephone (202) 708–3000.
Project/Activity: Hayward Senior Housing—Phase II, Hayward, CA, Project Number: 121–EE234/CA39–S101–011.
Nature of Requirement: Section 891.165 provides that the duration of the fund reservation of the capital advance is 18 months from the date of issuance with limited exceptions up to 36 months, as approved by HUD on a case-by-case basis.
Granted by: Carol J. Galante, Assistant Secretary for Housing-Federal Housing Commissioner.
Date Granted: January 8, 2014.
Reason Waived: Additional time was needed in order to meet the construction lender's loan requirement for this capital advance upon completion mixed-finance project.
Contact: Catherine M. Brennan, Director, Office of Housing Assistance and Grant Administration, Office of Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 6134, Washington, DC 20410, telephone (202) 708–3000.
Project/Activity: Westcliff Heights Senior Apartments, Las Vegas, NV, Project Number: 125–EE131/NV25–S081–001.
Nature of Requirement: Section 891.165 provides that the duration of the fund reservation of the capital advance is 18 months from the date of issuance with limited exceptions up to 36 months, as approved by HUD on a case-by-case basis.
Granted by: Carol J. Galante, Assistant Secretary for Housing-Federal Housing Commissioner.
Date Granted: January 28, 2014.
Reason Waived: Additional time was needed due to the minimum length of time of the construction loan before this capital advance upon completion project can reach initial closing.
Contact: Catherine M. Brennan, Director, Office of Housing Assistance and Grant Administration, Office of Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 6134, Washington, DC 20410, telephone (202) 708–3000.
• Fiscal Year 2012 (FY12) Section 811 Project Rental Assistance Demonstration Program NOFA (Docket No. FR–5600–N–28–C1)
Project/Activity: Waiver of NOFA provisions in the FY 2012 Section 811 Project Rental Assistance Demonstration Program NOFA dated May 15, 2012 to allow for revisions to the environmental requirements.
Nature of Requirement: The FY 2012 NOFA detailed environmental requirements and environmental assurance provisions (as corrected in a technical correction posted on July 2, 2012), which applicants selected for funding are obligated to implement. The waiver revised those provisions as follows:
○ Properties that are currently HUD-assisted or FHA-insured that will not engage in activities with physical impacts or changes beyond routine maintenance activities or minimal repairs will not have to comply with the environmental tenets.
○ Clarification that if, at the time that a project applies for PRAD assistance, the project is under construction or being rehabilitated, the project shall be subject to the environmental review requirements applicable to new construction or rehab if the work has not progressed beyond a stage of construction where modifications can be undertaken to avoid the adverse environmental impacts addressed by the requirement.
○ Projects will have the option to evaluate the site for contamination issues either through an assessment process that is detailed in the proposed revision and is similar to the Office of Community Planning and Development's Continuum of Care (a similar rental assistance program) contamination assessment requirements, or through an ASTM E 1527–05 (or most recent edition) Phase I ESA.
○ If the project involves an existing property for which a Phase I ESA was prepared previously for a real estate transaction, and that Phase I ESA met ASTM Phase I ESA requirements at the time it was prepared, a new Phase I ESA will not be required for that project.
○ Coastal Barrier Resources was removed as an environmental tenet and made a separate requirement because the statutory obligations of the Coastal Barrier Resources Act remain even without a HUD project level review.
Granted by: Carol J. Galante, Assistant Secretary for Housing-Federal Housing Commissioner.
Date Granted: March 14, 2014.
Reason Waived: The waiver responds to concerns raised by the grantees and further aligns the Section 811 Project Rental Assistance Demonstration NOFA with the environmental requirements and environmental policies of the Office of Housing and HUD generally. Properties that are currently HUD-assisted or FHA-insured and will undergo no more that routine maintenance activities or minimal repairs have already undergone applicable environmental reviews at time of the original assistance or insurance, and will not undergo significant new physical changes in connection with the PRA assistance. The optional process for evaluating a site for contamination issues, and the use of existing Phase I ESAs that were ASTM-compliant, will facilitate use of the PRA Demo by permitting less costly methods of assessment for contamination while continuing to protect the health and safety of residents. Revising the reference to the Coastal Barrier Resources Act will not alter the applicable requirement but will simply clarify that the requirement is required by statute.
Contact: Catherine M. Brennan, Director, Office of Housing Assistance and Grant Administration, Office of Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 6134, Washington, DC 20410, telephone (202) 708–3000.
For further information about the following regulatory waivers, please see the name of the contact person that immediately follows the description of the waiver granted.
Project/Activity: City of Vallejo Housing and Community Development Division (CVHCDD), Vallejo, CA.
Nature of Requirement: HUD's regulation at 24 CFR 982.505(5) states that irrespective of any increase or decrease in the payment standard amount, if the family unit size increases or decreases during the housing assistance payments (HAP) term, the new family unit size must be used to determine the payment standard amount for the family beginning at the family's first regular reexamination following the change in family unit size.
Granted By: Sandra B. Henriquez, Assistant Secretary for Public and Indian Housing.
Date Granted: March 21, 2014.
Reason Waived: The regulation was waived to allow the CVHCDD to delay implementation of the reduced subsidy standards for affected families until the end of their lease term instead of the family's next annual reexamination, in cases where the lease term does not expire for at least 30 days after the date of the reexamination, and the landlord is unwilling to release the family from its lease. This waiver did not apply to families that are renting on a month-to-month basis.
Contact: Laure Rawson, Director, Housing Voucher Management and Operations Division, Office of Public Housing and Voucher Programs, Office of Public and Indian Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 4216, Washington, DC 20410, telephone (202) 708–0477.
Project/Activity: San Francisco Housing Authority (SFHA), San Francisco, CA.
Nature of Requirement: HUD's regulation at 24 CFR 982.505(d) states that a public housing agency may only approve a higher
Granted By: Sandra B. Henriquez, Assistant Secretary for Public and Indian Housing.
Date Granted: January 13, 2014.
Reason Waived: The four homeless veterans, who are disabled, required an exception payment standard to move to units in a building that provided services for veterans. To provide this reasonable accommodation so the clients could move to these units and pay no more than 40 percent of their adjusted income toward the family share, the SFHA was allowed to approve an exception payment standard that exceeded the basic range of 90 to 110 percent of the FMR.
Contact: Laure Rawson, Director, Housing Voucher Management and Operations Division, Office of Public Housing and Voucher Programs, Office of Public and Indian Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 4216, Washington, DC 20410, telephone (202) 708–0477.
Project/Activity: Howard County Housing Commission (HCHC), Howard County, MD.
Nature of Requirement: HUD's regulation at 24 CFR 982.505(d) states that a public housing agency may only approve a higher payment standard for a family as a reasonable accommodation if the higher payment standard is within the basic range of 90 to 110 percent of the fair market rent (FMR) for the unit size.
Granted By: Sandra B. Henriquez, Assistant Secretary for Public and Indian Housing.
Date Granted: March 14, 2014.
Reason Waived: The participant, who is disabled, required an exception payment standard to move to a new unit that met her health needs. To provide this reasonable accommodation so the client could be assisted in a new current unit and pay no more than 40 percent of her adjusted income toward the family share, the HCHC was allowed to approve an exception payment standard that exceeded the basic range of 90 to 110 percent of the FMR
Contact: Laure Rawson, Director, Housing Voucher Management and Operations Division, Office of Public Housing and Voucher Programs, Office of Public and Indian Housing, Department of Housing and Urban Development, 451 Seventh Street, SW., Room 4216, Washington, DC 20410, telephone (202) 708–0477.
Project/Activity: New Avenues to Independence, Inc. (NAII), Cleveland, OH.
Nature of Requirement: HUD's regulation at 24 CFR 982.505(d) states that a public housing agency may only approve a higher payment standard for a family as a reasonable accommodation if the higher payment standard is within the basic range of 90 to 110 percent of the fair market rent (FMR) for the unit size.
Granted By: Sandra B. Henriquez, Assistant Secretary for Public and Indian Housing.
Date Granted: March 31, 2014.
Reason Waived: The participant, who is disabled, required an exception payment standard to remain in his current unit that meets his needs without becoming rent burdened. To provide this reasonable accommodation so the client could be assisted in his current unit and pay no more than 40 percent of his adjusted income toward the family share, the NAII was allowed to approve an exception payment standard that exceeded the basic range of 90 to 110 percent of the FMR
Contact: Laure Rawson, Director, Housing Voucher Management and Operations Division, Office of Public Housing and Voucher Programs, Office of Public and Indian Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 4210, Washington, DC 20410, telephone (202) 708–0477.
Project/Activity: New York City Department of Housing Preservation and Development (NYCDHPD), New York City, NY.
Nature of Requirement: HUD's regulation at 24 CFR 983.51 states the competitive selection and alternate selection requirements of project-based voucher (PBV) units.
Granted By: Sandra B. Henriquez, Assistant Secretary for Public and Indian Housing
Date Granted: January 6, 2014.
Reason Waived: The waiver was approved so that NYCDHPD could add an additional 15 percent of the 1,093 units in Ocean Village to the 103 units that were converted under the Rental Assistance Demonstration program due to the surge in housing need from the displacement of many homeowners due to Hurricane Sandy.
Contact: Laure Rawson, Director, Housing Voucher Management and Operations Division, Office of Public Housing and Voucher Programs, Office of Public and Indian Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 4216, Washington, DC 20410, telephone (202) 708–0477.
Project/Activity: Scott County Community Development Agency (SCDDA), Shakopee, MN.
Nature of Requirement: HUD's regulation at 24 CFR 983.59(b)(1) states that the rent to owner for public housing agency (PHA) owned units is determined according to the same requirements as for other project-based voucher (PBV) units, except that the independent entity approved by HUD must establish the initial contract rents based on an appraisal by a licensed, state-certified appraiser.
Granted By: Sandra B. Henriquez, Assistant Secretary for Public and Indian Housing.
Date Granted: January 6, 2014.
Reason Waived: This waiver was approved to provide partial relief from these requirements.
Contact: Laure Rawson, Director, Housing Voucher Management and Operations Division, Office of Public Housing and Voucher Programs, Office of Public and Indian Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 4216, Washington, DC 20410, telephone (202) 708–0477.
Project/Activity: Housing Authority of Snohomish County (HASC), Everett, WA.
Nature of Requirement: HUD's regulation at 24 CFR 983.59(b)(1) states that the rent to owner for public housing agency (PHA) owned units is determined according to the same requirements as for other project-based voucher (PBV) units, except that the independent entity approved by HUD must establish the initial contract rents based on an appraisal by a licensed, state-certified appraiser.
Granted By: Sandra B. Henriquez, Assistant Secretary for Public and Indian Housing.
Date Granted: March 18, 2014.
Reason Waived: This waiver was approved to provide partial relief from these requirements.
Contact: Laure Rawson, Director, Housing Voucher Management and Operations Division, Office of Public Housing and Voucher Programs, Office of Public and Indian Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 4216, Washington, DC 20410, telephone (202) 708–0477.
Project/Activity: Michigan State Housing Development Authority (MSHDA). Lansing, MI.
Nature of Requirement: HUD's regulation at 24 CFR 983.301(b)(1) allows the rent to owner to go below the initial rent in project-based voucher (PBV) units.
Granted By: Sandra B. Henriquez, Assistant Secretary for Public and Indian Housing.
Date Granted: January 2, 2014.
Reason Waived: The waiver was approved to allow MSHDA to apply provisions of the proposed rule to avoid a major operating deficit
Contact: Laure Rawson, Director, Housing Voucher Management and Operations Division, Office of Public Housing and Voucher Programs, Office of Public and Indian Housing, Department of Housing and Urban Development, 451 Seventh Street SW., Room 4216, Washington, DC 20410, telephone (202) 708–0477.
Office of the Assistant Secretary for Housing-Federal Housing Commissioner, HUD.
Notice of sales of mortgage loans.
This notice announces HUD's intention to competitively sell certain unsubsidized single family mortgage loans, in a sealed bid sale offering called SFLS 2014–2, without Federal Housing Administration (FHA) mortgage insurance. This notice also generally
For this sale action, the Bidder's Information Package (BIP) was made available to qualified bidders on or about May 12, 2014. Bids for the SFLS 2014–2 sale will be accepted on two Bid Dates and must be submitted on those dates, which are currently scheduled for June 11, 2014, and June 25, 2014 (Bid Dates). HUD anticipates that award(s) will be made on or about June 12, 2014, for the first offering and June 26, 2014 for the second (the Award Dates).
To become a qualified bidder and receive the BIP, prospective bidders must complete, execute, and submit a Confidentiality Agreement and a Qualification Statement acceptable to HUD. Both documents are available via the HUD Web site at:
Please mail and fax executed documents to SEBA Professional Services:
John Lucey, Director, Asset Sales Office, Room 3136, Department of Housing and Urban Development, 451 Seventh Street SW., Washington, DC 20410–8000; telephone number 202–708–2625, extension 3927. Hearing- or speech-impaired individuals may call 202–708–4594 (TTY). These are not toll-free numbers.
HUD announces its intention to sell in SFLS 2014–2 certain unsubsidized non-performing mortgage loans (Mortgage Loans) secured by single-family properties located throughout the United States. A listing of the Mortgage Loans is included in the due diligence materials made available to qualified bidders. The Mortgage Loans will be sold without FHA insurance and with servicing released. HUD will offer qualified bidders an opportunity to bid competitively on the Mortgage Loans.
The Loans will be offered on two sale dates. On June 11, 2014, the Department will offer national loan pools for bid. On June 25, 2014, the Department will offer regionally-based pools, with additional purchaser requirements, that are called the Neighborhood Stabilization Outcome pools.
The BIP describes in detail the procedure for bidding in SFLS 2014–2. The BIP also includes a standardized non-negotiable Conveyance, Assignment and Assumption Agreement (CAA Agreement). Qualified bidders will be required to submit a deposit with their bid. Deposits are calculated based upon each qualified bidder's aggregate bid price.
HUD will evaluate the bids submitted and determine the successful bid, in terms of the best value to HUD, in its sole and absolute discretion. If a qualified bidder is successful, the qualified bidder's deposit will be non-refundable and will be applied toward the purchase price. Deposits will be returned to unsuccessful bidders. For SFLS2014–2, settlements are expected to take place on or about July 25, 2014, and August 25, 2014.
This notice provides some of the basic terms of sale. The CAA Agreement, which is included in the BIP, provides comprehensive contractual terms and conditions. To ensure a competitive bidding process, the terms of the bidding process and the CAA Agreement are not subject to negotiation.
The BIP describes how qualified bidders may access the due diligence materials remotely via a high-speed Internet connection.
HUD reserves the right to remove Mortgage Loans from SFLS 2014–2 at any time prior to the Award Date. HUD also reserves the right to reject any and all bids, in whole or in part, and include any Mortgage Loans in a later sale. Deliveries of Mortgage Loans will occur in at least two monthly settlements and the number of Mortgage Loans delivered will vary depending upon the number of Mortgage Loans the Participating Servicers have submitted for the payment of an FHA insurance claim. The Participating Servicers will not be able to submit claims on loans that are not included in the Mortgage Loan Portfolio set forth in the BIP.
There can be no assurance that any Participating Servicer will deliver a minimum number of Mortgage Loans to HUD or that a minimum number of Mortgage Loans will be delivered to the Purchaser.
The SFLS 2014–2 Mortgage Loans are assigned to HUD pursuant to section 204(a)(1)(A) of the National Housing Act as amended under Title VI of the Departments of Veterans Affairs and Housing and Urban Development and Independent Agencies Appropriations Act, 1999. The sale of the Mortgage Loans is pursuant to section 204(g) of the National Housing Act.
HUD selected an open competitive whole-loan sale as the method to sell the Mortgage Loans for this specific sale transaction. For SFLS 2014–2, HUD has determined that this method of sale optimizes HUD's return on the sale of these Mortgage Loans, affords the greatest opportunity for all qualified bidders to bid on the Mortgage Loans, and provides the quickest and most efficient vehicle for HUD to dispose of the Mortgage Loans.
In order to bid in SFLS 2014–2 as a qualified bidder, a prospective bidder must complete, execute and submit both a Confidentiality Agreement and a Qualification Statement acceptable to HUD and applicable to the loan pool being purchased. If any of the following apply to (i) a prospective bidder, (ii) a prospective bidder's direct parent,, (iii) a prospective bidder's subsidiaries, and (iv) any entity with which the prospective bidder shares a common officer, director, subcontractor or sub-contractor who has access to Confidential information as defined in the Confidentiality Agreement or is involved in the formation of a bid transaction (“Related Entities”) or (v) a prospective bidder's repurchase lenders then the prospective bidder is ineligible to bid on any of the Mortgage Loans included in SFLS unless other exceptions apply as provided for in the Qualification Statement:
1. The prospective bidder is an employee of HUD, a member of such employee's household, or an entity owned or controlled by any such employee or member of such an employee's household with household to be inclusive of the employee's father, mother, stepfather, stepmother, brother, sister, stepbrother, stepsister, son, daughter, stepson, stepdaughter, grandparent, grandson, granddaughter, father-in-law, mother-in-law, brother-in-law, sister-in-law, son-in-law, daughter-in-law, first cousin, the spouse of any of the foregoing, and the employee's spouse.;
2. The prospective bidder is an individual or entity that is currently debarred, suspended, or excluded from doing business with HUD pursuant to the Governmentwide Suspension and Debarment regulations at title 2 of the
3. The prospective bidder is an individual or entity that has been suspended, debarred or otherwise restricted by any Department or Agency of the Federal Government or of a State Government from doing business with such Department or Agency.
4. The prospective bidder is an individual or entity that has been debarred, suspended, or excluded from doing mortgage related business, including having a business license suspended, surrendered or revoked, by any federal, state or local government agency, division or department;
5. The prospective bidder is an individual or entity that knowingly acquired or will acquire prior to the Sale Date material non-public information, other than the information which is made available to the prospective bidder by HUD pursuant to the terms of the Qualification Statement, about Mortgage Loans offered in the sale;
6. The prospective bidder is a contractor, subcontractor and/or consultant or advisor (including any agent, employee, partner, director, principal or affiliate of any of the foregoing) who performed services for or on behalf of HUD in connection with single family asset sales;
7. The prospective bidder is an individual or entity that uses the services, directly or indirectly, of any person or entity ineligible under subparagraphs 2 through 4 above to assist in preparing any of its bids on the Mortgage Loans;
8. The prospective bidder is an individual or entity which employs or uses the services of an employee of HUD (other than in such employee's official capacity) who is involved in single family asset sales;
9. The prospective bidder is an entity or individual that serviced or held any Mortgage Loan at any time during the 2-year period prior to the Award Date;
10. The prospective bidder is an entity or individual that is: (a) Any affiliate or principal of any entity or individual described in the preceding sentence (sub-paragraph 9); (b) any employee or subcontractor of such entity or individual during that 2-year period prior to Award Date; or (c) any entity or individual that employs or uses the services of any other entity or individual described in this paragraph in preparing its bid on such Mortgage Loan; or
12. The prospective bidder is an entity that has had its right to act as a Government National Mortgage Association (Ginnie Mae) issuer and its interest in mortgages backing Ginnie Mae mortgage-backed securities extinguished and terminated by Ginnie Mae.
HUD reserves the right, in its sole and absolute discretion, to disclose information regarding SFLS 2014–2, including, but not limited to, the identity of any successful qualified bidder and its bid price or bid percentage for any pool of loans or individual loan, upon the closing of the sale of all the Mortgage Loans. Even if HUD elects not to publicly disclose any information relating to SFLS 2014–2, HUD will disclose any information that HUD is obligated to disclose pursuant to the Freedom of Information Act and all regulations promulgated thereunder.
This notice applies to SFLS 2014–2 and does not establish HUD's policy for the sale of other mortgage loans.
Office of the Deputy Secretary, Interior.
Notice of tribal listening session; correction.
The Office of the Secretary previously announced that it will conduct a listening session on the status of implementation of the Land Buy-Back Program for Tribal Nations. The purpose of the session is to meet with Indian tribes to discuss progress to date and receive feedback. Indian landowners may also attend to provide input. This notice corrects the previously published notice to provide RSVP and testimony information and an agenda.
The listening session will take place on May 29, 2014, from 1 p.m.–4 p.m. Pacific Time. Please RSVP by May 27, 2014.
The listening session will take place at the Federal Building, Auditorium, 911 NE 11th Avenue, Portland, OR 97232–4128. Please RSVP via email or telephone to Genevieve Giaccardo,
Genevieve Giaccardo, Senior Advisor on Tribal Relations, (202) 208–1541.
The
The Department is currently implementing the Buy-Back Program at multiple locations across Indian Country. Since November 24, 2012, the Department has sent offers to over 19,000 landowners. Thus far, Interior has paid nearly $60 million to Indian landowners across the United States for voluntarily restoring the equivalent of more than 170,000 acres of land to tribal governments. Tribal governments are helping plan for and implement the Buy-Back Program at specific locations through cooperative agreements or other arrangements.
The purpose of this session is to gather input from tribes in order for the Department to continue to refine its land consolidation processes. Landowners may also attend the session to provide input.
The Updated Implementation Plan and additional information about the Buy-Back Program is available at:
Time and date: May 29, 2014, 1 p.m.–4 p.m. PT.
Place: Federal Building, Auditorium, 911 NE. 11th Avenue, Portland, OR 97232–4128.
Please RSVP by May 27, 2014 to Genevieve Giaccardo.
Written comments will be accepted prior to, during, or directly after the meeting. Due to time constraints during the meeting, written comments cannot be read but will be incorporated into the record.
The agenda for the listening session will be:
National Park Service, Interior.
Meeting notice.
This notice sets forth the date of the 294th Meeting of the Cape Cod National Seashore Advisory Commission.
The public meeting of the Cape Cod National Seashore Advisory Commission will be held on Monday, June 9, 2014, at 1 p.m. (EASTERN).
The Commission members will meet in the conference room at park headquarters, 99 Marconi Site Road, Wellfleet, Massachusetts 02667.
The 294th meeting of the Cape Cod National Seashore Advisory Commission will take place on Monday, June 9, 2014, at 1:00 p.m., in the meeting room at Headquarters, 99 Marconi Station, in Wellfleet, Massachusetts to discuss the following:
Further information concerning the meeting may be obtained from George E. Price, Jr., Superintendent, Cape Cod National Seashore, 99 Marconi Site Road, Wellfleet, MA 02667, or via telephone at (508) 771–2144.
The Commission was reestablished pursuant to Public Law 87–126 as amended by Public Law 105–280. The purpose of the Commission is to consult with the Secretary of the Interior, or her designee, with respect to matters relating to the development of Cape Cod National Seashore, and with respect to carrying out the provisions of sections 4 and 5 of the Act establishing the Seashore.
The meeting is open to the public. It is expected that 15 persons will be able to attend the meeting in addition to Commission members. Interested persons may make oral/written presentations to the Commission during the business meeting or file written statements. Such requests should be made to the park superintendent prior to the meeting. 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 may 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.
Office of Surface Mining Reclamation and Enforcement (OSMRE), Interior.
Notice; correction.
On March 28, 2014 (79 FR 17569), OSMRE published a notice of availability (NOA) for the Four Corners Power Plant and Navajo Mine Energy Project draft environmental impact statement (DEIS). The DEIS included a copy of the United States Army Corps of Engineers (USACE) Preliminary Draft Permit Evaluation (Appendix C of the DEIS) with Attachments A through D omitted. OSMRE updated the online DEIS found at
Marcelo Calle, 303–293–5035.
Drug Enforcement Administration, Department of Justice.
60-day notice.
The Department of Justice (DOJ), Drug Enforcement Administration (DEA), will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with
Comments are encouraged and will be accepted for 60 days until July 22, 2014.
If you have additional comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Ruth A. Carter, Office of Diversion Control, Drug Enforcement Administration, 8701 Morrissette Drive, Springfield, Virginia 22152.
This process is conducted in accordance with 5 CFR 1320.10. Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
1.
2.
3.
4.
Primary: Business or other for-profit.
Other: Not-for-profit, State, local or tribal government.
Abstract: Title 21 CFR, 1301.74(c) and 1301.76(b) require DEA registrants to complete and submit DEA Form 106 upon discovery of a theft or significant loss of controlled substances. This provides accurate accountability and allows DEA to monitor substances diverted for illicit purposes.
5.
6.
Drug Enforcement Administration, Department of Justice.
60-day notice.
The Department of Justice (DOJ), Drug Enforcement Administration (DEA), will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection is published to obtain comments from the public and affected agencies.
Comments are encouraged and will be accepted for 60 days until July 22, 2014.
If you have additional comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Ruth A. Carter, Office of Diversion Control, Drug Enforcement Administration, 8701 Morrissette Drive, Springfield, Virginia 22152.
This process is conducted in accordance with 5 CFR 1320.10. Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
1.
2.
3.
4.
Primary: Business or other for-profit.
Other: None.
Abstract: DEA Form 236 provides the DEA with control measures over the importation and exportation of controlled substances as required by United States drug control laws and international treaties.
5.
6.
Drug Enforcement Administration, Department of Justice.
60-day notice.
The Department of Justice (DOJ), Drug Enforcement Administration (DEA), will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection is published to obtain comments from the public and affected agencies.
Comments are encouraged and will be accepted for 60 days until July 22, 2014.
If you have additional comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Ruth A. Carter, Office of Diversion Control, Drug Enforcement Administration, 8701 Morrissette Drive, Springfield, Virginia 22152.
This process is conducted in accordance with 5 CFR 1320.10. Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
Overview of this information collection:
1.
2.
3.
4.
Primary: Business or other for-profit.
Other: Not-for-profit institutions, federal government, state, local or tribal government.
Abstract: Title 21 CFR 1307.21 requires that any registrant desiring to voluntarily dispose of controlled substances shall list these controlled substances on DEA Form 41 and submit the form to the nearest DEA office. DEA Form 41 is used to account for destroyed controlled substances, and its use is mandatory.
5.
6.
If additional information is required contact: Jerri Murray, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE., 3E.405B, Washington, DC 20530.
The Bureau of Labor Statistics Technical Advisory Committee will meet on Friday, June 20, 2014. The meeting will be held in the Postal Square Building, 2 Massachusetts Avenue NE., Washington, DC.
The Committee provides advice and makes recommendations to the Bureau of Labor Statistics (BLS) on technical aspects of the collection and formulation of economic measures. The BLS presents issues and then draws on the expertise of Committee members representing specialized fields within the academic disciplines of economics, statistics and survey design.
The meeting will be held in rooms 7 and 8 of the Postal Square Building Conference Center. The schedule and agenda for the meeting are as follows:
The meeting is open to the public. Any questions concerning the meeting should be directed to Lisa Fieldhouse, Bureau of Labor Statistics Technical Advisory Committee, on 202–691–5025. Individuals who require special accommodations should contact Ms. Fieldhouse at least two days prior to the meeting date.
Occupational Safety and Health Administration (OSHA), Labor.
Request for public comments.
OSHA solicits public comments concerning its proposal to extend OMB approval of the information collection requirements specified in the Fire Brigades Standard (29 CFR 1910.156).
Comments must be submitted (postmarked, sent, or received) by July 22, 2014.
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
OSHA does not mandate that employers establish fire brigades; however, if they do so, they must comply with the provisions of the Fire Brigades Standard. The provisions of the Standard, including the paperwork requirements, apply to fire brigades, industrial fire departments, and private or contract fire departments, but not to airport crash rescue units or forest firefighting operations. Paragraphs (b)(1), (b)(2), and (c)(4) contain the paperwork requirements of the Standard.
Under paragraph (b)(1) of the Standard, employers must develop and maintain an organizational statement that establishes the: existence of a fire brigade; the basic organizational structure of the brigade; type, amount, and frequency of training provided to brigade members; expected number of members in the brigade; and functions that the brigade is to perform. This paragraph also specifies that the organizational statement must be available for review by workers, their designated representatives, and OSHA compliance officers. The organizational statement describes the functions performed by the brigade members and, thereby, determines the level of training and type of personal protective equipment (PPE) necessary for these members to perform their assigned functions safely. Making the statement available to workers, their designated representatives, and OSHA compliance officers ensures that the elements of the statement are consistent with the functions performed by the brigade members and the occupational hazards they experience, and that employers are providing training and PPE appropriate to these functions and hazards.
To permit a worker with known heart disease, epilepsy, or emphysema to participate in fire brigade emergency activities, paragraph (b)(2) of the Standard requires employers to obtain a physician's certificate of the worker's fitness to do so. This provision provides employers with a direct and efficient means of ascertaining whether or not they can safely expose workers with these medical conditions to the hazards of firefighting operations.
Paragraph (c)(4) of the Standard requires employers to inform fire
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 an adjustment decrease of the previous estimate of 6,292 burden hours to 2,510 burden hours, a total decrease of 3,782 hours. The adjustment is primarily due to a decrease in the estimated number of manufacturing facilities with 100 or more workers.
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
Occupational Safety and Health Administration (OSHA), Labor.
Notice.
OSHA invites interested parties to attend an informal stakeholder meeting concerning the Nationally Recognized Testing Laboratory (NRTL) Program. The meeting will focus on the following NRTL Program topics: use of the private sector to increase the efficiency of the NRTL Program; certification marks; factory inspections; field inspections; fees; and, at OSHA's discretion and as time permits, other topics raised by participants or OSHA staff. OSHA plans to use the information gathered at this meeting to explore potential updates to NRTL Program policies and regulations.
The stakeholder meeting will be held on October 22, 2014, from 9:00 a.m. to 5:00 p.m., e.t., in Washington, DC. Attendees should arrive at least 30 minutes early to allow time for security access. Security-access information is available at
The deadline to register to attend the meeting as a presenter, participant, or an observer is July 22, 2014. If space remains after this deadline, OSHA may accept additional presenters, participants, and observers until the meeting is full. Those who submit their registrations after July 22, 2014, may not receive confirmation of their attendance from OSHA. The deadline to submit written comments, information, and documents in response to the meeting topics found in Appendix A of this notice, to submit suggestions for additional topics for the meeting, or to request an extension of time to make a submission is July 22, 2014. All submissions must bear a postmark or provide other evidence of the submission date.
OSHA will hold the stakeholder meeting in the Francis Perkins Building, U.S. Department of Labor, at 200 Constitution Avenue NW., Washington, DC 20210. Information concerning the room number for the meeting will be available, no later than Wednesday, September 20, 2014, on OSHA's NRTL Program Web site at
To register to attend as a presenter, during the presentation portion of the meeting, a participant, during the discussion portion of the meeting, or an observer of the meeting, you must use one of the three methods listed below. If you are registering as a presenter, you must include your presentation topic(s) and a synopsis of your presentation. OSHA will include, in the docket for this meeting (Docket No. OSHA–2013–0028, available at http://www.regulations.gov
All presentation topics must address the NRTL Program, and presentations that address those topics described in Appendix A of this notice will have priority
a.
b.
c.
In addition to including comments, information, documents, or suggestions for additional topics in individual registrations (see Section 2 of this Notice, “Registration to Attend,” above), stakeholders and the general public may also submit written comments, information, and documents in response to the meeting topics and corresponding questions found in Appendix A of this notice
a.
b.
c.
To read or download submissions or other material in the docket (e.g., public submissions of suggested topics), go to
Information regarding this notice is available from the following sources:
Several OSHA standards require an NRTL to approve equipment as safe if used in the workplace (see
OSHA's NRTL Program recognition process involves a thorough analysis of an NRTL applicant's policies and procedures, and a comprehensive on-site review of the applicant's testing and certification facilities, to ensure that the applicant meets the requirements of 29 CFR 1910.7. Once an NRTL obtains recognition from OSHA, OSHA's staff conducts on-site audits to ensure that existing NRTLs adequately perform their testing and certification activities and maintain the quality of their operations.
An NRTL's approval of a product generally consists of testing, inspection, and certification. Testing involves determining whether a sample or prototype of the product meets the applicable requirements of one or more specific consensus-based, U.S. product-safety test standards. If the product meets the requirements of the test standard, the NRTL then performs an initial inspection of the factory that manufactures, or will manufacture, the product to verify that the units of the product resulting from production runs are or will be in conformance with the test standard's requirements. Following a satisfactory initial inspection, the NRTL issues its certification, which provides assurance that the product conforms to the specific test standard(s). The NRTL also authorizes the manufacturer to apply the NRTL's mark to each unit of the manufactured product. After issuing its certification, the NRTL conducts periodic follow-up (i.e., quality-assurance and compliance) inspections of each manufacturing facility to provide assurance that the product currently manufactured at the facility and bearing the NRTL's mark is identical to the product that the NRTL tested, initially inspected, and certified. For more information about the NRTL Program, see the NRTL Program Web site (
In 2012, the Government Accountability Office (GAO) performed a study of OSHA's NRTL Program to examine the program's recognition process. GAO published its findings and recommendations from that study in December 2012, in a report entitled,
As a result of GAO's report, in early 2013, OSHA staff began reexamining several aspects of the NRTL Program to determine how it could improve program operations without compromising the Agency's mission to protect worker safety and health. On March 15, 2013, OSHA held an informal stakeholder meeting to help OSHA staff assess the NRTL Program and make efforts to increase program effectiveness. At the March meeting, OSHA discussed and received feedback from stakeholders on several potential NRTL Program policy, procedure, and guideline changes.
Following the March 15 stakeholder meeting, OSHA began investigating the possibility of aligning the NRTL Program requirements with ISO/IEC 17025:2005 and ISO/IEC 17065:2012. As part of this effort, OSHA may propose developing NRTL Program-specific guidance that would permit NRTLs to obtain and maintain recognition under the NRTL Program regulation, 29 CFR 1910.7, by following specific provisions in ISO/IEC 17025 and ISO/IEC 17065 in conjunction with OSHA guidance that tailors the general criteria found in ISO/IEC 17025 and ISO/IEC 17065 to the specific NRTL Program requirements for testing and certification activities.
As part of its investigation into aligning the NRTL Program requirements with international standards, OSHA also is investigating the use of the private sector to improve the timeliness and efficiency of the NRTL recognition process, while still maintaining the integrity of the program. As part of its effort to explore the use of the private sector for this purpose, OSHA is holding this stakeholder meeting to gather more information on the topic. Moreover, after reviewing the NRTL Program requirements as part of its alignment investigation, OSHA developed potential modifications to existing policies and regulatory requirements with respect to certification marks, factory inspections, field inspections, and fees. OSHA also seeks to gather input on these potential policy and regulatory changes through this stakeholder meeting.
The stakeholder meeting will consist of stakeholder presentations concerning the topics described in Appendix A of this notice, and, at OSHA's discretion, other NRTL Program-related topics. A facilitated discussion will follow the presentations. OSHA determined that stakeholder presentations, in conjunction with informal discussion on specific topics related to the NRTL Program, will be beneficial to OSHA's further deliberations on developing, updating, and proposing new or revised NRTL Program policies, procedures, regulations, or guidelines.
The stakeholder meeting will last approximately eight hours. The first part of the meeting will consist of stakeholder presentations on those topics described in Appendix A of this notice, and, at OSHA's discretion, other suggested topics related to the NRTL Program. Each presenter will have 10–20 minutes to make a presentation, depending on the number of people who request to make a presentation. A short period of 5–10 minutes will follow each presentation so that OSHA, other presenters, and registered participants can ask questions of, and request clarification from, the presenter. OSHA is limiting participation in these periods to OSHA and registered presenters and participants. Presenters may, at their discretion, submit written copies of their presentation to OSHA, either during the meeting or in written comments submitted to the docket in accordance with the procedures outlined in this notice. OSHA believes that having access to written copies of the presentations will facilitate its decisionmaking. OSHA will include copies of the presentations in the docket for this meeting (Docket No. OSHA–2013–0028, available at
OSHA is limiting the meeting to approximately 20 presentations, but may accommodate more presentations at its discretion and as time permits. OSHA will try to accommodate all presenters who respond in a timely fashion. To ensure all views are represented, OSHA encourages individuals and groups having similar interests to consolidate their information and present this information through a single representative. OSHA will try to accommodate, as space permits, all those who would like to observe the presentations.
If time permits, OSHA may hold an open-session portion of the meeting with facilitated discussion. OSHA is limiting the open-session portion of the meeting to approximately 30 participants. OSHA will try to accommodate all attendees who would like to participate. To ensure all views are represented, OSHA encourages individuals and groups having similar interests to consolidate their information and participate through a single representative. OSHA staff will be present to take part in the discussions.
The topics for the stakeholder meeting and related questions about these topics are in Appendix A of this notice. OSHA believes the discussion and related questions in Appendix A will provide the Agency with useful information, and will facilitate discussion during the meeting. If stakeholders and the public would like to provide input on the meeting topics and their corresponding questions prior to the stakeholder meeting, OSHA welcomes any available data, documentation, information, or comments related to those topics that might help facilitate the meeting. Stakeholders and the members of the public chosen to make presentations at the meeting and/or to participate during the open-session portion of the meeting, will also have an opportunity to provide information and comment on these topics and questions during the meeting. Any stakeholder or member of the public who chooses to provide data, documentation, information, or comments prior to the meeting should: identify any organization they are representing at the meeting; their position within that organization; and describe any qualifications they have that are relevant to their submission.
OSHA will provide the public with a copy of the final meeting agenda and any specific documents OSHA will use at the stakeholder meeting no later than five days prior to the meeting. These documents also will be available by that date at OSHA's NRTL Program Web site (
OSHA will prepare a full transcript of the meeting and post this transcript on the NRTL Program Web site (
Register to attend as a presenter, participant, or an observer in the stakeholder meeting by July 22, 2014, using one of the three methods described above in the “Registration to Attend” section of this notice under
OSHA is limiting the number of attendees who may present or participate in the meeting; therefore, OSHA will grant priority to current or former NRTLs, and current NRTL applicants. Only one representative from each organization may make a presentation, and only one representative from each organization may attend as a participant; however, each organization may register one representative to be a presenter and a different representative to be a participant. Each organization may have more than one observer in attendance (space permitting).
Any individual or entity not affiliated with a current or former NRTL, or a current NRTL applicant, who would like to present and/or participate in the meeting must submit, with their registration to attend, a written statement that indicates their interest in the NRTL Program and the specific topic(s) they would like to present or discuss. If they would like to make a presentation, they must also submit a synopsis of their presentation. OSHA will enter these presentations and synopses into the docket for the meeting (Docket No. OSHA–2013–0028, available at
Registrants not affiliated with a current or former NRTL, or with a current NRTL applicant, who would like to present a
In registering to participate during the open-session portion of the meeting, current or former NRTLs, and current NRTL applicants, need not submit statements indicating their interest in the NRTL Program and the specific topic(s) they would like to discuss. However, if they would like to make a presentation during the first portion of the meeting, they must submit their presentation topic(s) and a synopsis of their presentation. Additionally, these organizations are welcome to submit, in writing, suggestions for additional topics for discussion (pursuant to the procedures described under
When registering, please provide the following information:
a. Name, contact address, daytime phone, fax, and email address;
b. The organization for which you work or represent, if any;
c. Whether you are employed at, affiliated with, or represent a current or former NRTL or a current NRTL applicant;
d. Whether you are registering to be a presenter during the presentation portion of the meeting and/or a participant during the open-session portion of the meeting, or an observer;
e. If you registering to be a presenter during the presentation portion of the meeting, provide your presentation topic(s) and a synopsis of your presentation; and
f. If you are not affiliated with a current or former NRTL, or current NRTL applicant, and would like to make a presentation during the presentation portion of the meeting and/or be a participant during the open-session portion of the meeting, provide a written statement that indicates your
4. Submissions to the Docket
You must make all submissions to the docket using any of the methods listed above under
Note that a submission to the docket does not constitute registration to attend the meeting as a presenter, participant, or observer. To register as a presenter, participant, or observer, you must follow the procedures described above in the section of this notice titled “Registration” under
OSHA will use the submissions it timely receives to establish the meeting agenda, which it will release no later than five days prior to the meeting on its NRTL Program Web site (
OSHA will place all submissions, including any personal information, in the docket without revision, and these submissions and other material will be available online at
David Michaels, Ph.D., MPH, Assistant Secretary of Labor for Occupational Safety and Health, 200 Constitution Avenue NW., Washington, DC 20210, authorized the preparation of this notice. Accordingly, the Agency is issuing this notice pursuant to 29 U.S.C. 657(g)(2)), Secretary of Labor's Order No. 1–2012 (77 FR 3912, Jan. 25, 2012), and 29 CFR 1910.7.
OSHA presents here a discussion of the topics for the October 22, 2014, NRTL Program informal stakeholder meeting. OSHA believes the discussion and related questions presented here will assist commenters and presenters in narrowing their comments and presentations to topics about which OSHA has an interest in obtaining information, and facilitate discussion during the open-session portion of the meeting. OSHA numbered the individual topics below, and asks that commenters clearly delineate which number(s) (i.e., topics) each of their comments or other submissions is addressing.
OSHA is considering using private-sector accreditation bodies and/or independent contractors to increase the efficiency of the NRTL Program. As a result, OSHA is considering a number of different models to serve this purpose. This subsection of topics presents these models in general terms, and asks specific questions about each of these approaches.
OSHA is not endorsing any of these models at this time. Moreover, OSHA is open to considering other options or models for revising NRTL Program policies and regulations. OSHA invites stakeholders to provide any additional options, models, feedback, or suggestions that may assist OSHA in its decisionmaking.
1. OSHA is considering a model that uses private-sector accreditation as evidence of conformance to ISO/IEC 17025 and ISO/IEC 17065 to facilitate processing applications and performing on-site assessments. Although, OSHA would continue to conduct on-site assessments to NRTL Program-specific requirements, inclusion of accreditations may facilitate validation of generic ISO/IEC 17025 and ISO/IEC 17065 requirements. Under this approach, OSHA would deem NRTLs in compliance with the NRTL Program regulation, 29 CFR 1910.7, if along with OSHAs validation of compliance with NRTL Program specific requirements, a private-sector accreditation body accredits the NRTL headquarters to the appropriate scope of accreditation for ISO/IEC 17025 and ISO/IEC 17065, and the NRTL maintains this accreditation. In addition, under this approach, all of the NRTL's sites would require independent accreditation to ISO/IEC 17025.
a. Are you in favor of this approach? Please explain.
b. What are the benefits to this approach?
c. What are the weaknesses to this approach?
d. What resources and/or costs would be associated with this approach? Please explain.
e. Would there be any cost savings associated with this approach? Please explain.
f. As part of this approach, NRTLs would need to provide complete audit reports and final corrective actions to OSHA during OSHA's on-site assessments or upon request by OSHA. Note that such information could be subject to release by OSHA under the Freedom of Information Act (FOIA). Please explain the impact of this part of the approach.
2. OSHA is considering a model under which it makes use of one or more private-sector accreditation bodies as part of the NRTL recognition process. Under this approach, OSHA would delegate, to one or more private-sector accreditation bodies, the responsibility to assess NRTLs for recognition and perform NRTL Program on-site assessments. OSHA would maintain the official list of recognized NRTLs and still retain the authority to approve, deny, amend, or revoke NRTL recognition.
a. Are you in favor of this approach? Please explain.
b. What are the benefits to this approach?
c. What are the weaknesses to this approach?
d. What resources and/or costs would be associated with this approach? Please explain.
e. Would there be any cost savings associated with this approach? Please explain.
f. Are you in favor of using private-sector accreditation bodies in a manner not described in this approach? Please explain.
3. OSHA is considering a model under which it contracts with independent technical experts to perform specific functions for the NRTL Program. For example, OSHA may use independent technical experts to assess the technical requirements of NRTLs or applicants for purposes of NRTL applications and/or NRTL Program on-site assessments. OSHA would continue to perform all other aspects of the NRTL Program, and still would make all decisions regarding recognition.
a. Are you in favor of this approach? Please explain.
b. What are the benefits to this approach?
c. What are the weaknesses to this approach?
d. What resources and/or costs would be associated with this approach? Please explain.
e. Would there be any cost savings associated with this approach? Please explain.
f. Are you in favor of using independent technical experts in a manner not described in this approach? Please explain.
4. Under 29 CFR 1910.7, an NRTL must have the capability to perform both testing and certification functions. OSHA is considering a modification to the regulation that separates these two functions, thus allowing organizations to apply to the NRTL Program to perform testing only, certification only, or both testing and certification. If OSHA revises the regulation in this manner, it would also plan to use ISO/IEC 17025 and NRTL Program-specific policies to evaluate testing organizations, and ISO/IEC 17065 and
a. Are you in favor of this approach? Please explain.
b. What are the benefits to this approach?
c. What are the weaknesses to this approach?
d. What resources and/or costs would be associated with this approach? Please explain.
e. Would there be any cost savings associated with this approach? Please explain.
f. If OSHA were to revise its regulation as described above, OSHA also may revise its regulation to require certification organizations authorized under the NRTL Program to accept test results from any testing organization authorized under the NRTL Program. Are you in favor of such a requirement? If OSHA had to adopt this requirement to successfully implement this model, would you be in favor of this requirement? Please explain.
Under OSHA's current policy regarding certification marks, an NRTL is in compliance with the NRTL Program regulation, 29 CFR 1910.7, if it has a registered certification mark issued by the U.S. Patent and Trademark Office (USPTO) or by a national or international body under a registration system that requires ownership of the mark(s) and that is equivalent to the USPTO system of registration. Additionally, the NRTL can only use this certification mark(s) for its NRTL activities. OSHA is considering revising its policy to better account for ownership and use of certification marks for NRTL activities.
5. OSHA is considering making the following policy change: If an entity wholly owned by an NRTL owns a certification mark, and the NRTL uses that mark for its NRTL certifications, the entity owned by the NRTL could no longer use the mark for any purpose, including marketing or advertisement.
a. What impact would this policy change have on NRTLs? Please explain.
b. What resources and/or costs would be associated with this approach? Please explain.
6. OSHA is considering making the following policy change: Any mark owned by an NRTL, and used for its NRTL certifications, would need to be clearly distinguishable from the mark of another entity owned or affiliated with the NRTL (e.g., a mark used by an entity that is not a recognized NRTL would need to be clearly distinguishable from the mark used by the entity recognized as an NRTL, and a product certified by a non-NRTL could not appear to be a product certified by the NRTL).
a. What impact would this policy change have on NRTLs? Please explain.
b. What resources and/or costs would be associated with this approach? Please explain.
7. Under current OSHA policy, NRTLs need not add a unique identifier to their certification mark to signify work conducted under the NRTL Program and compliance to particular product-safety test standards (i.e.,, similar to the “C” mark for Canada). Some NRTLs voluntarily include the acronym “NRTL” with their regular certification marks. Under a policy change OSHA is considering, each NRTL would need to add a unique identifier to its certification mark to signify testing and certification conducted under the NRTL Program.
a. Are you in favor of requiring the NRTLs to add a unique identifier to their certification mark? Please explain.
b. What resources and/or costs would be associated with this approach? Please explain.
c. OSHA is considering delaying the effective date of this policy change for 2 years after it finalizes the policy change. Are you in favor of delaying the effective date of this policy change? If so, are you in favor of a 2 year delay? Please explain.
8. Under OSHA's current policy for factory inspections (OSHA Instruction CPL 01–00–003, NRTL Program Policies, Procedures, and Guidelines, App. C.III.A, “
a. Should OSHA allow each NRTL to adopt its own risk-based approach to determine the frequency with which it performs factory inspections or should OSHA keep its current policy in which NRTLs must perform a minimum number of inspections per year? Please explain.
b. What resources and/or costs would be associated with allowing NRTLs to adopt their own risk-based approach to determine the frequency with which they perform factory inspections? Please explain.
9. Under OSHA's current policy for factory inspections (OSHA Instruction CPL 01–00–003, NRTL Program Policies, Procedures, and Guidelines, App. C.III.B, “
a. Are you in favor of OSHA standardizing inspection content and processes for factory inspections? For example, should OSHA specify the activities NRTLs need to perform during each factory inspection and delineate how documentation should occur? Please explain.
b. Are you in favor of OSHA developing forms, with stakeholder involvement, for NRTLs to use during factoring inspections? Please explain.
c. What resources and/or costs would be associated with the modifications addressed in questions (a)–(c) above for your organization? Please explain.
10. Under 29 CFR 1910.7(b)(2)(iii), an NRTL must conduct field inspections to monitor and assure proper use of its identifying mark or labels on products. OSHA is considering eliminating this requirement. Are you in favor of OSHA eliminating this requirement? Please explain.
11. OSHA currently requires NRTLs to pay all NRTL Program fees in U.S. dollars by check or money order. OSHA is considering allowing NRTLs to make online electronic payments only (e.g., through credit card or ACH), and disallowing payments made by check or money order.
a. What impact would such a change have? Please explain
b. What resources and/or costs would be associated with this approach? Please explain.
Occupational Safety and Health Administration (OSHA), Labor.
Notice of grant of a permanent variance.
In this notice, OSHA grants a permanent variance to Tully/OHL USA Joint Venture from the provisions of OSHA standards that regulate work in compressed-air environments at 29 CFR 1926.803.
The permanent variance specified by this notice becomes
Information regarding this notice is available from the following sources:
On July 12, 2012, Tully/OHL USA Joint Venture (“Tully” or “the applicant”), 355 Front Street, Construction Site, Staten Island, NY 10304, submitted under Section 6(d) of the Occupational Safety and Health Act of 1970 (“OSH Act”; 29 U.S.C. 655) and 29 CFR 1905.11 (“Variances and other relief under section 6(d)”) an application for a permanent variance from several provisions of the OSHA standard that regulates work in compressed air at 29 CFR 1926.803, as well as a request for an interim order pending OSHA's decision on the application for a variance (Document ID No. OSHA–2012–0036–0003). Specifically, Tully seeks a variance from the provisions of the standard that: (1) Prohibit compressed-air worker exposure to pressures exceeding 50 pounds per square inch (p.s.i.) except in an emergency (29 CFR 1926.803(e)(5));
Tully is a contractor that works on complex tunnel projects using recently developed equipment and procedures for soft-ground tunneling. Tully's workers engage in the construction of subaqueous tunnels using advanced shielded mechanical excavation techniques in conjunction with an Earth Pressure Balanced Tunnel Boring Machine (EPBTBM).
According to its application, Tully is currently the managing partner of Tully/OHL USA Joint Venture, the general contractor for the New York Economic Development Corporation's New York Siphon Tunnel Project. Tully is seeking the permanent variance solely for the duration of the New York Economic Development Corporation's New York Siphon Tunnel Project (hereafter, “the project”).
The project consists of a 12-foot diameter tunnel beneath New York Harbor between Staten Island and Brooklyn. Tully will bore the tunnel below the water table through soft soils consisting of clay, silt, and sand. Tully employs specially trained personnel for the construction of the tunnel, and states that this construction will use shielded mechanical-excavation techniques. Tully asserts that its workers perform hyperbaric interventions at pressures greater than 50 p.s.i.g. in the excavation chamber of the EPBTBM; these interventions consist of conducting inspections and maintenance work on the cutter-head structure and cutting tools of the EPBTBM.
Tully asserts that innovations in tunnel excavation, specifically with EPBTBMs, have, in most cases, eliminated the need to pressurize the entire tunnel. This technology negates the requirement that all members of a tunnel-excavation crew work in compressed air while excavating the tunnel. These advances in technology modified substantially the methods used by the construction industry to excavate subaqueous tunnels compared to the caisson work regulated by the current OSHA compressed-air standard for construction at 29 CFR 1926.803. Such advances reduce the number of workers exposed, and the total duration of exposure, to hyperbaric pressure during tunnel construction.
Using shielded mechanical-excavation techniques, in conjunction with precast concrete tunnel liners and backfill grout, EPBTBMs provide methods to achieve the face pressures required to maintain a stabilized tunnel face through various geologies, and isolate that pressure to the forward section (the working chamber) of the EPBTBM. Interventions in the working chamber (the pressurized portion of the EPBTBM) take place only after halting tunnel excavation and preparing the machine and crew for an intervention. Interventions occur to inspect or maintain the mechanical-excavation components located in the working chamber. Maintenance conducted in the working chamber includes changing replaceable cutting tools and disposable wear bars, and, in rare cases, repairing structural damage to the cutter head.
In addition to innovations in tunnel-excavation methods, Tully asserts that innovations in hyperbaric medicine and technology improve the safety of decompression from hyperbaric exposures. According to Tully, the use of decompression protocols incorporating oxygen is more efficient, effective, and safer for tunnel workers than compliance with the decompression tables specified by the existing OSHA standard (29 CFR 1926, subpart S, Appendix A decompression tables). These hyperbaric exposures are possible due to advances in technology, a better understanding of hyperbaric medicine, and the development of a project-specific Hyperbaric Operations Manual (HOM) that requires specialized medical support and hyperbaric supervision to provide assistance to a team of specially trained man-lock attendants and hyperbaric or compressed-air workers.
OSHA initiated a technical review of the Tully's variance application and developed a set of follow-up questions that it sent to Tully on August 29, 2012 (Document ID No. OSHA–2012–0036–0004). On October 9, 2012, Tully submitted its response and a request for an interim order (Document ID No. OSHA–2012–0036–0005). In its response to OSHA's follow-up questions, Tully indicated that the maximum pressure to which it is likely to expose workers during interventions for the New York Economic Development Corporation's New York Siphon Tunnel Project is 58 p.s.i.g. Therefore, to work effectively on this project, Tully must perform hyperbaric interventions in compressed air at pressures higher than the maximum pressure specified by in the existing OSHA standard, 29 CFR 1926.803(e)(5), which states: “No employee shall be
OSHA considered Tully's application for a permanent variance and interim order. On January 7, 2014, OSHA published a
The applicant asserts that the advances in tunnel-excavation technology described in Section I of this notice modified significantly the equipment and methods used by contractors to construct subaqueous tunnels, thereby making several provisions of OSHA's compressed-air standard for construction at 29 CFR 1926.803 inappropriate for this type of work. These advances reduce both the number of employees exposed, and the total duration of exposure, to the hyperbaric conditions associated with tunnel construction.
Using shielded mechanical-excavation techniques, in conjunction with pre-cast concrete tunnel liners and backfill grout, EPBTBMs provide methods to achieve the pressures required to maintain a stabilized tunnel face, through various geologies, while isolating that pressure to the forward section (working or excavation chamber) of the EPBTBM.
Interventions involving the working chamber (the pressurized chamber at the head of the EPBTBM) take place only after the applicant halts tunnel excavation and prepares the machine and crew for an intervention. Interventions occur to inspect or maintain the mechanical-excavation components located in the forward portion of the working chamber. Maintenance conducted in the forward portion of the working chamber includes changing replaceable cutting tools and disposable wear bars, and, in rare cases, making repairs to the cutter head due to structural damage.
In addition to innovations in tunnel-excavation methods, research conducted after OSHA published its compressed-air standard for construction in 1971 resulted in advances in hyperbaric medicine. In this regard, the applicant asserts that the use of decompression protocols incorporating oxygen is more efficient, effective, and safer for tunnel workers than compliance with the existing OSHA standard (29 CFR 1926, subpart S, Appendix A decompression tables). According to the applicant, contractors routinely and safely expose employees performing interventions in the working chamber of EPBTBMs to hyperbaric pressures up to 75 p.s.i.g., which is 50% higher than the maximum pressure specified by the existing OSHA standard (see 29 CFR 1926.803(e)(5)). The applicant asserts that these hyperbaric exposures are possible because of advances in hyperbaric technology, a better understanding of hyperbaric medicine, and the development of a project-specific HOM that requires specialized medical support and hyperbaric supervision to provide assistance to a team of specially trained man-lock attendants and hyperbaric workers.
The applicant contends that the alternative safety measures included in its application provide its workers with a place of employment that is at least as safe and healthful as they would obtain under the existing provisions of OSHA's compressed-air standard for construction. The applicant certifies that it provided employee representatives of affected workers
The applicant states that it may perform hyperbaric interventions at pressures greater than 50 p.s.i.g. in the working chamber of the EPBTBM; this pressure exceeds the pressure limit of 50 p.s.i.g. specified for nonemergency purposes by 29 CFR 1926.803(e)(5). The EPBTBM has twin man locks, with each man lock having two compartments. This configuration allows workers to access the man locks for compression and decompression, and medical personnel to access the man locks if required in an emergency.
EPBTBMs are capable of maintaining pressure at the tunnel face, and stabilizing existing geological conditions, through the controlled use of propel cylinders, a mechanically driven cutter head, bulkheads within the shield, ground-treatment foam, and a screw conveyor that moves excavated material from the working chamber. As noted earlier, the forward-most portion of the EPBTBM is the working chamber, and this chamber is the only pressurized segment of the EPBTBM. Within the shield, the working chamber consists of two sections: The staging chamber and the forward working chamber. The staging chamber is the section of the working chamber between the man-lock door and the entry door to the forward working chamber. The forward working chamber is immediately behind the cutter head and tunnel face.
The applicant will pressurize the working chamber to the level required to maintain a stable tunnel face. Pressure in the staging chamber ranges from atmospheric (no increased pressure) to a maximum pressure equal to the pressure in the working chamber. The applicant asserts that most of the hyperbaric interventions will be around 14.7 p.s.i.g. However, the applicant maintains that they may have to perform interventions at pressures up to 58 p.s.i.g.
During interventions, workers enter the working chamber through one of the twin man locks that open into the staging chamber. To reach the forward part of the working chamber, workers pass through a door in a bulkhead that separates the staging chamber from the forward working chamber. The maximum crew size allowed in the forward working chamber is three. At certain hyperbaric pressures (i.e., when decompression times are greater than work times), the twin man locks allow for crew rotation. During crew rotation, one crew can be compressing or decompressing while the second crew is working. Therefore, the working crew always has an unoccupied man lock at its disposal.
The applicant developed a project-specific HOM (Document ID No. OSHA–2012–0036–0006) that describes in detail the hyperbaric procedures and required medical examinations used during the tunnel-construction project. The HOM is project specific, and discusses standard operating procedures and emergency and contingency procedures. The procedures include using experienced and knowledgeable man-lock attendants who have the training and experience necessary to recognize and treat decompression sickness and diving-related illnesses and injuries. The attendants are under the direct supervision of the hyperbaric supervisor and attending physician. In addition, procedures include medical screening and review of prospective
OSHA's compressed-air standard for construction requires decompression in accordance with the decompression tables in Appendix A of 29 CFR 1926, subpart S (see 29 CFR 1926.803(f)(1)). As an alternative to the OSHA decompression tables, the applicant proposes to use newer decompression schedules that supplement breathing air used during decompression with pure oxygen. The applicant asserts that these decompression protocols are safer for tunnel workers than the decompression protocols specified in Appendix A of 29 CFR 1926, subpart S. Accordingly, the applicant proposes to use the 1992 French Decompression Tables to decompress CAWs after they exit the hyperbaric conditions in the working chamber.
Depending on the maximum working pressure and exposure time
The applicant asserts that at higher hyperbaric pressures, decompression times exceed 75 minutes. The HOM establishes protocols and procedures that provide the basis for alternate means of protection for CAWs under these conditions. Accordingly, based on these protocols and procedures, the applicant requests to use the 1992 French Decompression Tables for hyperbaric interventions up to 58 p.s.i.g. for the project. The applicant is committed to follow the decompression procedures described in the project-specific HOM during these interventions.
According to the applicant, breathing air under hyperbaric conditions increases the amount of nitrogen gas dissolved in a CAW's tissues. The greater the hyperbaric pressure under these conditions, and the more time spent under the increased pressure, the greater the amount of nitrogen gas dissolved in the tissues. When the pressure decreases during decompression, tissues release the dissolved nitrogen gas into the blood system, which then carries the nitrogen gas to the lungs for elimination through exhalation. Releasing hyperbaric pressure too rapidly during decompression can increase the size of the bubbles formed by nitrogen gas in the blood system, resulting in DCI, commonly referred to as “the bends.” This description of the etiology of DCI is consistent with current scientific theory and research on the issue (see footnote 8 in this notice discussing a 1985 NIOSH report on DCI).
The 1992 French Decompression Tables proposed for use by the applicant provide for stops during worker decompression (i.e., staged decompression) to control the release of nitrogen gas from tissues into the blood system. Studies show that staged decompression, in combination with other features of the 1992 French Decompression Tables such as the use of oxygen, result in a lower incidence of DCI than the OSHA decompression requirements of 29 CFR 1926.803, which specify the use of automatically regulated continuous decompression (see footnotes 5 through 10 below for references to these studies).
A. A hyperbaric supervisor (a competent person experienced and trained in hyperbaric operations, procedures, and safety) directly supervises all hyperbaric interventions and ensures that the man-lock attendant, who is a competent person in the manual control of hyperbaric systems, follows the schedule specified in the decompression tables, including stops; and
B. The use of the 1992 French Decompression Tables for staged decompression offers an equal or better level of management and control over the decompression process than an automatic controller and results in lower occurrences of DCI.
Accordingly, the applicant is applying for a permanent variance from the OSHA standard at 29 CFR 1926.803(g)(1)(iii), which requires automatic controls to regulate decompression. As noted above, the applicant is committed to conduct the staged decompression according to the 1992 French Decompression Tables under the direct control of the trained man-lock attendant and under the oversight of the hyperbaric supervisor.
The OSHA compressed-air standard for construction requires employers to use a special decompression chamber when total decompression time exceeds 75 minutes (see 29 CFR 1926.803(g)(1)(xvii)). Another provision
Tully only applied for an interim order and variance for one site, the New York Siphon Tunnel Project, so the permanent variance OSHA is granting Tully is in effect in the State of New York solely during completion of the project. While the State of New York has an OSHA-approved safety and health program, that program covers only public-sector employers and not private-sector employers such as Tully; therefore, Federal OSHA continues to cover private-sector employers in the State of New York.
This section describes the alternative means of compliance with 29 CFR 1926.803(e)(5), (f)(1), (g)(1)(iii), and (g)(1)(xvii) and provides additional detail regarding the conditions that form the basis of Tully's permanent variance.
The scope of the permanent variance limits coverage to the work situations specified under this condition. Clearly defining the scope of the permanent variance provides Tully, Tully's employees, and OSHA with necessary information regarding the work situations in which the permanent variance applies.
This condition specifies the circumstances under which the permanent variance is in effect, notably only for hyperbaric work performed during interventions. The condition places clear limits on the circumstances under which the applicant can expose its employees to hyperbaric pressure.
Condition C defines a number of abbreviations used in the permanent variance. OSHA believes that defining these abbreviations serves to clarify and standardize their usage, thereby enhancing the applicant's and its employees' understanding of the conditions specified by the permanent variance.
The condition defines a series of terms, mostly technical terms, used in the permanent variance to standardize and clarify their meaning. Defining these terms serves to enhance the applicant's and its employees' understanding of the conditions specified by the permanent variance.
This condition requires the applicant to develop and submit to OSHA a project-specific HOM at least six months before using the EPBTBM for tunneling operations. This requirement ensures that the applicant develops hyperbaric safety and health procedures suitable for each specific project. The HOM enables OSHA to determine that the specific safety and health instructions and measures it specifies are appropriate and will adequately protect the safety and health of the CAWs. It also enables OSHA to enforce these instructions and measures. Additionally, the condition includes a series of related hazard prevention and control requirements and methods (e.g., decompression tables, job hazard analysis (JHA), operations and inspections checklists) designed to ensure the continued effective functioning of the hyperbaric equipment and operating system.
Condition F requires the applicant to develop and implement an effective system of information sharing and communication. Effective information sharing and communication ensures that affected workers receive updated information regarding any safety-related hazards and incidents, and corrective actions taken, prior to the start of each shift. The condition also requires the applicant to ensure that reliable means of emergency communications are available and maintained for affected workers and support personnel during hyperbaric operations. Availability of such reliable means of communications enables affected workers and support personnel to respond quickly and effectively to hazardous conditions or emergencies that may develop during EPBTBM operations.
This condition requires the applicant to develop and implement an effective qualification and training program for affected workers. The condition specifies the factors that an affected worker must know to perform safely during hyperbaric operations, including how to enter, work in, and exit from hyperbaric conditions under both normal and emergency conditions. Having well-trained and qualified workers performing hyperbaric intervention work ensures that they recognize, and respond appropriately to, hyperbaric safety and health hazards. These qualification and training requirements enable affected workers to cope effectively with emergencies, as well as the discomfort and physiological effects of hyperbaric exposure, thereby preventing worker injury, illness, and fatalities.
Paragraph (2)(e) of this condition also requires the applicant to provide affected workers with information they can use to contact the appropriate healthcare professionals if they believe they are developing hyperbaric-related health effects. This requirement provides for early intervention and treatment of DCI and other health effects resulting from hyperbaric exposure, thereby reducing the potential severity of these effects.
Condition H requires the applicant to develop, implement, and operate a program of frequent and regular inspections of the EPBTBM's hyperbaric equipment and support systems, and associated work areas. This condition helps to ensure the safe operation and physical integrity of the equipment and work areas necessary to conduct hyperbaric operations. The condition also enhances worker safety by reducing the risk of hyperbaric-related emergencies.
Paragraph (3) of this condition requires the applicant to document tests, inspections, corrective actions, and repairs involving the EPBTBM, and maintain these documents at the job site for the duration of the job. This
This condition requires the applicant to consult with its designated medical advisor regarding special compression or decompression procedures appropriate for any unacclimated CAW. This provision ensures that the applicant consults with the medical advisor, and involves the medical advisor in the evaluation, development, and implementation of compression or decompression protocols appropriate for any CAW requiring acclimation to the hyperbaric conditions encountered during EPBTBM operations. Accordingly, CAWs requiring acclimation have an opportunity to acclimate prior to exposure to these hyperbaric conditions. OSHA believes this condition will prevent or reduce adverse reactions among CAWs to the effects of compression or decompression associated with the intervention work they perform in the EPBTBM.
Condition J requires the applicant to maintain records of specific factors associated with each hyperbaric intervention. The information gathered and recorded under this provision, in concert with the information provided under Condition K, enables the applicant and OSHA to determine the effectiveness of the permanent variance in preventing DCI and other hyperbaric-related effects.
Under this condition, the applicant must, within specified periods: (1) Notify OSHA of any recordable injuries, illnesses, or fatalities that occur as a result of hyperbaric exposures during EPBTBM operations (using the OSHA 301 Incident Report form
These notification requirements enable the applicant, its employees, and OSHA to determine the effectiveness of the permanent variance in providing the requisite level of safety to the applicant's workers and, based on this determination, whether to revise or revoke the conditions of the permanent variance. Timely notification permits OSHA to take whatever action may be necessary and appropriate to prevent further injuries and illnesses. Providing notification to employees informs them of the precautions taken by the applicant to prevent similar incidents in the future.
This condition also requires the applicant to notify OSHA if it ceases to do business, has a new address or location for its main office, or transfers the operations covered by the permanent variance to a successor company. In addition, the condition specifies that OSHA must approve the transfer of the permanent variance to a successor company. These requirements allow OSHA to communicate effectively with the applicant regarding the status of the permanent variance, and expedite the Agency's administration and enforcement of the permanent variance. Stipulating that an applicant must have OSHA's approval to transfer a variance to a successor company provides assurance that the successor company has knowledge of, and will comply with, the conditions specified by permanent variance, thereby ensuring the safety of workers involved in performing the operations covered by the permanent variance.
OSHA received one public comment on the proposed variance application. Minda Nieblas, M.D. (occupational health physician), supported granting the permanent variance (Document ID No. OSHA–2012–0036–0012). In her comment, Dr. Nieblas proposed expanding and clarifying specific conditions of the proposed variance as follows: (1) Incorporating a clear definition of decompression illness (DCI) to include a broader range of hyperbaric health effects; (2) expanding the training provided to compressed air workers to improve their ability to recognize and report the signs and symptoms of decompression illness; (3) expanding the data collection associated with decompression illnesses experienced by CAWs to include a broader range of hyperbaric health effects; and (4) expanding the investigation and reporting criteria for hyperbaric incidents.
The remainder of this section describes the specific comments submitted by Dr. Nieblas and OSHA's responses to them.
It is important for CAW to recognize the signs and symptoms of decompression illness. However, it is also important that workers are trained about and how to recognize other adverse health effects from working at pressures. OSHA should consider adding requirements for training CAW regarding barotrauma, nitrogen narcosis, oxygen toxicity and any other health effects associated with work in compressed air or mixed gasses. It is not clear from the variance if the definition of DCI encompasses these adverse health effects.
Section J (Recordkeeping) OSHA should consider requiring additional recordkeeping for hyperbaric interventions. OSHA should consider requiring recordkeeping information to include post-intervention assessment of each individual worker for signs and symptoms of decompression illness, barotrauma, nitrogen narcosis, oxygen toxicity or other health effects associated with work in compressed air or mixed gasses for each hyperbaric intervention. Lack of standardized data collection has made it difficult to evaluate the incidence of adverse health effects in these workers. It would be useful if OSHA, NIOSH, and experts from academia and industry developed standardized tools to assess CAW pre/post intervention. This data collection could be used to refine tables and practices across the industry.
OSHA finds that the recommendation to develop standardized tools for assessing CAWs for pre- and post-hyperbaric intervention health effects, while undoubtedly highly useful for analyzing and evaluating the incidence of adverse health outcomes, is well beyond the scope of this variance. However, OSHA added language to conditions J and K to clarify the hyperbaric conditions that Tully must identify and include on the OSHA 301 form as part of the recordable injury or illness investigation.
OSHA should clarify that the incident must be reported even if the worker did not require recompression. OSHA should also be notified about injuries and illness that may have been the result of impairment from elevated nitrogen or oxygen partial pressures since these are the result of exposure to hyperbaric conditions. The incident investigation report must include an estimate of employee workload, the composition of the gas mixture, temperature in the work and decompression environments, a medical summary of the illness or injury, and the contact information for the treating healthcare provider.
This information is needed to determine the root cause of the injury/illness.
As a result of these comprehensive reporting and notification requirements, OSHA finds that the recommendation to expand the information requirements, while undoubtedly highly useful for evaluating and determining the root cause of hyperbaric incidents, is well beyond the scope of this proposed variance application. However, OSHA added language to condition K to clarify that recordable hyperbaric injuries or illnesses include those conditions that do not require recompression treatment (e.g., nitrogen narcosis, oxygen toxicity, barotrauma).
As noted earlier, on January 7, 2014, OSHA granted Tully an interim order (79 FR 844) to remain in effect until completion of the project or until the Agency makes a decision on its application for a permanent variance. During this period, the applicant had to comply fully with the conditions of the interim order (as an alternative to complying with the requirements of 29 CFR 1926.803 (hereafter, “the standard”)) that:
A. Prohibit employers using compressed air under hyperbaric conditions from subjecting workers to pressure exceeding 50 p.s.i.g., except in an emergency (29 CFR 1926.803(e)(5));
B. Require the use of decompression values specified by the decompression tables in Appendix A of the compressed-air standard (29 CFR 1926.803(f)(1)); and
C. Require the use of automated operational controls and a special decompression chamber (29 CFR 1926.803(g)(1)(iii) and .803(g)(1)(xvii), respectively).
After reviewing the proposed alternatives OSHA determined that:
A. Tully developed, and proposed to implement, effective alternative measures to the prohibition of using compressed air under hyperbaric conditions exceeding 50 p.s.i.g. The alternative measures include use of engineering and administrative controls of the hazards associated with work performed in compressed-air conditions exceeding 50 p.s.i.g. while engaged in the construction of a subaqueous tunnel using advanced shielded mechanical-excavation techniques in conjunction with an EPBTBM. Prior to conducting interventions in the EPBTBM's pressurized working chamber, the applicant halts tunnel excavation and prepares the machine and crew to conduct the interventions. Interventions involve inspection, maintenance, or repair of the mechanical-excavation components located in the working chamber.
B. Tully developed, and proposed to implement, safe hyperbaric work procedures, emergency and contingency procedures, and medical examinations for the project's CAWs. The applicant compiled these standard operating procedures into a project-specific HOM. The HOM discusses the procedures and personnel qualifications for performing work safely during the compression and decompression phases of interventions. The HOM also specifies the decompression tables the applicant proposes to use. Depending on the maximum working pressure and exposure times during the interventions, the tables provide for decompression using air, pure oxygen, or a combination of air and oxygen. The decompression tables also include delays or stops for various time intervals at different pressure levels during the transition to atmospheric pressure (i.e., staged
C. Tully developed, and proposed to implement, a training program to instruct affected workers in the hazards associated with conducting hyperbaric operations.
D. Tully developed, and proposed to implement, an effective alternative to the use of automatic controllers that continuously decrease pressure to achieve decompression in accordance with the tables specified by the standard. The alternative includes using the 1992 French Decompression Tables for guiding staged decompression to achieve lower occurrences of DCI, using a trained and competent attendant for implementing appropriate hyperbaric entry and exit procedures, and providing a competent hyperbaric supervisor and attending physician certified in hyperbaric medicine, to oversee all hyperbaric operations.
E. Tully developed, and proposed to implement, an effective alternative to the use of the special decompression chamber required by the standard. EPBTBM technology permits the tunnel's work areas to be at atmospheric pressure, with only the face of the EPBTBM (i.e., the working chamber) at elevated pressure. The applicant limits interventions conducted in the working chamber to performing required inspection, maintenance, and repair of the cutting tools on the face of the EPBTBM. The EPBTBM's man lock and working chamber provide sufficient space for the maximum crew of three CAWs to stand up and move around, and safely accommodate decompression times up to 360 minutes. Therefore, OSHA determined that the EPBTBM's man lock and working chamber function as effectively as the special decompression chamber required by the standard.
OSHA conducted a review of the scientific literature regarding decompression to determine whether the alternative decompression method (i.e., the 1992 French Decompression Tables) proposed by the applicant provide a workplace as safe and healthful as that provided by the standard. Based on this review, OSHA determined that tunneling operations performed with these tables
The review conducted by OSHA found several research studies supporting the determination that the 1992 French Decompression Tables result in a lower rate of DCI than the decompression tables specified by the standard. For example, H. L. Anderson studied the occurrence of DCI at maximum hyperbaric pressures ranging from 4 p.s.i.g. to 43 p.s.i.g. during construction of the Great Belt Tunnel in Denmark (1992–1996);
Based on a review of available evidence, the experience of State Plans that either granted variances (Nevada, Oregon, and Washington)
Under Section 6(d) of the Occupational Safety and Health Act of 1970 (29 U.S.C. 655), and based on the record discussed above, the Agency finds that when the employer complies with the conditions of the following order, the working conditions of the employer's workers are at least as safe and healthful as if the employer complied with the working conditions specified by paragraphs (e)(5), (f)(1), (g)(1)(iii), and (g)(1)(xvii) of 29 CFR 1926.803. Therefore, Tully will: (1) Comply with the conditions listed below under “Specific Conditions of the Permanent Variance” for the period between the date of this notice and completion of the New York Siphon Tunnel Project, but no later than March 31, 2015; (2) comply fully with all other applicable provisions of 29 CFR part 1926; and (3) provide a copy of this
As of the effective date of this final order, OSHA is revoking the interim order granted to the employer on January 7, 2014.
OSHA issues this final order authorizing Tully/OHL USA Joint Venture (“the employer”) to comply with the following conditions instead of complying with the requirements of paragraphs 29 CFR 1926.803(e)(5), (f)(1), (g)(1)(iii), and (g)(1)(xvii). This final order applies to Tully/OHL USA Joint Venture at the New York Siphon Tunnel Project. These conditions are:
The permanent variance applies only to work:
1. That occurs in conjunction with construction of the New York Siphon Tunnel Project, a subaqueous tunnel constructed using advanced shielded mechanical-excavation techniques and involving operation of an EPBTBM;
2. Performed under compressed-air and hyperbaric conditions up to 58 p.s.i.g.;
3. In the EPBTBM's forward section (the working chamber) and associated hyperbaric chambers used to pressurize and decompress employees entering and exiting the working chamber; and
4. Except for the requirements specified by 29 CFR 1926.803(e)(5), (f)(1), (g)(1)(iii), and (g)(1)(xvii), Tully must comply fully with all other applicable provisions of 29 CFR part 1926.
5. This order will remain in effect until one of the following conditions occurs: (1) completion of the New York Siphon Tunnel Project, but no later than March 31, 2015; or (2) OSHA modifies or revokes this final order in accordance with 29 CFR 1905.13.
The permanent variance applies only when Tully stops the tunnel-boring work, pressurizes the working chamber, and the CAWs either enter the working chamber to perform interventions (i.e., inspect, maintain, or repair the mechanical-excavation components), or exit the working chamber after performing interventions.
Abbreviations used throughout this permanent variance include the following:
The following definitions apply to this permanent variance. These definitions supplement the definitions in Tully's project-specific HOM.
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Note: Health effects associated with hyperbaric intervention, but not considered symptoms of DCI, can include: barotrauma (direct damage to air-containing cavities in the body such as ears, sinuses, and lungs); nitrogen narcosis (reversible alteration in consciousness that may occur in hyperbaric environments and caused by the anesthetic effect of certain gases at high pressure); and oxygen toxicity (a central nervous system condition resulting from the harmful effects of breathing molecular oxygen (O
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1. Tully must develop and implement a project-specific HOM, and submit the HOM to OSHA at least six months before using the EPBTBM. Tully must receive a written acknowledgement from OSHA regarding the acceptability of the HOM.
2. Tully must implement the safety and health instructions included in the manufacturer's operations manuals for the EPBTBM, and the safety and health instructions provided by the manufacturer for the operation of decompression equipment.
3. Tully must use air as the only breathing gas in the working chamber.
4. Tully must use the 1992 French Decompression Tables for air, air-oxygen, and oxygen decompression specified in the HOM, specifically the tables titled “French Regulation Air Standard Tables.”
5. Tully must equip man-locks used by its employees with an oxygen-delivery system as specified by the HOM. Tully must not store oxygen or other compressed gases used in conjunction with hyperbaric work in the tunnel.
6. Workers performing hot work under hyperbaric conditions must use flame-retardant personal protective equipment and clothing.
7. In hyperbaric work areas, Tully must maintain an adequate fire-suppression system approved for hyperbaric work areas.
8. Tully must develop and implement one or more JHAs for work in the hyperbaric work areas, and review, periodically and as necessary (e.g., after making changes to a planned intervention that affects its operation), the contents of the JHAs with affected employees. The JHAs must include all the job functions that the risk assessment
9. Tully must develop a set of checklists to guide compressed-air work and ensure that employees follow the procedures required by this permanent variance (including all procedures required by the HOM, which this permanent variance incorporates by reference). The checklists must include all steps and equipment functions that the risk assessment indicates are essential to prevent injury or illness during compressed-air work.
10. Tully must ensure that the safety and health provisions of the HOM adequately protect the workers of all contractors and subcontractors involved in hyperbaric operations.
1. Prior to beginning a shift, Tully must implement a system that informs workers exposed to hyperbaric conditions of any hazardous occurrences or conditions that might affect their safety, including hyperbaric incidents, gas releases, equipment failures, earth or rock slides, cave-ins, flooding, fires, or explosions.
2. Tully must provide a power-assisted means of communication among affected workers and support personnel in hyperbaric conditions where unassisted voice communication is inadequate.
a. Tully must use an independent power supply for powered communication systems, and these systems must operate such that use or disruption of any one phone or signal location will not disrupt the operation of the system from any other location.
b. Tully must test communication systems at the start of each shift and as necessary thereafter to ensure proper operation.
Tully must:
1. Ensure that each affected worker receives effective training on how to safely enter, work in, exit from, and undertake emergency evacuation or rescue from, hyperbaric conditions, and document this training.
2. Provide effective instruction, before beginning hyperbaric operations, to each worker who performs work, or controls the exposure of others, in hyperbaric conditions, and document this instruction. The instruction must include topics such as:
a. The physics and physiology of hyperbaric work;
b. Recognition of pressure-related injuries;
c. Information on the causes and recognition of the signs and symptoms associated with decompression illness, and other hyperbaric intervention-related health effects (e.g., barotrauma, nitrogen narcosis, and oxygen toxicity).
d. How to avoid discomfort during compression and decompression; and
e. Information the workers can use to contact the appropriate healthcare professionals should the workers have concerns that they may be experiencing adverse health effects from hyperbaric exposure.
3. Repeat the instruction specified in paragraph (2) of this condition periodically and as necessary (e.g., after making changes to its hyperbaric operations).
4. When conducting training for its hyperbaric workers, make this training available to OSHA personnel and notify the OTPCA at OSHA's national office and OSHA's Manhattan Area Office before the training takes place.
1. Tully must initiate and maintain a program of frequent and regular inspections of the EPBTBM's hyperbaric equipment and support systems (such as temperature control, illumination, ventilation, and fire-prevention and fire-suppression systems), and hyperbaric work areas, as required under 29 CFR 1926.20(b)(2) by:
a. Developing a set of checklists to be used by a competent person in conducting weekly inspections of hyperbaric equipment and work areas; and
b. Ensuring that a competent person conducts daily visual checks, as well as weekly inspections of the EPBTBM.
2. If the competent person determines that the equipment constitutes a safety hazard, Tully must remove the equipment from service until it corrects the hazardous condition and has the correction approved by a qualified person.
3. Tully must maintain records of all tests and inspections of the EPBTBM, as well as associated corrective actions and repairs, at the job site for the duration of the job.
Tully must consult with its attending physician concerning the need for special compression or decompression exposures appropriate for CAWs not acclimated to hyperbaric exposure.
Tully must maintain a record of any recordable injury, illness, or fatality (as defined by 29 CFR part 1904 Recording and Reporting Occupational Injuries and Illnesses) resulting from exposure of an employee to hyperbaric conditions by completing the OSHA 301 Incident Report form and OSHA 300 Log of Work Related Injuries and Illnesses.
Examples of important information to include on the OSHA 301 Incident Report form (along with the corresponding question on the form) are: the task performed (Question (Q) 14); an estimate of the CAW's workload (Q 14); the composition of the gas mixture (e.g., air or oxygen (Q 14)); the maximum working pressure (Q 14); temperatures in the work and decompression environments (Q 14); unusual occurrences, if any, during the task or decompression (Q 14); time of symptom onset (Q 15); duration between decompression and onset of symptoms (Q 15); type and duration of symptoms (Q 16); a medical summary of the illness or injury (Q 16); duration of the hyperbaric intervention (Q 17); possible contributing factors (Q 17); the number of prior interventions completed by the injured or ill CAW (Q 17); the number of prior interventions completed by the injured or ill CAW at this working pressure (Q 17); contact information for the treating healthcare provider (Q 17); and date and time of last hyperbaric exposure for this CAW.
In addition to completing the OSHA 301 Incident Report form and OSHA 300 Log of Work Related Injuries and Illnesses, the employer must maintain records of:
1. The date, times (e.g., began compression, time spent compressing, time performing intervention, time spent decompressing), and pressure for each hyperbaric intervention.
2. The name of each individual worker exposed to hyperbaric pressure and the decompression protocols and results for each worker.
3. The total number of interventions and the total hyperbaric exposure duration at each pressure.
4. The results of the post-intervention physical assessment of each CAW for signs and symptoms of decompression illness, barotrauma, nitrogen narcosis, oxygen toxicity or other health effects associated with work in compressed air or mixed gases for each hyperbaric intervention.
1. To assist OSHA in administering the conditions specified herein, the employer must:
a. Notify the OTPCA and the Manhattan Area Office of any recordable injury, illness, or fatality (by submitting the completed OSHA 301 Incident Report form
b. Provide certification within 15 days of the incident that the employer informed affected workers of the incident and the results of the incident investigation (including the root-cause determination and preventive and corrective actions identified and implemented).
c. Notify the OTPCA and the Manhattan Area Office within 15 working days in writing of any change in the compressed-air operations that affects the employer's ability to comply with the conditions specified herein.
d. Upon completion of the New York Siphon Tunnel Project, evaluate the effectiveness of the decompression tables used throughout the project, and provide a written report of this evaluation to the OTPCA and the Manhattan Area Office.
Note: The evaluation report is to contain summaries of: (1) The number, dates, durations, and pressures of the hyperbaric interventions completed; (2) decompression protocols implemented (including composition of gas mixtures (air and/or oxygen), and the results achieved; (3) the total number of interventions and the number of hyperbaric incidents (decompression illnesses and/or health effects associated with hyperbaric interventions as recorded on OSHA 301 and 300 forms, and relevant medical diagnoses and treating physicians' opinions); and (4) root causes of any hyperbaric incidents, and preventive and corrective actions identified and implemented.
e. To assist OSHA in administering the conditions specified herein, inform the OTPCA and the Manhattan Area Office as soon as possible after it has knowledge that it will:
i. Cease to do business;
ii. Change the location and address of the main office for managing the tunneling operations specified herein; or
iii. Transfer the operations specified herein to a successor company.
f. Notify all affected employees of this permanent variance by the same means required to inform them of its application for a variance.
2. OSHA must approve the transfer of this permanent variance to a successor company.
David Michaels, Ph.D., MPH, Assistant Secretary of Labor for Occupational Safety and Health, 200 Constitution Avenue NW., Washington, DC 20210, authorized the preparation of this notice. Accordingly, the Agency is issuing this notice pursuant to Section 29 U.S.C. 655(6)(d), Secretary of Labor's Order No. 1–2012 (77 FR 3912, Jan. 25, 2012), and 29 CFR 1905.11.
Institute of Museum and Library Services, The National Foundation for the Arts and the Humanities.
30-Day notice of submission of information collection approval from the Office of Management and Budget and request for comments.
As part of a Federal Government-wide effort to streamline the process to seek feedback from the public on service delivery, IMLS has submitted a Generic Information Collection Request (Generic ICR): “Generic Clearance for the Collection of Qualitative Feedback on Agency Service
Comments must be submitted by June 22, 2014.
Send comments regarding these information collections to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 Seventeenth Street NW., Washington, DC 20503, Attention: FRA Desk Officer. Alternatively, comments may be sent via email to the Office of Information and Regulatory Affairs (OIRA), Office of Management and Budget, at the following address:
To request additional information, please contact Matthew Birnbaum, Ph.D., Evaluation and Research Officer, Planning, Research and Evaluation, Institute of Museum and Library Services, 1800 M St. NW., 9th Floor, Washington, DC 20036. Dr. Birnbaum can be reached by Telephone: 202–653–4760, Fax: 202– 653–4601, or by email at
Feedback collected under this generic clearance will provide useful information, but it will not yield data that can be generalized to the overall population. This type of generic clearance for qualitative information will not be used for quantitative information collections that are designed to yield reliably actionable results, such as monitoring trends over time or documenting program performance. Such data uses require more rigorous designs that address: The target population to which generalizations will be made, the sampling frame, the sample design (including stratification and clustering), the precision requirements or power calculations that justify the proposed sample size, the expected response rate, methods for assessing potential non-response bias, the protocols for data collection, and any testing procedures that were or will be undertaken prior fielding the study. Depending on the degree of influence the results are likely to have, such collections may still be eligible for submission for other generic mechanisms that are designed to yield quantitative results.
The Agency received no comments in response to the 60-day notice published in the
Below we provide the projected average estimates for the next three years:
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 Office of Management and Budget control number.
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing requesting the addition of a Global Expedited Package Services 3 (MC2010–28) negotiated service agreement to the competitive product list. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202–789–6820.
On May 16, 2014, the Postal Service filed notice that it has entered into an additional Global Expedited Package Services 3 (GEPS 3) negotiated service agreement (Agreement).
To support its Notice, the Postal Service filed a copy of the Agreement, a copy of the Governors' Decision authorizing the product, a certification of compliance with 39 U.S.C. 3633(a), and an application for non-public treatment of certain materials. It also filed supporting financial workpapers.
The Commission establishes Docket No. CP2014–49 for consideration of matters raised by the Notice.
The Commission invites comments on whether the Postal Service's filing is consistent with 39 U.S.C. 3632, 3633, or 3642, 39 CFR part 3015, and 39 CFR part 3020, subpart B. Comments are due no later than May 27, 2014. The public portions of the filing can be accessed via the Commission's Web site (
The Commission appoints James F. Callow to serve as Public Representative in this docket.
1. The Commission establishes Docket No. CP2014–49 for consideration of the matters raised by the Postal Service's Notice.
2. Pursuant to 39 U.S.C. 505, James F. Callow is appointed to serve as an officer of the Commission to represent the interests of the general public in this proceeding (Public Representative).
3. Comments are due no later than May 27, 2014.
4. The Secretary shall arrange for publication of this order in the
By the Commission.
Under Section 2(e)(2) of the Railroad Retirement Act (RRA), an age and service annuity, spouse annuity, or divorced spouse annuity cannot be paid unless the Railroad Retirement Board (RRB) has evidence that the applicant has ceased railroad employment and relinquished rights to return to the service of a railroad employer. Under Section 2(f)(6) of the RRA, earnings deductions are required for each month an annuitant works in certain non-railroad employment termed Last Pre-Retirement Non-Railroad Employment.
Normally, the employee, spouse, or divorced spouse relinquishes rights and certifies that employment has ended as part of the annuity application process. However, this is
The estimated annual respondent burden is as follows:
Notice is hereby given in accordance with Public Law 92–463 that the Actuarial Advisory Committee will hold a meeting on June 5, 2014, at 10:00 a.m. at the office of the Chief Actuary of the U. S. Railroad Retirement Board, 844 North Rush Street, Chicago, Illinois, on the conduct of the 26th Actuarial Valuation of the Railroad Retirement System. The agenda for this meeting will include a discussion of the assumptions to be used in the 26th Actuarial Valuation. A report containing recommended assumptions and the experience on which the recommendations are based will have been sent by the Chief Actuary to the Committee before the meeting.
The meeting will be open to the public. Persons wishing to submit written statements or make oral presentations should address their communications or notices to the Actuarial Advisory Committee, c/o Chief Actuary, U. S. Railroad Retirement Board, 844 North Rush Street, Chicago, Illinois 60611–2092.
Securities and Exchange Commission (the “Commission”).
Notice of an application for an order under sections 6(c), 12(d)(1)(J), and 57(c) of the Investment Company Act of 1940 (“Act”) granting exemptions from sections 12(d)(1)(A), 18(a), 21(b), 57(a)(1)–(a)(3), and 61(a) of the Act; under section 57(i) of the Act and rule 17d–1 under the Act to permit certain joint transactions otherwise prohibited by section 57(a)(4) of the Act; and under section 12(h) of the Securities Exchange Act of 1934 (“Exchange Act”) granting an exemption from section 13(a) of the Exchange Act.
Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. Applicants, c/o Joseph B. Alala, III, Chief Executive Officer and President, Capitala Finance Corp., 4201 Congress Street, Suite 360, Charlotte, NC 28209.
Laura L. Solomon, Senior Counsel, at (202) 551–6915, or James M. Curtis, Branch Chief, at (202) 551–6712 (Division of Investment Management, Chief Counsel's Office).
The following is a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or an applicant using the Company name box, at
1. The Company, a Maryland corporation, is an externally-managed, non-diversified, closed-end management investment company that has elected to be regulated as a BDC under the Act.
2. On September 24, 2013, through a series of transactions, the Company acquired all of the interests in Fund II SBIC, Fund III SBIC and Florida Sidecar, as well as the General Partners (the “Subsidiaries”).
3. Fund II SBIC, a North Carolina limited partnership, and Fund III SBIC, a Delaware limited partnership, are SBICs licensed by the Small Business Administration (“SBA”) to operate under the Small Business Investment Act of 1958 (“SBA Act”). On September 24, 2013, Fund II SBIC and Fund III SBIC each filed an election to be regulated as a BDC within the meaning of section 2(a)(48) on Form N–54A under the Act, and each also filed a registration statement on Form 8–A to register its common stock under section 12 of the Exchange Act.
4. Fund II SBIC and Fund III SBIC are consolidated with the Company for financial reporting purposes.
5. Florida Sidecar, a Delaware limited partnership, is not registered under the Act under the exclusion from the definition of investment company contained in section 3(c)(7) of the Act,
6. Capitala Investment Advisors is a Delaware limited liability company and serves as the investment adviser to the Company, the SBIC Subsidiaries and Florida Sidecar. Capitala Investment Advisors is registered as an investment adviser under the Investment Advisers Act of 1940. Pursuant to an investment management agreement with the Company that satisfies the requirements under sections 15(a) and (c) of the Act, Capitala Investment Advisors manages the consolidated assets of the Company, including Fund II SBIC, Fund III SBIC and Florida Sidecar. The investment professionals of Capitala Investment Advisors are responsible for sourcing potential investments, conducting research and diligence on potential investments and equity sponsors, analyzing investment opportunities, structuring investments and monitoring the investments and portfolio companies of the Company and its wholly-owned subsidiaries, including Fund II SBIC, Fund III SBIC and Florida Sidecar. Applicants anticipate that Capitala Investment Advisors will also provide management and advisory services to all Subsidiaries.
1. Applicants request an order under sections 6(c), 12(d)(1)(J), 57(c) and 57(i) of the Act and rule 17d–1 under the Act granting exemptions from sections 12(d)(1)(A), 18(a), 21(b), 57(a)(1), 57(a)(2), 57(a)(3), and 61(a) of the Act and permitting certain joint transactions otherwise prohibited by section 57(a)(4) of the Act to permit the Company and its Subsidiaries to operate effectively as one company, specifically to: (a) Engage in certain transactions with each other; (b) invest in securities in which the other is or proposes to be an investor that would otherwise be permitted if the Company and the Subsidiaries were one company; and (c) be subject to modified consolidated asset coverage requirements for senior securities issued by a BDC and its SBIC Subsidiaries. Applicants also request an order under section 12(h) of the Exchange Act for an exemption for Fund II SBIC and Fund III SBIC from section 13(a) of the Exchange Act, so as to allow filing of consolidated reports with the Commission.
2. Section 12 of the Act is made applicable to BDCs by section 60 of the Act. Section 12(d)(1)(A) makes it unlawful for any registered investment company to purchase or otherwise acquire the securities of another investment company, except to the extent permitted by sections 12(d)(1)(A)(i), (ii) and (iii). Rule 60a–1 exempts the acquisition by a BDC of the securities of an SBIC that is operated as a wholly-owned subsidiary of the BDC from section 12(d)(1)(A) of the Act. Accordingly, since the Company has elected BDC status, and since Fund II SBIC and Fund III SBIC are operated as wholly-owned subsidiaries of the Company, the transfer of assets from the Company to Fund II SBIC or Fund III SBIC should be exempt from the provisions of section 12(d)(1)(A) by virtue of rule 60a–1. However, the provisions of section 12(d)(1) also apply to the activities of Fund II SBIC and Fund III SBIC since each has elected BDC status under the Act. Any loans or advances by Fund II SBIC or Fund III SBIC to the Company might be deemed to violate section 12(d)(1)(A)(ii) or (iii) if the loans or advances are construed as purchases of the securities of the Company by Fund II SBIC or Fund III SBIC.
3. Applicants request an exemption under section 12(d)(1)(J) from section 12(d)(1)(ii) and (iii) of the Act to permit the acquisition by either of Fund II SBIC or Fund III SBIC of any securities of the Company representing indebtedness. Section 12(d)(1)(J) of the Act provides that the Commission may exempt persons or transactions from any provision of section 12(d)(1) if and to the extent such exception is consistent with the public interest and the protection of investors. Applicants state that the requested relief meets this standard because Fund II SBIC's or Fund III SBIC's wholly owned subsidiary status and consolidated financial reporting with the Company will both eliminate the possibility of overreaching and prevent confusion as to the financial status of the Company to the Company's stockholders, who are the investors that the Act is intended to protect.
4. Section 18(a) prohibits a registered closed-end investment company from issuing any class of senior security or selling any such security of which it is the issuer unless the company complies with the asset coverage requirements set forth in that section. Section 61(a) applies section 18, with certain modifications, to a BDC. Section 18(k), however, provides an exemption from sections 18(a)(1)(A) and (B) (relating to senior securities representing indebtedness) for SBICs.
5. Applicants state that a question exists as to whether the Company must comply with the asset coverage requirements of section 18(a) on a consolidated basis because the Company may be an indirect issuer of senior securities issued by either of the SBIC Subsidiaries. To do so would mean that the Company would treat as its own all assets held directly by the Company and the SBIC Subsidiaries and would also treat as its own any liabilities of the SBIC Subsidiaries, including senior securities as to which the SBIC Subsidiaries are exempt from the provisions of sections 18(a)(1)(A) and (B) by virtue of section 18(k). Accordingly, applicants request relief under section 6(c) of the Act from sections 18(a) and 61(a) of the Act to permit the Company to exclude from its consolidated asset coverage ratio any senior security representing indebtedness that is issued by either of the SBIC Subsidiaries.
6. Section 6(c) of the Act, in relevant part, permits the Commission to exempt any transaction or class of transactions from any provision of the Act if, and to the extent that, such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Applicants state that, without the requested relief from sections 18(a) and 61(a), the ability of the SBIC Subsidiaries to obtain the kind of financing that would be available to the Company if it were to conduct the SBIC operations itself would be restricted. Applicants state that applying section 18(k) to the Company with respect to any senior security representing indebtedness that is issued by the SBIC Subsidiaries would not harm the public interest by exposing investors to risks of unconstrained leverage, because the SBA regulates the capital structure of the SBIC Subsidiaries. Companies operating under the SBA Act, such as the SBIC Subsidiaries, are subject to the SBA's substantial regulation of permissible
7. Sections 57(a)(1) and (2) of the Act make it unlawful, with certain exceptions, for any person related to a BDC in the manner described in section 57(b), or any affiliated person of that person (a) to sell any security or other property to the BDC or to any company controlled by the BDC, or (b) to purchase from any BDC or from any company controlled by such BDC any security or other property. Section 57(b) includes any person who, directly or indirectly, controls, is controlled by, or is under common control with the BDC or any person who controls, is controlled by, or is under common control with that person. Applicants state that the Company is an affiliated person of Fund II SBIC, Fund III SBIC and Florida Sidecar by reason of its direct or indirect ownership of all of the limited partnership interests in each of Fund II SBIC, Fund III SBIC and Florida Sidecar and its indirect ownership of 100% of the general partnership interests in Fund II SBIC, Fund III SBIC and Florida Sidecar through its 100% ownership of the General Partners. Fund II SBIC, Fund III SBIC and Florida Sidecar each is a person related to each other in a manner described in section 57(b) because each is deemed to be under the control of the Company and thus under common control. Any Subsidiary would also each be a person related to Fund II SBIC and Fund III SBIC in a manner described in section 57(b) as long as it is under the common control of the Company.
8. Applicants state that there may be circumstances when one or more of the Company and a Subsidiary would purchase all or a portion of the portfolio investments held by one of the others in order to enhance the liquidity of the selling company or for other reasons, subject in each case to the requirements of the SBA and the regulations thereunder, as applicable. In addition, there may be circumstances when it is in the interest of the Company and/or its Subsidiaries for any non-BDC Subsidiary to invest in securities of an issuer that may be deemed to be a person related to either the Company or Fund II SBIC or Fund III SBIC in a manner described in section 57(b), or for the Company to invest in securities of an issuer that may be deemed to be a person related to a Subsidiary in a manner described in section 57(b).
9. Accordingly, applicants request relief under sections 57(a)(1) and (2) to permit any transaction in which one or more of the Company, Fund II SBIC, Fund III SBIC or any other Subsidiary would purchase all or a portion of the portfolio investments or other property held by one of the others. Applicants also request relief under sections 57(a)(1) and (2) to permit any transaction in which any non-BDC Subsidiary invests in securities of an issuer that may be deemed to be a person related to either the Company or Fund II SBIC or Fund III SBIC in a manner described in section 57(b), but only to the extent that any such transaction would not be prohibited if such Subsidiary were deemed to be part of the Company and not a separate company. Additionally, applicants request relief to permit the Company to invest in securities of an issuer that may be deemed to be a person related to a Subsidiary in a manner described in section 57(b) and permitting Fund II SBIC or Fund III SBIC to invest in securities of an issuer that may be deemed to be a person related to the Company or the Subsidiaries in a manner described in section 57(b). It is the intent of this request only to permit the Company and the Subsidiaries to do that which they otherwise would be permitted to do within the provisions of the Act if they were one company.
10. Section 57(c) directs the Commission to exempt a transaction from one or more provisions of sections 57(a)(1), (2) and (3) if the terms of the proposed transaction, including the consideration to be paid or received, are reasonable and fair and do not involve overreaching of the BDC or its stockholders or partners on the part of any person concerned, the proposed transaction is consistent with the policy of the BDC concerned and the proposed transaction is consistent with the general purposes of the Act.
11. Applicants submit that the requested relief from sections 57(a)(1) and (2) meets this standard. Applicants represent that the proposed operations as one company will enhance the efficient operations of the Company and its wholly-owned Subsidiaries, and allow them to deal with portfolio companies as if the Company and its Subsidiaries were one company. Applicants contend that the terms of the proposed transactions are reasonable and fair and do not involve overreaching of the Company, its stockholders, or the Subsidiaries that are BDCs by any person, and that the requested order would permit the Company and the Subsidiaries to carry out more effectively their purposes and objectives of investing primarily in small business concerns. Applicants also state that since Fund II SBIC and Fund III SBIC and any Subsidiary are wholly-owned subsidiaries of the Company and since no officers or directors of Fund II SBIC and Fund III SBIC, any Subsidiary or of the Company, or any controlling persons or other “upstream affiliates” of the Company will have any prohibited financial interest in the transactions described, there can be no overreaching on the part of any persons and no harm to the public interest in transactions solely between the Company and Fund II SBIC and Fund III SBIC. Finally, applicants note that the proposed transactions are consistent with the policy of the Company and Fund II SBIC and Fund III SBIC as specified in filings with the Commission and reports to stockholders, as well as consistent with the policies and provisions of the Act.
12. Section 57(a)(3) of the Act makes it unlawful for certain affiliated persons of a BDC, and certain affiliated persons of those persons, set out in section 57(b) to borrow money or other property from such BDC or from any company controlled by the BDC, except as permitted by section 21(b) or section 62. Section 21(b) of the Act (made applicable to BDCs by section 62) provides that it shall be unlawful for a BDC to lend any money or property, directly or indirectly, to any person that controls or is under common control with the BDC, except to any company that owns all of the outstanding securities of the BDC other than directors' qualifying shares.
13. The Company is an affiliated person of Fund II SBIC and Fund III SBIC by reason of its direct or indirect ownership of all of the limited partnership interests in Fund II SBIC and Fund III SBIC and its indirect ownership of all of the general partnership interests in Fund II SBIC and Fund III SBIC through its 100% ownership of the Fund II SBIC General Partner and Fund III SBIC General Partner. The Company does not directly own all of the outstanding securities of Fund II SBIC or Fund III SBIC because Fund II SBIC General Partner holds a 1.03% general partnership interest in Fund II SBIC and Fund III SBIC General Partner holds a 0.95% general partnership interest in Fund III SBIC and both SBIC Subsidiaries have issued SBA guaranteed debentures and, in the future, may have other outstanding securities in the form of indebtedness. Fund II SBIC and Fund III SBIC are affiliated persons of the Company because they are deemed to be under the control of the Company. Accordingly, the Company is related to Fund II SBIC and Fund III SBIC in the manner set
14. Applicants state that there may be instances when it would be in the best interests of the Company and its stockholders for the Company to make loans to its Subsidiaries that are BDCs. There may also be instances when it would be in the best interests of the Company and its stockholders for its Subsidiaries that are BDCs to make loans to the Company. Applicants note that, in the case of loans from Fund II SBIC or Fund III SBIC to the Company, the loans would be prohibited by section 21(b) and section 57(a)(3) because the borrower controls the lender and the lender may have outstanding securities not owned by the borrower. Accordingly, applicants request an order under section 6(c) exempting from the provisions of section 21(b) the lending of money or other property by Fund II SBIC or Fund III SBIC to the Company and by the Company to Fund II SBIC or Fund III SBIC. Applicants argue that because these transactions are solely between the Company and Fund II SBIC, Fund III SBIC, or its wholly-owned subsidiaries, they will have no substantive economic effect and there is be no basis for overreaching or harm to the public interest. Applicants also request an order under section 57(c) exempting from the provisions of section 57(a)(3) the borrowing of money or property by the Company from Fund II SBIC or Fund III SBIC. Applicants submit that the requested relief meets the standards of section 57(c).
15. Section 57(a)(4) of the Act makes it unlawful for certain persons related to a BDC in the manner set forth in section 57(b), acting as principal, to knowingly effect any transaction in which the BDC or a company controlled by the BDC is a joint or joint and several participant with that person in contravention of such rules and regulations as the Commission may prescribe for the purpose of limiting or preventing participation by the BDC or controlled company on a basis less advantageous than that of the other participant. Section 57(i) of the Act provides that rules and regulations under section 17(d) of the Act,
16. Applicants request relief under section 57(i) and rule 17d-1 to permit any joint transaction that would otherwise be prohibited by section 57(a)(4) between the Company and either or both of Fund II SBIC or Fund III SBIC with respect to any transaction involving investments by the Company or Fund II SBIC or Fund III SBIC in portfolio companies in which any is or is proposed to become an investor, but only to the extent that the transaction would not be prohibited if Fund II SBIC and Fund III SBIC (and all of their respective assets and liabilities) were deemed to be part of the Company, and not separate companies.
17. In determining whether to grant an order under section 57(i) and rule 17d-1, the Commission considers whether the participation of the BDC in the joint transaction is consistent with the provisions, policies, and purposes of the Act, and the extent to which such participation is on a basis different from or less advantageous than that of other participants. Applicants state that the proposed transactions are consistent with the policy and provisions of the Act and will enhance the interests of the Company and the Subsidiaries while retaining the important protections afforded by the Act. In addition, because the joint participants will conduct their operations as though they comprise one company, the participation of one will not be on a basis different from or less advantageous than the others. Accordingly, applicants submit that the standard for relief under section 57(i) and rule 17d-1 is satisfied.
18. Section 54 of the Act provides that a closed-end company may elect BDC treatment under the Act if the company has either a class of equity securities registered under section 12 of the Exchange Act or has filed a registration statement pursuant to section 12 of the Exchange Act for a class of its equity securities. Section 12(g) of the Exchange Act requires issuers with specified assets and a specified number of security holders to register under the Exchange Act. As a BDC, the Company has registered its common stock under section 12(b) of the Exchange Act. In order to elect BDC treatment under the Act, Fund II SBIC and Fund III SBIC voluntarily registered their securities under the Exchange Act.
19. By filing a registration statement under section 12 of the Exchange Act, absent an exemption, Fund II SBIC and Fund III SBIC would be required to make periodic filings with the Commission, even though Fund II SBIC and Fund III SBIC have only one equity holder. Section 13 of the Exchange Act is the primary section requiring such filings. Accordingly, applicants request an order under section 12(h) of the Exchange Act exempting Fund II SBIC and Fund III SBIC from the reporting requirements of section 13(a) of the Exchange Act.
20. Section 12(h) of the Exchange Act provides that the Commission may exempt an issuer from section 13 of the Exchange Act if the Commission finds that by reason of the number of public investors, amount of trading interest in the securities, the nature and extent of the activities of the issuer, income or assets of the issuer, or otherwise, that such action is not inconsistent with the public interest or the protection of investors. Fund II SBIC and Fund III SBIC each have only one investor, which is itself a reporting company, and no public investors. There will be no trading in Fund II SBIC or Fund III SBIC securities, so no public interest or investor protective purpose will be served by separate Fund II SBIC and Fund III SBIC reporting. Further, applicants state that the nature and extent of each of Fund II SBIC's and Fund III SBIC's activities are such that its activities will be fully reported through consolidated reporting in accordance with normal accounting rules. Accordingly, applicants believe that the requested exemption meets the standards of section 12(h) of the Exchange Act.
Applicants agree that the requested order will be subject to the following conditions:
1. The Company will at all times own and hold, beneficially and of record, all of the outstanding limited partnership interests in any Subsidiary and all of the outstanding membership interests in the General Partners, or otherwise own and hold beneficially all of the outstanding voting securities and equity interests of such Subsidiary.
2. The Subsidiaries will have investment policies not inconsistent with those of the Company, as set forth in the Company's registration statement.
3. No person shall serve as a member of any of the Subsidiaries' board of directors, including as a manager under a different form of legal organization that might perform the function of a director, unless such person shall also
4. The Company shall not issue or sell any senior security and the Company shall not cause or permit any SBIC Subsidiaries to issue or sell any senior security of which the Company or such SBIC Subsidiary is the issuer except to the extent permitted by section 18 (as modified for BDCs by section 61) of the Act; provided that, immediately after the issuance or sale by either of the Company or any SBIC Subsidiary of any such senior security, the Company, individually and on a consolidated basis, shall have the asset coverage required by section 18(a) of the Act (as modified by section 61(a)). In determining whether the Company has the asset coverage on a consolidated basis required by section 18(a) of the Act, (as modified by section 61(a)), any senior securities representing indebtedness of an SBIC Subsidiary if that SBIC Subsidiary has issued indebtedness that is held or guaranteed by the SBA shall not be considered senior securities and, for purposes of the definition of “asset coverage” in section 18(h), shall be treated as indebtedness not represented by senior securities.
5. The Company will acquire securities of any SBIC Subsidiary representing indebtedness only if, in each case, the prior approval of the SBA has been obtained. In addition, the Company and the SBIC Subsidiaries will purchase and sell portfolio securities between themselves only if, in each case, the prior approval of the SBA has been obtained.
6. No person shall serve or act as investment adviser to the Subsidiaries unless the Board and the stockholders of the Company shall have taken such action with respect thereto that is required to be taken pursuant to the Act by the functional equivalent of the Subsidiary's Board and the equity holders of the Subsidiary, including as if such Subsidiary were a BDC.
For the Commission, by the Division of Investment Management, pursuant to delegated authority.
Securities and Exchange Commission (“Commission”).
Temporary order and notice of application for a permanent order under section 9(c) of the Investment Company Act of 1940 (“Act”).
Applicants have received a temporary order exempting them from section 9(a) of the Act, with respect to a guilty plea entered on May 19, 2014, by Credit Suisse AG (“CSAG”) in the U.S. District Court for the Eastern District of Virginia (“District Court”) in connection with a plea agreement between CSAG and the U.S. Department of Justice (“DOJ”), until the Commission takes final action on an application for a permanent order. Applicants have also applied for a permanent order.
Credit Suisse Asset Management, LLC (“CSAM”), Credit Suisse Asset Management Limited (“CSAML”), Credit Suisse Hedging-Griffo Servicos Internacionais S.A. (“CSHG”), Credit Suisse Securities (USA) LLC (“CSSU”), and CSAG (each an “Applicant” and collectively, the “Applicants”),
An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving Applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on June 13, 2014, and should be accompanied by proof of service on Applicants, in the form of an affidavit, or for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary.
Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. Applicants: c/o Credit Suisse Asset Management, LLC, Eleven Madison Avenue, New York, NY 10010.
Courtney S. Thornton, Senior Counsel, at (202) 551–6812 or Mary Kay Frech, Branch Chief, at (202) 551–6821 (Division of Investment Management, Chief Counsel's Office).
The following is a temporary order and a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or an applicant using the Company name box, at
1. Each of the Applicants is a direct or indirect wholly owned subsidiary of CS Group, the parent company of CSAG. CSAM, a limited liability company formed under Delaware law, is registered as an investment adviser under the Investment Advisers Act of 1940 (“Advisers Act”). CSAML, a corporation formed under the laws of the United Kingdom, is registered as an investment adviser under the Advisers Act. CSHG, a corporation formed under the laws of Brazil, is registered as an investment adviser under the Advisers Act. CSSU, a limited liability company formed under Delaware law, is registered as a broker-dealer under the Securities Exchange Act of 1934 and as an investment adviser under the Advisers Act, and is registered as a member of the Financial Industry Regulatory Authority. CSAM, CSAML, CSHG, and CSSU serve either as investment adviser (as defined in section 2(a)(20) of the Act) to investment companies (or series thereof) registered under the Act (“Funds”) and employees' securities companies (“ESCs”), or as principal underwriter (as defined in section 2(a)(29) of the Act) to open-end management investment companies registered under the Act (“Open-End Funds”) (such activities, collectively, “Fund Service Activities”). CSAG is the principal operating subsidiary of CS Group, which operates as a holding company. Both CSAG and CS Group are corporations organized under the laws of Switzerland; both are engaged in the private banking,
2. On May 19, 2014, the DOJ filed a one-count criminal information (the “Information”) in the District Court charging CSAG with conspiracy to commit tax fraud related to accounts CSAG established for cross-border clients in violation of Title 18, United States Code, Section 371. CASG has agreed to resolve the action brought by DOJ through a plea agreement dated May 19, 2014 (the “Plea Agreement”). Under the Plea Agreement, CSAG pleaded guilty to the charge set out in the Information (the “Guilty Plea”). Applicants expect that the District Court will enter a judgment against CSAG that will require remedies that are materially the same as set forth in the Plea Agreement. Pursuant to the Plea Agreement, CSAG agreed to comply with the undertakings described in the application and to pay substantial criminal penalties and restitution.
3. In addition to the Plea Agreement with DOJ, on February 21, 2014, CS Group reached a settlement with the Commission that resolved its investigation into the provision of unregistered broker-dealer and investment adviser services to U.S. clients during the time period between 2002–2008 (the “Commission Settlement”). The conduct that was the subject of the Commission investigation related to the conduct charged in the Information. As part of the Commission Settlement, CS Group agreed to pay $196,511,014, which includes $82,170,990 in disgorgement, $64,340,024 in interest and a $50,000,000 penalty. CS Group also retained an independent consultant in connection with the Commission Settlement.
4. CSAG will enter a settlement with the Board of Governors of the Federal Reserve System (the “Federal Reserve”) to resolve certain findings by the Federal Reserve, including that the activities of CSAG regarding opening of foreign accounts for U.S. taxpayers, provision of investment services to U.S. clients, and operation of CSAG's New York representative office prior to 2009 lacked adequate enterprise-wide risk management and compliance policies and procedures sufficient to ensure that all of its activities comply with U.S. laws and regulations (the “Federal Reserve Order”).
5. CSAG also will enter into a consent order with the New York State Department of Financial Services (“DFS”) to resolve DFS's investigation into the Conduct, as defined below (the “DFS Order”).
6. Ten individuals who have been identified as having been responsible for the conduct underlying the Plea Agreement (including the conduct described in any of the exhibits to the Plea Agreement) (the “Conduct”) are current employees of CSAG or a Covered Person. All other employees of CSAG and any Covered Person who were identified as having been responsible for the Conduct have either resigned or been terminated. Of the individuals identified as having been responsible for the Conduct that remain employees of CSAG or a Covered Person, all but one (the “December Employee”) will be notified no later than May 31, 2014 that their employment with CSAG or a Covered Person will be terminated no later than August 31, 2014.
7. Additionally, beginning in 2008, CSAG commenced a remediation program to ensure that only U.S. clients who established compliance with U.S. tax laws could remain clients of CSAG. U.S. clients that could not demonstrate tax compliance had to terminate their relationship with CSAG. As part of that program, CSAG moved the securities business with U.S. residents into U.S.-regulated subsidiaries or terminated those relationships.
1. Section 9(a)(1) of the Act provides, in pertinent part, that a person may not serve or act as an investment adviser or depositor of any registered investment company or a principal underwriter for any registered open-end investment company or registered unit investment trust, if such person within ten years has been convicted of any felony or misdemeanor arising out of such person's conduct, as, among other things, an investment adviser, a broker or dealer, or a bank. Section 2(a)(10) of the Act defines the term “convicted” to include a plea of guilty. Section 9(a)(3) of the Act extends the prohibitions of section 9(a)(1) to a company any affiliated person of which has been disqualified under the provisions of section 9(a)(1). Section 2(a)(3) of the Act defines “affiliated person” to include, among others, any person directly or indirectly controlling, controlled by, or under common control with, the other person. Applicants state that CSAG is an affiliated person of each of the other Applicants within the meaning of section 2(a)(3). Applicants state that the Guilty Plea would result in a disqualification of each Applicant for ten years under section 9(a) of the Act because CSAG would become the subject of a conviction described in 9(a)(1).
2. Section 9(c) of the Act provides that the Commission shall grant an application for exemption from the disqualification provisions of section 9(a) if it is established that these provisions, as applied to Applicants, are unduly or disproportionately severe or that the Applicants' conduct has been such as not to make it against the public interest or the protection of investors to grant the exemption. Applicants have filed an application pursuant to section 9(c) seeking temporary and permanent orders exempting the Applicants and other Covered Persons from the disqualification provisions of section 9(a) of the Act.
3. Applicants believe they meet the standard for exemption specified in section 9(c). Applicants state that the prohibitions of section 9(a) as applied to them would be unduly and disproportionately severe and that the conduct of Applicants has been such as not to make it against the public interest or the protection of investors to grant the exemption from section 9(a).
4. Applicants assert that the Conduct did not involve any of Applicants acting as an investment adviser or depositor of any Fund, ESC or business development company or principal underwriter for any Open-End Fund, unit investment trust registered under the Act, or face amount certificate company registered under the Act. The Conduct similarly did not involve any Fund, ESC or business development company with respect to which Applicants engaged in Fund Service Activities.
5. Except as discussed above, Applicants have agreed that neither they nor any of the other Covered Persons will employ any of the current or former employees of CSAG or any Covered Person who previously have been or who subsequently may be identified by CSAG or any U.S. or non-U.S. regulatory or enforcement agencies as having been responsible for the Conduct in any capacity without first making a further application to the Commission pursuant to section 9(c). Applicants also have agreed that each Applicant (and any Covered Person that acts in any capacity described in section 9(a) of the Act) will adopt and implement policies and procedures reasonably designed to ensure compliance with the terms and conditions of the order granted under section 9(c). In addition, CSAG has agreed to comply in all material respects with the material terms and conditions of the Plea Agreement and the material terms of the Federal Reserve Order and the DFS Order, and CS Group has agreed to comply in all material respects with the material terms and undertakings of the Commission Settlement.
6. Applicants further represent that the inability of CSAM, CSAML, CSHG, and CSSU to continue providing Fund Service Activities would result in potential hardships for both the Funds and the ESCs and their shareholders. Applicants state that they will distribute written materials, including an offer to meet in person to discuss the materials, to the board of trustees of the Funds, including the directors who are not “interested persons,” as defined in section 2(a)(19) of the Act, of such Funds, and their independent legal counsel as defined in rule 0–1(a)(6) under the Act, regarding the Plea Agreement, any impact on the Funds, and the application. The Applicants will provide the Funds with all information concerning the Plea Agreement and the application that is necessary for the Funds to fulfill their disclosure and other obligations under the federal securities laws.
7. Applicants also state that, if CSAM, CSAML, CSHG, and CSSU were barred from providing Fund Service Activities to the Funds and the ESCs, the effect on their business and employees would be severe.
8. Applicants state that certain of the Applicants and their affiliates have received exemptive orders under section 9(c), as described in greater detail in the application.
Applicants agree that any order granted by the Commission pursuant to the application will be subject to the following conditions:
1. Any temporary exemption granted pursuant to the application will be without prejudice to, and shall not limit the Commission's rights in any manner with respect to, any Commission investigation of, or administrative proceedings involving or against, Covered Persons, including, without limitation, the consideration by the Commission of a permanent exemption from section 9(a) of the Act requested pursuant to the application or the revocation or removal of any temporary exemptions granted under the Act in connection with the application.
2. Except as set out in the second paragraph of Section IV.E of the application, neither the Applicants nor any of the other Covered Persons will employ any of the current or former employees of CSAG or any Covered Person who previously have been or who subsequently may be identified by CSAG or any U.S. or non-U.S. regulatory or enforcement agencies as having been responsible for the Conduct in any capacity without first making a further application to the Commission pursuant to section 9(c).
3. Each Applicant and Covered Person will adopt and implement policies and procedures reasonably designed to ensure that they will comply with the terms and conditions of the requested orders within 60 days of the date on which any permanent order is granted or, with respect to condition 4, such later date as may be contemplated by the Federal Reserve Order, the DFS Order, or the Commission Settlement, as applicable.
4. CSAG will comply in all material respects with the material terms and conditions of the Plea Agreement and with the material terms of the Federal Reserve Order and the DFS Order, and CS Group will comply in all material respects with the material terms and undertakings of the Commission Settlement.
5. Applicants will provide written notification to the Chief Counsel of the Commission's Division of Investment Management, with a copy to the Chief Counsel of the Commission's Division of Enforcement, of a material violation of the terms and conditions of the requested orders within 30 days of discovery of the material violation.
The Commission has considered the matter and finds that the Applicants have made the necessary showing to justify granting a temporary exemption.
By the Commission.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The proposed rule changes consist of modifications to the Rulebook of the Government Securities Division (“GSD”) in connection with the GCF Repo® service.
In its filing with the Commission, FICC 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. FICC has prepared summaries, set forth in sections (A), (B) and (C) below, of the most significant aspects of such statements.
FICC is seeking the Commission's approval to extend the current pilot program (the “2013 Pilot Program”) that is currently in effect for the GCF Repo® service. FICC is requesting that the 2013 Pilot Program be extended for one year following the Commission's approval of the present filing.
By way of background, on July 12, 2011, FICC submitted a rule filing to the Commission (SR–FICC–2011–05) proposing to make certain changes to its GCF Repo service in order to comply with the recommendations that had been made by the Task Force on Triparty Reform (“TPR”), an industry group formed and sponsored by the Federal Reserve Bank of New York.
The rule change described in SR–FICC–2011–05 was proposed to be run as a pilot program for one year starting from the date on which the filing was approved by the Commission (the “2011 Pilot Program”).
The GCF Repo service allows GSD dealer members to trade general collateral repos
The GCF Repo service was developed as part of a collaborative effort among GSCC (FICC's predecessor), its two clearing banks (The Bank of New York Mellon (“BNY”) and JPMorgan Chase Bank, National Association (“Chase”))—and industry representatives. GSCC introduced the GCF Repo service on an
In 1999, GSCC expanded the GCF Repo service to permit dealer participants to engage in GCF Repo trading on an
The following simplified example illustrates the manner in which the GCF Repo services works on an interbank basis:
Assume that Dealer B clears at BNY and Dealer C clears at Chase. Further assume that: (i) outside of FICC, Dealer B engages in a triparty repo transaction with Party X to obtain funds and seeks to invest such funds via a GCF Repo transaction, (ii) outside of FICC, Dealer C engages in a DVP repo with Party Y to buy securities and seeks to finance these securities via a GCF Repo transaction, and (iii) Dealer B and Dealer C enter into a GCF Repo transaction (on a blind basis via a GCF Repo broker) and submit the trade details to FICC.
At the end of “Day 1”, GCF Repo collateral must be allocated, i.e., Dealer B must receive the securities. However, the securities that Dealer B is to receive are at Chase and the securities Fedwire is closed. The after-hours movement mechanism permits the securities to be “sent” to Dealer B as follows: FICC will instruct Chase to allocate to a special FICC clearance account at Chase securities in an amount equal to the net short securities position.
FICC has established on its own books and records two “securities accounts” as defined in Article 8 of the New York Uniform Commercial Code, one in the name of Chase (“FICC Account for Chase”) and one in the name of BNY (“FICC Account for BNY”). The FICC Account for Chase is comprised of the securities in FICC's special clearance account maintained by BNY (“FICC Special Clearance Account at BNY for Chase”), and the FICC Account for BNY is comprised of the securities in FICC's special clearance account maintained by Chase (“FICC Special Clearance Account at Chase for BNY”).
In our example, Chase, as agent for FICC, will transmit to BNY a description of the securities in the FICC Special Clearance Account at Chase for BNY. Based on this description, BNY will transfer funds equal to the funds borrowed position to the FICC GCF Repo account at Chase. Upon receipt of the funds by Chase, Chase will release any liens it may have on the FICC Special Clearance Account at Chase for BNY, and FICC will release any liens it may have on FICC Account for BNY (both of these accounts being comprised of the same securities). BNY will credit the securities in the FICC Account for BNY to FICC's GCF Repo account at BNY, and BNY will further credit these securities to Dealer B, who, as noted, is in a net long securities position. In the morning of “Day 2,” all securities and funds movements occurring on Day 1, are reversed (“unwind”).
In 2003, FICC shifted the GCF Repo service back to intrabank status only.
In 2007, FICC submitted a rule filing to address the issues raised by the interbank morning funds movement and return the GCF Repo service to interbank status (the “2007 NFE Filing”).
The 2007 NFE Filing replaced the Day 2 morning unwind process with an alternate process, which is currently in effect. Specifically, in lieu of making funds payments, the interbank dealers grant to FICC a security interest in their NFE-related collateral equal to their prorated share of the total interbank funds amount. FICC, in turn, grants to the other clearing bank (that was due to receive the funds) a security interest in the NFE-related collateral to support the debit in the FICC account at the clearing bank. The debit in the FICC account (“Interbank Cash Amount Debit”) occurs because the dealers who are due to receive funds in the morning must receive those funds at that time in return for their release of collateral. The debit in the FICC account at the clearing bank gets satisfied during the end of day GCF Repo settlement process. Specifically, that day's new activity yields a new interbank funds amount that will move at end of day—however, this amount gets netted with the amount that would have been due in the morning, thus further reducing the interbank funds movement. The NFE holds are released when the interbank funds movement is made at end of day. The 2007 NFE Filing did not involve any changes to the after-hours movement of securities occurring at the end of the day on Day 1. Using our simplified example:
On the morning of Day 2, Dealer C who needs to return funds in the unwind, instead of returning the funds in the morning, grants to FICC a security interest in Dealer C's NFE-related collateral equal to its funds movement (we have assumed only one GCF Repo transaction took place in this simplified example). FICC, in turn, grants BNY (that was due to receive the funds) a security interest in the NFE-related collateral to support the debit in the FICC account at BNY. As noted above, the debit in FICC's account at BNY arises because, under the current processing, Dealer B must receive its funds during the morning unwind. The FICC debit is then satisfied during the end of day GCF Repo settlement process.
As part of the 2007 NFE Filing, FICC imposed certain additional risk management measures with respect to the GCF Repo service. First, FICC imposed a collateral premium (called “GCF Premium Charge”) on the GCF Repo portion of the Clearing Fund
Second, the 2007 NFE Filing addressed the situation where FICC becomes concerned about the volume of interbank GCF Repo activity. Such a concern might arise, for example, if market events were to cause dealers to turn to the GCF Repo service for increased funding at levels beyond normal processing. The 2007 NFE Filing provides FICC with the discretion to institute risk mitigation and appropriate disincentive measures in order to bring GCF Repo levels to a comfortable level from a risk management perspective.
In SR–FICC–2011–05, FICC proposed the following rule changes with respect to the GCF Repo service to address the TPR's Recommendations:
(1) (a) To move the Day 2 unwind from 7:30 a.m. to 3:30 p.m., (b) to move the NFE process
(2) To establish rules for intraday GCF Repo collateral substitutions (i.e., SR–FICC–2011–05 stated that with respect to interbank GCF Repo transactions, the substitution process will only permit cash as an initial matter to accommodate current processing systems, however, as noted below, the substitution process will permit cash and/or securities).
During the term of the 2011 Pilot Program, FICC implemented the proposed changes referred to in subsections 1(c) and 1(d) above and during the term of the 2012 Pilot Program, FICC implemented the proposed changes referred to in subsections 1(a), 1(b) and 2 above.
The TPR recommended that the Day 2 unwind for all triparty transactions be moved from the morning to 3:30 p.m. The TPR made this recommendation in order to achieve the benefit of reducing the clearing banks' intraday exposure to the dealers. As stated, because the GCF Repo service is essentially a triparty mechanism, the TPR requested that FICC accommodate this time change. For the GSD rules, this necessitated a change to the GSD's “Schedule of GCF Timeframes.” Specifically, the 7:30 a.m. time in the Schedule was deleted and the language therein was moved to a new time of 3:30 p.m.
Because the Day 2 unwind moved from the morning to 3:30 p.m. and because the NFE process established by the 2007 NFE Filing is tied to the moment of the unwind, the NFE process also was required to move. During 2012, when the systems processing for the tri-party reform effort continued on the part of the clearing banks, the unwind moved to 3:30 p.m. and the funds continued to move between the two clearing banks at 5:00 p.m.; the NFE hold which applies to dealers moved to between 3:30 p.m. and 5:00 p.m. Because the NFE process is a legal process and not an operational process, it is not reflected on the Schedule of GCF Timeframes and therefore no change to the Schedule was required to accommodate the move of the NFE process. A change was needed in Section 3 of GSD Rule 20 to delete the reference to the “morning” timeframe on Day 2 with respect to the NFE process and to add language referencing “at the time established by the Corporation.”
As a result of the time change of the unwind (i.e., the reversal on Day 2 of collateral allocations established by FICC for each netting member's GCF net funds borrower positions and GCF net funds lender positions on Day 1) to 3:30 p.m., the provider of GCF Repo securities collateral in a GCF Repo transaction on Day 1 no longer has possession of such securities at the beginning of Day 2. Therefore, during Day 2 prior to the unwind of the Day 1 collateral allocations, the provider of GCF Repo securities collateral (in our simple example, Dealer C) needs a substitution mechanism for the return of its posted GCF Repo securities collateral in order to make securities deliveries for utilization of such securities in its business activities. (In our example, Dealer C may need to return the securities to Party Y depending upon the terms of their transaction.) In the 2012 Pilot Program, FICC established a substitution process for this purpose in conjunction with its clearing banks. The language for the substitution mechanism was added to Section 3 of GSD Rule 20. It provides that all requests for substitution for the GCF Repo securities collateral must be submitted by the provider of the GCF Repo securities collateral (i.e., Dealer C) by the applicable deadline on Day 2 (the “substitution deadline”).
If the GCF Repo transaction is between dealer counterparties effecting the transaction through the same clearing bank (i.e., on an intra-clearing bank basis and in our example Dealer C and other dealers clearing at Chase), on Day 2 such clearing bank will process each substitution request of the provider of GCF Repo securities collateral (i.e., Dealer C) submitted prior to the substitution deadline promptly upon
The term “Other Acceptable Securities” means, with respect to:
(an) adjustable-rate mortgage-backed security or securities issued by Ginnie Mae, any fixed-rate mortgage-backed security or securities issued by Ginnie Mae, or (an) adjustable-rate mortgage-backed security or securities issued by either Fannie Mae or Freddie Mac: (a) any fixed-rate mortgage-backed security or securities issued by Fannie Mae and Freddie Mac, (b) any fixed-rate mortgage-backed security or securities issued by Ginnie Mae, or (c) any adjustable-rate mortgage-backed security or securities issued by Ginnie Mae.
For a GCF Repo that was processed on an interbank basis and to accommodate a potential substitution request, FICC initiates a debit of the securities in the account of the lender through the FICC GCF Repo accounts at the clearing bank of the lender and the FICC GCF Repo account at the clearing bank of the borrower (“Interbank Movement”). This Interbank Movement is done so that a borrower who elects to substitute collateral will have access to the collateral for which it is substituting. The Interbank Movement occurs in the morning, though the clearing banks and FICC have the capability to have the Interbank Movement occur at any point during the day up until 2:30 p.m. During the 2012 Pilot Program, FICC and the clearing banks implemented a change to unwind the intrabank GCF Repo transactions at 3:30 p.m.
In the example above, the GCF Repo securities collateral will be debited from the securities account of the receiver of the collateral (i.e., Dealer B) at its clearing bank (i.e., BNY), and from the FICC Account for BNY. If a substitution request is received by the clearing bank (i.e., Chase) of the provider of GCF Repo securities collateral, prior to the substitution deadline at a time specified in FICC's procedures,
Simultaneously, with the debit of the GCF Repo securities collateral from the account at the clearing bank (i.e., BNY) of the original receiver of GCF Repo securities collateral (i.e., Dealer B), for purposes of making payment to the original receiver of securities collateral (i.e., Dealer B), such clearing bank will effect a cash debit equal to the value of the securities collateral in FICC's GCF Repo account at such clearing bank and will credit the account of the original receiver of securities collateral (i.e., Dealer B) at such clearing bank with such cash amount. (This is because when Dealer B is debited the securities, Dealer B must receive the funds.) In order to secure FICC's obligation to repay the balance in FICC's GCF Repo account at such clearing bank (i.e., BNY), FICC will grant to such clearing bank a security interest in the cash and/or securities substituted for the GCF securities collateral in FICC's GCF repo account at the other clearing bank (i.e., Chase).
Using the example from above, assume the Dealer C submits a substitution notification—it requires the securities collateral that has been pledged to Dealer B and will substitute cash and/or securities. BNY will debit the securities from Dealer B's account and the relevant liens will be released so that the securities are in FICC's account at Chase. Chase will credit the securities to Dealer C's account and the cash and/or securities that Dealer C uses for its collateral substitution will be credited by Chase to FICC's account at Chase. From Dealer B's perspective, when BNY debits the securities from Dealer B's account, Dealer B is supposed to receive the funds—but as noted, the funds are at Chase. BNY will credit the funds to Dealer B's account and debit FICC's account at BNY.
At this point in our example, FICC is running a credit at Chase and a debit at BNY. In order to secure FICC's debit at BNY, FICC will grant a security interest in the funds in the FICC account at Chase.
For substitutions that occur with respect to GCF Repo transactions that were processed on an inter-clearing bank basis, FICC and the clearing banks permit cash and/or securities for the substitutions. The proposed rule change provided FICC with flexibility in this regard by referring to FICC's procedures.
As noted above, each of the above-referenced changes were approved in connection with SR–FICC–2011–05
The proposed rule change is consistent with the Securities and Exchange Act of 1934, as amended (the “Act”) and the rules and regulations promulgated thereunder because it will align the GCF Repo service with recommendations being made by the TPR to address risks in the triparty market overall and therefore will serve to further safeguard the securities and funds for which FICC is responsible.
FICC does not believe that the proposed rule change will have any negative impact, or impose any burden, on competition.
Written comments relating to the proposed rule changes have not yet been solicited or received. FICC will notify the Commission of any written comments received by FICC.
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
Within 45 days of the date of publication of this notice in the
(A) by order approve or disapprove such 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 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.
China Green Lighting Limited (CIK No. 1421378) is a delinquent Colorado corporation located in Jiangshan City, China with a class of securities registered with the Commission pursuant to Exchange Act Section 12(g). China Green Lighting Limited is delinquent in its periodic filings with the Commission, having not filed any periodic reports since it filed a Form 10–Q for the period ended September 30, 2011, which reported a net loss of $1,252,940 for the prior nine months. As of May 8, 2014, the company's stock (symbol “CHGL”) was quoted on OTC Link (previously, “Pink Sheets”) operated by OTC Markets Group, Inc. (“OTC Link”), had three market makers, and was eligible for the “piggyback” exception of Exchange Act Rule 15c2–11(f)(3). It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of China Green Lighting Limited because it has not filed any periodic reports since the period ended September 30, 2011.
China Kangtai Cactus Bio-Tech, Inc. (CIK No. 1017699) is a revoked Nevada corporation located in Harbin, China with a class of securities registered with the Commission pursuant to Exchange Act Section 12(g). China Kangtai Cactus Biotech, Inc. is delinquent in its periodic filings with the Commission, having not filed any periodic reports since it filed a Form 10–Q for the period ended September 30, 2011. As of May 8, 2014, the company's stock (symbol “CKGT”) was quoted on OTC Link, had eight market makers, and was eligible for the “piggyback” exception of Exchange Act Rule 15c2–11(f)(3). It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of China Kangtai Cactus Biotech, Inc. because it has not filed any periodic reports since the period ended September 30, 2011.
Gemco Minerals, Inc. (CIK No. 1338118) is a Florida corporation located in Langley, British Columbia, Canada, with a class of securities registered with the Commission pursuant to Exchange Act Section 12(g). Gemco Minerals, Inc. is delinquent in its periodic filings with the Commission, having not filed any periodic reports since it filed a Form 10–Q for the period ended November 30, 2009, which reported a net loss of $3,394,046 since the company's August 21, 1997 inception. As of May 8, 2014, the company's stock (symbol “GMML”) was quoted on OTC Link, had three market makers, and was eligible for the “piggyback” exception of Exchange Act Rule 15c2–11(f)(3). It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Gemco Minerals, Inc. because it has not filed any periodic reports since the period ended November 30, 2009.
Perfectenergy International Limited (CIK No. 1345432) is a revoked Nevada corporation located in Shanghai, China with a class of securities registered with the Commission pursuant to Exchange Act Section 12(g). Perfectenergy International Limited is delinquent in its periodic filings with the Commission, having not filed any periodic reports since it filed a Form 10–K for the fiscal year ended September 30, 2011, which reported a net loss of $7,627,177 for the prior eleven months. As of May 8, 2014, the company's stock (symbol “PFGY”) was quoted on OTC Link, had six market makers, and was eligible for the “piggyback” exception of Exchange Act Rule 15c2–11(f)(3). It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Perfectenergy International Limited because it has not filed any periodic reports since the period ended September 30, 2011.
Rodobo International, Inc. (CIK No. 1177274) is a revoked Nevada corporation located in Harbin, China with a class of securities registered with the Commission pursuant to Exchange
The Commission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of the above-listed companies.
By the Commission.
U.S. Small Business Administration.
Notice.
This is a Notice of the Presidential declaration of a major disaster for Public Assistance Only for the State of FLORIDA (FEMA—4177—DR), dated 05/14/2014.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW., Suite 6050, Washington, DC 20416.
Notice is hereby given that as a result of the President's major disaster declaration on 05/14/2014, Private Non-Profit organizations that provide essential services of governmental nature may file disaster loan applications at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The Interest Rates are:
The number assigned to this disaster for physical damage is 13986B and for economic injury is 13987B.
The Social Security Administration (SSA) publishes a list of information collection packages requiring clearance by the Office of Management and Budget (OMB) in compliance with Public Law (Pub. L.) 104–13, the Paperwork Reduction Act of 1995, effective October 1, 1995. This notice includes revisions and one extension of OMB-approved information collections.
SSA is soliciting comments on the accuracy of the agency's burden estimate; the need for the information; its practical utility; ways to enhance its quality, utility, and clarity; and ways to minimize burden on respondents, including the use of automated collection techniques or other forms of information technology. Mail, email, or fax your comments and recommendations on the information collection(s) to the OMB Desk Officer and SSA Reports Clearance Officer at the following addresses or fax numbers.
I. The information collection below is pending at SSA. SSA will submit it to OMB within 60 days from the date of this notice. To be sure we consider your comments, we must receive them no later than July 22, 2014. Individuals can obtain copies of the collection instruments by writing to the above email address.
Medical Permit Parking Application—41 CFR 101–20—104.2—0960–0624. SSA employees and contractors with a qualifying medical condition who park at SSA-owned and leased facilities may apply to receive a medical parking permit. SSA uses three forms for this program: (1) SSA–3192, the Application and Statement, which an individual completes when first applying for the medical parking space; (2) SSA–3193, the Physician's Report, which the applicant's physician completes to verify the medical condition; and (3) SSA–3194, Renewal Certification, which medical parking permit holders complete to verify their continued need for the permit. The respondents are SSA employees and contractors seeking medical parking permits and their physicians.
Because SSA employees are Federal workers exempt from the requirements of the Paperwork Reduction Act, the burden below is only for SSA contractors and physicians (of both SSA employees and contractors).
II. SSA submitted the information collections below to OMB for clearance. Your comments regarding the information collections would be most useful if OMB and SSA receive them 30 days from the date of this publication. To be sure we consider your comments, we must receive them no later than June 23, 2014. Individuals can obtain copies of the OMB clearance packages by writing to
1. Disability Update Report—20 CFR 404.1589–404.1595 and 416.988–416.996—0960–0511. As part of our statutory requirements, SSA periodically uses Form SSA–455, the Disability Update Report, to evaluate current Title II disability beneficiaries' and Title XVI disability payment recipients' continued eligibility for Social Security disability payments. Specifically, SSA uses the form to determine if: (1) There is enough evidence to warrant referring the respondent for a full medical Continuing Disability Review (CDR); (2) the respondent's impairment(s) is still present and is indicative of no medical improvement, precluding the need for a CDR; or (3) there are unresolved work-related issues for the respondent. SSA mails Form SSA–455 to specific disability recipients, whom we select as possibly qualifying for the continuing disability review process. SSA pre-fills the form with data specific to the disability recipient, except for the sections we ask the beneficiary to complete. When SSA receives the completed form, we scan it into SSA's system. This allows us to gather the information electronically to enable SSA to process the returned forms through automated decision logic to decide the proper course of action to take. The respondents are recipients of Title II and Title XVI Social Security disability payments.
2. Request for Evidence from Doctor and Request for Evidence from Hospital—20 CFR 404 Subpart P and 20 CFR 416 Subpart I—0960–0722. Sections 223(d)(5) and 1614(a)(3)(H)(i) of the Social Security Act require claimants to furnish medical evidence of their disability when filing a disability claim. SSA uses Forms HA–66 and HA–67 to obtain evidence from medical sources identified by the claimants as having information relative to their impairments or ability to do work-related activities. In addition to accepting manual paper responses, SSA sends a barcode with the HA–66 and HA–67, allowing respondents to fax the information directly into the electronic claims folder rather than submitting it manually. SSA uses the information to determine eligibility for benefits. The respondents are medical sources, doctors, and hospitals that evaluate the claimants. Type of Request: Extension of an OMB-approved information collection.
This is a correction notice. When we published the 60-day Notice for this collection on 3/3/14 at 79 FR 11852 we listed it as a revision; however, this is an extension of a currently approved information collection.
Closed Meeting
In accordance with section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App 10(a)(2), the Department of State announces a meeting of the International Security Advisory Board (ISAB) to take place on June 26, 2014, at the Department of State, Washington, DC.
Pursuant to section 10(d) of the Federal Advisory Committee Act, 5 U.S.C. App 10(d), and 5 U.S.C. 552b(c)(1), it has been determined that this Board meeting will be closed to the public because the Board will be reviewing and discussing matters properly classified in accordance with Executive Order 13526. The purpose of the ISAB is to provide the Department with a continuing source of independent advice on all aspects of arms control, disarmament, nonproliferation, political-military affairs, international security, and related aspects of public diplomacy. The agenda for this meeting will include classified discussions related to the Board's studies on current U.S. policy and issues regarding arms control, international security, nuclear proliferation, cyber stability, energy security, and diplomacy.
For more information, contact Richard W. Hartman II, Executive Director of the International Security Advisory Board, U.S. Department of State, Washington, DC 20520, telephone: (202) 736–4290.
Federal Aviation Administration (FAA), DOT.
Notice of intent of waiver with respect to land.
The FAA is publishing notice of proposed release of 1.318 acres of land at the Richmond International Airport, Richmond, Virginia to the Henrico County for construction of the widening of Charles City Road. An additional 0.622 Acres will be permanently utilized by Henrico County within utility, and drainage easements. There are no adverse impacts to the Airport and the land is not needed for airport development as shown on the Airport Layout Plan. Fair Market Value of the land has been established. The Airport will benefit from the improvements to Charles City Road with the more efficient intersection at Airport Drive. The east and west bound through lanes and dedicated right and left turn lanes will provide a more efficient entry to the Airport. These intangible benefits will offset the value of the released property.
Comments must be received on or before
Comments on this application may be mailed or delivered to the FAA at the following address: Terry J. Page, Manager, FAA Washington Airports District Office, 23723 Air Freight Lane, Suite 210, Dulles, VA 20166.
In addition, one copy of any comments submitted to the FAA must be mailed or delivered to Jon E. Mathiasen, President & CEO, Capital Region Airport Commission, at the following address: Jon E. Mathiasen, President & CEO, Capital Region Airport Commission, 1 Richard E. Byrd Terminal Drive, Richmond International Airport, VA 23250.
Mr. Terry Page, Manager, Washington Airports District Office, 23723 Air Freight Lane, Suite 210, Dulles, VA 20166; telephone (703) 661–1354, fax (703) 661–1370, email
The Wendell H. Ford Aviation investment and Reform Act for the 21st Century, public Law 10–181 (Apr. 5, 2000; 114 Stat. 61) (AIR 21), as amended, requires that a 30 day public notice must be provided before the Secretary may waive any condition imposed on an interest in surplus property.
Federal Highway Administration (FHWA), DOT.
Notice of Limitation on Claims for Judicial Review of Actions by FHWA.
This notice announces actions taken by the FHWA that are final within the meaning of 23 U.S.C. 139(l)(1). The actions relate to a proposed project to connect Interstate 480 (I–480) to University Circle area in Cleveland, Ohio, Cuyahoga County, with a new boulevard. Those actions grant approvals for the project.
A claim seeking judicial review of the Federal agency actions on the highway project will be barred unless the claim is filed on or before October 20, 2014. If this date falls on a Saturday, Sunday, or legal holiday, parties are advised to file their claim no later than the business day preceding this date. If the Federal law that authorizes judicial review of a claim provides a time period of less than 150 days for filing such claim, then that shorter time period still applies.
Ms. Naureen Dar, PE, Transportation Engineer, Federal Highway Administration, 200 North High Street, Columbus, Ohio, 43215; telephone: (614) 280–6846; or Mr. Gary Benesh, PE, Ohio Department of Transportation (ODOT), 5500 Transportation Blvd., Garfield Heights, Ohio 44125 telephone: (216) 584–2108.
Notice is hereby given that the FHWA has taken final agency actions by issuing approvals for the following major highway improvements in the State of Ohio: The Cleveland Opportunity Corridor project. The project meets purpose of improving the roadway network within a historically underserved, economically depressed area within the City of Cleveland. It will also address the identified transportation need elements, including improving system linkage, improving mobility and supporting planned economic development. The length of the Opportunity Corridor is approximately 3.6 miles, and the project involves building an urban boulevard with traffic lights at intersections from the I–490-East 55th Street intersection to the East 105th Street-Chester Avenue intersection. The proposed boulevard will have two westbound through-lanes, but the number of eastbound through-lanes will vary. Left-turn lanes will also be added at many of the intersections. Additional amenities and mitigation measures are also provided. The actions by the Federal agencies, and the laws under which such actions were taken, are described in the Draft Environmental Impact Statement (DEIS) the project, approved on August 8, 2013, and the Final Environmental Impact Statement/Record of Decision (FEIS/ROD), approved on May 1st, 2014 and in other documents in the FHWA administrative record. The DEIS, FEIS/ROD and other documents in the FHWA administrative record are available by contacting the FHWA or ODOT at the addresses provided above or at
1. General: National Environmental Policy Act (NEPA) [42 USC 4321–4351]; Federal-Aid Highway Act [23 U.S.C. 109].
2. Air: Clean Air Act, 42 U.S.C. 7401–7671(q).
3. Land: Section 4(f) of the Department of Transportation Act of 1966 [49 U.S.C. 303]; Landscaping and Scenic Enhancement (Wildflowers), 23 U.S.C. 319.
4. Wildlife: Endangered Species Act [16 U.S.C. 1531–1544 and Section 1536], Marine Mammal Protection Act [16 U.S.C. 1361], Fish and Wildlife Coordination Act [16 U.S.C. 661–667(d)], Migratory Bird Treaty Act [16 U.S.C. 703–712].
5. Historic and Cultural Resources: Section 106 of the National Historic Preservation Act of 1966, as amended [16 U.S.C. 470(f)
6. Social and Economic: Civil Rights Act of 1964 [42 U.S.C. 2000(d)–2000(d)(1)]; American Indian Religious Freedom Act [42 U.S.C. 1996]; Farmland Protection Policy Act (FPPA) [7 U.S.C. 4201–4209].
7. Wetlands and Water Resources: Clean Water Act, 33 U.S.C. 1251–1377 (Section 404, Section 401, Section 319); Land and Water Conservation Fund (LWCF), 16 U.S.C. 4601–4604; Safe Drinking Water Act (SDWA), 42 U.S.C. 300(f)–300(j)(6); Rivers and Harbors Act of 1899, 33 U.S.C. 401–406; Wild and Scenic Rivers Act, 16 U.S.C. 1271–1287; Emergency Wetlands Resources Act, 16 U.S.C. 3921, 3931; TEA–21 Wetlands Mitigation, 23 U.S.C. 103(b)(6)(m), 133(b)(11); Flood Disaster Protection Act, 42 U.S.C. 4001–4128.
8. Executive Orders: E.O. 11990 Protection of Wetlands; E.O. 11988 Floodplain Management; E.O. 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low Income Populations; E.O. 11593 Protection and Enhancement of Cultural Resources; E.O. 13007 Indian Sacred Sites; E.O. 13287 Preserve America; E.O. 13175 Consultation and Coordination with Indian Tribal Governments; E.O. 11514 Protection and Enhancement of Environmental Quality; E.O. 13112 Invasive Species.
23 U.S.C. 139(l)(1); Sec. 1308, Public Law 112–141, 126 Stat. 405.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of application for exemption; request for comments.
FMCSA announces that it has received an application from the ATA for an exemption from the 14-hour provision of the Agency's hours-of-service regulations to enable certain drivers to exclude waiting time at a natural gas or oil well site from their calculations of on-duty time. Currently, only specially trained drivers of commercial motor vehicles (CMVs) that are specially constructed to service oil and natural gas extraction sites may employ this provision. ATA proposes that FMCSA by a limited 2-year exemption that may be renewed, permit exclusion of such waiting time by drivers of CMVs who are exclusively engaged in servicing oil and natural gas extraction sites and have the opportunity to obtain rest while waiting at such sites. FMCSA requests public comment on ATA's application for exemption.
Comments must be received on or before July 7, 2014.
You may submit comments identified by Federal Docket Management System Number FMCSA–2013–0470 by any of the following methods:
•
•
•
•
Mr. Thomas Yager, Chief, FMCSA Driver and Carrier Operations Division; Office of Carrier, Driver and Vehicle Safety Standards; Telephone: 202–366–4325. Email:
FMCSA has authority under 49 U.S.C. 31136(e) and 31315 to grant exemptions from certain parts of the Federal Motor Carrier Safety Regulations (FMCSRs) (49
The Agency reviews safety analyses and public comments submitted, and determines whether granting the exemption would likely achieve a level of safety equivalent to, or greater than, the level that would be achieved by the current regulation (49 CFR 381.305). The decision of the Agency must be published in the
Part 395 of the FMCSRs contains the hours of service (HOS) rules for drivers of CMVs in interstate commerce. Section 395.8 of the FMCSRs requires most interstate CMV drivers to maintain a handwritten or electronic record of duty status, or log, on a 24-hour grid. They must record their duty status as either “off duty,” “sleeper berth,” “on duty/not driving” or “on duty/driving.” Drivers must keep their log up to date to the most recent change of duty status, and have their log for the current date and the preceding 7 days on board the CMV.
Generally, a driver may not record time as “off duty” unless he or she has been relieved of all duty and responsibility for the care and custody of the CMV, its accessories, and its cargo, and is free to pursue activities of his or her own choosing. Thus, drivers who are waiting, whether at a loading dock or at a natural gas or oil well site, are generally considered to be “on duty.” Section 395.3(a)(2) of the FMCSRs provides that “a driver may drive only during a period of 14 consecutive hours after coming on duty following 10 consecutive hours off duty.” However, the FMCSRs provide a special exception to the 14-hour rule for the waiting time of a specific classification of driver. Section 395.1(d)(2) provides, “In the case of specially trained drivers of commercial motor vehicles that are specially constructed to service oil wells, on-duty time shall not include waiting time at a natural gas or oil well site” (waiting-time rule). These drivers may record such waiting time as off duty time, making note of the waiting-time rule on their log. Section 395.1(d)(2) also provides that the waiting time of these drivers “shall not be included in calculating the 14-hour period. . . .”
ATA asks that FMCSA, by a limited 2-year exemption that may be renewed, permit similar treatment of waiting time at such locations to drivers “exclusively engaged in servicing oil and natural gas extraction sites” who are able to establish “a method to adequately ensure a rest opportunity while waiting.” ATA suggests that “trucks equipped with sleeper berths” and “on-site bunking or resting facilities” would satisfy the “rest opportunity” standard. ATA believes the proposed exemption would encourage these drivers to obtain quality rest at extraction sites and would provide an improved standard for State officials enforcing waiting time requirements.
FMCSA can only grant an exemption if an FMCSR prevents a motor carrier from “implementing more efficient or effective operations that would maintain a level of safety equivalent to, or greater than, the level achieved without the exemption” [381.305(a)]. ATA asserts that its proposed exemption would maintain or exceed the level of safety of the current waiting-time rule.
In accordance with 49 U.S.C. 31136(e) and 31315(b)(4), FMCSA requests public comment on ATA's application for an exemption from section 395.1(d)(2) (the waiting-time rule) of the FMCSRs. The Agency will consider all comments received by close of business on July 7, 2014. Comments will be available for examination in the docket at the location listed under the
Geaux Geaux Railroad, LLC (GGRL), a noncarrier, has filed a verified notice of exemption under 49 CFR 1150.31 to acquire from Illinois Central Railroad Company (ICR) and to operate approximately 21.95 miles of rail line (the Line) between: (1) milepost 9.69 at or near Zee and milepost 0.00 at or near Slaughter, and (2) milepost 345.84 at or near Slaughter and milepost 358.10 at or near Maryland, in East Baton Rouge Parish, La. GGRL states it will also operate over ICR between mileposts 358.10 and 363.60 solely for purposes of interchanging traffic at ICR's Baton Rouge yard.
The transaction may be consummated on or after June 7, 2014 (30 days after the notice of exemption was filed).
GGRL certifies that its projected annual revenues as a result of this transaction will not exceed those that would qualify it as a Class III rail carrier and will not exceed $5 million.
If the verified notice contains false or misleading information, the exemption is void
An original and 10 copies of all pleadings, referring to Docket No. FD 35826, 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 Beatriz Beltranena, One Federal Highway, Suite 400, Boca Raton, FL 33432, and Thomas F. McFarland, 208 South LaSalle St., Suite 1890, Chicago, IL 60604.
Board decisions and notices are available on our Web site at “
By the Board,
The Apache Railroad Company, LLC (APA), and The Apache Railway Company (Apache) (collectively, applicants) have jointly filed a verified notice of exemption under 49 CFR 1180.2(d)(3) for a corporate family transaction.
According to the applicants, APA is a noncarrier and a limited liability company established for the purpose of owning and operating a common carrier short line railroad. Apache is an existing Class III railroad. Both are wholly owned subsidiaries of Snowflake Community Foundation (Snowflake), a noncarrier entity that, according to the applicants, was established to acquire Apache's common stock to preserve the railroad's track, facilities, and operations. Applicants state that APA would acquire all of the assets, franchises, rights, obligations, and operations of Apache, which would be merged into APA. Consequently, APA would become a Class III railroad upon the consummation of this transaction.
Unless stayed, the exemption will be effective on June 7, 2014 (30 days after the verified notice was filed). Applicants state that they intend to consummate the proposed transaction on or about mid-June 2014.
Applicants state that the transaction qualifies for the class exemption for corporate family transactions under 49 CFR 1180.2(d)(3) and have not indicated that the transaction would result in adverse changes in service levels, significant operational changes, or any changes in the competitive balance with carriers outside the corporate family.
Under 49 U.S.C. 10502(g), the Board may not use its exemption authority to relieve a rail carrier of its statutory obligation to protect the interests of its employees. Section 11326(c), however, does not provide for labor protection for transactions under §§ 11324 and 11325 that involve only Class III rail carriers. Accordingly, the Board may not impose labor protective conditions here, because the only carrier involved is a Class III rail carrier.
If the notice contains false or misleading information, the exemption is void
An original and 10 copies of all pleadings, referring to Docket No. FD 35828, must be filed with the Surface Transportation Board, 395 E Street SW., Washington, DC 20423–0001. In addition, one copy of each pleading must be served on John D. Heffner, Strasburger & Price, LLP, 1025 Connecticut Ave. NW., Suite 717, Washington, DC 20036.
Board decisions and notices are available on our Web site at “WWW.STB.DOT.GOV.”
By the Board, Rachel D. Campbell, Director, Office of Proceedings.
Pacific Harbor Line, Inc. (PHL), a Class III rail carrier, has filed a verified notice of exemption under 49 CFR 1150.41 to lease from Union Pacific Railroad Company (UP), and to operate, pursuant to a lease agreement, approximately 30,820 feet of rail line, known as the Santa Ana Bypass Track, extending from milepost 21.7 at CP Compton to milepost 15.9 at Firestone Park in Los Angeles County, Cal.
This transaction is related to a concurrently filed verified notice of exemption in
According to PHL, the agreement between PHL and UP does not contain any provision that may limit future interchange of traffic with any third-party connecting carrier. PHL states that, under the terms of the lease, UP will retain the exclusive common carrier obligation to provide service over the line.
PHL intends to consummate the proposed transaction 30 days or more after the exemption was filed (May 7, 2014), or 60 days or more after filing its certification with the Board pursuant to 49 CFR 1150.42(e).
PHL certifies that its projected annual revenues as a result of this transaction will not result in the creation of a Class II or Class I rail carrier. Because PHL's projected annual revenues will exceed $5 million, PHL certified to the Board on April 30, 2014, that it had complied with the requirements of 49 CFR 1150.32(e) by providing notice to employees and their labor unions on the affected 30,820 feet of rail line. Under 49 CFR 1150.32(e), this exemption cannot become effective until 60 days after the date notice was provided, which would be June 29, 2014.
If the verified notice contains false or misleading information, the exemption is void
An original and 10 copies of all pleadings, referring to Docket No. FD 35789, 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 Rose-Michele Nardi, Transport Counsel PC, 1701 Pennsylvania Avenue NW., Suite 300, Washington, DC 20006.
Board decisions and notices are available on our Web site at “
By the Board, Rachel D. Campbell, Director, Office of Proceedings.
Pacific Harbor Line, Inc. (PHL), a Class III rail carrier, has filed a verified notice of exemption under 49 CFR 1150.41 to operate, pursuant to a lease agreement, approximately 5.75 miles of track owned by the City of Los Angeles, Cal., acting by and through its Board of Harbor Commissioners (POLA), and the City of Long Beach, Cal., acting by and through its Board of Harbor Commissioners (POLB), and over which Union Pacific Railroad Company (UP) currently operates. Specifically, the 5.75 miles of rail line consists of: (1) approximately 5.5 miles extending from milepost 10.6 (CP Compton) to milepost 16.1 (CP West Thenard), known as the Rail Corridor Portion; and (2) an industrial lead (no known mileposts), known as the Drill Track Portion, extending less than a quarter mile in length and located on the west side of the Rail Corridor Portion in Los Angeles County, Cal. (the Subject Track).
This transaction is related to a concurrently filed verified notice of exemption in
According to PHL, the proposed grant of authority to operate over the Subject Track is necessary because it will allow PHL to access a line of railroad it is seeking to lease and operate in its verified notice of exemption filed in Docket No. FD 35789. PHL states that, pursuant to an agreement among themselves, POLA, POLB, and the Alameda Corridor Transportation Authority (ACTA), have consented to UP's grant of certain operating rights to PHL over the Subject Track.
PHL states that the agreement between PHL and UP does not contain any provision that may limit future interchange of traffic with any third-party connecting carrier.
PHL intends to consummate the proposed transaction 30 days or more after the exemption was filed (May 7, 2014), or 60 days or more after filing its certification with the Board pursuant to 49 CFR 1150.42(e).
PHL certifies that its projected annual revenues as a result of this transaction will not result in the creation of a Class II or Class I rail carrier. Because PHL's projected annual revenues will exceed $5 million, PHL certified to the Board on April 30, 2014, that it had complied with the requirements of 49 CFR 1150.32(e) by providing notice to employees and their labor unions on the affected 5.75-mile line. Under 49 CFR 1150.32(e), this exemption cannot become effective until 60 days after the date notice was provided, which would be June 29, 2014.
If the verified notice contains false or misleading information, the exemption is void
An original and 10 copies of all pleadings, referring to Docket No. FD 35814, 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 Rose-Michele Nardi, Transport Counsel PC, 1701 Pennsylvania Avenue NW., Suite 300, Washington, DC 20006.
Board decisions and notices are available on our Web site at “
By the Board, Rachel D. Campbell, Director, Office of Proceedings.
Trinity Railway Express (TRE),
The transaction may be consummated on or after June 7, 2014, the effective date of the exemption (30 days after the verified notice of exemption was filed). The temporary trackage rights are scheduled to expire on December 30, 2014. The purpose of the temporary trackage rights is to allow UP to continue providing rail service between adjacent UP lines during outages on connecting UP lines caused by construction of improvements to Tower 55.
As a condition to the exemption, any employees affected by the acquisition of the temporary trackage rights will be protected by the conditions imposed in
The verified notice of exemption is filed under 49 CFR 1180.2(d)(8). If it contains false or misleading information, the exemption is void
An original and 10 copies of all pleadings, referring to Docket No. FD 35827, 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 Jeremy Berman, 1400 Douglas Street, Union Pacific Railroad Company, STOP 1580, Omaha, NE 68179.
Board decisions and notices are available on our Web site at “WWW.STB.DOT.GOV.”
By the Board,
The Department of the Treasury will submit the following information collection requests to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, Public Law 104–13, on or after the date of publication of this notice.
Comments should be received on or before June 23, 2014 to be assured of consideration.
Send comments regarding the burden estimate, or any other aspect of the information collection, including suggestions for reducing the burden, to (1) Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for Treasury, New Executive Office Building, Room 10235, Washington, DC 20503, or email at
Copies of the submission(s) may be obtained by calling (202) 927–5331, email at
Office of Foreign Assets Control, Treasury.
Notice.
The Treasury Department's Office of Foreign Assets Control (“OFAC”) is publishing additional identifying information associated with the five individuals listed in the Annex to Executive Order 13667 of May 12, 2014, “Blocking Property of Certain Persons Contributing to the Conflict in the Central African Republic,” whose property and interests in property are therefore blocked.
Assistant Director, Compliance Outreach & Implementation, Office of Foreign Assets Control, Department of the Treasury, 1500 Pennsylvania Avenue NW., (Treasury Annex), Washington, DC 20220, Tel.: 202/622–2490.
This document and additional information concerning OFAC are available from OFAC's Web site (
On May 12, 2014, the President issued Executive Order 13667 “Blocking Property of Certain Persons Contributing to the Conflict in the Central African Republic” (the “Order”) pursuant to,
Section 1 of the Order blocks, with certain exceptions, all property and interests in property that are in the United States, that come within the United States, or that are or come within the possession or control of any United States person, of persons listed in the Annex to the Order and of persons determined by the Secretary of the Treasury, in consultation with the Secretary of State, to satisfy certain criteria set forth in the Order.
The Annex to the Order lists five individuals whose property and interests in property are blocked pursuant to the Order. OFAC is publishing additional identifying information associated with those individuals.
The listings for these individuals on OFAC's list of Specially Designated Nationals and Blocked Persons appear as follows:
Centers for Medicare & Medicaid Services (CMS), HHS.
Final rule.
The final rule will revise the Medicare Advantage (MA) program (Part C) regulations and prescription drug benefit program (Part D) regulations to implement statutory requirements; improve program efficiencies; and clarify program requirements. The final rule also includes several provisions designed to improve payment accuracy.
Table 1 lists key changes that have an applicability date other than 60 days after the date of publication of this final rule. The applicability dates are discussed in the preamble for each of these items.
The purpose of this final rule is to make revisions to the Medicare Advantage (MA) program (Part C) and Prescription Drug Benefit Program (Part D) regulations based on our continued experience in the administration of the Part C and Part D programs and to implement certain provisions of the Affordable Care Act. This final rule is necessary to—(1) clarify various program participation requirements; (2) improve payment accuracy; and (3) make other clarifications and technical changes.
The former regulatory compensation structure was comprised of a 6-year cycle that ended December 31, 2013. Under that structure, MA organizations and Part D sponsors provided an initial compensation payment to independent agents for new enrollees (Year 1), and paid a renewal rate (equal to 50 percent of the initial year compensation) for Years 2 through 6. MA organizations and Part D sponsors had the option to pay the 50 percent renewal rate for CY2014 (year 1). This compensation structure proved to be complicated to implement and monitor, and also created an incentive for agents to move beneficiaries as long as the fair market value (FMV) continued to increase each year. To resolve these issues, we proposed to revise the compensation structure. Under our proposal, MA organizations and Part D sponsors would continue to have the discretion to decide, on an annual basis, whether or not to use independent agents. Also, for new enrollments, MA organizations and Part D sponsors could determine what their initial rate would be, up to the CMS designated FMV amount. For renewals in Year 2 and subsequent years, with no end date, the MA organization or Part D sponsor could pay up to 35 percent of the current FMV amount for that year. We believed that revising the existing compensation
We received more than 140 comments from agents, health plans, and trade associations opposing the 35 percent renewal rate, and instead suggesting that CMS maintain the 50 percent renewal rate. A number of commenters expressed concerns that the proposed reduction in compensation would represent a significant decrease from the current compensation limit, and a rate set at 50 percent of FMV would be in line with industry standard. They noted that the higher compensation amount would be particularly important for stand-alone prescription drug plans, as 35 percent would be insufficient to cover an agent's costs associated with the renewal transaction and could discourage agents from assisting in the annual evaluation of a Medicare beneficiary's options. Commenters also stated that, compared to current practice, the proposed 35 percent renewal rate is a reduction since a number of MA plans began offering a renewal rate of 50 percent for 10 years or more at the end of the 6-year cycle (2013). The majority of commenters also stated that agents play an important role in educating beneficiaries about Medicare and the proposed reduction in the renewal rate could reduce the level and quality of services provided to beneficiaries, thereby resulting in less information sharing and poorer plan choices by beneficiaries. Many commenters also stated that agents spend a significant amount of time in training, preparing, and educating beneficiaries and that the compensation is already low relative to the hours spent. Some commenters also expressed concern that the lower compensation rate would discourage new agents from entering the MA market. Many agents stated they would have to stop selling MA products and instead sell other more profitable products. No plans strongly supported the 35 percent renewal rate. Therefore, we are modifying the compensation renewal rate from up to 35 percent to up to 50 percent. These changes will be applicable for enrollments effective January 2015. Because the proposed rate is similar to previous regulatory requirements, present CMS guidance, and industry practice, we believe this implementation timeframe is reasonable and appropriate. We are not finalizing the proposed changes to agent and broker training and testing at this time. We are finalizing limits on referral fees for agents as proposed.
We are not finalizing any new criteria and will maintain the existing six protected classes.
These proposed regulatory provisions codify the Affordable Care Act requirement establishing section 1128J(d) of the Act that MA organizations and Part D sponsors report and return identified Medicare overpayments.
We proposed to adopt the statutory definition of overpayment for both Part C and Part D, which means any funds that an MA organization or Part D sponsor has received or retained under Title XVIII of the Act to which the MA organization or Part D sponsor, after applicable reconciliation, is not entitled under such title. To reflect the unique structure of Part C and Part D payments to plan sponsors, we also propose to define two terms included in the statutory definition of overpayments: “funds” and “applicable reconciliation.” We proposed to define funds as payments an MA organization or Part D sponsor has received that are based on data that these organizations submitted to CMS for payment purposes. For Part C we proposed that applicable reconciliation occurs on the annual final risk adjustment data submission deadline. For Part D, we proposed that applicable reconciliation occurs on the date that is the later of either the annual deadline for submitting prescription drug event (PDE) data for the annual Part D payment reconciliations referred to in § 423.343(c) and (d) or the annual deadline for submitting DIR data.
In addition, we proposed to state in regulation that an MA organization or Part D sponsor has identified an overpayment if it has actual knowledge of the existence of the overpayment or acts in reckless disregard or deliberate ignorance of the existence of the overpayment. An MA organization or Part D sponsor must report and return any identified overpayment it received no later than 60 days after the date on which it identified it received an overpayment. The MA organization or Part D sponsor must notify CMS, using a notification process determined by CMS, of the amount and reason for the overpayment. Finally, we proposed a look-back period with an exception for overpayments resulting from fraud, whereby MA organizations and Part D sponsors would be held accountable for reporting overpayments within the 6 most recent completed payment years for which the applicable reconciliation has been completed.
We received approximately 30 comments from organizations and individuals. Generally, commenters supported establishing separate applicable reconciliation dates for Part C and Part D. Many commenters questioned when the 60-day period for reporting and returning begins, and what activities constitute reporting and returning an overpayment to CMS, including questions about estimating an amount of overpayment. A number of commenters also requested to clarify the standards for “identifying” an overpayment, including questions about the meaning of reasonable diligence. Finally, a few commenters recommended that we impose the same limitation on the look-back period for all overpayments, even those relating to fraud.
We are finalizing the provisions at §§ 422.326 and 423.360, with the following modifications. First, we add at the end of paragraph § 422.326(d) the phrase “unless otherwise directed by CMS for the purpose of § 422.311.” Also, to increase clarity we revise §§ 422.326(c) and 423.360(c) regarding identified overpayments. Finally, we strike the following sentence in the proposed paragraphs on the 6-year look-back period: “Overpayments resulting from fraud are not subject to this limitation of the lookback period.”
We proposed several amendments to § 422.310 to strengthen existing regulations related to the accuracy of
The Balanced Budget Act of 1997 (BBA) (Pub. L. 105–33) created a new “Part C” in the Medicare statute (sections 1851 through 1859 of the Social Security Act (the Act)) which established what is now known as the Medicare Advantage (MA) program. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108–173), enacted on December 8, 2003, added a new “Part D” to the Medicare statute (sections 1860D–1 through 42 of the Act) entitled the Medicare Prescription Drug Benefit Program (PDP), and made significant changes to the existing Part C program, which it named the Medicare Advantage (MA) Program. The MMA directed that important aspects of the Part D program be similar to, and coordinated with, regulations for the MA program. Generally, the provisions enacted in the MMA took effect January 1, 2006. The final rules implementing the MMA for the MA and Part D prescription drug programs appeared in the
Since the inception of both Parts C and D, we have periodically revised our regulations either to implement statutory directives or to incorporate knowledge obtained through experience with both programs. For instance, in the September 18, 2008 and January 12, 2009
In a final rule that appeared in the April 15, 2011
In a final rule that appeared in the April 12, 2012
In the proposed rule titled “Contract Year 2015 Policy and Technical Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs,” which appeared in the January 10, 2014
We received approximately 7,600 timely pieces of correspondence containing multiple comments on the CY 2014 proposed rule. While we are finalizing several of the provisions from the proposed rule, there are a number of provisions from the proposed rule (for example, enrollment eligibility criteria for individuals not lawfully present in the United States) that we intend to address later and a few which we do not intend to finalize. We also note that some of the public comments were outside of the scope of the proposed rule. These out-of-scope public comments are not addressed in this final rule. Summaries of the public comments that are within the scope of the proposed rule and our responses to those public comments are set forth in the various sections of this final rule under the appropriate heading. However, we note that in this final rule we are not addressing comments received with respect to the provisions of the proposed rule that we are not finalizing at this time. Rather, we will address them at a later time, in a subsequent rulemaking document, as appropriate.
As noted previously, some of the provisions of the proposed rule will be addressed later and, therefore, are not being finalized in this rule. Table 3 lists the provisions that were proposed but are not addressed at this time. We note that several provisions that were proposed are not being finalized in this rule and are effectively being withdrawn; those provisions are not listed in Table 3.
To ensure that our original intent is realized and to eliminate the potential for organizations to move enrollees from one of their plans to another based on financial or some other interest, we proposed to revise paragraph § 422.503(b)(4)(vi)(G)(5) so that an “entity seeking to contract as an MA organization must [n]ot accept, or share, a corporate parent organization with an entity that accepts, new enrollees under a section 1876 reasonable cost contract in any area in which it seeks to offer an MA plan.”
In making the proposed revision to paragraph § 422.503(b), we also proposed to add the definition of “parent organization” to § 422.2 of the MA program definitions, specifying that, “Parent organization means a legal entity that owns one or more other subsidiary legal entities.” Although the MA program regulations do not currently define the term “parent organization,” our proposed definition is consistent with the way the term is currently used in the context of the MA program, for example, when assessing an organization's business structure. We requested comments on whether a parent organization with less than a 100 percent interest in a subsidiary legal entity should trigger the prohibition we proposed with the amendment at § 422.503(b)(4).
During the public notice and comment process, a handful of commenters provided their input on our proposal. Some of the respondents included multiple comments. The comments and our responses follow.
• Not accept, or share a corporate parent organization owning a controlling interest in an entity that accepts, new enrollees under a section 1876 reasonable cost contract in any area in which it seeks to offer an MA plan.
• Not accept, as either the parent organization owning a controlling interest of, or subsidiary of, an entity that accepts, new enrollees under a section 1876 reasonable cost contract in any area in which it seeks to offer an MA plan.
We are finalizing the provisions of the proposed rule with the revisions and additions discussed in this section III.A.1 of this final rule.
Sections 1857(a) and 1860D–12(b)(1) of the Act provided the Secretary with the authority to enter into contracts with MA organizations, and Part D sponsors (respectively). Section 1857(g)(1) of the Act provided a list of contract violations and the corresponding enforcement responses (intermediate sanctions (sanctions) and/or civil money penalties (CMPs)) are listed under section 1857(g)(2) of the Act (section 1860D–12(b)(3)(E) applied these provisions to Part D contracts).
We proposed two changes to our existing authority to impose sanctions and CMPs based on section 6408 of the Affordable Care Act (Pub. L. 111–148). The provisions of section 6408 provided CMS with the authority to impose intermediate sanctions or CMPs for violations of the Part C and D marketing and enrollment requirements. As well as, an organization that enrolls an individual without prior consent (except in certain limited circumstances) or transfers an individual to a new plan without prior consent. Additionally, we proposed to revise the language of these provisions to clarify that either CMS or the OIG may impose CMPs for the violations listed at §§ 422.752(a) and 423.752(a), except 422.752(a)(5) and 423.752(a)(5).
After careful consideration of all of the comments we received, we are finalizing these proposals without modification.
Sections 1857(c) and 1860D–12(b)(3)(B) of the Act provided us with the authority to terminate a Part C or D sponsoring organization's contract. Sections 1857(h)(1)(B) and 1860D–12(b)(3)(F) of the Act provided us with the procedures necessary to facilitate the termination of those contracts. We proposed three revisions to our existing regulations that relate to contract termination.
First, we proposed to clarify the scope of our authority to terminate Part C and D contracts under §§ 422.510(a) and 423.509(a) by modifying the language at §§ 422.510(a) and 423.509(a) to separate the statutory bases for termination from our examples of specific violations which meet the standard for termination established by the statute. We proposed to effectuate this change by renumbering the list of bases contained in §§ 422.510(a) and 423.509(a).
Second, we proposed revisions to our contract termination notification procedures contained at §§ 422.510(b)(1) and 423.509(b)(1). Current regulations state that if CMS decides to terminate a Part C or Part D sponsoring organization's contract, we must notify the organization in writing 90 days before the intended date of termination. We proposed to shorten the notification timeframe from 90 days to 45 days. Additionally, in an effort to respond to changes in the media and information technology landscape, we proposed a slight modification to the termination notification provision for the general public at §§ 422.510(b)(1)(iii) and 423.509(b)(1)(iii) which includes the contracting organizations releasing a press statement to news media serving the affected community or county and posting the press statement prominently on the organization's Web site instead of publishing the notice in applicable newspapers.
Finally, we proposed minor revisions to the wording of our regulations at §§ 422.510 and 423.509 to reflect the authorizing language contained in sections 1857(c)(2) and 1860D–12 of the Act. Specifically, we proposed to replace the word “fails” with “failed” so that it reads consistently throughout §§ 422.510 and 423.509.
As for adequate notification to affected vendors and providers, it is the responsibility of the contracting organization to design their contracts with their providers and vendors in a manner that recognizes possible contract actions, such as termination, that could be taken by CMS. For example, all plans that have a contract with CMS could ultimately be subject to immediate termination if they are found in such substantial non-compliance by CMS that it poses an imminent and serious risk to Medicare enrollees. Therefore, most, if not all plans, likely have clauses in their provider and vendor contracts that allow them to terminate these contracts expeditiously with the affected entities in the event of a contract termination by CMS.
We also do not agree that the shortened timeframe in any way affects a contracting organization's ability to appeal. Contracting organizations who are subject to a contract termination in §§ 422.510(b) or 423.509(b) must file their request for a hearing within 15 days from the date of receipt of the notice of termination. A timely filed request for hearing effectively stays the termination proceeding until a hearing decision is reached. Consequently, shortening the notice of termination from 90 to 45 days should have no impact on a contracting organization's ability to file an appeal of the contract termination.
Finally, we do not agree that the shortened notice timeframe to effectuate a termination would result in increased costs to an organization. We already have the ability to prorate its payment to an organization for terminations that are effective in the middle of a month; consequently we do not agree that shortening the notification timeframe would in any way change the CMS's current approach to payment or recoupment of capitated payments in these circumstances.
After consideration of the public comment(s) received, we are finalizing these proposals without modification. We note that the amendatory instruction to the regulation text in this final rule more precisely describes the redesignation of subparagraph (a)(4) of § 423.509 than that found in the proposed rule.
Section 1857(a) and section 1860D–12(b)(1) of the Act provided the Secretary with the authority to enter into contracts with MA organizations and Part D sponsors (respectively). Sections 1860D–12(b)(3)(D)(i) and 1857(e)(1) of the Act, specify that these contracts shall contain other terms and conditions that the Secretary may find necessary and appropriate. We first established that all Part C and Part D contracting organizations have the necessary administrative and management arrangements to have an effective compliance program, as reflected in §§ 422.503(b)(4)(vi) and 423.504(b)(4)(vi). We later established that compliance plans for sponsoring organizations must include training and education and effective lines of communication between the compliance officer and the sponsoring organization's employees, managers, and directors, as well as their first-tier, downstream and related entities (FDRs). We reiterated the importance of this requirement in the October 22, 2009 proposed rule entitled, “Medicare Program; Policy and Technical Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs” (74 FR 53634). We were concerned that these FDRs would potentially have to participate in
Consequently, we proposed in this rule to require that all contracting organizations accept a certificate of completion of the CMS developed training as satisfaction of this general compliance program training requirement. We proposed to modify the regulation text by adding a new §§ 422.503(b)(vi)(C)(3) and 423.504(b)(vi)(C)(4) to permit only this CMS training for satisfaction of the requirement to train first–tier, downstream and related entities.
After careful consideration of all of the comments received, we are finalizing this proposal with the one modification discussed previously, with a delayed applicability date of January 1, 2016.
Sections 1857(g) and 1860D–12(b)(3)(E) of the Act provide the Secretary the ability to impose intermediate sanctions on MA organizations and PDP sponsors. Intermediate sanctions consist of suspension of enrollment, suspension of marketing and suspension of payment. Current regulations governing intermediate sanctions are contained in subparts O of part 422 and part 423. Sections 422.756 and 423.756 provide specific procedures for imposing intermediate sanctions and include provisions which address: The duration of the sanction; and the standard that we apply when determining if a sanction should be lifted.
We proposed to expand the potential applicability of the test period requirement to three types of intermediate sanctions by modifying the existing rules to clarify that CMS may require a test period for a sponsoring organization that has had any of the three types of intermediate sanctions imposed: Marketing, enrollment and/or payment. Second, we proposed to clarify the enrollment parameters for sanctioned sponsoring organizations offering Part D plans to include language specifying that a sanctioned plan is not available to receive automatically assigned beneficiaries for the entire duration or a portion of the testing period. We proposed to modify the regulation text at §§ 422.756 and 423.756 to reflect these changes.
Therefore, in situations where passive enrollment is determined permissible, like an immediate plan termination, CMS would factor in a number of criteria, including the receiving plan's current premium, benefit and formulary structure, as well as plan past performance. In any event, our goal would be to ensure that those affected members suffered as little disruption as possible during their transition. Plans that were under sanction at the time of a passive enrollment would not be considered a viable option for affected enrollees and it is unlikely that sponsors under a test period would either. However, if a sponsor who was removed from sanction and was under a test period met several other criteria for receiving passive enrollment (that is, plan's benefit and formulary structure was largely the same and their premium was not significantly higher), we may consider them among the group of available plans to receive passive enrollment.
After careful consideration of the comments received, we are finalizing these proposals without modification. We inadvertently failed to include proposed regulation text for § 423.756 that corresponds to this proposal. In this final rule, we finalize amendments to §§ 422.756 and 423.756 that are virtually identical to implement this proposal.
Section 1860D–12(b)(3) of the Act authorizes the Secretary to include contract terms for Part D sponsors, not inconsistent with the Part C and D statutes, as necessary and appropriate. Section 423.120(a)(3) specifies that a Part D sponsor's contracted network may include non-retail pharmacies, including mail order pharmacies, so long as the network access requirements are met. Part D plans are increasingly entering into contracts with mail order pharmacies to offer beneficiaries an alternative way to fill prescriptions under the Part D benefit, often at much lower cost sharing than is available at network retail pharmacies. While mail order pharmacies make up a relatively small percentage of total prescriptions filled under the Part D program, we are committed to ensuring consistent and reliable beneficiary access to medications, regardless of what type of pharmacy fills the prescriptions.
Section 1860D–4 of the Act describes the various beneficiary protections in place in the Part D program. For mail order pharmacies, the industry standard for delivery times appears to range from 7 to 10 business days from the date the prescription was received, and Part D sponsors' marketing materials often specify this time frame to beneficiaries. Beneficiaries generally choose to fill prescriptions through a mail order pharmacy, for lower cost sharing, when it is feasible to wait 7 to 10 days to receive their medications. However, if
When issues with filling a prescription arise in a retail setting, the beneficiary often is notified of the problem in real time, or within hours of discovery. When issues arise in a mail order setting, the delays in finding, communicating, and making the appropriate contacts to resolve the problem may add days onto the ultimate delivery date, resulting in a potentially more significant concern for mail order beneficiaries if these delays result in gaps in therapy. For this reason, we proposed to establish fulfillment requirements for mail order pharmacies as well as home delivery services offered by retail pharmacies, to set consistent expectations for beneficiary access to drugs in this growing segment. Many beneficiaries may be very well served by this type of pharmacy access, but only if they can rely upon efficient processing and turnaround times. Mail order pharmacies contracted by Part D sponsors can reasonably be expected to meet minimum performance standards for order fulfillment, including convenient order turnaround times, as a beneficiary protection and as a component of providing good customer service. Clearly stating in beneficiary materials the expected turnaround time for delivery allows the beneficiary to better control when they need to reorder to ensure no gaps in medication supply. Clarity in expected turnaround times also can prevent needing to address customer inquiries into the status of a pending order, setting parameters for when an order is or is not delayed and what options become available at that point. We believe that established companies that have been providing these services for years have generally been meeting these standards in practice already, and that the proposed turnaround times are in line with current practices followed by mail order pharmacies today.
Therefore, we proposed to amend § 423.120(a)(3) to specify mail order fulfillment requirements in line with what we have observed in other markets: 5 business days (from when the pharmacy receives the prescription order to when it is shipped) for those prescriptions requiring intervention beyond filling (such as clarifying illegible orders, resolving third party rejections, and coordinating with multiple providers as part of drug utilization management); and 3 business days (from when the pharmacy receives the prescription order to when it is shipped) for those prescriptions not requiring intervention. We recognize that some prescription orders may require clarification or additional steps to be taken by the provider or beneficiary that would extend beyond the proposed period of 5 days. We believe that such cases represent a minority of mail order prescriptions, and as such we would anticipate that more than 99 percent of all mail order prescriptions processed are filled in compliance with either the 3- or 5-day standard. We believed our proposed standards are in alignment with fulfillment requirements already in place in the market and as such do not create a new burden or new standard for mail order pharmacies to meet. We solicited comments not only on the proposed time frames, but also on whether there are instances (in addition to those discussed previously) in which the proposed 5-day time frame should apply. We received the following comments and our response follows:
In summary, we are not finalizing any fulfillment standards for mail order prescriptions, in light of the concerns raised. We will use the information gained from our mail order study and from the public comments submitted to explore the need for additional guidance or rulemaking in the future. The need to ensure consistent access to and prevent gaps in therapy for enrollees relying on mail order for their medications continues to be a significant concern.
We additionally solicited comments on whether we should establish additional requirements for beneficiary materials relating to mail order services, such as: Clear definitions of processing time and delivery time; how to access customer support; how to submit a complaint via 1 800 MEDICARE; and beneficiary options for accessing medications when a delivery is lost or delayed. We received the following comments and our response follows:
We also welcomed comments on any other requirements we should consider for mail order or other home delivery options. For example, also potentially affecting consistent access to medication is the use of mail order to fill initial prescriptions of new drugs or to fill 30-day supplies of chronically used medications. The need to order a refill early, allowing sufficient time for processing and delivery, can result in refill-too-soon edits based upon retail 30 day standards. Resolving inappropriate or inapplicable edits increases burden on the beneficiary and the mail order pharmacy and essentially creates a disincentive for beneficiaries who are planning ahead and attempting to order early enough to ensure uninterrupted supplies of chronic medications. In general, we believe that filling initial prescriptions or routine 30-day supplies at mail order is not good practice. We recognize that there may be a small minority of beneficiaries who successfully depend solely upon mail order or other home delivery options for access to prescription drugs due to particular circumstances of geography or mobility. We have no reason to
We did not propose any specific regulatory requirements to mail order for 30-day supplies or less. We are currently analyzing the types of prescriptions filled by mail order pharmacies and will use the information gained from this to explore the need for future guidance or rulemaking that could help ensure consistent timely access for Part D beneficiaries opting to use mail order for both short and extended days' supplies.
Section 103(b)(1)(B) of MIPPA revised the Act to charge the Secretary with establishing guidelines to ”ensure that the use of compensation creates incentives for agents and brokers to enroll individuals in the MA plan that is intended to best meet their health care needs.” Section 103(b)(2) of MIPPA revised the Act to apply these same guidelines to Part D sponsors. Our program experience indicates that some agents may encourage beneficiaries to enroll in plans that offer higher commissions without regard to whether plan benefits meet the beneficiaries' health needs. In recognition that agents and brokers play a significant role in providing guidance and advice to beneficiaries and are in a unique position to influence beneficiary choice, we had proposed, prior to the enactment of MIPPA, a rule to regulate agent and broker compensation. To implement the MIPAA provisions and relying in part on comments in response to our previously proposed rule, we adopted an interim final rule on September 18, 2008, entitled “Medicare Program; Medicare Advantage and Prescription Drug Benefit Programs: Final Marketing Provisions” (73 FR 554226), which, among other things, established the current compensation structure for agents and brokers as it applies to Parts C and D. That rule remains significantly in place at §§ 422.2274 and 423.2274, and our experience since then indicates that revision of the compensation requirements is necessary to ensure that we continue to meet our statutory mandate.
The current compensation structure is comprised of a 6-year compensation cycle that began in Contract Year (CY) 2009. MA organizations and Part D sponsors were to provide an initial compensation payment to independent agents for new enrollees (Year 1) and pay a renewal rate (equal to 50 percent of the initial year compensation) to independent agents for Years 2 through 6. These rates were to be adjusted annually based on changes to the MA payment rates or Part D parameters as established by CMS. We later amended the regulations to allow MA organizations and Part D sponsors to compensate independent agents and brokers annually using an amount at or below the Fair Market Value (FMV). (See the final rule with comment period entitled, “Medicare Program; Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs for Contract Year 2013 and Other Changes” (77 FR 22072) published in the April 12, 2012
The first 6-year cycle ended at the end of CY 2013, on December 31, 2013. The first year, CY 2009, was considered to be the first renewal year for those already enrolled, effectively making CY 2009 the second full year of compensation. Because our regulations were silent regarding compensation amounts for Year 7 and beyond, we stated in our Final Call Letter for Contract Year 2014, issued on April 1, 2013, that MA organizations and Part D sponsors could, at their discretion, pay agents and brokers the renewal amount for Year 7 and beyond. However, this subregulatory guidance was intended to be a temporary measure, pending final changes to our regulations.
Under the current structure, MA organizations and Part D sponsors pay an initial rate for the first year, and then a renewal payment of 50 percent of the initial compensation paid to the agent for years 2 through 6. This structure has proven to be complicated to implement and monitor as it requires the MA organization or Part D sponsor to track the compensation paid for every enrollee's initial enrollment, and calculate the renewal rate based on that initial payment. In our NPRM, dated January 10, 2014, we provided a detailed example of the complexities of the current compensation structure. Summarizing the current complexities, every MA organization or Part D sponsor has to know, at any given time, the amount of the initial compensation for each plan year—going back as far as 2009—in which the member enrolled in order to pay the correct compensation amount to the agent for the current contract year. For new members, MA organizations and Part D sponsors must first review CMS' reports to determine whether an initial or renewal payment should be made, and then combine that information with the FMV, or, if applicable, the plan's compensation set at less than the FMV, for each plan year to ensure the correct payments are made to agents.
In addition to its complexity, we remain concerned that the current structure creates an incentive for agents and brokers to move enrollees from a plan of one parent organization to a plan of another parent organization, even for like plan-type changes. In our NPRM, we discussed and expanded upon our example of how the current system results in different payments when a beneficiary moves from one like plan to another like plan in different organizations. In these cases, the new parent organization would pay the agent 50 percent of the current initial rate of the new parent organization; not 50 percent of the original initial rate paid by the other parent organization. Thus, in cases where the FMV has increased, or the other parent organization pays a higher commission, an incentive exists for the agent to move beneficiaries from one parent organization to another. (See §§ 422.2274(a)(3) and 423.2274(a)(3)).
Since 2008, we have received inquiries from MA organizations and Part D sponsors regarding the correct calculation of agent/broker compensation, and found it necessary to take compliance actions against MA organizations and Part D sponsors for failure to comply with the compensation requirements. To the extent that there is confusion about the required levels of compensation or the timing of compensation, there could be an uneven playing field for MA organizations and Part D sponsors
We proposed to revise the existing compensation structure for agents and brokers so that, for new enrollments, MA organizations and Part D sponsors could make an initial payment that is no greater than the FMV amount for renewals in Year 2 and beyond, the MA organization or Part D sponsor could pay up to 35 percent of the FMV amount for the renewal year, resulting in renewal year payment changes each year if the MA organization or Part D sponsor chooses to pay 35 percent of the current FMV (that is, the renewal year FMV threshold). As is currently the case, we would interpret the FMV threshold in our annual guidance to MA organizations and Part D sponsors. This flexibility would enable MA organizations and Part D sponsors to better react to changes in the marketplace and adjust their compensation structures accordingly.
When we proposed the 35 percent renewal rate, we also discussed several different alternatives, including prohibiting compensation payments entirely beyond year 6, permitting MA organizations and Part D sponsors to pay a residual payment for year 7 and subsequent years, and permitting existing renewal payments to extend past year 7. We also evaluated different renewal amounts, including a 50 percent renewal payment for years 2 through 6 with a continuing 25 percent residual payment for years 7 and beyond. The evaluation took into account different beneficiary ages for an initial enrollment, as well as life expectancy. In the analysis, a renewal payment of 35 percent was similar in payout to the combination of a 50 percent payment for years 2 through 6 and a residual payment of 25 percent for year 7 and beyond.
In our NPRM, we stated that we believed that revising the existing compensation structure to allow MA organizations or Part D sponsors to pay up to 35 percent of the FMV for year 2 and beyond was appropriate based on several factors. First, we stated that a two-tiered (initial and renewal) payment system would be significantly less complicated than a three-tiered system (initial, 50 percent renewal for years 2 through 6, and 25 percent residual for years 7 and beyond), and would reduce administrative burden and confusion for plan sponsors. Second, our analysis determined that 35 percent is the renewal compensation level at which the present value of overall payments under a two-tiered system would be relatively equal to the present value of overall payments under a three-tiered system (taking into account the estimated mortality rates for several beneficiary age cohorts). This analysis was based on the existing commission structure basing renewal commissions on the starting year initial commission amount and not the current year FMV amount.
In order to implement the changes in the identical Part C and Part D regulations at §§ 422.2274 and 423.2274, our NPRM first proposed to revise the introductory language for each section and then define “compensation” in paragraph (a)(1) and to restate the fair market value limit on compensation for the initial year as paragraph (b)(1)(i). Second, we proposed to combine the current (a)(1)(i)(B), which addresses payments for renewals, and (a)(1)(iii), which addresses the length of time that renewals should be paid, and designate the revisions as a new (b)(1)(ii). Thus, the proposed new paragraph (b)(1)(ii) would state that plans may pay up to 35 percent of the current FMV and that renewal payments may be made for the second year of enrollment and beyond.
In addition, we proposed to modify paragraph (a)(3) to remove the 6-year cap on the compensation cycle. Currently, paragraph (a)(3) refers to policies that are replaced with a like plan during the first year or the subsequent 5 renewal years. Since we proposed to eliminate the 6-year cycle, our revised paragraph (b)(2) deletes the reference to the initial year and the 5 renewal years. By tying renewal compensation to the FMV for the renewal year, rather than to the initial year of enrollment, our proposal reduces the financial incentives for an agent or broker to encourage Medicare beneficiaries to change plans, especially from one parent organization to another parent organization. As with the current regulation, we proposed in paragraph (b)(2)(iii) that a change in enrollment to a new plan type be payable under the same rules that apply to an initial enrollment, regardless of whether the change is to an unlike plan type in the same parent organization or an unlike plan type in another parent organization. Note that, as with the current rule, our proposal only addresses compensation paid to independent agents and does not address compensation payable by an MA organization or Part D sponsor to its employees who perform services similar to agents and brokers.
We welcomed comments on both the amount of the renewal payment, as well as the proposed indefinite time frame, which are discussed in depth as follows. In summary, we received a number of comments supporting our efforts to simplify agent/broker compensation calculation. These comments were primarily from plans and industry trade groups. We will be finalizing the rule to implement a two-tiered (initial and renewal) payment system using the FMV in the current year for renewal calculations.
We received numerous comments from agents, brokers, plans and trade associations overwhelmingly opposing the 35 percent renewal rate. Based on the comments received, we will finalize the amendment to the regulations with a cap of 50 percent of the current FMV for renewals.
In response to the comments received, we also determined that some clarifications were necessary. For renewals, the payment is based on the current FMV and not the initial enrollment year FMV. For example, assume a beneficiary enrolls in an MA plan in CY 2013. The plan pays the initial FMV for CY 2013, which is $413. In CY 2015, assume the FMV is $420. The plan chooses to pay 50 percent of the FMV for renewals. The maximum renewal payment for this member for CY 2015 would be $210 ($420 * .50) instead of $207 ($413 * .50). For all enrollments, MA organizations and Part D Sponsors should calculate the renewal rate based on the FMV of the enrollment year. We are also clarifying that our proposed and final regulations do not require an indefinite payment of 50 percent of the FMV. The final rule would permit up to 50 percent of the current FMV to be paid by an MA organization or Part D sponsor. CMS currently requires that plans inform CMS as to whether they are using independent agents. Contracts between MA organizations and Part D Sponsors, on one hand, and their independent agents and/or downstream entities on the other hand, such as Field Marketing Organizations, are not exhaustively regulated by CMS. Therefore, MA organizations and Part D sponsors may decide the duration of their contract with agents, number of applicable renewals, and the actual rate for renewals for each year, subject to the limits in this final rule.
Current regulations at §§ 422.2274(a)(4) and 423.2274(a)(4),
Currently, regulations at § 422.2274(a)(4)(i) permit payments to be made at one time or in installments and at any time. In order to reduce the number of payments that need to be recouped based on changes made during the annual coordinated election period (AEP), which runs from October 15 through December 7, CMS proposed, in new subparagraph (b)(3)(ii), changing the timing of payments to require that payments may not be made until January 1 of the enrollment year and must be paid in full by December 31 of the enrollment year. We stated that this proposal was appropriate given that the beneficiary's final application during the AEP becomes the effective enrollment. This would reduce the number of recoupments required when an enrollee signed more than one application during the AEP. We received several comments opposing the requirement that MA organizations and Part D plans may not make AEP payments until January 1 of the following year, but do not find these arguments sufficiently compelling to outweigh the simplification that would be gained by establishing the January deadline. We also received comments regarding our proposed requirement that payments be completed by December 31. MA organizations and industry associations stated that accurate payments, especially for enrollments effective on December 1, would be difficult to operationalize by the end of the year. However, we would expect enrollment requests for a December 1 effective date to be relatively low, as only individuals newly eligible to Medicare Advantage and those with a special election period would be able to enroll for that date. Moreover, organizations and sponsors are already required to process most post-enrollment activities within two weeks. Therefore, we continue to believe that the December 31 deadline is in the best interest of the program and are finalizing subparagraph (b)(3)(ii) as proposed.
Current regulations at §§ 422.2274(4)(ii)(A) and 423.2274(4)(ii)(A) require MA organizations and Part D sponsors to recoup compensation paid to agents when a beneficiary disenrolls from a plan within the first 3 months of enrollment. However, in sub-regulatory guidance, we have recognized several circumstances (for example, death of the beneficiary, the beneficiary moves out of the service area, the beneficiary becomes eligible to receive LIS, or the beneficiary loses Medicaid benefits) in which plans should not recoup compensation, even though the beneficiary was enrolled in the plan for less than 3 months. In such circumstances, since the disenrollment decision could not be based on agent or broker behavior, we believe it to be appropriate and in the best interest of the Medicare program for the agent to receive the compensation based on the number of months that beneficiary was enrolled in the plan. While the plan would not recoup the compensation for those months, it would recoup any compensation paid for the months after the date of disenrollment.
CMS proposed to combine current paragraphs (a)(4)(ii)(A) and (a)(4)(ii)(B) into a revised paragraph (b)(3)(iii), which included new text to require plans to recover compensation for only the months that the beneficiary is not enrolled, unless the disenrollment took place within the first 3 months. In our proposed rule, paragraph (b)(3)(iii) would require recoupment of all compensation in cases where the disenrollment was the result of agent or broker behavior. We received few but compelling comments on this proposal, which stated that it would be extremely difficult for MA organizations and Part D Sponsors to determine whether the disenrollment was a result of agent behavior, potentially resulting in compensation either being inappropriately recouped or not recouped when necessary. Based on these comments, we are not finalizing our proposal for subparagraph (b)(3)(iii) but are finalizing regulation text to state that the entire compensation must recouped if a disenrollment occurs during the first 3 months unless CMS determines that recoupment is not in the best interest of the Medicare program. We intend for this standard to be applied as we have implemented this aspect of the current regulation in past, with certain circumstances (for example, death of the beneficiary, the beneficiary moves out of the service area, the beneficiary becomes eligible to receive LIS, or the beneficiary loses Medicaid benefits) not triggering the recoupment requirement. We will continue to provide exceptions to the requirement in sub-regulatory guidance by applying the standard we are finalizing today.
We also proposed, to be codified at §§ 422.2274(h) and 423.2274(h), to codify existing sub-regulatory guidance regarding referral (finder's) fees. We released a memorandum on October 19, 2011 addressing excessive referral fees, noting that referral fees should not exceed $100. We have long been concerned that some MA organizations or Part D sponsors can offer the entire amount of compensation an agent or broker receives through only a referral while referral fees paid to others are part of the total compensation. This creates an uneven playing field within the marketplace and a clear financial incentive for the referring agent to steer beneficiaries to MA organizations or Part D sponsors that offer the higher amount, without regard for whether plan benefits meet the beneficiaries' health care needs. Therefore, we proposed to limit the amount that can be paid as a referral fee to independent, captive, and employed agents and brokers, regardless of who completes the enrollment form, to a reasonable amount, as determined by CMS, which is currently $100, for CY 2013 and CY 2014. The entire proposal concerning agent and broker compensation was discussed in the context of our concern that agents and brokers not be influenced by payments from MA organizations and Part D sponsors to steer beneficiaries to plans that do not meet the beneficiaries' needs. We note that this proposal was clearly identified in the preamble, 79 FR 1936, but the proposed regulation text, 79 FR 2060 and 2071, mistakenly included language discussing enrollee behavior and the value of health-related activities.
We are finalizing the regulations with additional regulation text for a technical correction. One entity commented that the proposal eliminated §§ 422.2274(a)(1)(iv) and 423.2274(a)(1)(iv). Our proposal was not to remove these provisions concerning the applicability of compensation to third party entities and the regulation text should have included the substance of current subparagraph (a)(1)(iv). We have inserted the text from the regulation prior to the proposal at §§ 422.2274(b)(1)(iii) and 423.2274(b)(1)(iii) of this final rule.
Finally, we are not finalizing the change to the introductory language to §§ 422.2274 and 423.2274 in favor of deleting the existing introductory language (which forms the substantive basis for the new paragraph (a) definitions); the introductory language we proposed seems unnecessary to establish the scope of each regulation.
After consideration of the public comments received, we are finalizing our proposal at §§ 422.2274(a), (b) and (h) and 423.2274(a), (b), and (h) with the following modifications as previously discussed:
• Deleting the introductory text to the regulation section.
• Raising the renewal compensation rate from 35 percent to (up to) 50 percent of the current fair market value cut-off amounts published annually by CMS.
• Removing the proposed recoupment standard for rapid disenrollments by reverting to the status quo where subregulatory guidance describes activities not triggering recoupments (rather than requiring recoupment based on “agent or broker behavior”; implementing a standard based on the best interests of the Medicare program to identify disenrollments that do not require recoupment.
• Incorporating existing regulation text about compensation to Field Marketing Organizations.
• Clarifying the CMS standard for applying the limit on referral fees.
Section 3307 of the Affordable Care Act amended section 1860D–4(b)(3)(G) of the Act by replacing the specific criteria established under MIPPA in 2008 to identify categories or classes of Part D drugs for which all Part D drugs therein shall be included on Part D sponsor formularies. The specified criteria were replaced with the requirement that the Secretary establish criteria through notice and comment rulemaking to identify drug categories or classes of clinical concern. In addition, section 3307 of the Affordable Care Act requires the Secretary to engage in rulemaking to establish exceptions that permit a Part D sponsor to exclude from its formulary a particular Part D drug that is otherwise required to be included in the formulary in a drug category or class of clinical concern (or otherwise limit access to such a drug, including through prior authorization or utilization management). The Affordable Care Act amendments to section 1860D–4(b)(3)(G) of the Act specified that until such time as the Secretary establishes through rulemaking the criteria to identify drug categories or classes of clinical concern through rulemaking, the following categories or classes shall be identified as categories or classes of clinical concern: anticonvulsants, antidepressants, antineoplastics, antipsychotics, antiretrovirals, and immunosuppressants for the treatment of transplant rejection. We proposed to implement the Affordable Care Act requirements set forth in section 1860D–4(b)(3)(G) of the Act by revising § 423.120(b)(2)(v) and (vi) to specify: (1) the criteria the Secretary will use to identify drug categories or classes of clinical concern; and (2) exceptions that permit Part D sponsors to exclude a particular Part D drug from within a category or class of clinical concern that is otherwise required to be included in the formulary (or to otherwise limit access to such a drug, including through utilization management or prior authorization restrictions). We also proposed to specify which drug categories or classes met the proposed criteria and explained the process we used for making these determinations.
We proposed to modify § 423.120(b)(2)(v) to require that, unless an exception applies, all Part D drugs within a drug category or class be included on the formulary if the drug category or class of drugs for a typical individual with a disease or condition treated by the drugs in the category or class meets both of the following criteria, as determined by CMS—
• Hospitalization, persistent or significant disability or incapacity, or death likely will result if initial administration (including self-administration) of a drug in the category or class does not occur within 7 days of the date the prescription for the drug was presented to the pharmacy to be filled; and
• More specific CMS formulary requirements will not suffice to meet the universe of clinical drug-and-disease-specific applications due to the diversity of disease or condition manifestations and associated specificity or variability of drug therapies necessary to treat such manifestations.
We were concerned that requiring essentially open coverage of certain categories and classes of drugs presents both patient welfare concerns and financial disadvantages for the Part D program as a result of increased drug prices and overutilization. We also believed that criteria for identifying drug categories and classes of clinical concern should identify only those drug categories or classes for which access cannot be adequately ensured by beneficiary protections that otherwise apply. Consequently, as we took the opportunity to propose to codify criteria for identifying categories or classes of drugs that are of clinical concern, we believed that the requirements of section 3307 of the Affordable Care Act should be implemented taking into consideration the other protections available to beneficiaries. Otherwise, we believed section 3307 of the Affordable Care Act would establish duplicative, and thus unnecessary, protections that would serve only to increase Part D costs—without any added benefit and with the possibility of added harm from misuse. Therefore, in considering whether additional protections continue to be needed under this section, we needed to take the other beneficiary access protections into account. We detailed five such protections: formulary transparency, formulary requirements, reassignment formulary coverage notices, transition supplies and notices, and the coverage determination and appeals processes. Taken together, we believed these requirements were comprehensive
We received the following comments, and our response follows:
During our annual formulary review and approval process, regardless of a drug's placement in a category or class of clinical concern, to the extent that a treatment guideline speaks to a specific category or class of drugs, we look for representation from that category or class of drugs on the formulary. Moreover, if the treatment guidelines address specific drugs, we would review formularies to ensure inclusion of those specific drugs. Thus, although a category or class of clinical concern is immunosuppressants for transplant rejection, to the extent that the treatment guidelines for multiple sclerosis indicate the use of immunosuppressants, we still would look for representation of these drugs on the formulary during our treatment guidelines review for multiple sclerosis.
After consideration of the public comments we received, we are finalizing a technical change to § 423.120(b)(2)(v) to reflect the existing categories and classes of clinical concern. Because the existing regulation at § 423.120(b)(2)(v) is obsolete in light of the Affordable Care Act, we are making a technical change to specify that until such time as we undertake rulemaking to establish criteria to identify, as appropriate, categories and classes of drugs for which we determine are of clinical concern, the categories and classes of clinical concern shall be as specified in section 1860D–4(b)(3)(G)(iv) of the Act.
Section 1860D–4(c)(2) of the Act provides that Part D sponsors, in offering Medication Therapy Management (MTM) programs, must target individuals who: (1) have multiple chronic diseases (such as diabetes, asthma, hypertension, hyperlipidemia, and congestive heart failure); (2) are taking multiple covered Part D drugs; and (3) are identified as likely to incur annual costs for covered Part D drugs that exceed a level specified by the Secretary. At the start of the Part D program, we believed that 25 percent of enrollees would qualify for MTM services. However, analysis revealed that MTM program enrollment was well below that level. In the 2010 Call Letter and subsequent regulation, we modified the criteria to reduce the variability in eligibility and level of service and to improve access to MTM services, again targeting 25 percent of enrollees. Despite these changes, MTM program participation remains very low. Moreover, additional evidence that the program improves quality and generates medical savings supports the belief that more than 25 percent of enrollees will benefit from MTM services.
We continue to see restrictive criteria, such as plan sponsors specifying a narrow list of chronic diseases or Part D drugs coupled with requiring a higher minimum number of covered drugs (for example, eight drugs versus two) for eligibility. As a result, access to MTM services remains very low with MTM program eligibility rates at less than 8 percent in 2011. In the proposed rule, we cited a number of studies which discussed the following: there may be racial disparities in meeting the eligibility criteria, the current eligibility criteria and variability are restricting access to MTM services, and MTM enrollees with certain chronic diseases, particularly those who received annual comprehensive medication reviews (CMRs), experienced significant improvements in drug therapy outcomes when compared to beneficiaries who did not receive any MTM services, and cost savings.
We believe the studies support the necessity to reduce variability and racial disparity in eligibility criteria among plans and improve access to beneficial MTM services. We proposed changes to the eligibility requirements regarding multiple chronic diseases, multiple Part D drugs, and the annual cost threshold.
Under the statute, one of the three criteria that are used to target beneficiaries for MTM services is whether a Part D beneficiary has multiple chronic diseases such as diabetes, asthma, hypertension, hyperlipidemia, and congestive heart failure. We previously interpreted this language to allow sponsors to define “multiple chronic diseases” with three chronic diseases being the maximum number a plan sponsor may require for targeted enrollment. Further, sponsors are allowed to target beneficiaries with select chronic diseases, but must include at least five of the nine core chronic diseases in their criteria. This list of core chronic diseases, as updated in the 2013 Call Letter (available at
The second of the three statutory criteria for identifying targeted beneficiaries is whether a Part D beneficiary is taking multiple covered Part D drugs. We proposed to revise our interpretation of “multiple Part D drugs” to require that sponsors must target enrollees taking two or more Part D covered drugs for MTM services. We also proposed to restrict the flexibility previously available to sponsors by requiring that they consider any Part D covered drug. In the proposed rule, we cited literature that supported the idea that patients with multiple diseases and taking at least two drugs are more likely to have drug therapy problems and need MTM.
The final statutory requirement for targeting Part D beneficiaries for MTM services is that the beneficiary be identified as likely to incur costs for covered Part D drugs that exceed a level specified by the Secretary. The Congress did not impose any specific requirements with respect to the cost threshold at the time the MTM criteria were passed in to law, nor has it addressed this threshold in any of the subsequent amendments to section 1860D–4(c)(2) of the Act. We previously codified a $3,000 threshold, as updated annually by the annual percentage increase in the average per capita aggregate expenditures for Part D drugs for Part D eligible individuals under § 423.104(d)(5)(iv) in the April 2010 final rule entitled, “Policy and Technical Changes to the Medicare Advantage and Medicare Prescription Drug Benefit Programs” (75 FR 19818). The threshold is currently $3,017 in 2014. However, we are concerned that there are a number of beneficiaries who need MTM, but are not currently eligible because they do not meet the current cost threshold of $3,017, despite the increased likelihood of having drug therapy problems as a result of having multiple chronic diseases and taking multiple medications. Moreover, the current cost threshold may have the unintended consequence of causing beneficiaries to no longer qualify for MTM services in the next plan year (whether remaining in the same plan or enrolling into a new plan) if they fall below the cost threshold as a result of their enrollment in plans that employ cost avoidant strategies, such as aggressive use of generics, or in MTM programs that center on therapeutic interchange. Consistent with our proposal that sponsors must target enrollees taking two or more Part D covered drugs for MTM services and taking into account that one or more of these Part D drugs are likely to be generics, we proposed setting the annual amount in Part D drug costs at an amount that represents the intersection of multiple conditions and multiple drugs. Specifically, we proposed setting the threshold at $620 which is the estimated annual total drug cost for a beneficiary filling two generic prescriptions, based on an analysis of prescription drug event (PDE) data.
We are not finalizing these proposals. We will engage in new notice and comment rulemaking on this issue as warranted in the future.
We received a large number of comments related to our proposal to revise § 423.153(d)(2)(i) through (iii) to expand MTM program eligibility and our response follows.
A significant number of commenters also were strongly opposed to the broad expansion of eligibility. They questioned the effectiveness of expansion under the current infrastructure as delivered by drug plans with limited incentives and a lack of care coordination, and they commented that the clinical evidence did not support the proposed changes. We received many comments that the proposed changes would significantly increase costs (both administrative and beneficiary premiums), reduce the quality of programs delivered to beneficiaries who most need MTM, and could overwhelm limited resources. Many commenters requested that the proposed changes be withdrawn, and some commenters offered alternative eligibility criteria for CMS to consider in the future. These included: delay the proposed changes or implement the changes incrementally, alternative criteria for the minimum thresholds for eligibility, alternative eligibility criteria based on risk factors, and requiring MTM at transition of care.
Despite the persuasive comments from those who support the proposed changes in eligibility criteria, we also take into account the comments that the timeline for implementing the proposed changes may be too aggressive and could negatively affect existing MTM programs. While our goal was to increase eligibility and access to MTM, we do not want to do it at the expense of sacrificing any quality with existing programs. Therefore, we are not finalizing our proposed changes to the eligibility criteria. But, we will continue to evaluate information on MTM programs and monitor sponsors' compliance in accordance with the MTM requirements established by § 423.153, with the goal of proposing other revisions to criteria in future rulemaking that will help expand the program. We believe that Part D sponsors can target more beneficiaries for MTM under the existing criteria. We plan to closely scrutinize sponsors that may be abusing the flexibility provided to them in establishing the eligibility criteria, which may have contributed to the racial disparity, variability, and beneficiary confusion with respect to MTM eligibility that we identified in the proposed rule. We will consider the commenters' suggestions for alternative criteria and may consider revisions to MTM eligibility criteria for future rulemaking. We may also consider changes to the definitions for “multiple chronic diseases,” including the core chronic diseases, and “multiple Part D drugs” in the future.
Since its establishment in 2006, the Medicare Part D program has matured into a generally stable, well-functioning program, and the Part D sponsors (as well as their first tier, downstream, and related entities (FDRs)) with which CMS contracts have developed vast expertise in the operational complexities of the program. While we will continue to fine tune the program through rulemaking, guidance, and additional oversight procedures, we believe the program has largely entered a mature stage. Despite this progress, we still find ourselves spending a disproportionate amount of resources and attention on the operations of new Part D sponsors where neither the new sponsor nor its supporting FDRs have experience with Part D.
To address this problem, pursuant to our authority at section 1860D–12(b)(3)(D) of the Act to adopt additional contract terms, not inconsistent with the Part C and D statutes, that are necessary and appropriate to administer the Part D program, we proposed to adopt provisions that would require any entity seeking to contract as a Part D plan sponsor (as a stand-alone prescription drug plan sponsor or as a MA organization offering Part D benefits) to have arrangements in place such that either the applicant or one of its contracted FDRs has one full benefit year serving as a Part D plan sponsor, or at least one full benefit year of experience performing key Part D functions for another Part D plan sponsor. The applicant or a contracted FDR will be required to have obtained that experience within the 2 years preceding the Part D sponsor qualification application submission. Under this proposal, the experience requirement would be met by an entity seeking to contract as a Part D plan sponsor if its parent or another subsidiary of that parent already holds a Part D sponsor contract that has been in effect for at least one year at the time of the application submission.
Given the wealth of available Part D expertise that now exists, it is justifiable for us to require that new applicants to the program bring with them Part D experience so that we can better protect Part D enrollees and minimize unnecessary expenditures of resources by us in correcting avoidable problems. When neither a Part D sponsor, nor its FDRs providing key Part D functions, has any experience delivering Part D benefits, the consequences can be disastrous for beneficiaries and highly disruptive for the program and CMS.
While there are many operational functions that must run smoothly for a Part D plan to be successful (for example, pharmacy network development/maintenance, enrollment processing, prescription drug discount negotiation, and provision of customer service), we proposed to require Part D experience in only three critical areas in which beneficiaries are particularly vulnerable should the sponsor demonstrate significant non-compliance. The three areas for which we proposed to require prior experience in Part D at the time of application to become a new Part D sponsor are—
• (1) Authorization, adjudication and processing of pharmacy claims at the point of sale;
• (2) Administration and tracking of enrollees' drug benefits in real time, including automated coordination of benefits with other payers; and
• (3) Operation of an enrollee appeals and grievance process.
It is in these three areas where—in our view, based on our experience with Part D—enrollee health is placed at the most significant risk by Part D sponsor compliance failures.
Under our proposal, multiple separate organizations could together combine their experience to meet the prior qualification requirements for the three key Part D functions. That is, no one single entity would need to have prior experience in all three areas. Rather, the requirement would be for the Part D applicant in combination with its FDRs, if any, to have Part D experience covering the three key functions.
Our proposal also does not prohibit additional organizations from gaining Part D experience in the selected key functional areas. Should an organization wish to become a new Part D FDR for one or more of the key functions, this “novice” entity could provide the service for just one of the hundreds of existing Part D sponsors. After a period of one year, the novice entity would then be qualified to provide its services to existing Part D sponsors as well as partner with new Part D applicants. In somewhat the opposite scenario, a new Part D sponsor contracting with experienced FDRs will have the opportunity to gain its experience in the key Part D functions by working closely with its FDRs, developing in house expertise, and providing oversight. After a period of one or more years, if desired, the Part D sponsor itself could conceivably take responsibility for carrying out one or more of the key Part D functions.
While our proposal did not require the Part D experience to be current at the time of an application to become a Part D sponsor, we proposed that the experience be recent (that is, within the past 2 years) and have lasted for at least one full benefit year. We believe that any experience older than 2 years would be out of date and would not represent experience with the current state of the
We intend to implement this proposal through our existing Part D contract qualification application process, and we proposed to amend § 423.504(b) accordingly. Applicants with existing Part D contracts or whose parents or other subsidiaries of the same parent hold Part D contracts will not be required to submit evidence of their Part D experience.
We received the following comments and our response follows:
Given the near universal support for this proposal we are finalizing this provision without modification.
The Medicare prescription drug benefit program has matured into a generally stable, well-functioning program, and the Part D sponsors with which CMS contracts have developed vast expertise in the operational complexities of the program. The market for stand-alone Part D Prescription Drug Plans (PDPs) has also matured significantly since the program's inception and what was once a novel product is now available to residents of every state from multiple sponsors who offer several plan options. Over the same period, we have noticed that the Part D program has in some cases attracted sponsors wishing to offer stand-alone PDPs who have no prior experience in the delivery of health or prescription drug insurance benefits, often to the detriment of the Part D program and the Medicare beneficiaries who elect plans offered by these sponsors.
To address this problem, we proposed, pursuant to our authority at section 1860D–12(b)(3)(D) of the Act to adopt additional contract terms that are necessary and appropriate to administer the Part D program, regulatory provisions that would require any entity seeking to contract as a stand-alone PDP sponsor, to have either actively provided health insurance or health benefits coverage for 2 continuous years immediately prior to submitting a contract qualification application, or provided certain prescription drug benefit management services to a company providing health insurance or health benefits coverage for 5 continuous years immediately prior to submitting an application. This requirement would not apply to an entity seeking to contract as the sponsor of a stand-alone PDP if its parent or another subsidiary of itself or its parent possesses the requisite experience.
This proposal may appear similar to the immediately-preceding proposal (section III.A.10. of this final rule) requiring, at § 423.504(b)(8), that new Part D sponsors engage first tier, downstream, and related entities with prior Part D experience. However, the proposed change we are discussing in this section, which we proposed to codify at § 423.504(b)(9), would apply only to entities seeking to contract as a Part D sponsor of a stand-alone PDP, whereas the proposed requirement at § 423.504(b)(8) would apply to all new Part D sponsors, including those seeking to contract as MA organizations offering Part D through an MA–PD plan. We proposed both requirements because the problems encountered by new PDP sponsors with no experience in the health insurance market are distinct from those encountered by new PDP sponsors and MA organizations that use PBMs with no experience in the Part D market. New PDPs with no prior health insurance or health benefits experience have demonstrated significant problems even when using experienced PBMs.
While relatively few sponsors fit this profile each year, they have caused disproportionate problems for beneficiaries and CMS. Time and again, these sponsors fail our past Medicare contract performance and audit tests or receive low quality scores (that is, star ratings) because they lack the ability to administer even the most basic elements of a health or drug benefit program, let alone one as complex as Medicare Part D.
When the sponsor is a novice not only to Medicare Part D, but also to virtually every aspect of health benefits administration, there is no assurance that the entity will be able to administer or oversee the most basic elements of health benefits coverage, such as processing claims, administering a coverage determination and appeals process, enrolling beneficiaries, or administering the benefit as approved. To entrust inexperienced applicants with responsibility for correctly operating a program for which even experienced health insurers have had to develop new expertise has proven to be unacceptably risky. We proposed that new applicants have 2-years of experience providing health insurance or health benefits coverage (that is, operating as risk-bearing entities licensed in the states where they offer benefits) prior to applying as stand-alone Part D Sponsors because we believe that this provides sufficient time to demonstrate the applicant's ability to operate a health plan. We believe that requiring 2-years of experience as a risk bearing entity offering health insurance or health benefits coverage ensures that new sponsors of stand-alone PDPs have minimal experience operating a health benefits program without unduly limiting new entrants to the marketplace.
We recognize that a number of PBMs and Third Party Administrators with experience administering prescription drug benefits have entered the stand-alone PDP market and have adapted to providing the Part D benefit despite their lack of previous experience as health insurers. Therefore, we proposed that organizations applying to contract as stand-alone PDP sponsors that do not have experience as a risk-bearing entity providing health insurance or health benefits coverage would, in the alternative, be eligible to hold a PDP contract if they had 5-continuous years of experience performing services on behalf of an insurer in the delivery of benefits in any health insurance market in the three key areas indicated in this section III.A.10. of this final rule. The three areas that we proposed as meeting the experience requirements are: (1) Adjudication and processing of pharmacy claims at the point of sale; (2) administration and tracking of enrollees' drug benefits in real time, including automated coordination of benefits with other payers; and (3) operation of an enrollee appeals and grievance process. Our reasons for selecting these three areas as meeting the experience requirements are described in more detail in the section of this rulemaking notice relating to the proposed requirement at § 423.504(b)(8) that new Part D sponsors employ experienced FDRs for these functions. We proposed a longer experience requirement for these entities because entities offering these services face fewer barriers to entry in the marketplace and are not as tightly regulated as risk bearing entities. Therefore, we believe that entities that seek to qualify on the basis of their experience as PBMs or Third Party Administrators should be required to have provided services in these key areas for 5-continuous years, rather than merely 2.
We intend to implement this proposal through our existing Part D contract qualification application process, and we proposed to amend § 423.504(b) accordingly.
We received the following comments and our response follows:
Given the universal support for this proposal, we are finalizing this provision without modification.
Each year, we accept and review applications from organizations seeking to qualify to offer stand-alone prescription drug plans in one or more PDP regions. With limited exceptions (for example, poor past contract performance, limited Part D experience), we approve all applications submitted by organizations that demonstrate that they meet all Part D application requirements. We proposed, under our authority at section 1860D–12(b)(3)(D) of the Act to adopt additional contract terms, not inconsistent with the Part C and D statutes, that are necessary and appropriate to administer the Part D program, to add as a basis upon which we may deny a PDP sponsor application the fact that the applicant is applying for qualification in a PDP Region where another subsidiary of the applicant's parent organization already holds a PDP sponsor contract. In our description of this proposal, the term “parent organization” refers to an entity that controls a subsidiary through ownership of more than 50 percent of the subsidiary's shares.
Section 1860D–12(b)(1) of the Act provides that PDP sponsors may offer multiple plan benefit packages (referred to as PBPs or plans) under one PDP sponsor contract. Therefore, parent organizations need only one PDP sponsor contract to offer the full range of the possible plan options in a particular PDP Region. Additionally, informal communications made by past requestors of duplicate contracts indicated that the purpose has been to either a) segregate low income beneficiaries into their own contract, or b) corral the experience of a particular low-performing plan into its own CMS contract so as not to taint the performance rating of the better performing plan offering, as performance ratings are calculated at the contract level. We oppose the inefficiencies of duplicate contracts and the gaming duplicate contracts can support. That said, we welcomed comments from industry, advocates, and others as to circumstances for our consideration under which duplicate contracts may be beneficial.
One of the fundamental principles of the Part D program is that the selection of plans made available to beneficiaries is the product of true competition among PDP sponsors. Two subsidiaries of the same parent organizations offering plans in the same PDP region are not truly competitors, as decisions concerning their operations are ultimately controlled by a single entity, or parent organization. Also, we only approve those PDP offerings that meet the meaningful differences test stated at § 423.265(b)(2), and we apply that test at the parent organization level. A parent organization would not gain an opportunity to offer more plan benefit packages under two or more contracts it controlled through its subsidiaries than it would under one contract because we would, as part of our bid review, evaluate whether all the plans proposed by the same parent organization met the meaningful differences test.
The proposed limitation on the number of PDP sponsor contracts a parent may control in a PDP Region is also necessary to preserve the integrity of CMS' star ratings. CMS assigns star ratings at the contract level, and they are intended to reflect all aspects of the PDP operations controlled by a unique contracting entity. However, that principle is compromised when a parent organization to one of the contracting entities is permitted to control, through other subsidiaries, more than one PDP contract. Allowing a parent organization to effectively administer two or more PDP sponsor contracts would allow it potentially to artificially inflate the star ratings on one contract by excluding the poor performance under its other contract from the rating calculation. In that instance, some beneficiaries could make a plan election without complete information about the performance of the organization ultimately responsible for the quality of services they would receive by enrolling in that plan.
Based on our experience in administering the Part D prescription drug benefit program we do not believe that there is a compelling justification for parent organizations to administer two PDP sponsor contracts in the same PDP region. Moreover, such arrangements impede our ability to efficiently administer the Part D program and provide a means by which the integrity and reliability of our star ratings system can be compromised. Therefore, we proposed to amend
We received the following comments and the response follows:
After consideration of the public comments we received, we are finalizing our proposal without modification, with the exception of a technical edit which changes the proposed phrase “may not approve” to “does not approve” to clarify that CMS will deny all applications that meet the criteria stated in the provision.
Under our authority at section 1860D–11(d) of the Act, we conduct negotiations with stand-alone prescription drug plan (PDP) sponsors concerning our approval of the bids they submit each year. As the Part D program has evolved, we have adopted regulations designed to authorize us to use that negotiating authority to ensure that the number of plans offered in a given PDP region reflects a balance between sponsors' interest in providing options tailored to meet the needs of a diverse Medicare population and the need to avoid creating undue confusion for beneficiaries as they consider various plan offerings. We continued with this proposal our process of updating our bid review authority to reflect the evolution of the Part D program by proposing to limit to two the number of plans stand-alone PDP sponsors may offer in each PDP region.
PDP sponsors must offer throughout a PDP region at least one basic plan that consists of: standard deductible and cost sharing amounts (or actuarial equivalents); an initial coverage limit based on a set dollar amount of claims paid on the beneficiary's behalf during the plan year; a coverage gap during which a beneficiary pays more of his drug costs; and finally, catastrophic coverage that applies once a beneficiary's out-of-pocket expenditures for the year have reached a certain threshold. Prior to our adopting regulations requiring meaningful differences among each PDP sponsor's plan offerings in a PDP Region, CMS guidance allowed sponsors that offered a basic plan to offer in the same region additional basic plans, as long as they were actuarially equivalent to the basic plan structure described in the statute. These sponsors could also offer enhanced alternative plans that provide additional value to beneficiaries in the form of reduced deductibles, reduced copays, coverage of some or all drugs while the beneficiary is in the gap portion of the benefit, or some combination of those features.
As we have gained experience with the Part D program, we have made consistent efforts to ensure that the number and type of plan benefit packages PDP sponsors may market to beneficiaries are no more numerous than necessary to afford beneficiaries choices from among meaningfully different plan options. In addition to setting differential out-of-pocket-cost (OOPC) targets each year to ensure contracting organizations submit bids that clearly offer differences in value to beneficiaries, we issued regulations in 2010 that established at § 423.265(b)(2) our authority to deny bids that are not meaningfully different from other bids submitted by the same organization in the same service area. Our application of this authority has effectively eliminated PDP sponsors' ability to offer more than one basic plan in a PDP region since all basic plan benefit packages must be actuarially equivalent to the standard benefit structure discussed in the statute. That regulation also effectively limited to two the number of enhanced alternative plans that we can approve for a single PDP sponsor in a PDP region. As part of the same 2010 rulemaking, we also established at § 423.507(b)(1)(iii) our authority to terminate existing plan benefit packages that do not attract a number of enrollees sufficient to demonstrate their value in the Medicare marketplace. Both of these authorities have been effective tools in encouraging the development of a variety of plan offerings that provide meaningful choices to beneficiaries without creating undue confusion for beneficiaries.
We believe that the progressive closure of the coverage gap provided for in the Affordable Care Act affords us another opportunity to promote even greater clarity in the set of stand-alone PDP plan options from which beneficiaries may make an election. Under the statute, beginning in 2011, applicable beneficiaries enjoy discounts of 50 percent off negotiated prices on covered brand name drugs when purchased while in the coverage gap portion of the benefit. Also, since 2011, the required coverage in the gap has increased and will continue to do so gradually until 2020, when the combination of required coverage and manufacturer discounts covers 75 percent on average for both brand-name and generic drugs. This “closing” of the coverage gap effectively will leave the beneficiary with only a 25 percent cost share on average across the entire benefit (or its actuarial equivalent) before the catastrophic threshold.
Our experience in applying the meaningful differences standard indicates that, as the Part D coverage gap is closed, it will become increasingly difficult for a PDP sponsor to qualify to offer more than two plans in the same service area and still meet the meaningful differences test. Since we began applying the meaningful differences standard to our bid reviews, we have generally approved two types of enhanced alternative plans. The first type of plan offers beneficiaries, in exchange for a higher premium than that charged for basic plan coverage, significant reductions in the cost sharing and deductible amounts associated with the basic Part D benefit. The second type offers even greater cost sharing and deductible reductions as well as coverage for many drugs in the gap. Since coverage of Part D drugs in the gap is the distinguishing feature between the two types of enhanced alternative plans currently available, closing the coverage gap also means that sponsors can no longer rely on it to establish that their proposed second enhanced alternative plan is meaningfully different than their first.
Despite these developments, many sponsors continue to submit three bids per region each year. We believe that plan sponsors and beneficiaries, as well as the taxpayers, would be better served by a more streamlined bid submission process that limited sponsors to submitting two PDP bids (one basic and one enhanced) per PDP region each year. This limitation would provide a consistent bidding framework for all sponsors, allowing them to focus on quality, rather than quantity, in development of their bids. It would also reduce some of the sponsors' administrative costs associated with preparing, marketing, and administering a third benefit package. It may also help ensure that beneficiaries can choose from a less confusing number of plans that represent the best value each sponsor can offer.
While the incremental closure of the coverage gap continues until 2020, we believe that the observed enrollment trends in these plans demonstrate the reduction in beneficiaries' coverage gap
Therefore, we proposed to amend the Part D regulations at § 423.265 to add a revised subsection (b)(3), which would state that “CMS shall not accept more than one basic bid and one enhanced bid for a coverage year from a single PDP sponsor in the same PDP region.” We would adopt this provision under our authority at section 1860D–11(d) of the Act. In instances where a parent organization owns a controlling interest in more than one subsidiary that operates as a PDP sponsor in a single PDP region, we would apply subsection (b)(3) at the parent organization level. That is, in the same way that we currently apply the meaningful differences test, a parent organization with two subsidiary PDP sponsors could offer no more than one plan under each sponsors' contract.
In addition to proposing to limit PDP sponsors to submitting one basic and one enhanced bid per coverage year, we also stated that we were considering several regulatory proposals for limiting the type of coverage offered in those two plans to reduce or eliminate the risk segmentation described previously. We believe that risk segmentation is not consistent with the policy goal, based on our interpretation of current law, of obtaining the best value for the government and the taxpayer. We believe the Congress intended sponsors to compete in the Part D market by offering their best bids for basic plans, in order to attract the greatest enrollment through the lowest premiums, and that this competition would maintain downward pressure on Part D bids and government subsidies. We do not believe that the Congress intended that instead sponsors would offer their best bids for a segment of the market that represents individuals who are low utilizers of prescription drugs due to better health and who can afford unsubsidized supplemental premiums due to better socioeconomic status. When many healthy individuals are not included in the basic plans, the cost of the basic plans is increased, and this in turn increases low-income premium subsidies. Therefore, permitting risk segmentation does not generate the best value for the Part D program as a whole. To reduce or eliminate risk segmentation, we stated that we were considering three options, including a proposal, based on a reinterpretation of section 1860D–11(b) and (c) of the Act, that enhanced alternative coverage be redefined to consist of supplemental coverage added to the sponsor's one basic benefits offering (for an additional premium). This could be thought of as basic benefits plus a supplemental benefit rider. We solicited comments on this approach and on our belief that this approach would be the most effective strategy for eliminating risk segmentation and providing the best value for the government and the taxpayer. We received the following comments and our response follows:
Nevertheless, the comments have given us reason to conduct further analysis of this issue and continue our
After consideration of the public comments we received, we are not finalizing our proposal to limit PDP sponsors to offering no more than two bids per PDP region.
We established transition requirements under § 423.120(b)(3) for Part D sponsors to address the needs of new Part D plan enrollees who are transitioning from other prescription drug coverage (Part D or otherwise), and whose current drug therapies may not be included on their Part D plan's formulary (including Part D drugs that are on a plan's formulary but require prior authorization or step therapy under the plan's utilization management requirements). While § 423.120(b)(3)(iii) specifies that PDP plans must provide a temporary fill when an enrollee requests a fill of a non-formulary drug during the transition time period (including Part D drugs that are on a plan's formulary but require prior authorization or step therapy under a plan's utilization management rules), it does not currently specify the cost sharing that should apply to such fills. Current guidance (at § 30.4.9 of Chapter 6 of the Medicare Drug Benefit Manual, found at
We believe that more consistent treatment of formulary and non-formulary drugs, respectively, will simplify the benefit and reduce sponsor and beneficiary confusion. Consequently, we proposed to add a paragraph at § 423.120(b)(3)(vi) clarifying that when providing a transition supply, the cost sharing is determined as follows: A Part D sponsor must charge cost sharing for a temporary supply of drugs provided under its transition process such that the following conditions are met:
• For low-income subsidy (LIS) enrollees, a sponsor must not charge higher cost sharing for transition supplies than the statutory maximum copayment amounts.
• For non-LIS enrollees, a sponsor must charge—
++ The same cost sharing for non-formulary Part D drugs provided during the transition that would apply for non-formulary drugs approved through a formulary exception in accordance with § 423.578(b); and
++ The same cost sharing for formulary drugs subject to utilization management edits provided during the transition that would apply once the utilization management criteria are met.
In light of the overwhelmingly positive comments on this proposal, we are finalizing this provision without modification.
Since the MMA created the Part D benefit in 2003, we have never formally interpreted section 1860D–11(i) of the Act, which is known as the noninterference provision. In practice we have generally invoked the spirit of this provision in declining to intervene in negotiations or disputes involving payment-related contractual terms between participants in the drug distribution channel. However, it is increasingly clear from the many questions that continue to arise when working with stakeholders on matters ranging from lawsuits to policy clearance to complaint resolution that the agency and all Part D stakeholders would benefit from a clear, formal interpretation of these limits on our authority. Some stakeholders appear to believe the prohibition on interference in negotiations extends far beyond the boundaries that we consider relevant, while others insist our authority extends into arbitrating matters that seem to us to clearly fall within the intended prohibition. Therefore, we proposed an interpretation through rulemaking in order to clarify and codify the extent of these limits on our authority.
The noninterference provision at section 1860D–11(i) of the Act provides that, “In order to promote competition under this part and in carrying out this part, the Secretary: (1) May not interfere with the negotiations between drug manufacturers and pharmacies and PDP
There is also a duty to avoid intervention in private market negotiations that take place in the context of that competitive market. We believe the intent of 1860D–11(i) is to ensure that we do not create any policies or become a participant in any discussions that could be expected to interfere with negotiations leading to the selection of drug products to be covered under Part D formularies. By this we mean selection by Part D sponsors (or other intermediary contracting organizations) of specific manufacturers' products for inclusion on formularies, formulary tier placement, and negotiations of acquisition costs, rebates, and any other price concessions. We believe this interpretation is consistent with a textual reading of 1860D–11(i) and with how private market transactions determine which prescription drug products are covered under Part D plans. We outlined aspects of the complex process of private market competition for prescription drugs described in detail elsewhere (such as in the 2007 CBO report entitled “Prescription Drug Pricing in the Private Sector” at:
Section 1860D–11(i)(1) of the Act states that we “may not interfere with the negotiations between drug manufacturers and pharmacies and PDP sponsors”. We believe that the term “interference” in this context should be interpreted as prohibiting our involvement in discussions between manufacturers and their distribution channel customers (such as wholesalers and pharmacies) or the ultimate purchasers of prescription drugs (such as plan sponsors and PBMs) leading to signed contracts. We also believe section 1860D–11(i)(1) of the Act should be interpreted as prohibiting our involvement in arbitration of agreements already executed between any of these parties. Therefore, we interpret the prohibition in section 1860D–11(i)(1) of the Act on interference in negotiations to pertain to discussions either between prescription drug manufacturers and pharmacies, or between prescription drug manufacturers and Part D sponsors (or their intermediary contracting organizations, hereafter included by association whenever we refer to Part D sponsors). Our interpretation is based on the sequential phrasing of the clause “negotiations between drug manufacturers and pharmacies and PDP sponsors.” Because in general these negotiations are not among all three parties at once, and because manufacturers separately contract with pharmacies for the purchase of inventory and with sponsors for formulary placement, we believe the quoted phrase can be interpreted as recognizing these distinct types of negotiations. Therefore, in our proposed rule we stated that under such a reading, the prohibition on interference in negotiations, as described in section 1860D–11(i)(1) of the Act, would not pertain to negotiations between Part D sponsors and pharmacies. In hindsight, given the strong reaction of most commenters a better way to have articulated CMS' long-standing position would have been to focus on what “interfere” means and to interpret it to mean a sort of hindering or influence beyond the implementation and enforcement of statutory requirements.
This is the case because there are numerous statutory provisions that require us to directly intervene in the contractual relationship between Part D sponsors and network pharmacies, and these provisions clearly signal that the Congress expected CMS involvement in at least some of these negotiations. The Congress has provided many contractual requirements for CMS to enforce between sponsors and pharmacies; just the drug-cost-related of these include: interpretation of what “access to negotiated prices” means, any-willing-pharmacy standard terms and conditions, prohibition on any requirement to accept insurance risk, prompt payment, and payment standard update requirements. Consequently, we believe that Part D sponsors and pharmacies do not have sole discretion to interpret these specific matters. We would be obligated to intervene in disputes over whether proposed or finalized contractual arrangements violated our rules in any area where our oversight is directed under the statute. So we believe it is clear that such involvement could not be what the Congress intended to prohibit. Therefore, we proposed at § 423.10(b) that CMS may not be a party to discussions between prescription drug manufacturers and pharmacies, or between drug manufacturers and Part D sponsors, and may not arbitrate the meaning of or compliance with the terms and conditions of agreements reached between these parties, except as necessary to enforce CMS requirements applicable to those agreements. Thus, we could only be involved in such discussions in order to explain CMS requirements and to ensure compliance with Part D rules and regulations. We also add that nothing in this prohibition limits our authority to require documentation of and access to all such
The first part of the section 1860D–11(i)(2) of the Act states that CMS “may not require a particular formulary”. The noninterference clause must be read in context of the other provisions that give CMS authority with respect to formularies, so we proposed to interpret the term “particular formulary” to mean the selection of specific manufacturer licensed drug products to be on formulary, or on any particular tier of a formulary, assuming the product meets the definition of a Part D drug. We believe the first part of section 1860D–11(i)(2) of the Act would prohibit us from developing formulary guidelines that prefer one manufacturer's product over another's in Part D formularies, leading to more limited formularies such as provided by the Department of Defense and the Veteran's Administration. The most efficient formularies will make formulary selections and then exclude all or most competing multi-source and therapeutically equivalent brand products in order to concentrate volume and maximize rebates. Given the size of the Part D market, if CMS were able to similarly limit access to Part D formularies to certain products, this would bestow significant competitive advantage on the manufacturers of selected products and significant competitive disadvantage on manufacturers of competing products. Such limits would be expected to fundamentally alter supply and demand in the marketplace. This prohibited sort of formulary drug product selection would be distinguished from CMS formulary requirements that may require particular types of drug entities to be on all formularies, or on preferred tiers, in order to provide non-discriminatory access to drugs necessary to treat conditions in all Medicare beneficiaries, or to address drug classes of clinical concern. Therefore, we proposed a provision prohibiting establishment of formulary drug product selection at § 423.10(c) that would specify that CMS does not determine the specific drug products to be included on Part D sponsor formularies or any tier placement of such products, except as required to comply with §§ 423.120(b)(1)(v) or 423.272(b)(2).
The second part of section 1860D–11(i)(2) of the Act states that CMS “may not institute a price structure for the reimbursement of covered Part D drugs”. Again, the noninterference clause must be read in context of the other provisions that give CMS responsibilities in a number of areas that pertain to pricing, so we stated our view that the phrase “price structure” refers to establishing either absolute or relative indices of price for Part D drugs. Specifically, we believe the intent of this provision is to prohibit two types of intervention by CMS. The first prohibited activity is that CMS may not require Part D drug acquisition costs or sales prices to be a function of (be defined relative to) any particular published or unpublished pricing standard, either existing or future. Thus, we could not require that Part D prices be based on, or be any particular mathematical function (such as a percentage or multiple) of established pricing standards such as Average Wholesale Price, Wholesale Average Cost, Average Manufacturer Price, Average Sales Price, Federal Supply Schedule, 340b pricing, etc. The second prohibited activity is that CMS cannot require price concessions (on any standard or basis) to be at any specific (absolute) dollar amount or equal to a level specified in other legislative requirements for other federal programs. Thus, we could not, for example, set minimum or maximum dollar prices for a drug product or require that Part D prices be offered at acquisition cost, or at the `best price' applicable under the Medicaid program. However, since the statute requires us to regulate many aspects of how drug costs are made available and displayed to beneficiaries and treated in Part D bidding and payment processes, it is clear that we have an important role to play in establishing rules for consistent treatment of drug costs in the program. Consequently, we may establish definitions of what constitutes a pricing standard, a price concession, a cost, etc. We may also establish rules concerning how drug costs are treated under Part D, including, but not limited to, how such amounts are disclosed in the marketplace, projected in Part D bids, made available to beneficiaries at point of sale, reported in Explanation of Benefits (EOBs), submitted to CMS, and treated in CMS payments to Part D sponsors. Therefore, we proposed a provision prohibiting establishment of drug price reimbursement methodologies at § 423.10(d) that specifies that CMS does not establish drug product pricing standards or the dollar level of price concessions at any stage in the drug distribution channel for Part D drugs. Nothing in our proposed regulation would have limited our authority to require full disclosure or uniform treatment and reporting of drug costs and prices.
We received numerous comments on this proposed interpretation, both supportive and strongly critical. Different commenters asserted different “plain readings” of the statute. The wide variation in interpretations of the statutory prohibition evidenced in these comments, in our view, confirms our belief that this provision is not consistently understood by all stakeholders. Although the interpretation we proposed to codify is the same interpretation we have been operating under in managing the Part D program since before the beginning of the Part D program, many commenters perceived our proposal as a change in interpretation. And as noted previously, in hindsight we could have better articulated our policy rationale than by stating that the prohibition in section 1860D–1(i)(1) did not apply to negotiations between sponsors and pharmacies. These widely differing reactions to our proposal to codify our current interpretation lead us to understand that additional work needs to be done to better explain our policy, as well as to address the concerns and arguments advanced by numerous commenters. Consequently, we will not finalize the proposed regulatory provision at § 423.10 in this final rule, and do not intend to codify this provision without issuing an additional future notice of proposed rulemaking.
We have learned that some Part D sponsors have been reporting costs and price concessions to CMS in different ways. This reporting differential matters because this variation in the treatment of costs and price concessions affects beneficiary cost sharing, CMS payments to plans, federal reinsurance and low-income cost-sharing (LICS) subsidies, and manufacturer coverage gap discount payments. Differential treatment of costs would also be expected to affect plan bids. If the projected net costs a sponsor is liable for in its bid are understated because the sponsor has been reporting certain types of price concessions as direct or indirect remuneration (DIR) rather than as price concessions that affect the negotiated price, it follows that the sponsor may be able to offer a lower bid than its competitors and may achieve a competitive advantage stemming not from greater efficiency, but rather from a technical difference in how costs are reported to CMS. When this happens, such differential reporting could result in bids that are no longer comparable, and in premiums that are no longer valid indicators of relative plan efficiency. Therefore, we proposed changes to rectify this concern.
Negotiated prices are the payment amounts pharmacies receive from plans for covered Part D drugs dispensed to plan enrollees. CMS payments to plans are based on the reporting of negotiated prices (through PDE reporting) that are actually paid and are then offset by any other price concessions (submitted in aggregate through the separate annual DIR reporting process). CMS establishes rules for cost and price concession reporting through both PDE and DIR guidance and other payment reconciliation rules, and has regulated the definition of negotiated price and how it is to be treated in Part D benefit administration and in payment reconciliation. Since 2010, the regulatory definition at § 423.100 has been: “Negotiated prices means prices for covered Part D drugs that: (1) The Part D sponsor (or other intermediary contracting organization) and the network dispensing pharmacy or other network dispensing provider have negotiated as the amount such network entity will receive, in total, for a particular drug; (2) Are reduced by those discounts, direct or indirect subsidies, rebates, other price concessions, and DIR that the Part D sponsor has elected to pass through to Part D enrollees at the point of sale; and (3) Include any dispensing fees.”
We intended clause 2 to primarily refer to price concessions from parties other than pharmacies, since these would be price concessions that were not based on the sale of the drug by the pharmacy and calculated when the claim adjudicated and, in fact, could not
In addition, when price concessions from pharmacies are reflected in forms other than the negotiated price, the degree of price concession that the pharmacy has agreed to is no longer reflected in the negotiated prices available at point of sale or reflected on the Medicare Prescription Drug Plan Finder (Plan Finder) tool. Thus, the true price of drugs at individual pharmacies is no longer transparent to the market. Consequently, consumers cannot efficiently minimize both their costs (cost sharing) and costs to the taxpayers by seeking and finding the lowest-cost drug/pharmacy combination. Moreover, as the coverage gap closes, there are fewer and fewer beneficiaries who are exposed to the full cost of drug products, either at the point of sale or as reflected in Plan Finder estimates. When this occurs, the basis of competition shifts from prices to cost sharing, and the pricing signals available to the market can be distorted when lower cost sharing is not aligned with lower prices. Thus, we believe the exclusion of pharmacy price concessions from the negotiated price thwarts the very price competition that the Congress intended with respect to how private plans would compete with other plans on both premiums and negotiated prices.
We are aware that certain pharmacy price concessions are being excluded from the determination of the negotiated price because they are being characterized as “network access fees”, “administrative fees,” “technical fees” or “service fees” that are frequently imposed through PBM-issued manuals rather than explicit contractual terms. Pharmacies and pharmacy organizations report that they do not receive anything of value for those fees other than the ability to participate in the Part D network. The itemized types of services for which their payments are offset reportedly include things such as transaction fees for submission of claims, help desk support, information technology and telecommunication systems connectivity, electronic funds transfers, and other expenses associated with credentialing, maintaining, and auditing pharmacy networks. These fees take the form of deductions from payments to pharmacies for drugs dispensed, but in our view clearly represent charges that offset sponsor/PBM operating costs. We believe that if the sponsor or its intermediary contracting organization wishes to be compensated for these services and have those costs treated as administrative costs, such costs should be accounted for in the administrative costs of the Part D bid. If instead these costs are deducted from payments made to pharmacies for purchases of Part D drugs, such costs are price concessions and must be treated as such in Part D cost reporting. This is the case regardless of whether the deductions are calculated on a per-claim basis or not.
In our view, the decision on how such network management costs are funded between the PBM and the sponsor is not governed by our rules, but our rules do require that price concessions be fully disclosed and net against drug costs in reconciliation. We have also heard from pharmacies that some sponsors apply dispensing fees to claims when they are adjudicated at point of sale, but require that these fees later be rebated back to the sponsor and deducted from payment remittances. Such practices again misstate the negotiated price. Our proposal would require that dispensing fees could only be applied at point of sale if they are received and retained by the pharmacy in the negotiated price.
Some stakeholders have recommended that certain incentive payments to pharmacies, such as generic dispensing incentive fees, should not be included in negotiated prices. If these payments are included, they explain, the negotiated prices appear higher at the more efficient pharmacy as the result of the additional incentive payment. This higher price then proportionally increases costs borne by beneficiaries, the government, and manufacturers. These incentives really represent amounts that the sponsor is willing to bear in order to encourage the most efficient drug choices, which will drive down total costs overall, and thus the sponsor is willing to bear a disproportionate share of such expense. We agree with this argument and we believe that this sort of arrangement would not conflict with our proposed requirement that all price concessions be reflected in the negotiated price since such additional payments are the opposite of price concessions. Instead such incentive fees represent contingent price increases that cannot be predicted in advance. Therefore, they cannot be programmed to be applied at point of sale or reflected in the price posted on Plan Finder. We believe it would be appropriate to treat this particular sort of price increase differently than price decreases because including such amounts in the negotiated price (incentive fee component) at point of sale could disguise the relative competitiveness of the underlying pharmacy prices. Incentive fees also primarily benefit the plan sponsor who benefits from the lower costs associated with the incentivized behavior, rather than the beneficiary. Therefore, in this case, we agree that it would be more appropriate for such incentive payments to be excluded from the negotiated price, and reported later in reconciliation as negative DIR. When reported as negative DIR, these amounts disproportionately affect (increase) the amounts the sponsor is liable for in risk sharing, which is appropriate given the intent of the incentives to promote least-cost drug product selection at point of sale. Least-cost drug product selection will directly reduce the sponsor's allowable risk corridor costs, so any incentive paid to encourage this behavior would be expected to be more than offset by the ingredient costs savings achieved through avoidance of higher-cost drug selection. This is so because, as we learned from numerous commenters to the 2014 draft Call Letter, the incentive payments are generally in the range of a dollar or two and the difference between preferred and non-preferred drug products is generally much greater.
Therefore, we proposed to revise the definition of negotiated prices at § 423.100 to require that all price concessions from pharmacies are reflected in these prices. Specifically we proposed to redefine negotiated prices to mean prices for covered Part D drugs
We received the following comments on our proposed revisions and our responses follow.
We also received some comments in opposition to the proposed provision. These commenters stated that some price concessions that benefit the Part D program do not lend themselves to inclusion in negotiated prices. A few commenters stated that savings from lower point-of-sale prices would be reflected in higher enrollee premiums and increased premium subsidies. Other commenters stated that payments received from pharmacies to PBMs were for services provided and should not be considered price concessions. One commenter stated that just because pharmacies pay for and benefit from services from PBMs does not necessarily make the fees price concessions. A few commenters opposed the provision on the grounds that it would place new limitations on the terms sponsors will be able to negotiate with network pharmacies and stated that CMS is limiting the tools available to sponsors to offer varied incentive-based agreements such as providing additional compensation for increased dispensing of generic medicines or superior customer service. Other commenters thought that Part D sponsors and PBMs should be able to retain the flexibility to determine which concessions to pass through to beneficiaries through drug prices or lower premiums. To bolster this argument one commenter quoted from our 2009 rule in which we stated that the statute says prices will “take into account” price concessions not include them all, and that a “plain reading of this demonstrates the Congress' intent to be permissive of Part D sponsors to choose how much of their negotiated price concessions to pass through to Part D beneficiaries at the point of sale”.
One of the commenters who opposed the provision suggested that, as an alternative, CMS use its existing authority to require plans to disclose both in the bid pricing tool (BPT) and through DIR, specific line-item reporting of performance-based DIR received from network pharmacies. Several commenters urged CMS to use its existing DIR reporting authority to capture price concessions attributable to risk-based performance measures, which often require retrospective performance review and therefore cannot be captured in negotiated prices. The commenters argued that the DIR process must be used to allow sponsors to maintain innovative payment arrangements that yield efficient and quality pharmacy networks. One of these commenters voiced support for “a competitive and level playing field for all sponsors” and urged CMS to create clear and comprehensive regulatory guidance with respect to pharmacy price concessions.
While we recognize that some pharmacy price concessions are contingent upon risk or incentive based arrangements, we provided an illustration of how such price concessions could adjust future negotiated prices, rather than adjusting the current quarter's prices downward through DIR reporting. Consequently, we did not believe that our proposal would limit Part D sponsors' ability to enter into such contracting relationships with their network pharmacies. We did not propose placing additional restrictions around such arrangements, only that their resulting costs must be transparent to all concerned.
Nevertheless, we are persuaded by the comments that there may be some price concessions from pharmacies that are based upon contingencies that cannot be known at the point-of-sale and that these price concessions should be distinguished from all other pharmacy price concessions and continue to be reported as direct or indirect remuneration. This would be also be consistent with the commenter who pointed out the statutory language that negotiated prices will “take into account” price concessions. While we had proposed including all price concessions from pharmacies in the negotiated price to provide maximum price transparency, we believe that there is room for further discussion with industry to determine whether there are specific types of arrangements that do not lend themselves to accurate inclusion in the negotiated prices. As long as all types of price concessions are consistently “taken into account” in the same way by each sponsor in preparing bids and reporting costs, bids and point-of-sale negotiated prices can remain comparable. Therefore, in response to comments we are revising our proposed definition of negotiated price to allow a narrow exception to the requirement that all pharmacy price concession be included in the negotiated price for those contingent pharmacy price concessions that cannot reasonably be determined at the point-of-sale. We intend to identify in our DIR reporting guidance which types of price concessions from pharmacies would meet the standard for this exception, and we intend to consult with industry in developing our guidance in this area. Any contingent pharmacy price concessions or incentive payments that
We agree with the commenter who pointed out that not all fees that pharmacies pay to PBMs are price concessions. But as discussed in the NPRM, when such fees take the form of deductions from payments to pharmacies for Part D drugs dispensed, such costs are price concessions and must be treated as such in Part D cost reporting. This is the case regardless of whether the deductions are calculated on a per-claim basis or not. Standard treatment of all price concessions will bring improved transparency to pharmacy payments. We disagree that this change is inconsistent with the MMA because the MMA established Medicare Part D as a voluntary, private-market-based program what would rely on private plans to provide coverage and to bear some of the financial risk for drug costs. These private plans would determine premiums through a bid process and would compete with other plans based on premiums and negotiated prices. While Part D sponsors may lose some flexibility in deciding how much of the price concessions should be applied to beneficiaries at the point of sale or through reduced premium, consistency in how specific types of price concessions are “taken into account” in negotiated prices is necessary in order to preserve reliance on market competition between plans, which is a cornerstone of the Medicare Part D program.
After considering comments received, we are finalizing the provision as proposed with modification to require that negotiated prices be inclusive of all price concessions from network pharmacies except contingent price concessions that cannot reasonably be determined at the point-of-sale. We also modified the language in paragraph (4) by clarifying that additional contingent amounts, such as incentive fees, that increase prices are always excluded from the negotiated price by removing the word “may,” and we also replaced “cannot be predicted in advance” with “cannot reasonably be determined at the point-of-sale” to parallel paragraph (2). Finally, we have modified the effective date of this provision to 2016 to avoid disruption of the existing regulation which will be applicable for the rest of 2014 and 2015.
In our original rule implementing the Part D Program, we codified an interpretation of section 1860D–4(b)(1)(B) of the Act at § 423.120(a)(9) that permitted Part D sponsors to offer lower cost sharing at a subset of network pharmacies, dubbed “preferred pharmacies,” than at other in-network pharmacies. This lower cost sharing was subject to certain conditions that seemed straightforward to us at the time, but which have proven to need clarification. We have recently discussed this concern in the Announcement of Calendar Year (CY) 2014 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter (2014 Call Letter) on pages 175 and 176 [at
Section 1860D–4(b)(1)(B) of the Act contemplates the possibility of sponsors offering lower cost sharing at some network pharmacies than is offered in conjunction with the any willing pharmacy terms and conditions mandated in the immediately preceding paragraph (A). However, a plan's ability to reduce cost sharing is contingent upon one condition: “In no case shall such a reduction result in an increase in payments made by the Secretary under section 1860D–15 of the Act to a plan.” In our original proposed rule entitled “Medicare Program; Medicare Prescription Drug Benefit; Proposed Rule,” published on August 3, 2004 in the
However, what we failed to sufficiently explain in 2005 was that if cost sharing cannot rise beyond a certain level, then in return for lower cost sharing, preferred networks must reduce drug costs paid by the plan in order to prevent an increase in CMS payments to the plan. In part this omission may have been because we presumed that Part D sponsors would motivate enrollees to go to a subset of pharmacies through lower cost sharing only if those pharmacies offered significantly lower negotiated prices, and thus would provide a competitive advantage for the sponsor in lowering costs. As the concerns expressed in the 2014 Call Letter indicate, this does not seem to have been the case for some sponsors. However, if drug costs (negotiated prices) are not lower in return for lower cost sharing, and the lower cost sharing cannot be completely offset by higher cost sharing on other beneficiaries due to our cost-sharing-outlier limits, then the amount that must be subsidized by the government and the taxpayer will increase.
Therefore, we proposed to clarify that preferred cost sharing should signal consistently lower costs. When lower cost sharing correctly signals the best prices on drugs, then choosing pharmacies on the basis of that lower cost sharing lowers not only beneficiary out-of-pocket costs, but also Part D plan and other government subsidy costs. Lower plan and government subsidies translate into lower CMS payments to plans, consistent with the statutory requirements at section 1860D–4(b)(1)(B) of the Act. Therefore, we proposed to revise § 423.120(a)(9) to state: “Preferred cost-sharing in network pharmacies. A Part D sponsor offering a Part D plan that provides coverage other than defined standard coverage may reduce copayments or coinsurance for covered Part D drugs obtained through a subset of network pharmacies, as long as such preferred cost sharing is offered in accordance with the requirements of § 423.120(a)(8) and for Part D drugs with consistently lower negotiated prices than the same drugs when obtained in the rest of the pharmacy network.” We proposed that by `consistently lower' we mean that sponsors must offer beneficiaries and the Part D program better (lower) negotiated prices on all drugs in return for the lower cost sharing. In practice we believe this would mean that whatever pricing standard is used to reimburse drugs purchased from network pharmacies in general, a lower pricing standard must be applied to drugs offered at the preferred level of cost sharing. We welcomed comments on alternative approaches to ensuring that the offering of preferred cost sharing does not increase our payments. We proposed that any alternative methodology must be based solely on the level of negotiated prices and thus consistent with our proposal to amend that definition (section III.A.15. of this final rule). As discussed in that section, we proposed to revise the definition to specify that all price concessions from pharmacies must be reflected in the negotiated price in order to promote transparent price competition, as well as to eliminate differential cost reporting and cost shifting that interfere with a fair and transparent competitive bidding process. We requested that any alternative methodology suggestions be accompanied by specific proposals for how we could objectively validate compliance through data we already collect.
In addition, we solicited comments on whether we should also establish standards on how much lower drug costs should be in return for preferred cost sharing. We are aware that there is a wide range of savings projections associated with the use of limited networks. For instance, a January 2013 study prepared for the Pharmaceutical Care Management Association (PCMA) provides various estimates ranging from 5 percent to 18 percent [at
We also proposed a clarification in terminology to better describe the application of the policy to a sponsor's approved Part D pharmacy network. Specifically, we proposed to delete the definitions of “preferred pharmacy” and “non-preferred pharmacy” from § 423.100 and to add a new definition of preferred cost sharing. “Preferred cost sharing” would mean lower cost sharing for certain covered Part D drugs at certain network pharmacies offered in accordance with the requirements of § 423.120(a)(9). We would then require that Part D sponsors would revise any marketing materials to reflect the revised nomenclature, and eliminate any references to preferred or non-preferred network pharmacies. We solicited comment on whether any further clarifications of terminology are needed for this policy proposal.
We received the following comments and our responses follow:
However, other commenters strongly opposed our proposal to require consistently lower negotiated prices at pharmacies offering preferred cost sharing. While no commenters dispute that benefit designs that provide preferred cost sharing at some network pharmacies must not increase payment to Part D plans, many dispute our proposal to make this determination based entirely upon negotiated prices. They assert that the reference in the statute to “an increase in payments” does not refer solely to negotiated prices but must also take into consideration the direct subsidy, reinsurance subsidies, end of year reconciliation, and beneficiary premiums. Several commenters said that we do not have the authority to implement this proposal because it violates the section 1860D–11(i) statutory non-interference provision that prohibits CMS from instituting a price structure for the reimbursement of Part D drugs. One commenter said that while they share our objectives for preferred cost sharing arrangements to lower costs for the Part D program and beneficiaries, they believe these arrangements can be beneficial if the price concessions are reflected in prices at the pharmacies and/or used to lower premiums. Commenters also stated that requiring lower negotiated prices for every drug will restrict the flexibility that Part D sponsors need to negotiate discounts with pharmacies, which will lead to increased prices and beneficiary disruption. Moreover, commenters argue that savings from preferred cost sharing cannot be determined at the individual drug level because that does not account for different drug mixes at different pharmacies that could better be determined by actuarially sound aggregate methods of comparison. One commenter recommended that we implement a “fixed basket of drugs” approach similar to our Out-of-Pocket (OOPC) tools used for determining meaningful differences between basic and enhanced plans. A number of commenters also contend that such a consistently-lower-price requirement is unworkable because their contracts frequently have a “lesser of” provision to ensure they only pay the pharmacies' usual & customary prices when such prices are lower than the negotiated rate and they would have no way to ensure that pharmacy usual & customary prices are never lower at pharmacies that do not offer preferred cost sharing. Finally, most commenters opposed CMS establishing standards on how much lower drug costs should be in return for preferred cost sharing.
Nevertheless, we premised this proposal on our related proposal to change the definition of “Part D Negotiated Price” to include all pharmacy price concessions. If we are going to use negotiated prices as the sole basis for determining increased payments to plans for purposes of section1860D–4(b)(1)(B) of the Act, then all pharmacy price concessions must be in the negotiated price because the price would need to have the same meaning at every network pharmacy. Consequently, because we are finalizing a different definition of negotiated price than originally proposed, one that will allow for the exclusion of some pharmacy price concessions from the negotiated price, we will not be finalizing our proposal to require consistently lower negotiated prices at pharmacies offering preferred cost sharing. Clearly if some price concessions are not reflected in the negotiated price, a higher negotiated price may not result in increased payments to plans. We also are not finalizing an alternative requirement at this time, in light of the comments that suggested different approaches because we intend to consider them further as we determine how best to ensure, in a transparent manner, that preferred cost sharing does not increase payments to plans. While we are not finalizing the proposal, we disagree with the commenter who stated that CMS does not have the authority to implement such a requirement because it is consistent with our obligation to implement and enforce many statutory requirements under the Part D program that directly or indirectly affect negotiations between pharmacies and Part D sponsors, in particular section 1860D–4(b)(1)(B) of the Act, and including several other closely related statutory provisions contained in section 1860D–4(b)(1) of the Act. For example, we have previously established retail and non-retail pharmacy network adequacy requirements under this authority to ensure convenient pharmacy access as required under section 1860D–4(b)(1)(C) of the Act.
Downloads/PharmacyNetwork.pdf) that we cited as showing some negotiated prices for drugs were higher at pharmacies offering preferred cost sharing than the rest of the network was flawed. Therefore, they contend that our rationale for the proposal was flawed. They point out that this study only looked at prescription drug event (PDE) data and did not take into consideration any direct or indirect remuneration. They claim that even if you accept the results of this study as stated, it shows only that drug prices were “slightly higher” and only in “a few” preferred networks in “some plans”. In addition, commenters raised methodological concerns because the CMS study was not normalized for different drug mix and utilization between plans, which they said will bias the results and lead to incorrect conclusions that will contribute to higher costs for beneficiaries and the Part D program.
After considering of the public comments received, we are not finalizing the proposed changes to §§ 423.120(a)(9) and 423.100. We will undertake notice and comment rulemaking if we are going to make changes to these provisions in the future.
We proposed a change to the regulations governing the disclosure and updating of prescription drug pricing standards used by Part D sponsors to reimburse network pharmacies to make clear that drug pricing based on maximum allowable cost is subject to these regulations. Section 173 of MIPPA amended sections 1860D–12(b) and 1857(f)(3) of the Act to add a provision requiring the regular updating of prescription drug pricing standards. Specifically, for plan years beginning on or after January 1, 2009, CMS's contracts with Part D sponsors must include a provision requiring sponsors to update any standard they use to reimburse network pharmacies based on the cost of the drug to accurately reflect the market price of acquiring the drug. These updates must occur not less frequently than once every 7 days, beginning with an initial update on January 1 of each year.
We codified this requirement in § 423.505(b)(21). We also amended § 423.505(i)(3) with respect to contracts or written arrangements between Part D sponsors and pharmacies or other providers, first tier, downstream and related entities. Specifically, § 423.505(i)(3)(viii)(A) requires that sponsors' pharmacy contracts include a provision establishing regular updates of any prescription drug pricing standard used by the Part D sponsor, consistent with § 423.505(b)(21), and § 423.505(i)(3)(viii)(B) requires that a Part D sponsor's pharmacy contract indicate the source used by the Part D sponsor for making any such pricing updates. We finalized these regulations in a final rule entitled, “Medicare Program; Medicare Advantage Program and Prescription Drug Benefit Programs” at 76 FR 54600 (September 1, 2011) (“September 2011 final rule”).
We stated in the preamble to the September 2011 final rule that a “prescription drug pricing standard” is an accepted methodology based on published drug pricing. In the preamble to the proposed rule, we explained that this was because we were unaware at the time that there is at least one standard based, at least in part, on costs of the drugs that is not based strictly on published drug pricing, which is maximum allowable cost prices. Now that we have become aware of these types of pricing standards, we wish to amend our regulatory requirement. We believe that the updating requirement should apply to pricing standards based on the cost of a drug, even when the standard is not based on published drug pricing, an approach consistent with the intent of the statute. The text of section 173 of MIPPA indicates the provision's purpose—Part D sponsors must update their prescription drug pricing standards regularly “to accurately reflect the market price of acquiring the drug.” We believe that this statement of purpose indicates that the Congress intended to provide pharmacies with a means of ensuring that they have current data on the amount of reimbursement that they can expect, including in cases when the reimbursement is based upon maximum allowable cost prices.
When the source of a prescription drug pricing standard is published publicly, such as with AWP or WAC, pharmacies can determine their reimbursement for all drugs at any given time and can monitor these sources to ensure they are being reimbursed correctly. However, when a prescription drug pricing standard is not published publicly, network pharmacies are unable to promptly determine whether their reimbursement is consistent with their contractual arrangements. This, in turn, presents risks to the Medicare Part D program in a number of ways. For example, disclosure of the source used to determine drug prices is necessary for pharmacies to ensure accurate payment of their claims, which is necessary for accuracy in the costs submitted to CMS by Part D sponsors on PDEs without unnecessary later adjustments that are disruptive to the operation of the Part D program.
In addition, when network pharmacies are unable to determine whether their reimbursement is consistent with their contractual arrangements, the accuracy of the prices displayed in the Medicare Prescription Drug Plan Finder (“MPDPF”) is questionable. While these prices only provide an estimate of Part D drugs costs at particular pharmacies, beneficiaries do use the MPDPF to make drug purchasing choices. If a pharmacy does not know what it will be paid for drugs on any given day, it cannot test the MPDPF and validate the prices.
For this and other reasons detailed in the preamble to the proposed regulation, as well as in response to comments received on the proposed regulation, we are defining “prescription drug pricing standard” in regulation. Specifically, in § 423.501 a “prescription drug pricing standard” is now defined as “any methodology or formula for varying the pricing of a drug or drugs during the term of a pharmacy reimbursement contract that is based on the cost of a drug, which includes, but is not limited to, drug pricing references and amounts that are based upon average wholesale price, wholesale acquisition cost, average manufacturer price, average sales price, maximum allowable cost, or other cost, whether publicly available or not.” In addition, we are finalizing the following technical changes to make the regulations on prescription drug pricing standards easier to reference: (1) To combine the current requirements contained in § 423.505(b)(21) (i) and (ii) into (i) and eliminate the reference to the effective contract year 2009 as no longer necessary. These requirements generally state that Part D sponsors agree to update any prescription drug pricing standard (as would be defined in § 423.501) on January 1 of each contract year and not less frequently than once every 7 days thereafter. Also, we are moving the current requirement to indicate the source used for making any such updates to (b)(21)(ii) from § 423.505(i)(3)(viii)(B), so that it is clearer by its placement in the regulation that this requirement is on Part D sponsors.
For new paragraph § 423.505(b)(21)(iii), we are finalizing a new requirement and not a technical change, that Part D sponsors agree in their contracts with CMS to disclose all individual drug prices to be updated to the applicable pharmacies in advance of their use for reimbursement of claims, if the source for any prescription drug pricing standard is not publicly available. This means, in conjunction with the proposed definition of a “prescription drug pricing standard” discussed previously, that Part D sponsors have to convey to network pharmacies the actual maximum allowable cost prices to be changed in advance. We are requiring that the actual maximum allowable cost prices be disclosed in advance because, if the pharmacies are not able to use the updates as a reference against which they can check their reimbursements, there would be no point to the statutory requirement.
As a final technical change, we are eliminating language in § 423.505(i)(3)(viii)(A) about establishing regular updates of any prescription drug pricing standard used by the Part D sponsor, which is duplicative to language in 423.505(b)(21). As a result of the changes described previously, there would be no paragraphs (A) and (B) of § 423.505(i)(3)(viii) (which we note will be redesignated as § 423.505(i)(3)(vii) due to other changes in this final rule), and this provision simply requires that, if applicable, each and every contract governing Part D sponsors and first tier, downstream, and related entities, must contain provisions addressing the prescription drug pricing standard requirements of § 423.505(b)(21). We believe these changes will make the regulation text easier to reference and understand.
The supportive comments stated that greater transparency in maximum allowable cost prices of drugs would not only give pharmacies the ability to shop for more cost-effective versions of generic drugs, but would improve pharmacies' ability to evaluate Medicare Part D plan contract proposals, plan their business staffing levels and potential capital investments, and monitor claims reimbursements and appeal when it appears that there has been a reimbursement error.
Conversely, some other commenters opposed our proposal. One commenter asserted that our proposal was based upon anecdotal complaints from pharmacies. This commenter stated that PBMs make their most utilized maximum allowable cost list available upon request to any pharmacy that asks for it, and that pharmacies almost never make such a request.
Conversely, many commenters requested that PBMs be required to give at least 7 days prior notice before a maximum allowable cost price change. One commenter opposed the proposal, but recommended as an alternative that maximum allowable cost prices be updated every 7 business days, and not necessarily beginning on January 1 of each year. Another commenter opposed the proposal, but recommended as an alternative that the no-less-than-7 day update requirement for maximum allowable cost prices be extended to no less than every 14 days.
We further were not persuaded by the argument that the requirement is redundant, as it seems to suggest that the Part D sponsors/PBMs will frequently update maximum allowable cost prices anyway and disclose them at POS, but requiring them to be updated at least every 7 days and disclosed in advance adds significant administrative costs. In fact, we think just the opposite—that negligible administrative costs will be incurred by Part D sponsors due to this requirement, since they are using and updating maximum allowable cost prices for reimbursement of drug claims already and must make minimal changes to that current system to comply with this requirement. In other words, so long as Part D sponsors are updating maximum allowable cost prices as frequently as commenters asserted that the prices change and using them for reimbursement, then the new updating and disclosure requirement changes nothing for that sponsor, other than that the sponsor must now disclose the maximum allowable cost prices to its network pharmacies in advance of their use (rather than just at point-of-sale) in a way that enables the pharmacy to connect a claim to the correct drug price at the appropriate point in time in order to validate the price. However, we acknowledge that to the extent the assertions of some commenters are true—that PBMs update maximum allowable cost prices only when drug prices are declining, but not when they are increasing—then we would agree that this requirement may also result in more updating for PBMs.
In addition, we note that the requirement to update prescription drug pricing standards every 7 days beginning on January 1 of each year is a statutory one. We do not have the authority to implement different update timing requirements, nor to disregard the January 1 start date every year.
One commenter requested that we require maximum allowable cost prices to be disclosed via a certain consistent format layout and delivery method and include industry standard drug identifiers, such as Generic Pricing Indicators (GPI), and that the data format allow for efficient data analysis such as MS Excel, or a text document that could be converted to Excel.
In light of all the comments received, we are finalizing this proposal without change, except for correcting the error in the definition for prescription drug pricing standard previously noted and delaying the effective date until January 1, 2016.
Section 1860D–4(b)(1)(A) of the Act requires Part D plans to permit any pharmacy meeting the plan's Terms and Conditions (T&C) to participate in the plan's network. We used this authority
When discussing cost sharing, distinctions are made in this section between plans offering a preferred cost sharing level and plans that do not. For the purposes of this section, the cost sharing levels offered at retail pharmacies not contracted to offer preferred cost sharing are referred to as standard cost sharing levels. Cost sharing levels offered at retail pharmacies at the preferred T&C are referred to as preferred cost sharing levels.
We have heard from many pharmacies, many of them small independent community pharmacies, that plans do not offer any willing pharmacy the opportunity to offer preferred cost sharing. Instead, some pharmacies are being offered only the plan's standard T&C, at the highest level of beneficiary cost sharing. We received more than 200 comments in response to our discussion of this topic in the Announcement of Calendar Year (CY) 2014 Medicare Advantage Capitation Rates and Medicare Advantage and PDP Payment Policies and Final Call Letter (2014 Call Letter) pp. 175 and 176 at
Consequently, we reviewed our original regulatory interpretation of these provisions, not only in light of these complaints, but also in light of our experience in the Part D program. We believe that an alternative reading of sections 1860D–4(b)(1)(A) and (B) of the Act to reduce barriers is not only permissible, but also it would have the following key policy benefits, which we describe as follows:
• Increased access for beneficiaries to preferred level cost sharing with any willing pharmacy able to agree to the T&C that include preferred cost sharing.
• Improved opportunity for competition among pharmacies contracting with the sponsor to charge no more than the ceiling price stated in the contract for preferred cost sharing, reducing costs charged to the program.
• Improved clarity for beneficiaries surrounding cost sharing levels available at retail and mail order pharmacies.
We have heard the assertion that limited networks achieve greater savings than broader networks, and that moreover, allowing more participants into a limited network than those hand-picked by the sponsor will necessarily lead to increased prices. However, we have been running a natural experiment of sorts relative to this assertion in the Part D program. If limited networks
We have also heard the argument that the pharmacies in currently limited networks are offering deeper discounts solely in return for increased market share and that they will withdraw such offers if the limited network is opened up to other pharmacies that can meet those T&C. We are skeptical that such participants in the highly competitive retail market will abandon their market share by returning to the broader network T&C. As some network pharmacies offering standard cost sharing have been able to extend discounts in pricing even deeper than what is seen in some pharmacies offering preferred cost sharing, it is not obvious that negotiated prices would necessarily increase in the aggregate in the event that a limited number of pharmacies consider changing from preferred to standard cost sharing. We have also been informally told by one sponsor with preferred cost sharing in a limited network that its preferred cost-sharing T&C already are offered to any willing pharmacy. For these reasons, we do not believe that our proposal would result in increased prices.
We also believe that there is a limit to the number of cost sharing levels offered under a benefit plan that can be well understood by beneficiaries. When establishing its network, a Part D sponsor does not offer identical T&C for network participation to every pharmacy. Certain terms will necessarily differ among contracts with the different types of pharmacies needed to provide all Part D drugs, if for no other reason than to address the different access and service standards established by CMS. These various types include at a minimum: Retail, mail-order, long-term care institutional, limited-distribution-drug specialty, and home infusion therapy pharmacies. Terms will also differ with respect to negotiated prices and the level of cost sharing that a pharmacy's claims will be subject to. For instance, long-term care institutional, specialty, and infusion pharmacies are generally offered at the standard level of cost sharing (for the applicable formulary tier) for a month's supply of a covered drug. Retail and mail-order pharmacies, in contrast, currently may contract with plans to be offered at more than one cost sharing level.
Cost sharing at retail and mail-order pharmacies currently vary on three dimensions: Whether the cost sharing is standard or preferred, on the quantity dispensed (or “days' supply”), and on dispensing location.
We proposed that a more simplified benefit design, incorporating these three variables and accommodating a more clearly defined set of cost sharing levels, would promote better understanding of Part D plan benefits, both in terms of beneficiary cost sharing and prices charged to the program, as well as streamlined contracting options. We also proposed to expressly state the total number of possible cost-sharing levels, to clarify expectations and to preempt the introduction of additional or unauthorized cost-sharing levels in the future.
For prescriptions not subject to Long Term Care, specialty pharmacy, or home infusion pricing, the interaction of the following four provisions of section 1860D–4(b)(1) of the Act point to three authorized levels of cost sharing: Standard, preferred, and extended days' supplies for retail and mail order pharmacies. We proposed to minimize the number of variations on these three levels to the following options and to ensure that standard T&C for network participation offer every level available for each respective pharmacy type. First, we proposed to limit long term care, specialty, and infusion pharmacy cost sharing to the standard monthly rate, as is industry practice today. Second, we proposed to limit retail pharmacies to the three authorized levels; either the standard or preferred monthly rate (for supplies up to 34 days), and one extended days' supply cost sharing rate not exceeding three times the monthly retail rate (either three times the standard monthly retail rate or three times the preferred monthly retail rate, depending upon the T&C of the pharmacy's contract). Third, we proposed to limit the levels of cost sharing at mail-order pharmacies to one monthly rate and one extended day mail order cost sharing rate (for any supplies greater than 34 days) for reasons discussed previously. We additionally solicited comments on the frequency of mail order being used to fill prescriptions lasting one month or less. We note that these proposals would not alter our requirements around the dispensing of any days' supplies less than 30 days, which is still subject to the “daily cost sharing” provision at § 423.153(b)(4).
In summary, we proposed to use the authority in section 1860D–4(b)(1)(C)(i) of the Act to establish rules defining convenient access within a Part D pharmacy network, combined with the authority in section 1860D–4(b)(1)(A) of the Act to revise the any willing pharmacy requirements, to ensure that any pharmacy that can meet the applicable T&C for offering standard or preferred cost sharing can join the network on those terms. We believe the network access provisions in section 1860D–4(b)(1) of the Act support expanding § 423.120(a)(8) to all levels of cost sharing offered under a sponsor's benefit plans. We believe that doing so supports the Congressional intent to have plans compete on negotiated prices by making this price competition more open and accessible to pharmacies. Specifically, we proposed to revise § 423.120(a)(8) to require that, in establishing its contracted pharmacy network, a Part D sponsor offering qualified prescription drug coverage must comply with all of the following requirements:
• Must offer and publicly post standard terms and conditions for network participation for each type of pharmacy in the network subject to the following:
++ May not require a pharmacy to accept insurance risk as a condition of participation in the PDP sponsor's contracted pharmacy network.
++ Must offer payment terms for every level of cost sharing offered under the sponsor's plans consistent with CMS limitations on the number and type of cost sharing levels, and for every type of similarly situated pharmacy.
• Must contract with any willing pharmacy able to meet one set of the terms and conditions offered by that plan for that type of pharmacy.
We also proposed to make conforming changes to the contracting provisions at § 423.505(b)(18) to require Part D sponsors to agree to have standard T&C for network participation that meet the requirements described in § 423.120(a)(8), with reasonable and relevant T&C of participation for each type of pharmacy in its network. We believe these proposed requirements would better ensure that each Part D plan: (1) Provides convenient access to Part D drugs in all Part D settings and to the extent practical, at all cost sharing levels; and (2) offers cost sharing levels that encourage beneficiaries to make choices that minimize costs not only for themselves, but also to the Medicare Part D program as a whole. We solicited comments on these proposals to expand the any willing pharmacy T&C and to streamline the levels of cost sharing offered under those standard T&C. We believe these proposals would increase beneficiary understanding of and access to cost sharing that is better aligned with the lowest negotiated prices, improve market competition, and increase downward pressure on total program costs. We received more than 4,000 comments on these proposals and our response follows:
Numerous comments from opponents of the provision cited published analyses that predate Part D on the elimination of selective contracting practices at the state level and higher drug expenditures noted after this change. However, we are concerned that traditional analyses that study drug expenditures after an expansion of a previously limited network may not be directly relevant to the Part D market. While we recognize the general parallels between the studies submitted for consideration and the any willing pharmacy proposal, any attempt to generalize these studies to the Part D benefit would need to incorporate multiple other variables, especially given the revenue streams other than point-of-sale pricing that may distort other economic incentives. The studies submitted offer only limited explanation of what trends in utilization, pricing, and care management surrounded the state-level changes, and without that context we do not consider these analyses persuasive. Further supporting our concerns, one commenter provided alternative economic analysis that supported our assumption that within the Part D market expanding access to any willing pharmacy may not affect drug prices.
While we continue to believe that there are benefits in increasing transparency and in permitting pharmacies willing to charge reduced prices in exchange for offering preferred cost sharing, in light of these comments we believe it is necessary to further analyze the potential impacts on the Part D market. Considering the conflicting comments and analyses submitted, and the potential consequences of implementing any changes based on incorrect assumptions, we believe it is important to wait and to spend additional time considering the evidence for potential financial impacts within the Part D benefit. We will be closely studying preferred cost sharing practices, including the associated point-of-sale drug pricing, going forward. In response to the comments suggesting that CMS use its current authority to respond to plan offerings that we determine to be discriminatory in its proposed availability and access to preferred cost sharing, we will further explore our authority in this area. In addition, we plan to closely monitor beneficiaries' access to preferred cost sharing, as well as drug pricing by pharmacies offering preferred cost sharing, to determine whether future rulemaking in this area is necessary.
In summary, pending further study, we are not finalizing the any willing pharmacy contracting proposed provision changes to § 423.120(a)(8) or 423.505(b)(18), nor the proposed changes to limit the authorized levels of cost sharing. We will engage in further notice and comment rulemaking on this issue as warranted in the future.
To improve our ability to oversee the Medicare Part D program, we proposed to implement section 6405(c) of the Affordable Care Act effective January 1, 2015. This section provides the Secretary with authority to require that prescriptions for covered Part D drugs be prescribed by a physician or eligible professional (as defined at section 1848(k)(3)(B) of the Act (42 U.S.C. 1395w–4(k)(3)(B)) who is enrolled in the Medicare program pursuant to section 1866(j) of the Act (42 U.S.C. 1395cc(j)). We generally proposed in revised § 423.120(c)(5) and new paragraph (6) that a prescriber of Part D drugs must have (1) an approved enrollment record in the Medicare program, or (2) a valid opt-out affidavit on file with a Part A/Part B Medicare Administrative Contractor (A/B MAC) in order for a prescription to be eligible for coverage under the Part D program. More specifically, we proposed the following:
• Under § 423.120(c)(5)(ii)(A) and (B), a Part D sponsor must deny or must require its PBM to deny a pharmacy claim for a Part D drug if: (1) An active and valid physician or eligible professional National Provider Identifier (NPI) is not contained on the claim; or (2) the physician or eligible professional (i) is not enrolled in the Medicare program in an approved status, and (ii) does not have a valid opt-out affidavit on file with an A/B MAC.
• Under § 423.120(c)(5)(ii)(C) and (c)(6)(ii), to receive payment for a drug, a beneficiary's request for reimbursement from a Part D sponsor must be for a Part D drug that was dispensed in accordance with a prescription written by a physician or eligible professional who: (1) Is identified by his or her legal name in the request; and (2) is either enrolled in Medicare in an approved status or has a valid opt-out affidavit on file with an A/B MAC.
• Under § 423.120(c)(6)(i), in order for a Part D sponsor to submit to CMS a prescription drug event (PDE) record, the PDE must pertain to a claim for a Part D drug that was dispensed in
• Under § 423.120(c)(6)(iii), a Part D sponsor must deny or must require its PBM to deny a pharmacy claim for a drug (or a request for reimbursement from a Medicare beneficiary for a drug) if the claim does not meet the requirements of § 423.120(c)(6)(i) or (ii), respectively.
The overriding purpose of these provisions is to help ensure that Part D drugs are prescribed only by physicians and eligible professionals who are qualified to do so under state law and under the requirements of the Medicare program.
Our proposed enrollment deadline of January 1, 2015 was intended to give physicians and eligible professionals at least 6 months after the publication of a final rule to complete the Medicare enrollment process. We solicited comments regarding the propriety of this effective date.
The Medicare enrollment process requires that an A/B MAC screen and validate each enrollment application submitted by a physician or eligible professional prior to the decision to approve or deny enrollment in the Medicare program. The enrollment application collects identifying information about the applicant and his or her credentials, such as licensure status. We have been concerned about instances where unqualified individuals are prescribing Part D drugs. In fact, in a June 2013 report the OIG found that the Part D program inappropriately paid for drugs ordered by individuals who clearly did not appear to have the authority to prescribe. (See “Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority” (OEI–02–09–00608).) There have also been reports that the prescriptions of physicians with suspended licenses have been covered by the Part D program. This should not happen, and we believe we can better address these and similar vulnerabilities by verifying the credentials of prescribers through either the Medicare enrollment process or their submission of a valid opt-out affidavit.
With respect to the latter, we note that under section 1802(b) of the Act and the implementing regulations at § 405.400 et seq., certain physicians and eligible professionals can opt-out of the Medicare program and enter into private contracts with Medicare beneficiaries. By entering into such contracts, these individuals do not bill the Medicare program for non-emergency services they furnish to beneficiaries.
Under our proposal, in short, the prescriptions of a physician or eligible professional who is not enrolled in Medicare and does not have a valid opt-out affidavit on file with an A/B MAC would not be covered under the Part D program. As explained in the proposed rule, CMS would furnish or make available to Part D sponsors a list of physicians and eligible professionals who have an approved Medicare enrollment record or who have a valid opt-out affidavit on file with an A/B MAC.
We also solicited comments on the following issues:
• Whether all pharmacies should be required to enroll in Medicare in order to dispense covered Part D drugs. (Alternatively, we sought comment on whether requiring Medicare enrollment for network pharmacies is a “best practice” in pharmacy contracting by plan sponsors, and should be an integral part of sponsors' required fraud, waste and abuse programs.)
• Whether doctors of dental surgery or dental medicine, including family dentists, should be required to enroll in Medicare in order to prescribe covered Part D drugs. (Note that we did not propose to exclude dentists from our requirements. Sections 423.120(c)(5) and (6) were intended to apply to dentists.)
We received a significant number of comments regarding these proposed provisions. Summaries of the comments as well as our responses follow:
We wish to assure plan sponsors, prescriber and supplier organizations, and beneficiary advocacy groups that we will regularly communicate with them in the months leading up to the June 1, 2015 effective date to address whatever concerns they have and to keep them abreast of CMS' preparations for implementation.
Plan sponsors, prescribers, beneficiaries, and other affected parties should note that existing policies that will be superseded by our changes remain intact (and should continue to be adhered to) through May 31, 2015.
In order to: (1) Help ensure that stakeholders can effectively determine which provisions apply to them before and after June 1, 2015, (2) simplify and consolidate our proposed changes to § 423.120(c), and (3) eliminate potential duplication between the provisions we proposed in (c)(5)(ii) and in (c)(6), we are making several technical revisions. The existing version of paragraph (c)(5) will remain intact with the exception of the addition of the “Before June 1, 2015, the following are applicable” language at the very beginning of the paragraph. We are not finalizing our proposed changes to paragraph (c)(5)(ii), but are instead merging them with our addition of paragraph (a)(6). Hence, our final version of new paragraph (c)(6) will read as follows:
“(6) Beginning June 1, 2015, the following are applicable—
(i) A Part D sponsor must deny, or must require its pharmaceutical benefit manager (PBM) to deny, a pharmacy claim for a Part D drug if an active and valid physician or eligible professional (as defined in section 1848(k)(3)(B)(i) or (ii) of the Act) National Provider Identifier (NPI) is not contained on the claim.
(ii) A Part D sponsor must deny, or must require its PBM to deny, a pharmacy claim for a Part D drug if the physician or eligible professional (when permitted to write prescriptions by applicable State law)—
(A) Is not enrolled in the Medicare program in an approved status; and
(B) Does not have a valid opt-out affidavit on file with an A/B Medicare Administrative Contractor (MAC).
(iii) A Part D sponsor must deny, or must require its PBM to deny, a request for reimbursement from a Medicare beneficiary for a drug if the request is not for a Part D drug that was dispensed in accordance with a prescription written by a physician or, when permitted by applicable State law, other eligible professional (as defined in section 1848(k)(3)(B)(i) or (ii) of the Act) who—
(A) Is identified by his or her legal name in the request; and
(B)(1) Is enrolled in Medicare in an approved status; or
(2) Has a valid opt-out affidavit on file with an A/B MAC.
(iv) In order for a Part D sponsor to submit to CMS a prescription drug event (PDE) record, the PDE must contain an active and valid individual prescriber NPI and must pertain to a claim for a Part D drug that was dispensed in accordance with a prescription written by a physician or, when permitted by applicable State law, an eligible professional (as defined in section 1848(k)(3)(B)(i) or (ii) of the Act) who:
(A) Is enrolled in Medicare in an approved status, or
(B) Has a valid opt-out affidavit on file with an A/B MAC.
We note that in our final version of § 423.120(c)(6)(iv), we have included the language “must contain an active and valid individual prescriber NPI.” This is not a new mandate, for a PDE must currently have the required NPI under § 423.120(c)(5)(i). We are simply clarifying that this requirement continues on and after June 1, 2015.
Again, these are merely technical revisions. They do not involve any changes to our proposed policies.
Information on the general provider enrollment process and the timeframes for application processing can be found on CMS' Web site at
Regarding the first recommendation, the aforementioned list will be the authoritative list of prescribers who are
We will continue to work with the health care industry to ensure that the files CMS disseminates contain the information necessary for plan sponsors, pharmacies, and prescribers to enforce and comply with all CMS requirements. This will include appropriate updates to reflect changes in a prescriber's status, as alluded to in the commenter's third suggestion.
We will consider making changes to the PDE as deemed necessary to facilitate the appropriate implementation of and adherence to § 423.120(c)(6). We will also, as deemed necessary, furnish guidance regarding: (1) appropriate information for prescribers and beneficiaries concerning the enrollment status of prescribers; (2) the importance of enrollment; and (3) vehicles for addressing prescriber inquiries.
We will, as deemed necessary, issue guidance concerning the importance of complying with Medicare enrollment rules.
Given this, we are finalizing our proposed provisions in § 423.120(c) with several exceptions. First, the January 1, 2015 effective date is changed to June 1, 2015. Second, the existing version of paragraph (c)(5) will remain intact with the exception of the addition of the “Before June 1, 2015, the following are applicable” language at the very beginning of the paragraph. Third, we are not finalizing our proposed changes to paragraph (c)(5)(ii), but are instead merging them with our addition of paragraph (a)(6). Our final version of new paragraph (c)(6) will thus read as follows:
“(6) Beginning June 1, 2015, the following are applicable—
(i) A Part D sponsor must deny, or must require its pharmaceutical benefit manager (PBM) to deny, a pharmacy claim for a Part D drug if an active and valid physician or eligible professional (as defined in section 1848(k)(3)(B)(i) or (ii) of the Act) National Provider Identifier (NPI) is not contained on the claim.
(ii) A Part D sponsor must deny, or must require its PBM to deny, a pharmacy claim for a Part D drug if the physician or eligible professional (when permitted to write prescriptions by applicable State law)—
(A) Is not enrolled in the Medicare program in an approved status; and
(B) Does not have a valid opt-out affidavit on file with an A/B Medicare Administrative Contractor (MAC).
(iii) A Part D sponsor must deny, or must require its PBM to deny, a request for reimbursement from a Medicare beneficiary for a drug if the request is not for a Part D drug that was dispensed in accordance with a prescription written by a physician or, when permitted by applicable State law, other eligible professional (as defined in section 1848(k)(3)(B)(i) or (ii) of the Act) who—
(A) Is identified by his or her legal name in the request; and
(B)(1) Is enrolled in Medicare in an approved status; or
(2) Has a valid opt-out affidavit on file with an A/B MAC.
(iv) In order for a Part D sponsor to submit to CMS a prescription drug event (PDE) record, the PDE must contain an active and valid individual prescriber NPI and must pertain to a claim for a Part D drug that was dispensed in accordance with a prescription written by a physician or, when permitted by applicable State law, an eligible professional (as defined in section 1848(k)(3)(B)(i) or (ii) of the Act) who:
(A) Is enrolled in Medicare in an approved status, or
(B) Has a valid opt-out affidavit on file with an A/B MAC.
These revisions to our proposed paragraph (c)(6) do not involve any changes from our proposed policy. They are merely technical changes designed to better fit the existing regulatory text.
We stated in the preamble to the proposed rule that notwithstanding our proposed provisions in § 423.120(c), additional program safeguard enhancements were necessary to protect the Medicare Trust Funds from fraud, waste and abuse, and to ensure that Part D drugs are prescribed only by qualified suppliers. Along with the aforementioned OIG report (“Medicare Inappropriately Paid for Drugs Ordered by Individuals Without Prescribing Authority” (OEI–02–09–00608)), we cited another OIG report titled, “Prescribers with Questionable Patterns in Medicare Part D” (OEI–02–09–00603). This report highlighted a number of instances in which physicians and eligible professionals prescribed inordinate amounts of drugs to Part D beneficiaries in 2009. For example—
• Medicare paid a total of $9.7 million—151 times more than the average—for one California physician's prescriptions; most of this physician's prescriptions were filled by two independent pharmacies, both of which the OIG had identified as having questionable billing;
• One hundred and eight general-care physicians each ordered an average of 71 or more prescriptions per beneficiary, more than 5 times general-care physicians' national average of 13;
• An Ohio physician ordered more than 400 drugs each for 13 of his 665 beneficiaries; and
• A Texas physician ordered more than 400 prescriptions each for 16 beneficiaries and prescribed 700 or more drugs for 3 of these beneficiaries.
The OIG also noted examples of physicians prescribing a high percentage of Schedule II and III drugs in 2009. In one case, 78 percent of the prescriptions a Florida physician ordered were for Schedule II drugs even though the OIG found that 4 percent of the prescriptions ordered by prescribers nationwide were for Schedule II drugs. For one beneficiary, the physician prescribed a 605-day supply of morphine sulfate, a 524-day supply of oxycodone HCl, a 460-day supply of fentanyl, and a 347-day supply of hydromophone HCl.
The OIG has recommended that CMS exercise greater oversight of the Part D program, not only to curb the specific practices outlined previously but also to stem the overall risk of fraud and abuse that the program presents. The OIG has expressed particular concern over the potential for beneficiaries to become addicted to or otherwise be seriously harmed by certain drugs if they are inappropriately prescribed in dangerously excessive amounts. We share this concern, particularly as we continue to receive reports of improper prescribing practices. The difficulty, as we explained in the proposed rule, is that CMS does not possess the legal authority to take administrative action against the prescriber. This means, in many cases, that the individual can continue prescribing drugs that will be covered under Part D and, if he or she is enrolled in Medicare, remain so enrolled to furnish medical services. We believe this is inconsistent with: (1) The OIG's recommendations in its various Part D reports; and (2) our goals of protecting and promoting the health and safety of Medicare beneficiaries and of safeguarding the Medicare Trust Funds.
To this end, and as we explain in this section, we proposed several changes to Part 424, subpart P.
The DEA implements and enforces Titles II and III of the Comprehensive Drug Abuse Prevention and Control Act of 1970, and the Controlled Substances Import and Export Act, as amended, and collectively referred to as the Controlled Substances Act (CSA) (21 U.S.C. 801–971); the implementing regulations for these statutes are in 21 CFR Parts 1300 through 1321. The CSA makes possession of authority under state law
We view a DEA Certificate of Registration to prescribe controlled substances as similar to a state's requirement that a physician or eligible professional be licensed or certified by the state to furnish health care services. Indeed, we are concerned that a physician or eligible professional's improper prescribing practices may be duplicated in the Medicare program. To address these issues, we proposed the following:
• Adding a new § 424.530(a)(11) granting CMS the authority to deny a physician or eligible professional's Medicare enrollment application if: (1) His or her DEA Certificate is currently suspended or revoked; or (2) the applicable licensing or administrative body for any state in which the physician or eligible professional practices has suspended or revoked the physician or eligible professional's ability to prescribe drugs, and such suspension or revocation is in effect on the date he or she submits his or her enrollment application to the Medicare contractor.
• Adding a new § 424.535(a)(13) granting CMS the authority to revoke a physician or eligible professional's Medicare enrollment if: (1) His or her DEA Certificate is suspended or revoked; or (2) the applicable licensing or administrative body for any state in which the physician or eligible professional practices suspends or revokes his or her ability to prescribe drugs. Again, this approach is consistent with our requirement that suppliers maintain compliance with all applicable licensure and certification requirements.
(We also solicited comments on whether our proposed additions of §§ 424.530(a)(11) and 424.535(a)(13) should be expanded to include pharmacy activities.)
We believe that the loss of the ability to prescribe drugs via a suspension or revocation of a DEA Certificate or by state action is a clear indicator that a physician or eligible professional may be misusing or abusing his or her authority to prescribe such substances. We also believe that our proposed provisions were consistent with the OIG's recommendations and, equally important, are necessary to protect Medicare beneficiaries and the Trust Funds.
We received a number of comments related to our proposal. Summaries of the comments and our responses are as follows:
The voluntary surrender of a DEA certificate would not constitute grounds for revocation under § 424.535(a)(13). The provision as written is limited to certificate revocations and suspensions. However, we may consider addressing this issue via future rulemaking.
At this stage, CMS does not have the legal authority to treat a DEA certificate revocation or suspension as a final adverse action because the current definition of the latter term in § 424.502 does not specifically include DEA actions. However, we may address this issue through future rulemaking.
For the reasons stated in this section, we are finalizing our proposed additions of §§ 424.530(a)(11) and 424.535(a)(13).
We also proposed to add a new § 424.535(a)(14) that would permit CMS to revoke a physician or eligible professional's Medicare enrollment if CMS determines that he or she has a pattern or practice of prescribing Part D drugs that—
• Is abusive and represents a threat to the health and safety of Medicare beneficiaries; or
• Fails to meet Medicare requirements.
We chose not to define “abusive” and “threat to the health and safety of Medicare beneficiaries” in the proposed rule, primarily because the myriad of questionable situations that could warrant the possible application of § 424.535(a)(14) requires that CMS have the flexibility to address each case on its own merits. We believed that the sounder approach was to propose a list of criteria that we would use in determining whether a prescriber is engaging in prescribing practices sufficient to warrant a revocation.
In determining instances of a pattern or practice of prescribing that is abusive and a threat to the health and safety of Medicare beneficiaries, we proposed to consider several factors, including—
• Whether there are diagnoses to support the indications for which the drugs were prescribed;
• Whether there are instances where the necessary evaluation of the patient for whom the drug was prescribed could not have occurred (for example, the patient was deceased or out of state at the time of the alleged office visit);
• Whether the physician or eligible professional has prescribed controlled substances in excessive dosages that are linked to patient overdoses;
• The number and type(s) of disciplinary actions taken against the physician or eligible professional by the licensing body or medical board for the state or states in which he or she practices, and the reason(s) for the action(s);
• Whether the physician or eligible professional has any history of “final adverse actions” (as that term is defined in § 424.502);
• The number and type(s) of malpractice suits that have been filed against the physician or eligible professional related to prescribing that have resulted in a final judgment against the physician or eligible professional or in which the physician or eligible professional has paid a settlement to the plaintiff(s) (to the extent this can be determined);
• Whether any State Medicaid program or any other public or private health insurance program has restricted, suspended, revoked, or terminated the physician or eligible professional's ability to prescribe medications, and the reason(s) for any such restriction, suspension, revocation, or termination; and
• Any other relevant information provided to CMS.
In determining whether a physician or eligible professional has a pattern or practice of prescribing that fails to meet Medicare requirements, we proposed to consider the following factors, including whether the physician or eligible professional—
• Has a pattern or practice of prescribing without valid prescribing authority;
• Has a pattern or practice of prescribing for controlled substances outside the scope of the prescriber's DEA Certificate of Registration;
• Has a pattern or practice of prescribing drugs for indications that were not medically accepted—that is, for indications neither approved by the Food and Drug Administration (FDA) nor medically accepted under 1860D–2(e)(4) of the Act—and whether there is evidence that the physician or eligible professional acted in reckless disregard for the health and safety of the patient.
Many patterns and practices of prescribing, though perhaps questionable on their face, do not upon investigation involve abusive or fraudulent behavior nor involve substandard medical care. As such, we proposed to base any revocation under proposed § 424.535(a)(14) on situations that fall outside the norm of appropriate prescribing, and only after carefully considering the relevant factors. A thorough, detailed investigation by CMS of the physician or eligible professional's prescribing practices would be a prerequisite for the use of § 424.535(a)(14). Honest physicians and eligible professionals who engage in reasonable prescribing activities would not be impacted by our proposal. We noted further that CMS, rather than the Part D plans or the A/B MACs, would make all determinations under our proposed provisions, though information contained in referrals from Part D Plan sponsors may be used as part of CMS' analysis to make revocation decisions.
We received a high volume of comments regarding proposed § 424.535(a)(14). Comment summaries and our responses are as follows.
We stress that § 424.535(a)(14)(i)(F) will represent only one of several factors in our § 424.535(a)(14) determinations, and it will not in and of itself be dispositive.
With respect to the next-to-last comment, we included the language “to the extent this can be determined” at the end of proposed § 424.535(a)(14)(i)(F) based on our recognition that it may occasionally be difficult to ascertain the specific outcome of such suits.
Regarding the last comment, and as already stated: (1) We only intend to invoke § 424.535(a)(14) in very limited and exceptional circumstances; (2) we will account for the patient's particular situation and setting in determining whether a § 424.535(a)(14) revocation is warranted; and (3) § 424.535(a)(14)(i)(F) is only one of a number of factors we will consider.
As mentioned earlier, we have the authority under sections 1102 and 1871 of the Act to establish requirements for the efficient administration of the Medicare program. We believe this includes ensuring that the Part D program is properly administered, and that Medicare beneficiaries and the Trust Funds are protected. We believe that § 424.535(a)(14) will be an important part of these objectives.
We appreciate the recommendation that we work with the medical community in developing future proposals and will take it under advisement.
As for the final comment, our addition of (c)(6) is aimed at stemming the problem of unqualified prescribers. Yet we disagree with the implication that this issue should be our sole focus. Other matters, such as egregious and dangerous prescribing practices by physicians and eligible professionals, must be addressed as well.
We intend to review all aspects of the prescriber's and the patient's statuses and physical locations when examining this criterion.
The revocation process will be the same as that which currently exists for all other revocation reasons under § 424.535(a), the lone exception being that Part D plan sponsors will be notified of a revocation action under § 424.535(a)(14).
Given these comments and our responses, we are finalizing our addition of § 424.535(a)(14) with the exception noted in the previous paragraph.
We also received a number of comments that, in general, either applied to all of our proposed provisions or were not precisely related to any specific proposal. Our summary of the comments and are responses are as follows.
We are neither finalizing nor proposing any regulatory changes as a result of these miscellaneous comments.
We proposed to revise our regulations governing the release of Part D data to expand the release of unencrypted prescriber, pharmacy, and plan identifiers contained in prescription drug event (PDE) records, as well as to make other changes to our policies regarding release of Part D PDE data. For background, in the May 28, 2008
In the preamble to the Part D data final rule (73 FR 30671), we stated, “we [ ] believe that it is in the interest of public health to share the information collected under [the authority of 1860D–12(b)(3)(D)] with entities outside of CMS.” We explained that the release of PDE data assists CMS in evaluating the Medicare Part D program and assessing related policies. We further stated such release was in the interest of public
In addition to setting forth the significant public policy reasons for disclosure of PDE data, we made clear in the preambles of both the Part D data final rule and the April 2010 rule that our primary concerns in releasing PDE data are protecting the confidentiality of beneficiary identifiable information and commercially sensitive data of Part D sponsors. Therefore, as described in the Part D data final rule and the April 2010 rule, the release of PDE data is subject to certain protections, described here generally, such as encryption of beneficiary information and aggregation of commercially sensitive data of Part D sponsors. In addition, whenever PDE data is released, we only release the minimum data necessary for a given purpose, as determined in the sole discretion of CMS after review of the requestor's detailed request for data. If releasing data to an external entity for research purposes, CMS indicated in the Part D data final rule that the requestor must be a legitimate researcher, meaning the requestor has the requisite experience and is working for, or on behalf of, a reputable institution. (In the preamble to the Part D data final rule (73 FR 30674 citing 45 CFR 164.501), we used the definition of “research” contained in the HIPAA Privacy Rule, which defines the term as “a systematic investigation, including research development, testing, and evaluation, designed to develop or contribute to generalizable knowledge.”) In the Part D data final rule (73 FR 30674), we also indicated that, consistent with our current policies for Part A and B data, identifiable Part D data would not be disclosed for commercial purposes.
In the preamble to the proposed rule, we stated that we believe the current limitations on the release of certain data elements hinder the use of PDE data in a health care environment that is substantially transforming due to the Affordable Care Act, and that these limitations therefore also inhibit accompanying insights into prescription drug benefit plans that could result from broader release of the data. We further stated that our experience has led us to conclude that broader release of PDE data to external entities can increase the positive contributions researchers make to the evaluation and function of the Part D program and improve the efficiency of the program and the clinical care of its beneficiaries, which is in the interest of public health. For these reasons, we stated that increased access to prescriber, pharmacy, and plan identifiers by all categories of requestors is of utmost importance and will facilitate research by entities outside CMS that involves identifiable plans, prescribers, and pharmacies. Furthermore, we stated that we could relax the current policies on the release of this PDE data, while still protecting beneficiary confidentiality and commercially sensitive data of Part D sponsors.
Specifically, we proposed to permit the release of unencrypted prescriber, pharmacy, and plan identifiers (including internal plan/pharmacy identification numbers on the claim that represent reference numbers assigned by the plan at the time a drug is dispensed) contained in PDE records to all current categories of requestors (including other HHS entities and the Congressional oversight agencies, non-HHS executive branch agencies and states, and external entities). We noted that because the minimum necessary policy will still apply to all such releases, our proposal was more a formality with respect to HHS entities/Congressional oversight agencies and non-HHS executive branch agencies/states, since this data is available in unencrypted format to these same entities under the current Part D data regulations “if needed.” For this reason, in the proposed rule, we focused on the release of unencrypted prescriber, pharmacy, and plan identifiers to external entities as discussed later in this section.
We acknowledged in the preamble to the proposed rule that there still may be concerns about releasing unencrypted prescriber, plan, and pharmacy identifiers to outside entities based on comments that were received in response to our original proposed Part D data regulations, and that were discussed in the Part D data final rule (73 FR 30675). In particular, we addressed concerns that this information could be used by pharmaceutical companies and others who may want to influence physicians' prescribing patterns and interfere with their professional judgment. As we stated in the proposed rule, it is our view today, however, that the vast majority of physicians have prescribed and do prescribe what they believe are the appropriate medications for their patients, and they should have no concerns with transparency in their prescribing patterns. Moreover, we stated that there are other measures in place to prevent inappropriate influence by external entities on prescribers, such as section 6002 of Affordable Care Act and the federal Anti-Kickback Law (section 1128B(b) of the Act). We also pointed out that when data are completely transparent, it is easier for the attempts of some to use the data for purposes of inappropriate manipulation to be countered by others who have access to the same data. We also noted that it appears prescriber data are already available commercially from pharmacy data aggregators. For these reasons, we stated that we believe that our earlier concerns expressed in the Part D data final rule about the release of unencrypted prescriber identifiers in PDE data to external entities are no longer warranted.
In the proposed rule, in conjunction with our proposal to broaden the release of unencrypted prescriber identifiers, we also highlighted our response to a comment discussed in the Part D data final rule, which argued that providing access to linked physician identifiable claims in order to pool them with employer data would allow analysis to reduce cost of care delivery and improve the quality of care (73 FR 30676). We noted that in response to the comment, we did not disagree with the commenter, but referenced a variety of pay for performance and value-based health care initiatives being undertaken by CMS at the time in an effort to encourage health care providers to furnish high quality health care and to provide cost and quality information to consumers. We also noted that in our response to the comment, we had stated that we intended to use PDE data in those activities, but we declined to adopt a policy that would include making unencrypted prescriber identifiers available for release to external entities (except when needed to link to another data set). In this proposed rule, however, we acknowledged that, in light of the goals of the Affordable Care Act to improve the quality of health care, including through better access to information, we now agree with the commenter regarding the importance of providing access to prescriber-identifiable claims in order to allow researchers to pool them with employer data and conduct broader research.
We noted in the proposed rule that our current policy on release of ingredient cost and dispensing fee data would not change under our proposal, meaning the minimum necessary data regarding ingredient costs and dispensing fees would continue to be available for release in disaggregated form only to other HHS entities and congressional oversight agencies. Non-HHS executive branch agencies and external entities could still only obtain the minimum necessary ingredient cost and dispensing fee data, and only in aggregated form.
With respect to our proposal to broaden the release of unencrypted plan
For the same reasons that we proposed to make prescriber and plan identifiers available for release in an unencrypted format, we explained in the proposed rule that we no longer see a reason that pharmacy identifiers should not be available for release in an unencrypted format. Accordingly, we also proposed to release unencrypted pharmacy identifiers to all categories of requestors.
We addressed one final aspect of our policies governing the release of Part D data in the proposed rule. As discussed previously, in the preamble to the Part D data final rule (73 FR 30664), we explained that consistent with CMS's existing policies with respect to Parts A and B data, CMS would not release PDE data for commercial purposes (but external researchers may be funded by commercial firms if the researchers are free to publish their results regardless of the findings). However, for the same reasons that we proposed to make changes to our rules governing the release of PDE data, we also solicited comment on the current restriction on the release of PDE data for commercial purposes. We noted that we were not making a specific proposal in this regard, but rather, that we wished to receive comments on this issue for consideration.
In addition to the proposed changes with respect to prescriber, pharmacy, and plan identifiers described previously, and our request for comment on the restriction on the release of Part D PDE data for commercial purposes, we proposed a few other changes to our regulations governing the submission, use, and release of PDE data, including some changes intended to clarify our existing policies with respect to several issues related to PDE data. First, we proposed to add supporting program integrity purposes, including coordination with states, as an additional purpose deemed necessary and appropriate by the Secretary for which a Part D sponsor must agree to submit all data elements included in all its drug claims under section 1860D–12(b)(3)(D) of the Act. The regulation at § 423.505(f)(3) currently contains a non-exclusive list of purposes deemed necessary and appropriate. Thus, we indicated that we believe the use of these data for supporting program integrity purposes has always been included, even though not explicitly listed. However, given the importance of our ability to release PDE data for program integrity purposes, including for coordination with states on program integrity, we proposed to add this purpose explicitly to the non-exclusive list in § 423.505(f)(3).
Second, we proposed to clarify that non-final action data (for example, information on claims subject to subsequent adjustment) are available to entities outside of CMS. We explained that non-final action data are captured through the data element, “Original versus Adjusted PDE (Adjustment/Deletion code).” We further explained that this is a PDE field which distinguishes original from adjusted or deleted PDE records, which allows sponsors to make adjustments to the original PDE record to ensure accurate payment. The information included in these revised PDE records is thus not point-of-sale data. With the increasing focus on coordination of care, we noted that requests for access to non-final action PDE data have understandably also increased, and that non-final action data are also routinely requested for evaluation and research projects. We noted that the Part D data final rule (73 FR 30683) included an appendix that explained in more specific detail the restrictions relative to the available PDE elements for the different categories of requestors. Specifically, we noted that this appendix stated (73 FR 30685) that the data element “Original versus Adjusted PDE (Adjustment/Deletion code)” was available to other (that is, non-CMS) HHS entities and the congressional oversight agencies, while for non-HHS executive branch agencies, states, and external entities, it stated that “Final Action claims would be provided, so this element should not be needed.” Thus, we noted that this appendix did not explicitly address the question of whether non-final action data would be available for release to non-HHS executive branch agencies, states, and external entities, because such data were not expected to be needed by these requestors. However, since it is clear that these entities do need access to non-final data, we proposed to clarify that non-final action data are also available for release to non-HHS executive branch agencies, states, and external entities under the Part D data final rule.
Due to our proposals to make changes to our policies governing the release of PDE data described previously, we proposed to make corresponding changes to the current applicable regulatory text. In addition, we also proposed to eliminate the appendix that accompanied the Part D data final rule (73 FR 30683) that explained in more specific detail which PDE elements would be available to different categories of requestors, and any restrictions that applied. We stated that we believed this appendix is no longer necessary, as our proposed changes in policy would eliminate most of the distinctions with respect to the PDE data available for release to the different categories of requesters, with the exception of Total Drug Costs, which will continue to be available in disaggregated form only to other (that is, non-CMS) HHS entities and the congressional oversight agencies, and we proposed to revise the regulation at § 423.505(m)(1)(iii)(B) to account for this distinction. We also proposed to revise this provision to clarify that we will continue to exclude sales tax from the aggregation, if necessary for the project. Finally, we proposed changes to the regulatory text to incorporate notes from the current Appendix that are not addressed by the existing reference to CMS data sharing procedures in § 423.505(m)(1)(ii).
We received the following comments on our proposed revisions to the regulations governing the release of Part D data:
Potential areas of research suggested by the commenters were linking information on Part D plan features (such as premiums, cost-sharing, and formularies) to health outcomes and the quality of health care provided to Medicare beneficiaries. Other commenters asserted that broader access to prescriber, plan, and pharmacy identifiers in PDE data will facilitate research in particular for conditions for which there are very few viable treatments, no available cure, and much more work to be done with respect to researching and developing safe and effective medicines. These commenters welcomed the availability of additional information to spur further knowledge, investigation, and progress on how to best treat—and ensure appropriate coverage for treating—complex health conditions.
In addition, we are not persuaded that these identifiers are commercially sensitive data. As we stated in the preamble to the proposed rule (79 FR 1990), an analysis of Part D plans, their network pharmacies, and average drug costs, can already be accomplished through data posted on CMS' Web site and/or purchased in public use files. Additionally, the MPDPF allows users to view and compare all available prescription drug plan choices, including plan and pharmacy specific estimates of the costs of individual drugs. Moreover, we noted that it appears that prescriber data are already available commercially from pharmacy data aggregators. These data can currently be manipulated by researchers to reveal information about specific plans, pharmacies and prescribers. For these reasons, we have concluded that prescriber, plan and pharmacy identifiers are not commercially sensitive information, and that it is appropriate to share this information in an unencrypted format when it is needed for a particular study or project.
Other commenters disagreed, asserting that the release of unencrypted identifiers has the potential, for instance, to influence prescribing patterns and physician judgment, or otherwise to be used to draw incorrect or inaccurate conclusions that could be damaging to the reputations of professionals and health care organizations. These commenters asserted that inappropriate influence may adversely affect the quality of care for beneficiaries. One commenter stated that the Affordable Care Act's additional reporting requirements with respect to physician prescribing do not address this type of influence, and that CMS has assumed that release of this data will not adversely affect beneficiaries, rather than carefully considering the impact of release. Another commenter stated that data and statistics are valuable in observing trends among patient populations, but that they are a blunt instrument when applied to individuals. One commenter opposed the indiscriminate release of data to any requesting external entity, including to data aggregators that have little knowledge of the Medicare Part D program. A few commenters encouraged CMS to present the data in a way that considers the quality of the services provided, including an explanation of the data limitations, and allows for the opportunity to correct information, for instance, to include patient non-compliance in the case of release of prescriber identifiers. Finally, these commenters stated that disputing inaccurate findings takes significant
Additionally, we were not persuaded that CMS should release data in a way that considers the quality of the services provided, includes an explanation of the data limitations, or allows for the opportunity to correct information. This is precisely what professional researchers do, and as we previously noted, we think the professional research community would be quick to offer criticisms of poor research, should a project fail to address these issues appropriately. Moreover, if CMS were to analyze data before its release for research, this practice would undermine the independent nature of the analyses performed by outside researchers.
After review of the comments we received, we are finalizing our proposed changes to the regulations governing the release of Part D data. Specifically, we are finalizing the following revisions to the applicable regulatory text:
• Section 423.505(f)(3) is revised to add supporting program integrity purposes, including coordination with states, as an additional purpose.
• Section 423.505(m)(1)(iii) is revised to remove references to encrypting certain identifiers since prescriber, plan, and pharmacy identifiers are no longer be subject to encryption when released.
• Section 423.505(m)(1)(iii)(A) is revised to clarify that, subject to the restrictions contained in paragraph (m)(1), all elements on the claim are available not only to HHS, but also to other executive branch agencies and states, since there is no longer any distinction between the two categories.
• Section 423.505(m)(1)(iii)(B) is revised to incorporate a note from the appendix that is being eliminated, which states: “Upon request, CMS excludes sales tax from the aggregation at the individual level, if necessary for the project” at the end of the provision.
• Section 423.505(m)(1)(iii)(C) is deleted as no longer necessary since unencrypted plan identifiers, including the internal plan/pharmacy identification numbers, are available for release.
• Section 423.505(m)(1)(iii)(D) is re-lettered as (C) and references to encryption of pharmacy and prescriber identifiers are deleted, since these identifiers are available for release in unencrypted format. Additional language regarding beneficiary identifiers is added to reflect the current policy on release of this identifier. In addition, we are including the statement, “Public disclosure of research results will not include beneficiary identifying information,” at § 423.505(m)(1)(iii)(C)(2), which also reflects current policy as described in the appendix that is being eliminated.
• Section 423.505(m)(3) re-lettered as (m)(3)(i) and (m)(3)(ii) is added to incorporate a note from the appendix that is being eliminated about the status of the Congressional Research Service as an external entity when it is not acting on behalf of a Congressional committee in accordance with 2 U.S.C. 166(d)(1).
With respect to our policy not to release Part D data for commercial purposes, we did not make a specific proposal but solicited comments for general consideration. We received comments on both sides of this topic, and thank all the commenters. The following is a summary of the comments:
The commenters also stated that eliminating or reducing this current restriction on the release of data for commercial purposes is consistent with CMS' desire to foster transparency and competition in the Part D program during a period of sweeping change to the health care system. These commenters asserted, for example, that suppliers need to incorporate accurate data into their product pricing and discounting strategies to align their approaches with the system-wide drive toward value-based decision-making and high quality care.
Commenters additionally stated that the more access there is to Medicare data, the more dramatically the bandwidth for research will be increased, leading to increased quality of care, system efficiency, and consumer satisfaction in the Medicare programs and health care system in general. These commenters noted that there is deep scientific and analytic expertise within organizations that are currently excluded from accessing CMS data. These commenters asserted that the standard for data release by CMS should be whether the research proposed is of high quality and whether it has the potential to improve program administration or the health of the covered population, rather than financial benefit and profit status of the organization proposing the research. These commenters further noted that CMS has in place strong research merit criteria, rules, and obligations for data use and individual privacy protections, and that these processes and this oversight are sufficient to determine whether a requestor should have access to PDE or other identifiable data, regardless of the researcher's affiliation.
Some commenters stated that broader release of Part D data would not only further public health research and analysis of the Part D program, but also would serve to further educate consumer organizations, patient advocates, and ultimately beneficiaries about the program generally, as well as coverage and prescribing patterns under various plans.
Some commenters stated that they would support changing the policy on non-release of Part D data for commercial purposes, so long as CMS ensured that release of the data would be conditioned on its use for improvement of one or more aspects of the Part D program, and CMS carefully screened potential recipients of the data for demonstrated expertise in using research data to improve health programs, as well as for any potential conflicts of interest or other concerns.
Commenters that believe that the policy of non-release for commercial purposes should remain unchanged stated that health care entities have legitimate concerns regarding the widespread dissemination of sensitive data, such as data that specifically identifies them. These commenters also stated that strong program oversight and public health and public policy imperatives do not exist to counterbalance these concerns.
One commenter stated that CMS lacks the authority to release Part D data for commercial purposes, because the authority cited by CMS limits releases to those required for program purposes and for improving public health. The same commenter asserted that the right to make data available for purely commercial reasons is a right inherent in the ownership of the data, and that CMS has never previously asserted an ownership over, or right to control the use of, data not obtained through access to a CMS system. This commenter stated that by granting itself this right to release Part D PDE data for purely commercial purposes, CMS would be exercising a right inherent in ownership of the data.
In light of all the comments received on both sides of this particular topic, we continue to believe that the best approach is for our policy regarding the release of Part D data for commercial purposes to remain consistent with the policies for the release of data from Medicare Parts A and B. As we discussed, in the Part D data final rule (73 FR 30672), the procedures that we use to make Part D data available are built upon the practice that was already in place with respect to the release of Part A and B data. Furthermore, absent specific reasons for treating the data differently, we believe it is appropriate to have consistent policies for the release of data across Medicare Parts A, B, and D. Therefore, although we are not changing our policy against releasing Part D data for commercial purposes at this time, we note that in the event the policy regarding the release of Parts A and B data for commercial purposes were to change, we would also revise our Part D data sharing policies to be consistent with that change.
Under section 1857(d)(2) and 1860D–12(b)(3)(c) of the Act, existing regulations at §§ 422.504(i) and 423.505(i) establish various conditions that entities contracting as a first tier, downstream, or related entity (FDR) to an MA organization or Part D sponsor must agree to in order to participate in the MA or Part D program. One such condition at §§ 422.504(i)(2)(i) and 423.505(i)(2)(i) is that HHS, the Comptroller General, or their designees have the right to audit, evaluate, and inspect any books, contracts, computer or other electronic systems, including medical records and documentation of the first tier, downstream, and related (FDR) entities related to CMS' contract with the Part C and D sponsor.
CMS (or its designee(s)) conduct routine audits of Part D sponsors and MA organizations, as well as conduct audits to investigate allegations of noncompliance with Part C and/or Part D rules and requirements. While §§ 422.504(d) and 423.505(d) address Part D and MA organizations' own maintenance of records and the rights of CMS to inspect those records, §§ 422.504(i)(2)(i) and 423.505(i)(2)(i) also require plan sponsors to require their FDRs to agree to a CMS right to inspection. Plan sponsors regularly contract with FDRs to perform critical Part C and D operating functions. For example, many (if not most) Part D sponsors delegate critical Part D functions to their PBMs. As a result, many of the records that we or our designees would need to review and evaluate when we audit a Part D sponsor or MA organization reside with its FDRs.
Our existing regulation at § 423.505 (i)(3)(iv) states that the contracts between the Part D sponsor and its FDRs must indicate whether records held by the FDR pertaining to the Part D contract will be provided to the sponsor to provide to CMS (upon request), or will be provided directly to CMS or its designees by the FDR (the Part C regulation is silent on this matter). As such, we have not previously required Part C or Part D FDRs to provide information directly to CMS.
Two separate reports by the OIG (OEI–03–08–00420, dated October 2009 and OEI 03–11–00310, dated January 2013), have highlighted barriers experienced by the Medicare Drug Integrity Contractor (MEDIC), the entity contracted by CMS to be responsible for detecting and preventing fraud, waste, and abuse in the Medicare Parts C and D programs nationwide, in obtaining requested information in an expeditious manner. The 2009 OIG report discussed that CMS' and its designees' (in this case, the MEDIC) lack of authority to directly obtain information from pharmacies, PBMs, and physicians has hindered the MEDIC's ability to investigate potential fraud and abuse and the OIG recommended that CMS change its regulations to establish its authority to obtain necessary information directly from FDRs. The OIG's 2013 report reiterated the recommendation that CMS have a more direct route to obtain records held by FDRs so that CMS would be able to obtain necessary records in a timely fashion. While the 2013 report pointed out that sponsors and their FDRs generally cooperate in providing the information requested by the MEDIC, it often takes months for it to reach the MEDIC because the MA organization or Part D sponsor acts as a gatekeeper.
In the past, we chose not to be prescriptive regarding whether a first tier, downstream, or related entity must make its books and records available to us directly or through the Part C or D sponsor. As a consequence of what we have learned through the OIG investigations and the seriousness with which we approach our fraud, waste, and abuse oversight obligations, we proposed to specify at §§ 422.504(i)(2)(ii) and 423.505(i)(2)(ii) that HHS, the Comptroller General, or their designees have the right to audit, evaluate, collect, and inspect any records by obtaining them directly from any first tier, downstream, or related entity.
We further proposed to revise the regulation at §§ 422.504(i)(2)(i) and 423.505(i)(2)(i) to make clear that CMS and its designees may “collect” records, in addition to our existing authority to “audit, evaluate, and inspect” information. The addition of “collect” removes any doubt that, in addition to our other options for obtaining records, we have the authority to request information to be reviewed in some location other than onsite at a sponsor's or FDR's facility. Furthermore, this proposed provision is intended to clarify only that CMS may contact FDRs directly and request that they provide Part C or D-related information directly to CMS. The question as to whether CMS has the authority to enter the premises of FDRs is to be determined by interpreting other applicable statutory and regulatory authority.
Finally, we also proposed to delete the existing provision at § 423.505(i)(3)(iv) which gives Part D sponsors the choice as to how information sought from their FDRs will be provided to CMS. Section 423.505 would be renumbered so that paragraphs (v) through (viii) would become paragraphs (iv) through (vii).
We received the following comments and our responses follow:
Therefore, we are finalizing this provision with the modification that CMS will provide notification to the MA organization or PDP sponsor that a direct request for information has been made to one of its FDRs, except in exceptional circumstances.
Entitlement and enrollment in the Medicare program (Part A and Part B) is contingent on entitlement to Social Security retirement and disability benefits as outlined in sections 226 and 226A of the Act, and enrollment in the Medicare program for individuals not receiving retirement or disability benefits is outlined in sections 1818 and 1818A of the Act. These sections do not preclude entitlement to or enrollment in the Medicare program for individuals who are incarcerated in prisons or other penal facilities. However, section 1862(a)(3) of the Act excludes Medicare payment for services which are paid directly or indirectly by another government entity, including federal, state and local prisons, and penal facilities. Given that Medicare entitlement flows from entitlement to Social Security retirement and disability benefits, we established regulations at § 411.4(b) and implemented section 1862(a)(3) of the Act through a payment exclusion process in the FFS program, outlined in section 50 of Chapter 16 of the Medicare Benefit Policy Manual and section 10.4 of the Medicare Claims Payment Manual.
The Medicare payment exclusion process includes the receipt of incarceration status for individuals via regular data transfers from the SSA to CMS. Once we receive the data, the incarceration status is noted on the individual's record and is retained in the FFS claims processing systems. Upon receipt of submitted FFS claims, CMS denies payment of both Part A and Part B claims for individuals with records on which incarceration is denoted, subject to the narrow exception provided in § 411.4(b). The denial of claims continues until the individual is no longer incarcerated and that information is reported by SSA to CMS. Individuals who are entitled to premium-free Part A will maintain their entitlement and will remain enrolled in Part B as long as premiums are paid. Similarly, individuals who are enrolled in premium Part A and/or Part B maintain their enrollment as long as premiums are paid. Sections 1851(a)(3)(B), 1860D–1(a)(3)(A), and 1876(a)(1)(A) of the Act outline the eligibility requirements to enroll in MA, Part D, and Medicare Health Maintenance Organization/Competitive Medical Plans (cost plans). In all options, individuals must have active Medicare coverage. Specifically, to enroll in MA, an individual must be entitled to Part A and enrolled in Part B; to enroll in a PDP, an individual must be eligible for Part D by either being entitled to Part A and/or enrolled in Part B; to enroll in a Medicare cost plan, an individual must be enrolled in Part B but Part A is not required.
In addition, sections 1851(b)(1)(A), 1860D–1(b)(1)(B)(i), and 1876(d) of the Act provide that Medicare beneficiaries are eligible to enroll in an MA plan, PDP, or cost plan only if they reside in the geographic area served by the plan, known as the plan's “service area.” As noted earlier, an individual who is incarcerated still meets the eligibility requirements for Part A and Part B and is eligible generally to enroll in an MA plan, PDP, or cost plan. However, residence in a plan's service area is also a condition for eligibility to enroll in an MA plan, PDP or cost plan. See §§ 422.50(a)(3)(i) for MA plans, 423.30(a)(1)(ii) for PDPs, and 417.422(b) for cost plans. If a member no longer resides in the service area, plans must disenroll that individual per rules at §§ 422.74(a)(2)(i) and 422.74 (d)(4) for MA plans, 423.44(b)(2)(i) for PDPs, and 417.460(b)(2)(i) for cost plans.
In order to implement the exclusion from Medicare coverage for incarcerated individuals under section 1862(a)(3) of the Act in the case of MA plans and PDPs, we explicitly excluded facilities in which individuals are incarcerated from an MA plan's service area by including this exclusion in the definition of “service area” when those regulatory definitions were adopted (54 FR 41734 and 72 FR 47410). Specifically, “service area,” under §§ 422.2 for MA plans and 423.4 for PDPs, is defined so that facilities in which individuals are incarcerated are considered outside of the service area.
We did not include a similar service area exclusion in the case of cost plans. To the extent that cost plans do not incur costs for incarcerated enrollees because their health care costs are covered by the facility, there would be no costs claimed on the cost report, and therefore, no Medicare payment. Nonetheless, to ensure that no cost payments are made, we proposed to revise the definition of service area in § 417.1 to specifically note that facilities in which individuals are incarcerated are not a part of the service area. This adjustment will ensure parity among the various Medicare plan coverage options and be the basis for ensuring that services are not paid by the Medicare Trust Funds for those who are not eligible for them.
Sections 1860D–1(b)(1)(B)(i), 1851(b)(1)(A), and 1876(a)(1)(A) of the Act provide that individuals whose permanent residence is outside the plan's service area are ineligible to enroll in or to remain enrolled in the MA, Part D, or cost plan. Based on the definition of service area established in §§ 422.2 and 423.4, this applied to individuals who were incarcerated as well. As such, individuals who became incarcerated while enrolled were ineligible to remain enrolled because they did not meet the eligibility criterion of residing in the MA plan or PDP's service area. As noted previously, the regulations for cost plans currently do not exclude incarcerated individuals from enrolling or remaining enrolled in these plans.
At the time of the implementation of Part D, the data regarding incarceration were not as robust as they are at the present time. To compensate, we provided instructions in sub-regulatory guidance that required MA plans and PDPs to investigate a notification from CMS of an individual's incarcerated status. If a plan could not confirm an enrollee's status, the plan would then apply the more-general policy for investigation of a possible out-of-area status, which would allow an
Given that the data CMS receives from SSA today regarding the incarceration status of Medicare beneficiaries are reliable enough for the purpose of involuntary disenrollment from MA, Part D, and cost plans, we proposed in the preamble of the January 2014 notice of proposed rulemaking to amend §§ 417.460(b)(2)(i), 417.460(f)(1)(i), 422.74(d)(4)(i), 422.74(d)(4)(v) and add 423.44(d)(5)(iii) and 423.44(d)(5)(iv) to establish that MA organizations, PDPs, and cost plan organizations must disenroll individuals incarcerated for 30 days or more upon notification of such status from CMS. Our proposal indicated that CMS, as a part of this change, would review the incarceration data provided by SSA and, where possible, involuntarily disenroll individuals who are incarcerated based on the data provided by SSA and notify the plan in which the individual is enrolled of this involuntary disenrollment. For all such disenrollments under our proposal, the effective date of disenrollment would be the first of the month after the incarceration start date, as reported by SSA. Such disenrolled individuals would maintain Medicare Part A and Part B coverage through FFS, provided they continue to pay premiums, as applicable, and payment of FFS claims would be based upon existing regulations outlined at 42 CFR 411.4(b). In connection with this change, we also proposed to deny enrollment requests for individuals if data received by CMS indicates an active incarceration status of at least 30 days. Based on the data received from SSA, if incarceration is denoted, we will deny that enrollment and notify the plan of the denial. This would replace the current process requiring plans to accept the enrollment and immediately begin the process to verify that the individual was out of the plan's service area. We indicated our intent to provide operational instructions in subregulatory guidance.
We received the following comments on our proposal:
We understand that QHPs may have different disenrollment effective dates because they can disenroll on days other than the first of the month. However, as previously stated, MA, Part D and cost plan effective dates begin and end on a monthly basis (that is, the first day of the month). Therefore, we cannot use the date of incarceration as the disenrollment effective date.
In addition, as outlined in Section 50.2.1 in Chapter 17, Subchapter D of the Medicare Managed Care Manual, cost plans must disenroll individuals who permanently move out of the service area based upon written statement from the beneficiary or other reasonable evidence that establishes the individual no longer resides in the plan's service area. With the change in definition of service area for cost plans as reflected in the proposed change at § 417.1, cost plans must establish that the individual is no longer residing in the plan's service area if they receive information regarding incarceration from CMS or another entity.
After consideration of the public comments received, we are taking the following action on our proposals:
• The definition of service area for cost plans at § 417.1 is finalized without modification.
• To articulate that the geographic area is the HMO or CMP's service area as defined in § 417.1, we are finalizing the language at § 417.460(b)(2)(i) with the minor modification of adding the word “service.”
• To articulate that the basis of the disenrollment for incarceration is due to the individual not residing in the plan's service area, the regulation text at §§ 417.460(f)(1)(i), 422.74(d)(4)(i)(A), and 422.74(d)(4)(v)) is finalized with modification.
• Due to an inadvertent omission, the proposed regulatory text changes to § 423.44(d)(5)(iii) and (iv) were not published in the proposed rule. Because our preamble was clear that our proposed changes were applicable to Part D, and the comments received demonstrated that readers understood our intent, we are adding and finalizing regulatory text changes at § 423.44(d)(5)(iii) and (iv).
• A proposed change to the definition of “service area” was inadvertently published in the January 2014 proposed rule at § 422.2. That revised definition is not being finalized.
Finally, we recognize that in our discussion of the proposed rule we described our intent that ineligibility for—as well as involuntary disenrollment from—MA, Part D, and cost plans would be based on a period of incarceration of 30 days or more. As we will note in implementing guidance for these final rules, we will determine eligibility based on confirmed incarceration data from SSA, not a 30-day timeframe.
Every year, CMS receives inquiries from MA organizations that wish to expand the scope of the rewards and incentives that currently may be offered to beneficiaries enrolled in their MA plans. In some cases, MA organizations wish to extend rewards and incentives already offered to their commercial members to their Medicare enrollees. There is some evidence to suggest that health-driven reward and incentive programs for currently enrolled members of health plans may lead to meaningful and sustained improvement to their health behaviors and health outcomes.
CMS would like to enable MA organizations to offer health-driven rewards and incentives programs that may be applied to more health-related services and activities than are allowed under our current guidance. We proposed to amend our regulations to establish parameters for rewards and incentives programs offered to enrollees of MA plans. Because we are concerned about the possibility that such programs would be targeted only to healthier enrollees, and discourage sicker enrollees from participating in such incentives and in remaining enrolled in the plan, we also proposed to include specific requirements regarding rewards and incentives so as to ensure that such programs do not discriminate against beneficiaries on the basis of health status or disability, or other impermissible bases for discrimination.
Section 1856(b)(1) of the Act provides authority for the establishment of MA standards by regulation that are consistent with and carry out Part C, and section 1857(e)(1) of the Act provides authority to impose contract requirements that CMS finds “necessary and appropriate” and that are not inconsistent with Part C. Section 1852(b)(1)(a) of the Act states that MA organizations may not discriminate against beneficiaries on the basis of health status and that CMS may not approve an MA plan if that offering is susceptible to discrimination based on an individual's health status. Furthermore, section 1857(g)(1)(D) of the Act provides authority for taking intermediate sanction action against an MA organization which “engages in any practice that would reasonably be expected to have the effect of denying or discouraging enrollment by eligible individuals” as a result of their health status or history. We proposed to rely upon the aforementioned rulemaking and substantive authority to establish requirements for rewards and incentives programs offered by MA organizations to Medicare beneficiaries enrolled in their MA plans.
Specifically, we proposed adding a new provision at § 422.134 that would authorize MA organizations to offer reward and incentive programs to their current Medicare enrollees to encourage their participation in activities that focus on promoting improved health, preventing injuries and illness, and promoting efficient use of health care resources. We proposed requiring that reward-eligible activities be designed so that all enrollees are able to earn rewards without discrimination based on race, gender, chronic disease, institutionalization, frailty, health status, and other impairments. This proposed requirement would not preclude MA organizations from offering rewards and incentives programs that target a specific disease, chronic condition or preventive service. Rather, the goal of having a non-discrimination requirement is to prevent particularly vulnerable populations from being disproportionately underserved. MA organizations may not use this provision to “cherry pick” healthier enrollees. Therefore, any rewards and incentives program implemented by an MA organization under this proposal must accommodate otherwise qualified beneficiaries who receive services in an institutional setting or who need a modified approach to enable effective participation.
To meet the proposed CMS requirements, a reward or incentive would have to be earned by completing the entire health-related service or activity and may not be offered for completion of less than all required components of the eligible service or activity. An MA organization would define what qualifies as an “entire service or activity” within its program design. This proposed requirement is tied to interpreting the value of the service provided as it relates to the value of the reward. Under this proposal, rewards and incentives would be subject to a monetary cap in an amount CMS determines could reasonably be expected to affect enrollee behavior while not exceeding the value of the health-related service or activity itself. As part of our proposal, we indicated the intent to provide guidance on this qualitative standard on a regular basis.
In addition, our proposed regulation would require MA organizations that offer rewards and incentives programs to provide information about the effectiveness of such programs to CMS upon request. If CMS determines that the rewards and incentives programs are not in compliance with our regulatory standard, we proposed that we may require that the MA organization modify the basic parameters of the program.
We received the following comments and our responses are as follows:
Rewards and incentives may never be used to decrease cost-sharing or plan premiums. In addition to the prohibition at § 422.134(c)(2)(i), CMS regulations requiring uniformity of benefits (42 CFR 422.100(d)(2)) preclude MA plans from charging enrollees of a plan different premiums or cost-sharing for the same service. Thus, a MA plan may not offer lower cost-sharing or premiums for plan benefits, as a reward or incentive.
We are not aware of what flexibilities plans may be using currently in providing rewards and incentive programs to enrollees that the commenter believes CMS proposed to remove. We specifically solicited information on this topic from MA organizations in both the proposed rule and in the CY 2014 Call Letter and have received no information that would lead us to believe that our proposed rewards and incentives program would limit, rather than expand, current plan flexibilities. The current guidance on rewards and incentive programs that may be offered to plan enrollees, included in the Medicare Marketing Guidelines, allows a very limited use of rewards and incentives to promote enrollee use of Medicare-covered preventive services. Therefore, we do not see how our proposed rewards and incentives program framework could remove plans' flexibilities rather than expand them.
After consideration of the public comments received, we are finalizing the proposed Rewards and Incentives Program Regulations for Part C Enrollees rule with modifications to subparagraph (b)(1) to include “national origin, including limited English proficiency,” and “disability.” In subparagraph (b)(1) we are also changing the text from “institutionalization” to “whether a person resides or receives services in an institutional setting” and from “other impairments” to “other prohibited basis.” These changes clarify the scope of the categories of beneficiaries included in the context of prohibited discrimination and address comments expressing concern about the possible disproportionate impact of rewards and incentives programs.
Additionally, we are modifying paragraph (c)(1)(i) to eliminate the phrase “completion of” from the regulation text to make it possible for smaller increments of service or activity to be defined as the “entire service or activity.” However, we emphasize that the value of any reward must reflect the value of the service and adhere to any monetary cap that has been determined by CMS under § 422.134(c)(1)(iii). Finally, we note that we have made a technical change to delete the phrase “all of the following” from the introductory language at paragraph (c).
This section of the final rule implements Section 6402 of the Affordable Care Act, which established new section 1128J(d) of the Social Security Act (“the Act”) entitled Reporting and Returning of Overpayments. Section 1128J(d)(4)(B) of the Act defines the term overpayment as any funds that a person receives or retains under title XVIII or XIX to which the person, after applicable reconciliation, is not entitled under such title. The definition of person at section 1128J(d)(4)(C) includes a Medicare Advantage organization (as defined in section 1859(a)(1) of the Act) and a Part D sponsor (as defined in section 1860D–41(a)(13) of the Act). The definition does not include a beneficiary.
Section 1128J(d)(1) of the Act requires a person who has received an overpayment to report and return the overpayment to the Secretary, the state, an intermediary, a carrier, or a contractor, as appropriate, at the correct address, and to notify the Secretary, state, intermediary, carrier or contractor to whom the overpayment was returned in writing of the reason for the overpayment. Section 1128J(d)(2) of the Act requires that an overpayment be reported and returned by the later of (1) the date which is 60 days after the date on which the overpayment was identified; or (2) the date any corresponding cost report is due, if applicable. Section 1128J(d)(3) of the Act specifies that any overpayment retained by a person after the deadline for reporting and returning an overpayment is an obligation (as defined in 31 U.S.C. 3729(b)(3)) for purposes of 31 U.S.C. 3729.
Finally, section 1128J(d)(4)(A) of the Act defines “knowing” and “knowingly” as those terms are defined in 31 U.S.C. 3729(b). Specifically, the terms “knowing” and “knowingly” “mean that a person with respect to information: (1) Has actual knowledge of the information; (2) acts in deliberate ignorance of the truth or falsity of the information; or (3) acts in reckless disregard of the truth or falsity of the information.” There need not be “proof of specific intent to defraud.”
To implement section 1128J(d) of the Act for the Part C Medicare Advantage program and the Part D Prescription Drug program, we proposed two new sections, §§ 422.326 and 423.360, respectively, both titled, “Reporting and Returning of Overpayments.” These sections proposed rules for MA organizations and Part D sponsors to report and return an identified overpayment to the Medicare program. We use the term Part D sponsor, as defined at § 423.4, to refer to the entities that offer prescription drug plans (PDPs) under part 423 and thus are subject to section 1128J(d) of the Act.
We also proposed conforming amendments to §§ 422.1, 422.300, and 423.1 that add a reference to section 1128J(d) of the Act to the existing list of statutory authorities for the regulations governing the MA organizations and Part D sponsors. We also proposed to amend §§ 422.504(l) and 423.505(k) to
We reminded all stakeholders that even in the absence of a final regulation on these statutory provisions, MA organizations and Part D sponsors are subject to the statutory requirements found in section 1128J(d) of the Act and could face potential False Claims Act liability, Civil Monetary Penalties (CMP) Law liability, and exclusion from Federal health care programs for failure to report and return an overpayment. Additionally, MA organizations and Part D sponsors continue to be obliged to comply with our current procedures for handling inaccurate payments.
In response to the January 10, 2014 proposed rule, we received approximately 30 pieces of correspondence from organizations and individuals. In this section of the final rule, we describe our proposals, respond to the public comments, and state our final policies.
We did not receive any comments on our proposed amendments to §§ 422.504(l) and 423.505(k) to incorporate a reference to the proposed §§ 422.326 and 423.360, respectively, in order to extend the existing data certification requirement to data that MA organizations and Part D sponsors submit to CMS as part of fulfilling their obligation to return an overpayment under section 1128J(d) of the Act. We did not receive any comments on our conforming amendments to §§ 422.1, 423.300, and 423.1. Therefore, we are finalizing these amendments as proposed.
We proposed definitions of 3 terms. First, we proposed to adopt the statutory definition of overpayment, where an overpayment exists when—after “applicable reconciliation”—an MA organization or Part D sponsor is not entitled to funds it has received and/or retained. In order to clarify the statutory definition of overpayment, we proposed definitions of 2 key terms at §§ 422.326(a) and 423.360(a): “Funds” and “applicable reconciliation.”
We proposed to define “funds” as payments an MA organization or Part D sponsor has received that are based on data that these organizations submitted to CMS for payment purposes. We also noted that MA organizations and Part D sponsors have responsibility for the accuracy, completeness, and truthfulness of data they submit under existing §§ 422.504(l) and 423.505(k). For Part C, the data submitted by the MA organization to CMS includes §§ 422.308(f) (enrollment data) and 422.310 (risk adjustment data). For Part D, data submitted by the Part D sponsor to CMS includes data submitted under §§ 423.329(b)(3), 423.336(c)(1), 423.343, and data provided for purposes of supporting allowable costs as defined in § 423.308 of this part which includes data submitted to CMS regarding direct or indirect remuneration (DIR).
There are additional payment-related data CMS uses to calculate Part C and Part D payments that are submitted directly to CMS by other entities, such as the Social Security Administration (SSA), which is the authoritative source for data they submit to CMS. We believe that MAOs and Part D sponsors cannot be held accountable for the accuracy of data controlled and submitted to CMS by other entities.
For example, the SSA is the authoritative source for date of death. An MA organization or Part D sponsor generally does not submit a date of death directly to CMS' systems; it comes from the SSA data feed. When the SSA submits to CMS corrected data regarding a beneficiary's date of death, CMS' systems recalculate the payments made to the plan for that beneficiary and recoup the incorrect payment in a routine retroactive payment adjustment process.
We stated that when CMS recoups an incorrect payment from an MA organization or Part D sponsor based on data corrections submitted by authoritative sources such as the SSA, CMS would not consider this recoupment to be the return of an overpayment by an MA organization or Part D sponsor under proposed §§ 422.326 and 423.360. Therefore, the proposed meaning of “funds” refers to a payment amount that an MA organization or Part D sponsor received from CMS that is based on data that the MA organization or Part D sponsor controls and submits to CMS.
We stated that the term “applicable reconciliation” refers to an event or events after which an overpayment can exist under section 1128J(d) of the Act, and we proposed definitions of the term applicable reconciliation that are specific to Part C and Part D.
For Part C, we proposed that applicable reconciliation occurs on the date that CMS announces as the final deadline for risk adjustment data submission. For each payment year, we apply three sets of risk scores to adjust payments: Initial and midyear risk scores during the payment year (both sets are based on incomplete diagnosis data from the data collection year); and final risk scores after the payment year using data MA organizations submit on or before the final deadline for risk adjustment data (which reflects complete data for the data collection year). We also stated that the final risk adjustment data submission deadline would function as the Part C applicable reconciliation date.
For Part D sponsors, we proposed that applicable reconciliation is the later of either: The annual deadline for submitting prescription drug event (PDE) data for the annual Part D payment reconciliations referred to in § 423.343 (c) and (d) or the annual deadline for submitting DIR data. The annual deadline for submitting PDE data is the last federal business day prior to June 30th of the year following the benefit year being reconciled. The annual deadline for submitting DIR data is announced annually through subregulatory guidance and generally occurs around the last business day in June the year following the benefit year being reconciled. We selected these events to define the Part D applicable reconciliation because these data are used for the purposes of determining final Part D payment reconciliation. We noted that MA organizations would still have to submit all final risk adjustment
In summary, we proposed an approach to defining applicable reconciliation that establishes dates that differ for Part C and Part D. We asked for comment on this approach.
We noted that payment errors identified as a result of any corrections to risk adjustment data submitted by MA organizations (and other organizations required to submit risk adjustment data to CMS) on or before the annual final risk adjustment data submission deadline are handled as part of the current annual process of risk adjustment payment reconciliation. Because these payment errors are prior to the date defined in this final rule as “applicable reconciliation”, we stated that we do not consider these errors to be overpayments for the purpose of §§ 422.326 and 423.360. That is, any deletions of risk adjustment data in the file submitted on or before the final risk adjustment data submission deadline for a payment year, would result in payment errors that are addressed with processes that have been in place prior to our codification of section 1128J(d) of the Act in proposed §§ 422.326 and 423.360.
Likewise, for Part D, any payment errors identified as a result of any corrections to PDE or DIR data submitted on or before the later of the annual deadline for submitted PDE and DIR data are handled as part of the current Part D reconciliation process, and we do not consider these errors to be overpayments for the purpose of § 423.360.
Finally, we stated our expectation that MA organizations and Part D sponsors must be continuously diligent regarding the accuracy and completeness of payment-related data they submit to CMS for a payment year, whether during or after that payment year, and whether before or after applicable reconciliation dates. This expectation is based on existing requirements at §§ 422.310, 422.504(l), 423.329(b)(3)(ii), and 423.505(k), and proposed amendments that clarify and strengthen these requirements.
We did not receive any comments on the proposed definitions of the terms “funds” or “overpayment.” (See the next section for comments and responses on the provision regarding “identified overpayment”.) We received the following comment on the term “applicable reconciliation”, and our response follows.
We would like to note that the final risk adjustment data submission deadline will still apply to diagnosis data for both Part C and Part D risk scores for beneficiaries in MA–PD plans.
After consideration of the public comments received, we are finalizing the provisions at §§ 422.326(a) and 423.360(a) as proposed.
We proposed at §§ 422.326(b) and 423.360(b) that if an MA organization or Part D sponsor has identified that it has received an overpayment, the MA organization or Part D sponsor must report and return that overpayment in the form and manner set forth in the section. In paragraphs §§ 422.326(c) and 423.360(c), we proposed that the MA organization or Part D sponsor has identified an overpayment if it has actual knowledge of the existence of the overpayment or acts in reckless disregard or deliberate ignorance of the existence of the overpayment. We noted that the terms “reckless disregard” and “deliberate ignorance” are part of the definitions of “knowing” and “knowingly” in section 1128J of the Act, which provides that the terms “knowing” and “knowingly” have the meaning given those terms in the False Claims Act (31 U.S.C. 3729(b)(3)). We stated that without such a proposal to include “reckless disregard” and “deliberate ignorance”, some MA organizations and Part D sponsors might avoid performing activities to determine whether an overpayment exists. We also provided that if an MA organization or Part D sponsor has received information that an overpayment may exist, the organization must exercise reasonable diligence to determine the accuracy of this information, that is, to determine if there is an identified overpayment.
Finally, in paragraphs §§ 422.326(d) and 423.360(d), we proposed the requirements for reporting and returning an identified overpayment. An MA organization or Part D sponsor must report and return any identified overpayment it received no later than 60 days after the date on which it identified it received an overpayment. The statute provides an alternative deadline: The date any corresponding cost report is due, if applicable. We proposed that this alternative deadline is not applicable to the Parts C or D programs because, in general, MA organizations and Part D sponsors are paid based on their bids, and not based on their actual incurred costs.
The MA organization or Part D sponsor must notify CMS, using a notification process determined by CMS, of the amount and reason for the overpayment. Also within this 60-day time period, the organization must return identified overpayments to CMS in a manner specified by CMS, including the amount and reason for the overpayment. We proposed to codify at paragraph (3) the statutory requirement that any overpayment retained by an MA organization or Part D sponsor after the 60-day deadline for reporting and returning is an obligation under 31 U.S.C. 3729(b)(3).
We also emphasized that an MA organization and Part D sponsor are deemed to have returned the overpayment when they have taken the actions that we will specify, in forthcoming operational guidance, to submit the corrected data that is the source of the overpayment. We will recover the returned overpayment through routine processing according to the systems schedule established in the annual operations budget. That is, payments are recovered through the established payment adjustment process, not on the 60-day schedule that applies to each MA organization or Part D sponsor that has identified an overpayment. Rerunning reconciliation each time an entity identifies an overpayment that triggers its 60-day clock is simply not feasible for CMS.
Finally, we proposed that there will be circumstances when we may ask the MA organization or Part D sponsor to provide an auditable estimate of the overpayment amount, reason for overpayment, and make a payment to CMS. This may occur, for example, when an overpayment is identified after the final Part D reopening for a contract year has occurred but prior to the end of the look-back period or if an MA organization or Part D sponsor had a thoroughly-documented catastrophic loss of stored data. Information about the nature of such a request would be
We received the following comments on general rules for overpayments and our responses follow.
An organization can identify or assess that there is a problem with data submitted to CMS, and determine that it is incorrect data, prior to actually calculating what the payment impact is of that erroneous data. For the MA and Part D programs, the relevant factor is identifying that the data is incorrect and will result in an overpayment. For example, a risk adjustment diagnosis that has been submitted for payment but is found to be invalid because it does not have supporting medical record documentation would result in an overpayment. Under this provision, the day after the date on which the organization has confirmed an identified overpayment—because the organization knows that the diagnosis is not supported by documentation—is the first day of the 60-day period for reporting and returning the overpayment. As another example, an MA organization may find that data used to calculate Healthcare Effectiveness Data and Information Set (HEDIS) measures that the organization submitted to CMS are found to be invalid; when the organization has confirmed that it has identified invalid data leading to an overpayment, this is the first day of the 60-day period for reporting and returning the overpayment.
Then, during the 2-month period for reporting and returning the overpayment, the organization must determine what data should be submitted to CMS to correct the identified overpayment, and then must engage in the reporting and returning process that we will describe in forthcoming guidance. This reporting and returning process will involve: (1) Notifying CMS that an overpayment exists, including notification of the reason and estimated amount for that overpayment; and (2) submitting the corrected data to CMS.
In other words, we believe that the MA organization and Part D sponsor will discover through appropriate payment evaluation procedures when a 60-day period would begin under the requirements of this provision, because “day one” of the 60-day period is the day after the date on which organization has determined that it has identified the existence of an overpayment. Once the organization “starts the clock,” it has 60 days to submit to CMS the corrected data that is the basis of the overpayment. It is the act of submitting the corrected data to CMS, along with a reason and an amount of the overpayment (which may be an estimate), that constitutes fulfillment of the requirement to report and return the overpayment.
As we stated in the January 10, 2014 proposed rule preamble (79 FR 1997), “It also is important to note that the MA organization and Part D sponsor are deemed to have returned the overpayment when they have taken the actions that we will specify, in forthcoming operational guidance, to submit the corrected data that is the source of the overpayment”. We will recover the returned overpayment through routine CMS payment processes. That is, payments will continue to be recovered through the established payment adjustment processes and schedules. As a result the payment recovery may not occur within the 60-day window triggered by identifying an overpayment. Rerunning payment reconciliations and conducting payment recovery within CMS payment systems each time an entity identifies an overpayment that triggers its 60-day clock is simply not feasible for CMS.
We will release operational guidance on the process an organization will use for informing CMS that it has identified a Part C and/or Part D overpayment. This guidance will also address how an organization will be required to provide a reason for and the amount of the overpayment (which may be estimated). We seek to reduce burden and implement an efficient process for administering the reporting and return of overpayments, so we are considering making use of existing procedures for organizations to communicate payment data issues to CMS. For example, MA organizations and Part D sponsors have used the Remedy system for a number of years to inform CMS of payment issues and provide relevant information on that issue.
In the forthcoming operational guidance, we will address the question of how to report the overpayment amount, including estimation of the overpayment amount and updates under certain scenarios.
However, we are clarifying the link between the § 422.326 overpayment provisions and RADV audits under § 422.311 by adding a condition to the requirement at § 422.326(d), as follows: an MA organization must report and return any overpayment it received no later than 60 days after the date on which it identified it received an overpayment. We are adding to paragraph (d) the provision “unless otherwise directed by CMS for the purpose of § 422.311.” Thus, when an MA organization has a contract selected for a RADV audit, during the audit the MA organization will not be allowed to report and return an overpayment under § 422.326 that is due to errors in the data used to risk-adjust payments for the audited contract for the payment year that is the subject of the RADV audit. We will notify the MA organization about the timeline for reporting and returning any overpayments for a contract under a RADV audit. This new provision protects the integrity of the RADV audit process, including the sampling frame of beneficiaries in a selected MA plan, whose diagnoses will be audited.
As to the circumstances that give rise to a duty to exercise reasonable diligence, we are not able to anticipate all factual scenarios in this rulemaking. MA organizations and Part D sponsors are responsible for ensuring that payment data they submit to CMS are accurate, truthful, and complete (based on best knowledge, information, and belief), and are expected to have effective and appropriate payment evaluation procedures and effective compliance programs as a way to avoid receiving or retaining overpayments. Thus, at a minimum, reasonable diligence would include proactive compliance activities conducted in good faith by qualified individuals to monitor for the receipt of overpayments. However, conducting proactive compliance activities does not mean that the person has satisfied the reasonable diligence standard in all circumstances. In certain circumstances, for example, reasonable diligence might require an investigation conducted in good faith and in a timely manner by
We note that in discussing the standard term “reasonable diligence” in the preamble, we are interpreting the obligation to “report and return the overpayment” which is contained in section 1128J(d) of the Social Security Act. We are not seeking to interpret the terms “knowing” and “knowingly”, which are defined in the Civil False Claims Act and have been interpreted by a body of False Claims Act case law.
We proposed at §§ 422.326(e) and 423.360(e) to codify a look-back period for MA organizations and Part D sponsors. MA organizations and Part D sponsors would be required to report and return any overpayment that they identify within the 6 most recent completed payment years. The statute of limitations related to the False Claims Act is 6 years from the date of the violation or 3 years from the date the relevant government official learns of the situation, but in no case more than 10 years from the date of the violation. CMS proposed 6 years as the look-back period because we believe this best balances government's interest in having overpayments returned with entities' interest in finality. Six years also is consistent with the CMP provisions, and maintenance of records requirements under the contracts. We also proposed that overpayments resulting from fraud would not be subject to this limitation of a look-back period.
We received the following comments on the look-back period, and our responses follow.
Finally, we note that an MA organization's and Part D sponsor's obligation to investigate and identify false and fraudulent claims is outside the scope of this final rule.
After consideration of the public comments received on the overpayment provisions, we are finalizing as proposed the following provisions: §§ 422.1, 422.300, 422.504(l), 423.1, and 423.505(k). We are finalizing the provisions at § 422.326, with the following modifications. First, we add at the end of paragraph (d) the phrase “unless otherwise directed by CMS for the purpose of § 422.311.” Second, we strike the following sentence in the proposed paragraph on the six-year look-back period: “Overpayments resulting from fraud are not subject to this limitation of the lookback period.” To increase clarity we also revise paragraph (c) regarding identified overpayments. We also are making a technical correction by redesignating proposed paragraph (d)(3) on enforcement as paragraph (e), and redesignating proposed paragraph (e) on the six-year look-back period as paragraph (f), and revising new paragraph (e) on enforcement to say “Any overpayment retained by an MA organization is an obligation under 31 U.S.C. 3729(b)(3) if not reported and returned in accordance with paragraph (d) above.”
Finally, we are finalizing the provisions at § 423.360 with the following modifications. We strike the following sentence in the proposed paragraph on the six-year look-back period: “Overpayments resulting from fraud are not subject to this limitation of the lookback period.” To increase clarity we also revise paragraph (c) regarding identified overpayments. We also are making a technical correction by redesignating proposed paragraph (d)(3) on enforcement as paragraph (e), and redesignating proposed paragraph (e) on the six-year look-back period as paragraph (f), and revising new paragraph (e) on enforcement to say “Any overpayment retained by a Part D sponsor is an obligation under 31 U.S.C. 3729(b)(3) if not reported and returned in accordance with paragraph (d).”
We proposed several amendments to § 422.310 to strengthen existing regulations related to the accuracy of risk adjustment data. We proposed to renumber existing paragraph § 422.310(e) as paragraph (e)(2) and add new paragraph (e)(1), which would require that any medical record reviews conducted by an MA organization must be designed to determine the accuracy of diagnoses submitted under §§ 422.308(c)(1) and 422.310(g)(2). Under our proposal, medical record reviews conducted by an MA organization could not be designed
We also proposed to amend § 422.310(g) regarding deadlines for submission of risk adjustment data; our proposal was to restructure and revise subparagraph (g)(2) and add subparagraph (g)(3). Our current procedures generally permit submission of risk adjustment data after the final risk adjustment submission deadline only to correct overpayments. Thus, we proposed, at § 422.310(g)(2)(ii) to explicitly permit late submissions only to correct overpayments but not to submit diagnoses for additional payment so that the regulation text would be consistent with our procedures.
Finally, we proposed to make two additional changes in paragraph (g). First, we proposed the deletion of the January 31 deadline in paragraph (2) and replacing it with the statement that CMS will announce the deadline by which final risk adjustment data must be submitted to CMS or its contractor. We noted that the risk adjustment data submission deadline would also function as the Part C applicable reconciliation date for purposes of proposed § 422.326 on overpayment rules, also discussed in this final rule. Second, we proposed adding paragraph (3) to § 422.310(g). Proposed paragraph (3) cites § 422.326 as the source of rules for submission of corrected risk adjustment data after the final risk adjustment data submission deadline, that is, after applicable reconciliation as defined at § 422.326(a).
In response to the January 10, 2014 proposed rule, we received approximately 25 pieces of correspondence from organizations and individuals regarding these proposals. We received the following public comments and our responses follow.
Finally, a few commenters argued that CMS should offset the payment impact of diagnoses an MA organization submitted to CMS that were later found through medical record reviews to not be supported by medical record documentation by adjusting the amount of CMS' overpayment to the MA organization for the level of error in equivalent diagnoses in FFS claims data. Specifically, the commenters argued that CMS should give MA organizations a credit for erroneous diagnoses they submitted from their providers' claims up to the rate identified by CMS as the applicable FFS Adjustor in the RADV program. The commenters also argued that there is no reason to require that both MA and FFS diagnosis data be scrutinized for error rates when determining retroactive payment adjustments, while not engaging in a similar adjustment process when paying plans prospectively.
However, we emphasize that our decision to not finalize this regulatory proposal does not change CMS' existing contractual requirement that MA organizations must certify (based on best knowledge, information, and belief) the accuracy, completeness, and truthfulness of the risk adjustment data they submit to CMS. Further, this decision does not change the long-standing risk adjustment data requirement that a diagnosis submitted to CMS by an MA organization for payment purposes must be supported by medical record documentation.
These risk adjustment processes have been in place for many years, and we believe it is the responsibility of MA organizations to have internal audit processes in place allowing them to finalize their risk adjustment data for a payment year by the conclusion of this 13-month period. Therefore, we are finalizing, as proposed, the provision codified at § 422.310(g)(2)(ii) that, after the final deadline, an MA organization may submit risk adjustment data to correct overpayments but not to add payments.
In summary, after consideration of the public comments received, we are not finalizing the proposed amendment to § 410.322(e). Also, we are not finalizing at this time our proposal at § 422.310(g)(2)(ii) to remove the current date of January 31 as the annual final risk adjustment data submission deadline and replace it with the provision that CMS will announce the deadline annually. We are finalizing as proposed the restructuring of §§ 422.310(g)(2) and the 422.310(g)(2)(ii) provision to prohibit submission of diagnoses for additional payment after the final risk adjustment data submission deadline. We did not receive any comments on subparagraph (g)(3) and are finalizing it as proposed.
We published final Risk Adjustment Data Validation (RADV) appeals regulations in the April 15 2010
We proposed changing certain RADV definitions at § 422.2. Specifically, we proposed removing the definition Initial Validation Contractor (IVC); removing the definition of RADV payment error calculation appeal process; and removing the definition of “One Best Medical Record for the purposes of Medicare Advantage Risk Adjustment Data Validation (RADV)”. In addition, we proposed adding one new definition by specifically defining the RADV appeals process. We also proposed revising the definitions of “Risk Adjustment Data Validation (RADV)” and “attestation process” within the RADV appeals context. Furthermore, we proposed amending RADV definitions at § 422.2 to specify that the Secretary, along with CMS, could conduct RADV audits.
At § 422.311, we proposed to update select RADV appeals terminology. We proposed amending the RADV regulations by adopting one common term to refer to RADV audit reports: “RADV Audit Report”. As mentioned earlier, we proposed removing from the RADV regulations the term—“Initial Validation Contractor, or IVC,” since RADV medical record review process no longer utilizes “initial” and “secondary” validation contractors to conduct medical record review under RADV. Instead, we now utilize medical record reviewers to code medical records who may be employed by the same or different medical record review contractors.
At § 422.311(c)(1), we proposed to simplify the RADV appeals process by combining the two existing RADV appeal procedures—one for medical record review and one for payment error calculation—into one set of requirements and one process comprised of three administrative steps: Reconsideration, hearing officer review, and CMS Administrator-level review. Combining these existing RADV medical record review determination and payment error calculation appeals policies and processes improves the overall appeals process by simplifying the overall RADV appeals process and reducing burden on all parties involved in the RADV appeals process. We also believed that doing so improves overall RADV appeals procedures by providing clarity that leads to greater efficiencies in adjudicating RADV appeals. Within this overall framework, we also proposed defining issues that would be eligible for RADV appeal at § 422.311(c)(2) and issues that would not be eligible for RADV appeals under this combined-appeal process at § 422.311(c)(3). We further proposed defining the manner and timing of a request for RADV appeal at § 422.311(c)(2)(iii), a reconsideration process at § 422.311(c)(6), a hearing process at § 422.311(c)(7)(iv), and an Administrator-level review at § 422.311(c)(8).
At § 422.311(a), we proposed that the Secretary, along with CMS, be permitted to conduct RADV audits beginning with the effective date of this regulation. Because of the absence of a clearly-defined burden of proof standard for RADV medical record review determination appeals, at § 422.311(c)(4) we proposed adoption of a burden of proof standard for all RADV determinations—be they payment error calculation or RADV medical record review determinations—whereby the burden would be on MA organizations to prove, based on a preponderance of the evidence, that CMS's determination(s) was (were) erroneous. At § 422.311(b)(2) we proposed changing the compliance date for meeting RADV audit requirements for the validation of risk adjustment data to the due date when MA organizations selected for RADV audit must submit medical records to the Secretary—and not only CMS.
We received comments from health plans, managed care industry trade associations, providers, provider trade associations and other interested parties. These comments have resulted in changes to the previously described proposals, as discussed later in this section. Some of the comments we received did not apply to the proposed RADV appeals processes. However, because some of these comments apply to underlying RADV audit process, we are responding to certain comments because they appear to be relevant to the RADV appeals process. Other comments were clearly outside the scope of our proposed rule, so we have not included responses to those comments.
We proposed to amend the RADV definitions at § 422.2 as follows:
• Removing the following definitions:
++ “Initial Validation Contractor (IVC)” means the first level of medical record review under the RADV audit process.
++ “RADV payment error calculation appeal process” means an administrative process that enables MA organizations that have undergone RADV audit to appeal the CMS calculation of an MA organization's RADV payment error.
++ “The one best medical record for the purposes of Medicare Advantage Risk Adjustment Validation (RADV)” means the clinical documentation for a single encounter for care (that is, a physician office visit, an inpatient hospital stay, or an outpatient hospital visit) that occurred for one patient during the data collection period. The single encounter for care must be based on a face-to-face encounter with a provider deemed acceptable for risk adjustment and documentation of this encounter must be reflected in the medical record.
• Adding the following definition:
++ “RADV appeal process” means an administrative process that enables MA organizations that have undergone RADV audit to appeal the Secretary's medical record review determinations and the Secretary's calculation of an MA organization's RADV payment error.
• Revising the following definitions:
++ Risk adjustment data validation (RADV) audit means a payment audit of a Medicare Advantage (MA) organization administered by CMS or the Secretary that ensures the integrity and accuracy of risk adjustment payment data.
++ “Attestation process” means a CMS-developed RADV process that enables MA organizations undergoing RADV audit to submit CMS-generated attestations for eligible medical records with missing or illegible signatures or credentials. The purpose of the CMS-generated attestations is to cure signature and credential issues for eligible medical records. CMS-generated attestations do not provide an opportunity for a provider or supplier to replace a medical record or for a provider or supplier to attest that a beneficiary has the medical condition.
We received no comments specifically recommending modifications to the proposed definitions as stated, though we did receive comments regarding the policy behind some of these definition changes. The policy comments will be addressed later in this rule, though we are finalizing the specific definitions without modification.
In the October 22, 2009 proposed rule, and as reinforced in the April 15, 2010 final rule, we indicated that we would, “publish its RADV methodology in some type of public document—most
In addition, we provided in the October 22, 2009 proposed rule preamble that we would provide an expanded explanation of methodology and payment error calculation factors as a part of each audit report of findings that we send to MA organizations that undergo RADV audit. Such explanation and factors have been and will continue to be part of the RADV audit report(s) that CMS provides health plans that have undergone RADV audits.
Current RADV regulations utilize the following terms for the CMS-issued RADV audit report: Audit report post medical record review; RADV audit report; IVC-level RADV audit report; and RADV audit report of finding. This use of multiple terms to refer to what is the same audit report (the RADV audit report that CMS issues following conclusion of the medical record review portion of the audit) is potentially confusing. Therefore, we proposed amending the RADV regulations throughout to adopt one common term to refer to RADV audit reports: “RADV Audit Report”. By standardizing terminology throughout the RADV regulations, the proposed amendment provides clarity which may lead to increased efficiency.
As mentioned earlier in the description of RADV-related definitions that have changed, we have revised certain RADV-related definitions to accommodate changes to both the RADV audit process and the RADV appeals process. One definition that we have removed from the RADV regulations is Initial Validation Contractor, or IVC. The RADV medical record review process no longer utilizes “initial” and “secondary” validation contractors to conduct medical record review under RADV. Instead we now utilize medical record reviewers to code medical records undergoing RADV review. These reviewers may be employed by the same or different medical record review contractors. Therefore, the term “IVC” is no longer relevant to the RADV audit process. As a result, we proposed to remove this term from the RADV regulations at the following citations: § 422.311(c)(2)(i)(B) through (D); § 422.311(c)(2)(ii)(B), § 422.311(c)(2)(iii)(A), § 422.111(c)(2)(v), (vi), § 422.311(c)(3)(ii)(A), and § 422.311(c)(3)(iii)(A) and (B). We invited comment on this proposal.
Currently, there are two types of RADV-related appeals processes described in our regulations at § 422.311: Medical record review-determination appeals and RADV payment error calculation appeals. RADV medical record review-determination appeal requirements and procedures are discussed at § 422.311(b)(3) and § 422.311(c)(2). Medical record review determination appeal is a two-stage administrative appeal process—the first step is a hearing by a hearing officer, followed by a CMS Administrator—level review. This appeal procedure provides MA organizations with an opportunity to appeal RADV medical record review determinations that are made by coders reviewing the medical record documentation submitted by MA organizations undergoing RADV audit. The second type of RADV appeal, payment error calculation appeal, is discussed at § 422.311(c)(3). Payment error calculation appeal is a three-pronged appeal process: reconsideration, followed by a hearing officer review, followed by CMS Administrator—level review. This appeal process was specifically designed to afford MA organizations the opportunity to appeal CMS's contract-level RADV payment error calculation.
We proposed that the administrative appeals language described at § 422.311(b)(3) and § 422.311(c)(2) for RADV medical record review determination appeals and § 422.311(c)(3) for RADV payment error calculation appeals be replaced with new regulatory language proposed § 422.311(c)(1), that combines the two existing RADV appeal policies and procedures into one set of requirements and one process. We proposed to combine the two RADV appeals processes into one combined RADV appeals process that is comprised of three administrative steps: Reconsideration, hearing officer review, and CMS Administrator-level review. A three-step administrative appeals process comprising reconsideration, hearing officer review, and Administrator-levels of review is a common administrative appeals model used elsewhere within the Medicare managed care program, such as in appealing contract award determinations and intermediate sanctions. The combined RADV appeal process that we proposed at new § 422.311(c)(1), also has the benefit of simplifying what is today a complex two-track appeal process into one process. While both CMS and the MA industry will benefit from simplifying this process, MA organizations also obtain an additional level of review under the combined approach since MA organizations will be afforded a reconsideration appeal step for medical record review determinations that is today—not part of the existing RADV appeal process. Shortening the existing two-track appeal process should also reduce the resources and level of effort needed from both MA organizations and CMS in participating in a RADV appeal proceeding. Under this proposal, MA organizations can simply request to appeal their RADV audit findings one time and specify whether they want to appeal either their medical record review determination(s), payment error calculation, or both. The specific details regarding this proposed process follow. We proposed these changes based upon
Current regulations at §§ 422.311(c)(2) et seq., and 422.311(c)(3) et seq., specify RADV-related medical record review and payment error calculation documents and issues eligible for the medical record review determination and payment error calculation appeal processes. We proposed to amend the policies and procedures around issues eligible for RADV appeals at § 422.311(c)(2) and § 422.311(c)(3) by combining proposed policies and procedures for the existing two-pronged appeal approach into one set of policies and procedures for RADV appeals at the new § part 422.311(c)(2)(iv). At § 422.311(c)(2)(i), we proposed that as a general rule, MA organizations may appeal RADV medical record review determinations and RADV payment error calculation, though in order to be eligible to pursue these appeals, we specify at proposed § 422.311(c)(2)(i)(A) and (B) that MA organizations must adhere to established RADV audit procedures and requirements and adhere to RADV appeals procedures and requirements. At § 422.311(c)(2)(ii) we proposed that failure to follow RADV audit procedures and requirements and RADV appeals procedures and requirements will render the MA organization's request for RADV appeal invalid. Furthermore, at proposed § 422.311(c)(2)(iii) we stipulate that the MA organization's written request for medical record review determination appeal must specify the audited HCC(s) that have been identified pursuant to RADV audit as being in error, and further specify that MA organizations must provide a justification in support of the audited HCC(s) that the MA organization elects to appeal. At § 422.311(c)(2)(i)(iv) we proposed that for each audited HCC, MA organizations may appeal one medical record that has undergone RADV medical record review and that if an attestation was submitted to cure a signature or credential issue, that attestation may likewise be included in the HCC appeal. For example, if an MA organization submitted a medical record that did not contain a signature and/or credential—and the MA organization submitted an attestation to cure the error that CMS subsequently failed to accept—the MA organization could choose to appeal CMS's determination to not accept the submitted attestation. We reiterate that the purpose of CMS-generated attestations is to cure signature and credential errors associated with an eligible submitted medical record and not to provide an opportunity for a provider or supplier to attest that a beneficiary has a certain medical condition. Evidence for the existence of the medical condition is found in a medical record.
We proposed to modify our language at § 422.311(c)(2)(i)(v) to clarify existing RADV appeals provisions which stipulate that MA organizations must adhere to the “one best medical record” policy. Under changes to the RADV audit methodology announced by CMS in February 2012, we now allow MA organizations to submit more than one medical record (that is, more than the “one best medical record”) during the RADV audit process to validate an audited CMS–HCC. However, for purposes of appealing a CMS medical record review determination, we will not permit organizations to appeal multiple medical records but will instead—require that MA organizations identify a record from amongst those records submitted, and to submit that record for appeal. For each audited HCC, MA organizations may appeal only one medical record that has undergone RADV review. This policy was published in the February 2012 White Paper and is not included in this final rule.
At § 422.311(c)(2)(vi) we proposed that a written request for RADV payment error calculation appeal must clearly specify the MA organization's own RADV payment error calculation and must also specify where the payment error calculation was erroneous.
At § 422.311(c)(3) we proposed documents and issues that are ineligible for RADV appeals. Consistent with the overall approach of combining into one RADV appeals process what was heretofore two separate RADV appeals processes—by way of this new proposed section, we propose to amend existing regulations at § 422.311(c)(3). At new § 422.311(c)(3), we proposed that MA organizations' request for appeal may not include HCCs, medical records or other documents beyond the audited HCC, selected medical record and any accompanying attestation that the MA organization chooses to appeal. We specify at § 422.311(c)(3)(ii) that the MA organizations may not appeal CMS's medical record review determination methodology or CMS's payment error calculation methodology. This is a clarification to existing RADV regulations at § 422.311(c)(3)(D) which specifies that MA organizations may not appeal CMS's payment error calculation methodology. At § 422.311(c)(3)(iii) we specify that MA organizations may not appeal RADV medical record review-related errors when appealing RADV error-calculation issues since medical record review determination issues must be resolved before we can calculate RADV payment errors. And at § 422.311(c)(3)(iv) we specify that RADV errors that result from an MA organization's failure to submit a medical record are not eligible for appeal.
We proposed to replace existing RADV regulations at § 422.311(c)(2)(iii) et seq., and § 422.311(c)(3)(iii) et seq., regarding the manner and timing of a request for RADV appeals. Again, at § 422.311(c)(5), we proposed to combine the formerly two separate sets of requirements and procedures into one RADV appeals process addressing the request for RADV appeal. At § 422.311(c)(5)(i) we proposed that at the time the Secretary issues her RADV audit report, the Secretary notifies audited MA organizations that they may appeal RADV HCC errors that are eligible for medical record review determination appeal and may appeal the Secretary's RADV payment error calculation. At § 422.311(c)(5)(ii) we specify that MA organizations have 30 days from the date of CMS's issuance of the RADV audit report to file a written request with CMS for RADV appeal. This request for RADV appeal must specify whether the MA organization requests medical record review determination appeal, whether the MA organization requests RADV payment error calculation appeal, or whether the MA organization requests both medical record review determination appeal and RADV payment error calculation appeal—and in each instance—the issues with which the MA organization disagrees, and the reasons for the disagreements. See proposed regulations at § 422.311(c)(6).
In proposed § 422.311(c)(5)(ii), we specify that while MA organizations may now elect to appeal either medical record review determination, payment error calculation, or both—they must notify CMS which issues they will appeal at the same time. This new provision replaces existing RADV appeals requirements regarding notification at § 422.311(c)(2)(iii) and § 422.311(c)(3)(iii)(C).
For MA organizations that elect both medical record review determination appeal and RADV payment error calculation appeal, we specify at § 422.311(c)(5)(iii)(A) and (B) that the Secretary will adjudicate the request for RADV payment error calculation following conclusion of reconsideration of the MA organization's request for medical record review determination appeal. This is necessary because RADV payment error calculations are based upon the outcomes of medical record review determinations. For example, for an MA organization that appeals both medical record review determinations and payment error calculations, the reconsideration official would first adjudicate and rule on the medical record review determinations and then proceed to recalculate the RADV payment error.
Under current RADV appeals procedures, only the RADV payment error calculation appeal process contains a reconsideration step. We proposed to amend existing regulations at § 422.311(c)(3)(iii)(C) and § 422.311(c)(3)(v), (vi), and (vii) by proposing a new reconsideration stage for RADV appeals at § 422.311(c)(6) et seq. Reconsideration is the first stage of the new RADV appeals process and will apply to both medical record review determinations and error calculation issues being appealed. Therefore, MA organizations that elect to appeal RADV audit findings de facto begin the appeal process with the reconsideration step. At proposed § 422.311(c)(6)(i) we specify that a MA organization's written request for medical record review determination reconsideration must specify the audited HCC identified as being in error that the MA organization wishes to appeal; and to provide a justification in support of the audited HCC chosen for appeal. At proposed § 422.311(c)(6)(ii) we specify that the MA organizations' written request for payment error calculation reconsideration must include the MA organization's own RADV payment error calculation that clearly indicates where the RADV payment error calculation was erroneous. The request for payment error calculation reconsideration may also include additional documentary evidence pertaining to the calculation of the error that the MA organization wishes the reconsideration official to consider.
At proposed § 422.311(c)(6)(iii) we describe the conduct of the reconsideration process that is being proposed. We specify that for medical record review determination reconsideration, a medical record review professional who was not involved in the initial medical record review determination of the disputed HCC reviews the medical record and accompanying dispute justification; and reconsiders the initial audited HCC medical record review determination. For payment error calculation reconsideration, we ensure that a third party not involved in the initial RADV payment error calculation reviews the RADV payment error calculation, reviews the MA organization's own RADV payment error calculation, and recalculates the payment error in accordance with CMS's RADV payment error calculation procedures.
At proposed § 422.311(c)(6)(iv), we specify that the reconsideration official issues a written reconsideration decision to the MA organization, and that the reconsideration official's decision is final unless the MA organization disagrees with the reconsideration official's decision. If the MA organization disagrees with the reconsideration official's decision, it may request a hearing.
Existing regulations at § 422.311(c)(2)(iv) through (ix) and § 422.311(C)(4) et seq., specify the procedures under which CMS conducts hearings under the RADV appeals process for medical record review and payment error calculation. We proposed to replace these provisions with new hearing requirements and procedures at § 422.311(c)(7)(iv).
At § 422.311(c)(7)(i), we proposed that at the time the RADV appeals reconsideration official issues his/her reconsideration determination to the MA organization, the reconsideration official notifies the MA organization of any RADV audited HCC errors and or payment error calculations that are eligible for RADV hearing. At § 422.311(c)(7)(ii), we specify that a MA organization that requests a hearing officer review must do so in writing in accordance with procedures established by CMS. At § 422.311(c)(7)(iii), we specify that a written request for a hearing must be filed with the Hearing Officer within 30 days of the date the MA organization receives the reconsideration officer's written reconsideration decision. If the MA organization appeals the medical record review reconsideration determination, the written request for RADV hearing must include a copy of the written decision of the reconsideration official; must specify the audited HCCs that the reconsideration official confirmed as being in error; and must specify a justification as to why the MA organization disputes the reconsideration official's determination. If the MA organization appeals the RADV payment error calculation, the written request for RADV hearing must include a copy of the written decision of the reconsideration official and must include the MA organization's own RADV payment error calculation that clearly specifies where the CMS's payment error calculation was erroneous.
At § 422.311(c)(7)(iv), we proposed that a CMS hearing officer conduct the RADV hearing. At § 422.311(c)(7)(v), we specify terms and conditions under which a hearing officer may be disqualified. A hearing officer may not conduct a hearing in a case in which he or she is prejudiced or partial to any party or has any interest in the matter pending for decision. A party to the hearing who objects to the assigned hearing officer must notify that officer in writing at the earliest opportunity. The hearing officer must consider the objections, and may, at his or her discretion, either proceed with the hearing or withdraw. If the hearing officer withdraws, another hearing officer will conduct the hearing. If the hearing officer does not withdraw, the objecting party may, after the hearing, present objections and request that the officer's decision be revised or a new hearing be held before another hearing officer. The objections must be submitted in writing to CMS.
At § 422.311(c)(7)(vi), we proposed that the hearing officer reviews the medical record and any accompanying attestation that the MA organization selected for review, the reconsideration official's payment error calculation (if appealed), the reconsideration official's written determination, and the written justification submitted by the MA organization and CMS in response to the reconsideration official's determination.
At § 422.311(c)(7)(vii), we proposed RADV appeal hearing procedures. We proposed that the hearing officer has full power to make rules and establish procedures, consistent with the law, regulations, and rulings. These powers include the authority to dismiss the appeal with prejudice and take any other action which the hearing officer considers appropriate, including for failure to comply with RADV audit and appeals rules and procedures. We proposed that the hearing be altogether on the record unless the hearing officer, at his or her full discretion, approves a parties request for a live or telephonic hearing regarding some or all of the medical records in dispute, or if the hearing office schedules a live or
In terms of specifying the conduct of the hearing, we proposed at § 422.311(c)(7)(vii)(B) that the hearing officer neither receives testimony nor accepts any new evidence that is not part of the record. At § 422.311(c)(7)(vii) we proposed that the hearing officer be given the authority to decide whether to uphold or overturn the reconsideration official's decision, and pursuant to this decision—to send a written determination to CMS and the MA organization, explaining the basis for the decision.
At § 422.311(c)(7)(ix), we proposed that in accordance with the hearing officer's decision, a third party not involved in the initial RADV payment error calculation recalculate the MA organization's RADV payment error and issue a new RADV audit report to the appellant MA organization and CMS. For MA organizations appealing the RADV payment error calculation only, we proposed that a third party not involved in the initial RADV payment error calculation recalculate the MA organization's RADV payment error and issue a new RADV audit report to the appellant MA organization and CMS. At§ 422.311(c)(7)(x) we proposed that the hearing officer's decision be final unless the decision is reversed or modified by the CMS Administrator.
Existing regulations at § 422.311(c)(2)(x) et seq., and § 422.311(C)(4)(vi) et seq., specify the CMS Administrator-level review procedures that CMS adheres to under the current RADV appeals process for medical record review determinations and payment error calculation. We proposed to replace these regulations with new RADV appeal-related CMS Administrator review requirements and procedures at § 422.311(c)(8).
At § 422.311(c)(8)(i) and (ii), we proposed that a request for CMS Administrator review must be made in writing within 30 days of receipt of the hearing officer's decision; and must be filed with the CMS Administrator by CMS or an MA organization. At § 422.311(c)(8)(iii), we proposed that after receiving a request for review, the CMS Administrator has the discretion to elect to review the hearing officer's decision or to decline to review the hearing officer's decision. At § 422.311(c)(8)(iv) we proposed that if the CMS Administrator elects to review the hearing decision—the Administrator acknowledges the decision to review the hearing decision in writing and notifies CMS and the MA organization of their right to submit comments within 15 days of the date of the notification. At § 422.311(c)(8)(iv)(B), we proposed that the CMS Administrator be limited to the review of the record and that the record be comprised of the hearing record, and written arguments from the MA organization and/or CMS explaining why either or both parties believe the hearing officer's determination was correct or incorrect.
Regarding Administrator-level review procedures at § 422.311(c)(8)(vi), we proposed that the Administrator reviews the record and determines whether the hearing officer's determination should be upheld, reversed, or modified. At § 422.311(c)(8)(v), we proposed that the Administrator render his or her final decision in writing to the parties within 60 days of acknowledging his or her decision to review the hearing officer's decision. At § 422.311(c)(8)(vi), we proposed that the decision of the hearing officer become final if the Administrator declines to review the hearing officer's decision or does not make a decision within 60 days.
Combining these existing RADV medical record review determination and payment error calculation appeals policies and processes improves the overall appeals process by strengthening the depth and integrity of these procedures. We also believe that doing so improves overall RADV appeals procedures by providing clarity that leads to greater efficiencies in adjudicating RADV appeals. We welcomed comments on these proposals.
We received the following comments and our response follows:
In December 2010, in response to questions from the MA industry regarding our RADV payment error calculation methodology, we published a white paper describing our RADV payment error calculation methodologies, and invited public comment. In response to comments received in February 2012, we published a RADV-related notice of methodology specifying the RADV payment error calculation methodology that the agency would utilize on a moving-forward basis.
This same principle applies to the way we conduct medical record review within the RADV audit context. We have long adhered to the International Classification of Diseases, Ninth Revision, Clinical Modification, or ICD–9–CM, system to classify and assign codes to health conditions abstracted from medical records that MA organizations submit to validate audited CMS–HCCs. ICD–9–CM standards are widely available to the public and will be available to MA organizations before RADV audits are initiated. We anticipate continuing to adhere to these standards until such time as new coding standards (for example, ICD–10) are universally adhered to in the United States. We continue to believe that it is essential that CMS adhere to a universally accepted coding classification system that is widely available in the public domain when conducting RADV audits.
We disagree that MA organizations lose their ability to pursue the administrative appeals process described at § 422.311 when they identify and explain objections to audit and appeals procedures. MA organizations can fully execute their rights to RADV administrative appeals as described at § 422.311 by following applicable regulations. Those rules clearly specify issues that are eligible for RADV appeal at § 422.311(c)(2) and § 422.311(c)(3); and issues that are ineligible for RADV appeal at § 422.311(c)(3). To the extent an MA organization appeals RADV issues that are eligible for RADV appeal that request for appeal will go forward. To the extent an MA organization appeals issues that are ineligible for RADV appeal; we will not act upon that request for RADV appeal. The act of identifying and explaining objections to audit and appeals procedures will not in and of itself nullify an MA organization's request to appeal issues that are eligible for RADV appeal.
Federal regulations at § 422.311(a) specify that RADV audits are conducted by CMS. We proposed to amend this regulation at § 422.311(a) by specifying that the Secretary of the Department of Health and Human Services, along with CMS, may conduct RADV audits beginning with the effective date of this regulation. We also proposed to amend RADV definitions at § 422.2 to specify that The Secretary of the Department of Health and Human Services, along with CMS, may conduct RADV audits. We welcomed comment on this proposal.
We received the following comments and our response follows:
Our regulations at § 422.311(c)(3)(iv) specify that for RADV payment error calculation appeals, MA organizations bear the burden of proving that CMS failed to follow its stated RADV payment error calculation methodology. However, RADV regulations do not specify a burden of proof standard for the RADV medical record review determination appeal process. The absence of a clearly-defined burden of proof standard for RADV medical record review determination appeals creates an appeal environment where MA organizations, CMS and RADV appellate officials are free to interpret and apply different burden of proof standards when arguing or reviewing appeals cases. We proposed to amend the rule with new § 422.311(c)(4) which specifies that the burden of proof for all RADV determinations—be they payment error calculation or RADV
This approach would stand in contrast to a burden of proof standard in which the MA organization were to prove that a valid diagnoses exists on the record, and that therefore, the audited HCC has been validated. This proposed amendment to the rule provides the medical record review determination process a clear burden of proof standard which more aligns with the existing RADV payment error calculation appeals burden of proof standard. Doing so also improves the overall RADV appeals procedures by providing clarity that leads to greater efficiencies in adjudicating RADV appeals. We invited comment on this proposal.
We received the following comments and our response follows:
Currently, the compliance date for RADV audits is the due date when MA organizations selected for RADV audit must submit medical records to CMS or its contractors. We proposed to change the compliance date for meeting RADV audit requirements for the validation of risk adjustment data to the due date when MA organizations selected for RADV audit must submit medical records to the Secretary—and not only to CMS. See proposed regulation language at § 422.311(b)(2).
We received no comments on this proposal and therefore are finalizing this provision without modification.
Section 306 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) required the Secretary to conduct a demonstration to determine whether recovery auditors could be used effectively to identify improper payments paid under Medicare Part A and Part B claims. We conducted the demonstration from March 2005 to March 2008 in six states. The Recovery Audit demonstration established recovery auditors as a successful tool in the identification and prevention of improper Medicare payments.
In December 2006, the Tax Relief and Health Care Act of 2006 (TRHCA) (Pub. L. 109–432) was enacted. Section 302(a) of the TRHCA created a permanent Medicare Recovery Audit Contractor (RAC) program and added a new paragraph (h) to section 1893 of the Act that required us to establish a national recovery audit program for Medicare Part A and Part B. The national Medicare Fee-For-Service (FFS) Recovery Audit program was established on January 1, 2010.
Section 6411(b) of the Affordable Care Act amended section 1893(h)(1) of the Act by requiring the establishment of recovery audit programs for Medicare Parts C and D, in addition to the RAC program already in place for Medicare A and B.
On December 27, 2010, we published a notice in the
In January 2011, we entered into a recovery audit contract for Part D. The Part D RAC began recouping identified overpayments in 2012. On December 7, 2012, we published a Request for Quotation (RFQ) via the General Services Administration's (GSA) eBuy seeking quotations on the implementation of a Medicare Part C RAC. We anticipate the award of a Part C RAC contract in FY 2014.
Given that we began recouping overpayments determined by the Part D RAC in 2012, and we anticipate recouping overpayments in Part C after awarding a Part C RAC contract in FY 2014, it is appropriate to provide a codified administrative appeals process to allow for plans to challenge the overpayment findings generated by the RACs just as we provide for challenges to overpayment determinations elsewhere in the Medicare program. In crafting our proposed appeals process for Parts C and D RAC determinations, we reviewed existing appeals processes in other areas, including Parts A and B RAC determinations, Part C RADV Audits, Part D payments, etc.
After reviewing the agency's existing appeal processes, we determined that the general mechanisms set forth in § 422.311 and § 423.350 offered the most appropriate models for the Part C and D RAC appeals process.
The Part D RAC currently reviews PDE data to identify overpayments and underpayments that are paid back to the plans. When overpayments are identified, Part D plans are notified and funds are recovered. If a plan disagrees with the calculated overpayment amounts or whether the overpayments are proper, the plan may appeal the Part D RAC's determination directly to the CMS Center for Program Integrity.
A multilevel independent appeals process is an important component of the Part C and Part D RAC program as it allows plans to appeal determinations they contend are made in error. The administrative appeals mechanisms in this final rule would apply to all Part C and Part D RAC determinations. As we implement the Part C RAC, we would determine if additional changes to the proposed appeals process are necessary.
Based on the foregoing, we proposed to add a new subpart Z in Parts 422 and 423, respectively that would include the proposed provisions discussed in this section. In accordance with CMS direction and criteria, the Part C or Part D RAC would conduct an issue specific audit of CMS' payment(s) to plans. An independent validation of all Part C and Part D RAC-identified improper
The following 3-level process sets forth our proposed administrative appeals process for overpayment determinations by the Part C and Part D RACs. Please note that the appeals process set forth applies to both § 422.2600 and § 423.2600. Because the sections largely mirror one another, discussions in this preamble would apply to both programs, unless otherwise noted. (1) Reconsiderations (§ 422.2605 and § 423.2605)
At § 422.2605 and § 423.2605, we proposed that if the plan believes the part C or Part D RAC did not apply CMS' stated payment methodology correctly, a plan may appeal the determination to an independent reviewer. CMS' payment methodology itself, however, is not subject to appeal. That is, while miscalculations and factual or data errors may be appealed, the plan may not appeal the substantive basis for the overpayment determination. This is consistent with the approach to Part D reconciliation appeals at § 423.350(a)(1), which states that the Part D plan may appeal “if CMS did not apply its stated payment methodology correctly.” The Part D reconciliation appeals process does not permit the underlying payment methodology to be appealed.
Examples of appealable issues would include, but are not limited to: (1) A Part C or Part D RAC determination that a plan provider/pharmacy was excluded from Medicare when the service was furnished; (2) a Part C or Part D RAC determination that a payment was a duplicate payment; or (3) whether the Part C or Part D RAC miscalculated an overpayment.
In paragraph (a), we proposed that the plan's request for reconsideration must be filed with the independent reviewer within 60 calendar days from the date of the demand letter. In paragraph (b)(1), we proposed that the request for reconsideration must be in writing and must provide evidence or reasons or both to substantiate the request. In paragraph (b)(2), we proposed that the plan must include with its request all supporting documentation, evidence, and substantiation it wants the independent reviewer to consider. This material must be submitted in the format requested by CMS. Documentation, evidence, or substantiation submitted after the filing of the reconsideration request would not be considered.
In paragraph (c), we proposed that CMS may file a rebuttal to the plan's reconsideration request. The rebuttal must be submitted to the independent reviewer within 30 calendar days of the independent reviewer's notification to CMS that it has received the plan's reconsideration request. We would notify and send its rebuttal to the plan at the same time it is submitted to the independent reviewer. In paragraph (d), we proposed that the independent reviewer would conduct the reconsideration. Specifically, the independent reviewer would review the notification of improper payment, the evidence, and findings upon which it was based, and any evidence that the plan or CMS submitted in accordance with regulations. In paragraph (e), we proposed that the independent reviewer would inform CMS and the plan of its decision in writing. In paragraph (f), we proposed that a reconsideration decision would be final and binding unless the plan requests a hearing in accordance with § 422.2605 and § 423.2605. Finally, in paragraph (g), we proposed that a plan that is dissatisfied with the independent reviewer's reconsideration decision would be entitled to a review by a hearing official as provided in § 422.2610 and § 423.2610.
In proposed § 422.2610 and § 423.2610, we outline the process for requesting review of the record by a CMS hearing official. In paragraph (a), we proposed that a request for review must be filed with CMS within 15 days from the date of the independent reviewer's issuance of a determination. The request must be in writing and must provide a basis for the request. In paragraph (b), we proposed that the plan must submit with its request all supporting documentation, evidence, and substantiation that it wants to be considered. Documentation, evidence, or substantiation submitted after the filing of the request would not be considered.
In paragraph (c), we proposed that a CMS-designated hearing official would conduct the review. A hearing would not be conducted, either live or via telephone, unless the hearing official, in his or her sole discretion, chooses such a mechanism. In all cases, the hearing official's review would be limited to information that: (1) The Part C or Part D RAC used in making its determinations; (2) the independent reviewer used in making its determinations; (3) the plan submits with its hearing request; and (4) CMS submits per paragraph (d). Neither the plan nor CMS would be allowed to submit new evidence.
In paragraph (d), we proposed that CMS may file a rebuttal to the plan's hearing request. The rebuttal must be submitted within 30 calendar days of the plan's submission of its hearing request. CMS would send its rebuttal to the plan at the same time it is submitted to the hearing official. In paragraph (e), we proposed that the CMS hearing official would decide the case within 60 days and send a written decision to the plan and CMS, explaining the basis for the decision. In paragraph (f), we proposed that the hearing official's decision would be final and binding, unless the decision was reversed or modified by the CMS Administrator in accordance with § 422.2615 and § 423.2615.
In proposed § 422.2615 and § 423.2615, we discuss the Administrator review process. In paragraph (a), we proposed that if a plan is dissatisfied with the hearing official's decision, the plan may request that the CMS Administrator review the decision. The request must be filed with the CMS Administrator within 15 calendar days of the date of the hearing official's decision. The request must provide evidence or reasons or both to substantiate the request. In paragraph (b), we proposed that the plan must submit with its request all supporting documentation, evidence, and substantiation that it wants to be considered. Neither the plan nor CMS would be allowed to submit new evidence. Documentation, evidence or substantiation submitted after the filing of the request would not be considered.
In paragraph (c), we proposed that after receiving a request for review, the Administrator would have the discretion to review the hearing official's decision in accordance with paragraph (e) or to decline to review said decision.
In paragraph (d), we proposed that the Administrator would notify the plan of whether he or she intends to review the
We received the following comments and our responses follow:
After review of the public comments received on these proposals, we are finalizing our proposals with one modification. In §§ 422.2610(a) and 422.2615(a) and § 423.2610(a) and § 423.2615(a), we are revising the timeframe for MA organizations and Part D plan sponsors, respectively, to request review by a Hearing Official or the Administrator from 15 days to 30 days.
Section 1860D–2(e) of the Act defines a covered Part D drug as a drug that may be dispensed only upon a prescription and that is described in paragraph (A)(i), (A)(ii), or (A)(iii) of section 1927(k)(2) of the Act; or a biological product described in clauses (i) through (iii) of paragraph (B) of such section, or insulin described in paragraph (C) of such section and medical supplies associated with the injection of insulin (as defined in regulations of the Secretary), and such term includes a vaccine licensed under section 351 of the Public Health Service Act (and, for vaccinations administered on or after January 1, 2008, its administration), and any use of a covered Part D drug for a medically
The FDA approves and regulates many products that include drug-drug and drug-device combinations. However, for the purposes of the Part D program, only combination products approved and regulated by the FDA as drugs, vaccines, or biologics are potentially eligible for Part D coverage, in line with the Part D drug definition. We proposed to address this issue in regulation to codify and clarify policy we previously addressed through guidance.
We proposed to add paragraph (vii) under the definition of a Part D drug to further clarify that only those combination products approved and regulated in their combination form by the FDA as a drug, vaccine, insulin, or biologic, as described in paragraph (i), (ii), (iii), or (v) of the Part D drug definition, may be eligible for Part D coverage. Our proposal would make it clear that the definition of a Part D drug excludes products where a combination of items are bundled or packaged together for convenience (such as one box packaging together multiple products, each in separate bottles), where the bundle has not been evaluated and approved by the FDA. This proposal would not affect products where multiple active ingredients (including at least one Part D eligible prescription-only ingredient) are incorporated into a single pill or single injection, as such products would have had to go through FDA approval in this combined form, meeting the Part D requirement. Combination products that are FDA approved would then be treated like other Part D drugs, eligible for coverage only when being used for a medically accepted indication and not otherwise excluded from Part D coverage (for example, because it is covered as prescribed and dispensed or administered under Medicare Part B).
This proposed policy is intended to clarify that a combination product containing at least one constituent ingredient that would, if dispensed separately, meet the definition of a Part D drug is eligible for Part D coverage only if it has received FDA approval in its combined form. Combination products not FDA approved as drugs under the Federal Food, Drug, and Cosmetics Act would not satisfy section 1927(k)(2)(A)(i) of the Act, defining covered outpatient drugs as those approved for safety and effectiveness as a prescription drug. Combination vaccines not licensed as a vaccine under section 351 of the Public Health Service Act similarly would not satisfy the definition of a Part D drug as defined in section 1860D–2(e)(1) of the Act.
Our proposal would not require that all constituent ingredients of a combination product be FDA-approved prescription drugs. An example would be an FDA-approved prescription drug that combines a Part D drug with a non-Part D covered vitamin. Conversely, a product combining a Part D drug with a medical food, dietary supplement, or another Part D drug, where the combined product has not received FDA approval as a prescription drug, vaccine, or biologic would not be eligible for Part D coverage.
After consideration of the public comments we received, we are finalizing this provision with a technical modification to improve the clarity of the provision.
We also proposed to amend the definition of a Part D drug to address certain exclusions by revising paragraph (2)(ii). When the Part D benefit started in 2006, all uses of barbiturates and benzodiazepines were excluded from coverage by statute. In 2008, section 175 of the MIPPA amended section 1860D–2(e)(2)(A) of the Act to include coverage for barbiturates when used in the treatment of epilepsy, cancer, or a chronic mental health disorder and for benzodiazepines when used for any medically accepted indication, effective January 1, 2013. In 2010, section 2502 of the Affordable Care Act amended section 1927(d) of the Act, to remove barbiturates and benzodiazepines from the list of drugs subject to exclusion from coverage, effective for services provided on or after January 1, 2014. Thus, this subsequent statutory change effectively includes barbiturates as a Part D drug for all medically accepted indications. The proposed revision to § 423.100 would conform our definition of Part D drug to the new statutory requirement by removing from paragraph (2)(ii) the clause “barbiturates when used to treat epilepsy, cancer, or a chronic mental health disorder; and benzodiazepines.”
We did not receive any comments regarding this proposal.
We note that an error appeared in the corresponding regulations text of the January 10, 2014 proposed rule. In the regulations text (79 FR 2062), we made a typographical error in an amendatory instruction and inadvertently did not remove the previously noted clause from the definition of “Part D drug” at § 423.100(2)(ii). Therefore, we are making the required corrections in the regulations text of this final rule.
We proposed to add paragraph (2)(iii) to the list of exclusions from the definition of Part D drug to specify that medical foods, as defined in 21 U.S.C. 360ee, are not Part D drugs. Medical foods are not described in paragraphs A(i), A(ii) or A(iii) of section 1927(k)(2) of the Act, and therefore, do not meet the statutory definition of a covered Part D drug, nor do they fall under other categories eligible for Part D coverage listed in the Part D drug definition, such as biologics, vaccines, and insulin.
Moreover, as described previously in the section on combination products, a product with relevant components including some or all ingredients meeting the definition of a Part D drug would not be eligible for Part D coverage unless the combined product has also been approved by the FDA as a drug, vaccine, or biologic.
The proposed clarifications involving coverage for approved combination products and non-coverage of medical foods would not affect current policies surrounding Part D coverage of parenteral nutrition. (See the Part D manual guidance, Chapter 30.7 regarding the payment for parenteral and enteral nutrition items and services.) Extemporaneously compounded prescription drug products (addressed separately in Chapter 6 of the Part D manual and in § 423.120) also would not be affected by the proposed changes. Part D coverage for
After consideration of the public comment we received, we are finalizing this provision without modification.
Section 1860D–4(b) of the Act requires us to ensure beneficiaries have access to covered Part D drugs. When a disaster strikes or is imminent, beneficiaries may find they have trouble accessing drugs through normal channels or must move to safer locations far away from their regular pharmacies. In order to ensure that beneficiaries do not run out of their medications during or as a result of a disaster or emergency, we issued guidance on December 18, 2009, identifying when, in the course of a disaster, Part D sponsors would be expected to relax “refill-too-soon” (RTS) edits. We proposed to codify a revised version of that policy. Proposed § 423.126(a)(1)(i) would require Part D sponsors to relax RTS edits in the event of any imminent or occurring disaster or emergency that would hinder an enrollee's access to covered Part D drugs. By this we mean that there is an anticipated or actual disaster or emergency, as evidenced by a declaration of a disaster or emergency issued by an appropriate federal, state or local official, and it is reasonable to conclude that such disaster or emergency or preparation therefore would make it difficult for beneficiaries to obtain refills of their medications because the disaster or emergency or anticipation thereof has affected, or will affect, their ability to have timely access to their usual pharmacies. For example, if federal, state or local authorities issue mandatory evacuation orders to populations or segments of the population in a geographic area, it would be reasonable to conclude that the evacuation would hinder an LTC resident's ability to get a refill after he or she is evacuated from the facility. In such an instance, then, Part D sponsors with enrollees in the affected area would be required to relax RTS edits so that the LTC pharmacies could provide beneficiaries with refills to take with them to the location to which they are being evacuated.
Our proposed requirement would apply to one refill for each drug the beneficiary is taking for refills sought within 30 days of the date the plan sponsor began relaxing RTS edits. We believe this timeframe would be sufficient to ensure that beneficiaries who are unable to obtain refills during the emergency or disaster will be able to do so as soon as they can safely access a network pharmacy. We solicited comment as to whether 30 days after the date of the triggering declaration provides an appropriate amount of time to ensure that beneficiaries do not run out of their medications. In particular, we would be interested in learning about any situations in which a beneficiary affected by an actual or impending disaster or emergency would be likely to go to a pharmacy more than 30 days after the triggering declaration such that the resumption of RTS edits after 30 days would be problematic. We also solicited comment as to how it would be feasible for Part D sponsors to identify pharmacies or beneficiaries located in affected areas for which they would be required to relax edits and, how long it might then take to program the necessary changes.
Although we believed our proposal provides a general framework for when RTS edits must be relaxed, we solicited comment on whether we should impose more particular requirements in cases where a disaster or emergency could result in a voluntary or mandatory evacuation of an LTC facility. We are also concerned that if a disaster strikes the area in which an LTC facility is located but not the area in which its servicing LTC pharmacy is located, the appropriate edits may not be relaxed. Accordingly, we solicited comment as to whether it would be more feasible to establish beneficiary specific edits limited to residents of LTC facilities in affected areas given that evacuation decision-making is rarely a straightforward, linear process (for example, not just based on the declaration of a disaster or emergency), but rather, often involves myriad facility-specific factors. In particular, we solicited comment on the practicality of requiring Part D sponsors to relax RTS edits for residents of a particular LTC facility after that facility decides on its own initiative to evacuate through use of National Council on Prescription Drug Programs (NCPDP) Submission Clarification Code (SCC) code 13, which conveys that there is an emergency. We solicited comment as to whether use of this code number, 13, is specific enough to signal that sponsors need to loosen RTS edits and whether it would be practical for LTC facilities to request that their LTC pharmacies enter the SCC code 13. Lastly, we stated we would be interested in any other ideas on how to structure workable edits or institute manual procedures to best target only enrollees who live in LTC facilities located in areas affected by a disaster.
We also stated that we would be interested in hearing from any commenters who would recommend any other triggering events that would require Part D sponsors to relax RTS edits. In particular, we solicited comment as to whether it would be feasible to require sponsors to relax edits after the issuance by the National Weather Service (NWS) of a Hurricane or Tropical Storm watch or warning. The NWS typically issues watches 36 hours in advance of adverse weather conditions possibly hitting an area, while the NWS issues watches 48 hours (2 days) in advance of those conditions possibly hitting an area. All watches/warnings are posted on the NWS Web site immediately after their issuance. We solicited comment as to whether watch/warnings would require RTS overrides in the whole state, or just areas under the watch or warning. We also stated that we were interested in comments regarding the time generally needed to move residents of LTC facilities with their medication supplies to safety.
Lastly, we believe that sponsors are in the best position to determine how to relax the specific RTS edits when required under our proposal. However, we also wish to ensure that all sponsors relax RTS edits in a consistent manner in order that enrollees have the same critical access to drugs when disasters and emergencies are imminent or have occurred—regardless of the specific plan in which they are enrolled. Accordingly, we solicited comments on the types of situations that might arise and the extent to which sponsors should be allowed to exercise some discretion in complying with this proposed requirement.
And, as has been the case under our current guidance, Part D sponsors may consider extending the implementation of the RTS edits but are not required to do so. However, if sponsors choose to reinstate the RTS edits, they need to work closely with enrollees who indicate that they are still displaced or otherwise impacted by the disaster or emergency.
In contrast, several commenters requested that we revise the regulation so that sponsors would be able to relax edits less often than proposed. Observing that many anticipated snow storms that did not actually take place last winter, a commenter requested that CMS not allow Part D sponsors to relax edits for government declarations that merely announced the possibility, rather than the occurrence, of disasters or emergencies. Another commenter suggested that we limit application of the policy to declarations only from federal and state authorities because it was difficult for Part D sponsors with large service areas to track declarations by local authorities.
Another commenter recommended that we retain the current guidance.
We believe it is important to ensure that beneficiaries receive drugs in the event of disasters or anticipated disasters that might hinder their access to such drugs for a period of time. But we are concerned that if sponsors do not uniformly relax edits under similar circumstances, beneficiaries in different plans will be treated disparately. We hope to prevent situations in which, for instance, two beneficiaries living in the same area are affected by the same disaster, but one beneficiary is able refill a prescription that otherwise would been subject by RTS edits, while the other, who is enrolled in a different plan, is not. The variety of comments and responses suggests that resolving these issues may require more focused inquiry. In the meantime, the current guidance will remain in place (found in Prescription Drug Benefit Manual, Chapter 5, Benefits and Beneficiary Protections, Section 50.12). We again thank all the commenters including those that took the time to respond to our specific solicitations. We will keep their suggestions in mind as we carefully consider our options for the future, including whether to address our regulatory proposals in future rulemaking.
Section 1857(h)(1)(B) and 1860D–12(b)(3)(F) of the Act describes the
We proposed to align the Part C and Part D appeal rights language under §§ 422.510(d) and 423.509(d) by replacing the inconsistent language at § 423.509(d) to now read “in accordance with subpart N of this part.”
Sections 1857(c) and 1860D–12(b)(3)(B) of the Act authorize CMS to terminate contracts with MA organizations and Part D plan sponsors respectively. In the current termination regulations at §§ 422.510 and 423.509, there is inconsistent use of the terms “days” and “calendar days”. Therefore, we proposed to replace the word “days” with “calendar days” in both §§ 422.510 and 423.509.
Sections 1857(c)(2) and 1860D–12(b)(3)(B) of the Act provide CMS with the authority to terminate contracts, for Part C and Part D sponsors respectively. The Part C paragraph heading at § 422.510(b)(2) incorrectly reads “Expedited termination of contract by CMS.” Therefore, we proposed to revise the paragraph heading of § 422.510(b)(2) to read “Immediate termination of contract by CMS”. This change will also make it consistent with the corresponding heading for Part D, in § 423.509(b)(2).
Sections 1857(c)(2) and 1860D–12(d)(3)(B) of the Act provide CMS with the authority to terminate contracts, for Part C and Part D sponsors respectively. In § 423.509(b)(2)(C)(ii) the regulation incorrectly references “MA organization.” This section concerns Part D, so the correct reference is “Part D Plan Sponsor”. Therefore, we proposed to change § 423.509(b)(2)(C)(ii) to appropriately reference Part D plan sponsor; not MA organization, as it currently states.
We received no comments on these proposals and are therefore finalizing these provisions without modification.
Sections 1857(g) and 1860D–12(b)(3)(E) of the Act provide us with the authority to impose intermediate sanctions (sanctions) and CMPs on Part C and Part D sponsors, respectively.
Under §§ 422.756(a)(2) and 423.756(a)(2) the current language states that written requests for rebuttal by the MA organization or Part D plan sponsor must be received within “10 calendar days from the receipt of notice”. The language in other sections of this subpart refers to receipt of a notice as “days after receipt of this notice.” All sections should be consistent. Therefore, we proposed to modify the language at §§ 422.756(a)(2) and 423.756(a)(2) to state “10 calendar days after receipt of the notice”. In addition, we proposed to correct grammatical errors in current §§ 422.756(a)(2) and 423.756(a)(2) by revising the language in both §§ 422.756(a)(2) and 423.756(a)(2)
Under § 422.756(b)(4) and § 423.756(b)(4), we reference the procedures MA organizations and Part D plan sponsors must follow for requesting a hearing to appeal the imposition of intermediate sanctions and civil money penalties. MA organizations and Part D sponsors must adhere to hearing procedures promulgated within subpart N of the regulations, not just §§ 422.660 through 422.684 and §§ 423.650 through 423.662, respectively, as currently cited in §§ 422.756(b)(4) and 423.756(b)(4). Therefore, we proposed to modify the language at §§ 422.756(b)(4) and 423.756(b)(4) so that it would read that MA organizations and Part D sponsors “must follow the right to a hearing procedures as specified in subpart N”.
In §§ 422.756(d) and 423.756(d) we provide alternatives to sanctions, including non-renewal or termination of the organizations contract. However, the paragraph heading of both §§ 422.756(d) and 423.756(d) only refers to terminations by CMS. Therefore, we proposed to revise the paragraph heading to “Non-renewal or termination by CMS” in both sections to reflect the content specified within the provision.
Within §§ 422.756(d) and 423.756(d), we state that we may decline to authorize the renewal of an organization's contract in accordance with § 422.506(b)(2) and (b)(3) for MA organizations and in accordance with § 423.507(b)(2) and (b)(3) for Part D plan sponsors. However, all of paragraph (b) in §§ 422.506 and 423.507 applies to §§ 422.756(d) and 423.756(d), respectively. Therefore, we proposed to change both provisions §§ 422.756(d) and 423.756(d) to read “§ 422.506(b)” and “§ 423.507(b)”, respectively.
Within §§ 422.756(d) and423.756(d), we refer to the “sanctions described in paragraph (c)” but in each section, paragraph (c) refers to the effective date and duration of sanctions, rather than sanctions which are actually described in §§ 422.750 and 423.750, respectively. Therefore, we proposed to change the current language at § 422.756(d) to read “In addition to or as an alternative to the sanctions described in § 422.750 . . .” and change the language at § 423.756(d) to read “In addition to or as an alternative to the sanctions described in § 423.750.” to correct this mistake.
The provisions at §§ 422.760(a)(3) and 423.760(a)(3) state, “the harm which resulted or could have resulted from conduct of an MA organization” and “the harm which resulted or could have resulted from conduct of a Part D plan sponsor”, respectively. However, this language is not consistent with the authorizing statutory provisions, nor is it consistent with other provisions in corresponding sections.
Therefore, we proposed to align the language with that used in paragraphs (b)(1) and (2) from that same section in both §§ 422.760(a)(3) and 423.760(a)(3). The language would be revised to state “The adverse effect to enrollees which resulted or could have resulted . . .” in both §§ 422.760(a)(3) and 423.760(a)(3) to track the statutory language.
Sections 1857(g)(4) and 1860D–12(b)(3)(E) of the Act provides us with the authority to impose civil money penalties on MA organizations and Part D plan sponsors, respectively. Under §§ 422.1020(a)(2) and 423.1020(a)(2), we discuss our procedures for requesting an appeal of a CMP. The current language in both sections state written requests for appeal “must be filed within 60 calendar days from the receipt of notice of initial determination.” However, this language does not align with the appeal language in subpart N for requesting a hearing.
Therefore, we proposed to change the language at §§ 422.1020(a)(2) and § 423.1020(a)(2) to align it with the language within subpart N for appeals. Specifically, we proposed to change the language in both §§ 422.1020(a)(2) and 423.1020(a)(2) to read “after receipt” instead of “from the receipt”, so it reads “within 60 calendar days after receipt of the notice of initial determination”.
In addition, under §§ 422.1016 and 423.1016, we furnish our procedures for filing briefs with the Administrative Law Judge or Departmental Appeals Board, and opportunity for rebuttal. The provisions at §§ 422.1016(b)(1) and 423.1016(b)(1) state, “the other party will have 20 days from the date of mailing or personal service to submit any rebuttal statement or additional evidence”. However, this language is not consistent with provisions in other corresponding sections. Therefore, we proposed to revise the language at §§ 422.1016(b)(1) and 423.1016(b)(1) to state “The other party will have 20 days from the date of mailing or in person filing . . .” to maintain consistency.
We received no comments on these proposals and therefore are finalizing these provisions without modification.
Under the Paperwork Reduction Act of 1995, we are required to provide 30-day notice in the
• The need for the information collection and its usefulness in carrying out the proper functions of our agency.
• The accuracy of our estimate of the information collection burden.
• The quality, utility, and clarity of the information to be collected.
• Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.
We solicited public comment on each of these issues for the following sections of this document that contain information collection requirements (ICRs).
Our additions of §§ 424.530(a)(11), 424.535(a)(13), and 424.535(a)(14) will likely result in an increase in denials, revocations, and associated appeals. However, we are unable to estimate the number of denials, revocations, and appeals. We do not have data available that can be used to make such projections, as each situation would have to be carefully reviewed and addressed on a case-by-case basis. Therefore, we cannot estimate the potential concomitant increase in the ICR burden, though, as we stated in the proposed rule, we believe any such increase will be minimal.
We received no comments on the potential ICR burden of §§ 424.530(a)(11), 424.535(a)(13), and 424.535(a)(14).
Proposed § 423.504(b)(8)(i) through (iii) would require that Part D organizations seeking a new Medicare contract must have arrangements in place such that either the applicant or a contracted entity that will be performing certain key Part D functions has at least 1 full benefit year of experience providing the function or providing the function for another Part D plan sponsor. The burden associated with this requirement is the time and effort put forth by Part D applicants to answer questions about such experience as part of the Part D application process. For entities that hold an existing Part D contract, or whose parent or another subsidiary of that parent has already held a Part D sponsor contract for at least a year, it is estimated that it will take each Part D applicant for a new contract 2 minutes to provide 1 or 2 new sentences in the organizational history section of the application, and 1 minute to respond to yes-no questions about experience with the 3 functions for which experience is required, for a total of 3 minutes per applicant. For entities new to Part D, it is estimated that it will take each Part D applicant for a new contract 2 minutes to provide 1 or 2 new sentences in the organizational history section of the application, 1 minute to respond to yes-no questions about experience with the 3 functions for which experience is required, and 1 additional minute to provide at least 1 contract number of an existing or recent Part D sponsor under which the entity to provide the key function obtained its experience, for a total of 4 minutes. Based on the number of Part D applications we receive each year, we would anticipate no more than 60 Part D applications for a new contract, of which no more than 15 would be entities new to Part D. Thus, the burden for the 45 existing entities at 3 minutes each, plus the burden for the 15 new entities at 4 minutes each, brings the total burden hours to approximately 3.25 hours. If approved, the new application questions would be addressed under currently approved OMB control number (OCN) 0938–0936.
We received no comments on this proposal and therefore are finalizing this provision without modification.
We proposed to amend §§ 417.460(b)(2)(i), 417.460(f)(1)(i), 422.74(d)(4)(i)(A), 422.74(d)(4)(v), and 423.44(d)(5) to clarify the eligibility requirement for residing in the plan's service area related to incarceration for the purposes of enrolling into and remaining enrolled in MA, Part D, and Medicare cost plans. To implement these regulations, we would relay data to plans regarding an individual's incarceration through the MARx system so that the plans would be aware of the individual's eligibility when requesting enrollment and notify the plans of loss of eligibility for current members. This data is already available to us. Thus no new data would be collected, and there is no new information collection or burden on organizations.
We received no comments on the ICRs for this proposal and therefore are finalizing the ICR assessment without modification.
This requirement does not impose any new information collection
We received no comments on the ICR assessment for this proposal and therefore are finalizing this assessment without modification.
The information collection burden associated with our proposed requirements consists of the submission of requests for: (1) Reconsiderations; (2) CMS hearing official determinations; and (3) CMS Administrator reviews. Based on existing Part D appeals data, we estimate that plans will file the following numbers of requests on an annual basis:
The reasons for the decrease in requests at higher appeal levels are that: (1) The plan may succeed in its appeal and thus have no need to appeal to the next level; and (2) the plan may simply wish to forgo further appeals. We stress that the figures in Table 4 are mere projections, though, again, they are based on the number of Part D appeals that have been submitted to date.
We estimate that it would take a plan 5 hours to prepare and file an appeal request. In terms of cost, it has been our experience that most appeals have been prepared by high-level officials of the plan. According to the most recent wage data provided by the Bureau of Labor Statistics (BLS) for May 2012, the mean hourly wage for the category of “General and Operations Managers”—which we believe, considering the variety of officials who have submitted appeals, is the most appropriate category—is $55.22. With fringe benefits and overhead, the per hour rate is $83.35. Multiplying this figure by 580 hours (or 116 submissions × 5 hours) results in a projected annual cost burden of $48,343, as outlined in Table 5.
We received no comments on the ICR assessment for this proposal and therefore are finalizing this assessment without modification.
The purpose of this final rule is to make revisions to the MA program (Part C) and Prescription Drug Benefit Program (Part D), implement provisions specified in the Affordable Care Act, and make other changes to the regulations based on our continued experience in the administration of the Part C and Part D programs. This final rule makes changes that are necessary to: Clarify various program participation requirements and make other clarifications and technical changes.
We have examined the impacts of this rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96–354), section 1102(b) of the Social Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995, Pub. L. 104–4), Executive Order 13132 on Federalism (August 4, 1999), and the Congressional Review Act (5 U.S.C. 804(2)).
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. A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). This final rule has been designated an “economically significant” rule under section 3(f)(1) of Executive Order 12866. Accordingly, we have prepared a regulatory impact analysis that details the anticipated effects (costs, savings, and expected benefits), and alternatives considered. Finally, in accordance with the provision of the Executive Order 12866, this final rule was reviewed by the Office of Management and Budget.
The RFA requires agencies to analyze options for regulatory relief of small entities, if a rule has a significant impact on a substantial number of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. The great majority of hospitals and most other health care providers and suppliers are small entities, either by being nonprofit organizations or by meeting the SBA definition of a small business (having revenues of less than $7.0 million to $35.5 million in any 1 year). Individuals
Part D sponsors and MA plans, entities that will be affected by the provisions of this rule, are not generally considered small business entities. We determined that there were very few MA plans and Part D sponsors that fell below the size thresholds for “small” businesses established by the Small Business Administration (SBA). Currently, the SBA size threshold is $35.5 million in total annual receipts for health insurers (North American Industry Classification System, or NAICS, Code 524114) and we have confirmed that most Part D sponsors have Part D receipts above the $35.5 million threshold.
While a very small rural plan could fall below the threshold, we do not believe that there are more than a handful of such plans. A fraction of MA organizations and sponsors are considered small businesses because of their non-profit status. HHS uses as its measure of significant economic impact on a substantial number of small entities, a change in revenue of more than 3 to 5 percent. Consequently, we do not believe that this threshold will be reached by the requirements in this final rule because this final rule will have minimal impact on small entities. Therefore, an analysis for the RFA will not be prepared because the Secretary has determined that this final rule will not have a significant impact on a substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare an analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a metropolitan statistical area and has fewer than 100 beds. We are not preparing an analysis for section 1102(b) of the Act because the Secretary has determined that this final rule will not have a significant impact on the operations of a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year by state, local, or tribal governments, in the aggregate, or by the private sector of $100 million in 1995 dollars, updated annually for inflation. In 2014, that threshold is approximately $141 million. This final rule is not expected to reach this spending threshold.
Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a final rule that imposes substantial direct requirement costs on state and local governments, preempts state law, or otherwise has federalism implications. Based on CMS Office of the Actuary estimates, we do not believe that this final rule imposes substantial direct requirement costs on state and local governments, preempts state law, or otherwise has federalism implications.
Table 10 details the final rule's impacts by entity, including the federal government and MA organizations and Part D sponsors. We note that the estimated savings do not represent net social benefits because they consist of transfers of value from drug manufacturers, pharmacies, and incarcerated individuals to the federal government, MA organizations, Part D sponsors and beneficiaries who continue in the programs.
We proposed to ensure that organizations do not move enrollees from one of their cost or MA plan types to another based on financial or some other interest, and to revise § 422.503(b)(5) so that an entity seeking to contract as an MA organization must “not accept new enrollees under a section 1876 reasonable cost contract in any area in which it seeks to offer an MA plan if the MA organization and reasonable cost contract are offered by the same parent organization.” We believe this provision will have minimal or no financial impact as only a handful of parent organizations currently offer MA and cost plans in the same service area. In addition, as the regulation requires that affected cost plans close to new enrollment, not that they terminate operations, we believe that there will be little or no impact to beneficiaries. We are finalizing the provision as proposed, with the revisions specified in our response to public comments earlier in this document.
We proposed to make two changes to existing authority for the imposition of intermediate sanctions and civil money penalties (CMPs). First, under the Affordable Care Act, new authority was provided to the Secretary, which now permits CMS to impose intermediate sanctions for additional contract violations in the areas of marketing and enrollment. This new authority further permits CMS to impose intermediate sanctions on contracting organizations' that employ or contract with organizations, agents, and suppliers who commit any of the contract violations contained in §§ 422.752 and 423.752.
Second, we are clarifying our authority to impose CMPs for the aforementioned contract violations. Current regulations designate the OIG as the sole government agency with the authority to impose CMPs for the contract violations contained in §§ 422.752 and/or 423.752. We are modifying the language of these provisions to clarify that CMS or the OIG may impose CMPs for these contract violations except the provision that relates to the misrepresentation of falsification of information furnished to CMS, an individual or entity.
We believe these provisions will not result in additional burden to sponsors nor will they have a financial impact on sponsors.
In current regulations, we are required to provide 90-day notice to organizations whose contracts are being terminated by CMS. The authorizing statute at section 1857(h)(1)(B) and 1860D–12(b)(3)(F) of the Act states that the Secretary must provide reasonable notice and opportunity for hearing (including the right to appeal the initial determination) before terminating a contract (except under certain circumstances). We proposed to modify the notice timeframe from 90 days to 45 days. We believe these provisions will not result in additional burden to sponsors nor will it have a financial impact on sponsors.
We proposed to lessen the burden placed on contracting organizations and their first tier, downstream and related entities (FDRs). Current regulations specify that contracting organizations are required to provide general compliance program training for their FDRs upon initial contracting and annually thereafter. To lessen this burden, we will require all contracting organizations to accept a certificate of completion of the CMS Standardized General Compliance Program Training and Education Module as evidence of
We believe these provisions will not result in additional burden to sponsors nor will they have a financial impact on sponsors.
We proposed to make changes to our authority for imposing intermediate sanctions and for determining when such sanctions will be lifted. Sections 1857(g) and 1860D–12(b)(3)(E) of the Act provide the Secretary the ability to impose intermediate sanctions on MA organizations and PDP sponsors. Intermediate sanctions consist of suspension of enrollment, suspension of marketing and suspension of payment. Current regulations governing intermediate sanctions are contained in subparts O of part 422 and Part 423. Sections 422.756 and 423.756 provide specific procedures for imposing intermediate sanctions and include provisions, which address: The duration of the sanction; and the standard that we apply when determining if a sanction should be lifted. As specified in the Act and regulations, when intermediate sanctions are imposed on contracting organizations, the sanctions remain in place until the Secretary/CMS is satisfied that the basis for the sanction determination has been corrected and is not likely to recur.
In the October 2009 proposed rule (74 FR 54634), we proposed a change that included a rule that allows us to require a plan under a marketing and/or enrollment sanction to market or accept enrollments or both for a limited period of time. As we explained in that proposed rule, the purpose of the test period is to assist us in making a determination as to whether the deficiencies that are the bases for the intermediate sanctions have been corrected and are not likely to recur. The test period provides us with the opportunity to observe a sanctioned plans ability to enroll or market to Medicare beneficiaries prior to lifting the sanction.
We proposed to extend the applicability of such a test period to include all intermediate sanctions and to clarify that while we may require a sponsor to receive enrollments during this test period, the sponsor will not receive any LIS annual or auto facilitated reassignments.
We believe these provisions will not result in additional burden to sponsors nor will they have a financial impact on sponsors.
We proposed to establish a fulfillment requirement for mail order prescriptions. We believed it was necessary and appropriate to establish mail order fulfillment requirements defining maximum turnaround times from when the pharmacy receives the prescription order to when it is shipped. This would underscore the importance of consistent and reliable access to medications, protecting beneficiaries from inconsistent or unreliable practices that may otherwise jeopardize timely access to prescriptions.
Comments persuaded us that we had not considered all relevant implications of this proposal and we decided not to finalize this provision. This in turn means that there will be no financial impact.
The current independent agent compensation structure (as originally published as CMS–4138–IFC2 in November 2008) is comprised of a 6-year cycle which ended December 31, 2013. MA organizations and Part D sponsors provide an initial compensation payment to independent agents for new enrollees or unlike plan changes (Year 1), and pay a renewal rate (equal to 50 percent of the initial year compensation) for Years 2 through 6. We proposed revising this existing compensation structure. MA organizations and Part D sponsors will have the discretion to decide, on an annual basis, whether to pay initial and/or renewal compensation payments to their independent agents. For new or unlike plan change enrollments, MA organizations and Part D sponsors could make an initial payment that is no greater than the fair market value (FMV) amount for such services, set annually by CMS in guidance interpreting these regulations. For renewals in Year 2 and subsequent years, the MA organization or Part D sponsor could pay up to 35 percent of the FMV amount for that year. We are finalizing the provision with an up to 50 percent payment for renewals, instead of the proposed 35 percent. We also proposed that plans not recover compensation when the disenrollment is not a result of the agent's behavior. We are not implementing the changes with respect to the recovery of compensation, but will finalize language to keep the existing situation, which requires full recoupment if a member disenrolls within the first 3 months of enrollment except in limited circumstances. In addition to the agent and broker compensation structures, we are setting limits on referral fees for agents and brokers.
We do not believe that any of these revisions will have a significant increase in burden or financial impact. Our existing compensation rules require that MA organizations and Part D sponsors pay on a calendar year basis, not a rolling year basis. Our regulations are restating existing requirements, to ensure consistency. While some MA organizations and Part D sponsors may have to make significant systems changes to ensure compliance, these changes are not based on this final rule but are required to meet existing requirements. MA organizations and Part D sponsors will likely have to make some systems modifications, such as paying between January 1 and December 31 of each year. However, we do not believe these will be of significant impact. Although some changes will be necessary, we believe the small cost and burden of the changes will outweigh the cost and burden of the existing multi-tier approach by simplifying the compensation structure for independent agent brokers.
We are not finalizing the proposed criteria or their application to the categories and classes of clinical concern.
Current regulations require that Part D sponsors must have established a Medication Therapy Management Program that targets beneficiaries who: (1) Have multiple chronic diseases with three chronic diseases being the maximum number a Part D plan sponsor may require for targeted enrollment; (2) are taking multiple Part D drugs, with
We proposed to broaden the MTM criteria to require that Part D sponsors target beneficiaries who have two or more chronic diseases and are taking two or more covered Part D drugs. We proposed to set the annual cost threshold at an amount commensurate with the annual amount of Part D costs incurred by individuals that meet the first two criteria regarding multiple chronic conditions and use of multiple covered Part D drugs. Applying this methodology, we would have set the cost threshold at $620 which is the approximate cost of filling two generic prescriptions. We proposed to revise this number periodically to reflect more up-to-date information regarding the drug spending of beneficiaries that have two or more chronic conditions and use two covered Part D drugs. We estimated that 2.5 million beneficiaries are currently eligible for MTM services, 13 percent opt-out of the MTM program, and 10 percent of participating beneficiaries will receive an annual CMR. We also estimated that an average CMR requires 35 minutes to complete and the average hourly compensation (including fringe benefits, overhead, general, and administrative expenses and fee) of the MTM provider is $120 (labor cost per CMR is $70), and that it costs $0.91 to print and mail a CMR summary in CMS' standardized format. Therefore, the estimated total annual cost of providing CMRs in all settings is $15,422,925 ($70.91/CMR x 217,500 CMRs). Previously, prior to the availability of more precise opt-out and CMR rates, we estimated that the total burden associated with conducting CMRs and delivering the CMR written summary in CMS' standardized format was 1,192,429 hours with a cost of $143,363,555, including delivery of 1,896,500 CMRs in all settings under the current eligibility criteria, and implementation and mailing costs for the CMR summary in standardized format (see OMB Control No. 0938–1154). We do not currently have data or estimates to determine the costs associated with quarterly targeted medication reviews and follow-up interventions, if necessary.
In the proposed rule, we estimated that 18 million beneficiaries would be eligible for MTM services based on the proposed criteria. Using the same opt-out, CMR, and expense rates as before, the estimated total annual cost of providing CMRs in all settings would be $111,045,060 ($70.91/CMR × 1,566,000 CMRs). This was below previous estimates.
We were unable to definitively score the proposed changes to the eligibility criteria because the portion of the administrative costs attributable to MTM is not a specific line item that can be easily extracted from the bid. Although the increase in the number of CMRs was estimated to cost $111 million, we cited evidence in the proposed rule that showed that MTM services may generate overall medical savings.
We are not finalizing these proposals. Therefore, the increased burden estimates associated with increasing eligibility from 2.5 million beneficiaries to 18 million beneficiaries are removed.
Based on CMS' authority at section 1860D–12(b)(3)(D) of the Act to adopt additional contract terms, not inconsistent with the Part C and D statutes, that are necessary and appropriate to administer the Part D program, we proposed at § 423.504(b)(8)(i) through (iii) that Part D organizations seeking a new Medicare contract must have arrangements in place such that either the applicant, or a contracted entity that will be performing certain key Part D functions, has at least one full benefit year of experience providing key Part D functions. This proposal ensures that applicants take advantage of the abundant Part D industry expertise and experience that exists today in the development of their Part D program operations, rather than relying on technical assistance from CMS and having their inexperience place beneficiaries' access to prescription drugs at risk. We believe this provision will have a very minor savings impact on the federal budget, based on savings of time and effort (staff time and contracted auditor time and resources) that the government would spend on overseeing the disproportionate level of problems experienced by organizations operating Part D plans without prior Part D experience. For each inexperienced organization allowed into the program in the absence of this proposal, we would anticipate a savings of 1,000 staff hours at an average rate of $50 per hour, for a total of $50,000 in employee time, plus an additional savings of $200,000 in contractor dollars to conduct an emergency audit, for a total of $250,000. In the absence of this proposal, we would anticipate no more than two such inexperienced entities beginning Part D operations per year, for a total annual savings of $500,000.
The burden associated with this proposal on industry will be minimal, with a total estimated number of labor hours of 3.25 to submit information during the Part D application process. Using the same average hourly salary as previously mentioned, the total cost to Part D applicants will be $162.50. We do not believe there are any non-administrative costs to industry associated with this proposal, as Part D applicants are already required to have arrangements in place to perform the key Part D functions discussed in our proposal.
The main anticipated effect from this proposal is ensuring that only entities with some experience with Part D in critically important functional areas are permitted to offer new Part D contracts, thus strengthening the Part D program by enhancing the qualification criteria. We considered the alternate proposal of requiring the prior Part D experience to be tied to specific quality outcomes. We rejected the alternative because we believed it added unnecessary complexity and burden to the process, and we believe a simple experience requirement is currently sufficient.
Based on CMS' authority at section 1860D–12(b)(3)(D) of the Act to adopt additional contract terms, not inconsistent with the Part C and D statutes, that are necessary and appropriate to administer the Part D program, we proposed at § 423.504(b)(9)(i) through (ii) that organizations seeking to offer a stand-alone prescription drug plans (PDP) for the first time must have either: (i) Actively offered health insurance or health benefits coverage for 2 continuous years immediately prior to submitting an application, or (ii) actively managed prescription drug
The burden associated with this proposal on industry will be minimal, with a total estimated number of labor hours of 3.25 to submit information during the Part D application process. Using the same average hourly salary as previously mentioned, the total cost to Part D applicants will be $162.50. We do not believe there are any non-administrative costs to industry associated with this proposal, as Part D applicants are already required to be licensed in at least one state prior to offering Part D benefits.
The main anticipated effect from this proposal is ensuring that only entities with some experience administering health insurance benefits will be permitted to offer new stand-alone PDPs, thus strengthening the Part D program by enhancing the qualification criteria. CMS considered the alternate proposal of requiring the prior health insurance benefit administration experience to be tied to specific quality outcomes. We rejected this alternative because we believed it added unnecessary complexity and burden to the process, and we believe a simple experience requirement is currently sufficient.
This provision has no quantifiable impact because the savings that might be achieved likely will be offset by the burden necessary with the consolidation activities and legal work necessary to implement these changes.
As this proposal is not being finalized, there will be no financial impact.
We proposed to add at § 423.120(b)(3)(vi) a paragraph clarifying that a Part D sponsor must charge cost sharing as follows: (a) For low-income subsidy (LIS) enrollees, a sponsor must not charge higher cost sharing for transition supplies than the statutory maximum copayment amounts; (b) for non-LIS enrollees, a sponsor must charge: (1) The same cost sharing for non-formulary Part D drugs provided during the transition that would apply for non-formulary drugs approved under a coverage exception; and (2) the same cost sharing for formulary drugs subject to utilization management edits provided (for example, prior authorization and step therapy) during the transition that would apply once the utilization management criteria are met.
Because increases or decreases in cost sharing during transition supplies under the various circumstances are likely to offset one another, we anticipate that there will be no cost impact on plans.
We proposed to formally interpret section 1860D–11(i) of the Act, referred to as the non-interference provision. This provision prohibits CMS from interfering with the negotiations between drug manufacturers and pharmacies and Part D sponsors, and requiring a particular formulary or instituting a price structure for the reimbursement of covered part D drugs. We have not formally interpreted the statutory provision, which has resulted in different stakeholders having different views about its scope. Consequently, we believe that a clear interpretation of the statutory provision will remove ambiguity. As we are not finalizing this proposal, there is no change in regulatory impact.
We proposed to revise the definition of negotiated prices at § 423.100 to specify that all pharmacy price concessions must be included in the negotiated price. This will preclude the differential reporting that is taking place today in the realm of reporting drug costs and price concessions from network pharmacies. The rule will change current policy that permits sponsors to elect which price concessions from pharmacies to report outside the PDE. This practice currently allows price concessions to be applied disproportionately to costs that plans are liable for, and thus may shift more low-income cost-sharing subsidy and reinsurance costs to the government, as well as to manufacturers in the calculation of coverage gap discount payments. A sponsor that engages in this practice can reduce its bid and achieve a competitive advantage relative to a sponsor that applies all price concessions to the negotiated price—a competitive advantage stemming not from greater efficiency, but from a technical difference in how costs are reported to CMS. Meanwhile, the higher the negotiated price, the higher beneficiary coinsurance will be, the faster the beneficiary is moved through the benefit, and the higher government subsidies for low-income cost sharing (LICS) and reinsurance subsidies will be. Our proposal will impose consistent treatment of drug price reporting.
Our proposal to require all price concessions to be reflected in the negotiated price received by the pharmacy would not necessarily change the level of price concessions received from network pharmacies, but will impose a single consistent price concession reporting process on all Part D sponsors. Therefore, it is not clear that any contractual arrangements between a subset of sponsors and network pharmacies will require renegotiation, since only the form of the price concession, rather than its level, will be affected by this proposal.
In addition, when price concessions from pharmacies are in forms other than the negotiated price, the degree of price concession that the pharmacy has agreed is no longer reflected in the negotiated prices available at point of sale or reflected on the Medicare Prescription Drug Plan Finder (Plan Finder) tool. Thus, the true price of drugs at individual pharmacies is no longer transparent to the market. Consequently, consumers cannot efficiently minimize both their costs (cost sharing) and costs to the taxpayers by seeking and finding the lowest-cost drug/pharmacy combination. This proposal will ensure that the actual level of price competition is transparent to the Part D market.
Under current policy, a sponsor may be able to offer a lower bid than its competitors and may achieve a competitive advantage stemming not from greater efficiency, but from a technical difference in how costs are reported to CMS. When this happens, such differential reporting may result in bids that are no longer comparable, and in premiums that are no longer valid indicators of relative plan efficiency. The changes we proposed will lend to Part D bids being more accurately comparable and premiums more accurately reflecting relative plan efficiencies. The lowest premiums will more accurately direct beneficiaries to the plans that have the lowest costs to the program overall.
We do not collect sufficient detail in price concession data reported to CMS to quantify the impact of this change to standardize price concession reporting. We believe that only certain sponsors are engaging in the differential reporting practices today, and these sponsors face close competition from larger competitors that do not appear to be employing the same strategies. Consequently, if the sponsors employing these tactics increase their bids to maintain margin, they could likely risk losing market share. Therefore, we would expect these sponsors to carefully consider the risk of losing market share before raising their bids in response to our regulatory proposals, particularly those that are committed to the LIS market.
We are finalizing the provision with modification to require that negotiated prices be inclusive of all price concessions from network pharmacies except those contingent price concessions that cannot reasonably be determined at the point of sale. We expect that the effect of regulation to require consistent and transparent pricing will not only provide higher-quality information to the Part D market, but also promote increased price competition among network pharmacies. This expectation is consistent with economic theory that holds that increased price transparency will increase price competition. We believe pharmacies will support including the full price concession in the point-of-sale price, and fully transparent price competition will align beneficiary and taxpayer interests in minimizing costs. Our rule will not change the level of price concessions and therefore costs under the program as a whole, but will apply consistency to how these are reported to CMS and treated in bidding and payment processes. Therefore, we anticipate that there will be no cost impact on plans.
We proposed to require that sponsors may offer reduced copayments or coinsurance for covered Part D drugs obtained through a subset of network pharmacies, as long as such preferred cost sharing is in return for consistently lower negotiated prices relative to the same drugs when obtained in the rest of the pharmacy network. Therefore, we intended to clarify that preferred cost sharing should consistently be aligned with and accurately signal lower costs. We proposed that by “consistently lower” we meant that sponsors must offer better prices on all drugs in return for the lower cost sharing. In practice we believe this would mean that whatever pricing standard is used to reimburse drugs purchased from network pharmacies in general, a lower pricing standard must be applied to drugs offered at the preferred level of cost sharing. Our analysis shows that most sponsors offering preferred cost sharing are currently achieving these levels of savings, and therefore our proposed policy would only require a change in price concession levels or reporting for a limited number of sponsors. Our proposal would apply a consistent expectation across all sponsors to compete on the same basis on negotiated prices, including in related-party pharmacy operations.
After considering the public comments, we are not finalizing the proposal to revise § 423.120(a)(9) to require consistently lower negotiated prices for Part D drugs obtained through pharmacies offering preferred cost sharing than the same Part D drugs when obtained in the rest of the pharmacy.
This proposal will not be finalized and we will not engage in further rulemaking without re-proposing in a future rule, eliminating any estimated costs for implementation at this time.
We proposed a change to the regulations at §§ 423.501, 423.505(b)(21) and 423.505(i)(3)(vii) governing the disclosure and updating of prescription drug pricing standards used by Part D sponsors to reimburse network pharmacies to make clear that drug pricing based on maximum allowable cost (MAC) is subject to these regulations. In the final rule at 76 FR 54600 (September 1, 2011), we did not estimate a regulatory impact for Part D sponsors to comply with the prescription drug pricing standard requirements, and we do not believe these changes would result in any regulatory impact. Read together, the new provisions in §§ 423.501, 423.505(b)(21), and 423.505(i)(3)(viii) require sponsors, when applicable, to include provisions in network pharmacy contracts, to address the disclosure of MAC prices themselves to be updated to the applicable pharmacies in advance of their use for reimbursement of claims, because the source of the MAC prices is not publicly available. Addressing prices that will be paid to a subcontractor is an activity undertaken in the normal course of business. Also, whether to use MAC prices is voluntary for Part D sponsors. Finally, sponsors must have procedures, systems, and technology currently in place to use these prices for reimbursement of pharmacy claims in the normal course of business. These systems will have to be adapted to also disclose the prices to pharmacies in advance of their use, which we believe will involve negligible effort for Part D sponsors' existing employees and/or subcontractors. Therefore, we estimate the impact of these provisions to be negligible.
Proposed changes to § 423.120(a)(8) would require Part D sponsors to offer the contract terms and conditions (T&C) for every level of cost sharing offered under a Part D plan (preferred, standard retail, mail order, etc.) to any willing pharmacy. We expected the burden for Part D sponsors to amend contracts, where necessary, to offer every level of cost sharing would be negligible. Sponsors already must meet any willing pharmacy requirements for retail and mail order cost sharing. In 2013, nearly half of non-employer group Part D sponsors were designing and marketing plans with T&C for preferred cost sharing levels. For these sponsors, the only change associated with this proposal would have been to ensure that now T&C for all levels of cost sharing, including preferred, are being offered (if they are not already) to all interested pharmacies. For the other half of Part D sponsors not currently offering preferred cost sharing options, this proposal did not require them to start.
Part D sponsors already negotiate contracts regularly with pharmacies in order to meet network access requirements. We estimated that for sponsors who currently offer benefit packages with a preferred cost sharing level (approximately 500 plans), an estimated new burden of 5,000 legal hours (500 plans x 10 hours) for revising contract language and 2,000 hours (500 plans x 4 hours) for additional contract
Any new burden on pharmacies was similarly expected to be negligible, as they are already reviewing and implementing terms from contracts, often annually. Pharmacies were not being directed to choose one set of T&C over another, but rather would have gained the option to review and implement terms for preferred cost sharing, if they so choose to accept the applicable negotiated pricing terms. Beneficiaries were expected to benefit from an increased number of pharmacies offering preferred cost sharing levels.
We received the following comments and our response follows:
We proposed that prescribers must either be enrolled in Medicare or have validly opted-out in order for their prescriptions to be covered under the Part D program. This will entail Part D sponsors or their designated PBMs checking the prescriber's individual NPI to determine whether the prescriber is enrolled or in a valid opt-out status in Medicare before paying a claim from a network pharmacy or a request for reimbursement from a beneficiary.
When we promulgated the NPI PDE requirement in a final regulation published on April 12, 2012 (77 FR 22072), we estimated the impact for PBMs and plan organizations to contract for or build prescriber ID validation services. Thus, while § 423.120(c)(6) entails a new requirement for Part D sponsors, we do not believe it will have any new or additional impact because Part D sponsors must already have prescriber validation capabilities to meet the NPI PDE requirement.
We presume that if a beneficiary's prescriber is not enrolled or does not enroll in Medicare, the beneficiary will find a new prescriber who is enrolled, rather than go without needed medications. Solely from this perspective, we do not project any savings from this provision. We believe there will be savings, though, from the fact that certain unqualified individuals will no longer be able to prescribe Part D drugs, for they will be unable to meet Medicare requirements. However, we are unable to estimate a particular savings figure because we do not know how many such individuals there will be.
Our additions of §§ 424.530(a)(11) and 424.535(a)(13) will likely result in additional application denials, revocations, and associated appeals. The DEA Web site found at
Section 424.535(a)(14) will result in an increase in the total number of revocations and associated appeals. Yet we are unable to project the number of providers and suppliers that will be revoked under § 424.535(a)(14) because we do not have data available that can be used to make such an estimate. Thus, we cannot project: (1) The potential costs to providers and suppliers in lost billings, or (2) the possible costs or savings to the government arising from this provision.
We received the following comments regarding the impact of proposed §§ 424.530(a)(11), 424.535(a)(13), and 424.535(a)(14).
No modifications are being made to §§ 424.530(a)(11), 424.535(a)(13), and 424.535(a)(14) as a result of these comments.
We proposed to revise our regulations governing the release of Part D data to expand the release of unencrypted prescriber, plan, and pharmacy identifiers contained in prescription drug event (PDE) records to external entities, as well as to make other changes to our policies regarding the use and release of PDE data, as currently codified at § 423.505 (f)(3), (l) and (m). These proposals would not impose any new costs on any stakeholders. Medicare Part D plan sponsors are already required to, and do, submit the information that may be used or released in accordance with these proposals. Therefore, although we are finalizing the revisions to the Part D data regulations as proposed, we are not including any assessment of this final
Pursuant to sections 1857(d)(2) and 1860D 12(b)(3)(c) of the Act, we are now proposing to specify at §§ 422.504(i)(2)(ii) and 423.505(i)(2)(ii) that HHS, the Comptroller General, or their designees have the right to audit, evaluate, collect, and inspect any records directly from any first tier, downstream, or related entity. This regulatory change would not grant CMS (or the MEDIC, the contractor that conducts fraud investigations on our behalf) any oversight authority beyond what we already possess.
In enabling CMS or its designee(s) to directly request information from a first tier, downstream, or related entity, we would provide a more efficient avenue to obtain necessary information. This proposal would change the current policy, which requires going through the plan sponsor in order to collect information. Our proposal would save money and time for CMS as well as the plan sponsor.
We anticipate that adoption of this proposal would result in cost savings for plan sponsors. Under the current regulatory structure, assuming that the MEDIC (the CMS contractor that typically would put forth such requests) puts forth 1000 requests per year to Part C and D sponsors, each request requires the plan sponsor to spend 5 hours developing and making the request for information from its first tier, downstream, or related entity, and communicating the results of that request back to CMS. At a rate of $55 per hour, plan sponsors may save a total of $275,000 in employee costs in the aggregate. Additionally, we believe this provision will have a very minor savings impact on the federal budget. This calculation is based on the savings in time and effort the MEDIC will experience (2 hours per information request) resulting from the ability to request information directly from first tier, downstream, and related entities. The 2 hours reflects the time the MEDIC currently spends resolving ambiguities in the request or in the information provided in response that are created by the presence of an intermediary (that is, the plan sponsor) between the requestor (MEDIC) and the custodian of the information (that is; first tier, downstream, or related entity).
In addition to cost savings, this regulatory change will reduce the administrative burden on plan sponsors. The plan sponsor will no longer have to act as the gatekeeper between the MEDIC and its first tier, downstream, or related entity.
We do not anticipate any additional burden relating to the requirement that we alert the plan sponsor that we are contacting its first tier, downstream or related entity since CMS will be merely copying the plan sponsor on the request.
We proposed to amend §§ 417.460(b)(2)(i), 417.460(f)(1)(i), 422.2, 422.74(d)(4)(i)(A), 422.74(d)(4)(v), 423.4, and 423.44(d)(5) to clarify the eligibility requirement for residing in the plan's service area related to incarceration for the purposes of enrolling into and remaining enrolled in MA, Part D, and Medicare cost plans. We expect the impact of this change to be primarily that of savings to the MA and Part D programs. In CY 2012, there were close to 50 million Medicare beneficiaries. Approximately 34.4 million of those beneficiaries were enrolled in MA plans, PDPs, or cost plans which accounts for 68.8 percent of the total Medicare population. In the same year, an average of 21,329 Medicare beneficiaries enrolled in MA or Part D plans were identified by SSA as being incarcerated.
We issued guidance to MA plans and PDPs to investigate each individual's incarcerated status and disenroll the individual for no longer residing in the plan's service area if the plan confirmed incarcerated status. If the MA plan or PDP could not confirm the incarcerated status, those plans were to continue to investigate each instance of incarceration for up to 6 or 12 months and disenroll the individuals at the end of that time following §§ 422.74(b)(4)(ii)/423.44(b)(5)(ii) if they could not verify the incarcerated status sooner. As a result, plans received capitated payments when individuals were ineligible to receive payment of Medicare benefits. Section 1876 Cost contracts had no such instructions to disenroll individuals who are incarcerated. By directing MA plans, PDPs, and cost plans to disenroll incarcerated individuals at the time of notification from CMS, we intend to prevent improper payment for these individuals to MA plans, PDPs, and cost plans for periods when they were ineligible to receive such services. Based on the data for capitation payments for MA and PDPs, as well as the prepayments provided to cost plans, we estimate that the disenrollment of incarcerated individuals would result in a decrease in improper payments made by CMS and would result in a cost savings of $73 million in 2015.
We estimate, based on the numbers mentioned previously, that this change could save the MA program approximately $27 million in 2015, increasing to $103 million in 2024, and could save the Part D program (includes the Part D portion of MA PD plans) approximately $46 million in 2015, increasing to $153 million in 2024. As cost plans are paid based on the reasonable costs of delivering Medicare covered services to their enrollees, instead of the fixed capitation amounts paid to MA and PDPs, we believe the impact to cost plans associated with this provision to be negligible.
We received the following comment:
After consideration of the public comment received, we are finalizing the policy without modification.
This provision permits plans to provide limited rewards and incentives to enrollees who participate in activities that focus on promoting improved health, preventing injuries and illness, and promoting efficient use of health care resources. While there would be a cost associated with providing rewards and incentives there may be savings as a result of healthier behavior. Because plans are not required to provide rewards and incentives and CMS does not have a means of calculating the costs and benefits of rewards/incentives at this time, we are not providing an impact analysis for this provision.
This section proposes only technical changes for overpayment reporting, RADV appeals, and CMS' treatment of diagnoses for additional payment after the final risk adjustment data submission deadline. These technical changes will not result in costs to MA organizations and Part D sponsors, nor do we expect the impact of these technical changes to result in savings.
In section III.B.4. of this final rule, to establish an administrative appeals process for overpayment determinations by the Part C and Part D RACs. The cost associated with these provisions involves the preparation and submission of appeal requests by plans. We estimate this cost to be $48,343 as summarized in the following Table 9.
There is no impact associated with this provision as it is a technical change to regulation language.
In § 423.126(a), we proposed to codify requirements similar to existing guidance that pertains to relaxing “refill-too-soon” (RTS) edits to permit one refill in the event of any imminent or occurring disaster or emergency that would hinder an enrollee's access to covered Part D drugs.
The proposed changes would not have resulted in any additional costs. For one, we currently expect through guidance that sponsors will relax edits after the issuance of certain federal declarations. We also do not anticipate that providing a general framework for when sponsors must relax RTS edits would necessitate an increase in resources because it is currently not uncommon for Part D sponsors to relax edits for particular individuals under certain circumstances.
The provisions would have required Part D sponsors to relax “refill-too-soon” (RTS) edits when, as evidenced by a declaration of a disaster or emergency or its imminence by an appropriate federal, state, or local official, it is reasonable to conclude that an occurring or imminent disaster or emergency would make it difficult for beneficiaries to obtain refills of their medications. Relaxing RTS edits in these circumstances would benefit beneficiaries by better ensuring that they do not run out of their medications
As this proposal is not being finalized, there will be no financial impact.
The changes to §§ 422.510 and 423.509 are minor technical and clarifying revisions and include making language consistent, aligning titles and correcting references. These technical and clarifying changes will not result in additional burden to MA organizations or Part D sponsors nor will they have a financial impact on such entities.
The changes to §§ 422.756 and 423.756 are minor technical and clarifying revisions and include making language consistent, aligning titles and correcting references. These technical and clarifying changes will not result in additional burden to MA organizations or Part D sponsors nor will they have a financial impact on such entities.
Proposed codification of the categories or classes of clinical concern provisions would assist PBMs in applying the Part D plans and managing the Part D sponsor's benefit packages more efficiently.
However, we are not codifying the propose criteria or applying them to the drug categories and classes of clinical concern. Thus, this does not apply.
We anticipated that many more beneficiaries would have access to MTM services and believed that the proposed changes would have simplified the MTM criteria and minimized beneficiary confusion when choosing or transitioning between plans. Moreover, we believed the proposed changes would have reduced disparity and allowed more beneficiaries with drug therapy problems to receive MTM services.
However, we are not finalizing these proposals, so these expected benefits are no longer applicable.
In the preamble of this final rule, we outlined a few alternative compensation schedules. Ultimately we determined that the best approach was a two-tiered payment schedule, incorporating an initial payment and a continuous renewal payment.
We considered the alternative of maintaining the current process where Part D plans can limit pharmacy access to preferred cost-sharing contracts. We have observed this in practice to be limiting market competition, creating a barrier to entry, and further, not producing the savings to the program that were initially anticipated.
We are not finalizing this proposal.
We did not identify any alternatives that both maintained consistent reporting among sponsors leading to comparable bids, and maximized price competition.
We did not consider alternatives to requiring Part D sponsors to lift “refill too soon” (RTS) edits in the event of any imminent or occurring disaster or emergency that would hinder an enrollee's access to covered Part D drugs. It is important for the well-being and health of beneficiaries that they be able to obtain their medications after disasters strike. Furthermore, given the complexities of moving large numbers of people with different health conditions to safer locations, we also believed we had no alternative but to require Part D sponsors to relax RTS edits when a disaster is imminent and access to services might be jeopardized rather than waiting for it to strike.
We are not finalizing this proposal.
The critical policy decision was how broadly or narrowly to establish criteria and exceptions to those criteria pursuant to Affordable Care Act provisions. Broad criteria might easily encompass many classes of drugs and significantly increase costs to the Part D program by eliminating the need for manufacturers to aggressively rebate their products for formulary placement.
However, we are not codifying the propose criteria or applying them to the drug categories and classes of clinical concern. Thus, this does not apply.
In the proposed rule, we considered leaving the maximum number of multiple chronic diseases a plan may require for targeted enrollment at three, but believed this threshold significantly limited the number of beneficiaries who qualified for MTM services and was inconsistent with literature concerning the relative risk of the combination of multiple disease states and the need for access to MTM interventions. Similarly, we considered other numbers of Part D drugs less than eight, but again believed these thresholds decreased access to MTM services, contributed to beneficiary confusion, and led to racial disparities in access to MTM services. We also considered other cost thresholds less than $3,000, for example, $900 or $1,200, which roughly coincide with cost thresholds achieved by taking 3 or 4 generic drugs, and we solicited stakeholder comment on where the threshold might alternatively be set.
Based on our authority at section 1860D–12(b)(3)(D) of the Act to adopt additional contract terms that are necessary and appropriate to administer the Part D program, we proposed changes at § 423.504(b)(8)(i) through (iii) that Part D organizations seeking a new Medicare contract must have arrangements in place such that either the applicant or a contracted entity that will be performing certain key Part D functions has at least 1 full benefit year of experience providing the function for another Part D plan sponsor. This proposal ensures that applicants take advantage of the abundant Part D industry expertise and experience that exists today in the development of their Part D program operations, rather than relying on technical assistance from CMS and having their inexperience place beneficiaries' access to prescription drugs at risk. We believe this provision will have a very minor savings impact on the federal budget, based on savings of time and effort (staff time and contracted auditor time and resources) that the government would spend on overseeing the disproportionate level of problems experienced by organizations operating Part D plans without prior Part D experience. For each inexperienced organization allowed into the program in the absence of this proposal, we would anticipate a savings of 1,000 staff hours at an average rate of $50 per hour, for a total of $50,000 in employee time, plus an additional savings of $200,000 in contractor dollars to conduct an emergency audit, for a total of $250,000. In the absence of this proposal, we would anticipate no more than two such inexperienced entities beginning Part D operations per year, for a total annual savings of $500,000.
The burden associated with this proposal on industry would be minimal, with a total estimated number of labor hours of 3.25 to submit information during the Part D application process. Using the same average hourly salary as previously mentioned, the total cost to Part D applicants would be $162.50. We do not believe there are any non-administrative costs to industry associated with this proposal, as Part D applicants are already required to have arrangements in place to perform the key Part D functions discussed in our proposal.
The main anticipated effect from this proposal is ensuring that only entities with some experience with Part D in critically important functional areas are permitted to offer new Part D contracts, thus strengthening the Part D program by enhancing the qualification criteria. We considered the alternate proposal of requiring the prior Part D experience to be tied to specific quality outcomes. We rejected the alternative because we believed it added unnecessary complexity and burden to the process, and we believe a simple experience requirement is currently sufficient.
As required by OMB Circular A–4 (available at
We estimate the savings to the federal government from implementing these provisions will be $73 million in CY 2015. The savings will increase annually. In CY 2024, the federal government savings from implementing these provisions will be $256 million. For the entire estimated period, CYs 2015 through 2024, we estimate the total federal government (Medicare) impact to result in savings of approximately $1.615 billion. We note that these savings do not represent net social benefits because they consist of transfers
Administrative practice and procedure, Grant programs—health, Health care, Health insurance, Health maintenance organizations (HMO), Loan programs—health, Medicare, and Reporting and recordkeeping requirements.
Administrative practice and procedure, Health facilities, Health maintenance organizations (HMO), Medicare, Penalties, Privacy, and Reporting and recordkeeping requirements.
Administrative practice and procedure, Emergency medical services, Health facilities, Health maintenance organizations (HMO), Health professionals, Medicare, Penalties, Privacy, Reporting and recordkeeping requirements.
Administrative practice and procedure, Emergency medical services, Health facilities, Health maintenance organizations (HMO), Health professionals, Medicare, Penalties, Privacy, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services amends 42 CFR Chapter IV as follows:
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh), secs. 1301, 1306, and 1310 of the Public Health Service Act (42 U.S.C. 300e, 300e–5, and 300e–9), and 31 U.S.C. 9701.
(b) * * *
(2) * * *
(i) Moves out of the HMO's or CMP's geographic service area or is incarcerated.
(f) * * *
(1) * * *
(i) * * *
(A)
(B)
(C)
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
The revisions and additions read as follows:
(d) * * *
(4) * * *
(i) * * *
(A) Out of the MA plan's service area or is incarcerated as specified in paragraph (d)(4)(v) of this section.
(v)
(B)
(a)
(b)
(1) Must not discriminate against enrollees based on race, national origin, including limited English proficiency, gender, disability, chronic disease, whether a person resides or receives services in an institutional setting, frailty, health status or other prohibited basis;
(2) Must be designed so that all enrollees are able to earn rewards; and
(3) Are subject to sanctions at § 422.752(a)(4).
(c)
(i) Be offered in connection with the entire service or activity;
(ii) Be offered to all eligible members without discrimination;
(iii) Have a monetary cap as determined by CMS of a value that may be expected to impact enrollee behavior but not exceed the value of the health related service or activity itself; and
(iv) Otherwise comply with all relevant fraud and abuse laws, including, when applicable, the anti-kickback statute and civil money penalty prohibiting inducements to beneficiaries.
(2) Reward and incentive items may not—
(i) Be offered in the form of cash or other monetary rebates; or
(ii) Be used to target potential enrollees.
(3) The MA organization must make information available to CMS upon request about the form and manner of any rewards and incentives programs it offers and any evaluations of the effectiveness of such programs.
(g) * * *
(2) After the payment year is completed, CMS recalculates the risk factors for affected individuals to determine if adjustments to payments are necessary.
(i) Prior to calculation of final risk factors for a payment year, CMS allows a reconciliation process to account for risk adjustment data submitted after the March deadline until the final risk adjustment data submission deadline in the year following the payment year.
(ii) After the final risk adjustment data submission deadline, which is January 31 of the year following the payment year, an MA organization can submit data to correct overpayments but cannot submit diagnoses for additional payment.
(3) Submission of corrected risk adjustment data in accordance with overpayments after the final risk adjustment data submission deadline, as described in paragraph (g)(2) of this section, must be made as provided in § 422.326.
The revision reads as follows:
(c)
(2)
(A) Established RADV audit procedures and requirements.
(B) RADV appeals procedures and requirements.
(ii)
(iii)
(A) The audited HCC(s) that the Secretary identified as being in error.
(B) A justification in support of the audited HCC selected for appeal.
(iv)
(v)
(vi)
(A) The MA organization's own RADV payment error calculation.
(B) Where the Secretary's RADV payment error calculation was erroneous.
(3)
(ii) MA organizations may not appeal the Secretary's medical record review determination methodology or RADV payment error calculation methodology.
(iii) As part of the RADV payment error calculation appeal— MA organizations may not appeal RADV medical record review-related errors.
(iv) MA organizations may not appeal RADV errors that result from an MA organization's failure to submit a medical record.
(4)
(5)
(A) That they may appeal RADV HCC errors that are eligible for medical record review determination appeal.
(B) That they may appeal the Secretary's RADV payment error calculation.
(ii) MA organizations have 60 days from date of issuance of the RADV audit report to file a written request with CMS for RADV appeal. This request for RADV appeal must specify one of the following:
(A) Whether the MA organization requests medical record review determination appeal, the issues with which the MA organization disagrees, and the reasons for the disagreements.
(B) Whether the MA organization requests RADV payment error calculation appeal, the issues with which the MA organization disagrees, and the reasons for the disagreements.
(C) Whether the MA organization requests both medical record review determination appeal and RADV payment error calculation appeal, the issues with which the MA organization disagrees, and the reasons for the disagreements.
(iii) For MA organizations that appeal both medical record review determination appeal and RADV payment error calculation appeal:
(A) The Secretary adjudicates the request for RADV payment error calculation following conclusion of reconsideration of the MA organization's request for medical record review determination appeal.
(B) An MA organization's request for appeal of its RADV payment error calculation will not be adjudicated until appeals of RADV medical record review determinations filed by the MA organization have been completed and the decisions are final for that stage of appeal.
(6)
(A) The audited HCC that the Secretary identified as being in error that the MA organization wishes to appeal.
(B) A justification in support of the audited HCC chosen for appeal.
(ii)
(A) Must include the MA organization's own RADV payment error calculation that clearly specifies where the Secretary's RADV payment error calculation was erroneous; and
(B) May include additional documentary evidence pertaining to the calculation of the payment error that the MA organization wishes the reconsideration official to consider.
(iii)
(
(
(B) For payment error calculation reconsideration, CMS ensures that a third party not involved in the initial RADV payment error calculation does the following:
(
(
(
(iv)
(B) The reconsideration official's decision is final unless the MA organization disagrees with the reconsideration official's decision.
(C) If the MA organization disagrees with the reconsideration official's decision, they may request a hearing in accordance with paragraph (c)(7) of this section.
(7)
(ii)
(iii)
(A) If the MA organization appeals medical record review reconsideration determination, the written request for RADV hearing must—
(
(
(
(B) If the MA organization appeals the RADV payment error calculation reconsideration determination, the written request for RADV hearing must include the following:
(
(
(iv)
(v)
(B) A party to the hearing who objects to the designated hearing officer must notify that officer in writing at the earliest opportunity.
(C) The hearing officer must consider the objections, and may, at his or her discretion, either proceed with the hearing or withdraw.
(D) If the hearing officer withdraws, another hearing officer conducts the hearing.
(E) If the hearing officer does not withdraw, the objecting party may, after the hearing, present objections and request that the officer's decision be revised or a new hearing be held before another hearing officer. The objections must be submitted in writing to the Secretary.
(vi)
(A) For a medical record review determination appeal, the hearing officer reviews all of the following:
(
(
(
(B) For a payment error calculation appeal, the hearing officer reviews all of the following:
(
(
(vii)
(B)
(
(
(
(
(
(
(
(
(viii)
(ix)
(B) For MA organizations appealing the RADV error calculation only, a third party not involved in the initial RADV payment error calculation recalculates the MA organization's RADV payment error and issues a new RADV audit report to the appellant MA organization and CMS.
(x)
(8)
(ii) CMS or a MA organization that has received a hearing officer's decision and requests review by the CMS Administrator must do so within 60 days of receipt of the hearing officer's decision.
(iii) After receiving a request for review, the CMS Administrator has the discretion to elect to review the hearing officer's decision or to decline to review the hearing officer's decision.
(iv) If the CMS Administrator elects to review the hearing decision—
(A) The CMS Administrator acknowledges the decision to review the hearing decision in writing and notifies CMS and the MA organization of their right to submit comments within 15 days of the date of the notification; and
(B) The CMS Administrator is limited to the review of the record. The record is comprised of the following:
(
(
(
(C) The CMS Administrator reviews the record and determines whether the hearing officer's determination should be upheld, reversed, or modified.
(v) The CMS Administrator renders his or her final decision in writing to the parties within 60 days of acknowledging his or her decision to review the hearing officer's decision.
(vi) The decision of the hearing officer is final if the CMS Administrator—
(A) Declines to review the hearing officer's decision; or
(B) Does not make a decision within 60 days.
(a)
(b)
(c)
(d)
(1)
(2)
(e)
(f)
The revisions and additions are as follows:
(b) * * *
(4) * * *
(vi) * * *
(C) * * *
(
(G) * * *
(
(ii) Not accept, as either the parent organization owning a controlling interest of, or subsidiary of, an entity that accepts new enrollees under a section 1876 reasonable cost contract in any area in which it seeks to offer an MA plan.
The revisions and additions read as follows:
(i)* * *
(2)* * *
(i) HHS, the Comptroller General, or their designees have the right to audit, evaluate, collect, and inspect any books, contracts, computer or other electronic systems, including medical records and documentation of the first tier, downstream, and entities related to CMS' contract with the MA organization.
(ii) HHS, the Comptroller General, or their designees have the right to audit, evaluate, collect, and inspect any records under paragraph (i)(2)(i) of this section directly from any first tier, downstream, or related entity.
(iii) For records subject to review under paragraph (i)(2)(ii) of this section, except in exceptional circumstances, CMS will provide notification to the MA organization that a direct request for information has been initiated.
(l) * * *
(5)
The additions and revisions read as follows:
(a) * * *
(4) CMS may make a determination under paragraph (a)(1), (2), or (3) of this section if the MA organization has had one or more of the following occur:
(xii) Has failed to report MLR data in a timely and accurate manner in accordance with § 422.2460 or that any MLR data required by this subpart is found to be materially incorrect or fraudulent.
(b) * * *
(1) * * *
(i) CMS notifies the MA organization in writing at least 45 calendar days before the intended date of the termination.
(ii) The MA organization notifies its Medicare enrollees of the termination by mail at least 30 calendar days before the effective date of the termination.
(iii) The MA organization notifies the general public of the termination at least 30 calendar days before the effective date of the termination by releasing a press statement to news media serving the affected community or county and posting the press statement prominently on the organization's Web site.
(2)
(a) * * *
(9) Except as provided under § 423.34 of this chapter, enrolls an individual in any plan under this part without the prior consent of the individual or the designee of the individual.
(10) Transfers an individual enrolled under this part from one plan to another without the prior consent of the individual or the designee of the individual or solely for the purpose of earning a commission.
(11) Fails to comply with marketing restrictions described in subpart V or applicable implementing guidance.
(12) Employs or contracts with any individual, agent, provider, supplier or entity who engages in the conduct described in paragraphs (a)(1) through (11) of this section.
(c) * * *
(1)
(i) Section 422.760(b) for any of the determinations at § 422.510(a), except § 422.510(a)(4)(i).
(ii) Section 422.760(c) for any of the determinations at § 422.752(a) except § 422.752(a)(5).
(2) * * *
(ii) Determinations made under § 422.510(a)(4)(i).
The addition and revision read as follows:
(c) * * *
(3) * * *
(ii) * * *
(C) During the limited time period, sanctioned sponsoring organizations
(d)
(1) Decline to authorize the renewal of an organization's contract in accordance with § 422.506(b); or
(2) Terminate the contract in accordance with § 422.510.
(a) * * *
(3) The adverse effect to enrollees which resulted or could have resulted from the conduct of MA organization;
(b)
(c)
(1) Civil money penalties of not more than $25,000 for each determination made.
(2) With respect to a determination made under § 422.752(a)(4) or (a)(5)(i), not more than $100,000 for each such determination, except with respect to a determination made under § 422.752(a)(5), an assessment of not more than the amount claimed by such plan or MA organization based upon the misrepresentation or falsified information involved.
(3) Plus with respect to a determination made under § 422.752(a)(2), double the excess amount charged in violation of such paragraph (and the excess amount charged must be deducted from the penalty and returned to the individual concerned).
(4) Plus with respect to a determination made under § 422.752(a)(4), $15,000 for each individual not enrolled as a result of the practice involved.
(b) * * *
(1) The other party will have 20 calendar days from the date of mailing or in person filing to submit any rebuttal statement or additional evidence.* * *
(a) * * *
(2) The MA organization or its legal representative or other authorized official must file the request, in writing, to the appropriate Departmental Appeals Board office, with a copy to CMS, within 60 calendar days after receipt of the notice of initial determination, to request a hearing before an ALJ to appeal any determination by CMS to impose a civil money penalty.
The revisions and addition read as follows:
If an MA organization uses agents and brokers to sell its Medicare plans, the following requirements in this section are applicable.
(a)
(i) Commissions;
(ii) Bonuses;
(iii) Gifts;
(iv) Prizes or Awards; or
(v) Referral or Finder fees.
(2) Does not include—
(i) Payment of fees to comply with State appointment laws, training, certification, and testing costs;
(ii) Reimbursement for mileage to, and from, appointments with beneficiaries; or
(iii) Reimbursement for actual costs associated with beneficiary sales appointments such as venue rent, snacks, and materials.
(1) PDP replaced with another PDP.
(2) MA or MA–PD replaced with another MA or MA–PD.
(3) Cost plan replaced with another cost plan.
(1) PDP replaced with an MA–PD or an MA–PD replaced with a PDP.
(2) PDP replaced with a cost plan or a cost plan replaced with a PDP.
(3) MA–PD replaced with a cost plan or a cost plan replaced with an MA–PD.
(b)
(1)
(ii) For renewal years, compensation may be up to 50 percent of the current fair market value cut-off amounts published annually by CMS.
(iii) If the MA organization contracts with a third party entity such as a Field Marketing Organization or similar type entity to sell its insurance products, or perform services (for example, training, customer service, or agent recruitment)—
(A) The total amount paid by the MA organization to the third party and its agents for enrollment of a beneficiary into a plan, if any, must be made in accordance with paragraph (b)(1) of this section; and
(B) The amount paid to the third party for services other than selling insurance products, if any, must be fair-market value and must not exceed an amount that is commensurate with the amounts paid by the MA organization to a third party for similar services during each of the previous 2 years.
(2)
(ii) An agent or broker must not receive aggregate compensation greater than the renewal compensation payable by the replacing plan on renewal policies if an existing policy is replaced with a like plan type at any time.
(iii) The initial compensation is paid for replacements between unlike plan types.
(3)
(ii)(A) Subject to paragraph (b)(3)(iii) of this section, compensation payments may be made at one time for the entire current plan year or in installments throughout the year.
(B) Compensation may not be paid until January 1 of the enrollment year and, if paid at all, must be paid in full by December 31 of the enrollment year.
(iii) When a beneficiary disenrolls from an MA plan, compensation paid to agents and brokers must be recovered for those months of the plan year for which the beneficiary is not enrolled. For disenrollments occurring within the first 3 months, the entire compensation must be recovered unless CMS determines that recoupment is not in the best interests of the Medicare program.
(4)
(ii) Compensation structures must be available upon CMS request including for audits, investigations, and to resolve complaints.
(h)
(1) May not exceed an amount that CMS determines could reasonably be expected to provide financial incentive for an agent or broker to recommend or enroll a beneficiary into a plan that is not the most appropriate to meet his or her needs; and
(2) Must be included in the total compensation not to exceed the fair market value for that calendar year.
If the Part C RAC did not apply its stated payment methodology correctly, an MA organization may appeal the findings of the applied methodology. The payment methodology itself is not subject to appeal.
(a)
(b)
(2) The MA organization must include with its request all supporting documentary evidence it wishes the independent reviewer to consider.
(i) This material must be submitted in the format requested by CMS.
(ii) Documentation, evidence, or substantiation submitted after the filing of the reconsideration request will not be considered.
(c)
(1) The rebuttal must be submitted within 30 calendar days of the review entity's notification to CMS that it has received the MA organization's reconsideration request.
(2) CMS sends its rebuttal to the MA organization at the same time it is submitted to the independent reviewer.
(d)
(e)
(f)
(g)
(a)
(b)
(2) The MA organization must submit with its request all supporting documentation, evidence, and substantiation that it wants to be considered.
(3) No new evidence may be submitted.
(4) Documentation, evidence, or substantiation submitted after the filing of the request will not be considered.
(c)
(1) The rebuttal must be submitted within 30 calendar days of the MA organization's submission of its hearing official review request.
(2) CMS sends its rebuttal to the MA organization at the same time it is submitted to the hearing official.
(d)
(1) The hearing is not to be conducted live or via telephone unless the hearing official, in his or her sole discretion, requests a live or telephonic hearing.
(2) In all cases, the hearing official's review is limited to information that meets one or more of the following:
(i) The Part C RAC used in making its determinations.
(ii) The independent reviewer used in making its determinations.
(iii) The MA organization submits with its hearing request.
(iv) CMS submits in accordance with paragraph (c) of this section.
(3) Neither the MA organization nor CMS may submit new evidence.
(e)
(f)
(a)
(1) The request must be filed with the CMS Administrator within 30 calendar
(2) The request must provide evidence or reasons to substantiate the request.
(b)
(1) Documentation, evidence, or substantiation submitted after the filing of the request will not be considered.
(2) Neither the MA organization, nor CMS may submit new evidence.
(c)
(d)
(1) If the Administrator agrees to review the hearing official's decision, CMS may file a rebuttal statement within 30 days of the Administrator's notice to the plan that the request for review has been accepted. CMS sends its rebuttal statement to the plan at the same time it is submitted to the Administrator.
(2) If the CMS Administrator declines to review the hearing official's decision, the hearing official's decision is final and binding.
(e)
Secs. 1102, 1860D–1 through 1860D–42, and 1871 of the Social Security Act (42 U.S.C. 1302, 1395w–101 through 1395w–152, and 1395hh).
(a) * * *
(1) * * *
1128J(d). Reporting and Returning of Overpayments.
1860D–14A. Medicare coverage gap discount program.
1860D–43. Condition for coverage of drugs under this part.
(d) * * *
(5) * * *
(iii)
(iv)
The additions read as follows:
(1) * * *
(vii) A combination product approved and regulated by the FDA as a drug, vaccine, or biologic described in paragraphs (1)(i), (ii), (iii), or (v) of this definition.
(2) Does not include any of the following:
(iii) Medical foods, defined as a food that is formulated to be consumed or administered enterally under the supervision of a physician and which is intended for the specific dietary management of a disease or condition for which distinctive nutritional requirements, based on recognized scientific principles, are established by medical evaluation, and that are not regulated as drugs under section 505 of the Federal Food, Drug, and Cosmetic Act.
(1) The Part D sponsor (or other intermediary contracting organization) and the network dispensing pharmacy or other network dispensing provider have negotiated as the amount such network entity will receive, in total, for a particular drug.
(2) Are inclusive of all price concessions from network pharmacies except those contingent price concessions that cannot reasonably be determined at the point-of-sale; and
(3) Include any dispensing fees; but
(4) Excludes additional contingent amounts, such as incentive fees, if these amounts increase prices and cannot reasonably be determined at the point-of-sale.
(5) Must not be rebated back to the Part D sponsor (or other intermediary contracting organization) in full or in part.
The revisions and additions read as follows:
(b) * * *
(2) * * *
(v) Until such time as there are established, through notice and comment rulemaking, criteria to identify, as appropriate, categories and classes of clinical concern, the categories and classes of clinical concern are as specified in section 1860D–4(b)(3)(G)(iv) of the Act.
(3) * * *
(vi) A Part D sponsor must charge cost sharing for a temporary supply of drugs provided under its transition process such that the following conditions are met:
(A) For low-income subsidy (LIS) enrollees, a sponsor must not charge higher cost sharing for transition supplies than the statutory maximum copayment amounts.
(B) For non-LIS enrollees, a sponsor must charge—
(
(
(c) * * *
(5) Before June 1, 2015, the following are applicable:
(6) Beginning June 1, 2015, the following are applicable: —
(i) A Part D sponsor must deny, or must require its pharmaceutical benefit manager (PBM) to deny, a pharmacy claim for a Part D drug if an active and valid physician or eligible professional (as defined in section 1848(k)(3)(B)(i) or (ii) of the Act) National Provider Identifier (NPI) is not contained on the claim.
(ii) A Part D sponsor must deny, or must require its PBM to deny, a pharmacy claim for a Part D drug if the physician or eligible professional (when permitted to write prescriptions by applicable State law)—
(A) Is not enrolled in the Medicare program in an approved status; and
(B) Does not have a valid opt-out affidavit on file with an A/B Medicare Administrative Contractor (MAC).
(iii) A Part D sponsor must deny, or must require its PBM to deny, a request for reimbursement from a Medicare beneficiary for a drug if the request is not for a Part D drug that was dispensed in accordance with a prescription written by a physician or, when permitted by applicable State law, other eligible professional (as defined in section 1848(k)(3)(B)(i) or (ii) of the Act) who—
(A) Is identified by his or her legal name in the request; and
(B)(
(
(iv) In order for a Part D sponsor to submit to CMS a prescription drug event record (PDE), the PDE must contain an active and valid individual prescriber NPI and must pertain to a claim for a Part D drug that was dispensed in accordance with a prescription written by a physician or, when permitted by applicable State law, an eligible professional (as defined in section 1848(k)(3)(B)(i) or (ii) of the Act) who—
(A) Is enrolled in Medicare in an approved status, or
(B) Has a valid opt-out affidavit on file with an A/B MAC.
(a)
(i) PDE data for the annual Part D payment reconciliations referred to in § 423.343(c) and (d); or
(ii) Direct and indirect remuneration data.
(b)
(c)
(d)
(1)
(2)
(e)
(f)
(1) Average wholesale price.
(2) Wholesale acquisition cost.
(3) Average manufacturer price.
(4) Average sales price.
(5) Maximum allowable cost.
(6) Other cost, whether publicly available or not.
(a) * * *
(3) CMS does not approve an application when it would result in the applicant's parent organization, directly or through its subsidiaries, holding more than one PDP sponsor contract in the PDP Region for which the applicant is seeking qualification as a PDP sponsor. A parent organization is an entity that exercises a controlling interest in the applicant.
(b) * * *
(4) * * *
(vi) * * *
(C) * * *
(
(8) If neither the applicant, nor its parent or another subsidiary of the same parent, holds a Part D sponsor contract that has been in effect for at least 1 year at the time it submits an application, the applicant must have arrangements in place such that the applicant and its contracted first tier, downstream, or related entities, in combination, have at least 1 full-benefit year of experience within the 2 years preceding the application submission performing at a minimum all of the following functions in support of the operation of another Part D contract:
(i) Authorization, adjudication, and processing of prescription drug claims at the point of sale.
(ii) Administration and tracking of enrollees' drug benefits in real time, including automated coordination of benefits with other payers.
(iii) Operation of an enrollee appeals and grievance process.
(9) For organizations applying to offer stand-alone prescription drug plans, the organization, its parent, or a subsidiary of the organization or its parent, must have either of the following:
(i) For 2 continuous years immediately prior to submitting an application, actively offered health insurance or health benefits coverage, including prescription drug coverage, as a risk-bearing entity in at least one State.
(ii) For 5 continuous years immediately prior to submitting an application, actively managed prescription drug benefits for an organization that offers health insurance or health benefits coverage, including at a minimum, all of the services listed in paragraph (b)(8) of this section.
The revisions and additions read as follows:
(f) * * *
(3) * * *
(viii) Supporting program integrity purposes, including coordination with the States.
(i) * * *
(2) * * *
(ii) HHS, the Comptroller General or their designees have the right to audit, evaluate, collect, and inspect any records under paragraph (i)(2)(i) of this section directly from any first tier, downstream, or related entity.
(iii) For records subject to review under paragraph (i)(2)(ii) of this section, except in exceptional circumstances, CMS will provide notification to the Part D sponsor that a direct request for information has been initiated.
(k) * * *
(7)
(m)
(1) * * *
(iii) Subject, in certain cases, to encryption of beneficiary identifiers and aggregation of cost data to protect beneficiary confidentiality and commercially sensitive data of Part D sponsors, in accordance with all of the following principles:
(A) Subject to the restrictions in this paragraph, all elements on the claim are available to HHS, other executive branch agencies, and the States.
(B) Cost data elements on the claim generally are aggregated for releases to other executive branch agencies, States, and external entities. Upon request, CMS excludes sales tax from the aggregation at the individual level if necessary for the project.
(C) Beneficiary identifier elements on the claim generally are encrypted for release, except in limited circumstances, such as the following:
(
(
(3)(i) CMS must make available to Congressional support agencies (the Congressional Budget Office, the Government Accountability Office, the Medicare Payment Advisory Commission, and the Congressional Research Service when it is acting on behalf of a Congressional committee in accordance with 2 U.S.C. 166(d)(1)) all information collected under paragraph (f)(3) of this section for the purposes of conducting congressional oversight, monitoring, making recommendations, and analysis of the Medicare program.
(ii) The Congressional Research Service is considered an external entity when it is not acting on behalf of a Congressional committee in accordance with 2 U.S.C. 166(d)(1) for the purposes of paragraph (m)(1) of this section.
(b) * * *
(21)(i) Update any prescription drug pricing standard (as defined in § 423.501) based on the cost of the drug used for reimbursement of network pharmacies by the Part D sponsor on January 1 of each contract year and not less frequently than once every 7 days thereafter;
(ii) Indicate the source used for making any such updates; and
(iii) Disclose all individual drug prices to be updated to the applicable pharmacies in advance of their use for reimbursement of claims, if the source for any prescription drug pricing standard is not publicly available.
(i) * * *
(3) * * *
(vii) If applicable, provisions addressing the drug pricing standard requirements of § 423.505(b)(21).
The additions and revisions read as follows:
(a) * * *
(4) CMS may make a determination under paragraph (a)(1), (2) or (3) of this section if the Part D Plan sponsor has had one or more of the following occur:
(x) Achieves a Part D summary plan rating of less than 3 stars for 3 consecutive contract years. Plan ratings issued by CMS before September 1, 2012 are not included in the calculation of the 3-year period.
(xi)(A) Has failed to report MLR data in a timely and accurate manner in accordance with § 423.2460; or
(B) That any MLR data required by this subpart is found to be materially incorrect or fraudulent.
(b) * * *
(1) * * *
(i) CMS notifies the Part D plan sponsor in writing at least 45 calendar days before the intended date of the termination.
(ii) The Part D plan sponsor notifies its Medicare enrollees of the termination by mail at least 30 calendar days before the effective date of the termination.
(iii) The Part D plan sponsor notifies the general public of the termination at least 30 calendar days before the effective date of the termination by releasing a press statement to news media serving the affected community or county and posting the press statement prominently on the organization's Web site.
(iv) CMS notifies the general public of the termination no later than 30 calendar days after notifying the plan of CMS's decision to terminate the Part D plan sponsor's contract by releasing a press statement.
(2) * * *
(i) * * *
(C) The contract is being terminated based on the grounds specified in paragraphs (a)(4)(i) and (xi) of this section.
The additions and revision read as follows:
(a) * * *
(7) Except as provided under § 423.34, enrolls an individual in any plan under this part without the prior consent of the individual or the designee of the individual.
(8) Transfers an individual enrolled under this part from one plan to another without the prior consent of the individual or the designee of the individual or solely for the purpose of earning a commission.
(9) Fails to comply with marketing restrictions described in subpart V or applicable implementing guidance.
(10) Employs or contracts with any individual, agent, provider, supplier or entity who engages in the conduct described in paragraphs (a)(1) through (9) of this section.
(c) * * *
(1)
(i) Section 423.760(b) for any of the determinations at § 423.509(a), except § 423.509(a)(4)(i).
(ii) Section 423.760(c) for any of the determinations in paragraph (a) of this section except § 422.752(a)(5) of this chapter.
The addition and revision read as follows:
(c) * * *
(3) * * *
(ii) * * *
(C) During the limited time period, sanctioned Part D plan sponsors under the benchmark that would normally participate in the annual and monthly auto enrollment process for enrollees receiving the low income subsidy will not be allowed to receive or process these types of enrollments.
(d)
(1) Decline to authorize the renewal of an organization's contract in accordance with § 423.507(b); or
(2) Terminate the contract in accordance with § 423.509.
The revision and addition read as follows:
(a) * * *
(3) The adverse effect to enrollees which resulted or could have resulted from the conduct of the Part D sponsor.
(c)
(1) Civil money penalties of not more than $25,000 for each determination made.
(2) With respect to a determination made under § 423.752(a)(4) or (a)(5)(i), not more than $100,000 for each such determination except with respect to a determination made under § 423.752(a)(5), an assessment of not more than the amount claimed by such plan or PDP sponsor based upon the misrepresentation or falsified information involved.
(3) Plus with respect to a determination made under § 423.752(a)(2), double the excess amount charged in violation of such paragraph (and the excess amount charged must be deducted from the penalty and returned to the individual concerned).
(4) Plus with respect to a determination made under § 423.752(a)(4), $15,000 for each individual not enrolled as a result of the practice involved.
(b) * * *
(1) The other party will have 20 calendar days from the date of mailing or in person filing to submit any rebuttal statement or additional evidence. * * *
(a) * * *
(2) The Part D sponsor or its legal representative or other authorized official must file the request, in writing, to the appropriate Departmental Appeals Board office, with a copy to CMS, within 60 calendar days after receipt of the notice of initial determination, to request a hearing before an ALJ to appeal any determination by CMS to impose a civil money penalty.
The revisions and additions read as follows:
If a Part D sponsor uses agents and brokers to sell its Part D plans, the following requirements in this section are applicable.
(a)
(i) Commissions;
(ii) Bonuses;
(iii) Gifts;
(iv) Prizes or Awards; or
(v) Referral or Finder fees.
(2) Does not include—
(i) Payment of fees to comply with State appointment laws, training, certification, and testing costs;
(ii) Reimbursement for mileage to, and from, appointments with beneficiaries; or
(iii) Reimbursement for actual costs associated with beneficiary sales appointments such as venue rent, snacks, and materials.
(1) PDP replaced with another PDP.
(2) MA or MA–PD replaced with another MA or MA–PD.
(3) Cost plan replaced with another cost plan.
(1) PDP replaced with an MA–PD or an MA–PD replaced with a PDP.
(2) PDP replaced with a cost plan or a cost plan replaced with a PDP.
(3) MA–PD replaced with a cost plan or a cost plan replaced with an MA–PD.
(b)
(1)
(ii) For renewal years, compensation may be up to 50 percent of the current fair market value cut-off amounts published annually by CMS.
(iii) If the Part D sponsor contracts with a third party entity such as a Field Marketing Organization or similar type entity to sell its insurance products, or perform services (for example, training, customer service, or agent recruitment)—
(A) The total amount paid by the Part D sponsor to the third party and its agents for enrollment of a beneficiary into a plan, if any, must be made in accordance with paragraph (b)(1) of this section; and
(B) The amount paid to the third party for services other than selling insurance products, if any, must be fair-market value and must not exceed an amount that is commensurate with the amounts paid by the Part D sponsor to a third party for similar services during each of the previous 2 years.
(2)
(ii) An agent or broker must not receive aggregate compensation greater than the renewal compensation payable by the replacing plan on renewal policies if an existing policy is replaced with a like plan type at any time.
(iii) The initial compensation is paid for replacements between unlike plan types.
(3)
(ii)(A) Subject to paragraph (b)(3)(iii) of this section, compensation payments may be made at one time for the entire current plan year or in installments throughout the year.
(B) Compensation may not be paid until January 1 of the enrollment year and, if paid at all, must be paid in full by December 31 of the enrollment year.
(iii) When a beneficiary disenrolls from an MA plan, compensation paid to agents and brokers must be recovered for those months of the plan year for which the beneficiary is not enrolled. For disenrollments occurring within the first 3 months, the entire compensation must be recovered unless CMS determines that recoupment is not in the best interests of the Medicare program.
(4)
(ii) Compensation structures must be available upon CMS request including for audits, investigations, and to resolve complaints.
(h) Finder's (referral) fees. Finder's (referral) fees paid to all agents and brokers—
(1) May not exceed an amount that CMS determines could reasonably be expected to provide financial incentive for an agent or broker to recommend or enroll a beneficiary into a plan that is not the most appropriate to meet his or her needs; and
(2) Must be included in the total compensation not to exceed the fair market value for that calendar year.
If the Part D RAC did not apply its stated payment methodology correctly, a Part D plan sponsor may appeal the findings of the applied methodology. The payment methodology itself is not subject to appeal.
(a)
(b)
(2) The Part D plan sponsor must include with its request all supporting documentary evidence it wishes the independent reviewer to consider.
(i) This material must be submitted in the format requested by CMS.
(ii) Documentation, evidence, or substantiation submitted after the filing of the reconsideration request will not be considered.
(c)
(1) The rebuttal must be submitted within 30 calendar days of the review entity's notification to CMS that it has received the Part D plan sponsor's reconsideration request.
(2) CMS sends its rebuttal to the Part D plan sponsor at the same time it is submitted to the independent reviewer.
(d)
(e)
(f)
(g)
(a)
(b)
(2) The Part D plan sponsor must submit with its request all supporting documentation, evidence, and substantiation that it wants to be considered.
(3) No new evidence may be submitted.
(4) Documentation, evidence, or substantiation submitted after the filing of the request will not be considered.
(c)
(1) The rebuttal must be submitted within 30 calendar days of the Part D plan sponsor's submission of its hearing official review request.
(2) CMS sends its rebuttal to the Part D plan sponsor at the same time it is submitted to the hearing official.
(d)
(1) The hearing is not to be conducted live or via telephone unless the hearing official, in his or her sole discretion, requests a live or telephonic hearing.
(2) In all cases, the hearing official's review is limited to information that meets one or more of the following:
(i) The Part D RAC used in making its determinations.
(ii) The independent reviewer used in making its determinations.
(iii) The Part D plan sponsor submits with its hearing request.
(iv) CMS submits in accordance with paragraph (c) of this section.
(3) Neither the Part D plan sponsor nor CMS may submit new evidence.
(e)
(f)
(a)
(1) The request must be filed with the CMS Administrator within 30 calendar days of the date of the hearing official's decision.
(2) The request must provide evidence or reasons to substantiate the request.
(b)
(1) Documentation, evidence, or substantiation submitted after the filing of the request will not be considered.
(2) Neither the Part D plan sponsor nor CMS may submit new evidence.
(c)
(d)
(e)
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).
(a) * * *
(11)
(ii) The applicable licensing or administrative body for any State in which a physician or eligible professional practices has suspended or revoked the physician or eligible professional's ability to prescribe drugs, and such suspension or revocation is in effect on the date the physician or eligible professional submits his or her enrollment application to the Medicare contractor.
(a) * * *
(13)
(ii) The applicable licensing or administrative body for any state in which the physician or eligible professional practices suspends or revokes the physician or eligible professional's ability to prescribe drugs.
(14)
(i) The pattern or practice is abusive or represents a threat to the health and safety of Medicare beneficiaries or both. In making this determination, CMS considers the following factors:
(A) Whether there are diagnoses to support the indications for which the drugs were prescribed.
(B) Whether there are instances when the necessary evaluation of the patient for whom the drug was prescribed could not have occurred (for example, the patient was deceased or out of state at the time of the alleged office visit).
(C) Whether the physician or eligible professional has prescribed controlled substances in excessive dosages that are linked to patient overdoses.
(D) The number and type(s) of disciplinary actions taken against the physician or eligible professional by the licensing body or medical board for the State or States in which he or she practices, and the reason(s) for the action(s).
(E) Whether the physician or eligible professional has any history of “final adverse actions” (as that term is defined in § 424.502).
(F) The number and type(s) of malpractice suits that have been filed against the physician or eligible professional related to prescribing that have resulted in a final judgment against the physician or eligible professional or in which the physician or eligible professional has paid a settlement to the plaintiff(s) (to the extent this can be determined).
(G) Whether any State Medicaid program or any other public or private health insurance program has restricted, suspended, revoked, or terminated the physician or eligible professional's ability to prescribe medications, and the reason(s) for any such restriction, suspension, revocation, or termination.
(H) Any other relevant information provided to CMS.
(ii) The pattern or practice of prescribing fails to meet Medicare requirements. In making this determination, CMS considers the following factors:
(A) Whether the physician or eligible professional has a pattern or practice of prescribing without valid prescribing authority.
(B) Whether the physician or eligible professional has a pattern or practice of prescribing for controlled substances outside the scope of the prescriber's DEA registration.
(C) Whether the physician or eligible professional has a pattern or practice of prescribing drugs for indications that were not medically accepted—that is, for indications neither approved by the FDA nor medically accepted under section 1860D–2(e)(4) of the Act—and whether there is evidence that the physician or eligible professional acted in reckless disregard for the health and safety of the patient.
Office of the Secretary (OST), Department of Transportation (DOT).
Notice of proposed rulemaking.
The Department is seeking comment on a number of proposals to enhance protections for air travelers and to improve the air travel environment, including a proposal to clarify and codify the Department's interpretation of the statutory definition of “ticket agent.” By codifying the Department's interpretation, the Department intends to ensure that all entities that manipulate fare, schedule, and availability information in response to consumer inquiries and receive a form of compensation are adhering to all of the Department's consumer protection requirements that are applicable to ticket agents such as the full-fare advertising rule and the code-share disclosure rule.
This NPRM also proposes to require airlines and ticket agents to disclose at all points of sale the fees for certain basic ancillary services associated with the air transportation consumers are buying or considering buying. Currently, some consumers may be unable to understand the true cost of travel while searching for airfares, due to insufficient information concerning fees for ancillary services. The Department is addressing this problem by proposing that carriers share real-time, accurate fee information for certain optional services with ticket agents.
Other proposals in this NPRM to enhance airline passenger protections include: Expanding the pool of “reporting” carriers; requiring enhanced reporting by mainline carriers for their domestic code-share partner operations; requiring large travel agents to adopt minimum customer service standards; codifying the statutory requirement that carriers and ticket agents disclose any airline code-share arrangements on their Web sites; and prohibiting unfair and deceptive practices such as undisclosed biasing in schedule and fare displays and post-purchase price increases. The Department is also considering whether to require ticket agents to disclose the carriers whose tickets they sell in order to avoid having consumers mistakenly believe they are searching all possible flight options for a particular city-pair market when in fact there may be other options available. Additionally, this NPRM would correct drafting errors and make minor changes to the Department's second Enhancing Airline Passenger Protections rule to conform to guidance issued by the Department's Office of Aviation Enforcement and Proceedings (Enforcement Office) regarding its interpretation of the rule.
Comments must be received by August 21, 2014. Comments received after this date will be considered to the extent practicable.
You may file comments identified by the docket number DOT–OST–2014–0056 by any of the following methods:
•
•
•
•
Kimberly Graber or Blane A. Workie, Office of the Assistant General Counsel for Aviation Enforcement and Proceedings, U.S. Department of Transportation, 1200 New Jersey Ave. SE., Washington, DC 20590, 202–366–9342 (phone), 202–366–7152 (fax),
The U.S. Department of Transportation (DOT) is issuing this notice of proposed rulemaking (NPRM) to improve the air travel environment of consumers based on its statutory authority to prohibit unfair or deceptive practices in air transportation, 49 U.S.C. 41712. The Department is taking action to strengthen the rights of air travelers when purchasing airline tickets from ticket agents, ensure that passengers have adequate information about regional carriers' operations to make informed decisions when selecting flights, increase notice to consumers of some of the fees carriers charge for optional or ancillary services, and prohibit unfair and deceptive practices such as post-purchase price increases and undisclosed biasing in fare and schedule displays.
The quantifiable costs of this rulemaking exceed the quantifiable benefits. However, when unquantified costs and benefits are taken into account, we anticipate that the benefits of this rulemaking would justify the costs. It was not possible to measure the benefits of the proposals in this rulemaking, except for the benefits for provision 2. For example, there are a number of unquantified benefits for the proposals such as improved on time performance for newly reporting carriers and code-share flights of reporting carriers, improved customer goodwill towards ticket agents, and greater competition and lower overall prices for ancillary services and products. There are also some unquantified costs such as increased management costs to improve carrier performance, increased staff time to address consumer complaints, and decreased carrier flexibility to customize services, though we believe these costs would be minimal. If the value of the unquantified benefits, per passenger, is any amount greater than one cent and the unquantified costs are minimal as anticipated, then the entire rule is expected to be net beneficial.
This NPRM addresses several recommendations to the Department regarding aviation consumer protection as well as two issues identified in the second Enhancing Airline Passenger Protections final rule. In that final rule, the Department instituted many passenger protections including expanding the rules regarding lengthy tarmac delays to non-U.S. carriers, requiring U.S. and non-U.S. carriers to adopt and adhere to minimum customer service standards, increasing the amounts of involuntarily denied boarding compensation, enhancing Web site disclosures for baggage fees and other ancillary service fees, and prohibiting post-purchase price increases.
This NPRM also addresses certain recommendations made by two Federal advisory committees—the Future of Aviation Advisory Committee (FAAC) and the Advisory Committee on Aviation Consumer Protection. The FAAC was established on April 16, 2010, with the mandate to provide information, advice, and recommendations to the Secretary of Transportation on ensuring the competitiveness of the U.S. aviation industry and its capability to address the evolving transportation needs, challenges, and opportunities of the global economy. On December 15, 2010, the FAAC delivered a report to the Secretary with 23 recommendations. FAAC Recommendation 11 addressed disclosure of ancillary service fees, code-share operations, and air travel statistics. This NPRM incorporates many aspects of FAAC Recommendation 11. For more information regarding the FAAC, please visit
More recently, on May 24, 2012, the Advisory Committee on Aviation Consumer Protection was established to advise the Secretary in carrying out activities related to airline customer service improvements. On October 22, 2012, this Committee submitted its first set of recommendations to the Secretary on a wide range of aviation consumer issues, including adopting FAAC Recommendation 11, which urged greater transparency in the disclosure of ancillary fees and code-share operations. This NPRM addresses the recommendations by the Committee to ensure transparency in air carrier pricing, to require on-time performance data be reported to the Department for all flights and airlines, and to mandate disclosures by online travel agencies and other agents as to which carriers' services they sell. Records relating to the advisory committee, including a transcript and minutes of its meetings and its full recommendation report, are contained in the Department's docket, which is available at
This NPRM proposes a regulatory definition for the statutory term “ticket agent” to clarify for the industry what type of entity the Department considers to be a ticket agent and to ensure that its consumer protection regulations apply to all entities that hold out airfare, schedule, and availability information to consumers. Consumers and stakeholders in the air transportation industry have identified relatively new entities, such as meta-search engines, as primary information sources and entry points for the purchase of air transportation. However, such entities do not consistently provide the
The Department is considering codifying in its regulations its interpretation of the statutory definition of “ticket agent” to make clear that all entities involved in the sale or distribution of air transportation, including those intermediaries that do not themselves sell air transportation but arrange for air transportation and receive compensation in connection with the sale of air transportation, are ticket agents subject to the Department's regulations regarding the display of airfare information. The definition would include all commercial entities that are involved in arranging for the sale of air transportation through the Internet (among other channels), regardless of whether an entity received a share of revenue from a third party for transactions that originated on the entity's Web site, or the entity charged a commission for each transaction that originated on its Web site, or the entity was simply compensated on a cost-per-click for advertisements, or was compensated on some other basis.
The means by which airline itineraries are commonly displayed and sold has changed dramatically and continues to evolve. New entities that were not previously involved in the distribution of air transportation are now an important source of information for consumers as well as a means of distribution for carriers. Online entities, such as Web sites that provide a variety of travel information, advertising, and links as well as meta-search engines that provide flight search tools including fare and schedule information, are now frequently used by consumers to research airfares and schedules and to connect to the airline or travel agent Web site that ultimately books and/or fulfills the consumer's ticket purchase. Meanwhile, some airlines provide direct electronic access to their own internal systems providing fare, schedule, and availability information to certain Internet entities with the condition that when displaying that carrier's flight itineraries in flight search results, the entity must provide a link only to the airline's Web site and not to travel agent Web sites that have similar information. Staff members from the Department have been informed that, in some cases, entities such as meta-search engines and other Web sites that operate flight search tools receive a commission or some other compensation for transactions that originate on their Web sites, for example, from a flight search tool that allowed the consumer to select a particular itinerary. However, in other cases, entities that are involved in arranging for air transportation by allowing a consumer to select an itinerary using a flight search tool are compensated for advertising and not for the individual transaction. But regardless of the manner of compensation, consumers are increasingly relying on those Internet entities in making their air transportation purchasing decisions. In some cases, these Internet entities display schedules, fares and availability but direct consumers to other Web sites to purchase and are not the final point of sale for an airline ticket. They may be earning revenue through advertising sales and providing flight search capabilities based on data gathered from other sources. These entities would be included under our proposed definition of ticket agent along with traditional ticket agents. The Department seeks comment on the differences between traditional ticket agents and entities that provide flight search tools but direct consumers to another site to finalize their purchase. Are there considerations regarding entities that are not the final point of sale for air transportation that should be considered in connection with the regulations proposed in this rulemaking? DOT also seeks comment on the impact on these entities of complying with the Department's existing regulations applicable to ticket agents. For example, what are the impacts on ticket agents that are not the final point of sale for air transportation of the regulations in 14 CFR 399.80 (e.g., prohibition against misrepresentation of quality or kind of service, type or size of aircraft, time of departure or arrival, and so forth; prohibition against misrepresentation of fares and charges)? Are those impacts different from the impacts on traditional ticket agents or other agents that have a different business model?
As noted above, consumers may begin their search by selecting their flights on one Web site and then completing their purchase on another Web site and, in the process, bypass the pages containing disclosures regarding code-share operations, baggage fee information, and other consumer protection information that the Department requires air carriers, foreign air carriers, and ticket agents to provide to consumers before an air transportation purchase is finalized. Accordingly, the Department is considering a definition of “ticket agent” that would clarify that global distribution systems, meta-search Internet sites that offer a flight search tool and are compensated for advertisements that are displayed on the same Web site (even if the advertising content is not directly related to air travel), and other such compensated intermediaries, regardless of the manner in which they are compensated for their role in arranging air transportation, are ticket agents for the purposes of the Department's air transportation consumer protection regulations. Such a broad definition would ensure that all commercial entities that receive compensation in connection with air transportation advertising/marketing and that are involved in arranging for air transportation would be required to provide consumers with certain essential information early in the process (e.g., information regarding code-share operations, disclosure about baggage fees). A broad definition of “ticket agent” would better ensure passengers are protected regardless of the path they choose to arrange for air transportation. Additionally, this rulemaking proposes to prohibit ticket agents from incorporating undisclosed bias into their displays, and solicits comment on whether ticket agents should be required to disclose information about incentive payments and/or identify the carriers the ticket agent markets or does not market.
We are not aware of whether there is a widespread problem of consumers being confused by Web sites that do not sell tickets but do provide fare, schedule, and availability information that consumers are relying on in planning their travel. However, we believe that there is a risk of harm because some Web sites do not provide all of the disclosures required by the Department. We seek comment from any consumers who have faced these types of problems.
Past litigation has made clear that GDSs are ticket agents.
The Department seeks comment on whether the definition of “ticket agent” should be codified in the regulation so as to clarify the Department's view that it is a broad term and includes entities such as meta-search engines that provide a flight search tool and other Web sites that act as intermediaries between consumers and the ultimate entity that sells the air transportation, whether an airline or another ticket agent. The Department also seeks comment on whether the proposed definition of a ticket agent, which includes an entity that arranges for or sells air transportation for compensation (regardless of the form of compensation), is sufficiently broad and meets the Department's goal of encompassing the variety of entities that use the Internet to arrange for the sale of air transportation. For example, under the proposed definition, an entity that provides a flight search tool that allows consumers to select an itinerary that can be purchased on another site and displays air transportation advertisements for which the entity is compensated on a “cost-per-click” basis would fall under the definition of a ticket agent. The Department also seeks comment on whether the definition of a ticket agent should include all entities that operate flight search tools that display itineraries and allow consumers to begin the booking process but are not compensated for the specific transaction. We also request comments on the costs and benefits to consumers, airlines, meta-search engines, and other entities involved in arranging for and selling air transportation, of codifying the definition of “ticket agent” to include air transportation intermediaries such as meta-search engines that offer a flight search tool.
As a related matter, the Department is considering whether carriers should be prohibited from restricting the information provided by ticket agents when those ticket agents do not sell air transportation directly to consumers but rather provide consumers with different airlines' flight information for comparison shopping. For example, the Department has been informed that some carriers may not allow certain entities with Web sites that operate flight search tools to display the carrier's fare, schedule and availability information. Should carriers be prohibited from imposing restrictions on ticket agents that prevent ticket agents from including a carrier's schedules, fares, rules, or availability information in an integrated display?
Also, we understand that a number of carriers restrict the links ticket agents may place next to a particular flight itinerary on a display, and in many cases only permit a link to the carrier's own Web site. Why might carriers place such restrictions on travel agents? Should the Department require carriers to allow ticket agents to provide links to the Web sites of the entities listed in an integrated display, including non-carrier Web sites?
Many services or products previously included in the price of an airline ticket such as checked baggage, advance seat assignments and priority boarding are now sold separately. Traditional and online travel agents generally access their airline ticket inventory through large Global Distribution Systems (GDSs) and often do not have access to the fees associated with ancillary services/products and thus cannot disclose this information to consumers without looking directly at carriers' Web sites. In discussions with the Department, consumers and corporate travel companies have identified the lack of complete transparency of fees for unbundled services and products as a problem. Specifically, when consumers are making decisions on whether to purchase air transportation and if so, from which entity, they continue to have difficulty determining the total cost of travel because the fees for the basic ancillary services are not available through all sales channels. This lack of transparency also creates challenges in the corporate and managed travel community. Currently, approximately 50% of air transportation is booked through a channel that involves a ticket agent rather than the airline's own reservation agents or its Web site, whether it is through a traditional brick-and-mortar travel agency, a corporate travel agent, or an online travel agency.
In the NPRM that led to the second Enhancing Airline Passenger Protections rule, the Department reiterated its goal of increasing notice to consumers of the fees carriers charge for optional or ancillary services, including checked baggage fees and carry-on baggage fees, by proposing a series of disclosure requirements related to ancillary service fees. When drafting the disclosure regime in the second Enhancing Airline Passenger Protections rule, the Department recognized that a problem in the marketplace existed because ticket agents did not have access to real-time and accurate fee data for ancillary services. Therefore, in the NPRM, the Department asked whether it should require that carriers provide fee information for ancillary services and products to the GDSs in which each carrier participates, in an up-to-date and useful fashion. Although the
The Department received numerous comments regarding the GDS proposal from interested industry parties and consumer advocacy groups both before and after the closing of the comment period. The comments demonstrated to the Department that before it issued a final rule it needed more information on the contractual and historical relationships between the GDSs and the carriers, as well as an in-depth cost-benefit analysis of such a requirement. Therefore, in the Final Rule for Enhancing Airline Passenger Protections published in the
In the 2011 final rule, the Department did impose various disclosure requirements on both carriers and travel agents via the new 14 CFR 399.85. However, in recognition of the fact that the Department had not required the dissemination of ancillary service fee information through GDSs and, therefore, agents would not necessarily have access to the most up-to-date and accurate ancillary service fee information, the Department promulgated different baggage disclosure requirements for ticket agents from those required of carriers. For example, the rule allows ticket agents with Web sites marketed to consumers in the United States to disclose baggage fees through hyperlinks displayed with itinerary search results and included in e-ticket confirmations which link to static lists. Also, 14 CFR 399.85(a) requires carriers but not ticket agents to disclose on their homepage for three months any change to their baggage fees. Additionally, under 14 CFR 399.85(d), carriers must provide a listing of all optional service fees on one Web page. There must be a link to that listing on the homepage. Agents are not required to have this listing, as they do not necessarily have access to all carriers' current optional service fee information on a real-time basis.
While the Department considers the disclosure requirements in its 2011 final rule to be a step in the right direction, these requirements do not fully address the problem of lack of transparency of ancillary services and products. Consumers who book transportation through a ticket agent still do not receive accurate and real-time information about fees for ancillary services and products and are unable to determine the total cost of travel. Consumers also can't use the list of optional services and fees that airlines post on their Web site to determine the cost of travel since airlines generally provide a range of fees for ancillary services aside from baggage and acknowledge that the fees vary based on a number of factors such as the type of aircraft used, the flight on which a passenger is booked or the time at which a passenger pays for the service or product. Further, the list of optional services and fees that the airlines post on their Web sites are static lists. In many cases, it is not possible for consumers to know the specific fees that would apply to them based on these lists as there are numerous possible fare and fee combinations and routings for any given trip. With respect to baggage, the existing disclosure requirements mandate specific information, but passengers must still review lengthy and complex charts to determine the exact fee that they would be charged for their baggage.
The Department remains of the view that as carriers continue to unbundle services that used to be included in the price of air transportation, passengers need to be protected from hidden and deceptive fees and allowed to price shop for air transportation in an effective manner. However, we lack sufficient data to be able to quantify the extent of this problem for consumers. We request comment from consumers about whether it is difficult to find baggage and seat assignment fee information and how much of an impact this has on their ability to comparison shop among carriers. The Department also requests comment from consumers on whether and how much the fee disclosures required of carriers and travel agents in Passenger Protections II have improved their ability to find information on fees.
Consumers and consumer groups have reiterated to the Department through comments in the second Enhancing Airline Passenger Protections rulemaking and comments to the docket for the Advisory Committee on Aviation Consumer Protection the difficulty in determining the specific fees that apply to ancillary services. Additionally, members of Congress, representing their constituents, have expressed support for full disclosure of ancillary fees during the rulemaking period for the second Enhancing Airline Passenger Protections rule. The Department also receives consumer complaints that reflect the confusion consumers experience regarding fees for ancillary services, particularly in connection with baggage and seat assignments. For example, consumers complain that when shopping for air transportation they do not know how much it will cost them to book seats together for family members or to transport all of their baggage. Similarly, representatives of business travelers complain that it is difficult to advise clients on the best and most cost-effective flights because the fee information for seat assignments or baggage is not readily available. Additionally, the issue has been raised at meetings of the Advisory Committee on Aviation Consumer Protection by various industry stakeholders and consumer advocates. The Department believes that regulation is needed to address the lack of transparency regarding the true cost of air transportation and is proposing to require that fees for certain ancillary services be disclosed to consumers through all sale channels. The Department seeks input on this proposal as well as any innovative solutions that we may not have considered to address the problem of lack of transparency.
In the final rule that was issued on April 25, 2011, the Department announced its intention to address in a future rulemaking the transparency of ancillary fees at all points of sale. Since that time, the Department has met with numerous stakeholders with an interest in the distribution of ancillary service fee information and conducted an inquiry regarding current distribution models as well as the contractual and historical relationships between the GDSs and the carriers. Representatives of carriers, GDSs, consumer advocacy organizations, and trade associations, as well as other interested entities, including third-party technology developers, have met with Department staff to explain their views. They have also provided information to the Department's economists. The description of the current airline distribution system provided below is largely based on the information that the Department received from these stakeholders.
Today, airlines sell airfares in two ways: Directly through their Web sites, call centers, or employees at airports or indirectly through ticket agents. Approximately 50% percent of airline tickets are purchased indirectly through ticket agents, whether it is through a traditional brick-and-mortar travel agency, a corporate travel agent, or an online travel agency. Ticket agents that display or sell air transportation
Most U.S. airlines use GDSs to distribute their products. Some low cost carriers
Nevertheless, airlines have expressed frustration about paying what they view as more in fees to GDS than the value they feel they receive now that technology provides new ways of selling fares and ancillary services. Still these airlines are not able to forgo using GDSs to aggregate flight schedule and fare information because airlines earn a large percentage of their revenue from business travelers, and the majority of the world's managed business travel is booked through travel management companies which use GDSs. Unlike Southwest, the legacy carriers do not have the option to participate on a selective basis in GDSs (i.e., only for business travel). Overall, airline revenue from the GDS channel is higher than direct channels mainly due to the greater proportion of high-yield business bookings.
Airlines' efforts to reduce their reliance on GDSs and transition to direct connections with travel agents have also been difficult. By direct connect, we are referring to agreements between an airline and a travel agent in which the airline provides fare, schedule and availability information to the travel agent directly, bypassing GDSs. Various airlines have reported to the Department that they as well as new-entrant travel technology firms, such as Farelogix, have had difficulty in facilitating direct connections to ticket agents because of highly restrictive agreements between GDSs and ticket agents. Similar assertions were made by other third party technology providers. GDSs have contracts with both airlines and travel agents for use of their services. These contracts tend to be long-term agreements that are renewed every 3 to 5 years. Historically, contracts between carriers and the GDSs generally provided that carriers compensate the GDSs per flight segment booked. These contracts also generally require that carriers offer the same fares through GDSs that are offered through other channels, even if it is cheaper for the carrier to distribute the fares in a different manner, such as direct connect. Contracts between travel agencies and GDSs generally provide for incentive payments to travel agencies for booking travel through GDSs. GDSs also provide travel agencies with the technology used for mid- and back- office solutions such as quality control and office accounting. GDSs do not view the contracts as a barrier to entry for travel technology firms. They assert that the direct connect services will succeed or fail based on whether they meet the needs of travel agencies and the consumers they serve.
It is also worth noting that IATA has filed an application with the Department for approval of its Resolution 787, the agreement that establishes the framework for its New Distribution Capability (NDC). NDC would be based on a common XML based technical standard for direct connect services. Airlines contend that this new standard would allow airlines to custom-tailor product offers that would include different combinations of ancillary services in addition to air transportation and would include a total price. The new standard, if approved by the Department, will be available for use by any party. While the Department acknowledges that carriers are working towards technological solutions to distribute information, such solutions are prospective. Additionally, even if a standard is agreed upon, its use is optional and the information transmitted using the standard would be determined by each carrier. Accordingly, the development of a standard would not solve the immediate problem that some current consumers are not receiving the information that they need to determine the total cost of travel including the cost of certain ancillary services.
While fare, schedule, and availability information is currently provided by the airlines to the GDSs, and by GDSs to the agents that display and sell to consumers, information about the cost of ancillary services is not typically shared. One reason, as it has been explained to Department staff by airline representatives, is that GDSs do not have the modern technology airlines need to merchandise and sell their products the way they choose. The GDSs disagree with the airlines' assessment and contend that they are capable of handling the most complex airline transactions and have worked with airlines, airline associations, and airline-owned intermediaries like ATPCO, ARC and IATA to establish technical standards for the distribution of their products, including ancillary offerings. While expressing a general willingness to distribute ancillary products to travel agents subject to assurances that the technology is in place to conduct transactions in an efficient and cost‐effective manner, airlines expressed the need for the flexibility to do so on terms that meet their business needs. Airlines prefer to negotiate with the GDSs for the business terms acceptable to them. They argue that market forces and not government mandates are the best way to ensure that information about ancillary services and fees reaches consumers using the travel agent channel.
Various airlines and airline associations have also asserted to the Department that if it were to require carriers to provide ancillary service fee information to all ticket agents that the carrier permits to distribute its fare and schedule information, including GDSs, the Department would reinforce the existing distribution patterns and stifle innovation in the air transportation distribution marketplace. These carriers argue that since existing business arrangements provide significant benefits to most ticket agents, including GDSs, those entities would strive to retain existing distribution technology and transaction patterns. The carriers have also expressed concern that if they are required to provide information to GDSs, the GDSs will use existing contractual agreements and market power to pressure carriers to provide the
We agree with the GDSs that there is a need for rulemaking because we believe that consumers continue to have difficulty finding ancillary fee information. The Department is striving to find the most beneficial disclosure rule for consumers while avoiding any adverse impact on innovations in the air transportation marketplace, contract negotiations between carriers and their distribution partners, and a carrier's ability to set its own fees and fares in response to its own commercial strategy and market forces. Also, despite the disputes regarding contract terms and distribution methods, both carriers and GDSs have assured the Department that they share our goal of transparency of ancillary service fee information.
Given our continuing concern that consumers may not be getting sufficient information about carriers' fees, we solicit comment from consumers on the following questions:
• Do you have a problem finding fee information? And if so, how significant is that problem? If you have a problem finding fees, how does it affect your ability to comparison shop?
• What types of fees would you most like to have more information about during the shopping process, prior to purchase?
• When would you like to see that information displayed in your search process—as soon as you see a list of fares or later in the process? How would you like to see the information regarding ancillary fees displayed—as a link, as a specific dollar amount shown with the airfare quote, as a table or menu on the homepage or flight search results list? Should the Department require a standardized format for disclosure?
• Do you feel that our proposed disclosure requirements would improve your search experience? Have we selected the most ancillary fees that are most important to your decision making process? Will disclosure of all these fees at the point of search cause further confusion on ticket agent Web sites (as defined in this proposal), or diminish your user experience (because of screen clutter, diminished usability features, etc.)?
• Is either of our co-proposals outlined below likely to make fees easy to find?
Based on the information gathered, the Department is co-proposing two regulatory texts and seeking input regarding those two proposals. One proposal is to require each carrier to distribute certain ancillary service fee information to all ticket agents (including GDSs) that the carrier permits to distribute its fare, schedule, and availability information. Carriers would not be required to distribute ancillary fee information to any GDS or other ticket agent that the carrier did not permit to distribute its fare, schedule, and availability information. Additionally, under this proposal, the Department would not require carriers to allow ticket agents to sell/transact its ancillary services to consumers but rather would require carriers to provide “usable, current and accurate” information on fees for certain ancillary services to all ticket agents so this information can be disclosed to consumers at all points of sale. Each airline would continue to determine where and how its ancillary services may be purchased. For instance, if a carrier chooses to allow a ticket agent to sell its ancillary services directly to consumers, we expect that the carrier and ticket agent would determine through negotiation whether the ticket agent would offer the ancillary services at the same prices that the carrier offers those services. In other words, the proposal would require airlines to provide certain ancillary fee information to ticket agents, including GDSs, in order to enable disclosure to consumers of fees associated with certain ancillary services at all points of sale but would not require that these ancillary services be transactable. Carriers and ticket agents would negotiate regarding the ability of ticket agents to sell a carrier's ancillary services and the price at which those services would be sold.
The second proposal is similar to the first in all ways except one. Unlike the first proposal, the second would omit the requirement that the information on ancillary fees be distributed to GDSs or other intermediaries since GDSs and similar intermediaries would not be subject to any direct consumer notification requirements. Instead, the second alternative would require carriers to distribute certain ancillary service fee information to all ticket agents that the carrier permits to distribute its fare, schedule, and availability information
The Department has proposed these two options as it remains of the view that as carriers continue to unbundle services that used to be included in the price of air transportation, passengers need to be protected from hidden and deceptive fees and allowed to price shop for air transportation in an effective manner. The Department believes that failing to disclose basic ancillary service fees in an accurate and up-to-date manner before a consumer purchases air transportation would be an unfair and deceptive trade practice in violation of 49 U.S.C. 41712.
Under both proposals, the Department recognizes that not all ancillary service fee information needs to be available through all channels. However, there are certain basic services that are intrinsic to air transportation that carriers used to include in the cost of air transportation but that they now often break out from the airfare, and the cost of those services is a factor that weighs heavily into the decision-making process for many consumers. We consider these basic ancillary services to consist of the first and second checked bag, one carry-on item and advance seat selection. This rulemaking would require U.S. and foreign air carriers to distribute to ticket agents the fees for these basic ancillary services. However, carriers would not be required to provide ticket agents information about individual customers, such as their frequent flyer status or type of credit card though these factors may impact the fee for an ancillary service. Carriers would, of course, be required to provide ticket agents the fee rules for particular passenger types (e.g., military, frequent flyers, or credit card holders). Under the proposal, the failure of airlines to share this fee information
As the requirement for carriers to distribute this information to agents would not be helpful to consumers without a disclosure requirement, the Department is also proposing to require all carriers and agents to disclose the fees for these basic ancillary services before the passenger purchases the air transportation. Airlines and agents that have Web sites marketed towards U.S. consumers must disclose, or at a minimum display by a link or rollover, the fees for these basic ancillary services on the first page on which a fare is displayed in response to a specific flight itinerary search request in a schedule/fare database. To comply with this proposed requirement, airlines and agents would have to modify their Web sites to display these basic ancillary service fees adjacent to the fare information on the first page on which a fare for the requested itinerary is displayed. We solicit comment on whether the Department should require the ancillary service fee information to be disclosed only upon the consumer's request, or require that the information be provided in the first screen that displays the results of a search performed by a consumer. The Department also seeks comments on whether it should limit the applicability of the disclosure requirement only to agent and carrier Web site displays marketed to members of the general public, or whether the disclosure requirement should include agent and carrier Web site displays that are not publicly available (e.g., displays used by corporate travel agents).
Under both co-proposals, the fee information disclosed to consumers for a carry-on bag, the first and second checked bag, and advance seat assignment would need to be expressed as specific charges. Airlines would be required to disclose customer-specific fees for these services to the extent the customer provides identifying information, and if the customer does not provide that information, must disclose itinerary-specific fees. Ticket agents would be required to disclose itinerary-specific fees for these services. Ticket agents may also arrange/negotiate with the airlines to obtain data that would enable them to give customer-specific fees for basic ancillary services. “Customer-specific” refers to variations in fees that depend on, for example, the passenger type (e.g., military), frequent flyer status, method of payment, geography, travel dates, cabin (e.g., first class, economy), ticketed fare (e.g., full fare ticket—Y class), and, in the case of advance seat assignment, the particular seat on the aircraft if different seats on that flight entail different charges. In other words, the response to a specific flight itinerary search request by a consumer on a carrier's Web site would need to display next to the fare the actual fee to that consumer for his or her carry-on bag, first and second checked bags, and advance seat assignment. Nothing in this proposal would require carriers to compel consumers to provide the passenger-specific details before searching for airfare. Providing such details before conducting a search should be an option and not a requirement for consumers. We note that many carriers already offer seat maps during the online booking process on their Web site that permit consumers to obtain a seat assignment at that time and that disclose the charge for each seat. This process would comply with the proposed rule as long as there is a statement adjacent to the fare on the first screen where an itinerary-specific fare is displayed that informs the consumer that there are fees for advance seat assignments and direct links to the seat map.
The fee information that ticket agents would be required to display to consumers differs from what would be required of airlines in that ticket agents would not be required to include variations in fees that depend on the attributes of the passengers such as the passenger type (e.g., military), frequent flyer status, or method of payment. Ticket agents would be required to take into account variations in fees that are related to the itinerary such as travel dates, geography, ticketed fare and cabin. In addition to providing itinerary-specific fees for a first checked bag, a second checked bag, a carry-on bag and an advance seat assignment, ticket agents would also be required to clearly and prominently disclose that these fees may be reduced or waived based on the passenger's frequent flyer status, method of payment or other characteristic. Ticket agents who have not negotiated an agreement with the airlines to sell advance seat assignments would also be required to disclose that seat availability and fees may change at any time until purchase of the seat assignment. In addition, it is worth noting that carriers and agents would be permitted to offer an “opt out” option for consumers who prefer to search for fare information only, without any ancillary fee information, and when this option is selected carriers and agents would not be required to present the fee information.
We ask for comment on whether the Department should only require carriers and agents to provide information on standard baggage fees without taking into account variations based on frequent flyer discounts, loyalty card discounts, geography, ticketed fare, etc. If all of the varieties of baggage fees are displayed, how should the varying fees be arranged? Regarding advance seat assignments, the charges for which also may vary considerably based on, among other things, the location of the seat and how far in advance the seat assignment is purchased, should carriers and agents be required to display all possible advance seat assignment fees, or a range, or the fee for each seat assignment available at the time of the search for a particular city-pair? What is the technological feasibility and cost of providing this information to consumers in a usable fashion, particularly for ticket agents?
As discussed earlier, neither of the Department's two alternative proposals would require that carriers enable agents to sell the carrier's ancillary services; in industry idiom, we are not proposing to require that the fees be “transactable.” The Department is addressing the harm caused to consumers of not knowing the true cost of travel before purchasing air transportation. Under the proposed disclosure regime, every point of sale for a particular carrier's fares would also provide access to the carrier's fee information for first and second checked bag, one carry-on bag, and an advance seat assignment. This requirement would place a legal obligation on carriers to disseminate this information to all of their agents; however, the Department is not stating the method the carriers must use to distribute the information, as long as it is in a form that would allow the fee information to be displayed on the first itinerary-specific results page in a schedule/fare database. Carriers would be free to develop cost-effective methods for distributing this information to their agents. Carriers could use existing channels, such as filing the fee information through the ATPCO, or they could develop their own systems to disseminate the information, in conjunction with the agents who would receive the information.
Although neither of the Department's alternative proposals dictate the method that carriers must use to distribute the information, carriers should be mindful that whatever distribution method they might choose must be usable, accurate, and current so the information is accessible in real-time. Similarly, ticket agents must work in good faith with
Proponents of the first alternative have argued that, because most carriers already rely on GDSs to transmit information to ticket agents that act as a point of sale, the Department could ensure that the information was disseminated in a quick and efficient manner by requiring carriers to provide the information to GDSs. They also assert that such a proposal would resolve the “market failure” that has prevented carriers and ticket agents from coming to agreements that would allow the information to be provided to consumers. Advocates of the second alternative state that permitting carriers to decide which intermediaries, if any, to use to provide ancillary fee information to ticket agents acting as sales outlets still provides for consumer disclosure but minimizes government interference with business arrangements. Additionally, they contend that the second proposal provides opportunities for the development of new and innovative technologies and methods of distribution of air transportation while allowing carriers the freedom to use traditional methods if it makes commercial sense for them to do so.
In addition to the two alternative proposals under consideration, we also solicit comment on whether any of the alternatives rejected earlier in the rulemaking process better address the problem of lack of transparency of fees associated with ancillary services. For example, should the Department set design standards (e.g., filing of fees for ancillary services through ATPCO, EDIFACT, XML or some other technology) rather than using performance standards for transmission of ancillary fee data from airlines to ticket agents or from airlines and ticket agents to consumers? Under both alternative proposals, the Department does not prescribe particular standards in order to avoid stifling innovation and imposing more of a burden on industry participants than is necessary to solve the transparency problem. However, we are interested in comments on whether setting a specific technological/information standard could potentially enhance innovation and improve transparency, and if so, how. Would selecting a specific standard allow for new market entrants in the transmission or display of air travel information, by making fare and fee information more open and accessible?
The Department also solicits comment on the issue of whether the basic ancillary services that are disclosed to consumers should also be transactable. Although the Department has tentatively determined that it would be sufficient to require carriers and agents to disclose certain basic ancillary fee information to consumers, it has not closed the door on the possibility of also requiring that those ancillary services be available for purchase through all channels that carriers decide should sell their fares. In other words, should we require these ancillary services to also be “transactable”?
Representatives of certain consumer advocacy groups and trade associations have argued to the Department that if consumers are not entitled to purchase the ancillary services at the time of booking air transportation, the carrier may increase the price of those ancillary services before the consumer has a chance to purchase the ancillary service on the carrier's Web site or through its reservation center. In the case of advance seat assignments, the problem is particularly acute because in addition to price increases, the consumer risks the possibility that the advance seat assignment that he or she wished to purchase will no longer be available.
Carriers are prohibited from increasing the price of baggage fees after a consumer purchases air transportation under the current 14 CFR 399.88, but under the
The Department also solicits comment on leaving the disclosure requirements established in 14 CFR 399.85 unchanged instead of adopting new proposed requirements for customer-specific information about one carry-on bag, the first and second checked bag, and an advance seat assignment. Under the existing regulation, consumers may visit individual carrier Web sites to ascertain all of the fees associated with ancillary services. This information is in a centralized location accessible from a link on each carrier's homepage. Leaving the existing requirements in place would not require carriers to enable agents to provide up-to-date and real-time pricing for ancillary services, but it would still require that passengers be made aware that “baggage fees may apply” on the first page on which a fare quote is given for a flight search. The Department asks consumers to comment on the existing requirements, particularly whether the disclosure requirements under section 399.85 have aided in their ability to price shop and their ability to understand the true cost of travel before purchasing. The Department also asks carriers and ticket agents to comment regarding whether they believe the current disclosure requirements are sufficient and effective and why or why not. The Department also asks agents to comment on how the current disclosure requirements are affecting their businesses and whether consumers are aided under the disclosure requirements. If the Department decides to maintain the current disclosure requirements, should the Department require carriers to list the fees for advance seat assignments in a more specific manner, rather than a range, on the page listing ancillary fees and on e-ticket confirmations? Comments on the cost and benefits of the proposal and all of the alternatives are invited. Further, we encourage interested parties to provide comment regarding any innovative alternatives/solutions that Department may not have considered but that would address the lack of disclosure of ancillary service fees in all sales channels.
In 14 CFR Part 234, the Department sets forth requirements for “reporting carriers” to file certain performance data with the Department and provide flight on-time performance information to the public. “Reporting carrier” is defined in 14 CFR 234.2 as an air carrier certificated under 49 U.S.C. 41102 that accounts for at least one percent of domestic scheduled-passenger revenues. In addition to reporting carriers, any carrier that does not reach the reporting carrier threshold may voluntarily file Part 234 reports, provided that the Department's Bureau of Transportation Statistics (BTS) is advised beforehand and such data will be submitted voluntarily for 12 consecutive months.
Pursuant to Part 234, reporting carriers are required to submit to BTS' Office of Airline Information their domestic scheduled passenger on-time performance data and mishandled baggage information, and provide on-time performance codes to computer reservation systems (CRS). These carriers also must disclose to consumers the on-time performance code, on a flight-by-flight basis, for all domestic scheduled flights that they market to the public, including the flights operated by code-share partners. The on-time performance codes must be disclosed to consumers during in-person or telephone communication (including but not limited to reservations or ticketing transactions) upon reasonable inquiry. For flight schedule Web site displays, the on-time performance information must be provided either on the initial listing of the flights or via a prominent hyperlink. Furthermore, to implement a statutory requirement of the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (Pub. L. 106–81), the Department amended Part 234 in 2005 to require all U.S. air carriers (not only “reporting carriers”) to file a report with the Department's Aviation Consumer Protection Division on any incident involving the loss, injury, or death of an animal during air transportation.
Since their implementation, Parts 234 and 250 have been effective tools for the Department to collect on-time performance, mishandled baggage, and oversales data and use these data to monitor the quality of service provided by each reporting carrier to the flying public and to provide such information to consumers. On October 22, 2013, BTS issued a Technical Reporting Directive (Technical Directive #23) to update the list of reporting air carriers that are required to file “Airline Service Quality Performance Reports” under 14 CFR Part 234 for calendar year 2014. Technical Directive #23 identified the following 14 air carriers that reached the reporting threshold of one percent of domestic scheduled-passenger revenue in the 12-month period ending June 30, 2013: AirTran Airways, Alaska Airlines, American Airlines, American Eagle Airlines, Delta Air Lines, ExpressJet Airlines, Frontier Airlines, Hawaiian Airlines, JetBlue Airways, SkyWest Airlines, Southwest Airlines, United Airlines, US Airways, and Virgin America.
The one percent domestic scheduled-passenger revenue threshold for reporting carriers was set in a final rule that initiated the reporting requirements contained in Part 234. 52 FR 34056 (September 9, 1987). In that final rule, the Department considered some comments asserting that flight delays affect passengers without regard to the size of the carrier or the length of the flight. The Department concluded, however, that compliance with the rule was likely to be much more costly for small carriers than for large carriers, particularly due to the fact that, at the time when the rule was finalized, large carriers were more likely than small carriers to maintain their flight performance data in a computerized form. Therefore, the Department made the determination that as an initial matter, it would limit the application of
Twenty-five years have passed since the issuance of that final rule. Technology innovations that have fundamentally reshaped our world in many ways have also profoundly changed almost every aspect of the commercial aviation industry's operations. In 1987, for a small carrier to file data with the Department, it had to commit to either a significant capital investment in a comprehensive computer data tracking system or to a significant human resource investment so it could compile and file reports manually. Conversely, in this day and age, virtually all air carriers are using computerized recordkeeping methods to store and distribute data to file reports with the Department or are conducting internal performance evaluations, or both, which makes reporting data a much easier and less costly task.
Moreover, we believe that requiring smaller carriers to report service quality data to the Department will greatly benefit the public in several ways. First, adding these smaller carriers' performance data to the data currently collected by BTS will enable the Department to obtain and provide to the flying public a more complete picture of the performance of scheduled passenger service in general. These data will, in turn, provide consumers with more meaningful information on which to base their purchasing decisions. For example, based on BTS-provided domestic scheduled passenger revenue and enplanement data for 2010, the carriers that reach the one percent threshold represent approximately 90 percent of total domestic scheduled passenger revenue, and 80 percent of total domestic scheduled passenger enplanements. If we were to lower the threshold to 0.5 percent of domestic scheduled passenger revenue, the reporting carrier pool would capture approximately 98 percent of domestic scheduled passenger revenue and 94 percent of the domestic scheduled passenger enplanements.
Further, the public benefits of including smaller carriers in the reporting pool were also recognized and supported by a September 2011 Report to Congressional Requesters prepared by the Government Accountability Office (GAO). In the report titled
For these reasons, we are proposing in this NPRM to amend the definition of “reporting carrier” under Part 234 to include carriers that account for at least 0.5 percent of annual domestic scheduled-passenger revenue. Additionally, since for years BTS has been using June 30, instead of March 31, as the cutoff date to compile a carrier's annual domestic scheduled-passenger revenue percentage, we propose to codify this change in the definition of “reporting carrier.” We seek public comments on whether 0.5 percent is a reasonable threshold to achieve our goal of maximizing the scope of data collection from the industry while balancing that benefit against the burden of increasing reporting requirements on carriers, particularly small businesses. If 0.5 is not the most reasonable threshold, we seek comment on an even larger expansion, e.g., to 0.25 percent of domestic scheduled passenger revenue, or a smaller expansion to 0.75 percent of domestic scheduled passenger revenue. Additionally, we seek comment on whether we should require that all carriers that provide domestic scheduled passenger service report to the Department. We especially welcome comments that provide specific cost estimates or analysis by small carriers that would potentially be impacted by this proposal. We also request comments regarding whether a carrier's share of domestic scheduled passenger revenue remains an appropriate benchmark. Should we use a carrier's share of domestic scheduled passenger enplanements instead? If so, what percentage is a reasonable threshold for triggering the reporting obligation?
Finally, in relation to the burden associated with implementing a reporting mechanism within a carrier's operation system, what is the approximate time period that a newly reporting carrier will likely need to prepare for the new reporting duties? Although not proposed in the rule text, we are contemplating that should this proposal be finalized, we would permit carriers that otherwise would not have been reporting carriers but become a reporting carrier under a new threshold to file their first Part 234 report by February 15 for the first January that is at least six months after the effective date of this rule. We believe this would provide carriers adequate time to implement necessary procedures for filing the reports and amending their Web sites to comply with the flight on-time performance disclosure requirements contained in section 234.11, to the extent that the Web sites directly market flights to consumers. Having the initial reports start in January would provide the added benefit of preserving the consistency of the Department's data for a full calendar year during the transition. We seek comments on whether this rationale for determining the compliance date for the reporting requirement would be helpful to newly reporting carriers.
In addition to expanding the pool of reporting carriers, we are also contemplating expanding the scope of “reportable flights” in relation to airports. The current rule only requires reports for flights operated to and from U.S. airports that count for at least 1% of domestic enplanements (large hub airports). However, since the inception of the rule, the reporting carriers have chosen to file reports for scheduled passenger flights to all U.S. airports
The Department of Transportation provides information each month on the quality of services provided by the airlines through its Air Travel Consumer Report (ATCR). This Report is divided into six sections: Flight delays, mishandled baggage, oversales, consumer complaints, customer service reports to the Transportation Security Administration, and airline reports of the loss, injury, or death of animals during air transportation. The sections that deal with flight delays, mishandled baggage, and oversales are based on data collected by BTS pursuant to 14 CFR Part 234 and Part 250. The section that deals with animal incidents during air transport is based on reports required by section 234.13 and collected by the Aviation Consumer Protection Division.
With respect to flight delay information, in addition to the monthly overview of each reporting carrier, the ATCR also ranks each reporting carrier's performance at all large hub U.S. airports from which it operates. These performance tables, particularly the rankings, are widely accepted as important indicators of the carriers' quality of service, and are frequently referred to in news reports, industry analyses, and consumer commentaries and forums. Moreover, it is not uncommon that these rankings are used as the key references in institutional studies, the results of which are often cited in news reports with attention-grabbing headlines such as “The Best and Worst Airlines of the U.S.” Although headlines like this tend to over-simplify the complexity of airline operations, being named as one of “the best” or “the worst” airlines in the country in a national news outlet does have a significant impact on a carrier's image and brand identity and either affords the carrier a great marketing tool or causes some consumers to avoid selecting that carrier's flights when making purchase decisions which acts as an incentive for the carrier to improve its performance.
Because of the influence of the ATCR on consumer perception of carriers as well as its effect on the perception of carriers within the industry, it is vitally important that the information provided by these reports remains accurate. Since the Department began to issue the ATCR, the Aviation Consumer Protection Division and BTS have been working closely to ensure that the published reports accurately reflect the data received by the Department. However, this continuing effort does not address the growing problem of an inadequate scope of data collection, the most significant area being that a marketing carrier's data do not include its flights operated by code-share partners.
The data that carriers file under Part 234 and Part 250 are the primary source from which each monthly ATCR is developed. A “reportable flight” under Part 234 refers to any domestic scheduled nonstop flight reported to the Department by a reporting carrier pursuant to 14 CFR Part 241, Uniform System of Accounts and Reports for Large Certificated Air Carriers. Part 241 in turn defines a “reporting carrier” for the purpose of Form T–100 (U.S. air carrier traffic and capacity data by nonstop segment and on-flight market) as “the carrier in operational control of the flight,
If the reporting carrier engages in code-sharing arrangements in which the reporting carrier is the marketing carrier but not the operating carrier, the performance data for those flights are not included in the reporting carrier's Part 234 and Part 250 reports. If the operating carrier of a code-share flight is a reporting carrier itself, the performance data for its code-share flights that are also marketed by another carrier will be reported to the Department, but data for those flights will not be attributed to the marketing carrier. What's more, some operating carriers of code-share flights marketed by larger carriers do not meet the current reporting threshold of Part 234, and a certain number of operating carriers of code-share flights marketed by larger carriers would not meet the proposed lower reporting threshold of 0.5 percent of annual domestic scheduled passenger revenue. Therefore, the on-time performance, mishandled baggage, and oversales data for those flights are not currently reported to the Department at all and, even under a revised reporting threshold, not all of those operating carriers of code-share flights marketed by larger carriers would necessarily be required to report performance data.
The Department considers the current scope of reportable flights under Part 234 inadequate to truly capture many carriers' quality of service, so as to be accurately reflected in the ATCR. The limited scope of the current reporting requirements may result in consumer confusion or misperception. We note that the majority of legacy/mainline U.S. carriers continue to seek brand consolidation, while still maintaining the “hub and spoke” operation structure. For economic reasons, those legacy carriers' regional short-haul flights are operated, in many markets, by code-share partners on a fee-for-flight basis and these operating carriers do not engage in the sale of tickets at all. According to the data contained in the FAA's Aerospace Forecast for fiscal years 2012–2032, mainline carriers provided 16 percent less domestic passenger capacity in 2011 than they did in 2001. Over the same ten-year period, however, regional carriers' capacity overall has increased to 153 percent of the 2001 level. Further, a recent Official Airline Guide (OAG) survey provides a snapshot of the current operations of mainline carriers and their regional partners and indicates the comparative scope of code-share operations. It shows that in 2011, each of the top five legacy carriers had more than 45% of its domestic scheduled flights operated by code-share regional partners, with the carrier on the top of the survey list having almost 70% of its domestic scheduled flights operated by code-share regional partners. The service quality data for these code-shared flights are not reported by the legacy carriers and are not attributed to these carriers' records and rankings in the ATCR. However, those flights are marketed by the legacy carriers with their own airline designator codes and usually their own brands, sometimes bearing trademarks such as
The Department is also concerned that the inadequacy of the scope of service quality reports may hinder competition. The Department is mindful that on-time performance data in the ATCR may have a limited influence on a consumer's purchase decision regarding a particular flight, because the consumer is more likely to refer to that specific flight's on-time performance record, which under 14 CFR 234.11 must be provided on a marketing carrier's Web site, regardless of whether it is operated by a code-share partner. Nonetheless, a carrier's ATCR ranking speaks of the carrier's performance quality from a macro perspective, and is often used by carriers as a powerful marketing tool in developing brand loyalty, recruiting talented employees, and negotiating with suppliers and airports, as well as promoting its service in a newly developed or targeted geographic market. Most importantly, the ATCR numbers and rankings are benchmarks carriers use to assess their performance among competitors and to seek effective ways to improve. As stated above, recent numbers show that virtually all legacy carriers have at least 45% of their domestic scheduled passenger flight segments operated by code-share partners, which means data for those flights are not reported by the marketing carriers under Part 234 and Part 250 or attributed to the carrier in the ATCR. By contrast, most relatively new carriers that are ranked in the ATCR operate a “point-to-point” network and follow a different business model, the so-called “low cost” model. Under this business model, carriers engage in very few, if any, code-share arrangements. As a result, the ATCR is comparing the service quality of all flights marketed by a low-cost carrier with the service quality of 55% or less of the flights marketed under legacy carriers' brands and codes. We will not seek to determine how including code-share flight records in the ATCR would affect legacy carriers' rankings, but we are of the tentative opinion that requiring all reporting carriers to report data for all flights marketed under that carrier's name and code would put carriers on an equal footing in this important competitive arena.
Additional support for our proposal comes from the aforementioned final report by FAAC, which noted that the Competitiveness and Viability Subcommittee recommended that the Department should continue to require marketing carriers to provide clear and transparent notification of operations conducted by an air carrier other than the marketing carrier. Further, some subcommittee members also believed that more detailed disclosure regarding regional carriers' operations should be included in the ATCR, and that the report should include metrics organized not only by operating air carrier, but by the marketing air carrier.
For the reasons stated above, we are proposing to expand the scope of “reportable flight” under Part 234, and consequently under Part 250. Pursuant to this proposal, a reporting carrier would continue to file Form 234 and Form 251 (the oversales report required by Part 250) with respect to nonstop scheduled flights operated by the reporting carrier. In addition, each reporting carrier would file a separate Form 234 and a separate Form 251 to include both flights that are operated by the reporting carrier itself and all nonstop scheduled flights that are operated by a code-share partner and sold under the reporting carrier's code. Reportable flights under Part 234 (on-time performance and baggage data) are limited to domestic nonstop flight segments. The Form 251 oversales report has always included data for outbound international flights from the United States, and that will continue to be the case for the proposed new report that would include service operated by code-share partners. However, this new report, like the original report, would be limited to service operated by “a certificated carrier or commuter air carrier”—both of which are U.S. air carriers—and consequently the new report would not collect data on code-share flights operated for a reporting carrier by a foreign-carrier code-share partner. Our primary regulatory interest at this time is collecting and publishing data on code-share service operated by the regional-carrier partners of the larger U.S. airlines. We are not proposing at this time to collect oversales data for flights from the United States (the oversales rule doesn't apply to inbound international flights to the United States) that are operated by large foreign carriers that do not already report these data.
For this purpose it is irrelevant whether the actual operating carrier in the code-share arrangement is a reporting carrier itself and is required to file data for that flight under the reporting requirements applicable to the operating carrier. Under our proposed rule, the marketing carrier reporting data on flights operated by another carrier would not need to distinguish flights operated by different code-share partners. We are proposing to require the marketing carrier to provide aggregated consumer statistics for all flights operated under its code (i.e., flights it operates and flights operated by its code-share partners). This would be an additional reporting requirement (second set of reports) and is not intended to replace the existing requirement for a reporting carrier to provide separate data for flights it operates. We seek comment on whether the second sets of reports should only contain the performance records of all flights operated for the reporting carrier by its code-share partners but not the flights operated by the reporting carrier. Alternatively, rather than having all code-share partners' records in aggregation, we ask if we should require the marketing carrier to provide separate data on flights operated by each of its code-share partner's operations. What are the benefits of separating each code-share partner's records and what are the costs, if any, added to the reporting carriers? Finally, since many regional carriers operate flights under the code of more than one large carrier, we seek comment on whether “double-counting,” i.e., situations where a given flight carries the code of more than one large carrier, is an issue and if so, how to avoid it. Do regional carriers that have code-share agreements with more than one large carrier ever operate a given flight for more than one marketing carrier, or on the other hand, do these flights always operate in discrete city-pair markets? How should we deal with the situation of large U.S. carriers that code-share with each other?
Our proposal to expand the scope of reportable flights will necessitate amendments to the rule text of 14 CFR 234.6, Baggage Handling Statistics. On July 15, 2011, the Department issued an NPRM, Reporting Ancillary Airline Passenger Revenues (RIN 2105–AE31, Docket No. DOT–RITA–2011–0001) that proposes, among other things, to amend section 234.6 by changing the way it computes mishandled baggage rates, from mishandled baggage reports per unit of domestic enplanements to mishandled baggage per unit of checked
We note that if the operating carrier is already a reporting carrier, the data for the code-share flights that will be added to the marketing carrier's report will have to be prepared and submitted to the Department by the operating carrier to meet the existing reporting requirement. In these instances, we expect that the cost to the marketing carrier to obtain this data would be negligible. With respect to flights operated by a code-share partner that is not a reporting carrier, we believe the cost of obtaining data would be higher but not significant, as most carriers, large or small, already have internal systems in place that track the major elements of flight performance quality. There are also costs related to compiling data for the code-share flights and setting up the reporting infrastructure to file the compiled report with the Department. We seek comments from carriers and the public regarding the costs associated with adding data on flights operated by code-share partners to reports filed with the Department. We further note that 14 CFR 234.8 requires reporting carriers to calculate and assign an on-time performance code for each “reportable flight.” Currently section 234.8 only covers domestic scheduled flights operated by a reporting carrier, so our proposal to expand the scope of “reportable flight” under Part 234 will require that reporting carriers also calculate and assign an on-time performance code for each domestic scheduled flight operated by a code-share partner. However, since April 29, 2010, all current reporting carriers have been required by section 234.11 to disclose on their Web sites that provide schedule information detailed on-time performance records, on a monthly basis, for each domestic scheduled flight, including each domestic code-share flight. In this regard, we expect that these current reporting carriers are already adequately prepared to comply with requirement of section 234.8 with respect to code-share flights. Finally, we ask what the reasonable implementation period should be if this proposal becomes a final rule.
In the Department's first Enhancing Airline Passenger Protections final rule, 74 FR 68983, the Department required U.S. carriers in 14 CFR 259.5 to adopt a customer service plan. In the second Enhancing Airline Passenger Protections final rule, 76 FR 23110, the Department extended this requirement to foreign carriers and required both U.S. and foreign carriers to adopt minimum standards for their customer service plans. Among other standards, the Department requires carriers to provide prompt ticket refunds where ticket refunds are due, in accordance with existing Department rules; hold a reservation at the quoted fare or permit the reservation to be cancelled without penalty for at least 24 hours after a customer books the ticket; disclose cancellation policies, seating configuration, and lavatory availability to consumers; notify travelers of changes in travel itineraries; and respond to consumer-related complaints in a timely manner. Section 259.5 only applies to U.S. and foreign carriers that provide scheduled passenger service using at least one aircraft with an original designed passenger capacity of 30 or more seats. In a
The Department is proposing to amend 14 CFR 399.80, which addresses unfair and deceptive practices by ticket agents, because the Department believes that all airline passengers should benefit from certain customer service plan protections. Not all of the customer service standards set forth in 14 CFR 259.5 should apply to agents, but the Department sees no reason not to extend the standards related to ticket purchases and information dissemination to ticket agents that sell air transportation. As such, the Department is proposing to require these ticket agents to adopt minimum customer service standards in select areas. The customer service standards would not apply to ticket agents that don't sell air transportation but rather arrange for air transportation and receive compensation in connection with air transportation sold by others. Additionally, as proposed, the standards would only apply to those ticket agents with annual revenue of $100 million or more that market to the general public in the United States. A majority of U.S. travelers who bought their airline tickets through an avenue other than a carrier used large ticket agents.
As carriers are already required to allow reservations to be held at the quoted fare without payment or cancelled without penalty for at least 24 hours after a reservation is made if the reservation is made one week or more prior to a flight's departure, the Department is proposing to extend this requirement to ticket agents that sell air transportation. The Department feels that such agents should be able to allow reservations to be held at the quoted fare, as carriers are already required to provide this option. Moreover, through this proposal, the benefits of reserving without payment or canceling without penalty will reach consumers who use an agent to book air transportation. Similar to carriers, this proposal would only require ticket agents that sell air transportation to hold the fare at the quoted price. The proposal would not require agents to hold for 24 hours the price for other related items such as fees associated with ancillary services or tour components (e.g., hotel stay) although agents are, of course, free to do so if they wish. We solicit comment on whether the Department should require specific disclosure by agents and airlines about what is and is not being held for 24 hours.
The Department also seeks comments on requiring both agents and carriers to inform consumers, when engaging in oral communications with them about changes to a reservation, of the consumer's right to cancel without penalty if applicable. The Department has received complaints alleging that airlines are not disclosing to consumers when they are eligible to change their reservation without penalty and charging consumers change fees when consumers are unaware that they can cancel without penalty and rebook. Should carriers and agents be required to disclose the 24-hold policy to a consumer who is making a change within 24 hours of booking? Should the
Additionally the Department is proposing to require agents to provide prompt refunds where ticket refunds are due. This requirement would mirror 14 CFR 259.5(b)(5), which requires carriers to submit a refund for a credit card purchase within 7 days of the complete refund request, and in the case of cash or check purchases, within 20 days of receiving a complete refund request. Oftentimes, if a consumer has to cancel a trip, and a refund is due, they find themselves going between the airline and the agent for the refund in cases where the passenger purchased the airline ticket through an agent. This requirement would prevent this type of hassle and back-and-forth for consumers and clarify the agent's responsibility in assisting consumers when ticket refunds are due.
The Department is also proposing that agents disclose cancellation policies, seating configuration, and lavatory availability upon request to a passenger before a consumer books a selected flight. Many consumers who choose to book through a ticket agent are unaware of restrictions or fees associated with canceling the ticket. Additionally, consumers are not always aware that they are booking a flight on a smaller aircraft or an aircraft that may not have a bulkhead seat or lavatory available. As carriers are required to provide this information to consumers on their Web sites and upon request from their telephone reservation staff, the Department feels agents should also provide the information. Under this proposal, agents would have to make this information available on their Web sites that are marketed to U.S. consumers, and upon request for reservations made over the telephone. The Department invites interested parties to comment on this proposal, specifically whether agents already have this information to share with consumers. If agents do not have information about carriers' cancellation policies, aircraft seating configurations and lavatory availability, should the Department impose a requirement for carriers to provide their agents this information or should agents be required to provide links so that consumers can obtain that information? The Department also invites comments regarding the methods for disclosing cancellation policies, seating configurations, and lavatory availability information to consumers. Should the Department require that this information be placed at a particular location on a carrier's Web site, e.g., next to every flight in a search-result list for a particular itinerary?
The Department is also proposing that agents adopt a customer service standard to notify consumers of changes in travel itineraries in a timely manner. A carrier is not required to notify a consumer about a change in his or her travel itinerary if the carrier does not have contact information for that individual, and an agent is not required to provide a client's contact information to an airline. Therefore, consumers who use agents that do not provide contact information to carriers may not receive direct or timely notice of changes to their itinerary. This requirement is intended to ensure that consumers are timely notified of such changes.
Finally, the Department is proposing that agents be required to substantively respond to consumer complaints. Agents would be required to acknowledge receipt of a consumer-related complaint within 30 days of receipt of the complaint. Where the complaint (in whole or in part) is about the agent's service, the agent must substantively respond to the complaint within 60 days. If all or part of the complaint is about services furnished (or to be furnished) by an airline or other travel supplier, the agent must forward the complaint to that supplier for response. If no part of the complaint is about the agent's service and the agent sends the complaint to the appropriate supplier(s), the agent's substantive reply can consist of the agent informing the passenger that his or her complaint has been forwarded to the appropriate party and providing contact information to the passenger for that entity. This proposal closes the gap that exists in 14 CFR 259.5(b)(11) and 259.7, which require carriers to respond to consumer complaints but do not provide for complaints related to a ticket agent's services.
Although the subjects that we are proposing that ticket agents that sell air transportation address in their customer service plans are identical to those that carriers are already required to include in their customer service plans with respect to ticket purchases and information dissemination, we request comment on whether any of these subjects would be inappropriate if applied to ticket agents. Why or why not? Some of these items may be under direct control of the air carrier, and not the ticket agent. In commenting on these customer service commitments, large ticket agents should address the extent to which they are responsible for each of these items. Moreover, we seek comment on whether the Department should require that ticket agents address any other subjects in their customer service plans. For example, should ticket agents be required to prominently disclose to individuals who will be issued more than one ticket for their trip that their bags may not be checked through, as airlines typically check a passenger's baggage between the origin and destination points that are issued on a single ticket? Should ticket agents also be required to disclose to such individuals that they may have to pay multiple and different bag fees if ticketed separately as the Department's requirement for one set of baggage allowances and fees throughout a passenger's itinerary only applies when there is a single ticket? If so, when should this disclosure occur—before or after a ticket is purchased? We also seek comment on the appropriate form for such a disclosure (e.g., orally, on the ticket agent's Web site, on e-ticket confirmation). The Department is proposing to apply these customer service standards only to large ticket agents (those with annual revenue of $100 million or more) that market to the general public in the United States. The Department invites comment on whether the applicability should be expanded to cover other ticket agents, e.g., smaller ticket agents, or ticket agents who do not sell to members of the general public.
The Department recognizes that requiring these minimum customer service standards for agents would place a cost burden on these agencies. However, the Department believes that the benefits to consumers of receiving timely information, permitting reservations to be held for 24 hours without risk, and having their complaints addressed outweigh the costs. These proposals put all airline passengers on an equal footing when it comes to customer service standards, regardless of how they purchased their tickets.
The Department invites comments on the costs and benefits of these proposed customer service standards. For consumers who use agents, have you had problems in the past determining the cancellation policies associated with your ticket or being informed of changes in travel itineraries? For carriers, do you see any cost in sharing the information with the agents that the agents would be required to provide to consumers? For agents, what are the costs and benefits that you see in the proposal? Are you already receiving the information that
Code-sharing is an arrangement whereby a flight is operated by a carrier other than the airline whose designator code is used in schedules and on tickets. The Department's current regulation on the disclosure of code-sharing and long term wet lease arrangements, 14 CFR 257.5, was initially issued in 1999. Based on the statutory prohibition against unfair and deceptive practices in the sale of air transportation, 49 U.S.C. 41712, the purpose of § 257.5 is to ensure that consumers are aware of the identity of the airline actually operating their flight in code-sharing and long-term wet lease arrangements in domestic and international air transportation.
Pursuant to § 257.5, carriers and ticket agents are required to inform consumers, when engaging in oral communications with the public, of code-share service “before booking transportation” and to “identify the transporting carrier by its corporate name and any other name under which that service is held out to the public” (section 257.5(b)). Written notice of code-sharing arrangements is also required when a ticket purchase is made, regardless of whether an itinerary is issued (section 257.5(c)). In “printed” advertisements, including those appearing on a Web site, the code-sharing relationship must be “prominently” disclosed and an abbreviated notice must be included in any radio or television advertisement (section 257.5(d)). With respect to all schedule information that is publicly available in writing, including on Web site displays, section 257.5(a) requires that any code-share service be indicated with “an asterisk or other easily identifiable mark and that the corporate name of the transporting carrier and any other name under which that service is held out to the public” also be disclosed. As a matter of enforcement policy, since the issuance of section 257.5, we have permitted entities providing schedules on Web sites to provide disclosure of an operating carrier's corporate name and other pertinent names through rollover or hyperlinked displays.
In February 2009, a flight operated by a regional air carrier under a mainline air carrier's code crashed during landing. In the aftermath of that fatal incident, family members of some victims questioned the adequacy of disclosure regarding the code-sharing nature of that operation. In response to these concerns and in recognition of the necessity of further strengthening the disclosure requirements of code-sharing arrangements, Congress amended 49 U.S.C. 41712 in August 2010 to add a subsection (c) that requires that in any oral, written, or electronic communications with the public, U.S. and foreign air carriers and ticket agents disclose the name of the carrier providing the air transportation for each flight segment prior to the ticket purchase. In addition, subsection (c) provides that if an offer to sell tickets is provided on a Web site, such information must be disclosed “on the first display of the Web site following a search of a requested itinerary in a format that is easily visible to a viewer.”
In this NPRM, we are proposing to amend 14 CFR 257.5 to codify the requirements of 49 U.S.C. 41712(c) and the Department's current enforcement policy with respect to Web site disclosure of code-share and long term wet lease arrangements. In addition, we are proposing to update certain other disclosure requirements of 14 CFR 257.5 in order to reflect the technology changes in the airline industry's reservation and ticketing systems that have resulted in the predominance of electronic ticketing and the significant use of online transactions. As noted in the background section of this NPRM, these proposals are also intended to implement the Future of Aviation Advisory Committee and the Advisory Committee on Aviation Consumer Protection recommendation that the Secretary should ensure transparency regarding flight operators, such as disclosure of the identity of the operator on regional-carrier code-share flights. See
14 CFR 257.5 contains subsections (a) through (d), which deal with disclosure in schedule displays, oral notice to prospective consumers, written notice to ticket purchasers, and disclosure in advertisements, respectively. Most code-share disclosure requirements under 14 CFR 257.5 cover both carriers and ticket agents, but section 257.5(a), notice in schedules, only covers U.S. air carriers and foreign air carriers. On the other hand, 49 U.S.C. 41712(c) (enacted in 2010), as well as the January 10, 2011, notice issued by the Department's Enforcement Office, are explicit that the same heightened requirements regarding
The inclusion of ticket agents in section 41712(c) reflects the fact that, through the growth and development of the Internet and related technologies, more and more ticket agents, especially online travel agencies (OTAs), are able to provide flight schedules and itinerary search functions to the public. The Department applauds new technologies that increase the number of venues from which consumers can search and compare airfares and schedules and perform one-stop shopping for airfares along with other components of travel packages. However, it is our firm belief that information is useful and beneficial to the public only if it is accurate and complete. As a result, we are proposing to codify the code-share disclosure requirement in section 41712(c) concerning schedule displays and make it applicable to both carriers and ticket agents doing business in the United States with respect to flights in, to, or from the United States. Although the rule text and the preamble of the final rule issued in 1999 did not specify what constitutes “doing business in the United States,” we are tentatively of the opinion that any ticket agent that markets and is compensated for the sale of tickets to consumers in the United States, either from a brick-and-mortar office located in the United States or via an Internet Web site that is marketed towards consumers in the United States, would be considered as “doing business in the United States.” This interpretation would cover any travel agent or ticket agent that does not have a physical presence in the United States but has a Web site that is marketed to consumers in the United States for purchasing tickets for flights within, to, or from the United States. We also note that with the usage of mobile devices gaining popularity among consumers, our code-share disclosure requirement with respect to flight schedule and itinerary displays covers not only conventional Internet Web sites under the control of carriers and ticket agents, but also those Web sites and applications specifically designed for mobile devices, such as mobile phones and tablets.
Furthermore, the text of section 257.5(a) states that any code-sharing arrangements must be disclosed in flight schedules provided to the public in the United States, which we interpret to include electronic schedules on Web sites marketed to the public in the United States, by an asterisk or other easily identifiable mark. As discussed above, the new amendment to section 41712 and the guidance provided by the Enforcement Office make it clear that for schedules posted on a Web site in response to an itinerary search, disclosure though a rollover, pop-up window or hyperlink is no longer sufficient. Moreover, as stated in the rationale behind our recently amended price advertising rule, 14 CFR 399.84, which ended the practice of permitting sellers of air transportation to disclose airfare taxes and mandatory fees through rollovers and pop-up windows, we believe that the extra step a consumer must take by clicking on a hyperlink or using a rollover to find out about code-share arrangements is cumbersome and may cause some consumers to miss this important disclosure.
Our proposal codifies the requirement of section 41712(c)(2) that the code-share disclosure must appear on the first display of the Web site following an itinerary search. Further, section 41712(c)(2) requires that the disclosure on a Web site must be “in a format that is easily visible to a viewer.” In that regard, we are proposing that the disclosure must appear in text format immediately adjacent to each code-share flight displayed in response to an itinerary request by a consumer. We ask whether the proposed requirement is sufficient to meet the statutory requirement that the disclosure must be in a format that is easily visible by a viewer. We further seek comments on whether we should specify minimum standards on the text size of the disclosure in relation to the text size of the schedule itself. As an alternative to the proposed standard, we ask whether a code-share disclosure appearing immediately adjacent to the entire itinerary as opposed to appearing immediately adjacent to each code-share flight would be a sufficient way to meet the “easily visible” standard.
With regard to flight schedules provided to the public (whether the schedules are in paper or electronic format), we propose that the code-share disclosure be provided by an asterisk or other identifiable mark that clearly indicates the existence of a code-sharing arrangement and directs the readers' attention to another prominent location on the same page where the identity of the operating carrier is fully disclosed. We seek public comments on whether we should impose the same standard for flight schedules as for flight itineraries provided on the Internet in response to an itinerary search, i.e., requiring that the disclosure be provided immediately adjacent to each applicable flight.
Section 257.5(b) requires that carriers and ticket agents must identify the actual operator of a code-share flight the first time that a code-share flight is cited to a consumer in person, over the telephone, or through other means of oral communication. With respect to covered entities, this section currently applies to, and, under this proposal, will continue to apply to, both U.S. and foreign air carriers, as well as ticket agents doing business in the United States. We are not proposing any changes to this provision, but we propose to interpret the phrase “ticket agent doing business in the United States” in the same manner as described in the discussion of that phrase in section 259.5(a) above. Consequently, a ticket agent that sells air transportation via a Web site marketed toward U.S. consumers (or that distributes other marketing material in the United States) is covered by section 259.5(b) even if the agent does not have a physical location in the United States, and such an agent must provide the disclosure required by section 259.5(b) during a telephone call placed from the United States even if the call is to the agent's foreign location.
With respect to written notice of code-share arrangements provided to ticket purchasers, we propose to retain the basic requirements listed in 14 CFR 257.5(c)(1) but delete the language in 14 CFR 257.5(c)(3). The basic requirements in section 257.5(c)(1) are as follows: if a code-share flight segment has its own designated flight number, the code-share disclosure must be immediately adjacent to that flight number; if a single-flight number service involves one or more code-share segments, each code-share segment must be identified immediately adjacent to that flight number in the format “Service between XYZ City and ABC City will be operated by Jane Doe Airlines d/b/a ORS Express.” Section 257(c)(3) states that the written code-share notice required by section 257.5(c) must accompany the ticket if the transportation is purchased far enough in advance of travel to allow for advance delivery of the ticket. If time does not allow for advance delivery of the ticket, “or in the case of ticketless travel,” the required written notice is to be provided no later than the time that
The first part of section 257.5(c)(3) appears to refer to paper tickets, as it speaks of the time required for delivery of the ticket, and it draws a contrast with “ticketless travel” in the next sentence. (Ticketless travel is a term that used to be used for what is now referred to as electronic ticketing or e-tickets.) We believe that the required written notice should in all cases be provided “at the time of purchase” as indicated at the beginning of section 257.5(c), regardless of whether a paper ticket is subsequently issued or the consumer will receive an e-ticket. Section 257.5(c)(2) states that if a consumer does not receive an itinerary, the selling carrier or ticket agent must provide a separate written notice that identifies the operating carrier. Thus, the existing rule anticipates situations in which the required written code-share notice is not automatically generated by industry purchase/ticketing systems and states that in such cases the selling carrier or ticket agent must manually generate and furnish a written disclosure of the identity of the carrier(s). We do not believe that a written code-share notice that is provided at the airport is sufficient though currently permitted under section 257.5(c)(3) for passengers who purchase their air transportation in advance but do not receive a paper ticket until a date close to the scheduled departure date and for e-ticketed passengers including those who have purchased their transportation weeks or months in advance. Accordingly, we propose to make it clear that written code-share disclosure must be provided at the time of purchase.
Subsection (d) deals with disclosure requirements in city-pair specific advertisements. We are proposing to use the phrase “written advertisement” to replace the phrase “printed advertisement,” which in the current rule text refers to both advertisements printed in paper and advertisements published on the Internet. We believe the word “written” is more accurate in describing both formats of advertisements.
In addition, we are proposing to add a descriptive phrase to specify the scope of the disclosure requirements on Internet advertisements in an effort to eliminate any possible ambiguity. Specifically, the current rule states that our requirements cover advertisements “published in or mailed to or from the United States” including those published on the Internet. As the Internet is a global information network, this language may leave it unclear what would constitute an Internet advertisement that is “published” in the United States. For example, a Web site that is hosted on a server located in the United States could arguably fall within the scope of our rule. Conversely, a Web site hosted on a server located outside of the United States could still be marketing airfares to consumers in the United States. For this reason, and to achieve consistency with the Department's other airline consumer protection rules, we are proposing to specify that our code-share disclosure requirements regarding advertisements published on the Internet would apply to advertisements for service in, to or from the United States that are marketed to consumers in the United States. This standard is consistent with the recently amended full-fare advertising rule, 14 CFR 399.84, which only covers Internet advertisements published on Web sites marketed to United States consumers. As explained in a
We note that this proposed standard will cover all advertisements appearing on a carrier's or a ticket agent's own Web site, as well as advertisements that are presented to U.S. consumers through other paid advertising venues on the Internet (such as a news media Web site or a travel blog Web site) and social media Web sites (such as Facebook or Twitter). We seek comments with regard to whether imposing the same standard to advertisements on all of these Web sites is reasonable and technically practical. We specifically ask what type of code-share disclosure is considered adequate from a consumer's point of view, in light of the brevity of the Facebook and Twitter posting formats. Finally, we are proposing some editorial changes to 14 CFR 257.5. First, we propose to replace the term “transporting carrier”, which is used throughout section 257.5, with the term “operating carrier” to refer to the carrier in a code-share or wet lease arrangement that has the operational control of a flight but does not market the flight in its own name. In doing so, we are trying to achieve consistency with other recently amended consumer protection rules, see, e.g., 14 CFR 259.4(c) (code-share partners' responsibilities in tarmac delay contingency plans) and 14 CFR 399.85(e) (notice of baggage fees for code-share flights). Another stylistic change proposed in this NPRM concerns the example disclosure statement that a seller of air transportation must include in a radio or television broadcasting advertisement. The current sample statement includes the phrase “[s]ome services are provided by other airlines.” Because the words ” services” and “provided” cover a wide range of activities, including ground operations, customer service, etc., they do not accurately convey the information we intended to relate, which was regarding the actual operation of a flight. Accordingly, we propose to change the sentence to read “[s]ome flights are operated by other airlines.”
The Department is considering requiring large travel agents to disclose in online displays the fact that not all carriers that serve a particular market are marketed by the travel agent if that is the case. Consumers deserve complete information regarding whether a particular ticket agent provides flight and fare information for all carriers or just a subset of carriers. Many online travel agents provide flight and fare information for a significant number of carriers serving a particular city-pair market but not all carriers that serve that market. In some markets, they may not provide information regarding any carrier serving the market. Online travel agents do not necessarily identify the carriers whose schedule and fare information is or is not provided in search results. As a result, consumers may believe they are searching all possible flight options for a particular city-pair market when in fact there may be other options available. The Advisory Committee for Aviation Consumer Protection recommended that DOT require ticket agents, including online ticket agents, to disclose the fact that they do not offer for sale all airlines' tickets, if that is the case, and that additional airlines may serve the route being searched, so that consumers know they may need to search elsewhere if they want to find all available air travel options. Accordingly, the Department is considering requiring large ticket agents, such as online travel agents, that operate Web sites that display schedules or fares and/or sell tickets for air transportation of more than one carrier to disclose whether they display the airfares of all
The Department is not providing rule text for this proposal. Instead, it seeks comment on how such a requirement should be implemented. For example, should the disclosure be made with a general statement on the travel agent's home page with a link to more detailed information? Or should the disclosure be made through a statement on the search results page that displays itineraries in response to a consumer search? If the general disclosure statement is linked to a page with more detailed information, what additional information should be provided? Additionally, the Department seeks comment on whether such a rule should be limited to ticket agents of a certain size or should include all ticket agents, and if the rule should be limited to ticket agents of a certain size, what parameters should the Department use to define the ticket agents included in the requirement. The Department also seeks comment on the costs and benefits of requiring Web sites to state whether a particular carrier's schedule information is provided on that Web site and of identifying those air carriers that must be included in such disclosure. For example, what are the costs and benefits of a disclosure that says, “These schedules do not include all carriers in these markets” versus a disclosure that would
In connection with electronic displays of multiple carriers' airfares and schedules, the Department is proposing to prohibit any undisclosed bias in any presentation of carrier schedules, fares, rules or availability. A Department prohibition on airfare display bias is not unprecedented. In the past, Department regulations contained a limited prohibition on bias of computer terminal displays provided to travel agents by computer reservation systems (CRSs), the precursors to GDSs. At that time, there was a concern that the owners of the CRSs (initially airlines and, subsequently, other entities) would potentially engage in display bias or other unfair, deceptive, predatory, or anticompetitive practices absent Department regulation of their operations (14 CFR Part 255). This rule prohibited CRSs used by travel agents from using factors relating to carrier identity in determining how airfares were displayed. Among other things, the CRSs were required to use the same editing and ranking criteria for “both on-line and interline connections and not give on-line connections a system-imposed preference over interline connections.” 14 CFR 255.4(a)(1). However, Part 255 sunset on July 31, 2004 (see 14 CFR 255.8).
Recently, the Enforcement Office has been informed of allegations that certain ticket agents, including GDSs, have biased their displays to disadvantage certain airlines in the course of hard-fought contract negotiations. Those ticket agents have allegedly biased the listing of available itineraries displayed in response to searches by consumers or travel agents on their Web sites. The display bias allegedly resulted in consumers and travel agents being presented with favored carriers' fare and schedule information first. Complainants also assert that although some ticket agents may have received limited disclosure regarding certain instances of display bias, the general public received no notice or disclosure. Moreover, we are concerned that GDSs and other ticket agents could sell bias to certain airline competitors or bias displays toward carriers that pay higher segment fee compensation to GDSs and such bias could be difficult to detect. The prohibition would also apply to flight search tools operated by meta-search engines and similar entities engaged in the distribution of certain air transportation information. As discussed earlier, the Department would view such entities as being ticket agents.
The Department is considering a regulation that would require any carrier or ticket agent that provides electronic display of airfare information to provide unbiased displays or disclose the biases in the display. The regulation would apply to all electronic displays of multiple carriers' fare and schedule information, whether the display is available on an unrestricted basis, e.g., to the general public, or is only available to travel agents who sell to the public. The requirement to provide unbiased displays or disclose biases in the display would also apply to electronic displays used for corporate travel unless a corporation agrees by contract to biases in the display used by its employees for business travel. If not, the regulation would require carriers and ticket agents that provide airfare information electronically to display the lowest generally available airfares and most direct routings that meet the parameters of the search in response to an inquiry for an airfare quotation for a specific itinerary. It would also prohibit biasing displays such that less direct routings that are equivalently priced, or more expensive fares with an equally direct routing, and that meet the parameters of a search, are displayed more prominently or earlier in the search results list than a more direct routing or a lower fare simply to benefit a particular favored carrier or penalize a disfavored carrier. In the alternative, carriers and ticket agents could provide biased displays so long as they have prominent and specific disclosure of the bias. The requirements would apply to displays in response to airfare inquiries by a consumer for a particular itinerary and displays in response to airfare inquiries made by a travel agent or other intermediary in the sale of air transportation for a particular itinerary.
Under this proposal, undisclosed display bias would not be permitted on displays publicly available directly to consumers or displays directed toward travel agents, such as those working for corporations or other travel management companies. To the extent the consumer or travel agent placed restrictions on the search, for example, by limiting to one or more specific carriers or classes of service, the display would not be considered to contain undisclosed display bias as long as the display disclosed the lowest available fares and most direct itineraries that met the search parameters. In addition to prohibiting display bias, the Department is considering requiring any ticket agent that decided to bias its displays and disclose the existence of bias to also disclose any incentive payments it is receiving. We seek comment on what kind of disclosure of the existence of incentive payments would be most helpful for consumers. When providing notice, should the ticket agent list the companies, air carriers, and foreign air carriers offering the incentives? If so, should the list rank companies in order of the company providing the incentives of the greatest monetary value? Or should it group them based on whether the incentive is provided in the form of payments, rebates, discounts, commissions, volume-based compensation, or another method? Should the requirement apply to
The Department seeks comment on whether the prohibition on display bias should be limited to airfare and routings. We also seek comment on the costs and benefits of a prohibition on display bias.
In the second Enhancing Airline Passenger Protections rule, the Department prohibited an air carrier or agent from increasing the price of air transportation after the passenger purchases a ticket. Under 14 CFR 399.88, carriers and other sellers of air transportation are now prohibited from increasing the price of air transportation to a particular passenger after the purchase of a ticket, including but not limited to the price of a seat, the price for the carriage of passenger baggage, and the price for any applicable fuel surcharge. The rule includes a limited exception for an increase in a government-imposed tax or charge. In response to questions received after publication of the final rule, the Department's Enforcement Office clarified that there could not be an increase to a particular passenger in the charge for any ancillary service after a ticket is purchased, including services not purchased with the ticket. The reasoning behind this was twofold. First, by using the phrase “including but not limited to” when describing the types of items that sellers of air transportation are prohibiting from price increases after ticket purchase, the Department made it clear that these items are simply examples and not an exhaustive list. Second, under the disclosure requirements of 14 CFR 399.85(c), sellers of air transportation are required to inform passengers about baggage charges on their e-ticket confirmations as a means of preventing consumers from being surprised about hidden fees. If these fees could change after the passenger purchases the ticket, the information provided in the e-ticket would be useless.
However, after the rule became final, certain carriers raised concerns that had not been raised previously: That a prohibition on an increase in the price of any ancillary service after a ticket purchase could prove cumbersome for carriers in practice. For example, one passenger might be entitled to pay a lesser amount for a drink or a snack than the passenger sitting next to him or her. They contended that the cost of developing systems to keep track of the price of every ancillary service at the time of passenger purchase and charging those prices on an individualized basis would be prohibitive.
In light of the problems in application of the rule as it relates to ancillary services that are not purchased with the ticket, the Enforcement Office issued
The Department is now proposing to modify 14 CFR 399.88 to prohibit a price increase after the purchase of air transportation for any mandatory charge the consumer must pay (such as the air fare or an applicable fuel surcharge), and the price for the carriage of any passenger baggage. Sellers of air transportation would also continue to be prohibited from increasing the price of any ancillary service after it is purchased. The logistical and financial burdens placed on carriers related to ancillary services other than baggage that are not purchased with the ticket are too great. Ensuring that in-flight crew have the information and tools to impose varying service fees depending on when a passenger purchased a ticket would likely lead to unreasonable costs for carriers, significant confusion, and ultimately consumer harm by incentivizing carriers to set prices for ancillary services artificially high. However, the Department believes that transporting baggage is intrinsic to air transportation and baggage fees are a major factor for consumers when deciding which air transportation to purchase, and should be subject to the rule prohibiting post-purchase price increases. Therefore, under the proposed rule, the price for the transportation of passenger baggage that applies when a passenger buys a ticket is the price that they will pay, even if they do not pay for the transportation of baggage at the time they purchase the ticket. This interpretation is consistent with guidance given by the Department in 2008 which states that “[i]n no case should more restrictive baggage policies or additional charges be applied retroactively to a consumer who purchased his or her ticket at a time when the charges did not apply, or when a lower charge applied.”
In addition, under the revised 14 CFR 399.88, after a ticket is purchased, carriers and other sellers of air transportation would continue to be prohibited from raising the price of the air transportation or of ancillary services that are purchased with the ticket. For example, if a passenger buys a ticket that costs $200 (total fare, inclusive of taxes and fees) and pays an additional $25.00 for a priority boarding pass, and the carrier subsequently increases the price of a priority boarding pass effective on a date before this passenger travels, the carrier cannot retroactively increase the price for the consumer who already purchased their priority boarding pass. The new 14 CFR 399.88 would still allow for the limited exception of an increase in the price of a ticket if there is an increase in a government-imposed tax or fee; that tax/fee could still be retroactively applied to the passenger's travel if the required notice is provided to consumers prior to the ticket purchase. However, any other increase in price of any already purchased ancillary service would constitute an unfair and deceptive practice.
The Department is also considering the alternative of keeping the original interpretation of the rule. Under this interpretation, the price of ancillary services and products for a given consumer is capped at the time that he or she purchases the air transportation whether or not these items are purchased along with the air transportation, as the existence of a fee for other services or products related to the air transportation, as well as the amount of any such fee, can influence a customer's purchasing decision. The Department invites comments on the costs and benefits of retaining the rule as originally interpreted and on the new
Finally, the Department is also contemplating revising the post-purchase price provision to better address the issue of “mistaken fares.” As explained above, section 399.88 essentially bans sellers of air transportation from increasing the price of an airline ticket to a consumer who has purchased and paid for the ticket in full. As a result, the Department's Enforcement Office explained in a guidance document that, under section 399.88, “if a consumer purchases a fare and that consumer receives confirmation (such as a confirmation email and/or the purchase appears on their credit card statement or online account summary) of their purchase, then the seller of air transportation cannot increase the price of that air transportation to that consumer, even when the fare is a `mistake.' ” Since then, the Enforcement Office has investigated a number of incidents where passengers complained that airlines or ticket agents would not honor tickets that had been paid for in full because the sellers of the air transportation erroneously let them book flights for less than the actual value. The Enforcement Office has become concerned that increasingly mistaken fares are getting posted on frequent-flyer community blogs and travel-deal sites, and individuals are purchasing these tickets in bad faith and not on the mistaken belief that a good deal is now available. We solicit comment on how best to address the problem of individual bad actors while still ensuring that airlines and other sellers of air transportation are required to honor mistaken fares that were reasonably relied upon by consumers.
Additionally, industry and consumers have raised questions regarding when transportation is considered to touch upon the United States and thus covered by the prohibition on post-purchase price increases. Currently, section 399.88 states that it is an unfair and deceptive practice for any seller of scheduled air transportation within, to, or from the United States or of a tour or tour component that includes scheduled air transportation within, to, or from the United States, to increase the price of that air transportation to a consumer after the air transportation has been purchased by the consumer, except in the case of a government-imposed tax or fee and only if the passenger is advised of a possible increase before purchasing a ticket. We are considering defining the phrase “air transportation within, to, or from the United States” for the purposes of this section to mean any transportation that begins or ends in the United States or involves a connection or stopover in the United States that is 24 hours or longer. We ask for comments on whether this new definition would provide greater clarity to members of the public and the regulated entities on when sellers of air transportation would be required to honor mistaken fares.
In response to questions and concerns from airlines and other regulated entities, the proposed amendments to the rules described below are intended to correct drafting errors, provide clarifications and reflect minor changes to the second Enhancing Airline Passenger Protections rule to increase consistency and conform to guidance issued by the Department's Enforcement Office regarding its interpretation of the rule. On its own initiative, the Department is also making administrative changes to another rule.
In sections 399.85(a) and 399.85(b) the final rule inadvertently refers to Web sites that are “accessible” from the United States. In this NPRM, we are proposing to codify the guidance given in Frequently Asked Question #25, page 25, and amend sections 399.85(a) and 399.85(b) to reflect the intended applicability of those sections to Web sites “marketed to” U.S. consumers. This change also makes sections 399.85(a) and 399.85(b) consistent with the other provisions in 14 CFR 399.85 that apply to Web sites that market air transportation to U.S. consumers. The Department invites comment on this proposal.
In further regard to section 399.85(b), after issuing the rule and assisting carriers and online travel agents with their efforts to come into compliance, it became clear that the Enforcement Office needed to clarify two aspects of this disclosure rule. The first issue is when a carrier or agent needs to notify a passenger that “baggage fees may apply.” The rule text states that an agent or carrier must “clearly and prominently disclose on the first screen in which the agent or carrier offers a fare quotation for a specific itinerary selected by a consumer that additional airline fees for baggage may apply and where consumers can see these baggage fees.” Although section 399.85(b) may be amended in accordance with the proposal regarding the “[d]isplay of ancillary service fees through all sales channels,” if the Department decides not to adopt that proposal it would amend section 399.85(b) to conform to the guidance previously issued. In that case, section 399.85(b) would state that the first screen on which the carrier offers a fare quotation after a passenger initiates a search for flight itineraries must include notification that baggage fees may apply. For example, if a passenger performs a search for flights from San Francisco to Dallas on a carrier or agent's Web site, the first page displayed in response to that search that includes a fare quote must also note that baggage fees may apply. The second issue is that the Department wishes to clarify that in showing “where consumers can see these baggage fees,” the search results screen of the Web site of the agent or carrier must include a hyperlink that takes the consumer to the up-to-date and accurate baggage fee listings. An agent may link to a chart of information that it generates itself, to a third party site containing the information, or to the carrier's page, as it is allowed to do under the current rule.
In 14 CFR Part 244, the Department requires U.S. and foreign air carriers to file Form 244 “Tarmac Delay Report” with the Department with respect to any covered flight that experienced a lengthy departure or arrival delay on the tarmac at a large, medium, small, or non-hub U.S. airport. A “lengthy” tarmac delay for purposes of this report is defined in Part 244 as any tarmac delay that lasts “three hours or more.” This standard is inconsistent with the standard applicable to the tarmac delay contingency plan requirements under 14 CFR Part 259 and the existing reporting requirements of BTS, both of which refer to any tarmac delay of “more than three hours.” In a Frequently Asked Questions document issued by the Department following the issuance of the final rule for Part 244, we acknowledged this discrepancy and stated that we intend to correct it in a future rulemaking. In this NPRM, we are proposing to amend the rule text of Part 244 and to adopt the “more than three hours” standard so this Part would be consistent with other Parts of our rules. Under this proposal, any tarmac delay that lasts exactly three hours would not be covered under the requirements of Part 244.
In the first and second Enhancing Airline Passenger Protections final rule, the Department stated that failure to comply with the assurances required by the tarmac delay rule will be considered an unfair and deceptive practice within the meaning of 49 U.S.C. 41712 that is subject to enforcement action by the Department. Under 49 U.S.C. 46301, the Department has authority to impose a civil penalty of “of not more than $27,500” for each violation of the specifically listed aviation-related laws and regulations, which would include DOT's tarmac delay rule. Nevertheless, in recent years, there have been questions raised as to whether the Department has the authority under the civil penalty statute (49 U.S.C. 46301) to assess a civil penalty on a per passenger basis for tarmac delay violations. As such, we are amending the tarmac delay rule to clarify that the Department may impose penalties for tarmac delay violations on a per passenger basis.
It has long been the Department's policy that each consumer affected by an unlawful carrier practice is a separate violation. For example, if a flight is canceled and ten people on that flight cannot be rerouted and thus are entitled to a refund of their unused transportation, and the carrier fails to comply with the Department's refund rules, each person whose refund was not provided in compliance with our rules would constitute a separate violation. Similarly, if five people were involuntarily denied boarding from an oversold flight and none were paid denied boarding compensation as required by our oversales rule that would be five violations. Our authority to calculate a civil penalty on a per passenger basis for tarmac delay violations is just as clear. Each passenger on a flight that experiences a tarmac delay that exceeds three hours for domestic flights or four hours for international flights experiences the inconvenience that this rule was designed to prevent and gives rise to a separate violation. Likewise, each passenger who is not offered food and water at the two-hour mark during a tarmac delay gives rise to a separate violation. Indeed, a number of carriers have recognized this fact and complained in public filings and press reports of the prospect of incurring $27,500 per passenger in fines for tarmac delay violations.
The purpose of the tarmac delay rule is clearly to mitigate hardships for individual airline passengers during lengthy tarmac delays. To that end, the rule requires carriers to develop contingency plans for lengthy tarmac delays, and to provide an assurance that the carrier will not allow an aircraft to remain on the tarmac for more than three hours for domestic flights and for more than four hours for international flights without each passenger being given an opportunity to deplane. The preambles to both the first and second Enhancing Airline Passenger Protections final rules refer to protecting individual passengers. Carriers are also required to tell passengers what they can expect by posting their contingency plans on their Web site. To the extent that carriers do not live up to the assurances that they provided to any passenger, it is an unfair and deceptive practice with respect to each affected passenger and therefore a separate violation of 49 U.S.C. 41712 with respect to each such passenger.
Another inconsistency in the second Enhancing Airline Passenger Protections final rule concerns the requirement in 14 CFR Part 250 to provide oral disclosure of any material restrictions on travel vouchers offered to any passenger a carrier solicits to voluntarily give up his or her confirmed reservation on an oversold flight. The preamble to the final rule discussed extensively the reason for requiring such oral disclosure to both voluntarily and involuntarily bumped passengers who are orally offered a voucher, but inadvertently, the new Part 250 rule text only requires oral disclosures to passengers who are involuntarily denied boarding. The rule text, as it currently stands, allows carriers to provide such disclosure solely by written notice to passengers who are orally solicited to be volunteers in exchange for travel vouchers. However, for the reasons discussed in the preamble to the second Enhancing Airline Passenger Protections rule, we are unconvinced that such written notice alone is adequate at times when the solicitation itself is oral and passengers are constrained by time pressure to make a quick decision as to whether to volunteer. Many times, the written notice is incorporated in the printed contents of the travel voucher, and the passenger frequently would not have time to review the notice before he or she commits to the acceptance of the voucher. We continue to believe that a brief oral summary of the material restrictions applicable to the travel vouchers that are orally offered to potential volunteers (as well as continuation of the requirement to orally disclose this information to involuntarily bumped passengers who are offered the option of a travel voucher) will provide further protections to these passengers so they can make an informed decision. As such, we are proposing to amend section 250.2b(c) to reflect this notion. Under this proposal, when carriers orally solicit volunteers and offer travel vouchers as incentives, they would also be required to orally describe any material restrictions applicable to the travel vouchers.
Section 259.8 requires that covered carriers must notify passengers and other interested persons of flight status changes within 30 minutes after the carrier becomes aware of such changes. Flight status changes in this section include a flight cancellation, a delay of more than 30 minutes, or a diversion. Although the preamble and rule text did not specify how far in advance of the date of the scheduled operation carriers must comply with the notification requirements, the
We are also proposing some editorial changes to section 259.8 to clarify that flight status change notifications required in this section should be provided not only to passengers, but also to any member of the public who may be affected by the changes, including persons meeting passengers at airports or escorting them to or from airports. This is a point we made clear in the preamble of the final rule document but not in the rule text. In this regard, we are proposing to change the word “passengers” to “consumers” in the title of section 259.8, to change the first instance of the word “passengers” in subsection 259.8(a)(1) to the phrase “passengers and other interested persons,” and to change the second instance of that word to “subscribers.”
Section 399.80(h) states that it is an unfair or deceptive practice or unfair method of competition for a ticket agent to advertise or sell air transportation at less than the rates specified in the tariff of the air carrier, or offer rebates or concessions, or permit persons to obtain air transportation at less than the lawful fares and rates. This provision is a vestige of the period before deregulation of the airline industry. Domestic air fares were deregulated effective 1983, and in most cases international air fares to and from the United States are no longer contained in tariffs that specify “lawful” fares. In those markets where international fares are still subject to regulation, carriers that do not comply with their tariff are potentially subject to enforcement action under 49 U.S.C. 41510 concerning adherence to tariffs or 49 U.S.C. 41712 concerning unfair or deceptive practices and unfair methods of competition (the statutory basis for section 399.80(h)). The Department's Enforcement Office has said that it will pursue enforcement action against a carrier that does not comply with its tariff when there is clear evidence of a pattern of direct consumer fraud or deception, invidious discrimination, or violations of the antitrust laws. It has been the longstanding policy of that office to decline to prosecute instances of noncompliance with tariff obligations that result in benefits to consumers absent clear evidence of such behavior. (
This action has been determined to be significant under Executive Order 12866 and the Department of Transportation's Regulatory Policies and Procedures. It has been reviewed by the Office of Management and Budget under that Executive Order. The Regulatory Evaluation finds that the costs for the proposed rule exceed the monetized benefits as the benefits from all provisions, with the exception of provision 2, could not be measured and valued with confidence. The benefits which could be estimated for provision 2 do not include the value of all likely benefits, as values for some of those could not be adequately estimated. The total present value of monetized passenger benefits from the proposed requirements over a 10-year period at a 7% discount rate is $25.1 million and the total present value of monetized costs incurred by carriers and other sellers of air transportation over a 10-year period at a 7% discount rate is $80.5 million. The net present cost of the rule for 10 years at a 7% discount rate is $53.8 million. However, if the value of the unquantified benefits, per passenger, is any amount greater than one cent, and unquantified costs are minimal, then the entire rule is net beneficial. In other words, if passengers are willing to pay, on average, one penny per trip for all eight provisions of the proposal, then the value of the proposal outweighs its costs.
Below, we have included a table outlining the projected costs and benefits of this rulemaking.
We invite comment on the quantification of costs and benefits for each provision, as well as the methodology used to develop our cost and benefit estimates. We also seek comment on how unquantified costs and benefits could be measured. More detail on the estimates within this table can be found in the preliminary Regulatory Impact Analysis associated with this proposed rule.
The Regulatory Flexibility Act (5 U.S.C. 601
The Initial Regulatory Flexibility Analysis found that there are some costs, though not substantial, to certain small entities from provision 3 which would expand the definition of a reporting carrier to one that accounts for at least 0.5% of domestic scheduled passenger revenues; provision 4, which would expand the reporting requirements for reporting carriers to include an additional, combined set of reports for both the carrier's own flights and its code-share partner flights; and provision 2, which would require that U.S. and foreign air carriers and ticket agents disclose certain ancillary service fees to a consumer who requests such information.
Our analysis estimates that a total of 87 small U.S. and foreign air carriers may be impacted by this rulemaking. We believe that the economic impact on these entities would not be significant. The estimated cost to small carriers from all the provisions would be $5.1 million for the first year and $24.7 million for a 10-year period discounted at 7 percent. On the basis of this examination, I certify that this rulemaking would not have a significant economic impact on a substantial number of small entities. A copy of the Initial Regulatory Flexibility Analysis has been placed in docket.
This NPRM has been analyzed in accordance with the principles and criteria contained in Executive Order 13132 (“Federalism”). This notice does not propose any provision that (1) has substantial direct effects on the States, the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government; (2) imposes substantial direct compliance costs on State and local governments; or (3) preempts State law. States are already preempted from regulating in this area by the Airline Deregulation Act, 49 U.S.C. 41713. Therefore, the consultation and funding requirements of Executive Order 13132 do not apply.
This NPRM has been analyzed in accordance with the principles and criteria contained in Executive Order 13084 (“Consultation and Coordination with Indian Tribal Governments”). Because none of the options on which we are seeking comment would significantly or uniquely affect the communities of the Indian tribal governments or impose substantial direct compliance costs on them, the funding and consultation requirements of Executive Order 13084 do not apply.
This NPRM proposes two new collections of information that would require approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (Pub. L. 104–13, 49 U.S.C. 3501
The first collection of information proposed here is a requirement that more carriers report on-time performance, mishandled baggage, and oversales data to the Department (i.e., expansion of reporting carriers from any U.S. airline that accounts for at least one percent of annual domestic scheduled passenger revenue to any U.S. airline that accounts for at least 0.5 percent of annual domestic scheduled-passenger revenues). The second information collection is a requirement that mainline carriers provide enhanced reporting for their domestic code-share partner operations including requiring reporting carriers to separately report on-time performance, mishandled baggage, and oversales data for all domestic scheduled passenger flights marketed by the reporting carriers.
For each of these information collections, the title, a description of the respondents, and an estimate of the annual recordkeeping and periodic reporting burden are set forth below:
The Department invites interested persons to submit comments on any aspect of each of these two information collections, including the following: (1) The necessity and utility of the information collection, (2) the accuracy of the estimate of the burden, (3) ways to enhance the quality, utility, and clarity of the information to be collected, and (4) ways to minimize the burden of collection without reducing the quality of the collected information. Comments submitted in response to this notice will be summarized or included, or both, in the request for OMB approval of these information collections.
The Department has determined that the requirements of Title II of the Unfunded Mandates Reform Act of 1995 do not apply to this NPRM.
Air carriers, Consumer protection, Reporting and recordkeeping requirements.
Air carriers, Consumer protection, Reporting and recordkeeping requirements.
Air carriers, Consumer protection, Reporting and recordkeeping requirements.
Air carriers, Antitrust.
Air carriers, Antitrust.
Air carriers, Air rates and fares, Consumer protection, Reporting and recordkeeping requirements.
Air carriers, Air rates and fares, Consumer protection.
Administrative practice and procedure, Air carriers, Air rates and fares, Air taxis, Consumer protection, Small businesses.
49 U.S.C. 329 and chapters 401 and 417.
This part applies to certain domestic scheduled passenger flights that are held out to the public by certificated air carriers that account for at least 0.5 percent of domestic scheduled passenger revenues. Certain provisions also apply to voluntary reporting of on-time performance by carriers.
(a) Each reporting carrier shall file BTS Form 234 “On-Time Flight Performance Report” with the Office of Airline Information of the Department's Bureau of Transportation Statistics on a monthly basis, setting forth the information for each of its reportable flights operated by the reporting carrier and held out to the public on the reporting carrier's Web site and the Web sites of major online travel agencies, or in other generally recognized sources of schedule information. (See also paragraph (k) of this section.)
(k) Each reporting carrier shall file a separate BTS Form 234 “On-Time Flight Performance Report” with the Office of Airline Information on a monthly basis, setting forth the information for each of its reportable flights held out with the reporting carrier's code on the reporting carrier's Web site, on the Web sites of major online travel agencies, or in other generally recognized sources of schedule information, including reportable flights operated by any code-share partner that is a certificated air carrier or commuter air carrier. The report shall be made in a form and manner consistent with the requirements set forth in paragraphs (a) through (j) of this section.
(a) Each reporting carrier shall report monthly to the Department on a domestic system basis, excluding charter flights, the total number of checked bags, including gate checked baggage, the total number of wheelchairs and scooters transported in the aircraft cargo compartment, the total number of mishandled checked bags, including gate checked baggage, and the number of mishandled wheelchairs and
(b) This information shall be submitted to the Department within 15 days after the end of the month to which the information applies and must be submitted with the transmittal letter accompanying the data for on-time performance in the form and manner set forth in accounting and reporting directives issued by the Director, Office of Airline Information.
49 U.S.C. 40101(a)(4), 40101(a)(9), 40113(a), 41702, and 41712.
(a) * * * Covered carriers must report all passenger operations that experience a tarmac time of more than 3 hours at a U.S. airport.
(a) Each covered carrier shall file BTS Form 244 “Tarmac Delay Report” with the Office of Airline Information of the Department's Bureau of Transportation Statistics setting forth the information for each of its covered flights that experienced a tarmac delay of more than 3 hours, including diverted flights and cancelled flights on which the passengers were boarded and then deplaned before the cancellation. The reports are due within 15 days after the end of any month during which the carrier experienced any reportable tarmac delay of more than 3 hours at a U.S. airport.
49 U.S.C. chapters 401, 411, 413 and 417.
(c) If a carrier offers free or reduced rate air transportation as compensation to volunteers, the carrier must disclose all material restrictions, including but not limited to administrative fees, advance purchase or capacity restrictions, and blackout dates applicable to the offer before the passenger decides whether to give up his or her confirmed reserved space on the flight in exchange for the free or reduced rate transportation. If the free or reduced rate air transportation is offered orally to potential volunteers, the carrier shall also orally provide a brief description of the material restrictions on that transportation at the same time that the offer is made.
(c) * * * (See also section 250.9(c)).
(a) Each reporting carrier as defined in § 234.2 of this chapter and any carrier that voluntarily submits data pursuant to § 234.7 of this chapter shall file, on a quarterly basis, the information specified in BTS Form 251. The reporting basis shall be flight segments originating in the United States operated by the reporting carrier. The reports must be submitted within 30 days after the end of the quarter covered by the report. The calendar quarters end March 31, June 30, September 30 and December 31. “Total Boardings” on Line 7 of Form 251 shall include only passengers on flights for which confirmed reservations are offered. Data shall not be included for inbound international flights.
(b) Each reporting carrier and voluntary reporting carrier shall file a separate BTS Form 251 for all flight segments originating in the United States operated under the reporting carrier's code, including flight segments operated by a code-share partner that is a certificated air carrier or commuter air carrier using aircraft that have a designed passenger capacity of 30 or more seats. For code-share flight segments that also carry passengers ticketed under another carrier's code, the reporting carrier shall only report information applicable to passengers ticketed under its own code.
49 U.S.C. chapters 401 and 417.
(a) The purpose of this part is to set forth requirements for the operation of electronic airline information systems that provide air carrier or foreign air carrier schedule, fare, rule, or availability information, including, but not limited to, global distribution systems (GDSs) and Internet flight search engines, for use by consumers, carriers, ticket agents, and other business entities as well as for related air transportation distribution practices so as to prevent unfair and deceptive practices in the distribution and sale of air transportation.
(b) Nothing in this part exempts any person from the operation of the antitrust laws set forth in subsection (a) of the first section of the Clayton Act (15 U.S.C. 12).
(a) This part applies to any air carrier, foreign air carrier, or ticket agent that:
(1) Creates or develops the content of an electronic airline information system that combines the schedules, fares, rules, or availability information of more than one air carrier or foreign air carrier for the distribution or sale in the United States of interstate and foreign air transportation; or
(2) Operates an electronic airline information system, e.g., GDS or Internet flight search tool.
(b) This part applies only if the electronic airline information system is displayed on a Web site marketed to consumers in the United States or on a proprietary display available to travel agents, business entities, or a limited segment of consumers of air transportation in the United States.
For purposes of this part,
(a)
(b)
(c)
(d)
(e)
(f)
Each air carrier, foreign air carrier, and ticket agent that operates an EAIS that provides at least one integrated display must comply with the requirements of this section.
(a) Each EAIS shall display accurately all schedule, fare, rules, and availability information provided by or on behalf of listed carriers or obtained from third parties by the EAIS operator.
(b) Each EAIS that uses any factors directly or indirectly relating to carrier identity in ordering the information contained in an integrated display must clearly disclose that the identity of the carrier is a factor in the order in which information is displayed.
(c) Undisclosed display bias in an integrated display is prohibited.
(1) Each EAIS's integrated display must use the same editing and ranking criteria for each listed carrier's flights and must not give any listed carrier's flights a system-imposed preference over any other listed carrier's flights unless the preference is prominently disclosed.
(2) EAISs may organize information on the basis of any service criteria that do not reflect carrier identity provided that the criteria are consistently applied to all carriers and to all markets. Unless any display bias is specifically and prominently disclosed, when providing information in response to a search by a user of the EAIS, the EAIS must order the information provided so that the lowest fare generally available that best satisfies the parameters of the request (e.g., date and time of travel, number of passengers, class of service, stopovers, limitations on carriers to be used or routing [e.g., nonstop only], etc.) is displayed conspicuously and no less prominently than any other fare displayed. To the extent the user (e.g., consumer or travel agent) is entitled to access to any fares restricted to a limited category of travelers, the lowest of those fares must also be displayed conspicuously and no less prominently than any other fare displayed.
(a) No air carrier, foreign carrier, or ticket agent may induce or attempt to induce the developer or operator of an EAIS to create a display that would not comply with the requirements of § 256.4 of this part or provide inaccurate schedule, fare, rules, or availability information that would result in a display that would not comply with the requirements of § 256.4.
(b) Nothing in this section requires an air carrier, foreign air carrier, or ticket agent to allow a system to access its internal computer reservation system or to permit “screen scraping” or “content scraping” of its Web site; nor does it require an air carrier or foreign air carrier to permit the sale of the carrier's services through any ticket agent or other carrier's system. “Screen scraping” refers to a process whereby a company uses computer software techniques to extract information from other companies' Web sites. In the travel industry, screen scraping companies generally extract schedule and fare information from the Web sites of airlines or online travel agencies (OTAs) in order to display the lowest rates on their own Web site and eliminate the need for consumers to compare offerings from site to site.
49 U.S.C. 40113(a) and 41712.
(a)
(1) In flight schedule information provided to U.S. consumers on desktop browser-based or mobile browser-based Internet Web sites or applications in response to any requested itinerary search, for each flight in scheduled passenger air transportation that is operated by a carrier other than the one listed for that flight, the corporate name of the transporting carrier and any other name under which the service is held out to the public must appear prominently in text format on the first display following the input of a search query, immediately adjacent to each code-share flight in that search-results list. Roll-over, pop-up and linked disclosures do not comply with this paragraph.
(2) For static written schedules, each flight in scheduled passenger air transportation that is operated by a carrier other than the one listed for that flight shall be identified by an asterisk or other easily identifiable mark that leads to disclosure of the corporate
(b)
(c)
(d) In any written advertisement distributed in or mailed to or from the United States (including those that appear on an Internet Web site that is marketed to consumers in the United States) for service in a city-pair market that is provided under a code-sharing arrangement or long-term wet lease, the advertisement shall prominently disclose that the advertised service may involve travel on another carrier and clearly indicate the nature of the service in reasonably sized type and shall identify all potential operating carriers involved in the markets being advertised by corporate name and by any other name under which that service is held out to the public. In any radio or television advertisement broadcast in the United States for service in a city-pair market that is provided under a code-sharing or long-term wet lease, the advertisement shall include at least a generic disclosure statement, such as “Some flights are operated by other airlines.”
49 U.S.C. 40101(a)(4), 40101(a)(9), 40113(a), 41702, and 41712.
(f)
(a) * * * A change in the status of a flight means, at a minimum, a cancellation, diversion or delay of 30 minutes or more in the planned operation of a flight that occurs within seven calendar days of the scheduled date of the planned operation. * * *
(1) With respect to any U.S. air carrier or foreign air carrier that permits passengers and other
49 U.S.C. 40101
The revisions and additions read as follows:
It is the policy of the Department to regard the practices enumerated in paragraphs (a) through (m) of this section by a ticket agent of any size and the practices enumerated in paragraphs (o) through (r) of this section by a ticket agent that sells air transportation and has annual revenue of $100 million or more as an unfair or deceptive practice or unfair method of competition:
(l) Failing or refusing to make proper refunds promptly when service cannot be performed as contracted or representing that such refunds are obtainable only at some other point, thus depriving persons of the timely use of the money to arrange other transportation, or forcing them to suffer unnecessary inconvenience and delay or requiring them to accept transportation at higher cost, or under less desirable circumstances, or on less desirable aircraft than that represented at the time of sale. For purposes of this subsection “promptly” means processing a credit card refund (e.g., forwarding a credit to the merchant bank) within seven business days and a cash, check or debit card refund within 20 days. These deadlines are calculated from the time that the ticket agent receives all information from the consumer that is necessary to process the refund. The ticket agent must request any missing information without delay. A ticket agent's need to collect information from its own records does not suspend these deadlines.
(o) Failure to hold a reservation at the quoted fare without payment or to permit it to be cancelled without penalty for at least 24 hours after the reservation is made if the reservation is made one week or more prior to a flight's departure. (The ticket agent may choose between these two methods; it need not offer both options to consumers.)
(p) Failure to disclose cancellation policies applicable to a consumer's selected flights, the aircraft's seating configuration, and lavatory availability on the aircraft on its Web site, and upon request, from the telephone reservations staff.
(q) Failure to notify consumers in a timely manner of carrier-initiated changes to the consumer's air travel itinerary about which the carrier notifies
(r) Failure to respond to consumer problems by acknowledging receipt of a consumer complaint within thirty days of receiving the complaint and sending a substantive written response within sixty days of receiving the complaint. If all or part of the complaint is about services furnished (or to be furnished) by an airline or other travel supplier, the agent must send the complaint to that supplier for response. If no part of the complaint is about the agent's service and the agent sends the complaint to the appropriate suppliers, the agent's substantive reply can consist of advising the consumer where the agent has sent the complaint and why.
(s) As used in this subpart G and in 14 CFR parts 257 and 258, “Air carrier”, “foreign air carrier”, and “ticket agent” have the same definitions as set forth in 49 U.S.C. 40102. The term “person . . . arranging for [,] air transportation” as set forth in the definition of “ticket agent” in section 40102(40) includes any person that acts as an intermediary involved in the sale of air transportation directly or indirectly to consumers, including by operating an electronic airline information system, if the person holds itself out as a source of information about, or reservations for, the air transportation industry and receives compensation in any way related to the sale of air transportation (e.g., cost-per-click for air transportation advertisements, commission payment, revenue-sharing, or other compensation based on factors such as the number of flight segments booked, number of sales made, or number of consumers directed or referred to an air carrier, foreign air carrier, or ticket agent for the sale of air transportation). The term does not include persons who only publish advertisements of fares and are paid only per click for linking consumers to the Web sites of the carriers or agents that provided the advertisement.
(a) If a U.S. or foreign air carrier has a Web site marketed to U.S. consumers where it advertises or sells air transportation, the carrier must promptly and prominently disclose any increase in its fee for carry-on or first and second checked bags and any change in the first and second checked bags or carry-on allowance for a passenger on the homepage of that Web site (e.g., provide a link that says “changed bag rules” or similarly descriptive language that takes the consumer from the homepage directly to a pop-up or a place on another Web page that details the change in baggage allowance or fees and the effective dates of such changes).
(b) All U.S. and foreign air carriers and ticket agents must disclose the current ancillary services fees for a first and second checked bag, for a carry-on bag, and for an advance seat assignment to a consumer who requests such information. On Web sites marketed to the general public in the U.S., the fees for a first checked bag, a second checked bag, one carry-on bag, and an advance seat assignment must be disclosed (and at a minimum displayed by a link or rollover) at the first point in a search process where a fare is listed in response to a specific flight itinerary request from a passenger, and on the summary page provided to the consumer at the completion of any purchase.
(c) On all e-ticket confirmations for air transportation within, to or from the United States, including the summary page at the completion of an online purchase and a post-purchase email confirmation, an air carrier, foreign air carrier, agent of either, or ticket agent that advertises or sells air transportation in the United States must include information regarding the passenger's free baggage allowance and/or the applicable fee for a carry-on bag and the first and second checked bag, including size and weight limitations. Carriers and agents must provide this information in text form in the e-ticket confirmation.
(a) It is an unfair and deceptive practice within the meaning of 49 U.S.C. 41712 for any seller of scheduled air transportation within, to or from the United States, or of a tour (i.e., a combination of air transportation and ground or cruise accommodations), or tour component (e.g., a hotel stay) that includes scheduled air transportation within, to, or from the United States, to increase the price of that air transportation, tour or tour component to a consumer, including but not limited to an increase in the price of the airfare, an increase in the price for the carriage of passenger baggage, or an increase in an applicable fuel surcharge, after the air transportation has been purchased by the consumer, except in the case of an increase in a government-imposed tax or fee. A purchase is deemed to have occurred when the full amount agreed upon for the air transportation has been paid by the consumer. An itinerary that does not begin or end in the United States or include a stopover of 24 hours or more in the United States is not considered air transportation for purposes of this section. This prohibition on a post-purchase price increase extends to all mandatory fees and charges a consumer must pay in order to obtain air transportation and to fees associated with transporting baggage. This prohibition does not extend to fees for optional services ancillary to air transportation that are not purchased with the ticket except for baggage. The price for other ancillary services not purchased at the time of ticket purchase may be increased until the consumer purchases the service itself.
(a) The purpose of this section is to ensure that air carriers, foreign air carriers and ticket agents doing business in the United States clearly disclose to consumers at all points of sale the fees for certain basic ancillary services associated with the air transportation consumers are buying or considering buying. Nothing in this section should be read to require that these ancillary services must be transactable (e.g., purchasable online).
(b) Each air carrier and foreign air carrier shall provide useable, current, and accurate information for certain ancillary service fees to all ticket agents that receive and distribute the U.S. or foreign carrier's fare, schedule, and availability information. For purposes of this section, the fees that must be provided are: fees for a first checked bag, a second checked bag, one carry-on bag, and an advance seat assignment. Fees for an advance assignment to a seat adjacent to a window or aisle, bulkhead seat, exit row seat, or any other seat for which a consumer must pay an additional fee to receive an advance seat assignment are to be provided.
(c) Each ticket agent that provides a U.S. or foreign carrier's fare, schedule, and availability information to consumers in the United States must disclose the U.S. or foreign carrier's fees for a first checked bag, a second checked bag, one carry-on bag, and an advance seat assignment. The fee information disclosed to consumers for these ancillary services must be expressed as itinerary-specific charges. “Itinerary-
(d) Each U.S. or foreign air carrier that provides its fare, schedule and availability information directly to consumers in the United States must also disclose its fees for a first checked bag, a second checked bag, one carry-on bag, and an advance seat assignment. The fee information disclosed to a consumer for these ancillary services must be expressed as customer-specific charges if the consumer elects to provide his or her personal information to the carrier, such as name and frequent flyer number. “Customer-specific” refers to variations in fees that depend on, for example, the passenger type (e.g., military), frequent flyer status, method of payment, geography, travel dates, cabin (e.g., first class, economy), ticketed fare (e.g., full fare ticket -Y class), and, in the case of advance seat assignment, the particular seat on the aircraft if different seats on that flight entail different charges. If a consumer does not provide his or her personal information and submits an anonymous shopping request, the fee information disclosed to that consumer for these ancillary services must be expressed as itinerary-specific charges.
(e) If a U.S. or foreign air carrier or ticket agent has a Web site marketed to U.S. consumers where it advertises or sells air transportation, the carrier and ticket agent must disclose the fees for a first checked bag, a second checked bag, one carry-on bag, and an advance seat assignment as specified in paragraphs (c) and (d) of this section at the first point in a search process where a fare is listed in connection with a specific flight itinerary. Carriers and ticket agents may permit a consumer to opt out of seeing this basic ancillary fee information so that the consumer will see only fares. The opt-out option must not be pre-selected and must notify the consumer that fees may include charges for a first and second checked bag (including oversize and overweight charges), a carry-on bag, and an advance seat assignment.
(f) In any oral communication with a prospective consumer and in any telephone calls placed from the United States, the carrier or ticket agent must inform a consumer, upon request, of the fees for a first checked bag, a second checked bag, one carry-on bag, and an advance seat assignment as specified in paragraphs (c) and (d) of this section.
(g) Ticket agents with an existing contractual agreement with an air carrier or foreign air carrier for the distribution of that carrier's fare and schedule information shall not charge separate or additional fees for the distribution of the ancillary service fee information described in paragraph (b) of this section. Nothing in this paragraph should be read as invalidating any provision in an existing contract among these parties with respect to compensation.
(h) Failure of an air carrier or foreign carrier to provide the ancillary fee information as described in paragraph (b) of this section to its ticket agents and failure of a U.S. carrier, foreign carrier, or ticket agent to provide the information to consumers as described in paragraph (c) and (d) of this section will be considered an unfair and deceptive practice in violation of 49 U.S.C. 41712.
(a) The purpose of this section is to ensure that air carriers, foreign air carriers doing business in the United States, and ticket agents doing business in the United States and selling a carrier's tickets directly to consumers clearly disclose to consumers at all points of sale the fees for certain basic ancillary services associated with the air transportation consumers are buying or considering buying. Nothing in this section should be read to require that these ancillary services must be transactable (e.g., purchasable online).
(b) Each air carrier and foreign air carrier shall provide useable, current, and accurate information for certain ancillary service fees to all ticket agents that receive and distribute the U.S. or foreign carrier's fare, schedule, and availability information, and sell that carrier's tickets directly to consumers. For purposes of this section, the fees that must be provided are: fees for a first checked bag, a second checked bag, one carry-on bag, and an advance seat assignment. Fees for an advance assignment to a seat adjacent to a window or aisle, bulkhead seat, exit row seat, or any other seat for which a consumer must pay an additional fee to receive an advance seat assignment are to be provided.
(c) Each ticket agent that provides a U.S. or foreign carrier's fare, schedule, and availability information to consumers in the United States and sells that carrier's tickets directly to consumers must provide the U.S. or foreign carrier's fees for a first checked bag, a second checked bag, one carry-on bag, and an advance seat assignment. The fee information disclosed to consumers for these ancillary services must be expressed as itinerary-specific charges. “Itinerary-specific” refers to variations in fees that depend on, for example, geography, travel dates, cabin (e.g., first class, economy), ticketed fare (e.g., full fare ticket -Y class), and, in the case of advance seat assignment, the particular seat on the aircraft if different seats on that flight entail different charges. Ticket agents that sell the carrier's tickets directly to consumers must also disclose that advance seat assignment and baggage fees may be reduced or waived based on the passenger's frequent flyer status, method of payment or other characteristic. When providing the fees associated with advance seat assignments, such ticket agents must also disclose that seat availability and fees may change at any time until the seat assignment is purchased.
(d) Each U.S. or foreign air carrier that provides its fare, schedule and availability information directly to consumers in the United States must also provide its fees for a first checked bag, a second checked bag, one carry-on bag, and an advance seat assignment. The fee information disclosed to a consumer for these ancillary services must be expressed as customer-specific charges if the consumer elects to provide his or her personal information to the carrier, such as name and frequent flyer number. “Customer-specific” refers to variations in fees that depend on, for example, the passenger type (e.g., military), frequent flyer status, method of payment, geography, travel dates, cabin (e.g., first class, economy), ticketed fare (e.g., full fare ticket -Y class), and, in the case of advance seat assignment, the particular seat on the aircraft if different seats on that flight entail different charges. If a consumer does not provide his or her personal information and submits an anonymous shopping request, the fee information disclosed to that consumer for these ancillary services must be expressed as itinerary-specific charges.
(e) If a U.S. or foreign air carrier, or ticket agent that sells such a carrier's
(f) In any oral communication with a prospective consumer and in any telephone calls placed from the United States, the carrier and ticket agent that sells that carrier's tickets directly to consumers must inform a consumer, upon request, of the fees for a first checked bag, a second checked bag, one carry-on bag, and an advance seat assignment as specified in paragraphs (c) and (d) of this section.
(g) Ticket agents that sell a carrier's tickets directly to consumers and have an existing contractual agreement with an air carrier or foreign air carrier for the distribution of that carrier's fare and schedule information shall not charge separate or additional fees for the distribution of the ancillary service fee information described in paragraph (b) of this section. Nothing in this paragraph should be read as invalidating any provision in an existing contract among these parties with respect to compensation.
(h) Failure of an air carrier or foreign carrier to provide the ancillary fee information as described in paragraph (b) of this section to its ticket agents and failure of a U.S. carrier, foreign carrier, or ticket agent to provide the information to consumers as described in paragraph (c) and (d) of this section will be considered an unfair and deceptive practice in violation of 49 U.S.C. 41712.