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Natural Resources Conservation Service (NRCS) and the Commodity Credit Corporation (CCC), U.S. Department of Agriculture (USDA).
Interim rule adopted as final with changes.
An interim rule, with request for comments, was published on December 12, 2014, to implement changes to EQIP that were either required by the Agricultural Act of 2014 (the 2014 Act) or required to implement administrative streamlining improvements and clarifications. This document provides background on the final rule, issues the final rule to make permanent these changes, responds to comments, and makes further adjustments in response to some of the comments received.
Effective Date: This rule is effective May 12, 2016.
Mark Rose, Director, Financial Assistance Programs Division, U.S. Department of Agriculture, Natural Resources Conservation Service, Post Office Box 2890, Washington, DC 20013–2890; telephone: (202) 720–1845; fax: (202) 720–4265. Persons with disabilities who require alternate means for communication (Braille, large print, audio tape, etc.) should contact the USDA TARGET Center at: (202) 720–2600 (voice and TDD).
The 2014 Act reauthorized and amended EQIP. EQIP is implemented under the general supervision and direction of the Chief of NRCS, who is a Vice President of CCC.
Through EQIP, NRCS incentivizes agricultural producers to conserve and enhance soil, water, air, plants, animals (including wildlife), energy, and related natural resources on their land. In particular NRCS provides technical and financial assistance to implement conservation practices in a manner that promotes agricultural production, forest management, and environmental quality as compatible goals; optimize conservation benefits; and help agricultural producers meet Federal, State, and local environmental requirements. Conservation benefits are reflected in the differences between anticipated effects of treatment in comparison to existing or benchmark conditions. Differences may be expressed by narrative, quantitative, visual, or other means. Estimated or projected impacts are used as a basis for making informed conservation decisions by applicants and NRCS to help determine which projects to approve for EQIP assistance.
Eligible lands include cropland, grassland, rangeland, pasture, wetlands, nonindustrial private forest land, and other land on which agricultural or forest-related products or livestock are produced and natural resource concerns may be addressed. Participation in the program is voluntary.
On December 12, 2014, the EQIP interim final rule with request for comments was published in the
• Eliminating the requirement that the program contract remain in place for a minimum of 1 year after the last practice is implemented, but keeping the requirement that the contract term not exceed 10 years;
• Consolidating elements of the Wildlife Habitat Incentive Program (WHIP) in light of the 2014 Act repealing the WHIP authority and incorporating its purposes into EQIP;
• Targeting at least five percent of available EQIP funds for wildlife-related conservation practices for each fiscal year (FY) from 2014 to 2018;
• Replacing the rolling 6-year payment limitation with an established payment limitation for FY 2014 to FY 2018;
• Requiring Conservation Innovation Grants (CIG) to report no later than Dec 31, 2014, and every 2 years thereafter;
• Establishing a $450,000 payment limitation and eliminating payment limit waiver authority.
• Modifying the special rule for foregone income payments for certain associated management practices and resource concern priorities;
• Revising availability of advance payments to up to 50 percent for eligible historically underserved participants to purchase material or contract services instead of the previous 30 percent;
• Providing flexibility for repayment of advance payment if payments are not expended within 90 days;
• Identifying EQIP as a contributing program authorized to accomplish the purposes of the Regional Conservation Partnership Program (RCPP) (Subtitle I of Title XII of the Food Security Act of 1985, as amended) (Seven percent of EQIP's funding is transferred to facilitate implementation of RCPP); and
• Adding provisions to target assistance to veteran farmers and ranchers.
In addition to updating the EQIP regulation to reflect changes made by the 2014 Act, the following administrative changes in the EQIP interim rule were made:
• Incorporating nonindustrial private forest owners and Indian Tribes where appropriate;
• Making reference to Tribal Conservation Advisory Councils when appropriate;
• Clarifying the issues where State Technical Committees and Tribal Conservation Advisory Councils provide input;
• Adjusting definitions to conform to definitions in other NRCS and USDA regulations;
• Clarifying definitions and requirements for development of Comprehensive Nutrient Management Plans (CNMP) associated with Animal Feeding Operations (AFO);
• Clarifying outreach activities and adding language that NRCS will ensure outreach is provided so as to not limit producer participation because of size
• For irrigation and water management practices, allowing an exception to the requirement that land has to have been irrigated 2 of the previous 5 years. The Chief may grant a waiver where there was a loss of access to water due to circumstances beyond the producer's control;
• Changing the contract limitation to correspond with the new payment limitation and clarify that such limitations do not apply to Indian Tribes;
• Revising the rule to clarify when payment rates may be reduced as a result of NRCS entering into a formal agreement with a partner who provides payments to producers participating under general EQIP implementation,
• Revising and adding definitions to reflect EQIP authority to encourage development of wildlife habitat;
• Clarifying terminology and procedures associated with the development of payment schedules documenting practice payment rates;
• Simplifying language throughout to improve the regulation's readability; and
• Removing provisions in the rule that relate solely to internal agency administrative procedures that do not impact any rights or responsibilities of participants in the program;
The interim final rule had a 60-day comment period ending February 10, 2015. There were received 65 timely submitted responses to the rule, constituting 331 comments. This final rule responds to comments received during the public comment period and incorporates changes as appropriate. In this preamble, the comments have been organized alphabetically by topic. The topics include: Acreage cap, administration, advanced payments, allocations, comprehensive nutrient management plan, conservation activity plans, conservation innovation grants, conservation plan, conservation practices, contract length, contract violation and terminations, definitions, EQIP plan of operations, forestry funding, fund management, grouping and selecting applications, irrigation history, national priorities, payment limitations, program requirements, regional conservation partnership program, regional conservationist approval, regulatory certifications, Transparency Act requirements, technical service providers, veteran farmer or ranchers, and wildlife funding. Additionally, NRCS received 34 comments that were general in nature, most of which expressed support for the program or how the program has benefitted particular operations. The topics that generated the greatest response include the irrigation history requirement waiver, wildlife funding, and funding for animal feeding operations.
NRCS limits the ability to waive EQIP regulatory provisions to the authority provided by statute under RCPP, and believes that it is not appropriate to extend such waiver authority further. With its review of project-wide considerations, RCPP provides a structured format for consideration of waiver requests that helps ensure waivers are not granted in an arbitrary fashion. This safeguard is not available for consideration of waiver requests during a general EQIP sign-up. No changes were made to the regulation in response to the recommendation that the regulatory waiver authority be extended to all EQIP contracts.
NRCS coordinates with Indian Tribes to ensure that program opportunities are available on Tribal lands to Tribal members. NRCS currently identifies this coordination with Indian Tribes, including with the Tribal Conservation Advisory Council (TCAC), the State Technical Committee, and local working groups, in § 1466.2 and throughout the regulation.
NRCS policy related to coordination with Indian Tribes and Tribal members is found at Part 405 of Title 410 of the NRCS General Manual. In its policy, NRCS identifies that an Indian Tribe may designate a TCAC to provide input on NRCS programs and the conservation needs of the Tribe and Tribal producers. The TCAC may:
• Be an existing Tribal committee or department, including a Tribal conservation district;
• Consist of an association of member Tribes that provide direct consultation to NRCS at the State, regional, and national levels; or
• Include a Tribal designee (or designees) from a State Association of Tribal Conservation Districts that represents them and participates as part of the TCAC.
Since coordination with Indian Tribes is established as part of the regulation and NRCS policy, no change was made to the EQIP regulation in response to this comment.
As provided by statute and rule, NRCS already requires development of a CNMP as a condition to implement waste facility practices. Since some practices must be implemented prior to others, it is infeasible to require full implementation of a CNMP as a precondition for EQIP assistance for applicable practices.
As identified above and in the regulatory certifications, two respondents recommended that NRCS undertake an environmental analysis of the effects of providing EQIP assistance to CAFOs. NRCS has and will continue to conduct an environmental evaluation before providing EQIP financial assistance to any producer to ensure EQIP financial assistance does not result in significant adverse impacts to the quality of the human environment. The environmental evaluation is used to aid NRCS in compliance with the National Environmental Policy Act (NEPA) and helps NRCS determine the need for an environmental analysis (EA) or environmental impact statement (EIS) when the impacts of the proposed action do not fall within a categorical exclusion or have not already been addressed in the EQIP programmatic EA.
CAP 142 is a wildlife habitat management plan. Under the TSP provisions at 7 CFR part 652, a TSP hired by a program participant may utilize the services of another TSP to provide specific technical services or expertise needed by the participant. However, it remains the responsibility of the TSP hired by the participant to ensure that any technical services provided to them meets NRCS standards and specifications, and are consistent with the Certification Agreement the TSP entered into with NRCS at the time of Certification. Therefore, on a project-by-project basis, when CAP 142 on forested lands identifies the use of complex forestry conservation practice standards, such as Forest Stand Improvement (FSI), the plan must be approved by a TSP that also has been certified as having the requisite forestry technical skills. Other CAP 142 wildlife habitat management plans may not include forestry practices as complicated as FSI. Depending on the geographic location and the particular practices being planned and implemented, NRCS maintains the flexibility to determine when CAP 142 projects on forested lands need to be approved by TSPs who also have been certified for particular forestry conservation practices. As a result, no changes were made in response to this comment.
For the first time the 2014 Act included language to allow CIG to fund on-farm research and development of technologies and approaches, and this
NRCS supports the broad dissemination of the public announcement of national CIG competition. The CIG APF contains guidance on how to apply for the grants competition. NRCS, at one time, used the
In addition, a ranking criterion was added at 7 CFR 1466.20(b) to provide priority to applicants who indicate a willingness to complete all conservation practices in an expedited manner. NRCS identified that the purpose of this ranking criterion was to further statutory intent and to ensure timely and effective conservation improvements. NRCS continues to support the policy behind this regulation. NRCS implements this regulatory provision during the ranking process for applicants that indicate a willingness to implement all conservation practices within 3 years. While the statute authorizes contracts can be for up to 10 years in duration, NRCS implements this criterion for those funding pools where the nature and type of the resource concern to be addressed and practices applied do not require longer term conservation treatment, such as with applications for exclusion fences or other applications with comparatively low application costs. Additionally, NRCS recognizes that this criterion may not be appropriate to implement in funding pools set aside for historically underserved or limited resource producers, or in cases where infrastructure construction is necessary, as financially these producers or projects may need a longer implementation schedule.
The EQIP contract violation provisions (7 CFR 1466.25) address circumstances in which a participant violates their EQIP contract by losing control of the land under contract. NRCS may allow a participant to transfer the EQIP contract rights to an eligible producer provided the participant notifies NRCS of the loss of control within the time specified in the contract, NRCS determines that the new producer is eligible to participate in the program, and the transfer of the contract
Given that the new producer is not a party to the EQIP contract until NRCS approves the contract transfer and adds the new producer to the contract, a new producer may not be aware they are not eligible for payment until the contract transfer has been approved by NRCS. In particular, any practices that a new producer implements prior to NRCS approval of the contract transfer is not eligible for payment because they are not a program participant at the time of implementation. Changes to 7 CFR 1466.25 clarify a participant's responsibility to notify NRCS about any loss of control of land, the timing of when a new producer must be identified, the timing of when a new producer becomes eligible for payment, and the circumstances when partial or full termination of the contract may be appropriate. These changes do not affect the substance of the EQIP regulatory and policy framework regarding land transfers.
• Have no ranking;
• Streamline the application process and ranking;
• Not prioritize applications based upon a producer's ability to expedite practice implementation;
• Prioritize grass-based systems over AFOs;
• Encourage transition to more sustainable practices;
• Prioritize greenhouse gas reduction and carbon sequestration; and
• Include consistency with Tribal law as well as State law related to irrigation practice provisions.
As to the grouping of applications, one commenter felt that beginning farmers and ranchers received too much emphasis. One commenter felt that there were too many funding pools, while another recommended that States with at-risk species have more funding pools. One commenter recommended that operations compete against operations of similar sizes, while another commenter recommended prohibiting separate funding pools for CAFOs and instead encourage grazing plans for livestock.
In evaluating EQIP applications, NRCS strives to obtain input from Tribes, States, and other affected constituents through seeking advice from the State Technical Committees, TCACs, and local working groups. For water conservation or irrigation-related practices, TCACs routinely have the opportunity to identify issues, including those that raise concerns related to Tribal laws, in order to advise NRCS on more effective ways to deliver programs and on the application process. While not explicitly stated in the regulation, NRCS believes that this advisory process with State Technical Committees and TCACs is considerate of and consistent with applicable State and Tribal laws.
Additionally, in its ranking, NRCS groups applications to the greatest extent possible by similar crop, forestry, or livestock operations for evaluation purposes or otherwise evaluating each application relative to other applications of similar agricultural operations. NRCS establishes a funding pool for beginning farmer and ranchers in accordance with statutory set-aside requirements. Subaccounts may also be developed to address a specific resource concern, geographic area, or type of agricultural operation, such as addressing habitat needs of at-risk species. However, to promote efficient and timely delivery of program assistance, NRCS policy encourages States to limit creating subaccounts in ProTracts to the minimum number needed to effectively rank and approve applications. EQIP policy currently addresses the respondents concerns regarding grouping applications and no changes were made to the regulation.
• Support for the new waiver provision;
• The requirements for the waiver be less restrictive;
• That Indian Tribes be exempt from the irrigation history requirement altogether, or at least not subject to the agricultural history waiver criterion, provided the Tribe has a secured legal water right;
• The irrigation history requirement be completely removed;
• All producers, not just limited resource or socially disadvantaged producers, be eligible for a waiver; and
• Specific recommendations related to the waiver criteria, such as:
○ Removing the proposed acreage limit;
○ Removing the exclusion of land that has been subject to a water shortage;
○ Prohibiting waivers on native prairie and grasslands with no prior cropping history;
○ Clarifying the types of practices that are considered irrigation practices;
○ Clarifying whether the acreage limitation is per operation or per year; and
○ Considering impacts to wildlife when implementing irrigation practices.
• The waiver provision should be limited to applicants who are limited resource or socially disadvantaged producers (including Indian Tribal producers). Beginning farmers and ranchers were excluded from this consideration;
• The irrigation practices are necessary for the adoption of a sustainable agricultural production method, such as the adoption of cover crops to improve the soil condition;
• The land has been in active agriculture (cropped, hayed, or grazed) for 4 of the last 6 years;
• The waiver would adversely impact limited surface or groundwater supplies; and
• An acreage limitation should be applied, such as 50 acres per producer or 200 acres per Tribe.
In order to implement the waiver provision, NRCS developed and issued program policy at Title 440 Conservation Programs Manual, Part 515, Section 515.52, reflecting all criteria in the preamble of the EQIP rule except for the acreage limitation. NRCS believes that the criteria incorporated into policy ensure that program participants will be able to obtain access to EQIP to address resource concerns in a manner that does not adversely affect available water supplies. NRCS will continue to evaluate the utility of these criteria as it reviews actual waiver requests and may make adjustments based upon the experience obtained from actual implementation of the waiver provision.
NRCS is working in coordination with other USDA and Federal agencies to ensure that we are consistent with our outreach approach to serve historically underserved producers in rural and urban areas. NRCS is collaborating and
• Higher payment rates for historically underserved producers with one commenter expressing disagreement for higher payment rates, while another commenter expressed support for veteran farmers or ranchers receiving a higher payment rate;
• Payment schedule scenarios, with two commenters recommending that payment scenarios be published on NRCS State Web sites, one commenter recommending that NRCS address disparities between small or large operations of payments for management practices that are based on number of acres, while another commenter recommending that NRCS have additional organic production scenarios; and
• Initiatives, with the commenter requesting clarification about when NRCS may reduce the level of EQIP assistance provided due to a contribution by a partnering entity.
While Indian Tribes and their members are eligible to participate in EQIP, such participation is voluntary and does not mandate compliance costs on the part of the Tribe. Additionally, in response to the 2014 Act enactment, NRCS developed and implemented an outreach plan to obtain meaningful input from Indian Tribes regarding all NRCS conservation programs, including EQIP. NRCS consultation policies related to Executive Order 13175 are currently contained in the NRCS General Manual (GM) at 410 GM Part
Executive Order 13132 governs how agencies should develop policies that have federalism implications. Under Executive Order 13132, “policies that have federalism implications” refers to regulations that 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. EQIP is a voluntary program to provide assistance to producers of eligible lands. As stated in the EQIP interim rule preamble, EQIP does not have a substantial direct effect on States, the relationship between the Federal government and the States, or the distribution of power and responsibilities.
Section 2 of Executive Order 13563 requires that regulations be adopted through a process that involves public participation, and to the extent feasible and consistent with law, the open exchange of information and perspectives among State, local, and Tribal officials, experts in relevant disciplines, affected stakeholders in the private sector, and the public as a whole. Section 1246 of the 1985 Act requires publication of the EQIP regulation as an interim rule with an opportunity for public comment. The EQIP interim rule published on December 12, 2014, included a 60-day public comment period, during which the comments regarding Executive Order 13563 were received by NRCS.
Given the statutory language, it is appropriate to track both the 16 wildlife-specific practices and, in wildlife-focused initiatives, the 45 standards that are utilized to benefit wildlife. No changes were made to the regulation in response to these comments.
Executive Order 12866, “Regulatory Planning and Review,” and Executive Order 13563, “Improving Regulation and Regulatory Review,” directs 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. OMB designated this final rule a significant regulatory action. The administrative record is available for public inspection at NRCS National Headquarters located at 1400 Independence Avenue Southwest, South Building, Room 5831, Washington, DC 20250–2890. Pursuant to Executive Order 12866, NRCS conducted an economic analysis of the potential impacts associated with this program. A summary of the economic analysis can be found at the end of the regulatory certifications section of this preamble, and a copy of the analysis is available upon request from the Director of NRCS' Financial Assistance Programs Division or electronically at:
The Regulatory Flexibility Act (5 U.S.C. 601–612) (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. NRCS did not prepare a regulatory flexibility analysis for this rule because NRCS is not required by 5 U.S.C. 553, or any other provision of law, to publish a notice of proposed rulemaking with respect to the subject matter of this rule. Regardless, NRCS has determined that this action, while mostly affecting small entities, will not have a significant economic impact on a substantial number of these small entities. NRCS made this determination based on the fact that this regulation is incentive-based, and therefore only impacts those who participate voluntarily in the program. Small entity
Section 1246(c) of the 1985 Act, as amended by section 2608 of the 2014 Act, enables the Secretary of Agriculture to use the authority granted in section 808(2) of Title 5 of the United States Code to forego the Congressional Review Act's 60-day Congressional review, which delays the effective date of major regulations, if the agency finds that there is a good cause to do so. NRCS hereby determines that it has good cause to do so in order to meet the Congressional intent to have the conservation programs, authorized or amended under Title 7 of the 1985 Act, in effect as soon as possible. NRCS also determined it has good cause to forgo delaying the effective date given the critical need to let agricultural producers know what programmatic changes are being made so that they can make financial plans accordingly prior to planting season. For these reasons, this rule is effective upon publication in the
NRCS prepared a programmatic EA in association with the EQIP rulemaking to aid in its compliance with NEPA when expending EQIP funds in implementing site-specific actions (40 CFR 1501.3(b)). As a result of the analysis, the Chief of NRCS determined that there will not be a significant impact to the human environment as a result of the changes implemented by this rule; therefore, an EIS was not required (40 CFR 1508.13). Only one comment was received on the EA. The commenter expressed that EQIP has not allowed for seed producers to adequately respond to programs that are announced after the seed production season and requested communication improvements. This comment did not provide new information that is relevant to environmental concerns or that bears on the proposed action or its impacts that warrants supplementing or revising the EQIP EA and Finding of No Significant Impact.
Two additional letters were received providing comments on the interim final rule recommending that NRCS undertake an EA of the effects of providing EQIP assistance to CAFOs. NRCS considered this input and determined it lacks discretion on whether to provide assistance to existing or expanding CAFOs. NRCS made this determination based on its review of the EQIP legislative history, the purposes of EQIP—which include assisting producers to meet regulatory requirements related to soil and water quality—and the fact that in the Farm Security and Rural Investment Act of 2002, Congress removed the restriction on providing financial assistance to large confined livestock operations to construct animal waste management facilities and required NRCS to direct 60 percent of its EQIP assistance to livestock producers. NRCS has, and will continue to conduct an environmental evaluation before providing EQIP financial assistance to any producer to determine the need for an EA or EIS. NRCS regulations in 7 CFR part 652 define the environmental evaluation as the part of the NRCS planning process that inventories and estimates the potential effects on the human environment of alternative solutions to resource problems. The environmental evaluation is used to determine the need for an EA or EIS, and aids in the consideration of alternatives and in the identification of available resources when an EA or EIS is not required (7 CFR 650.4(c)).
NRCS will also use the environmental evaluation to evaluate the environmental effects of specific requests to grant irrigation waivers. It is not possible to meaningfully analyze the effects of these waivers at a national level because of site-specific factors. NRCS would have to speculate as to the types of requests that might be received and granted, and NEPA does not require analysis of speculative actions. As a result, the programmatic EA prepared to identify the effects of the EQIP rule does not analyze the effects of waiver requests.
A copy of the EA and FONSI may be obtained from the following Web site:
NRCS conservation programs apply to all persons equally regardless of their race, color, national origin, gender, sex, or disability status. Through its Civil Rights Impact Analysis, NRCS determined that the final rule discloses no disproportionately adverse impacts for minorities, women, or persons with disabilities. The national target of setting aside 5 percent of EQIP funds for socially disadvantaged farmers or ranchers, and an additional 5 percent of EQIP funds for beginning farmers or ranchers, as well as prioritizing veterans that are socially disadvantaged farmers or ranchers and beginning farmer or ranchers is expected to increase participation among these groups.
The Civil Rights Impact Analysis indicates that producers who are members of the protected groups have participated in NRCS conservation programs at the same rates as other producers. Extrapolating from historical participation data, it is reasonable to conclude that EQIP will continue to be administered in a nondiscriminatory manner. Outreach and communication strategies are in place to ensure all producers are provided the same information, enabling them to make informed compliance decisions regarding the use of their lands that will affect their participation in USDA programs. Therefore, this final rule portends no adverse civil rights implications for women, minorities, and persons with disabilities.
Section 1246 of the 1985 Act, as amended by the 2014 Act, requires that implementation of programs authorized by Title 7 of the 1985 Act be made without regard to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
NRCS is committed to compliance with the Government Paperwork Elimination Act and the Freedom to E-File Act, which require government agencies, in general, to provide the public the option of submitting information or transacting business electronically to the maximum extent possible. To better accommodate public access, NRCS has developed an online application and information system for public use.
This final rule has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. Executive Order 13175 requires Federal agencies to consult and coordinate with Tribes on a government-to-government basis on policies that have Tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that may have substantial direct effects on one or more Indian Tribes, the relationship between the Federal
Title 2 of the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1531–1538) requires Federal agencies to assess the effects of their regulatory actions on State, local, and Tribal governments or the private sector of $100 million or more in any 1 year. When such a statement is needed for a rule, section 205 of UMRA requires agencies to prepare a written statement, including a cost benefit assessment, for proposed and final rules with “Federal mandates” that may result in such expenditures for State, local, or Tribal governments, in the aggregate, or to the private sector. UMRA generally requires agencies to consider alternatives and adopt the more cost effective or least burdensome alternative that achieves the objectives of the rule.
This rule contains no Federal mandates, as defined under Title 2 of UMRA, for State, local, and Tribal governments or the private sector. Therefore, a statement under section 202 of UMRA is not required.
NRCS has considered this final rule in accordance with Executive Order 13132, issued August 4, 1999, and has determined that the final rule conforms with the Federalism principles set out in this Executive Order, would not impose any compliance costs on the States, and would not have substantial direct effects on the States, on the relationship between the Federal government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, NRCS concludes that this final rule does not have Federalism implications.
Pursuant to section 304 of the Federal Crop Insurance Reform Act of 1994 (Pub. L. 103–354), USDA has estimated that this regulation will not have an annual impact on the economy of $100,000,000 in 1994 dollars, and therefore, is not a major regulation. As such, a risk analysis was not conducted.
This rule is not a significant regulatory action subject to Executive Order 13211, Energy Effects.
OMB published two regulations, codified at 2 CFR part 25 and 2 CFR part 170, to assist agencies and recipients of Federal financial assistance in complying with the Federal Funding Accountability and Transparency Act of 2006 (FFATA) (Pub. L. 109–282, as amended). Both regulations have implementation requirements effective as of October 1, 2010.
The regulations at 2 CFR part 25 require, with some exceptions, recipients of Federal financial assistance to apply for and receive a Dun and Bradstreet Universal Numbering Systems (DUNS) number and register in the Central Contractor Registry (CCR). The regulations at 2 CFR part 170 establish new requirements for Federal financial assistance applicants, recipients, and sub-recipients. The regulation provides standard wording that each agency must include in its awarding of financial assistance that requires recipients to report information about first-tier sub-awards and executive compensation under those awards.
The regulations at 2 CFR part 25 and 2 CFR part 170 apply to EQIP financial assistance provided to entities and, therefore, these registration and reporting requirements will continue to include in the requisite provisions as part of EQIP financial assistance contracts.
Pursuant to Executive Order 12866, Regulatory Planning and Review, NRCS has conducted a Regulatory Impact Analysis (RIA) of EQIP as pursuant to the changes of the 2014 Act. On December 12, 2014, an interim rule and an accompanying RIA, with request for comments, was published which implemented changes to EQIP necessitated by the enactment of the 2014 Act or required to implement administrative clarifications and streamlining improvements. NRCS received 331 comments from 65 respondents to the interim rule. NRCS received no comments on the RIA. The final rule makes permanent the changes proposed in the interim rule along with some minor adjustments based on public comments. NRCS determined that these minor adjustments would not significantly alter the RIA.
In considering alternatives for implementing EQIP, USDA followed the legislative intent to maximize beneficial conservation impacts, address natural resource concerns, establish an open participatory process, and provide flexible assistance to producers who apply appropriate conservation measures to comply with Federal, State, and Tribal environmental requirements. Because EQIP is a voluntary program, the program will not impose any obligation or burden upon agricultural producers who choose not to participate.
EQIP has been authorized by the Congress in the 2014 Farm Bill at $8 billion over the 5-year period beginning in FY 2014 and proceeding through 2018, with annual amounts of $1.35 billion in FY 2014, $1.60 billion in FY 2015, $1.65 billion in FY 2016, $1.65 billion in FY 2017, and $1.75 billion in FY 2018. EQIP and WHIP had been previously authorized under the 2008 Act with annual amounts of $1.32 billion for FY 2008, $1.37 billion in FY 2009, $1.55 billion in FY 2010, $1.66 billion in FY 2011, and $1.75 billion in FY 2012 to FY 2013. Despite this authorization, EQIP and WHIP received only $7.75 billion in funding from FY 2008 through FY 2013. Funds received annually over this period were $1.09 billion in FY 2008, $1.15 billion in FY 2009, $1.27 billion in FY 2010, $1.32 billion in FY 2011, $1.45 billion in FY 2012, and $1.47 billion in FY 2013. Since the enactment of the 2014 Act EQIP received $1.35 billion, the full amount authorized in FY 2014, but only $1.347 billion in FY 2015 rather the
The 1985 Act, as amended by the 2014 Act, makes several changes to EQIP. The changes include consolidating elements of the former WHIP into EQIP, expanding participation among military veteran farmers or ranchers, requiring that funds provided in advance that are not expended during the 90-day period beginning on the date of receipt of funds be returned, establishing an overall payment limitation over FY 2014 through FY 2018 of $450,000, providing that EQIP funding authorized by the 2014 Act remains available until expended, and requiring that at least 5 percent of available EQIP funds to be targeted for wildlife conservation practices for each fiscal year from 2014 to 2018. This 5 percent for wildlife habitat practices is based upon the total EQIP funding allocated as financial assistance available nationally for producer contracts. Based upon historical expenditures of wildlife-related practices in both WHIP and EQIP, and with emphasis to prioritize funding applications that address wildlife resource concerns, the agency anticipates that the actual funding associated with developing wildlife practices through EQIP will exceed the 5 percent national target. In FY 2014, about 6.5 percent of EQIP funds ($60.8 million) were devoted to wildlife conservation practices. Seven percent of EQIP funds are available for eligible RCPP contracts. Additional explanation regarding funding pools and EQIP program priorities is provided in the Background section of the preamble.
EQIP technical assistance and financial assistance facilitates the adoption of conservation practices that address natural resource concerns. Those practices improve on-site resource conditions and produce offsite environmental benefits for the public. Water erosion conservation practices reduce the flow of pollutants off of fields, thus improving freshwater and marine water quality, including protecting fish habitat, enhancing aquatic recreation opportunities, and reducing sedimentation of reservoirs, streams, and drainage channels. More efficient irrigation practices conserve scarce water, making it available for other uses. Wind erosion control practices improve air quality and some practices increase carbon in the soil profile. Wildlife habitat conservation practices increase wildlife habitat, enhance scenic value, and provide opportunities for recreation. A definition of “habitat development” was added and adopted to encompass the conservation practices that support the wildlife habitat activities authorized by section 1240B(g) of the 2014 Act. The term, as originally defined in the WHIP regulation, is added to EQIP at section 1466.3, “Definitions.” The definition, consistent with EQIP authority to assist with implementation of conservation practices that include the specific technical purpose of habitat development, provides for the conservation of wildlife species.
Other impacts of conservation practices may accrue to the producer. Examples of these impacts include the maintenance of the long-term productivity of the land, improved irrigation efficiency, improved grazing productivity, more efficient crop use of animal waste and fertilizer, and increased profits from energy conservation.
Most of this rule's impacts consist of transfer payments from the Federal government to producers. While those transfers create incentives that very likely cause changes in the way society uses its resources, we lack data with which to quantify the resulting social costs or benefits. Given the existing limitation and lack of data, NRCS will investigate ways to quantify the incremental benefits obtained from this program. Despite the limitations on our ability to quantify and estimate the value of social costs or benefits from the implementation of conservation practices, EQIP, as amended under the 2014 Act, is expected to positively affect natural resources and mitigate environmental degradation. Results from the national Conservation Effects Assessment Project conducted by NRCS demonstrate that implementation of the types of conservation practices funded under EQIP reduce sediment and nutrient loss from agricultural fields and improve water quality nationwide.
The 2014 Act increases EQIP funding over the amount provided by Congress for both EQIP and WHIP from FY 2008 through FY 2013 by 24 percent on an annualized basis to $1.6 billion per year. From FY 2008 through FY 2013, the authorized level for EQIP and WHIP was a total of $9.585 billion, but annual restrictions on EQIP and WHIP obligations enacted in the annual appropriations bills resulted in the actual authority being $7.748 billion, for an annualized amount of $1.291 billion. In contrast, the authorized level for EQIP under the 2014 Act for FY 2014 through FY 2018 is $8 billion, for an annualized amount of $1.6 billion (this assumes future funding caps are set at the authorized amounts). Actual authority for EQIP funding in FY 2014 of $1.350 billion matched the amount authorized in the 2014 Act while restrictions limited actual EQIP funding in FY 2015 to $1.347 million. These changes reduce the authorized level of spending for EQIP for FY 2014 through FY 2018 to $7.747 million. Additionally, the 2014 Act changed the period of availability for EQIP funding from 1-year to no-year funding, which means the funds remain available until expended. Thus, any unobligated balance at the end of a fiscal year could be available for obligation in the subsequent year. It is estimated that the conservation practices implemented with this funding will continue to contribute to reductions of water and wind erosion on cropland, pasture, and rangeland; reduce nutrient losses to streams, rivers, lakes, and estuaries; increase wildlife habitat; and provide other private and public environmental benefits. It is also expected that continued implementation of practices which treat and manage animal waste through EQIP will directly contribute to improvements in water quality and associated improvements in air quality from, for example, reduction in emissions such as methane. NRCS estimates that the cost,
Program features of EQIP, except for the increase in wildlife focus, remains essentially unchanged from the 2008 Act. The increased funding over the period of FY 2014 through FY 2018 will increase the amount of conservation applied by agricultural producers, support continued improvement in the natural resource base (
Overall, the conservation effects resulting from transferring $5.7 billion to producers and providing $2.1 billion in technical assistance from FY 2014 through FY 2018 will be reflected in nine primary resource categories and lead to improvements in cropland and grazing land productivity, water quality, air quality, water use efficiency, energy use efficiency, carbon sequestration and wildlife habitat.
Agricultural operations, Animal feeding operations, Conservation payments, Conservation practices, Contract, Forestry management, Natural resources, Payment rates, Soil and water conservation, Soil quality, Water quality and water conservation, Wildlife.
Accordingly, the interim rule amending 7 CFR part 1466, which was published at 79 FR 73953 on December 12, 2014, is adopted as a final rule with the following changes:
15 U.S.C. 714b and 714c; 16 U.S.C. 3839aa–3839–8.
(c) No delegation in the administration of this part to lower organizational levels will preclude the Chief from making any determinations under this part, re-delegating to other organizational levels, or from reversing or modifying any determination made under this part. Since EQIP is a covered program under the Regional Conservation Partnership Program (RCPP), the Chief may modify or waive a discretionary provision of this part with respect to contracts entered into under RCPP if the Chief determines that such an adjustment is necessary to achieve the purposes of EQIP. Consistent with section 1271C(c)(3) of the Food Security Act of 1985, the Chief may also waive the applicability of the Adjusted Gross Income (AGI) limitation in section 1001D(b)(2) of the Food Security Act of 1985 for program participants if the Chief determines that the waiver is necessary to fulfill RCPP objectives.
(e) If an EQIP plan of operations addresses forest land related resource concerns, the participant must implement conservation practices consistent with an approved forest management plan.
(b) In selecting EQIP applications, NRCS, with advice from the State Technical Committee, Tribal Conservation Advisory Council, or local working group, may establish ranking pools to address a specific resource concern, geographic area, or agricultural operation type or develop an evaluation process to prioritize and rank applications for funding that address national, State, and local priority resource concerns, taking into account the following guidelines:
(1) NRCS will select applications for funding based on applicant eligibility, fund availability, and the NRCS evaluation process. NRCS will rank applications according to the following factors related to conservation benefits to address identified resource concerns through implementation of conservation practices:
(5) The evaluation process will determine the order in which applications will be selected for funding. To improve administrative efficiency, NRCS may use screening factors as part of its evaluation process that may include sorting applications into high, medium, or low priority. If screening factors are used to designate a higher priority for ranking, all eligible applications with a higher priority and that address an eligible resource concern are ranked and considered for funding before ranking or considering for funding applications that are a lower priority. The approving authority for EQIP contracts will be NRCS.
(b) * * *
(3) * * *
(v) Implement conservation practices consistent with an approved forest management plan when the EQIP plan of operations includes forest-related practices that address resource concerns on NIPF,
(b) Within the time specified in the contract, the participant must provide NRCS with written notice regarding any voluntary or involuntary loss of control of any acreage under the EQIP contract, which includes changes in a participant's ownership structure or corporate form. Failure to provide timely notice will result in termination of the entire contract.
(c) Unless NRCS approves a transfer of contract rights under this paragraph (c), a participant losing control of any acreage will constitute a violation of the EQIP contract and NRCS will terminate the contract and require a participant to refund all or a portion of any financial assistance provided. NRCS may approve a transfer of the contract if:
(1) NRCS receives written notice that identifies the new producer who will take control of the acreage, as required in paragraph (d) of this section;
(2) The new producer meets program eligibility requirements within a reasonable time frame, as specified in the EQIP contract;
(3) The new producer agrees to assume the rights and responsibilities for the acreage under the contract; and
(4) NRCS determines that the purposes of the program will continue to be met despite the original participant's losing control of all or a portion of the land under contract.
(d) Until NRCS approves the transfer of contract rights, the new producer is not a participant in the program and may not receive payment for conservation activities commenced prior to approval of the contract transfer.
(e) NRCS may not approve a contract transfer and may terminate the contract in its entirety if NRCS determines that the loss of control is voluntary, the new producer is not eligible or willing to assume responsibilities under the contract, or the purposes of the program cannot be met.
Bureau of Industry and Security, Commerce.
Final rule.
The Bureau of Industry and Security (BIS) publishes this final rule to amend the Export Administration Regulations (EAR) to remove the short supply license requirements that, prior to the entry into force of the “Consolidated Appropriations Act, 2016” on December 18, 2015, applied to exports of crude oil from the United States. Specifically, this rule removes the Commerce Control List (CCL) entry and the corresponding short supply provisions in the EAR that required a license from BIS to export crude oil from the United States. This rule also amends certain other EAR provisions to reflect the removal of these short supply license requirements. The changes made by this rule are intended to bring the provisions of the EAR into full compliance with the act, which mandates that, apart from certain exemptions specified therein, “no official of the Federal Government shall impose or enforce any restriction on the export of crude oil.” Consistent with the exceptions in the act, exports of crude oil continue to require authorization from BIS to embargoed or sanctioned countries or persons and to persons subject to a denial of export privileges.
This rule is effective May 12, 2016.
Send comments regarding this collection of information, including suggestions for reducing the burden, to Jasmeet Seehra, Office of Management and Budget (OMB), by email to
Eileen Albanese, Director, Office of National Security and Technology Transfer Controls, Bureau of Industry and Security, Telephone: (202) 482–0092, Email:
The Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) to comply with the requirements of Division O, Title 1, Section 101 of Public Law 114–113 (the Consolidated Appropriations Act, 2016) concerning exports of crude oil from the United States. These provisions repeal Section 103 of the Energy Policy and Conservation Act (formerly, 42 U.S.C. 6212), which required that the President promulgate a rule prohibiting the export of crude oil, and mandate, instead, that “notwithstanding any other provision of law, except as provided in subsections (c) and (d) . . . no official of the Federal Government shall impose or enforce any restriction on the export of crude oil.” Consistent with this requirement, this final rule amends part 754 of the EAR by removing and reserving § 754.2, which described the short supply license requirements and licensing policies that applied to exports of crude oil from the United States to all destinations. This rule also amends the Commerce Control List (CCL) in Supplement No. 1 to part 774 of the EAR by removing Export Control Classification Number (ECCN) 1C981, which controlled crude petroleum, including reconstituted crude petroleum, tar sands and crude shale oil listed in Supplement No. 1 to part 754 of the EAR (Crude Petroleum and Petroleum Products). In addition, this rule moves the definition of “crude oil,” which previously appeared in § 754.2(a) of the EAR, to § 772.1 (Definitions of terms as used in the Export Administration Regulations (EAR)), because it continues to have relevance with respect to the end-user/end-use requirements in part 744 of the EAR and the embargoes and other special controls in part 746 of the EAR. The scope of this definition remains unchanged.
The effect of the changes described above is to remove the short supply license requirements previously applicable to crude oil, as controlled under ECCN 1C981, thereby making crude oil an EAR99 item (
This final rule also amends certain other provisions in the EAR to reflect the removal of the short supply license requirements on crude oil. Specifically, this rule makes additional amendments to part 754 by removing and reserving paragraph (b)(1)(i) in § 754.1 and by removing and reserving Supplement No. 3 to part 754 (Statutory Provisions Dealing with Exports of Crude Oil). This rule also removes references to § 754.2 from Supplement No. 1 to part 730 and § 762.2(b)(39). In addition, this rule amends § 740.15 (License Exception AVS) by removing the parenthetical reference to § 754.2 from § 740.15(b)(3) and by removing the Note to paragraph (c)(3), which also referenced § 754.2. This rule also removes references to ECCN 1C981 from § 742.1(b)(1) and § 746.7(a)(1) of the EAR. In § 744.7 (Restrictions on Certain Exports to and for the use of Certain Foreign Vessels or Aircraft), paragraphs (b)(3)(i) and (ii) are revised to remove the exclusions that previously applied to crude oil and blends of crude oil with other petroleum products, because such items were subject to the short supply controls described in § 754.2 of the EAR.
Finally, this rule removes authority citations for statutory provisions dealing with restrictions on the exports of crude oil, which no longer provide BIS with enforcement authority, based on Division O, Title 1, Section 101, subsection (b) of Public Law 114–113, which prohibits officials of the Federal Government from imposing or enforcing any restriction on the export of crude oil “notwithstanding any other provision of law.” Specifically, this rule removes the authority citations to 30 U.S.C. 185(s), 30 U.S.C. 185(u), and 43 U.S.C. 1354 from parts 730, 754, and 774 of the EAR.
Although the Export Administration Act expired on August 20, 2001, the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 2001 Comp., p. 783 (2002), as amended by Executive Order 13637 of March 8, 2013, 78 FR 16129 (March 13, 2013), and as extended by the Notice of August 7, 2015 (80 FR 48233 (Aug. 11, 2015)), has continued the Export Administration Regulations in effect under the International Emergency Economic Powers Act (50 U.S.C. 1701
1. Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been designated a “significant regulatory action,” although not economically significant, under section 3(f) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget.
2. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
3. This rule does not contain policies with Federalism implications as that term is defined in Executive Order 13132.
4. The provisions of the Administrative Procedure Act (APA) (5 U.S.C. 553) requiring notice of proposed rulemaking and the opportunity for public participation are waived for good cause, because they are “unnecessary” and “contrary to the public interest.” (See 5 U.S.C. 553(b)(B)). This rule brings the Export Administration Regulations (EAR) into conformity with the Congressional mandate in Division O, Title 1, Section 101 of Public Law 114–113, which states that “notwithstanding any other provision of law, except as provided in subsections (c) and (d) . . . no official of the Federal Government shall impose or enforce any restrictions on the export of crude oil.” A delay of this rulemaking to allow for notice and public comment would be “unnecessary,” within the context of the APA, because continuance of the controls in § 754.2 of the EAR would be contrary to the explicit mandate in Public Law 114–113 against the imposition or enforcement of any restriction on the export of crude oil by an official of the Federal Government. Under such circumstances, the public interest would not be served by soliciting comments on the removal of these controls. A delay of this rulemaking to allow for notice and public comment also would be “contrary to the public interest,” within the context of the APA, because continuance of the controls in § 754.2 of the EAR would result in unnecessary confusion due to the obvious contradiction between the short supply license requirements for crude oil, as described in § 754.2 of the EAR prior to the publication of this rule, and the Congressional mandate in Public Law 114–113, which prohibits such license requirements. Furthermore, the confusion resulting from any delay to allow for notice and comment would be contrary to the public interest, as stated in Public Law 114–113, which is “to promote the efficient exploration, production, storage, supply, marketing, pricing, and regulation of energy resources, including fossil fuels.” Specifically, the obvious contradiction between the requirements previously described in § 754.2 of the EAR and the mandate in Public Law 114–113 might discourage some persons from pursuing crude oil export opportunities, thereby resulting in significant economic losses due to lost sales. At best, the confusion
The provision of the Administrative Procedure Act (APA) (5 U.S.C. 553) requiring a 30-day delay in effectiveness is also waived for good cause. (5 U.S.C. 553(d)(3)). The amendments to the EAR contained in this final rule are required to make the EAR conform to the Congressional mandate in Public Law 114–113, which states that “except as provided in subsections (c) and (d) . . . no official of the Federal Government shall impose or enforce any restrictions on the export of crude oil.” A delay of this rulemaking to allow for a 30-day delay in effectiveness would be “unnecessary,” within the context of the APA, because continuance of the controls in § 754.2 of the EAR would be contrary to the explicit mandate in Public Law 114–113 and, as such, would not serve the public interest. A delay of this rulemaking to allow for a 30-day delay in effectiveness, also would be “contrary to the public interest,” within the context of the APA, because such a delay would result in unnecessary confusion caused by the contradiction between the EAR's short supply license requirements for crude oil and the Congressional mandate in Public Law 114–113, as described above. In addition, any delay to allow for notice and comment would be contrary to the public interest, as stated in Public Law 114–113 and reiterated above.
Further, no other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this final rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule under the Administrative Procedure Act or by any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601
Administrative practice and procedure, Advisory committees, Exports, Reporting and recordkeeping requirements, Strategic and critical materials.
Administrative practice and procedure, Exports, Reporting and recordkeeping requirements.
Administrative practice and procedure, Chemicals, Exports, Foreign trade, Reporting and recordkeeping requirements.
Exports, Foreign trade, Reporting and recordkeeping requirements.
Exports, Reporting and recordkeeping requirements.
Agricultural commodities, Exports, Forests and forest products, Horses, Petroleum, Reporting and recordkeeping requirements.
Administrative practice and procedure, Business and industry, Confidential business information, Exports, Reporting and recordkeeping requirements.
Exports.
Exports, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, parts 730, 740, 742, 744, 746, 754, 762, 772, and 774 of the Export Administration Regulations (15 CFR parts 730–774) are amended as follows:
50 U.S.C. 4601
50 U.S.C. 4601
The revision reads as follows:
(b) * * *
(3)
50 U.S.C. 4601
50 U.S.C. 4601
(b) * * *
(3) * * *
(i) Fuel, including crude oil, petroleum products other than crude oil that are of non-Naval Petroleum Reserves origin or derivation (see § 754.3 of the EAR), and blends of crude oil with such petroleum products;
(ii) Deck, engine, and steward department stores, provisions, and supplies for both port and voyage requirements, provided that any petroleum products other than crude oil which are listed in Supplement No. 1 to part 754 of the EAR are of non-Naval Petroleum Reserves origin or derivation (see § 754.3 of the EAR);
50 U.S.C. 4601
50 U.S.C. 4601
This Supplement provides relevant Schedule B numbers and commodity descriptions for crude oil (EAR99) and for petroleum products other than crude oil that are controlled by ECCN 1C980, 1C982, 1C983, or 1C984. * * *
50 U.S.C. 4601
50 U.S.C. 4601
50 U.S.C. 4601
Drug Enforcement Administration, Department of Justice.
Interim final rule, with request for comments.
The Drug Enforcement Administration is placing the substance brivaracetam ((2
The effective date of this rulemaking is May 12, 2016. Interested persons may file written comments on this rulemaking in accordance with 21 CFR 1308.43(g). Electronic comments must be submitted, and written comments must be postmarked, on or before June 13, 2016. Commenters should be aware that the electronic Federal Docket Management System will not accept comments after 11:59 p.m. Eastern Time on the last day of the comment period.
Interested persons, defined at 21 CFR 1300.01 as those “adversely affected or aggrieved by any rule or proposed rule issuable pursuant to section 201 of the Act (21 U.S.C. 811),” may file a request for hearing or waiver of hearing pursuant to 21 CFR 1308.44. Requests for hearing and waivers of an opportunity for a hearing or to participate in a hearing must be received on or before June 13, 2016.
To ensure proper handling of comments, please reference “Docket No. DEA–435” on all correspondence, including any attachments.
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Barbara J. Boockholdt, Office of Diversion Control, Drug Enforcement Administration; Mailing Address: 8701 Morrissette Drive, Springfield, Virginia 22152; Telephone: (202) 598–6812.
Please note that all comments received are considered part of the public record. They will, unless reasonable cause is given, be made available by the Drug Enforcement Administration (DEA) for public inspection online at
If you want to submit confidential business information as part of your comment, but do not want it to be made publicly available, you must include the phrase “CONFIDENTIAL BUSINESS INFORMATION” in the first paragraph of your comment. You must also prominently identify the confidential business information to be redacted within the comment.
Comments containing personal identifying information and confidential business information identified as directed above will generally be made publicly available in redacted form. If a comment has so much confidential business information or personal identifying information that it cannot be effectively redacted, all or part of that comment may not be made publicly available. Comments posted to
An electronic copy of this document and supplemental information, including the complete Department of Health and Human Services and Drug Enforcement Administration eight-factor analyses, to this interim final rule are available at
Pursuant to 21 U.S.C. 811(a), this action is a formal rulemaking “on the record after opportunity for a hearing.” Such proceedings are conducted pursuant to the provisions of the Administrative Procedure Act (APA), 5 U.S.C. 551–559. 21 CFR 1308.41–1308.45; 21 CFR part 1316, subpart D. In accordance with 21 CFR 1308.44(a)–
Please note that pursuant to 21 U.S.C. 811(a), the purpose and subject matter of the hearing are restricted to “(A) find[ing] that such drug or other substance has a potential for abuse, and (B) mak[ing] with respect to such drug or other substance the findings prescribed by subsection (b) of section 812 of this title for the schedule in which such drug is to be placed. * * *” Requests for a hearing and waivers of participation in the hearing should be submitted to DEA using the address information provided above.
The DEA implements and enforces titles II and III of the Comprehensive Drug Abuse Prevention and Control Act of 1970, as amended. 21 U.S.C. 801–971. Titles II and III are referred to as the “Controlled Substances Act” and the “Controlled Substances Import and Export Act,” respectively, and are collectively referred to as the “Controlled Substances Act” or the “CSA” for the purpose of this action. The DEA publishes the implementing regulations for these statutes in title 21 of the Code of Federal Regulations (CFR), chapter II. The CSA and its implementing regulations are designed to prevent, detect, and eliminate the diversion of controlled substances and listed chemicals into the illicit market while providing for the legitimate medical, scientific, research, and industrial needs of the United States. Controlled substances have the potential for abuse and dependence and are controlled to protect the public health and safety.
Under the CSA, controlled substances are classified into one of five schedules based upon their potential for abuse, their currently accepted medical use in treatment in the United States, and the degree of dependence the substance may cause. 21 U.S.C. 812. The initial schedules of controlled substances established by Congress are found at 21 U.S.C. 812(c), and the current list of all scheduled substances is published at 21 CFR part 1308.
Pursuant to 21 U.S.C. 811(a)(1), the Attorney General may, by rule, “add to such a schedule or transfer between such schedules any drug or other substance if he * * * finds that such drug or other substance has a potential for abuse, and * * * makes with respect to such drug or other substance the findings prescribed by subsection (b) of section 812 of this title for the schedule in which such drug is to be placed * * *” The Attorney General has delegated this scheduling authority under 21 U.S.C. 811 to the Administrator of the DEA. 28 CFR 0.100.
The CSA provides that scheduling of any drug or other substance may be initiated by the Attorney General (1) on her own motion; (2) at the request of the Secretary of Health and Human Services (HHS); or (3) on the petition of any interested party. 21 U.S.C. 811(a). This action imposes the regulatory controls and administrative, civil, and criminal sanctions of schedule V controlled substances for any person who handles or proposes to handle BRV.
The Improving Regulatory Transparency for New Medical Therapies Act (Pub. L. 114–89) was signed into law on November 25, 2015. This law amended 21 U.S.C. 811 and states that in cases where a new drug is (1) approved by the Department of Health and Human Services (HHS) and (2) HHS recommends control in CSA schedule II–V, DEA shall issue an interim final rule scheduling the drug, within 90 days.
The law further states that the 90-day timeframe starts the later of (1) the date DEA receives the HHS scientific and medical evaluation/scheduling recommendation or (2) the date DEA receives notice of drug approval by HHS. In addition, the law specifies that the rulemaking shall become immediately effective as an interim final rule without requiring the DEA to demonstrate good cause therefor.
Specifically, Public Law 114–89 revised section 201 of the CSA (21 U.S.C. 811) by inserting after subsection (i) a new paragraph (j), which requires that with respect to a drug referred to in subsection (f), if the Secretary recommends that the Attorney General control the drug in schedule II, III, IV, or V pursuant to subsections (a) and (b), the Attorney General is required to, within 90 days, issue an interim final rule controlling the drug in accordance with such subsections and 21 U.S.C. 812(b) using the specified procedures. For purposes of calculating the 90 days, Public Law 114–89 states that such date shall be the later of the date on which the Attorney General receives the scientific and medical evaluation and the scheduling recommendation from the Secretary in accordance with subsection (b), or the date on which the Attorney General receives notification from the Secretary that the Secretary has approved an application under section 505(c), 512, or 571 of the Federal Food, Drug, and Cosmetic Act or section 351(a) of the Public Health Service Act, or indexed a drug under section 572 of the Federal Food, Drug, and Cosmetic Act, with respect to the drug described in paragraph (1). Public Law 114–89 further stipulates that a rule issued by the Attorney General under paragraph (1) becomes immediately effective as an interim final rule without requiring the Attorney General to demonstrate good cause and requires that the interim final rule give interested persons the opportunity to comment and to request a hearing. After the conclusion of such proceedings, the Attorney General must issue a final rule in accordance with the scheduling criteria of subsections 21 U.S.C. 811(b), (c), and (d) of this section and 21 U.S.C. 812(b).
Brivaracetam ((2S)-2-[(4R)-2-oxo-4-propylpyrrolidin-1-yl] butanamide) (also referred to as BRV; UCB–34714; Briviact) is a new molecular entity with central nervous system (CNS) depressant properties. BRV is known to be a high affinity ligand for the synaptic vesicle protein, SV2A, which is found on excitatory synapses in the brain. On November 22, 2014, UCB Inc. (Sponsor) submitted three New Drug Applications (NDAs) to the U.S. Food and Drug Administration (FDA) for the tablet, oral, and intravenous formulations of BRV. The FDA accepted the NDA filings for BRV on January 21, 2015.
On March 28, 2016 the DEA received notification that HHS/FDA approved BRV as an add-on treatment to other medications to treat partial onset seizures in patients age 16 years and older with epilepsy.
Pursuant to 21 U.S.C. 811(a)(1), proceedings to add a drug or substance to those controlled under the CSA may be initiated by request of the Secretary
In response, in December 2015, the DEA reviewed the scientific and medical evaluation and scheduling recommendation provided by the HHS, along with all other relevant data, and completed its own eight-factor review document pursuant to 21 U.S.C. 811(c). The DEA concluded that BRV met the 21 U.S.C. 812(b)(5) criteria for placement in schedule V of the CSA. Subsequently, on March 28, 2016, the DEA received notification that HHS/FDA approved three NDAs for BRV (
Pursuant to the provisions of the Improving Regulatory Transparency for New Medical Therapies Act (Pub. L. 114–89), and based on the HHS recommendation, NDA approvals by HHS/FDA, and DEA's determination, DEA is issuing this interim final rule to schedule brivaracetam ((2
Included below is a brief summary of each factor as analyzed by the HHS and the DEA, and as considered by the DEA in its scheduling action. Please note that both the DEA and HHS analyses are available in their entirety under “Supporting Documents” in the public docket for this interim final rule at
1.
BRV is not self-administered in animals and, unlike schedule IV benzodiazepines and the schedule III AED perampanel, lacks pentobarbital-like (schedule II) discriminative stimulus and reinforcing effects (HHS review, 2015). In humans, BRV is most similar to the schedule V AEDs lacosamide, ezogabine, and pregabalin in producing positive subjective effects without producing sedation and withdrawal following drug discontinuation that is observed with schedule IV benzodiazepines. Based on this collective evidence, the HHS concluded that BRV has an abuse potential that is most similar to AEDs in schedule V.
2.
In rats, BRV at high doses partially generalizes to the schedule IV benzodiazepine chlordiazepoxide. BRV, across a wide range of doses, neither initiates nor maintains self-administration in rats trained to self-administer cocaine. Human studies have reported that healthy individuals may experience euphoria, sedation, and a drunken-like feeling following BRV administration. When treatment-emergent adverse events (TEAEs)
3.
BRV is readily soluble in water at up to 700 mg/mL. In an
Following oral ingestion, BRV is rapidly and completely absorbed. In healthy young males, the half-life of BRV was determined to be approximately 9 hours. According to the HHS, the half-life of BRV is decreased to 6 hours when a repeated oral dose of 800 mg/day BRV is administered. The HHS noted that BRV binds weakly to plasma proteins and is extensively metabolized through several pathways. Clearance through the kidneys represents 5–10% of the total clearance and only 3–7% of the parent compound (BRV) was detected in the urine. The three main metabolites of BRV were detected in urine and according to the HHS, these metabolites are relatively inactive. One BRV metabolite was characterized as having a potency that was 20 times less than BRV, and this metabolite was not detected in human plasma and represented less than 3% of the dose in urine.
4.
5.
6.
7.
8.
The CSA outlines the findings required to place a drug or other substance in any particular schedule (I, II, III, IV, or V). 21 U.S.C. 812(b). After consideration of the analysis and recommendation of the Assistant Secretary for Health of the HHS and review of all available data, the Acting Administrator of the DEA, pursuant to 21 U.S.C. 812(b)(5), finds that:
1. BRV has a low potential for abuse relative to the drugs or other substances in schedule IV. The overall abuse potential of BRV is comparable to schedule V controlled substances such as ezogabalin, pregabalin, and lacosamide;
2. With FDA's approval of the new drug applications, BRV has a currently accepted medical use in the United States as adjunctive treatment of partial onset seizures in epileptic individuals ages 16 and older; and
3. Human and animal studies demonstrate that BRV has limited psychological dependence and does not appear to have physical dependence. There was no evidence of physical dependence associated with BRV in human and animal studies since there have been no reports of withdrawal syndromes or other physical dependence effects. Based on these data, abuse of BRV may lead to limited psychological dependence similar to schedule V AEDs but less than that of drugs in schedule IV.
Based on these findings, the Acting Administrator of the DEA concludes that brivaracetam ((2S)-2-[(4R)-2-oxo-4-propylpyrrolidin-1-yl] butanamide) (also referred to as BRV; UCB–34714; Briviact), including its salts, warrants control in schedule V of the CSA. 21 U.S.C. 812(b)(5).
BRV is subject to the CSA's schedule V regulatory controls and administrative, civil, and criminal sanctions applicable to the manufacture, distribution, reverse distribution, dispensing, importing, exporting, research, and conduct of instructional activities and chemical analysis with, and possession involving schedule V substances, including the following:
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Any person who becomes registered with the DEA must take an initial inventory of all stocks of controlled substances (including BRV) on hand on the date the registrant first engages in the handling of controlled substances, pursuant to 21 U.S.C. 827 and 958, and in accordance with 21 CFR 1304.03, 1304.04, and 1304.11.
After the initial inventory, every DEA registrant must take a new inventory of all stocks of controlled substances (including BRV) on hand every two years, pursuant to 21 U.S.C. 827 and 958, and in accordance with 21 CFR 1304.03, 1304.04, and 1304.11.
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Public Law 114–89 was signed into law, amending 21 U.S.C. 811. This amendment provides that in cases where a new drug is (1) approved by the Department of Health and Human Services (HHS) and (2) HHS recommends control in CSA schedule II–V, the DEA shall issue an interim final rule scheduling the drug within 90 days. Additionally, the law specifies that the rulemaking shall become immediately effective as an interim final rule without requiring the DEA to demonstrate good cause. Therefore, the DEA has determined that the notice and comment requirements of section 553 of the APA, 5 U.S.C. 553, do not apply to this scheduling action.
In accordance with Public Law 114–89, this scheduling action is subject to formal rulemaking procedures performed “on the record after opportunity for a hearing,” which are conducted pursuant to the provisions of 5 U.S.C. 556 and 557. The CSA sets forth the procedures and criteria for scheduling a drug or other substance. Such actions are exempt from review by the Office of Management and Budget (OMB) pursuant to section 3(d)(1) of Executive Order 12866 and the principles reaffirmed in Executive Order 13563.
This regulation meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate drafting errors and ambiguity, minimize litigation, provide a clear legal standard for affected conduct, and promote simplification and burden reduction.
This rulemaking does not have federalism implications warranting the application of Executive Order 13132. The rule does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
This rule does not have tribal implications warranting the application of Executive Order 13175. It does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes.
In accordance with 5 U.S.C. 603(a), “[w]henever an agency is required by [5 U.S.C. 553], or any other law, to publish general notice of proposed rulemaking for any proposed rule, or publishes a notice of proposed rulemaking for an interpretive rule involving the internal revenue laws of the United States, the agency shall prepare and make available for public comment an initial regulatory flexibility analysis.” As noted in the above discussion regarding applicability of the Administrative Procedure Act, the DEA has determined that the notice and comment requirements of section 553 of the APA, 5 U.S.C. 553, do not apply to this scheduling action. Consequently, the RFA does not apply to this interim final rule.
In accordance with the Unfunded Mandates Reform Act (UMRA) of 1995, 2 U.S.C. 1501
This action does not impose a new collection of information requirement under the Paperwork Reduction Act of 1995. 44 U.S.C. 3501–3521. This action would not impose recordkeeping or reporting requirements on State or local governments, individuals, businesses, or organizations. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
This rule is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996 (Congressional Review Act (CRA)). This rule will not result in: An annual effect on the economy of $100,000,000 or more; a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of U.S.-based companies to compete with foreign based companies in domestic and export markets. However, pursuant to the CRA, the DEA has submitted a copy of this interim final rule to both Houses of Congress and to the Comptroller General.
Administrative practice and procedure, Drug traffic control, Reporting and recordkeeping requirements.
For the reasons set out above, the DEA amends 21 CFR part 1308:
21 U.S.C. 811, 812, 871(b), unless otherwise noted.
(e) * * *
Drug Enforcement Administration, Department of Justice.
Final order.
The Administrator of the Drug Enforcement Administration is issuing this final order to temporarily schedule the synthetic opioids,
This final order is effective on May 12, 2016.
Barbara J. Boockholdt, Office of Diversion Control, Drug Enforcement Administration; Mailing Address: 8701 Morrissette Drive, Springfield, Virginia 22152; Telephone: (202) 598–6812.
The Drug Enforcement Administration (DEA) implements and enforces titles II and III of the Comprehensive Drug Abuse Prevention and Control Act of 1970, as amended. 21 U.S.C. 801–971. Titles II and III are referred to as the “Controlled Substances Act” and the “Controlled Substances Import and Export Act,” respectively, and are collectively referred to as the “Controlled Substances Act” or the “CSA” for the purpose of this action. The DEA publishes the implementing regulations for these statutes in title 21 of the Code of Federal Regulations (CFR), chapter II. The CSA and its implementing regulations are designed to prevent, detect, and eliminate the diversion of controlled substances and listed chemicals into the illicit market while ensuring an adequate supply is available for the legitimate medical, scientific, research, and industrial needs of the United States. Controlled substances have the potential for abuse and dependence and are controlled to protect the public health and safety.
Under the CSA, every controlled substance is classified into one of five schedules based upon its potential for abuse, its currently accepted medical use in treatment in the United States, and the degree of dependence the drug or other substance may cause. 21 U.S.C. 812. The initial schedules of controlled substances established by Congress are found at 21 U.S.C. 812(c), and the current list of all scheduled substances is published at 21 CFR part 1308.
Section 201 of the CSA, 21 U.S.C. 811, provides the Attorney General with the authority to temporarily place a substance into schedule I of the CSA for two years without regard to the requirements of 21 U.S.C. 811(b) if she finds that such action is necessary to avoid an imminent hazard to the public safety. 21 U.S.C. 811(h)(1). In addition, if proceedings to control a substance are initiated under 21 U.S.C. 811(a)(1), the Attorney General may extend the temporary scheduling for up to one year. 21 U.S.C. 811(h)(2).
Where the necessary findings are made, a substance may be temporarily scheduled if it is not listed in any other schedule under section 202 of the CSA, 21 U.S.C. 812, or if there is no exemption or approval in effect for the substance under section 505 of the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. 355. 21 U.S.C. 811(h)(1). The Attorney General has delegated her scheduling authority under 21 U.S.C. 811 to the Administrator of the DEA. 28 CFR 0.100.
Section 201(h)(4) of the CSA, 21 U.S.C. 811(h)(4), requires the Administrator to notify the Secretary of the Department of Health and Human Services (HHS) of his intention to temporarily place a substance into schedule I of the CSA.
To find that placing a substance temporarily into schedule I of the CSA is necessary to avoid an imminent hazard to the public safety, the
A substance meeting the statutory requirements for temporary scheduling may only be placed into schedule I. 21 U.S.C. 811(h)(1). Substances in schedule I are those that have a high potential for abuse, no currently accepted medical use in treatment in the United States, and a lack of accepted safety for use under medical supervision. 21 U.S.C. 812(b)(1). Available data and information for butryl fentanyl and beta-hydroxythiofentanyl, summarized below, indicate that these synthetic opioids have a high potential for abuse, no currently accepted medical use in treatment in the United States, and a lack of accepted safety for use under medical supervision. The DEA's three-factor analysis, and the Assistant Secretary's January 13, 2016, letter, are available in their entirety under the tab “Supporting Documents” of the public docket of this action at
Clandestinely produced substances structurally related to the schedule II opioid analgesic fentanyl were trafficked and abused on the West Coast in the late 1970s and 1980s. These clandestinely produced fentanyl-like substances were commonly known as designer drugs, and recently there has been a reemergence in the trafficking and abuse of designer drug substances, including fentanyl-like substances. Alpha-methylfentanyl, the first fentanyl analogue identified in California, was placed into schedule I of the CSA in September 1981. 46 FR 46799. Following the control of alpha-methylfentanyl, the DEA identified several other fentanyl analogues (3-methylthiofentanyl, acetyl-alpha-methylfentanyl, beta-hydroxy-3-methylfentanyl, alpha-methylthiofentanyl, thiofentanyl, beta-hydroxyfentanyl, para-fluorofentanyl, and 3-methylfentanyl) in submissions to forensic laboratories. These substances were temporarily controlled
Prior to October 1, 2014, the System to Retrieve Information from Drug Evidence (STRIDE) collected the results of drug evidence analyzed at DEA laboratories and reflected evidence submitted by the DEA, other federal law enforcement agencies, and some local law enforcement agencies. STRIDE data were queried through September 30, 2014, by date submitted to federal forensic laboratories. Since October 1, 2014, STARLiMS (a web-based, commercial laboratory information management system) has replaced STRIDE as the DEA laboratory drug evidence data system of record. DEA laboratory data submitted after September 30, 2014, are reposited in STARLiMS. Data from STRIDE and STARLiMS were queried on December 21, 2015. The National Forensic Laboratory Information System (NFLIS) is a program of the DEA that collects drug identification results from drug cases analyzed by other federal, state, and local forensic laboratories. NFLIS reports from other federal, state, and local forensic laboratories were queried on December 22, 2015.
The first laboratory submission of butyryl fentanyl was recorded in Kansas in March 2014 according to NFLIS. STRIDE, STARLiMS, and NFLIS registered seven reports containing butyryl fentanyl in 2014 in Illinois, Kansas, Minnesota, and Pennsylvania; 81 reports of butyryl fentanyl were recorded in 2015 in California, Connecticut, Florida, Indiana, North Dakota, New York, Ohio, Oregon, Tennessee, Virginia, and Wisconsin. A total of three reports of beta-hydroxythiofentanyl were recorded by STARLiMS, all of which were reported in 2015 from Florida. As of December 22, 2015, beta-hydroxythiofentanyl had not been reported in NFLIS; however, this substance was identified in June 2015 by a forensic laboratory in Oregon.
Evidence also suggests that the pattern of abuse of fentanyl analogues, including butyryl fentanyl and beta-hydroxythiofentanyl, parallels that of heroin and prescription opioid analgesics. Seizures of butyryl fentanyl have been encountered in tablet and powder form. Butyryl fentanyl was identified on bottle caps and spoons and residue was detected within glassine bags, on digital scales, and on sifters which demonstrates the abuse of this substance as a replacement for heroin or other opioids, either knowingly or unknowingly. Butyryl fentanyl has been encountered as a single substance as well as in combination with other illicit substances, such as acetyl fentanyl, heroin, cocaine, or methamphetamine. Like butyryl fentanyl, beta-hydroxythiofentanyl has been encountered in both tablet and powder form. Both butyryl fentanyl and beta-hydroxythiofentanyl have caused fatal overdoses, in which intravenous routes of administration are documented.
The DEA is currently aware of at least 40 confirmed fatalities associated with butyryl fentanyl and 7 confirmed fatalities associated with beta-hydroxythiofentanyl. The information on these deaths occurring in 2015 was collected from toxicology and medical examiner reports and was reported from four states—Florida (7, beta-hydroxythiofentanyl), Maryland (1, butyryl fentanyl), New York (38, butyryl fentanyl), and Oregon (1, butyryl fentanyl). STRIDE, STARLiMS, and NFLIS have a total of 88 drug reports in which butyryl fentanyl was identified in drug exhibits submitted in 2014 and 2015 from California, Connecticut, Florida, Illinois, Indiana, Kansas, Minnesota, North Dakota, New York, Ohio, Oregon, Pennsylvania, Tennessee, Virginia, and Wisconsin. STARLiMS has a total of three drug reports in which beta-hydroxythiofentanyl was identified in drug exhibits submitted in 2015 from Florida. It is likely that the prevalence of butyryl fentanyl and beta-hydroxythiofentanyl in opioid analgesic-related emergency room admissions and deaths is underreported as standard immunoassays cannot differentiate these substances from fentanyl.
The population likely to abuse butyryl fentanyl and beta-hydroxythiofentanyl overlaps with the populations abusing prescription opioid analgesics and heroin. This is evidenced by the routes of administration and drug use history documented in butyryl fentanyl and beta-hydroxythiofentanyl fatal overdose cases. Because abusers of these fentanyl analogues are likely to obtain these
Butyryl fentanyl and beta-hydroxythiofentanyl exhibit pharmacological profiles similar to that of fentanyl and other mu-opioid receptor agonists. Due to limited scientific data, their potency and toxicity are not known; however, the toxic effects of both butyryl fentanyl and beta-hydroxythiofentanyl in humans are demonstrated by overdose fatalities involving these substances. Abusers of these fentanyl analogues may not know the origin, identity, or purity of these substances, thus posing significant adverse health risks when compared to abuse of pharmaceutical preparations of opioid analgesics, such as morphine and oxycodone.
Based on the documented case reports of overdose fatalities, the abuse of butyryl fentanyl and beta-hydroxythiofentanyl leads to the same qualitative public health risks as heroin, fentanyl and other opioid analgesic substances. The public health risks attendant to the abuse of heroin and opioid analgesics are well established and have resulted in large numbers of drug treatment admissions, emergency department visits, and fatal overdoses.
Butyryl fentanyl and beta-hydroxythiofentanyl have been associated with numerous fatalities. At least 40 confirmed overdose deaths involving butyryl fentanyl abuse have been reported in Maryland (1), New York (38), and Oregon (1) in 2015. At least seven confirmed overdose fatalities involving beta-hydroxythiofentanyl have been reported in Florida in 2015. This indicates that both butyryl fentanyl and beta-hydroxythiofentanyl pose an imminent hazard to the public safety.
In accordance with 21 U.S.C. 811(h)(3), based on the data and information summarized above, the continued uncontrolled manufacture, distribution, importation, exportation, and abuse of butyryl fentanyl and beta-hydroxythiofentanyl pose an imminent hazard to the public safety. The DEA is not aware of any currently accepted medical uses for these substances in the United States. A substance meeting the statutory requirements for temporary scheduling, 21 U.S.C. 811(h)(1), may only be placed into schedule I. Substances in schedule I are those that have a high potential for abuse, no currently accepted medical use in treatment in the United States, and a lack of accepted safety for use under medical supervision. Available data and information for butyryl fentanyl and beta-hydroxythiofentanyl indicate that these substances have a high potential for abuse, no currently accepted medical use in treatment in the United States, and a lack of accepted safety for use under medical supervision. As required by section 201(h)(4) of the CSA, 21 U.S.C. 811(h)(4), the Administrator, through a letter dated December 21, 2015, notified the Assistant Secretary of the DEA's intention to temporarily place these substances into schedule I.
In accordance with the provisions of section 201(h) of the CSA, 21 U.S.C. 811(h), the Administrator considered available data and information, herein sets forth the grounds for his determination that it is necessary to temporarily schedule butyryl fentanyl and beta-hydroxythiofentanyl into schedule I of the CSA, and finds that placement of these synthetic opioids into schedule I of the CSA is necessary to avoid an imminent hazard to the public safety. Because the Administrator hereby finds it necessary to temporarily place these synthetic opioids into schedule I to avoid an imminent hazard to the public safety, this final order temporarily scheduling butyryl fentanyl and beta-hydroxythiofentanyl will be effective on the date of publication in the
The CSA sets forth specific criteria for scheduling a drug or other substance. Permanent scheduling actions in accordance with 21 U.S.C. 811(a) are subject to formal rulemaking procedures done “on the record after opportunity for a hearing” conducted pursuant to the provisions of 5 U.S.C. 556 and 557. 21 U.S.C. 811. The permanent scheduling process of formal rulemaking affords interested parties with appropriate process and the government with any additional relevant information needed to make a determination. Final decisions that conclude the permanent scheduling process of formal rulemaking are subject to judicial review. 21 U.S.C. 877. Temporary scheduling orders are not subject to judicial review. 21 U.S.C. 811(h)(6).
Upon the effective date of this final order, butyryl fentanyl and beta-hydroxythiofentanyl will become subject to the regulatory controls and administrative, civil, and criminal sanctions applicable to the manufacture, distribution, reverse distribution, importation, exportation, engagement in research, and conduct of instructional activities or chemical analysis with, and possession of schedule I controlled substances including the following:
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Section 201(h) of the CSA, 21 U.S.C. 811(h), provides for an expedited temporary scheduling action where such action is necessary to avoid an imminent hazard to the public safety. As provided in this subsection, the Attorney General may, by order, schedule a substance in schedule I on a temporary basis. Such an order may not be issued before the expiration of 30 days from (1) the publication of a notice in the
Inasmuch as section 201(h) of the CSA directs that temporary scheduling actions be issued by order and sets forth the procedures by which such orders are to be issued, the DEA believes that the notice and comment requirements of the Administrative Procedure Act (APA) at 5 U.S.C. 553, do not apply to this temporary scheduling action. In the alternative, even assuming that this action might be subject to 5 U.S.C. 553, the Administrator finds that there is good cause to forgo the notice and comment requirements of 5 U.S.C. 553, as any further delays in the process for issuance of temporary scheduling orders would be impracticable and contrary to the public interest in view of the manifest urgency to avoid an imminent hazard to the public safety.
Further, the DEA believes that this temporary scheduling action is not a “rule” as defined by 5 U.S.C. 601(2), and, accordingly, is not subject to the requirements of the Regulatory Flexibility Act. The requirements for the preparation of an initial regulatory flexibility analysis in 5 U.S.C. 603(a) are not applicable where, as here, the DEA is not required by the APA or any other law to publish a general notice of proposed rulemaking.
Additionally, this action is not a significant regulatory action as defined by Executive Order 12866 (Regulatory Planning and Review), section 3(f), and, accordingly, this action has not been reviewed by the Office of Management and Budget (OMB).
This action will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132 (Federalism) it is determined that this action does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.
As noted above, this action is an order, not a rule. Accordingly, the Congressional Review Act (CRA) is inapplicable, as it applies only to rules. However, if this were a rule, pursuant to the Congressional Review Act, “any rule for which an agency for good cause finds that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest, shall take effect at such time as the federal agency promulgating the rule determines.” 5 U.S.C. 808(2). It is in the public interest to schedule these substances immediately because they pose a public health risk. This temporary scheduling action is taken pursuant to 21 U.S.C. 811(h), which is specifically designed to enable the DEA to act in an expeditious manner to avoid an imminent hazard to the public safety. 21 U.S.C. 811(h) exempts the temporary scheduling order from standard notice and comment rulemaking procedures to ensure that the process moves swiftly. For the same reasons that underlie 21 U.S.C. 811(h), that is, the DEA's need to move quickly to place these substances into schedule I because they pose an imminent hazard to public safety, it would be contrary to the public interest to delay implementation of the temporary scheduling order. Therefore, this order shall take effect immediately upon its publication. The DEA has submitted a copy of this final order to both Houses of Congress and to the Comptroller General, although such filing is not required under the Small Business Regulatory Enforcement Fairness Act of 1996 (Congressional Review Act), 5 U.S.C. 801–808 because, as noted above, this action is an order, not a rule.
Administrative practice and procedure, Drug traffic control, Reporting and recordkeeping requirements.
For the reasons set out above, the DEA amends 21 CFR part 1308 as follows:
21 U.S.C. 811, 812, 871(b), unless otherwise noted.
(h) * * *
Coast Guard, DHS.
Notice of deviation from drawbridge regulation.
The Coast Guard has issued a temporary deviation from the operating schedule that governs the Tower Drawbridge across the Sacramento River, mile 59.0, at Sacramento, CA. The deviation is necessary to allow the community to participate in the Capital City Classic Run.
This deviation is effective from 7:30 a.m. to 11 a.m. on May 15, 2016.
The docket for this deviation, [USCG–2016–0348] is available at
If you have questions on this temporary deviation, call or email David H. Sulouff, Chief, Bridge Section, Eleventh Coast Guard District; telephone 510–437–3516, email
California Department of Transportation has requested a temporary change to the operation of the Tower Drawbridge, mile 59.0, over Sacramento River, at Sacramento, CA. The vertical lift bridge navigation span provides a vertical clearance of 30 feet above Mean High Water in the closed-to-navigation position. The draw operates as required by 33 CFR 117.189(a). Navigation on the waterway is commercial and recreational.
The drawspan will be secured in the closed-to-navigation position from 7:30 a.m. to 11 a.m. on May 15, 2016, to allow the community to participate in the Capital City Classic Run. This temporary deviation has been coordinated with the waterway users. No objections to the proposed temporary deviation were raised.
Vessels able to pass through the bridge in the closed position may do so at any time. The bridge will be able to open for emergencies and there is no immediate alternate route for vessels to pass. The Coast Guard will also inform the users of the waterways through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge so that vessels can arrange their transits to minimize any impact caused by the temporary deviation.
In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary moving security zone around all Canadian Naval Ships in the New York Harbor, New York, NY. The moving security zone will extend 100 yards on all sides of the ships. The security zone is needed to protect the vessels and their respective crews from potential security threats. Entry of vessels or persons into this zone is prohibited unless specifically authorized by the Captain of the Port New York.
This rule is effective from May 25, 2016 through May 31, 2016.
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 MST1 R. J. Sampert, Waterways Management Division, U.S. Coast Guard; telephone 718–354–4197, email
The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a NPRM with respect to this rule because the specifics associated with the entry and transit of the foreign naval vessels in the harbor were not received in time to publish an NPRM. Publishing an NPRM and delaying the effective date of this rule to await public comments would be impracticable and contrary to the public interest since it would inhibit the Coast Guard's ability to fulfill its statutory missions to protect and secure the ports and waterways of the United States.
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making it effective less than 30 days after publication in the
The Coast Guard is issuing this rule under the authority in 33 U.S.C. 1231. The Captain of the Port of New York (COTP) has determined that potential security risks associated with Canadian Naval Vessels in the Port of New York will be a security concern for vessels within a 100-yard radius of all Canadian Naval Vessels. This rule is needed to protect the vessels and their respective crew in the navigable waters within the security zone while the vessels are within New York Harbor.
This rule establishes a security zone from May 25, 2016 through May 31, 2016. The security zone will cover all navigable waters within 100 yards of all Canadian Naval Vessels. The duration of the zone is intended to protect the vessels and their respective crews in the navigable waters while in port and while transiting New York Harbor. No vessel or person will be permitted to enter the security zone without obtaining permission from the COTP or a designated representative.
We developed this rule after considering numerous statutes and executive orders (E.O.s) related to rulemaking. Below we summarize our analyses based on a number of these statutes and E.O.s, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, it has not been reviewed by the Office of Management and Budget.
This regulatory action determination is based on the size, location, duration, and time-of-year of the safety zone. Vessel traffic will be able to safely transit around this security zone which will impact a small designated area of the Port of New York South side of Pier 92 for 7 days. Moreover, the Coast Guard will issue Broadcast Notice to Mariners via VHF–FM marine channel 16 about the zone and the rule allows vessels to seek permission to enter the zone.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601–612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104–121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1–888–REG–FAIR (1–888–734–3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order, 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. If you believe this rule has implications for federalism or Indian tribes, please 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.
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 (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 a security zone lasting less than seven days that will prohibit entry within 100 yards of the Canadian Naval Vessels. It is categorically excluded from further review under paragraph 34(g) of Figure 2–1 of the Commandant Instruction. An environmental analysis checklist
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
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; 50 U.S.C. 191; 33 CFR 1.05–1, 6.04–1, 6.04–6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(c)
(2) To seek permission to enter, contact the COTP or the COTP's representative via VHF channel 16 or by phone at (718) 354–4353 (Sector New York Command Center). Those in the security zone must comply with all lawful orders or directions given to them by the COTP or the COTP's designated representative.
(d)
Coast Guard, DHS.
Notice of enforcement of regulation.
The Coast Guard will enforce the security zone for the Portland Rose Festival on the Willamette River in Portland, OR from 11 a.m. on June 9, 2016, through noon on June 13, 2016. This action is necessary to ensure the security of vessels participating in the 2016 Portland Rose Festival on the Willamette River during the event. Our regulation for the Security Zone Portland Rose Festival on Willamette River identifies the regulated area. During the enforcement period, no person or vessel may enter or remain in the security zone without permission from the Sector Columbia River Captain of the Port.
The regulations in 33 CFR 165.1312 will be enforced from 11 a.m. on June 9, 2016, through noon on June 13, 2016.
If you have questions about this notice of enforcement, call or email Mr. Kenneth Lawrenson, Waterways Management Division, MSU Portland, Oregon, U.S. Coast Guard; telephone 503–240–9319, email
The Coast Guard will enforce the security zone for the Portland Rose Festival detailed in 33 CFR 165.1312 from 11 a.m. on June 9, 2016, through noon on June 13, 2016. This action is necessary to ensure the security of vessels participating in the 2016 Portland Rose Festival on the Willamette River during the event. Under the provisions of 33 CFR 165.1312 and 33 CFR 165 subpart D, no person or vessel may enter or remain in the security zone, consisting of all waters of the Willamette River, from surface to bottom, encompassed by the Hawthorne and Steel Bridges, without permission from the Sector Columbia River Captain of the Port. Persons or vessels wishing to enter the security zone may request permission to do so from the on scene Captain of the Port representative via VHF Channel 16 or 13. The Coast Guard may be assisted by other Federal, State, or local enforcement agencies in enforcing this regulation.
This notice of enforcement is issued under authority 33 CFR 165.1312 and 5 U.S.C. 552 (a). In addition to this notice of enforcement in the
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is withdrawing a May 22, 2014 final action approving a state implementation plan (SIP) revision submitted by the State of California under the Clean Air Act (CAA) to address contingency measure requirements for the 1997 annual and 24-hour national ambient air quality standards (NAAQS) for fine particulate matter (PM
This rule is effective June 13, 2016.
The EPA has established docket number EPA–R09–OAR–2013–0534 for this action. Generally, documents in the docket for this action are available electronically at
Doris Lo, EPA Region IX, (415) 972–3959,
Throughout this document, “we,” “us” and “our” refer to EPA.
On August 17, 2015, EPA proposed to withdraw its May 22, 2014 final action approving California's July 3, 2013 submission to address contingency measure requirements for the 1997 annual and 24-hour PM
EPA proposed to determine that the disapproval of the 2013 Contingency Measure Submittal would not start a mandatory sanctions clock or Federal implementation plan (FIP) clock because the specific type of contingency measure at issue in that submittal was no longer a required attainment plan element for the San Joaquin Valley (SJV) area. The California Air Resources Board (CARB) had submitted the 2013 Contingency Measure Submittal to address the contingency measure requirement in CAA section 172(c)(9) as applied to the 2008 PM
EPA received one comment on the proposed action, submitted by Earthjustice. EPA summarizes and responds to the comment below.
Section 179(a) of the Act provides that, for any SIP revision required under part D of title I of the Act or required in response to a finding of substantial inadequacy as described in section 110(k), if EPA disapproves a submission for a nonattainment area based on the state's failure to meet one or more of the CAA requirements applicable to the area, mandatory sanctions under section 179(b) shall apply. The 2013 Contingency Measure Submittal was a plan revision required under part D of
Section 110(c) of the Act states that EPA “shall promulgate a Federal implementation plan at any time within 2 years after the Administrator—. . . (B) disapproves a State implementation plan submission in whole or in part,” unless the State corrects the deficiency and EPA approves the plan or plan revision before promulgating such FIP. As a consequence of our disapproval of the 2013 Contingency Measure Submittal, the California SIP does not contain any contingency measures to be triggered if the SJV area fails to attain the 1997 PM
As explained in the proposed action, contingency measures for failure to attain by the Moderate area attainment date are no longer required in the SJV as the requirement for such measures has been superseded by the requirement for contingency measures as part of a Serious area plan for the 1997 PM
California submitted a Serious area plan for the 1997 PM
EPA is withdrawing its May 22, 2014 final action approving the 2013 Contingency Measure Submittal. Simultaneously, under section 110(k)(3) of the Act, EPA is disapproving this SIP submission for failure to satisfy the requirements of CAA section 172(c)(9).
Under section 179(a) of the CAA, a final disapproval of a submittal that addresses a requirement of part D of title I of the CAA or is required in response to a finding of substantial inadequacy as described in CAA section 110(k)(5) (SIP Call), triggers a sanction clock under CAA section 179(b) that runs from the effective date of the final action. The first sanction, the offset sanction in CAA section 179(b)(2), will apply in the SJV PM
In addition to the sanctions, CAA section 110(c)(1) provides that EPA must promulgate a federal implementation plan (FIP) addressing the deficiency at any time within two years after June 13, 2016, the effective date of this rule, unless the state makes a SIP submission to correct the deficiency and EPA approves such submission before promulgating a FIP.
Because we previously approved the RFP and attainment demonstrations and the motor vehicle emissions budgets,
Additional information about these statutes and Executive Orders can be found at
This action is not a significant regulatory action and was therefore not submitted to the Office of Management and Budget (OMB) for review.
This action does not impose an information collection burden under the PRA, because this SIP disapproval does not in-and-of itself create any new information collection burdens, but simply disapproves certain State requirements for inclusion in the SIP.
I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on small entities. This SIP disapproval does not in-and-of itself create any new requirements but simply disapproves certain State requirements for inclusion in the SIP.
This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531–1538, and does not significantly or uniquely affect small governments. This action disapproves pre-existing requirements under State or local law, and imposes no new requirements. Accordingly, no additional costs to State, local, or tribal
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.
This action does not have tribal implications, as specified in Executive Order 13175, because the SIP revision that the EPA is disapproving would not apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction, and will not impose substantial direct costs on tribal governments or preempt tribal law. Thus, Executive Order 13175 does not apply to this action.
The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2–202 of the Executive Order. This action is not subject to Executive Order 13045 because this SIP disapproval does not in-and-of itself create any new regulations, but simply disapproves certain State requirements for inclusion in the SIP.
This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.
Section 12(d) of the NTTAA directs the EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. The EPA believes that this action is not subject to the requirements of section 12(d) of the NTTAA because application of those requirements would be inconsistent with the CAA.
The EPA lacks the discretionary authority to address environmental justice in this rulemaking.
This action is subject to the CRA, and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a “major rule” as defined by 5 U.S.C. 804(2).
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by July 11, 2016. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements (see section 307(b)(2)).
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Particulate matter, Sulfur oxides.
Part 52, Chapter I, Title 40 of the Code of Federal Regulations is amended as follows:
42 U.S.C. 7401
(c) * * *
(438) * * *
(ii) * * *
(C) Previously approved in paragraphs (c)(438)(ii)(A)(
(a) * * *
(8) The contingency measure portion of the 2008 PM
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; inseason General category retention limit adjustment.
NMFS is adjusting the Atlantic bluefin tuna (BFT) General category daily retention limit from the default limit of one large medium or giant BFT to five large medium or giant BFT for June 1 through August 31, 2016. This action is based on consideration of the regulatory determination criteria regarding inseason adjustments, and applies to Atlantic Tunas General category (commercial) permitted vessels and Highly Migratory Species (HMS) Charter/Headboat category permitted vessels when fishing commercially for BFT.
Effective June 1, 2016, through August 31, 2016.
Sarah McLaughlin or Brad McHale, 978–281–9260.
Regulations implemented under the authority of the Atlantic Tunas Convention Act (ATCA; 16 U.S.C. 971
The currently codified baseline U.S. quota is 1,058.9 mt (not including the 25 mt ICCAT allocated to the United States to account for bycatch of BFT in pelagic longline fisheries in the Northeast Distant Gear Restricted Area). Among other things, Amendment 7 revised the allocations to all quota categories, effective January 1, 2015. See § 635.27(a). The currently codified General category quota is 466.7 mt. Each of the General category time periods (“January,” June through August, September, October through November, and December) is allocated a portion of the annual General category quota. The codified June through August subquota is 233.3 mt.
Unless changed, the General category daily retention limit starting on June 1 would be the default retention limit of one large medium or giant BFT (measuring 73 inches (185 cm) curved fork length (CFL) or greater) per vessel per day/trip (§ 635.23(a)(2)). This default retention limit would apply to General category permitted vessels and to HMS Charter/Headboat category permitted vessels when fishing commercially for BFT. For the 2015 fishing year, NMFS adjusted the daily retention limit from the default level of one large medium or giant BFT to three large medium or giant BFT for the January subquota period (79 FR 77943, December 29, 2014), which closed March 31, 2015 (the regulations allow the General category fishery under the “January” subquota to continue until the subquota is reached, or March 31, whichever comes first); four large medium or giant BFT for the June through August subquota period (80 FR 27863, May 15, 2015) as well as for September 1 through November 27, 2015 (80 FR 51959, August 27, 2015); and three large medium or giant BFT for November 28 through December 31, 2015 (80 FR 74997, December 1, 2015). NMFS adjusted the daily retention limit for the 2016 January subquota period (which closed March 31) from the default level of one large medium or giant BFT to three large medium or giant BFT in the same action as the 24.3-mt transfer from the December 2016 subquota period to the January 2016 subquota period (80 FR 77264, December 14, 2015).
Under § 635.23(a)(4), NMFS may increase or decrease the daily retention limit of large medium and giant BFT over a range of zero to a maximum of five per vessel based on consideration of the relevant criteria provided under § 635.27(a)(8), which are: The usefulness of information obtained from catches in the particular category for biological sampling and monitoring of the status of the stock; the catches of the particular category quota to date and the likelihood of closure of that segment of the fishery if no adjustment is made; the projected ability of the vessels fishing under the particular category quota to harvest the additional amount of BFT before the end of the fishing year; the estimated amounts by which quotas for other gear categories of the fishery might be exceeded; effects of the adjustment on BFT rebuilding and overfishing; effects of the adjustment on accomplishing the objectives of the FMP; variations in seasonal distribution, abundance, or migration patterns of BFT; effects of catch rates in one area precluding vessels in another area from having a reasonable opportunity to harvest a portion of the category's quota; review of dealer reports, daily landing trends, and the availability of the BFT on the fishing grounds; optimizing fishing opportunity; accounting for dead discards, facilitating quota monitoring, supporting other fishing monitoring programs through quota allocations and/or generation of revenue; and support of research through quota allocations and/or generation of revenue.
NMFS has considered these criteria and their applicability to the General category BFT retention limit for June through August 2016. These considerations include, but are not limited to, the following: Regarding the usefulness of information obtained from catches in the particular category for biological sampling and monitoring of the status of the stock, biological samples collected from BFT landed by General category fishermen and provided by BFT dealers continue to provide NMFS with valuable data for ongoing scientific studies of BFT age and growth, migration, and reproductive status. Additional opportunity to land BFT would support the collection of a broad range of data for these studies and for stock monitoring purposes.
Regarding the effects of the adjustment on BFT rebuilding and overfishing and the effects of the adjustment on accomplishing the objectives of the FMP, as this action would be taken consistent with the previously implemented and analyzed quotas, it is not expected to negatively impact stock health or otherwise affect the stock in ways not previously analyzed, including on rebuilding, overfishing, or the objectives of the FMP. It is also supported by the Environmental Analysis for the 2011 final rule regarding General and Harpoon category management measures, which increased the General category maximum daily retention limit from three to five fish (76 FR 74003, November 30, 2011).
Another principal consideration in setting the retention limit is the objective of providing opportunities to harvest the full General category quota without exceeding it based on the goals of the 2006 Consolidated HMS FMP and Amendment 7, including to achieve optimum yield on a continuing basis and to optimize the ability of all permit categories to harvest their full BFT quota allocations. This retention limit would be consistent with the quotas established and analyzed in the BFT quota final rule (80 FR 52198, August 28, 2015), and with objectives of the 2006 Consolidated HMS FMP and amendments, and is not expected to negatively impact stock health or to affect the stock in ways not already analyzed in those documents. It is also important that NMFS limit landings to BFT subquotas both to adhere to the FMP quota allocations and to ensure that landings are as consistent as possible with the pattern of fishing mortality (
Commercial-size BFT are anticipated to migrate to the fishing grounds off the northeast U.S. coast by early June. Based on General category landings rates during the June through August time period over the last several years, it is highly unlikely that the June through
Despite elevated General category limits, the vast majority of successful trips (
NMFS anticipates that some underharvest of the 2015 adjusted U.S. BFT quota will be carried forward to 2016 to the Reserve category, in accordance with the regulations implementing Amendment 7, this summer (
A limit lower than five fish could result in unused quota being added to the later portion of the General category season (
Based on these considerations, NMFS has determined that a five-fish General category retention limit is warranted for the June–August 2016 subquota period. It would provide a reasonable opportunity to harvest the full U.S. BFT quota (including the expected increases in available 2016 quota later in the year), without exceeding it, while maintaining an equitable distribution of fishing opportunities; help optimize the ability of the General category to harvest its full quota; allow the collection of a broad range of data for stock monitoring purposes; and be consistent with the objectives of the 2006 Consolidated HMS FMP, as amended. Therefore, NMFS increases the General category retention limit from the default limit (one) to five large medium or giant BFT per vessel per day/trip, effective June 1, 2016, through August 31, 2016.
Regardless of the duration of a fishing trip, no more than a single day's retention limit may be possessed, retained, or landed. For example (and specific to the June through August 2016 limit), whether a vessel fishing under the General category limit takes a two-day trip or makes two trips in one day, the daily limit of five fish may not be exceeded upon landing. This General category retention limit is effective in all areas, except for the Gulf of Mexico, where NMFS prohibits targeting fishing for BFT, and applies to those vessels permitted in the General category, as well as to those HMS Charter/Headboat permitted vessels fishing commercially for BFT.
NMFS will continue to monitor the BFT fishery closely. Dealers are required to submit landing reports within 24 hours of a dealer receiving BFT. General, HMS Charter/Headboat, Harpoon, and Angling category vessel owners are required to report the catch of all BFT retained or discarded dead, within 24 hours of the landing(s) or end of each trip, by accessing
The Assistant Administrator for NMFS (AA) finds that it is impracticable and contrary to the public interest to provide prior notice of, and an opportunity for public comment on, this action for the following reasons:
Prior notice is impracticable because the regulations implementing the 2006 Consolidated HMS FMP, as amended, intended that inseason retention limit adjustments would allow the agency to respond quickly to the unpredictable nature of BFT availability on the fishing grounds, the migratory nature of this species, and the regional variations in the BFT fishery. Based on available BFT quotas, fishery performance in recent years, and the availability of BFT on the fishing grounds, responsive adjustment to the General category BFT daily retention limit from the default level is warranted to allow fishermen to take advantage of the availability of fish and of quota. For such adjustment to be practicable, it must occur in a timeframe that allows fishermen to take advantage of it.
Fisheries under the General category daily retention limit will commence on June 1 and thus prior notice would be contrary to the public interest. Delays in increasing these retention limits would adversely affect those General and Charter/Headboat category vessels that would otherwise have an opportunity to harvest more than the default retention limit of one BFT per day/trip and may result in low catch rates and quota rollovers. Analysis of available data shows that adjustment to the BFT daily retention limit from the default level would result in minimal risks of exceeding the ICCAT-allocated quota.
Adjustment of the General category retention limit needs to be effective June 1, 2016, or as soon as possible thereafter, to minimize any unnecessary disruption in fishing patterns, to allow the impacted sectors to benefit from the adjustment, and to not preclude fishing opportunities for fishermen in geographic areas with access to the fishery only during this time period. Foregoing opportunities to harvest the respective quotas may have negative social and economic impacts for U.S. fishermen that depend upon catching the available quota within the time periods designated in the 2006 Consolidated HMS FMP, as amended. Therefore, the AA finds there is also good cause under 5 U.S.C. 553(d) to waive the 30-day delay in effectiveness.
This action is being taken under §§ 635.23(a)(4) and is exempt from review under Executive Order 12866.
16 U.S.C. 971
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to supersede Airworthiness Directive (AD) 2013–19–04, which applies to certain The Boeing Company Model 737–600, –700, –700C, –800, and –900 series airplanes. AD 2013–19–04 currently requires repetitive detailed and high frequency eddy current (HFEC) inspections for cracking of the skin around the eight fasteners common to the ends of the station (STA) 540 bulkhead chords between stringers S–22 and S–23, left and right sides; related investigative actions and corrective actions, if necessary; and provides an optional terminating modification. Since we issued AD 2013–19–04, we have received reports of additional cracks that are larger and initiated sooner than previously predicted. This proposed AD would reduce the inspection threshold and repetitive inspection intervals. We are proposing this AD to detect and correct fatigue cracking in the fuselage skin around the eight fasteners securing the STA 540 bulkhead chords. Such cracking can result in rapid decompression of the cabin.
We must receive comments on this proposed AD by June 27, 2016.
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 NPRM, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H–65, Seattle, WA 98124–2207; telephone 206–544–5000, extension 1; fax 206–766–5680; Internet
You may examine the AD docket on the Internet at
Alan Pohl, Aerospace Engineer, Airframe Branch, ANM–120S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue SW., Renton, WA 98057–3356; phone: 425–917–6450; fax: 425–917–6590; 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 September 9, 2013, we issued AD 2013–19–04, Amendment 39–17586 (78 FR 59801, September 30, 2013) (“AD 2013–19–04”), for certain The Boeing Company Model 737–600, –700, –700C, –800, and –900 series airplanes. AD 2013–19–04 requires repetitive detailed and HFEC inspections for cracking of the skin around the eight fasteners common to the ends of the STA 540 bulkhead chords between stringers S–22 and S–23, left and right sides; related investigative actions and corrective actions, if necessary; and provides an optional terminating modification. AD 2013–19–04 resulted from a report of cracks found in the skin at body STA 540 just below the left side of stringer S–22 on a Model 737–700 series airplane. We issued AD 2013–19–04 to detect and correct fatigue cracking in the fuselage skin around the eight fasteners securing the STA 540 bulkhead chords, which can result in rapid decompression of the cabin.
Since we issued AD 2013–19–04, we have received reports of cracks that initiated sooner and are larger than previously predicted.
We reviewed Boeing Special Attention Service Bulletin 737–53–1294, Revision 2, dated December 9, 2015, which specifies procedures for doing inspections for cracking of the skin around the eight fasteners common to the ends of the STA 540 bulkhead chords between stringers S–22 and S–23, left and right sides, repairing cracks,
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 designs.
Although this proposed AD does not explicitly restate the requirements of AD 2013–19–04, this proposed AD would retain all of the requirements of AD 2013–19–04. Those requirements are referenced in the service information identified previously, which, in turn, is referenced in paragraphs (g) through (k) of this proposed AD. This proposed AD would require accomplishing the actions specified in the service information described previously, except as discussed under “Differences Between this Proposed AD and the Service Information.” For information on the procedures and compliance times, see this service information at
The phrase “related investigative actions” is used in this proposed AD. Related investigative actions are follow-on actions that (1) are related to the primary action, and (2) further investigate the nature of any condition found. Related investigative actions in an AD could include, for example, inspections.
The phrase “corrective actions” is used in this proposed AD. Corrective actions correct or address any condition found. Corrective actions in an AD could include, for example, repairs.
Boeing Special Attention Service Bulletin 737–53–1294, Revision 2, dated December 9, 2015, specifies to contact the manufacturer for instructions on how to repair certain conditions, but this proposed AD would require accomplishment of repair methods, modification deviations, and alteration deviations in one of the following ways:
• In accordance with a method that we approve; or
• Using data that meet the certification basis of the airplane, and that have been approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) whom we have authorized to make those findings.
We estimate that this proposed AD affects 903 airplanes of U.S. registry. We estimate the following costs to comply with this proposed AD:
We estimate the following costs to do any necessary repairs and inspections that would be required based on the results of the proposed inspection. We have no way of determining the number of aircraft that might need these repairs:
According to the manufacturer, some of the costs of this proposed AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We 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.
For the reasons discussed above, I certify that the proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, 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 June 27, 2016.
This AD replaces AD 2013–19–04, Amendment 39–17586 (78 FR 59801, September 30, 2013) (“AD 2013–19–04”).
This AD applies to The Boeing Company Model 737–600, –700, –700C, –800, and –900 series airplanes; certificated in any category; as identified in Boeing Special Attention Service Bulletin 737–53–1294, Revision 2, dated December 9, 2015.
Air Transport Association (ATA) of America Code 53, Fuselage.
This AD was prompted by a report of cracks found in the skin at body station (STA) 540 just below the left side of stringer S–22. We are issuing this AD to detect and correct fatigue cracking in the fuselage skin around the eight fasteners securing the STA 540 bulkhead chords, which can result in rapid decompression of the cabin.
Comply with this AD within the compliance times specified, unless already done.
Except as required by paragraphs (i)(1) and (i)(2) of this AD, at the applicable time specified in table 1 of paragraph 1.E. “Compliance,” of Boeing Special Attention Service Bulletin 737–53–1294, Revision 2, dated December 9, 2015: Do detailed and high frequency eddy current (HFEC) inspections for cracking of the skin in the area around the eight fasteners securing the STA 540 bulkhead chords between stringers S–22 and S–23; and do all applicable related investigative and corrective actions; in accordance with Parts 1, 2, 3, 4, and 5 of the Accomplishment Instructions of Boeing Special Attention Service Bulletin 737–53–1294, Revision 2, dated December 9, 2015, except as required by paragraphs (i)(3) and (i)(4) of this AD. Do all applicable related investigative and corrective actions before further flight. Repeat the detailed and HFEC inspections thereafter at the intervals specified in table 1 of paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 737–53–1294, Revision 2, dated December 9, 2015, until the optional preventive modification specified in paragraph (h) of this AD is done.
Accomplishing the preventive modification or repair, including an HFEC inspection for cracking of the skin and STA 540 bulkhead chords, and all applicable repairs, in accordance with paragraph 3.B, Part 2 or Part 4 (left side), and Part 3 or Part 5 (right side), of the Accomplishment Instructions of Boeing Special Attention Service Bulletin 737–53–1294, Revision 2, dated December 9, 2015, except as required by paragraph (i)(2) of this AD, terminates the inspection requirements of paragraph (g) of this AD for the side on which the modification is done.
(1) Where paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 737–53–1294, Revision 2, dated December 9, 2015, specifies a compliance time “after the Revision 2 date of this service bulletin,” this AD requires compliance within the specified compliance time after the effective date of this AD.
(2) For airplanes on which Boeing Business Jet Lower Cabin Altitude Supplemental Type Certificate (STC) ST01697SE (
(3) If any cracking is found during any inspection required by this AD, and Boeing Special Attention Service Bulletin 737–53–1294, Revision 2, dated December 9, 2015, specifies to contact Boeing for appropriate action: Before further flight, repair using a method approved in accordance with the procedures specified in paragraph (l) of this AD.
(4) The access and restoration instructions identified in the Accomplishment Instructions of Boeing Special Attention Service Bulletin 737–53–1294, Revision 2, dated December 9, 2015, are not required by this AD. Operators may perform those actions in accordance with approved maintenance procedures.
Table 2 of paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 737–53–1294, Revision 2, dated December 9, 2015, specifies post-modification airworthiness limitation inspections in compliance with 14 CFR 25.571(a)(3) at the modified locations, which support compliance with 14 CFR 121.1109(c)(2) or 129.109(b)(2). As airworthiness limitations, these inspections are required by maintenance and operational rules. It is therefore unnecessary to mandate them in this AD. Deviations from these inspections require FAA approval, but do not require an alternative method of compliance.
This paragraph provides credit for the actions required by paragraphs (g) and (h) of this AD, if those actions were performed before the effective date of this AD using Boeing Special Attention Service Bulletin 737–53–1294, dated March 31, 2011, which is not incorporated by reference in this AD; or Boeing Special Attention Service Bulletin 737–53–1294, Revision 1, dated June 14, 2013, which is incorporated by reference in AD 2013–19–04.
(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (m) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Seattle ACO, to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.
(4) AMOCs approved previously for the optional preventive modification installed in accordance with paragraph (h) of AD 2013–19–04, and AMOCs approved previously for repairs for AD 2013–19–04, are approved as AMOCs for the corresponding provisions of this AD, provided that such modification or repair included installation of the splice plate as specified in Boeing Special Attention Service Bulletin 737–53–1294, except as provided by paragraph (l)(5) of this AD.
(5) The time-limited repair approved as specified in FAA Letter 120S–15–140, dated June 3, 2015, is approved as an AMOC to the corresponding requirements of this AD.
(1) For more information about this AD, contact Alan Pohl, Aerospace Engineer, Airframe Branch, ANM–120S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue SW., Renton, WA 98057–3356; phone: 425–917–6450; fax: 425–917–6590; email:
(2) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H–65, Seattle, WA 98124–2207; telephone 206–544–5000, extension 1; fax 206–766–5680; Internet
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to supersede Airworthiness Directive (AD) 2006–20–11, which applies to certain The Boeing Company Model 757–200, –200CB, and –200PF series airplanes. AD 2006–20–11 currently requires initial and repetitive detailed or high frequency eddy current (HFEC) inspections for cracks around the rivets at the upper fastener row of the skin lap splice of the fuselage, and repairing any crack found. Since we issued AD 2006–20–11, an evaluation done by the design approval holder (DAH) indicated that the fuselage skin lap splice is subject to widespread fatigue damage (WFD). This proposed AD would no longer allow the detailed inspections and would instead require repetitive external HFEC inspections for cracking of the skin lap splices of the fuselage, and repair if necessary. We are proposing this AD to detect and correct fatigue cracking at certain skin lap splice locations of the fuselage, which could result in reduced structural integrity and rapid decompression of the airplane.
We must receive comments on this proposed AD by June 27, 2016.
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 NPRM, contact Boeing Commercial Airplanes, Attention: Data & Services Management, 3855 Lakewood Boulevard, MC D800–0019, Long Beach, CA 90846–0001; telephone: 206–544–5000, extension 2; fax: 206–766–5683; Internet
You may examine the AD docket on the Internet at
Eric Schrieber, Aerospace Engineer, Airframe Branch, ANM–120L, FAA, Los Angeles Aircraft Certification Office (ACO), 3960 Paramount Boulevard, Lakewood, CA 90712–4137; phone: 562–627–5348; fax: 562–627–5210; 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 September 22, 2006, we issued AD 2006–20–11, Amendment 39–14781 (71 FR 58485, October 4, 2006) (“AD 2006–20–11”), for certain The Boeing Company Model 757–200, –200CB, and –200PF series airplanes. AD 2006–20–11 requires initial and repetitive detailed or HFEC inspections for cracks around the rivets at the upper fastener row of the skin lap splice of the fuselage, and repairing any crack found. AD 2006–20–11 resulted from reports of cracking in the fuselage skin of the crown skin panel. We issued AD 2006–20–11 to detect and correct premature fatigue cracking at certain skin lap splice locations of the fuselage, and consequent rapid decompression of the airplane.
Structural fatigue damage is progressive. It begins as minute cracks, and those cracks grow under the action of repeated stresses. This can happen because of normal operational conditions and design attributes, or
The FAA's WFD final rule (75 FR 69746, November 15, 2010) became effective on January 14, 2011. The WFD rule requires certain actions to prevent structural failure due to WFD throughout the operational life of certain existing transport category airplanes and all of these airplanes that will be certificated in the future. For existing and future airplanes subject to the WFD rule, the rule requires that DAHs establish a limit of validity (LOV) of the engineering data that support the structural maintenance program. Operators affected by the WFD rule may not fly an airplane beyond its LOV, unless an extended LOV is approved.
The WFD rule (75 FR 69746, November 15, 2010) does not require identifying and developing maintenance actions if the DAHs can show that such actions are not necessary to prevent WFD before the airplane reaches the LOV. Many LOVs, however, do depend on accomplishment of future maintenance actions. As stated in the WFD rule, any maintenance actions necessary to reach the LOV will be mandated by airworthiness directives through separate rulemaking actions.
In the context of WFD, this action is necessary to enable DAHs to propose LOVs that allow operators the longest operational lives for their airplanes, and still ensure that WFD will not occur. This approach allows for an implementation strategy that provides flexibility to DAHs in determining the timing of service information development (with FAA approval), while providing operators with certainty regarding the LOV applicable to their airplanes.
We are proposing this AD to detect and correct fatigue cracking at certain skin lap splice locations of the fuselage, which could result in reduced structural integrity and rapid decompression of the airplane.
Since issuance of AD 2006–20–11, an evaluation done by the DAH indicated that the fuselage skin lap splice is subject to WFD.
We have determined that the detailed inspection that is allowed as an option in AD 2006–20–11, does not adequately address the identified unsafe condition. Only HFEC inspections are adequate to address the identified unsafe condition.
We reviewed Boeing Special Attention Service Bulletin 757–53–0090, Revision 1, dated November 19, 2015. The service information describes procedures for repetitive external HFEC inspections for cracking of the skin lap splices of the fuselage. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
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 accomplishing the actions specified in the service information described previously. For information on the procedures and compliance times, see this service information at
We estimate that this proposed AD affects 572 airplanes of U.S. registry.
We estimate the following costs to comply with this proposed AD:
We have received no definitive data that would enable us to provide a cost estimate for the on-condition repairs specified in this proposed AD.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We 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.
For the reasons discussed above, I certify that the proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, 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 June 27, 2016.
This AD replaces AD 2006–20–11, Amendment 39–14781 (71 FR 58485, October 4, 2006) (“AD 2006–20–11”). This AD affects AD 2006–11–11, Amendment 39–14615 (71 FR 30278, May 26, 2006) (“AD 2006–11–11”).
(c) This AD applies to The Boeing Company Model 757–200, –200CB, and –200PF series airplanes, certificated in any category, as identified in Boeing Special Attention Service Bulletin 757–53–0090, Revision 1, dated November 19, 2015.
Air Transport Association (ATA) of America Code 53, Fuselage.
This AD was prompted by an evaluation done by the design approval holder which indicated that the fuselage skin lap splice is subject to widespread fatigue damage. We are issuing this AD to detect and correct fatigue cracking at certain skin lap splice locations of the fuselage, which could result in reduced structural integrity and rapid decompression of the airplane.
Comply with this AD within the compliance times specified, unless already done.
This paragraph restates the requirements of paragraph (f) of AD 2006–20–11, with terminating action. Do initial and repetitive detailed or high frequency eddy current (HFEC) inspections for cracking around the rivets at the upper fastener row of the skin lap splice of the fuselage by doing all the actions in accordance with the Accomplishment Instructions of Boeing Special Attention Service Bulletin 757–53–0090, dated June 2, 2005, except as provided by paragraphs (h) and (i) of this AD. Do the inspections at the applicable times specified in Paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 757–53–0090, dated June 2, 2005; except where Boeing Special Attention Service Bulletin 757–53–0090, dated June 2, 2005, specifies a compliance time “after the original release date of this service bulletin,” this AD requires compliance after November 8, 2006 (the effective date of AD 2006–20–11). Accomplishing an inspection required by paragraph (j) of this AD terminates the inspections required by this paragraph.
This paragraph restates the requirements of paragraph (g) of AD 2006–20–11, with no changes. If any crack is found during any inspection required by paragraph (g) of this AD: Before further flight, repair the crack using a method approved in accordance with the procedures specified in paragraph (m) of this AD.
This paragraph restates the provision specified in paragraph (h) of AD 2006–20–11, with no changes. Although Boeing Special Attention Service Bulletin 757–53–0090, dated June 2, 2005, recommends that inspection results be reported to the manufacturer, this AD does not include that requirement.
At the applicable time specified in table 1 of paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 757–53–0090, Revision 1, dated November 19, 2015, except as provided by paragraph (l)(1) of this AD: Do an external high frequency eddy current (HFEC) inspection for cracking of the skin lap splices of the fuselage, in accordance with the Accomplishment Instructions of Boeing Special Attention Service Bulletin 757–53–0090, Revision 1, dated November 19, 2015. Repeat the inspection thereafter at the applicable times specified in table 1 of paragraph 1.E., “Compliance,” of Boeing Special Attention Service Bulletin 757–53–0090, Revision 1, dated November 19, 2015. Doing an inspection required by this paragraph terminates the inspections required by paragraph (g) of this AD.
If any cracking is found during any inspection required by paragraph (j) of this AD, repair before further flight using a method approved in accordance with the procedures specified in paragraph (m) of this AD.
(1) Where Boeing Special Attention Service Bulletin 757–53–0090, Revision 1, dated November 19, 2015, specifies a compliance time “after the Revision 1 date of this service bulletin,” this AD requires compliance within the specified compliance time after the effective date of this AD.
(2) Although Boeing Special Attention Service Bulletin 757–53–0090, Revision 1, dated November 19, 2015, specifies to contact Boeing for repair instructions, and specifies that action as “RC” (Required for Compliance), paragraph (k) of this AD requires repair before further flight using a method approved in accordance with the procedures specified in paragraph (m) of this AD.
(1) The Manager, Los Angeles Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (n)(1) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Los Angeles ACO, to make those findings. To be approved the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane and the approval must specifically refer to this AD.
(4) AMOCs approved for AD 2006–20–11, are approved as AMOCs for the corresponding provisions of paragraphs (g) and (j) of this AD.
(5) Except as required by paragraph (l)(2) of this AD: For service information that contains steps that are labeled as Required for Compliance (RC), the provisions of paragraphs (m)(5)(i) and (m)(5)(ii) apply.
(i) The steps labeled as RC, including substeps under an RC step and any figures
(ii) Steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.
(6) The inspections specified in paragraph (g) of this AD are approved as an AMOC to paragraph (h) of AD 2006–11–11 for the inspections of Significant Structural Items (SSI) 53–30–07 and 53–60–07 (fuselage lap splices, left and right upper fastener row) listed in the May 2003 or June 2005 revision of the Boeing 757 Maintenance Planning Data (MPD) Document D622N001–9. This AMOC applies only to the common areas identified in paragraphs (m)(6)(i) and (m)(6)(ii) of this AD. All provisions of AD 2006–11–11 that are not specifically referenced in the above statements remain fully applicable and must be complied with as specified in AD 2006–11–11. Operators may revise their FAA-approved maintenance or inspection program with these alternative inspections for common areas.
(i) Common areas inspected before the effective date of this AD in accordance with the Accomplishment Instructions of Boeing Special Attention Service Bulletin 757–53–0090, dated June 2, 2005.
(ii) Common areas inspected in accordance with the Accomplishment Instructions of Boeing Special Attention Service Bulletin 757–53–0090, Revision 1, dated November 19, 2015.
(1) For more information about this AD, contact Eric Schrieber, Aerospace Engineer, Airframe Branch, ANM–120L, FAA, Los Angeles Aircraft Certification Office (ACO), 3960 Paramount Boulevard, Lakewood, CA 90712–4137; phone: 562–627–5348; fax: 562–627–5210; email:
(2) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, 3855 Lakewood Boulevard, MC D800–0019, Long Beach, CA 90846–0001; telephone: 206–544–5000, extension 2; fax: 206–766–5683; Internet
Federal Aviation Administration (FAA), DOT.
Supplemental notice of proposed rulemaking (NPRM); reopening of comment period.
We are revising an earlier proposed airworthiness directive (AD) for certain ATR—GIE Avions de Transport Régional Model ATR42–500 and Model ATR72–212A airplanes. The NPRM proposed to require measuring the gap between the Type III Emergency Exit doors and certain overhead stowage compartment fittings; removing certain fittings from the overhead stowage compartments and measuring the gap between the Type III Emergency Exit doors and the overhead stowage compartment hooks, if necessary; and re-installing or repairing, as applicable, the Type III Emergency Exit doors. The NPRM was prompted by a report indicating that interference occurred between a Type III Emergency Exit door and the surrounding passenger cabin furnishing during a production check. This action revises the NPRM by adding new proposed requirements for modifying the overhead stowage compartments. We are proposing this supplemental NPRM (SNPRM) to prevent interference between a Type III Emergency Exit door and the overhead stowage compartment fitting installed on the rail; which could result in obstructed opening of a Type III Emergency Exit door during an emergency evacuation. Since these actions impose an additional burden over those proposed in the NPRM, we are reopening the comment period to allow the public the chance to comment on these proposed changes.
We must receive comments on this SNPRM by June 27, 2016.
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 SNPRM, contact ATR—GIE Avions de Transport Régional, 1, Allée Pierre Nadot, 31712 Blagnac Cedex, France; telephone +33 (0) 5 62 21 62 21; fax +33 (0) 5 62 21 67 18; email
You may examine the AD docket on the Internet at
Tom Rodriguez, Aerospace Engineer, International Branch, ANM–116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057–3356; telephone 425–227–1137; fax: 425–227–1149.
We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain ATR—GIE Avions de Transport Régional Model ATR42–500 and Model ATR72–212A airplanes. The NPRM published in the
Since we issued the NPRM, we have determined that, in order to address the identified unsafe condition, additional requirements are needed for modifying the overhead stowage compartments (including removing the hooks and fittings from the lateral rails) and re-identifying the overhead stowage compartments with new part numbers. The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2015–0018, dated February 5, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition on certain ATR—GIE Avions de Transport Régional Model ATR42–500 and Model ATR72–212A airplanes. The MCAI states:
Interference between a Type III Emergency Exit door opening and surrounding passenger cabin furnishing was detected during a production check.
Subsequent investigation identified an insufficient gap between the emergency exit door internal skin structure and the overhead stowage compartment fitting, installed on the rail, as a cause of the interference.
This condition, if not detected and corrected, could prevent an unobstructed opening of both Type III Emergency Exit doors in case of emergency evacuation.
Prompted by this finding, EASA issued AD 2013–0280 [
Since that [EASA] AD was issued, ATR developed a design solution to ensure that no interference with surrounding structure occurs during opening of an emergency exit. ATR Service Bulletins (SB) ATR42–25–0185, SB ATR42–25–0186, SB ATR72–25–1148 and SB ATR72–25–1149 were issued to provide the necessary modification instructions for in-service aeroplanes.
For the reason described above, this [EASA] AD retains the requirements of EASA AD 2013–0280, which is superseded, and requires modification of the overhead bin attachment adjacent to the Type III emergency exit doors [The modification includes removing the hooks and fittings from the lateral rails and re-identifying the overhead stowage compartments].
Avions de Transport Régional Service has issued the following service information:
• ATR Service Bulletin ATR42 25–0180, dated August 19, 2013, which describes procedures for, among other things, removing certain fittings from the overhead stowage compartments, measuring the gap between the Type III Emergency Exit doors and the overhead stowage compartment hooks, re-installing the Type III Emergency Exit doors, and repair.
• ATR Service Bulletin ATR72 25–1141, dated August 19, 2013, which describes procedures for, among other things, removing certain fittings from the overhead stowage compartments, measuring the gap between the Type III Emergency Exit doors and the overhead stowage compartment hooks, and re-installing the Type III Emergency Exit doors.
• ATR Service Bulletin ATR42–25–0185, dated November 21, 2014, which describes procedures for modifying the overhead stowage compartments.
• ATR Service Bulletin ATR42–25–0186, dated November 21, 2014, which describes procedures for modifying the overhead stowage compartments.
• ATR Service Bulletin ATR72–25–1148, dated November 21, 2014, which describes procedures for modifying the overhead stowage compartments.
• ATR Service Bulletin ATR72–25–1149, dated November 21, 2014, which describes procedures for modifying the overhead stowage compartments.
This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We gave the public the opportunity to participate in developing this proposed AD. We received no comments on the NPRM or on the determination of the cost to the public.
This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of these same type designs.
Certain changes described above expand the scope of the NPRM. As a result, we have determined that it is necessary to reopen the comment period to provide additional opportunity for the public to comment on this SNPRM.
We estimate that this SNPRM affects 4 airplanes of U.S. registry.
We also estimate that it would take about 4 work-hours per product to comply with the new basic requirements of this SNPRM. The average labor rate is $85 per work-hour. Required parts would cost about $0 per product. Based on these figures, we estimate the cost of this SNPRM on U.S. operators to be $1,360, or $340, or per product.
In addition, we estimate that any necessary follow-on actions would take about 1 work-hour for a cost of $85 per product. We have no way of determining the number of aircraft that might need these actions.
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
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
3. Will not affect intrastate aviation in Alaska; and
4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, 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 June 27, 2016.
None.
This AD applies to the airplanes, certificated in any category, identified in paragraphs (c)(1) and (c)(2) of this AD.
(1) ATR—GIE Avions de Transport Régional Model ATR42–500 airplanes, all manufacturer serial numbers (MSNs) on which ATR Modification 6518 has been embodied in production, except those airplanes on which ATR Modification 7294 has been embodied in production.
(2) ATR—GIE Avions de Transport Régional Model ATR72–212A airplanes on which ATR Modification 6517 has been embodied in production, except those airplanes on which ATR Modification 7294 has been embodied in production.
Air Transport Association (ATA) of America Code 25, Equipment/furnishings.
This AD was prompted by a report indicating that interference occurred between a Type III Emergency Exit door and the surrounding passenger cabin furnishing during a production check. We are issuing this AD to prevent interference between a Type III Emergency Exit door and the overhead stowage compartment fitting installed on the rail; which could result in obstructed opening of a Type III Emergency Exit door during an emergency evacuation.
Comply with this AD within the compliance times specified, unless already done.
For all airplanes, except those airplanes on which ATR Modification 7152 has been embodied in production and except airplanes having MSN 1002, 1005, 1089, 1094, 1095, 1097, 1098, 1099, 1100, 1101, or 1102: Within 2 months after the effective date of this AD, measure the gap between each Type III Emergency Exit door, left hand (LH) and right hand (RH), and the overhead stowage compartment fitting installed on the rail, by unlocking and slightly rotating the LH and RH Type III Emergency Exit doors with the doors remaining on the lower fittings. Use a shim gauge 6 millimeters (mm) (0.236 inch) thick, to measure the gap between the internal skin of the doors and the relevant fittings, part number (P/N) S2522924620000 (LH fitting) and P/N S2522924620100 (RH fitting).
During the measurement required by paragraph (g) of this AD, if it is determined that there is a gap equal to or greater than 6 mm (0.236 inch): Before further flight, re-install the LH and RH Type III Emergency Exit Doors, in accordance with paragraph 3.C.(1)(d) of the Accomplishment Instructions of ATR Service Bulletin ATR42–25–0180, dated August 19, 2013; or ATR Service Bulletin ATR72–25–1141, dated August 19, 2013; as applicable.
During the measurement required by paragraph (g) of this AD, if it is determined that there is a gap less than 6 mm (0.236 inch): Before further flight, remove the fitting P/N S2522924620000 (LH fitting) or P/N S2522924620100 (RH fitting), and measure the gap between the internal skin of the LH and RH Type III Emergency Exit Doors and the overhead stowage compartment hooks, in accordance with the Accomplishment Instructions of ATR Service Bulletin ATR42–25–0180, dated August 19, 2013; or ATR72–25–1141, dated August 19, 2013; as applicable.
(1) If, during the measurement required by paragraph (i) of this AD, it is determined that there is a gap equal to or greater than 6 mm (0.236 inch): Before further flight, re-install the LH and RH Type III Emergency Exit Doors, in accordance with the Accomplishment Instructions of ATR Service Bulletin ATR42–25–0180, dated August 19, 2013; or ATR72–25–1141, dated August 19, 2013; as applicable.
(2) If, during the measurement required by paragraph (i) of this AD, it is determined that there is a gap less than 6 mm (0.236 inch): Before further flight, repair using a method approved by the Manager, International Branch, ANM–116, Transport Airplane Directorate, FAA; or the European Aviation Safety Agency (EASA); or ATR—GIE Avions de Transport Régional's EASA Design Organization Approval (DOA).
Within 4 months after the effective date of this AD: Modify the overhead stowage compartments, in accordance with the Accomplishment Instructions of the applicable service information identified in paragraphs (j)(1) through (j)(4) of this AD.
(1) For airplanes identified in ATR Service Bulletin ATR42–25–0185, dated November 21, 2014: ATR Service Bulletin ATR42–25–0185, dated November 21, 2014.
(2) For airplanes identified in ATR Service Bulletin ATR42–25–0186, dated November 21, 2014: ATR Service Bulletin ATR42–25–0186, dated November 21, 2014.
(3) For airplanes identified in ATR Service Bulletin ATR72–25–1148, dated November 21, 2014: ATR Service Bulletin ATR72–25–1148, dated November 21, 2014.
(4) For airplanes identified in ATR Service Bulletin ATR72–25–1149, dated November 21, 2014: ATR Service Bulletin ATR72–25–1149, dated November 21, 2014.
The following provisions also apply to this AD:
(1)
(2)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA Airworthiness Directive 2015–0018, dated February 5, 2015, for related information. This MCAI may be found in the AD docket on the Internet at
(2) For service information identified in this AD, contact ATR—GIE Avions de Transport Régional, 1, Allée Pierre Nadot, 31712 Blagnac Cedex, France; telephone +33 (0) 5 62 21 62 21; fax +33 (0) 5 62 21 67 18; email
Department of Defense (DoD), General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA).
Proposed rule.
DoD, GSA, and NASA are proposing to amend the Federal Acquisition Regulation (FAR) to revise the estimated administrative cost to award and administer a contract, for the purpose of evaluating bids for multiple awards.
Interested parties should submit written comments to the Regulatory Secretariat Division at one of the addresses shown below on or before July 11, 2016 to be considered in the formation of the final rule.
Submit comments in response to FAR case 2016–003 by any of the following methods:
•
•
Mr. Michael O. Jackson, Procurement Analyst, at 202–208–4949 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202–501–4755. Please cite FAR Case 2016–003.
DoD, GSA, and NASA are proposing to revise the provision of the FAR that addresses the Government's cost to award and administer a contract, for the purpose of evaluating bids for multiple awards. The FAR provision at 52.214–22, Evaluation of Bids for Multiple Awards, which was issued in March 1990, reflects that $500 is the administrative cost to the Government for issuing and administering contracts. Based on inflation factors and escalating annual Consumer Price Index (CPI) data available, an upward adjustment of $500 in the provision to $1,000 is a realistic reflection of the actual cost to the Government. We used the CPI calculator at the following web address,
Amendments to FAR subparts 14.2 and 52.2 are proposed by this rulemaking. A monetary adjustment is proposed for FAR 14.201–8, Price Related Factors, and clause 52.214–22, Evaluation of Bids for Multiple Awards. The adjustment from $500 to $1,000 is to reflect a realistic estimate of the cost to the Government to issue and administer a contract.
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This proposed rule is not a major rule under 5 U.S.C. 804.
DoD, GSA, and NASA do not expect this proposed rule to have a significant
FAR 14.201–8 and 52.214–22, Evaluation of Bids for Multiple Awards, reflect that $500 is the administrative cost to the Government for issuing and administering contracts. The rule is necessary to reestablish a more realistic estimate of the cost to award and administer a contract, for the purpose of evaluating bids for multiple awards. The current cost to award and administer a contract has not changed since 1990.
The objective of this rule is to revise FAR 14.201–8 and 52.214–22, Evaluation of Bids for Multiple Awards, to include an inflation adjustment based on Consumer Price Index (CPI),
According to the Federal Procurement Data System, in Fiscal Year 2015, the Federal Government made approximately 2,019 definitive contract awards to small businesses using sealed bidding procedures and 103 indefinite-delivery contract awards to small businesses using sealed bidding procedures, 12 of which were multiple awards.
DoD, GSA, and NASA do not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601,
There will be no burden on small businesses because this rule change does not place any new requirement on small entities.
The Regulatory Secretariat Division has submitted a copy of the IRFA to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the IRFA may be obtained from the Regulatory Secretariat Division. DoD, GSA, and NASA invite comments from small business concerns and other interested parties on the expected impact of this rule on small entities.
DoD, GSA, and NASA will also consider comments from small entities concerning the existing regulations in subparts affected by the rule consistent with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (FAR Case 2016–003), in correspondence.
This proposed rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).
Government procurement.
Therefore, DoD, GSA, and NASA are proposing to amend 48 CFR parts 14 and 52, as set forth below:
40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.
The revision reads as follows.
The factors set forth in paragraphs (a) through (e) of this section may be applicable in evaluation of bids for award and shall be included in the solicitation when applicable (see 14.201–5(c)):
The revision reads as follows:
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Department of Commerce.
90-day petition finding, request for information.
We, NMFS, announce a 90-day finding on a petition to list the Taiwanese humpback dolphin (
Information and comments on the subject action must be received by July 11, 2016.
You may submit comments, information, or data on this document, identified by the code
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•
Copies of the petition and related materials are available on our Web site at
Chelsey Young, Office of Protected Resources, 301–427–8403.
On March 9, 2016, we received a petition from the Animal Welfare Institute, Center for Biological Diversity and WildEarth Guardians to list the Taiwanese humpback dolphin (
Section 4(b)(3)(A) of the ESA of 1973, as amended (16 U.S.C. 1531
Under the ESA, a listing determination may address a species, which is defined to also include subspecies and, for any vertebrate species, any DPS that interbreeds when mature (16 U.S.C. 1532(16)). A joint NMFS–U.S. Fish and Wildlife Service (USFWS) (jointly, “the Services”) policy clarifies the agencies' interpretation of the phrase “distinct population segment” for the purposes of listing, delisting, and reclassifying a species under the ESA (61 FR 4722; February 7, 1996). A species, subspecies, or DPS is “endangered” if it is in danger of extinction throughout all or a significant portion of its range, and “threatened” if it is likely to become endangered within the foreseeable future throughout all or a significant portion of its range (ESA sections 3(6) and 3(20), respectively, 16 U.S.C. 1532(6) and (20)). Pursuant to the ESA and our implementing regulations, we determine whether a species is threatened or endangered based on any of the following five section 4(a)(1) factors: The present or threatened destruction, modification, or curtailment of its habitat or range; overutilization for commercial, recreational, scientific, or educational purposes; disease or predation; the inadequacy of existing regulatory mechanisms; and any other natural or manmade factors affecting the species' continued existence (16 U.S.C. 1533(a)(1), 50 CFR 424.11(c)).
ESA implementing regulations issued jointly by NMFS and USFWS (50 CFR 424.14(b)) define “substantial information” in the context of reviewing a petition to list, delist, or reclassify a species as the amount of information that would lead a reasonable person to believe that the measure proposed in the petition may be warranted. In evaluating whether substantial information is contained in a petition, the Secretary must consider whether the petition: (1) Clearly indicates the administrative measure recommended and gives the scientific and any common name of the species involved; (2) contains detailed narrative justification for the recommended measure, describing, based on available information, past and present numbers and distribution of the species involved and any threats faced by the species; (3) provides information regarding the status of the species over all or a significant portion of its range; and (4) is accompanied by appropriate supporting documentation in the form of bibliographic references, reprints of pertinent publications, copies of reports or letters from authorities, and maps (50 CFR 424.14(b)(2)).
At the 90-day finding stage, we evaluate the petitioners' request based upon the information in the petition including its references and the information readily available in our files. We do not conduct additional research, and we do not solicit information from parties outside the agency to help us in evaluating the petition. We will accept the petitioners' sources and characterizations of the information presented if they appear to be based on accepted scientific principles, unless we have specific information in our files that indicates the petition's information is incorrect, unreliable, obsolete, or otherwise irrelevant to the requested action. Information that is susceptible to more than one interpretation or that is contradicted by other available information will not be dismissed at the 90-day finding stage, so long as it is reliable and a reasonable person would conclude it supports the petitioners' assertions. In other words, conclusive information indicating the species may meet the ESA's requirements for listing is not required to make a positive 90-day finding. We will not conclude that a lack of specific information alone negates a positive 90-day finding if a reasonable person would conclude that the unknown information itself suggests an extinction risk of concern for the species at issue.
To make a 90-day finding on a petition to list a species, we evaluate whether the petition presents substantial scientific or commercial information indicating the subject species may be either threatened or endangered, as defined by the ESA. First, we evaluate whether the information presented in the petition, along with the information readily available in our files, indicates that the petitioned entity constitutes a “species” eligible for listing under the ESA. Next, we evaluate whether the information
Information presented on impacts or threats should be specific to the species and should reasonably suggest that one or more of these factors may be operative threats that act or have acted on the species to the point that it may warrant protection under the ESA. Broad statements about generalized threats to the species, or identification of factors that could negatively impact a species, do not constitute substantial information indicating that listing may be warranted. We look for information indicating that not only is the particular species exposed to a factor, but that the species may be responding in a negative fashion; then we assess the potential significance of that negative response.
Many petitions identify risk classifications made by nongovernmental organizations, such as the International Union on the Conservation of Nature (IUCN), the American Fisheries Society, or NatureServe, as evidence of extinction risk for a species. Risk classifications by other organizations or made under other Federal or state statutes may be informative, but such classification alone may not provide the rationale for a positive 90-day finding under the ESA. For example, as explained by NatureServe, their assessments of a species' conservation status do “not constitute a recommendation by NatureServe for listing under the U.S. Endangered Species Act” because NatureServe assessments “have different criteria, evidence requirements, purposes and taxonomic coverage than government lists of endangered and threatened species, and therefore these two types of lists should not be expected to coincide” (
The petitioned population of dolphin (
In general, the Indo-Pacific humpback dolphin is medium-sized, with lengths up to 2.8 m, and weighs approximately 250–280 kg (Ross
The petition identifies the Taiwanese humpback dolphin (
While pigmentation of the Taiwanese population is significantly different from other populations within the taxon
The Taiwanese humpback dolphin has an extremely small, restricted range, and is distributed throughout only 512 square km of coastal waters off western Taiwan, from estuarine waters of the Houlong and Jhonggang rivers in the north, to waters of Waishanding Jhou to the South (about 170 km linear distance), with the main concentration of the population between the Tongsaio River estuary and Taisi, which encompasses the estuaries of the Dadu and Jhushuei rivers, the two largest river systems in western Taiwan (Wang
The Taiwanese humpback dolphin is thought to be geographically isolated from mainland Chinese populations, with water depth being the primary factor dictating their separation. The Taiwan Strait is 140–200 km wide, and consists of large expanses of water 50–70 m deep (the Wuchi and Kuanyin depressions). Despite extensive surveys, Taiwanese humpback dolphins have never been observed in water deeper than 25–30 meters, and thus deep water is thought to be the specific barrier limiting exchange with Chinese mainland populations (Jefferson and Karczmarski, 2001). The species as a whole experiences limited mobility and its restriction to shallow, near-shore estuarine habitats is a significant barrier to movement (Karczmarski
Little is known about the life history and reproduction of the Indo-Pacific humpback dolphin as a species, let alone the Taiwanese humpback dolphin as a subspecies. In some cases, comparison of the Taiwanese humpback dolphin with other populations may be appropriate, but one needs to be cautious about making these comparisons, as environmental factors such as food availability and habitat status may affect important rates of reproduction and generation time in different populations. A recent analysis of life history patterns for individuals in the Pearl River Estuary (PRE) population of mainland China may offer an appropriate proxy for understanding life history of the Taiwanese humpback dolphin population. Life history traits of the PRE population are similar to those of the South African population, suggesting that some general assumptions of productivity can be gathered, even on the genus-level (Jefferson and Karczmarski, 2001; Jefferson
The petition contains information on the Taiwanese humpback dolphin, including its taxonomy, description, geographic distribution, habitat, population status and trends, and factors contributing to the species' decline. According to the petition, all five causal factors in section 4(a)(1) of the ESA are adversely affecting the continued existence of the Taiwanese humpback dolphin: (A) The present or threatened destruction, modification, or curtailment of its habitat or range; (B) overutilization for commercial, recreational, scientific, or educational purposes; (C) disease or predation; (D) inadequacy of existing regulatory mechanisms; and (E) other natural or manmade factors.
In the following sections, we summarize and evaluate the information presented in the petition and in our files on the status of
There have been two formal estimates of abundance for the Taiwanese humpback dolphin. The first is based on surveys conducted between 2002 and 2004 using line transects to track and count animals, which resulted in an estimated population size of 99 individuals (coefficient of variation (CV) = 52 percent, 95 percent confidence interval = 37–266) (Wang
Given the extremely small and isolated nature of the population, even a small number of mortalities could potentially have significant negative population-level effects. For the Taiwanese humpback dolphin, Wang
While the petition presents information on each of the ESA section 4(a)(1) factors, we find that the information presented, including information within our files, regarding habitat destruction and overutilization of the species as a result of fisheries interactions is substantial enough to make a determination that a reasonable person would conclude that this species may warrant listing as endangered or threatened based on these two factors alone. As such, we focus our discussion below on the evidence of habitat destruction and overutilization of the species, and present our evaluation of the information regarding these factors and their impact on the extinction risk of the Taiwanese humpback dolphin. The remaining factors discussed in the petition will be thoroughly evaluated in a comprehensive status review of the species.
The Taiwanese humpback dolphin habitat best compares with that of populations located off the coast of mainland China. Taiwanese humpback dolphins are thought to be restricted to water <30 m deep, and most observed sightings have occurred in estuarine habitat with significant freshwater input (Wang
The petition states that the Taiwanese humpback dolphin is threatened by habitat destruction and modification and lists multiple causes, including reduction of freshwater outflows to estuaries, seabed reclamation, coastal development, and pollution (including chemical, biological, and noise pollution). Information in our files indicates that much of the preferred habitat of the Taiwanese humpback dolphin has been altered or may become altered. The near-shore marine and estuarine environment in Taiwan is intensively used by humans for fishing, sand extraction, land reclamation, transportation, and recreation, and is a recipient of massive quantities of effluent and runoff (Wang
In terms of pollution, we do have some information in our files indicating that these dolphins are exposed to toxic PCBs and are likely negatively affected through ingestion of contaminated prey. The Taiwanese humpback dolphin's exposure to land-based pollution and other threats is relatively high all along the central western coast of Taiwan, because these dolphins are thought to inhabit only a narrow strip of coastal habitat. Further, these dolphins have not been observed in waters deeper than 25–30 m and are typically sighted in waters 15 m deep and within 3 km from shore (Reeves
Overall, while we have insufficient information to evaluate some of the claims in the petition, we do have sufficient information to indicate that pollution is likely having a negative impact on the status of the Taiwanese humpback dolphin. Thus, we conclude that the information in the petition and in our files presents substantial
Information from the petition and in our files suggests that the primary threat to the Taiwanese humpback dolphin is overutilization as a result of commercial fisheries interactions and bycatch-related mortality. Bycatch poses a significant threat to small cetaceans in general, where entanglement in fishing gear results in widespread injury and mortality (Read
In addition to direct mortality as a result of entanglement in fisheries gear, indirect effects of fishing activities may also be negatively impacting the Taiwanese humpback dolphin. Indirect effects of fishing include: Depletion of prey resources, pollution, noise disturbance, altered behavioral responses to prey aggregation in fishing gear, and potential changes to social structure arising from the deaths of individuals caused by fisheries activity. In fact, individual Taiwanese humpback dolphins have shown evidence of disturbance from all of these effects (Slooten
While the petition provides insufficient evidence to quantify the impact of fishing activities on the population of Taiwanese humpback dolphin, the annual removal of even a few individuals from such a small population due to fisheries interactions can disproportionally reduce population viability and could eventually lead to the extinction of the subspecies (Ross
While the petition identifies numerous other threats to the species, including diseases, the inadequacy of existing regulatory mechanisms, and other natural or manmade factors (
After reviewing the information contained in the petition, as well as information readily available in our files, and based on the above analysis, we conclude the petition presents substantial scientific information indicating the petitioned action of listing the Taiwanese humpback dolphin (
To ensure that the status review is based on the best available scientific and commercial data, we are soliciting
A complete list of references is available upon request to the Office of Protected Resources (see
The authority for this action is the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
Research, Education, and Economics, USDA.
Notice of meeting.
In accordance with the Federal Advisory Committee Act, 5 U.S.C. App 2, Section 1408 of the
The National Agricultural Research, Extension, Education, and Economics Advisory Board will meet from 8:30 a.m. until 5:00 p.m. EDT on May 23, 2016, and May 24, 2016.
The meeting will be held at the Grand Hyatt Washington, 1000 H Street NW., Washington, DC. Written comments from the public may be sent to: The National Agricultural Research, Extension, Education, and Economics Advisory Board Office, Room 332A, Whitten Building, United States Department of Agriculture, STOP 0321, 1400 Independence Avenue SW., Washington, DC 20250–0321.
Michele Esch, Executive Director, or Shirley Morgan-Jordan, Program Support Coordinator, National Agricultural Research, Extension, Education, and Economics Advisory Board; telephone: (202) 720–3684; fax: (202) 720–6199; or email:
• Discussion and deliberation on the draft report of recommendations on the mandatory annual relevance and adequacy review of the food safety and human nutrition programs and activities of the Research, Education, and Economics mission area and to establish the relevance and adequacy committee for the 2017 review on responding to climate and energy needs.
• Discussion on establishing national priorities and on reviewing the mechanism for technology assessment in USDA.
• Updates on the activities of the Research, Education, and Economics mission area.
• Updates from the permanent subcommittees and working groups of the NAREEE Advisory Board, including the presentation and deliberation of the letter of
Animal and Plant Health Inspection Service, USDA.
Notice of availability.
We are advising the public that the Animal and Plant Health Inspection Service has prepared an environmental assessment concerning authorization to ship for the purpose of field testing, and then to field test, an unlicensed Infectious Laryngotracheitis-Marek's Disease-Newcastle Disease Vaccine, Serotype 3, Live Marek's Disease Vector. Based on the environmental assessment, risk analysis and other relevant data, we have reached a preliminary determination that field testing this veterinary vaccine will not have a significant impact on the quality of the human environment. We are making the documents available to the public for review and comment.
We will consider all comments that we receive on or before June 13, 2016.
You may submit comments by either of the following methods:
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•
Supporting documents and any comments we receive on this docket may be viewed at
Dr. Donna Malloy, Operational Support Section, Center for Veterinary Biologics, Policy, Evaluation, and Licensing, VS, APHIS, 4700 River Road Unit 148, Riverdale, MD 20737–1231; phone (301) 851–3426, fax (301) 734–4314.
For information regarding the environmental assessment or the risk analysis, or to request a copy of the environmental assessment (as well as the risk analysis with confidential business information removed), contact Dr. Patricia L. Foley, Risk Manager, Center for Veterinary Biologics, Policy, Evaluation, and Licensing, VS, APHIS, 1920 Dayton Avenue, P.O. Box 844, Ames, IA 50010; phone (515) 337–6100, fax (515) 337–6120.
Under the Virus-Serum-Toxin Act (21 U.S.C. 151
APHIS issues licenses to qualified establishments that produce veterinary biological products and issues permits to importers of such products. APHIS also enforces requirements concerning production, packaging, labeling, and shipping of these products and sets standards for the testing of these products. Regulations concerning veterinary biological products are contained in 9 CFR parts 101 to 124.
A field test is generally necessary to satisfy prelicensing requirements for veterinary biological products. Prior to conducting a field test on an unlicensed product, an applicant must obtain approval from APHIS, as well as obtain APHIS' authorization to ship the product for field testing.
To determine whether to authorize shipment and grant approval for the field testing of the unlicensed product referenced in this notice, APHIS considers the potential effects of this product on the safety of animals, public health, and the environment. Based upon a risk analysis provided by the requester and other relevant data, APHIS has prepared an environmental assessment (EA) concerning the field testing of the following unlicensed veterinary biological product:
The above-mentioned product is a live Marek's Disease serotype 3 vaccine virus containing a gene from the Newcastle disease virus and two genes from the infectious laryngotracheitis virus. The attenuated vaccine is intended for use in healthy 18-day-old or older embryonated eggs or day-old chickens, as an aid in the prevention of infectious laryngotracheitis, Marek's disease, and Newcastle disease.
The EA has been prepared in accordance with: (1) The National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321
We are publishing this notice to inform the public that we will accept written comments regarding the EA from interested or affected persons for a period of 30 days from the date of this notice. Unless substantial issues with adverse environmental impacts are raised in response to this notice, APHIS intends to issue a finding of no significant impact (FONSI) based on the EA and authorize shipment of the above product for the initiation of field tests following the close of the comment period for this notice.
Because the issues raised by field testing and by issuance of a license are identical, APHIS has concluded that the EA that is generated for field testing would also be applicable to the proposed licensing action. Provided that the field test data support the conclusions of the original EA and the issuance of a FONSI, APHIS does not intend to issue a separate EA and FONSI to support the issuance of the product license, and would determine that an environmental impact statement need not be prepared. APHIS intends to issue a veterinary biological product license for this vaccine following completion of the field test provided no adverse impacts on the human environment are identified and provided the product meets all other requirements for licensing.
21 U.S.C. 151–159.
Animal and Plant Health Inspection Service, USDA.
Notice of availability.
We are advising the public that the Animal and Plant Health Inspection Service has prepared an environmental assessment concerning authorization to import under permit, for distribution and sale for emergency use, a Classical Swine Fever Virus Vaccine, Live Pestivirus Vector. The environmental assessment, which is based on a risk analysis prepared to assess the risks associated with the use of this vaccine, examines the potential effects that this veterinary vaccine could have on the quality of the human environment. Based on the risk analysis and other relevant data, we have reached a preliminary determination that use of this veterinary vaccine will not have a significant impact on the quality of the human environment, and that an environmental impact statement need not be prepared. We intend to authorize shipment of this vaccine under permit for distribution and sale for emergency use in the United States following the close of the comment period for this notice unless new
We will consider all comments that we receive on or before June 13, 2016.
You may submit comments by either of the following methods:
•
•
Supporting documents and any comments we receive on this docket may be viewed at
Dr. Donna Malloy, Operational Support Section, Center for Veterinary Biologics, Policy, Evaluation, and Licensing, VS, APHIS, 4700 River Road Unit 148, Riverdale, MD 20737–1231; phone (301) 851–3426, fax (301) 734–4314.
For information regarding the environmental assessment or the risk analysis, or to request a copy of the environmental assessment (as well as the risk analysis with confidential business information removed), contact Dr. Patricia L. Foley, Risk Manager, Center for Veterinary Biologics, Policy, Evaluation, and Licensing, VS, APHIS, 1920 Dayton Avenue, P.O. Box 844, Ames, IA 50010; phone (515) 337–6100, fax (515) 337–6120.
Under the Virus-Serum-Toxin Act (21 U.S.C. 151
APHIS issues licenses to qualified establishments that produce veterinary biological products and issues permits to importers of such products. APHIS also enforces requirements concerning production, packaging, labeling, and shipping of these products and sets standards for the testing of these products. Regulations concerning veterinary biological products are contained in 9 CFR parts 101 to 124.
Veterinary biological products meeting the requirements of the regulations may be considered for addition to the U.S. National Veterinary Stockpile (NVS). The NVS is the nation's repository of vaccines and other critical veterinary supplies and equipment. It exists to augment State and local resources in responding to high-consequence livestock diseases that could potentially devastate U.S. agriculture, seriously affect the economy, and threaten public health. The NVS vaccines would be used in APHIS programs or under U.S. Department of Agriculture control or supervision. The manufacturer of Classical Swine Fever Virus Vaccine, Live Pestivirus Vector, has been awarded a contract to supply the vaccine to the NVS for emergency use in the United States. The addition of this vaccine to the stockpile would not preclude private development and use of other vaccines meeting the requirements of the Virus-Serum-Toxin Act.
To determine whether to authorize shipment and grant approval for the use of the imported product referenced in this notice, APHIS has considered the potential effects of this product on the safety of animals, public health, and the environment. Using a risk analysis and other relevant data, APHIS has prepared an environmental assessment (EA) concerning the safety testing of the following unlicensed veterinary biological product:
The above-mentioned product is a single-dose 1-mL modified live product for emergency vaccination in an outbreak situation. The proposed indication is intramuscular administration to healthy swine 6 weeks of age or older as an aid in preventing mortality and viremia caused by classical swine fever virus.
The EA has been prepared in accordance with: (1) The National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321
Unless substantial issues with adverse environmental impacts are raised in response to this notice, APHIS intends to issue a finding of no significant impact based on the EA and authorize the importation under permit of the above product for distribution and sale for emergency use following the close of the comment period for this notice, provided the product meets all other requirements for approval.
21 U.S.C. 151–159.
Animal and Plant Health Inspection Service, USDA.
Notice of availability.
We are notifying the public that we have prepared an evaluation of the State of Chihuahua, excluding the municipalities of Guadalupe y Calvo and Morelos, for fever ticks. The evaluation concludes that this region is free from fever ticks, and that ruminants imported from the area pose a low risk of exposing ruminants within the United States to fever ticks. We are making the evaluation available for review and comment.
We will consider all comments that we receive on or before July 11, 2016.
You may submit comments by either of the following methods:
•
•
Supporting documents and any comments we receive on this docket may be viewed at
Dr. Betzaida Lopez, Senior Staff Veterinarian, National Import Export Services, VS, APHIS, 4700 River Road Unit 39, Riverdale, MD 20737; (301) 851–3300.
The regulations in 9 CFR part 93 prohibit or restrict the importation of certain animals, birds, and poultry into the United States to prevent the introduction of communicable diseases of livestock and poultry. Subpart D of part 93 (§§ 93.400 through 93.436, referred to below as the regulations) governs the importation of ruminants; within the regulations, §§ 93.424 through 93.429 specifically address the importation of various ruminants from Mexico into the United States.
The regulations in paragraph (b)(1) of § 93.427 contain conditions for the importation of ruminants from regions of Mexico that we consider free from fever ticks (
Mexico has asked the Animal and Plant Health Inspection Service to recognize the State of Chihuahua, except the municipalties of Guadalupe y Calvo and Morelos, as a region free from fever ticks. In response to this request, we have prepared an evaluation of the fever tick status of this region. The evaluation concludes that the State of Chihuahua, excluding the municipalities of Guadalupe y Calvo and Morelos, is free from fever ticks, and that ruminants imported from the region pose a low risk of exposing ruminants within the United States to fever ticks.
We are making the evaluation available for public review and comment. The assessment is available on the Regulations.gov Web site (see
7 U.S.C. 1622 and 8301–8317; 21 U.S.C. 136 and 136a; 31 U.S.C. 9701; 7 CFR 2.22, 2.80, and 371.4.
Forest Service, USDA.
Call for Nominations.
The United States Department of Agriculture (USDA) is seeking nominations for the Secure Rural Schools Resource Advisory Committees (SRS RACs) pursuant the Secure Rural Schools and Community Self-Determination Act (Pub. L. 110–343) (the Act) and the Federal Advisory Committee Act (FACA) (5 U.S.C., App. 2). Additional information on the SRS RACs can be found by visiting SRS RACs Web site at:
Written nominations must be received by June 27, 2016. Nominations must contain a completed application packet that includes the nominee's name, resume, and completed Form AD–755 (Advisory Committee or Research and Promotion Background Information). The package must be sent to the address below.
See
David Bergendorf, Senior Program Specialist, Forest Service Secure Rural Schools Program, by telephone at (202) 205–1468, or by email at
In accordance with the provisions of FACA, the Secretary of Agriculture is seeking nominations for the purpose of improving collaborative relationships among people who use and care for National Forests and provide advice and recommendations to the Forest Service concerning projects and funding consistent with Title II of the Act. The duties of SRS RACs include monitoring projects, advising the Secretary on the progress and results of monitoring efforts, and making recommendations to the Forest Service for any appropriate changes or adjustments to the projects being monitored by the SRS RACs.
The SRS RACs will be comprised of 15 members approved by the Secretary of Agriculture. SRS RACs membership will be fairly balanced in terms of the points of view represented and functions to be performed. The SRS RACs members will serve 4-year terms. The SRS RACs shall include representation from the following interest areas:
(1) Five persons that—
(a) represent organized labor or non-timber forest product harvester groups;
(b) represent developed outdoor recreation, off-highway vehicle users, or commercial recreation activities;
(c) represent energy and mineral development, or commercial or recreational fishing interests;
(d) represent the commercial timber industry; or
(e) hold Federal grazing or other land use permits, or represent nonindustrial private forest land owners, within the area for which the committee is organized.
(2) Five persons that represent—
(a) nationally recognized environmental organizations;
(b) regionally or locally recognized environmental organizations;
(c) dispersed recreational activities;
(d) archaeological and historical interests; or
(e) nationally or regionally recognized wild horse and burro interest groups, wildlife or hunting organizations, or watershed associations.
(3) Five persons that—
(a) hold State elected Office (or designee);
(b) hold county or local elected office;
(c) represent American Indian tribes within or adjacent to the area for which the committee is organized;
(d) are school officials or teachers; or
(e) represent the affected public at large.
In the event that a vacancy arises, the Designated Federal Officer (DFO) may fill the vacancy with a replacement member appointed by the Secretary, if an appropriate replacement member is available. In accordance with the Act, members of the SRS RAC shall serve without compensation. SRS RAC members and replacements may be allowed travel expenses and per diem for attendance at committee meetings, subject to approval of the DFO responsible for administrative support to the SRS RAC.
The appointment of members to the SRS RACs will be made by the Secretary of Agriculture. The public is invited to submit nominations for membership on the SRS RACs, either as a self-nomination or a nomination of any qualified and interested person. Any individual or organization may nominate one or more qualified persons to represent the interest areas listed above. To be considered for membership, nominees must:
1. Be a resident of the State in which the SRS RAC has jurisdiction;
2. Identify what interest group they would represent and how they are qualified to represent that interest group;
3. Provide a cover letter stating why they want to serve on the SRS RAC and what they can contribute;
4. Provide a resume showing their past experience in working successfully as part of a group working on forest management activities; and
5. Complete Form AD–755, Advisory Committee or Research and Promotion Background Information. The Form AD–755 may be obtained from the Regional Coordinators listed below or from the following SRS RACs Web site:
Nominations and completed applications for SRS RACs should be sent to the appropriate Forest Service Regional Offices listed below:
Jerry Drury, Northern Regional Coordinator (Montana), Forest Service, Federal Building, 200 East Broadway, Missoula, Montana 59807–7669, (406) 329–3149.
Carol McKenzie, Northern Regional Coordinator (Idaho), Forest Service, 3815 Schreiber Way, Coeur d'Alene, Idaho 83815–8363, (208) 765–7380.
Jace Ratzlaff, Rocky Mountain Regional Coordinator, Forest Service, 740 Simms Street, Golden, Colorado 80401, (719) 469–1254.
Mark Chavez, Southwestern Regional Coordinator, Forest Service, 333 Broadway SE., Albuquerque, New Mexico 87102, (505) 842–3393.
Andy Brunelle, Intermountain Regional Coordinator (Idaho/Utah), Forest Service, Federal Building, 324 25th Street, Ogden, Utah 84401, (208) 344–1770.
Cheva Gabor, Intermountain Regional Coordinator (Nevada), Forest Service, 35 College Drive, South Lake Tahoe, California 96150, (530) 543–2600.
Marty Dumpis, Pacific Southwest Regional Coordinator, Forest Service, 1323 Club Drive, Vallejo, California 94592, (909) 599–1267.
Amber Sprinkle, Pacific Northwest Regional Office, Forest Service, 595 Northwest Industrial Way, Estacada, Oregon 97023, (503) 808–2242.
Glen Sachet, Pacific Northwest Regional Office, Forest Service, 1220 Southwest 3rd Avenue, Portland, Oregon 97204, (503) 545–6083.
Kathy Anderson, Pacific Northwest Regional Office, Forest Service, 1220 Southwest 3rd Avenue, Portland, Oregon 97204, (503) 545–6083.
Steve Bekkerus, Southern Regional Coordinator, Forest Service, 1720 Peachtree Road, Northwest, Atlanta, Georgia 30309, (404) 347–7240.
David Scozzafave, Eastern Regional Coordinator, Forest Service, 626 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, (414) 297–3602.
Dawn Heutte, Alaska Regional Coordinator, Forest Service, 709 West 9th Street, Room 559A, Juneau, Alaska 99801–1807, (907) 586–7836.
Equal opportunity practices in accordance with USDA policies shall be followed in all appointments to the Panel. To ensure that the recommendations of the Panel have taken into account the needs of the diverse groups served by USDA, membership will, to the extent practicable, include individuals with demonstrated ability to represent all racial and ethnic groups, women and men, and persons with disabilities.
The Department of Agriculture has submitted the following information collection requirement(s) to Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104–13. Comments are requested regarding (1) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information to be collected; (4) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by June 13, 2016 will be considered. Written comments should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), New Executive Office Building, 725 17th Street NW., Washington, DC 20502. Commenters are encouraged to submit their comments to OMB via email to:
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
LionsHead Specialty Tire & Wheel, LLC (LionsHead) submitted a notification of proposed production activity to the FTZ Board for its facility in Goshen, Indiana. The notification conforming to the requirements of the regulations of the FTZ Board (15 CFR 400.22) was received on May 3, 2016.
A separate application for usage-driven site designation at the LionsHead facility will be submitted and will be processed under Section 400.38 of the FTZ Board's regulations. The facility is used to produce wheel assemblies for specialty applications, including trailers and golf carts. Pursuant to 15 CFR 400.14(b), FTZ activity would be limited to the specific foreign-status materials and components and specific finished products described in the submitted notification (as described below) and subsequently authorized by the FTZ Board.
Production under FTZ procedures could exempt LionsHead from customs duty payments on the foreign-status components used in export production. On its domestic sales, LionsHead would be able to choose the duty rates during customs entry procedures that apply to wheel assemblies for non-agricultural trailers, golf carts, farm feed tenders, grain wagons, all-terrain vehicles (ATVs), recreational vehicles (RVs), handling equipment, forklifts and other types of industrial lifting equipment
The components sourced from abroad include: Radial and bias-ply tires for agricultural machinery, forklifts, ATVs, golf carts, lawn and garden equipment, and passenger cars; specialty tire (ST)-rated radial and bias-ply tires for trailers; steel and aluminum wheels for agricultural machinery, trailers, golf carts, ATVs, forklifts, and lawn and garden equipment; and, steel and aluminum wheel parts (duty rates range from free to 4%).
Public comment is invited from interested parties. Submissions shall be addressed to the FTZ Board's Executive Secretary at the address below. The closing period for their receipt is June 21, 2016.
A copy of the notification will be available for public inspection at the Office of the Executive Secretary, Foreign-Trade Zones Board, Room 21013, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230–0002, and in the “Reading Room” section of the FTZ Board's Web site, which is accessible via
For further information, contact Diane Finver at
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Department) is conducting an administrative review of the antidumping duty order on drawn stainless steel sinks (drawn sinks) from the People's Republic of China (PRC), for the period of review (POR), April 1, 2014, through March 31, 2015. We preliminarily find that respondent Guangdong Dongyuan Kitchenware Industrial Co., Ltd. (Dongyuan) made sales of the subject merchandise in the United States at prices below normal value (NV). In addition, we preliminarily find that the other mandatory respondents, B&R Industries Limited (B&R Industries), Zhongshan Newecan Enterprise Development Corporation (Newecan), and Zhongshan Superte Kitchenware Co., Ltd./Superte invoiced as Foshan Zhaoshun Trade Co., Ltd. (Superte), are part of the PRC-wide entity and will receive the rate of that entity, which is not under review. We are also preliminarily granting separate rates to Feidong Import and Export Co., Ltd. (Feidong) and Ningbo Afa Kitchen and Bath Co., Ltd. (Ningbo Afa),
Brian C. Smith or Brandon Custard, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482–1766 and (202) 482–1823, respectively.
The products covered by the order include drawn stainless steel sinks. Imports of subject merchandise are currently classified under the Harmonized Tariff Schedule of the United States (HTSUS) subheadings 7324.10.0000 and 7324.10.0010. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of the order is dispositive.
As explained in the memorandum from the Acting Assistant Secretary for Enforcement and Compliance, the Department has exercised its discretion to toll all administrative deadlines due to the recent closure of the Federal Government. All deadlines in this segment of the proceeding have been extended by four business days.
The Department is conducting this review in accordance with section 751(a)(1)(B) of the Tariff Act of 1930, as amended (the Act). For the mandatory respondent Dongyuan, export prices were calculated in accordance with section 772 of the Act. Because the PRC is a non-market economy (NME) within the meaning of section 771(18) of the Act, NV was calculated in accordance with section 773(c) of the Act.
For a full description of the methodology underlying our conclusions,
On June 24, 2015, Kehuaxing submitted a timely-filed certification that it had no exports, sales, or entries of subject merchandise during the POR.
Consistent with our practice in NME cases, the Department is not rescinding this administrative review for Kehuaxing, but intends to complete the review and issue appropriate instructions to CBP based on the final results of the review.
Because B&R Industries, Newecan, and Superte withdrew from participation in the review and did not respond to the Department's requests for information, the Department preliminarily finds these companies to be part of the PRC-wide entity.
The Department preliminarily determines that the following weighted-average dumping margins exist for the period April 1, 2014, through March 31, 2015:
The
Any interested party may request a hearing within 30 days of publication of this notice.
Unless otherwise extended, the Department intends to issue the final results of this administrative review, which will include the results of its analysis of issues raised in the case briefs, within 120 days of publication of these preliminary results, pursuant to section 751(a)(3)(A) of the Act.
Upon issuance of the final results, the Department will determine, and CBP shall assess, antidumping duties on all appropriate entries covered by this review.
For Dongyuan, if we continue to calculate a weighted-average dumping margin that is not zero or
For Feidong and Ningbo Afa, the respondents which were not selected for individual examination in this administrative review and which qualified for a separate rate, the assessment rate will be equal to the rate calculated for the mandatory respondent in this review (
For the final results, if we continue to treat the non-responding mandatory respondents B&R Industries, Newecan, and Superte, as part of the PRC-wide entity, we will instruct CBP to apply an
The Department announced a refinement to its assessment practice in NME cases. Pursuant to this refinement in practice, for entries that were not reported in the U.S. sales database submitted by the company individually examined during this review, the Department will instruct CBP to liquidate such entries at the PRC-wide rate. In addition, if we continue to find that Kehuaxing had no shipments of the subject merchandise, any suspended entries of subject merchandise from Kehuaxing will be liquidated at the PRC-wide rate.
The following cash deposit requirements will be effective upon publication of the final results of this administrative review for all shipments of the subject merchandise from the PRC entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided for by section 751(a)(2)(C) of the Act: (1) For the companies listed above that have a separate rate, the cash deposit rate will be that rate established in the final results of this review (except, if the rate is zero or
This notice also serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f) to file a certificate regarding the reimbursement of antidumping and/or countervailing duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping and/or countervailing duties occurred and the subsequent assessment of double antidumping duties.
We are issuing and publishing these preliminary results of review in accordance with sections 751(a)(l) and 777(i)(l) of the Act and 19 CFR 351.213.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (“the Department”) is rescinding the administrative review of the antidumping duty order on certain frozen warmwater shrimp (“shrimp”) from the People's Republic of China (“PRC”) for the period February 1, 2015 through January 31, 2016.
Kabir Archuletta, AD/CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482–2593.
On April 7, 2016, based on a timely request for review on behalf of the Ad Hoc Shrimp Trade Action Committee (“Petitioner”)
Pursuant to 19 CFR 351.213(d)(1), the Department will rescind an administrative review, in whole or in part, if the party that requested the review withdraws its request within 90 days of the publication of the notice of initiation of the requested review. In this case, Petitioner and Domestic Processors timely withdrew their request by the 90-day deadline, and no other party requested an administrative review of the antidumping duty order. As a result, pursuant to 19 CFR 351.213(d)(1), we are rescinding the administrative review of the antidumping order on shrimp from the PRC for the period February 1, 2015, through January 31, 2016, in its entirety.
The Department will instruct U.S. Customs and Border Protection (“CBP”) to assess antidumping duties on all appropriate entries. Because the Department is rescinding this administrative review in its entirety, the entries to which this administrative review pertained shall be assessed antidumping duties at rates equal to the cash deposit of estimated antidumping duties required at the time of entry, or withdrawal from warehouse, for consumption, in accordance with 19 CFR 351.212(c)(1)(i). The Department intends to issue appropriate assessment instructions to CBP 15 days after the publication of this notice in the
This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Department's presumption that reimbursement of the antidumping duties occurred and the subsequent assessment of doubled antidumping duties.
This notice also serves as a final reminder to parties subject to administrative protective order (“APO”) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
This notice is issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Tariff Act of 1930, as amended, and 19 CFR 351.213(d)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
David Goldberger at (202) 482–4136 or Brian Smith at (202) 482–1766, Office II, AD/CVD Operations, Enforcement and Compliance, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230.
On January 5, 2016, the Department of Commerce (the Department) initiated the antidumping duty investigation of large residential washers (washing machines) from the People's Republic of China (PRC).
The period of investigation is April 1, 2015, through September 30, 2015.
Section 733(c)(1)(A) of the Act permits the Department to postpone the time limit for the preliminary determination if it receives a timely request from the petitioner for postponement. The Department may postpone the preliminary determination under section 733(c)(1) of the Act no later than 190 days after the date on which the administering authority initiates an investigation.
On May 2, 2016, Whirlpool Corporation (the petitioner), made a timely request pursuant to section 733(c)(1) of the Act, 19 U.S.C. 1673(c)(1) and 19 CFR 351.205(e) for a 50-day postponement of the preliminary determination in this investigation.
For the reasons stated above, and because there are no compelling reasons to deny the petitioner's request, the Department is postponing the preliminary determination in this investigation in accordance with section 733(c)(1)(A) of the Act and 19 CFR 351.205(b)(2) and (e) by 50 days until July 19, 2016.
The deadline for the final determination will continue to be 75 days after the date of the preliminary determination, unless extended.
This notice is issued and published pursuant to section 733(c)(2) of the Act and 19 CFR 351.205(f)(1).
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of a public meeting.
The Gulf of Mexico Fishery Management Council will hold a two and a half day meeting of its Standing, Socioeconomic,
The meeting will begin at 9 a.m. on Wednesday, June 1, 2016, and end at 12 noon on Friday, June 3, 2016. To view the agenda, see
The meeting will be held at the Hilton Westshore Tampa Airport Hotel, 2225 N. Lois Avenue, Tampa, FL 33607; telephone: (813) 877–6688.
Steven Atran, Senior Fishery Biologist, Gulf of Mexico Fishery Management Council;
The Agenda is subject to change, and the latest version along with other meeting materials will be posted on the Council's file server. To access the file server, the URL is
The meeting will be webcast over the internet. A link to the webcast will be available on the Council's Web site,
Although other non-emergency issues not on the agenda may come before the Scientific and Statistical Committee for discussion, in accordance with the Magnuson-Stevens Fishery Conservation and Management Act, those issues may not be the subject of formal action during this meeting. Actions of the Scientific and Statistical Committee will be restricted to those issues specifically identified in the
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Kathy Pereira at the Gulf Council Office (see
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting.
The Mid-Atlantic Fishery Management Council's (Council) Mackerel-Squid-Butterfish (MSB) Monitoring Committee will meet via webinar to develop recommendations for future MSB specifications.
The meeting will be held Tuesday, May 31, 2016, at 1:30 p.m. and end by 4 p.m.
The meeting will be held via webinar with a telephone-only connection option:
Christopher M. Moore, Ph.D. Executive Director, Mid-Atlantic Fishery Management Council; telephone: (302) 526–5255. The Council's Web site,
The Council's MSB Monitoring Committee will meet to develop recommendations for future MSB specifications. There will be time for public questions and comments. The Council utilizes the Monitoring Committee recommendations at each June Council meeting when setting the subsequent years' MSB specifications.
This meeting is 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.
Bureau of Consumer Financial Protection.
Fair Lending Report of the Consumer Financial Protection Bureau.
The Bureau of Consumer Financial Protection (CFPB or Bureau) is issuing its fourth Fair Lending Report of the Consumer Financial Protection Bureau (Fair Lending Report) to Congress. We are committed to ensuring fair access to credit and eliminating discriminatory lending practices. This report describes our fair lending activities in prioritization, supervision, enforcement, rulemaking, research, interagency coordination, and outreach for calendar year 2015.
The Bureau released the April 2016 Fair Lending Report on its Web site on April 29, 2016.
Anita Visser, Policy Advisor to the Director of Fair Lending, Office of Fair Lending and Equal Opportunity, Consumer Financial Protection Bureau, 1–855–411–2372.
When Congress established the Consumer Financial Protection Bureau, the goal was to shine a light on unfair and discriminatory practices in the financial system. The legislation specifically tasked the Office of Fair Lending and Equal Opportunity with this critical obligation, but our commitment to finding and eliminating these practices extends throughout the Bureau. Indeed, ensuring fair and nondiscriminatory access to credit goes to the core of the Bureau's mission: Protecting consumers and promoting openness in America's financial markets.
The past year has been especially productive for the Office of Fair Lending. In the mortgage market, they teamed up with the Department of Justice to resolve the largest redlining case in history against Hudson City Savings Bank (since acquired by M&T Bank), which will pay nearly $33 million in direct loan subsidies, funding for community programs and outreach, and a civil penalty. In that case, which arose out of a fair lending supervisory review at Hudson City, the Bureau found that Hudson City provided unequal access to credit by structuring its business to avoid and thus discourage access to mortgages for residents in majority-Black-and-Hispanic neighborhoods
The Office of Fair Lending also has continued to examine and investigate indirect auto lenders for compliance with the Equal Credit Opportunity Act. Last year brought two noteworthy results, with prominent consent orders issued for American Honda Finance Corporation and Fifth Third Bank. In both matters, the Bureau alleged that the lender's policy of discretionary dealer markup resulted in minority borrowers
One tangible outcome of the Office of Fair Lending's dedication is the money they help return to harmed consumers. When an enforcement action is resolved, typically much more work must be done before consumers see the benefits. Last year, the Office worked with Synchrony Bank (formerly GE Capital Retail Bank) to complete payments of over $200 million to consumers who were excluded from debt relief offers because of their national origin. They also worked with PNC Bank (successor to National City Bank) to complete payments of over $35 million to tens of thousands of African-American and Hispanic borrowers who were charged higher prices on their mortgage loans. Finally, they worked with Ally Financial Inc. and Ally Bank to complete payments of over $80 million to over 300,000 borrowers who experienced discrimination in the pricing of Ally's auto loans. In addition to money returned to consumers through public enforcement actions, we achieve additional redress for consumers through the supervisory process. These results demonstrate the Office of Fair Lending's commitment to bettering the lives of consumers by ensuring fair, nondiscriminatory access to credit.
The list of fair lending successes is even longer, as this report attests. We share our work in many ways, including guidance through
We are proud of the Bureau's work in 2015 and the successes of our Fair Lending team. And we are thankful for the continued interest that so many people have in our fair lending work.
This past year, 2015, has been one of tremendous growth and accomplishment for the CFPB's Office of Fair Lending and Equal Opportunity. From enforcement and supervision to outreach and rulemaking, our office is dedicated to using the tools Congress provided to achieve our mission: Fair, equitable, and nondiscriminatory credit for consumers.
As part of the Office of Fair Lending's statutory responsibility for oversight and enforcement of the Equal Credit Opportunity Act
While our settlement administration and mortgage and auto work continue to be priorities for our office, we have made significant strides in expanding our efforts to help consumers in other priority markets. These priority markets include the credit card market, where we continue to engage in both supervisory and enforcement work related to fair lending risks in that market.
Notably, we also added small business lending to our priorities to address fair lending risks in that market. Small businesses are a backbone of our nation's economy and access to credit is critical to their operation and growth. Unlike large businesses, many small businesses are sole proprietorships where the owner's personal credit—and potentially that of family and friends—may be on the line.
The Bureau also published its final rule implementing Dodd-Frank's amendments to HMDA's Regulation C. HMDA data are integral to the everyday work of our office and others within the Bureau. One of HMDA's primary purposes is identifying potential discrimination, and many other stakeholders will benefit from improved data, including other agencies, the public, consumer groups, researchers, and industry itself. The final rule reflects our practical experience
The Dodd-Frank Act mandated the creation of the CFPB's Office of Fair Lending and Equal Opportunity and charged it with ensuring fair, equitable, and nondiscriminatory access to credit to consumers; coordinating our fair lending efforts with Federal and State agencies and regulators; working with private industry, fair lending, civil rights, consumer and community advocates to promote fair lending compliance and education; and annually reporting to Congress on our efforts.
I am proud to say that the Office continues to fulfill our Dodd-Frank mandate and looks forward to continuing to work together with all stakeholders in protecting America's consumers. To that end, I am excited to share our progress with this, our fourth, Fair Lending Report.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank or Dodd-Frank Act)
The Bureau and the Office of Fair Lending and Equal Opportunity (the Office of Fair Lending) have taken important strides over the last year in our efforts to protect consumers from credit discrimination and broaden access to credit, as we identify new and emerging fair lending risks and monitor institutions for compliance. In 2015, our fair lending supervisory and public enforcement actions directed institutions to provide approximately $108 million in remediation and other monetary payments.
• Supervision and enforcement priorities and activity. The Bureau's risk-based prioritization process allows the Office of Fair Lending to focus our supervisory and enforcement efforts on markets or products that represent the greatest risk for consumers.
○ Mortgage lending. Mortgage lending continues to be a key priority for the Office of Fair Lending for both supervision and enforcement, with a focus on HMDA data integrity and potential fair lending risks in the areas of redlining, underwriting, and pricing. In 2015, the Bureau resolved two public enforcement actions involving mortgage lending. Through 2015, our mortgage origination work has covered institutions responsible for close to half of the transactions reported pursuant to HMDA (and more than 60% of the transactions reported by institutions subject to the CFPB's supervision and enforcement authority).
○ Indirect auto lending. In 2015, the Bureau continued its work in overseeing and enforcing compliance with ECOA in indirect auto lending through both supervisory and enforcement activity, including monitoring compliance with our previous supervisory and enforcement actions. Our auto finance targeted ECOA reviews
○ Credit cards. The Bureau also continued fair lending supervisory and enforcement work in the credit card market. We have focused in particular on the quality of fair lending compliance management systems and on fair lending risks in underwriting, line assignment, and servicing, including the treatment of consumers residing in Puerto Rico or who indicate that they prefer to speak in Spanish. Our work in this highly-concentrated market has covered institutions responsible for more than 75% of outstanding credit card balances in the United States.
○ Other product areas. The Bureau has focused supervision and enforcement work in other markets as well. For example, this year we began targeted ECOA reviews of small-business lending, focusing in particular on the quality of fair lending compliance management systems and on fair lending risks in underwriting, pricing, and redlining. We remain committed to assessing and evaluating fair lending risk in all credit markets under the Bureau's jurisdiction.
• Rulemaking. In October 2015, the Bureau published a final rule to amend Regulation C, the regulation that implements HMDA, to require covered lenders to report additional data elements, among other changes.
• Guidance. In May 2015, the Bureau issued a compliance bulletin on the Section 8 Housing Choice Voucher (HCV) Homeownership Program.
• Outreach to industry, advocates, consumers, and other stakeholders. The Bureau continues to initiate and encourage industry and consumer engagement opportunities to discuss fair lending compliance and access to credit issues, including through speeches, presentations, blog posts, webinars, rulemaking, public comments, and communication with Members of Congress.
• Interagency coordination and collaboration. The Bureau continues to coordinate with the Federal Financial Institutions Examination Council (FFIEC) agencies,
This report generally covers the Bureau's fair lending work during calendar year 2015.
To use the CFPB's fair lending research, supervision, and enforcement resources most efficiently and effectively, the Office of Fair Lending, working with other offices in the Bureau, developed a fair lending risk-based prioritization approach that assesses and determines how best to address areas of potential fair lending harm to consumers in the entities, products, and markets under our jurisdiction.
The Bureau considers both qualitative and quantitative information at the institution, product, and market levels to determine where potential fair lending harm to consumers may be occurring. This information includes: Consumer complaints; tips from advocacy groups, whistleblowers, and government agencies; supervisory and enforcement history; quality of lenders' compliance management systems; results from data analysis; and market insights. The Office of Fair Lending integrates all of this information into the fair lending risk-based prioritization process, which is incorporated into the Bureau's larger risk-based prioritization process, allowing the Bureau to efficiently allocate its fair lending resources to areas of greatest risk to consumers. We then coordinate with other regulators so that our focus and efforts may inform their work and vice versa.
The CFPB uses input from a variety of external and internal stakeholders to inform its fair lending prioritization process. We consider fair lending complaints handled by the Bureau's Office of Consumer Response and tips brought to the Office of Fair Lending's attention by advocacy groups, whistleblowers, and other government agencies (at the local, state, and federal levels). As part of the prioritization process the Office of Fair Lending also considers public and private fair lending litigation.
The Bureau considers information gathered from prior fair lending work of the Bureau and other regulators, including any supervisory or enforcement actions. At the institution level, the Bureau considers results from past reviews, including information the Bureau has gathered about the fair lending risk(s) presented by a lender's policies, procedures, practices, or business model; the extent and nature of any violations previously cited; and the institution's remediation efforts. Additionally, the Bureau considers self-identified issues and whether the institution took appropriate corrective action when it identified those issues. We also closely monitor institutions' compliance with orders arising from previous enforcement actions. Finally, we coordinate with other regulators to share and consider the results of our respective fair lending efforts.
One critical piece of information the Bureau obtains through our supervisory work is the quality of an institution's fair lending compliance management system, which is a key factor considered in the fair lending prioritization process. The Bureau has previously identified common features of a well-developed fair lending compliance management system,
Many CFPB-supervised institutions face similar fair lending risks, but they may differ in how they manage those risks, based on their size, complexity, and risk profile. A key consideration is that, the lower the quality of an institution's fair lending compliance management system, the less likely that the institution will identify and effectively address fair lending risks. As a result, a lower quality fair lending compliance management system generally indicates a higher fair lending risk to consumers.
The Bureau's fair lending prioritization process is also driven by quantitative data analysis that evaluates developments and trends at the institution and market levels. For example, in the housing finance marketplace, HMDA data allow regulators to assess a specific institution's risk as well as risk across the market in order to identify those institutions or segments that appear to present heightened fair lending risk to consumers. Such analyses can be particularly useful in identifying those lenders that appear to deviate significantly from their peers in, for example, the extent to which they provide access to credit in communities of color.
The Office of Fair Lending works closely with all of the Bureau's markets offices, which monitor consumer financial markets to identify emerging developments and trends. These offices monitor key consumer financial products and services, including mortgages, credit cards, auto lending, consumer reporting, installment lending, student lending, and payday lending. The Bureau uses market
Based on our evaluation of the information and data gathered from the sources above, this year we identified mortgage lending (including both origination and servicing), auto finance, and credit cards as priority markets for our fair lending supervision and enforcement work. We also identified small business lending as a priority market in connection with the Bureau's exploration of the issues that will need to be addressed in the rulemaking required under Section 1071 of the Dodd-Frank Act, which amended ECOA to require financial institutions to collect and report data on lending to women-owned, minority-owned, and small businesses.
Once fair lending risks are identified and prioritized through our risk-based prioritization process, the Office of Fair Lending considers, as part of its strategic planning process, how best to address those risks and which resources to dispatch to address the risks.
The Bureau's fair lending risk-based prioritization is an ongoing rather than a static process. Even after priorities are identified and steps are taken to effectuate those priorities, we continue to receive and consider information relevant to prioritization. At an institution level, such information may include new whistleblower tips and leads; additional risks identified in ongoing supervisory and enforcement activities; and compliance issues identified and brought to our attention by institutions themselves.
The Office of Fair Lending considers a number of factors in determining how best to address this new information. Such factors may include the nature and extent of the fair lending risk; the degree of consumer harm involved; whether the risk appears to be isolated or widespread within a market; whether the risk was self-identified and/or self-disclosed to the Bureau; and the nature and extent of an institution's remediation plans. Based on these and other factors, the Office of Fair Lending may decide to initiate supervisory or enforcement activity, conduct additional research or ongoing monitoring of particular issues or institutions, issue guidance, leverage outreach events, or engage in other activity within the Bureau's authority. Fair Lending takes account of responsible conduct as set forth in CFPB Bulletin 2013–06, Responsible Business Conduct: Self-Policing, Self-Reporting, Remediation, and Cooperation.
The CFPB's Fair Lending Supervision program assesses compliance with Federal consumer financial laws and regulations at banks and nonbanks over which the Bureau has supervisory authority. Supervision activities range from assessments of institutions' fair lending compliance management systems to in-depth reviews of products or activities that may pose heightened fair lending risks to consumers. As part of its Fair Lending Supervision program, the Bureau continues to conduct three types of fair lending reviews at Bureau-supervised institutions: ECOA baseline reviews, ECOA targeted reviews, and HMDA data integrity reviews. Our supervisory work has focused in the priority areas of mortgage, auto lending, credit cards, and small business lending.
When the CFPB identifies situations in which fair lending compliance is inadequate, it directs institutions to establish fair lending compliance programs commensurate with the size and complexity of the institution and its lines of business. When fair lending violations have been identified, the CFPB may direct institutions to provide remediation and restitution to consumers, and may pursue other appropriate relief. The CFPB also refers a matter to the Justice Department when it has reason to believe that a creditor has engaged in a pattern or practice of lending discrimination in violation of ECOA.
Although the Bureau's supervisory process is confidential, the Bureau publishes regular reports called
Regulation B requires a creditor to notify an applicant of an adverse action on the application taken within 30 days after receiving a completed application.
In the Winter 2015 edition of
In 2015, the Bureau published guidance in
The Winter 2015 edition of
While the general rules governing the prohibition against consideration of protected sources of income include narrow exceptions (
The relevant supervised entities were directed by examination staff to identify mortgage applicants who were wrongly denied on the basis of their protected income source, as well as prospective applicants who were discouraged by the marketing materials. Supervision also directed that remediation be made to harmed applicants and prospective applicants, including reimbursement of fees and interest; the opportunity to reapply; and additional remuneration for any consumers who were improperly denied and subsequently lost their homes.
The Winter 2015 edition of
The Summer 2015 edition of
The Section 8 HCV Homeownership Program was created to assist low-income, first-time homebuyers in purchasing homes. The program is a component of the Department of Housing and Urban Development's (HUD) broader Section 8 Housing Choice Voucher Program, which also includes a rental assistance program.
As stated above, ECOA and Regulation B prohibit creditors from discriminating in any aspect of a credit transaction against an applicant “because all or part of the applicant's income derives from any public
Regulation B further provides that “[i]n a judgmental system of evaluating creditworthiness, a creditor may consider . . . whether an applicant's income derives from any public assistance program only for the purpose of determining a pertinent element of creditworthiness.”
Through the supervisory process, the Bureau has become aware of one or more institutions excluding or refusing to consider income derived from the Section 8 HCV Homeownership Program during the mortgage loan application and underwriting process. Some institutions have restricted the use of Section 8 HCV Homeownership Program vouchers to only certain home mortgage loan products or delivery channels. Supervision has required one or more institutions to update their policies and procedures to ensure that their practices concerning Section 8 HCV Homeownership Program vouchers comply with ECOA and its implementing regulation, Regulation B. In addition, Supervision has required one or more institutions to identify borrowers who, due to their reliance on Section 8 HCV Homeownership Program vouchers, were either denied loans, or discouraged from applying; and to provide those borrowers with financial remuneration and an opportunity to reapply.
The Fall 2015 edition of
CFPB examination teams conduct targeted ECOA reviews to evaluate areas of heightened fair lending risk. These reviews generally focus on a specific line of business, such as mortgages, credit cards, automobile finance or small business lending. Our underwriting reviews typically include a statistical analysis, and in some cases a loan file review, that assess an institution's compliance with ECOA and its implementing regulation, Regulation B, within the specific business line selected.
In each examination where a file review is conducted, the review is tailored to the specific heightened areas of risk that have previously been identified. If the examiners identify examples of files that may provide evidence of discrimination, they share the files with the institution to obtain the institution's explanation. If, following the statistical analysis and the file review, the examination team believes that there may be a violation of ECOA, the CFPB may share the findings with the institution in a Potential Action and Request for Response for Fair Lending letter (detailed below).
We noted that CFPB examination teams have conducted numerous examinations to determine whether statistical disparities in underwriting outcomes attributable to race, national origin, or some other prohibited basis characteristic constituted a violation of ECOA. Many of these examinations have concluded without findings of discrimination. In one or more examinations, however, examiners concluded that the disparities resulted from illegal discrimination in violation of ECOA.
When examiners identify underwriting disparities that violate ECOA, the Bureau will require the institution to pay remuneration to affected borrowers, which may include application or other fees, costs, and other damages. Institutions also may be required to re-offer credit. In addition, institutions must identify and address any underlying compliance management system (CMS) weaknesses that led to the violations.
In the event that the Bureau is considering formal action, the Bureau may send a Potential Action and Request for Response for Fair Lending (PARR–FL) letter to the institution.
Generally, a PARR–FL letter will:
• Identify the laws that the Bureau has preliminarily identified may have been violated and describe the possible illegal conduct;
• Generally describe the types of relief available to the Bureau;
• Inform the relevant institution of its opportunity to submit a written response presenting its positions regarding relevant legal and policy issues, as well as facts through affidavits or declarations;
• Describe the manner and form by which the institution should respond, if it chooses to do so, and provide a submission deadline, generally 14 calendar days, for timely consideration;
• Inform the relevant institution that the Bureau is considering recommending corrective action; and
• When appropriate, inform the relevant institution that the Office of Fair Lending is considering recommending that the Bureau refer the institution to the DOJ.
Typically, when a PARR–FL letter results from supervisory activity, the
On October 30, 2015, the CFPB published an update to the ECOA Baseline Review Modules, which are part of the CFPB Supervision and Examination Manual. Examination teams use the ECOA Baseline Review Modules to conduct ECOA Baseline Reviews, which evaluate how well institutions' compliance management systems identify and manage fair lending risks. The revised Baseline Review modules better align in content and organization with the CFPB's examination procedures for CMS. The revised modules are consistent with the FFIEC Interagency Fair Lending Examination Procedures and organized by fair lending risk areas, such as origination and servicing. In addition, the fifth module, “Fair Lending Risks Related to Models,” is a new module that examiners will use to review empirical models that supervised financial institutions may use.
When using the modules to conduct an ECOA Baseline Review, CFPB examination teams review an institution's fair lending supervisory history, including any history of fair lending risks or violations previously identified by the CFPB or any other federal or state regulator. Examination teams collect and evaluate information about an entity's fair lending compliance program, including board of director and management participation, policies and procedures, training materials, internal controls and monitoring and corrective action. In addition to responses obtained pursuant to information requests, examination teams may also review other sources of information, including any publicly-available information about the entity as well as information obtained through interviews with an institution's staff or supervisory meetings with an institution. Examiners may complete one or more modules as part of a broader review of compliance within an institution product line. For example, in order to evaluate fair lending risks related to mortgage servicing, examination teams may use Module IV, Fair Lending Risks Related to Servicing. This module includes questions on such topics as servicing consumers with Limited English Proficiency and policies and procedures related to the offering of hardship and/or loss mitigation options.
The updated ECOA Baseline Review Modules and the CFPB Supervision and Examination Manual can be found on the Bureau's Web site at
The Bureau conducts investigations of potential violations of HMDA and ECOA, and if it believes a violation has occurred, can file a complaint either through its administrative enforcement process or in federal court. Like the other federal bank regulators, the Bureau refers matters to the DOJ when it has reason to believe that a creditor has engaged in a pattern or practice of lending discrimination.
On September 24, 2015, the CFPB and the DOJ filed a joint complaint against Hudson City Savings Bank (Hudson City) alleging discriminatory redlining practices in mortgage lending and a proposed consent order to resolve the complaint.
Hudson City was a federally-chartered savings association with 135 branches and assets of $35.4 billion and focused its lending on the origination and purchase of mortgage loans secured by single-family properties. According to the complaint, Hudson City illegally avoided and thereby discouraged consumers in majority-Black-and-Hispanic neighborhoods from applying for credit by:
• Placing branches and loan officers principally outside of majority-Black-and-Hispanic communities;
• Selecting mortgage brokers that were mostly located outside of, and did not effectively serve, majority-Black-and-Hispanic communities;
• Focusing its limited marketing in neighborhoods with relatively few Black and Hispanic residents; and
• Excluding majority-Black-and-Hispanic neighborhoods from its credit assessment areas.
The consent order, which was entered by the court on November 4, 2015,
On May 28, 2015, the CFPB and the DOJ filed a joint complaint against Provident Funding Associates (Provident) alleging discrimination in mortgage lending, along with a proposed order to settle the complaint.
Provident is headquartered in California and originates mortgage loans through its nationwide network of brokers. Between 2006 and 2011, Provident made over 450,000 mortgage loans through its brokers. During this time period, Provident's practice was to set a risk-based interest rate and then allow brokers to charge a higher rate to consumers. Provident would then pay the brokers some of the increased interest revenue from the higher rates—these payments are also known as yield spread premiums. Provident's mortgage brokers also had discretion to charge borrowers higher fees. The fees paid to Provident's brokers were thus made up of these two components: Payments by Provident from increased interest revenue and through the direct fees paid by the borrower.
The CFPB and the DOJ alleged that Provident violated ECOA by charging African-American and Hispanic borrowers more in total broker fees than non-Hispanic White borrowers based on their race and national origin and not based on their credit risk. The DOJ also alleged that Provident violated the Fair Housing Act, which also prohibits discrimination in residential mortgage lending. The agencies alleged that Provident's discretionary broker compensation policies caused the differences in total broker fees, and that Provident unlawfully discriminated against African-American and Hispanic borrowers in mortgage pricing. Approximately 14,000 African-American and Hispanic borrowers paid higher total broker fees because of this discrimination.
The consent order, which was entered by the court on June 18, 2015, requires Provident to pay $9 million to harmed borrowers, to pay to hire a settlement administrator to distribute funds to the harmed borrowers identified by the CFPB and the DOJ, and to not discriminate against borrowers in assessing total broker fees.
Provident must hire a settlement administrator to distribute the $9 million to harmed borrowers.
On September 28, 2015, the CFPB resolved an action with Fifth Third Bank (Fifth Third) that requires Fifth Third to change its pricing and compensation system by substantially reducing or eliminating discretionary markups to minimize the risks of discrimination. On that same date, the DOJ also filed a complaint and proposed consent order in the U.S. District Court for the Southern District of Ohio addressing the same conduct. That consent order was entered by the court on October 1, 2015. Fifth Third's past practices resulted in thousands of African-American and Hispanic borrowers paying higher interest rates than similarly-situated non-Hispanic White borrowers for their auto loans. The consent orders require Fifth Third to pay $18 million in restitution to affected borrowers.
As of the second quarter of 2015, Fifth Third was the ninth largest depository auto loan lender in the United States and the seventeenth largest auto loan lender overall. As an indirect auto lender, Fifth Third sets a risk-based interest rate, or “buy rate,” that it conveys to auto dealers. Fifth Third then allows auto dealers to charge a higher interest rate when they finalize the transaction with the consumer. As described above, this is typically called “discretionary markup.” Markups can generate compensation for dealers while giving them the discretion to charge similarly-situated consumers different rates. Fifth Third's policy permitted dealers to mark up consumers' interest rates as much as 2.5% during the period under review.
From January 2013 through May 2013, the Bureau conducted an examination that reviewed Fifth Third's indirect auto lending business for compliance with ECOA and Regulation B. On March 6, 2015, the Bureau referred the matter to the DOJ. The CFPB found and the DOJ alleged that Fifth Third's indirect lending policies resulted in minority borrowers paying higher discretionary markups, and that Fifth Third violated ECOA by charging African-American and Hispanic borrowers higher discretionary markups for their auto loans than non-Hispanic White borrowers without regard to the creditworthiness of the borrowers. Fifth Third's discriminatory pricing and compensation structure resulted in thousands of minority borrowers paying, on average, over $200 more for their auto loans originated between January 2010 and September 2015.
The CFPB's administrative consent order and the DOJ's consent order require Fifth Third to reduce dealer discretion to mark up the interest rate to a maximum of 1.25% for auto loans with terms of five years or less, and 1% for auto loans with longer terms, or move to non-discretionary dealer compensation. Fifth Third is also required to pay $18 million to affected African-American and Hispanic borrowers whose auto loans were financed by Fifth Third between January 2010 and September 2015. The Bureau did not assess penalties against Fifth Third because of the bank's responsible conduct, namely the proactive steps the bank is taking that directly address the fair lending risk of discretionary pricing and compensation systems by substantially reducing or eliminating that discretion altogether. In addition, Fifth Third Bank must hire a settlement
On July 14, 2015, the CFPB resolved an action with American Honda Finance Corporation (Honda) that, like Fifth Third Bank, requires Honda to change its pricing and compensation system by substantially reducing or eliminating discretionary markups to minimize the risks of discrimination.
Honda is wholly-owned by American Honda Motor Co., Inc. and as of the first quarter of 2015, Honda was the fourth largest captive auto lender in the United States and the ninth largest auto lender overall. As an indirect auto lender, Honda sets a risk-based interest rate, or “buy rate,” that it conveys to auto dealers. Honda then allows auto dealers to charge a higher interest rate when they finalize the transaction with the consumer. As described above, this is typically called “discretionary markup.” The discretionary markups can generate compensation for dealers while giving them the discretion to charge similarly-situated consumers different rates. Honda permitted dealers to mark up consumers' risk-based interest rates as much as 2.25% for contracts with terms of five years or less, and 2% for contracts with longer terms.
The enforcement action was the result of a joint CFPB and DOJ investigation that began in April 2013. The agencies investigated Honda's indirect auto lending activities' compliance with ECOA. The CFPB found and the DOJ alleged that Honda's indirect lending policies resulted in minority borrowers paying higher discretionary markups and that Honda violated ECOA by charging African-American, Hispanic, and Asian and Pacific Islander borrowers higher discretionary markups for their auto loans than similarly-situated non-Hispanic White borrowers. Honda's discriminatory pricing and compensation structure resulted in thousands of minority borrowers paying, on average, from $150 to over $250 more for their auto loans originated from January 2011 through July 14, 2015.
The CFPB's administrative consent order and the DOJ's consent order require Honda to reduce dealer discretion to mark up the interest rate to a maximum of 1.25% for auto loans with terms of five years or less, and 1% for auto loans with longer terms, or move to non-discretionary dealer compensation. Honda is also required to pay $24 million to affected African-American, Hispanic, and Asian and Pacific Islander borrowers whose auto loans were financed by Honda between January 1, 2011 and July 14, 2015. As in the case of Fifth Third, the Bureau did not assess penalties against Honda because of Honda's responsible conduct, namely the proactive steps the company took to directly address the fair lending risk of discretionary pricing and compensation systems by substantially reducing or eliminating that discretion altogether. In addition, Honda, through American Honda Motor Co., will contact consumers, distribute the funds, and ensure that affected borrowers receive compensation.
When an enforcement action is resolved through a public consent order, the Bureau (and the DOJ, where relevant) will take steps to ensure that the respondent or defendant complies with the requirements of the order. As appropriate to the specific requirements of individual public consent orders, the Bureau may take steps to ensure that borrowers who are eligible for compensation receive remuneration and that the defendant has implemented a comprehensive fair lending compliance management system. Throughout 2015, the Offices of Fair Lending and Supervision worked to implement and oversee compliance with three separate consent orders that were issued by Federal courts or the Bureau's Director in prior years. A description of these is included below.
On June 19, 2014, the CFPB, as part of a joint enforcement action with the DOJ, ordered Synchrony Bank, formerly known as GE Capital, to provide $169 million in relief to about 108,000 borrowers excluded from debt relief offers because of their national origin.
As previously reported, Synchrony Bank had two different promotions that allowed credit card customers with delinquent accounts to address their outstanding balances, one by paying a specific amount to bring their account current in return for a statement credit and another by paying a specific amount in return for waiving the remaining account balance. However, it did not extend these offers to any customers who indicated that they preferred to communicate in Spanish and/or had a mailing address in Puerto Rico, even if the customer met the promotion's qualifications. This practice denied consumers the opportunity to benefit from these promotions on the basis of national origin in direct violation of ECOA. This public enforcement action represented the federal government's largest credit card discrimination settlement in history.
In the course of administering the settlement, Synchrony Bank identified additional consumers who were excluded from these offers and had a mailing address in Puerto Rico or indicated a preference to communicate in Spanish. Synchrony Bank provided a total of approximately $201 million in redress including payments, credits, interest, and debt forgiveness to approximately 133,463 eligible consumers. This amount includes approximately $4 million of additional redress based on its identification of additional eligible consumers. Synchrony completed redress to consumers as of August 8, 2015.
As previously reported, on December 23, 2013, the CFPB and the DOJ filed a joint complaint against National City Bank for discrimination in mortgage lending, along with a proposed order to settle the complaint. Specifically, the complaint alleged that National City Bank charged higher prices on mortgage loans to African-American and Hispanic borrowers than similarly-situated non-Hispanic White borrowers between 2002 and 2008. The consent order, which was entered on January 9, 2014, by the U.S. District Court for the Western District of Pennsylvania, required National City's successor, PNC Bank, to pay $35 million in restitution to harmed African-American and Hispanic borrowers. The
In order to carry out the Bureau's and the DOJ's 2013 settlement with PNC, as successor in interest to National City Bank, the Bureau and the DOJ worked closely with the settlement administrator and PNC to distribute $35 million to harmed African-American and Hispanic borrowers. On September 16, 2014, the Bureau published a blog post (available in English
On December 19, 2013, the CFPB and the DOJ entered into the federal government's largest auto loan discrimination settlement in history
Ally hired a settlement administrator to distribute the $80 million in damages to harmed borrowers. On June 15, 2015, the Bureau published a blog post announcing the selection of the settlement administrator and providing information on contacting the administrator and submitting settlement forms.
The CFPB must refer to the DOJ a matter when it has reason to believe that a creditor has engaged in a pattern or practice of lending discrimination in violation of ECOA.
In 2015 the Bureau had a number of ongoing fair lending investigations and authorized enforcement actions against a number of institutions. In particular, as mortgage lending is among the Bureau's top priorities, the Bureau focused its fair lending enforcement efforts on addressing the unlawful practice of redlining. Redlining occurs when a lender provides unequal access to credit, or unequal terms of credit, because of the racial or ethnic composition of a neighborhood. At the end of 2015, the Bureau had a number of authorized enforcement actions in settlement negotiations and pending investigations.
The Bureau is also focused on institutions' indirect auto lending, specifically discrimination resulting from lender compensation policies that give auto dealers discretion to set loan prices. In 2015, the Bureau investigated several indirect auto lenders and at the end of 2015 had a number of authorized enforcement actions in settlement negotiations and pending investigations.
Finally, the Bureau is also investigating other areas for potential discrimination. At the end of 2015, the Bureau had a number of pending investigations in other markets including credit cards.
In October 2015, the Bureau issued and published in the
HMDA was enacted 40 years ago to respond to redlining concerns and the effects of disinvestment in urban neighborhoods and to encourage reinvestment in the nation's cities. The statute, as implemented by Regulation C, is intended to provide the public with loan data that can be used to help determine whether financial institutions are serving the housing needs of their communities; to assist public officials in distributing public-sector investment to attract private investment in communities where it is needed; and to assist in identifying possible discriminatory lending patterns and enforcing anti-discrimination statutes.
The Dodd-Frank Act transferred rulemaking authority for HMDA to the Bureau, effective July 2011. It also amended HMDA to require financial institutions to report new data points and authorized the Bureau to require financial institutions to collect, record, and report additional information.
On August 29, 2014, the Bureau published in the
In adopting the final rule, the Bureau carefully reviewed and considered all of the comments it received, and published the final rule in the
The rule modifies the types of institutions and transactions subject to Regulation C, adds new data reporting requirements, clarifies several existing data reporting requirements and modifies the processes for reporting and disclosing the required data.
The HMDA Rule changes institutional coverage in two phases. First, to reduce burden on industry, certain lower-volume depository institutions will no longer be required to collect and report HMDA data beginning in 2017. A bank, savings association, or credit union will not be subject to Regulation C in 2017 unless it meets the asset-size, location, federally related, and loan activity tests under current Regulation C and it originates at least 25 home purchase loans, including refinancings of home purchase loans, in both 2015 and 2016. Second, effective January 1, 2018, the HMDA Rule adopts a uniform loan-volume threshold for all institutions. Beginning in 2018, an institution will be subject to Regulation C if it originated at least 25 covered closed-end mortgage loan originations in each of the two preceding calendar years or at least 100 covered open-end lines of credit in each of the two preceding calendar years. Other applicable coverage requirements will apply, depending on the type of covered entity.
The Rule also modifies the types of transactions covered under Regulation C. In general, the HMDA Rule adopts a dwelling-secured standard for transactional coverage. Beginning on January 1, 2018, covered loans under the HMDA Rule generally will include closed-end mortgage loans and open-end lines of credit secured by a dwelling and will not include unsecured loans.
For HMDA data collected on or after January 1, 2018, covered institutions will collect, record, and report additional information on covered loans. New data points include those specifically identified in Dodd-Frank as well as others the Bureau determined will assist in carrying out HMDA's purposes. The HMDA Rule adds new data points for applicant or borrower age, credit score, automated underwriting system information, debt-to-income ratio, combined loan-to-value ratio, unique loan identifier, property value, application channel, points and fees, borrower-paid origination charges, discount points, lender credits, loan term, prepayment penalty, non-amortizing loan features, interest rate, and loan originator identifier as well as other data points. The HMDA Rule also modifies several existing data points.
For data collected on or after January 1, 2018, the HMDA Rule amends the requirements for collection and reporting of information regarding an applicant's or borrower's ethnicity, race, and sex. First, a covered institution will report whether or not it collected the information on the basis of visual observation or surname. Second, covered institutions must permit applicants to self-identify their ethnicity and race using disaggregated ethnic and racial subcategories. However, the HMDA Rule will not require or permit covered institutions to use the disaggregated subcategories when identifying the applicant's or borrower's ethnicity and race based on visual observation or surname.
The Bureau is developing a new web-based submission tool for reporting HMDA data, which covered institutions will use beginning in 2018. Regulation C's appendix A is amended effective January 1, 2018 to include new transition requirements for data collected in 2017 and reported in 2018. Covered institutions will be required to electronically submit their loan application registers (LARs). Beginning with data collected in 2018 and reported in 2019, covered institutions will report the new dataset required by the HMDA Rule, using revised procedures that will be available at
Beginning in 2020, the HMDA Rule requires quarterly reporting for covered institutions that reported a combined total of at least 60,000 applications and covered loans in the preceding calendar year. An institution will not count covered loans that it purchased in the preceding calendar year when determining whether it is required to report on a quarterly basis. The first quarterly submission will be due by May 30, 2020.
Beginning in 2018, covered institutions will no longer be required to provide a disclosure statement or a modified LAR to the public upon request. Instead, in response to a request, a covered institution will provide a notice that its disclosure
For data collected in or after 2018 and reported in or after 2019, the Bureau will use a balancing test to determine whether and, if so, how HMDA data should be modified prior to its disclosure in order to protect applicant and borrower privacy while also fulfilling HMDA's disclosure purposes. At a later date, the Bureau will provide a process for the public to provide input regarding the application of this balancing test to determine the HMDA data to be publicly disclosed.
The Bureau took a number of steps to reduce industry burden while ensuring HMDA data are useful and reflective of the current housing finance market. A key part of this balancing is ensuring an adequate implementation period. Most provisions of the HMDA Rule go into effect on January 1, 2018—more than two years after publication of the Rule—and apply to data collected in 2018 and reported in 2019 or later years. At the same time, an institutional coverage change that will reduce the number of depository institutions that need to report is effective earlier: On January 1, 2017. Institutions subject to the new quarterly reporting requirement will have additional time to prepare: That requirement is effective on January 1, 2020, and the first quarterly submission will be due by May 30, 2020.
As with all of its rules, the Bureau continues to look for ways to help the mortgage industry implement the new mortgage lending data reporting rules, and has created regulatory implementation resources that are available online. These resources include an overview of the final rule, a plain-language compliance guide, a timeline with various effective dates, a decision tree to help institutions determine whether they need to report mortgage lending data, a chart that provides a summary of the reportable data, and a chart that describes when to report data as not applicable. The Bureau will monitor implementation progress and will be publishing additional regulatory implementation tools and resources on its Web site to support implementation needs.
In response to dialogue with industry and other stakeholders, the Bureau is considering modifications to its current resubmission guidelines. In comments on the Bureau's proposed changes to Regulation C, some stakeholders asked that the Bureau adjust its existing HMDA resubmission guidelines to reflect the expanded data the Bureau will collect under the HMDA Rule.
Accordingly, on January 7, 2016, the Bureau published on its Web site a Request for Information (RFI) asking for public comment on the Bureau's HMDA resubmission guidelines.
• Should the Bureau continue to use error percentage thresholds to determine the need for data resubmission? If not, how else may the Bureau ensure data integrity and compliance with HMDA and Regulation C?
• If the Bureau retains error percentage thresholds, should the thresholds be calculated differently than they are today? If so, how and why?
• If the Bureau retains error percentage thresholds, should it continue to maintain separate error thresholds for the entire HMDA LAR sample and individual data fields within the LAR sample? If not, why?
The RFI was published in the
Section 1071 of Dodd-Frank requires financial institutions to compile, maintain, and submit to the Bureau certain data on credit applications for women-owned, minority-owned, and small businesses.
The Bureau has begun to explore some of the issues involved in the rulemaking, including engaging numerous stakeholders about the statutory reporting requirements. The Bureau is also considering how best to work with other agencies to, in part, gain insight into existing small business data collection efforts and possible ways to cooperate in future efforts. In addition, current and future small business lending supervisory activity will help expand and enhance the Bureau's knowledge in this area, including the credit process; existing data collection processes; and the nature, extent, and management of fair lending risk.
The Bureau's Amicus Program files amicus, or friend-of-the-court, briefs in court cases concerning the federal consumer financial protection laws that the Bureau is charged with implementing, including ECOA. These amicus briefs provide the courts with our views on significant consumer financial protection issues and help ensure that consumer financial protection statutes and regulations are correctly and consistently interpreted by the courts.
On May 28, 2015, the Bureau with the Solicitor General of the United States filed an amicus brief in
In 2015, the Bureau also began the process of working on an amicus brief in
The Bureau's Amicus Program is ongoing and we welcome suggestions of pending cases that might make good candidates for the program.
As part of the Bureau's commitment to transparency and to being a data-driven agency, we continue to evaluate and share our fair lending methodologies and analytical approaches. In the Bureau's 2015 Fair Lending Report to Congress,
On September 17, 2014, the Bureau published a white paper, titled
The analysis in the white paper showed that, compared to the distribution of self-reported race and ethnicity in a sample of mortgage applicants, the BISG proxy underestimated the percentage of non-Hispanic White mortgage applicants and overestimated the percentage of minority applicants. The analysis suggested that this pattern of under- and over-estimation is likely more pronounced for mortgage applicants, who tend to be disproportionately more non-Hispanic White than the U.S. adult population, and that in other settings, such as auto lending, the pattern may be less pronounced.
Subsequent analysis of auto loan originations reported in the Consumer Expenditure Survey (CEX), a publicly-available survey of U.S. consumer expenditures conducted by the Bureau of Labor Statistics,
The Bureau's methodology is designed to arrive at the best estimate, based on publicly available data, of the total number of harmed borrowers and to accurately identify the full scope of harm. The Bureau makes final determinations regarding discriminatory outcomes and their scope in dialogue with individual lenders, and carefully considers every argument lenders make about alternative ways to identify the number of harmed borrowers and the amount of harm. These alternative methods do not typically suggest an absence of discrimination or consumer harm, but rather a lower level than the Bureau's original estimates. In some instances, as a result of dialogue with institutions, the Bureau has adopted changes to our analyses and reduced our estimates in response to specific alternatives offered by individual lenders with regard to their specific loan portfolios. In other instances, the Bureau has retained its original estimates, for example, where we have concluded that the proffered alternatives would underestimate the level of discrimination and harm without an adequate basis.
As we stated in our white paper, the Bureau is committed to continuing our dialogue with other federal agencies,
As noted above, the Fall 2015 edition of
In CFPB underwriting reviews, which typically evaluate potential disparities in denial rates, Bureau economists and analysts may rely on various methods to measure whether outcomes differ based on race, national origin, sex, or other prohibited bases.
One traditional method involves odds ratios, which measure the ratio of the odds of two different events. In the context of an underwriting analysis, the ratio reflects the odds of a loan application denial between groups of borrowers.
However, the Bureau may use other methods of analysis, including marginal effects, to gain a better understanding of the nature and relative magnitude of any underwriting disparities. In contrast to odds ratios, the marginal effect expresses the absolute change in denial probability associated with being a member of a prohibited basis group. For example, a marginal effect of 0.10 in an underwriting analysis means the probability of denial for the test group is 10 percentage points higher than the probability of denial for the control group. When the CFPB calculates marginal effects, it also considers a conditional marginal effect, which provides the increased chances of denial for a group holding all other factors constant, and thus controls for other, legitimate credit characteristics that may affect the probability of denial.
An additional benefit of marginal effects is that they can be compared across groups and institutions, and to the institution's overall approval and denial rates in the specific product reviewed. In this manner, the CFPB can contextualize the disparity to determine whether it warrants additional inquiry. In a number of instances, our review of marginal effects data has allowed us to decide that a particular disparity does not merit additional inquiry.
The Office of Fair Lending regularly coordinates the CFPB's fair lending efforts with those of other federal agencies and state regulators to promote consistent, efficient, and effective enforcement of federal fair lending laws.
The Financial Fraud Enforcement Task Force was established in November 2009 by an Executive Order aimed at strengthening the efforts of the DOJ and federal, state, and local agencies “to investigate and prosecute significant financial crimes and other violations relating to the current financial crisis and economic recovery efforts, recover the proceeds of such financial crimes and violations, and ensure just and effective punishment of those who perpetuate financial crimes and violations.”
The CFPB, along with the FTC, DOJ, HUD, FDIC, FRB, NCUA, OCC, and the Federal Housing Finance Agency, comprise the Interagency Task Force on Fair Lending. The Task Force meets regularly to discuss fair lending enforcement efforts, share current methods of conducting supervisory and enforcement fair lending activities, and coordinate fair lending policies.
The CFPB belongs to a standing working group of Federal agencies—with the DOJ, HUD, and FTC—that meets regularly to discuss issues relating to fair lending enforcement. The agencies use these meetings to discuss fair lending developments and trends, methodologies for evaluating fair lending risks and violations, and coordination of fair lending enforcement efforts. In addition to these interagency working groups, we meet periodically and on an ad hoc basis with the prudential regulators to coordinate our fair lending work.
The CFPB takes part in the FFIEC HMDA/Community Reinvestment Act Data Collection Subcommittee, which is a subcommittee of the FFIEC Task Force on Consumer Compliance, as its work relates to the collection and processing of HMDA data jurisdiction.
To increase efficiency and reduce industry burden where appropriate, the Bureau and HUD frequently collaborate and share information when there is overlapping authority. On September 2, 2015, the Bureau and HUD entered into a Memorandum of Understanding (MOU) delineating how each agency will use and properly share information to enhance fair lending compliance and interagency collaboration around institutions and issues over which the two agencies share jurisdiction. The MOU further extends the Bureau's robust working relationship with HUD. In particular, HUD can now access the Bureau's Government Portal, allowing HUD to view the Bureau's consumer complaints. HUD, in turn, provides to the Bureau reports describing the fair lending complaints that it has received. Additionally, the agencies have agreed to coordinate joint fair lending investigations to minimize duplication of efforts; meet quarterly to discuss current fair lending investigations of entities within the jurisdiction of both Agencies; coordinate action(s) in a manner consistent and complementary to each agency's actions, including determining whether multiple or joint actions are necessary and appropriate; notify each agency of relevant information under specified circumstances; and meet annually to assess the implementation of the MOU.
Pursuant to Dodd-Frank,
When the Bureau becomes aware of compliance issues that may be widespread, it works to share information with industry stakeholders and consumers to address the concerns. On May 11, 2015, the Bureau issued a compliance bulletin on the Section 8 Housing Choice Voucher (HCV) Homeownership Program.
The Bureau became aware of circumstances where institutions were excluding or refusing to consider income derived from the Section 8 HCV Homeownership Program during mortgage loan application and underwriting processes. Some institutions have restricted the use of Section 8 HCV Homeownership Program vouchers to only certain home mortgage loan products or delivery channels. Our reminder to mortgage lenders, in the form of the compliance bulletin, should help consumers who receive Section 8 HCV Homeownership Program vouchers receive fair and equal access to credit and will help industry comply with current law.
As explained more fully earlier in this report, the Bureau published its final rule implementing the Dodd-Frank Act's amendments to HMDA and Regulation C in October 2015. Prior to publishing its final rule, the Bureau received and reviewed approximately 400 comments in response to its proposed rule. Additionally, the Bureau, in accordance with its obligation under the Dodd-Frank Act to consult with the appropriate prudential regulators and other Federal agencies prior to proposing a rule and during the comment process,
In conjunction with the HMDA Rule, the Bureau published a Web page dedicated to HMDA to consolidate resources for consumers, industry, academia, the media and other stakeholders. The HMDA Web page contains the new rule, materials for better understanding the rule and its requirements, a tool to explore HMDA data, helpful facts and figures about HMDA data, and more. The Web page can be accessed at
In addition, on January 12, 2016, the Bureau published in the
The Bureau firmly believes that an informed consumer is the best defense against predatory lending practices. When issues arise that consumers need to know about, the Bureau uses many tools to spread the word. The Bureau regularly uses its blog as a tool to communicate effectively to consumers on timely issues, emerging areas of concern, Bureau initiatives, and more. In 2015 we published several blog posts related to fair lending, including announcement of the Hudson City redlining settlement, published in both English
The blog may be accessed any time at
On October 15, 2015, along with federal partners from the FRB, the DOJ, the FDIC, the OCC, HUD, and the NCUA, the Office of Fair Lending staff participated in and presented at the 2015 Federal Interagency Fair Lending Hot Topics webinar. The webinar covered several fair lending topics,
More information about the topics discussed this year in
Pursuant to ECOA, the CFPB is required to file a report to Congress describing the administration of its functions under ECOA, providing an assessment of the extent to which compliance with ECOA has been achieved, and giving a summary of public enforcement actions taken by other agencies with administrative enforcement responsibilities under ECOA.
• A description of the CFPB's and other agencies' ECOA enforcement efforts; and
• an assessment of compliance with ECOA.
In addition, the CFPB's annual HMDA reporting requirement calls for the CFPB, in consultation with HUD, to report annually on the utility of HMDA's requirement that covered lenders itemize certain mortgage loan data.
The enforcement efforts and compliance assessments made by all the agencies assigned enforcement authority under Section 704 of ECOA are discussed in this section.
In addition to the CFPB, the agencies charged with administrative enforcement of ECOA under Section 704 include: The FRB, the FDIC, the OCC, and the NCUA (collectively, the FFIEC agencies);
Among institutions examined for compliance with ECOA and Regulation B, the FFIEC agencies reported that the most frequently cited violations were:
The GIPSA, the SEC, and the SBA reported that they received no complaints based on ECOA or Regulation B in 2015. In 2015, the DOT reported that it received a “small number of consumer inquiries or complaints concerning credit matters possibly covered by ECOA,” which it “processed informally.” The FTC is an enforcement agency and does not conduct compliance examinations.
In 2015, the FFIEC agencies including the CFPB referred a total of 16 matters to the DOJ. The FDIC referred four matters to the DOJ. These matters alleged discriminatory treatment of persons in credit transactions due to protected characteristics, including race, national origin, marital status and receipt of public assistance income. The FRB referred four matters to the DOJ. These matters alleged discriminatory treatment of persons in credit transactions due to protected characteristics, including race, national origin, and marital status. The CFPB referred eight matters to the DOJ during 2015, finding discrimination in credit transactions on the following prohibited bases: Race, color, national origin, age, receipt of public assistance income, sex, and marital status.
The CFPB's annual HMDA reporting requirement calls for the CFPB, in consultation with the Department of Housing and Urban Development (HUD), to report annually on the utility of HMDA's requirement that covered lenders itemize in order to disclose the number and dollar amount of certain mortgage loans and applications, grouped according to various characteristics.
In this, our fourth Fair Lending Report to Congress, we outline our work in furtherance of our Congressional mandate to ensure fair, equitable, and nondiscriminatory access to credit. Our multipronged approach uses every tool at our disposal—supervision, enforcement, rulemaking, outreach, research, data-driven prioritization, interagency coordination, and more. We are proud to present this report as we continue to fulfill our Congressional mandate as well as the Bureau's mission to help consumer finance markets work by making rules more effective, by consistently and fairly enforcing these rules, and by empowering consumers to take more control over their economic lives.
This Fair Lending Report of the Consumer Financial Protection Bureau summarizes existing requirements under the law, and summarizes findings made in the course of exercising the Bureau's supervisory and enforcement authority. It is therefore exempt from notice and comment rulemaking requirements under the Administrative Procedure Act pursuant to 5 U.S.C. 553(b). Because no notice of proposed rulemaking is required, the Regulatory Flexibility Act does not require an initial or final regulatory flexibility analysis. 5 U.S.C. 603(a), 604(a). The Bureau has determined that this Fair Lending Report does not impose any new or revise any existing recordkeeping, reporting, or disclosure requirements on covered entities or members of the public that would be collections of information requiring OMB approval under the Paperwork Reduction Act, 44 U.S.C. 3501,
Wednesday May 18, 2016, 2:00 p.m.–4:00 p.m.
Hearing Room 420, Bethesda Towers, 4330 East West Highway, Bethesda, Maryland.
Commission Meeting—Open to the Public.
A live webcast of the Meeting can be viewed at
Todd A. Stevenson, Office of the Secretary, U.S. Consumer Product Safety Commission, 4330 East West Highway, Bethesda, MD 20814, (301) 504–7923.
Department of the Air Force, Air Force Scientific Advisory Board, DOD.
Meeting notice.
Under the provisions of the Federal Advisory Committee Act of 1972 (5 U.S.C., Appendix, as amended), the Government in the Sunshine Act of 1976 (5 U.S.C. 552b, as amended), and 41 CFR 102–3.150, the Department of Defense announces that the United States Air Force (USAF) Scientific Advisory Board (SAB) Summer Board meeting will take place on 15 June 2016 at the Arnold & Mabel Beckman Center, located at 100 Academy Drive in Irvine, CA 92617. The meeting will occur from 8:00 a.m.–4:00 p.m. on Wednesday, 15 June 2016. The session that will be open to the
Any member of the public that wishes to attend this meeting or provide input to the USAF SAB must contact the SAB meeting organizer at the phone number or email address listed in this announcement at least five working days prior to the meeting date. Please ensure that you submit your written statement in accordance with 41 CFR 102–3.140(c) and section 10(a)(3) of the Federal Advisory Committee Act. Statements being submitted in response to the agenda mentioned in this notice must be received by the SAB meeting organizer at least five calendar days prior to the meeting commencement date. The SAB meeting organizer will review all timely submissions and respond to them prior to the start of the meeting identified in this noice. Written statements received after this date may not be considered by the SAB until the next scheduled meeting.
The SAB meeting organizer, Major Mike Rigoni at
Office of Planning, Evaluation and Policy Development (OPEPD), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 3501
Interested persons are invited to submit comments on or before July 11, 2016.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Julie Warner, 202–453–6043.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
Federal Student Aid (FSA), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 3501
Interested persons are invited to submit comments on or before June 13, 2016.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Valerie Sherrer, 202–377–3547.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
Office of Planning, Evaluation and Policy Development (OPEPD), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 3501
Interested persons are invited to submit comments on or before July 11, 2016.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Michael Fong, 202–401–7462.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also
On April 28, 2014 Turlock Irrigation District and Modesto Irrigation District, licensees for the Don Pedro Hydroelectric Project, filed an Application for a New License pursuant to the Federal Power Act (FPA) and the Commission's regulations thereunder. The Don Pedro Hydroelectric Project facilities are located on the Tuolumne River in Tuolumne County, California.
The license for Project No. 2299 was issued for a period ending April 30, 2016. Section 15(a)(1) of the FPA, 16 U.S.C. 808(a)(1), requires the Commission, at the expiration of a license term, to issue from year-to-year an annual license to the then licensee under the terms and conditions of the prior license until a new license is issued, or the project is otherwise disposed of as provided in section 15 or any other applicable section of the FPA. If the project's prior license waived the applicability of section 15 of the FPA, then, based on section 9(b) of the Administrative Procedure Act, 5 U.S.C. 558(c), and as set forth at 18 CFR 16.21(a), if the licensee of such project has filed an application for a subsequent license, the licensee may continue to operate the project in accordance with the terms and conditions of the license after the minor or minor part license expires, until the Commission acts on its application. If the licensee of such a project has not filed an application for a subsequent license, then it may be required, pursuant to 18 CFR 16.21(b), to continue project operations until the Commission issues someone else a license for the project or otherwise orders disposition of the project.
If the project is subject to section 15 of the FPA, notice is hereby given that an annual license for Project No. 2299 is issued to the licensee for a period effective May 1, 2016 through April 30, 2017 or until the issuance of a new license for the project or other disposition under the FPA, whichever comes first. If issuance of a new license (or other disposition) does not take place on or before April 30, 2017, notice is hereby given that, pursuant to 18 CFR 16.18(c), an annual license under section 15(a)(1) of the FPA is renewed automatically without further order or notice by the Commission, unless the Commission orders otherwise.
If the project is not subject to section 15 of the FPA, notice is hereby given that the licensee, Turlock Irrigation District and Modesto Irrigation District, is authorized to continue operation of the Don Pedro Hydroelectric Project, until such time as the Commission acts on its application for a subsequent license.
As announced in the Notice of Technical Conference issued on April 15, 2016 in the above-captioned proceeding, a technical conference will be held in this proceeding on Monday, May 9, 2016, beginning at 10:00 a.m. and ending at approximately 3:30 p.m., at the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426. The purpose of the technical conference is to examine the issues raised in the protests and comments regarding the February 19, 2016 filing made by Algonquin Gas Transmission, LLC (Algonquin). In that filing, Algonquin proposed to exempt from the capacity release bidding requirements certain types of capacity releases of firm transportation by electric distribution companies that are participating in state-regulated electric reliability programs.
The agenda for this technical conference is attached. Due to the number of parties requesting to make presentations, each presentation will be limited to fifteen minutes to provide sufficient time for discussion. We have allotted time between each presentation for questions and comments from staff, panelists, and the audience. Parties may file in this docket longer presentations or other materials prior to the technical conference. A schedule for post-
For more information about this technical conference, please contact Anna Fernandez at
On March 14, 2016, Green Canyon Energy, LLC filed an application for a preliminary permit, pursuant to section 4(f) of the Federal Power Act (FPA), proposing to study the feasibility of the Eagle Creek Hydroelectric Project (Eagle Creek Project or project) to be located on Eagle Creek, in Lane County, Oregon. The proposed project boundary will occupy approximately 14.5 acres of federal land within the Willamette National Forest. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed project would consist of the following new features: (1) A 40-foot-long, 9.5-foot-high concrete diversion weir traversing Eagle Creek; (2) an approximately 0.7 acre-foot impoundment; (3) an approximately 11,470-foot-long, 36-inch-diameter polyvinyl chloride pipe penstock; (4) a 50-foot-long, 40-foot-wide concrete powerhouse; (5) one Pelton turbine/generator with a total installed capacity of 7.0-megawatts; (6) a tailrace comprised of a 50-foot-long, 60-inch steel pipe and a 350-foot-long and 25-foot-wide rip-rapped channel discharging flows from the powerhouse back to Eagle Creek; (7) an approximately 3,960-foot-long, 12.4-kilovolt (kV) transmission line interconnecting with the existing Blachly-Lane Electric Cooperative transmission line; and (8) appurtenant facilities. The estimated annual generation of the Eagle Creek Project would be 50 gigawatt-hours.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36.
The Commission strongly encourages electronic filing. Please file comments, motions to intervene, notices of intent, and competing applications using the Commission's eFiling system at
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of Commission's Web site at
The staff of the Federal Energy Regulatory Commission (FERC or Commission) will prepare an environmental assessment (EA) that will discuss the environmental impacts of the B-System Project involving abandonment, construction, and operation of facilities by Columbia Gas Transmission, LLC (Columbia) in Fairfield and Franklin Counties, Ohio. The Commission will use this EA in its decision-making process to determine whether the project is in the public convenience and necessity.
This notice announces the opening of the scoping process the Commission will use to gather input from the public and interested agencies on the project. You can make a difference by providing us with your specific comments or concerns about the project. Your comments should focus on the potential environmental effects, reasonable alternatives, and measures to avoid or lessen environmental impacts. Your input will help the Commission staff determine what issues they need to evaluate in the EA. To ensure that your comments are timely and properly recorded, please send your comments so that the Commission receives them in Washington, DC on or before June 6, 2016.
If you sent comments on this project to the Commission before the opening of this docket on March 10, 2016, you will need to file those comments in Docket No. PF16–4–000 to ensure they are considered as part of this proceeding.
This notice is being sent to the Commission's current environmental mailing list for this project. State and local government representatives should notify their constituents of this planned project and encourage them to comment on their areas of concern.
If you are a landowner receiving this notice, a pipeline company representative may contact you about the acquisition of an easement to construct, operate, and maintain the planned facilities. The company would seek to negotiate a mutually acceptable agreement. However, if the Commission approves the project, that approval conveys with it the right of eminent
A fact sheet prepared by the FERC entitled “An Interstate Natural Gas Facility On My Land? What Do I Need To Know?” is available for viewing on the FERC Web site (
For your convenience, there are three methods you can use to submit your comments to the Commission. The Commission encourages electronic filing of comments and has expert staff available to assist you at (202) 502–8258 or
(1) You can file your comments electronically using the
(2) You can file your comments electronically by using the
(3) You can file a paper copy of your comments by mailing them to the following address. Be sure to reference the project docket number (PF16–4–000) with your submission: Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 888 First Street NE., Room 1A, Washington, DC 20426.
Columbia plans to abandon pipeline and appurtenant aboveground facilities as well as construct replacement and new pipeline and appurtenant aboveground facilities in Franklin and Fairfield Counties, Ohio. The project would replace aging infrastructure and construct new facilities as a part of Columbia's proposed Modernization II Program, which would allow Columbia to achieve compliance with emerging regulations and meet current and future service requirements.
The B-System Project would:
• Abandon in place approximately 17.5 miles of 20-inch-diameter pipeline and remove two associated mainline valves (mileposts 7.7 and 10.9) on Columbia's Line B–105;
• construct approximately 14.0 miles of 20-inch-diameter replacement pipeline, and construct one new bi-directional pig
• replace approximately 0.1 mile of 4-inch-diameter pipeline on Columbia's Line B–121;
• replace approximately 0.5 mile of 4-inch-diameter pipeline on Columbia's Line B–130; and
• construct approximately 7.6 miles of new 20-inch-diameter pipeline (“Line K–270”) connecting Columbia's K-System to its B-System, one pig launcher and tie-in piping (milepost 0.0), and one pig receiver, tie-in piping, gas heater, and regulation facility (milepost 7.6).
The general location of the project facilities is shown in appendix 1.
Columbia's planned abandonment and construction activities would disturb about 387.6 acres of land. Following construction, Columbia would utilize and maintain about 147.5 acres for permanent operation of the new and replacement facilities.
The National Environmental Policy Act (NEPA) requires the Commission to take into account the environmental impacts that could result from an action whenever it considers the issuance of a Certificate of Public Convenience and Necessity. NEPA also requires us
In the EA we will discuss impacts that could occur as a result of the construction and operation of the planned project under these general headings:
• Geology and soils;
• land use;
• water resources, fisheries, and wetlands;
• cultural resources;
• vegetation and wildlife;
• air quality and noise;
• endangered and threatened species;
• public safety; and
• cumulative impacts.
We will also evaluate possible alternatives to the planned project or portions of the project, and make recommendations on how to lessen or avoid impacts on the various resource areas.
Although no formal application has been filed, we have already initiated our NEPA review under the Commission's pre-filing process. The purpose of the pre-filing process is to encourage early involvement of interested stakeholders and to identify and resolve issues before the FERC receives an application. As part of our pre-filing review, we have begun to contact some federal and state agencies to discuss their involvement in the scoping process and the preparation of the EA.
The EA will present our independent analysis of the issues. The EA will be available in the public record through eLibrary. Depending on the comments received during the scoping process, we may also publish and distribute the EA to the public for an allotted comment period. We will consider all comments on the EA before we make our recommendations to the Commission. To ensure we have the opportunity to consider and address your comments, please carefully follow the instructions in the Public Participation section, beginning on page 2.
With this notice, we are asking agencies with jurisdiction by law and/or special expertise with respect to the environmental issues related to this project to formally cooperate with us in the preparation of the EA.
In accordance with the Advisory Council on Historic Preservation's implementing regulations for section 106 of the National Historic Preservation Act, we are using this notice to initiate consultation with the applicable State Historic Preservation Office(s), and to solicit their views and those of other government agencies, interested Indian tribes, and the public on the project's potential effects on historic properties.
The environmental mailing list includes federal, state, and local government representatives and agencies; elected officials; environmental and public interest groups; Native American Tribes; other interested parties; and local libraries and newspapers. This list also includes all affected landowners (as defined in the Commission's regulations) who are potential right-of-way grantors, whose property may be used temporarily for project purposes, or who own homes within certain distances of aboveground facilities, and anyone who submits comments on the project. We will update the environmental mailing list as the analysis proceeds to ensure that we send the information related to this environmental review to all individuals, organizations, and government entities interested in and/or potentially affected by the planned project.
If we publish and distribute the EA, copies of the EA will be sent to the environmental mailing list for public review and comment. If you would prefer to receive a paper copy of the document instead of the CD version or would like to remove your name from the mailing list, please return the attached Information Request (appendix 2).
Once Columbia files its application with the Commission, you may want to become an “intervenor” which is an official party to the Commission's proceeding. Intervenors play a more formal role in the process and are able to file briefs, appear at hearings, and be heard by the courts if they choose to appeal the Commission's final ruling. An intervenor formally participates in the proceeding by filing a request to intervene. Motions to intervene are more fully described at
Additional information about the project is available from the Commission's Office of External Affairs, at (866) 208–FERC, or on the FERC Web site (
In addition, the Commission offers a free service called eSubscription which allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. Go to
Finally, public meetings or site visits will be posted on the Commission's calendar located at
Take notice that on May 5, 2016, the California Power Exchange Corporation submitted its Refund Rerun Compliance Filing pursuant to the Federal Energy Regulatory Commission's (Commission) July 15, 2011 Order Accepting Compliance Filings and Providing Guidance.
Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211, 385.214). Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. Such notices, motions, or protests must be filed on or before the comment date. On or before the comment date, it is not necessary to serve motions to intervene or protests on persons other than the Applicant.
The Commission encourages electronic submission of protests and interventions in lieu of paper using the “eFiling” link at
This filing is accessible on-line at
In accordance with the National Environmental Policy Act of 1969 and the Federal Energy Regulatory Commission's (Commission) regulations, 18 CFR part 380 (Order No. 486, 52 FR 47897), the Office of Energy Projects has reviewed Erie Boulevard Hydropower, L.P. and Saint Regis Mohawk Tribe's (licensees) Environmental Analysis, filed with the Commission on April 28, 2016, regarding the proposed surrender of project license for the Hogansburg Hydroelectric Project. The project is located on the St Regis River in Franklin County, New York. The project does not occupy any federal lands.
After independent review of the licensees' Environmental Analysis, Commission staff has decided to adopt it and issue it as staff's Environmental Assessment (EA). The EA analyzes the potential environmental impacts of decommissioning project facilities, including dam removal, and the surrender of the project license. The EA includes proposed mitigation measures and concludes that granting the proposed surrender would not constitute a major federal action that would significantly affect the quality of the human environment.
A copy of the EA is on file with the Commission and is available for public inspection. The EA may be viewed on the Commission's Web site at
A copy of the EA may also be accessed using this link:
You may also register online at
All comments must be filed within 30 days of the date of this notice and should reference Project No. 7518–018. The Commission strongly encourages electronic filing. Please file comments using the Commission's efiling system at
For further information, contact Mo Fayyad at (202) 502–8759 or
The staff of the Federal Energy Regulatory Commission (FERC or Commission) has prepared a draft environmental impact statement (EIS) for the Atlantic Sunrise Project, proposed by Transcontinental Gas Pipe Line Company, LLC (Transco) in the above-referenced docket. Transco requests authorization to expand its existing pipeline system from the Marcellus Shale production area in northern Pennsylvania to deliver an incremental 1.7 million dekatherms per day of year-round firm transportation capacity to its existing southeastern market areas.
The draft EIS assesses the potential environmental effects of the construction and operation of the project in accordance with the requirements of the National Environmental Policy Act. The FERC staff concludes that approval of the project would result in some adverse environmental impacts; however, most of these impacts would be reduced to less-than-significant levels with the implementation of Transco's proposed mitigation and the additional measures recommended in the draft EIS.
The U.S. Army Corps of Engineers participated as a cooperating agency in the preparation of the EIS. Cooperating agencies have jurisdiction by law or special expertise with respect to resources potentially affected by the proposal and participate in the National Environmental Policy Act analysis. Although the U.S. Army Corps of Engineers provided input to the conclusions and recommendations presented in the draft EIS, the agency will present its own conclusions and recommendations in its respective record of decision or determination for the project.
The draft EIS addresses the potential environmental effects of the construction and operation of about 197.7 miles of pipeline composed of the following facilities:
• 183.7 miles of new 30- and 42-inch-diameter natural gas pipeline in Pennsylvania;
• 11.5 miles of new 36- and 42-inch-diameter pipeline looping in Pennsylvania;
• 2.5 miles of 30-inch-diameter replacements in Virginia; and
• associated equipment and facilities.
The project's proposed aboveground facilities include two new compressor stations in Pennsylvania; additional compression and related modifications to three existing compressor stations in Pennsylvania and Maryland; two new meter stations and three new regulator stations in Pennsylvania; and minor modifications at existing aboveground facilities at various locations in Pennsylvania, Virginia, North Carolina, and South Carolina to allow for bi-directional flow and the installation of supplemental odorization, odor detection, and/or odor masking/deodorization equipment.
The FERC staff mailed copies of the draft EIS to federal, state, and local government representatives and agencies; elected officials; environmental and public interest
Any person wishing to comment on the draft EIS may do so. To ensure consideration of your comments on the proposal in the final EIS, it is important that the Commission receive your comments on or before June 27, 2016.
For your convenience, there are four methods you can use to submit your comments to the Commission. In all instances, please reference the project docket number (CP15–138–000) with your submission. The Commission encourages electronic filing of comments and has expert staff available to assist you at (202) 502–8258 or
(1) You can file your comments electronically using the eComment feature on the Commission's Web site (
(2) You can file your comments electronically by using the eFiling feature on the Commission's Web site (
(3) You can file a paper copy of your comments by mailing them to the following address: Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 888 First Street NE., Room 1A, Washington, DC 20426.
(4) In lieu of sending written or electronic comments, the Commission invites you to attend one of the public comment meetings its staff will conduct in the project area to receive comments on the draft EIS. We
The Baltimore District of the U.S. Army Corps of Engineers will participate (jointly with FERC) in the public comment meetings to gather information on this proposal to assist them in the review of the permit application for the proposed activity.
The joint comment meetings will begin at 7:00 p.m. with a description of our environmental review process by Commission staff, after which speakers will be called. The meetings will end once all speakers have provided their comments or at 10:30 p.m., whichever comes first. Please note that there may be a time limit of three minutes to present comments, and speakers should structure their comments accordingly. If time limits are implemented, they will be strictly enforced to ensure that as many individuals as possible are given an opportunity to comment. The meetings will be recorded by a court reporter to ensure comments are accurately recorded. Transcripts will be entered into the formal record of the Commission proceeding.
Any person seeking to become a party to the proceeding must file a motion to intervene pursuant to Rule 214 of the Commission's Rules of Practice and Procedures (Title 18 Code of Federal Regulations Part 385.214).
Additional information about the project is available from the Commission's Office of External Affairs, at (866) 208–FERC, or on the FERC Web site (
In addition, the Commission offers a free service called eSubscription that allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. Go to
Take notice
This Notice does not confer a right on third parties to intervene in the investigation or any other right with respect to the investigation.
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j. This application is not ready for environmental analysis at this time.
k. The proposed Lake Powell Pipeline Project would consist of: (1) 140 miles of 69-inch-diameter pipeline and penstock, (2) a combined conventional peaking and pumped storage hydro station, (3) four conventional in-pipeline hydro stations, (4) a conventional hydro station, and (4) transmission lines.
The proposed project's water intake would convey water from the Bureau of Reclamation's Lake Powell up to a high point within the Grand Staircase-Escalante National Monument, after which it would flow through a series of hydroelectric turbines, ending at Sand Hollow reservoir, near St. George, Utah.
The energy generation components of the proposed project would include: (1) An inline single-unit, 1-megawatt (MW) facility at Hydro Station 1 in the Grand Staircase-Escalante National Monument; (2) an inline single-unit, 1.7–MW facility at Hydro Station 2 east of Colorado City, Arizona; (3) an inline single-unit, 1–MW facility in Hildale City, Utah; (4) an inline single-unit, 1.7–MW facility above the Hurricane Cliffs forebay reservoir; (5) a 2-unit, 300–MW (150–MW each unit) hydroelectric pumped storage development at Hurricane Cliffs, with the forebay and afterbay sized to provide ten hours of continuous 300–MW output; (6) a single-unit, 35–MW conventional energy recovery generation unit built within the Hurricane Cliffs development; and (7) a single-unit, 5–MW facility at the existing Sand Hollow Reservoir.
l.
m. You may also register online at
n.
The application will be processed according to the following preliminary Hydro Licensing Schedule. Revisions to the schedule may be made as appropriate.
o. Final amendments to the application must be filed with the Commission no later than 30 days from the issuance date of the notice of ready for environmental analysis.
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j. Deadline for filing comments, motions to intervene, and protests: June 6, 2016.
The Commission strongly encourages electronic filing. Please file comments, motions to intervene, and protests using the Commission's eFiling system at
The Commission's Rules of Practice and Procedure require all intervenors filing documents with the Commission to serve a copy of that document on each person whose name appears on the official service list for the project. Further, if an intervenor files comments or documents with the Commission relating to the merits of an issue that may affect the responsibilities of a particular resource agency, they must also serve a copy of the document on that resource agency.
k.
l.
m. Individuals desiring to be included on the Commission's mailing list should so indicate by writing to the Secretary of the Commission.
n.
o.
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following electric rate filings:
Description: § 205(d) Rate Filing: Rate Schedule Nos. 44, 98, 211—Four Corners Acquisition to be effective 7/6/2016.
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Federal Energy Regulatory Commission, Department of Energy.
Comment request.
In compliance with the requirements of the Paperwork Reduction Act of 1995, 44 U.S.C. 3507(a)(1)(D), the Federal Energy Regulatory Commission (Commission or FERC) is submitting its information collection FERC–725J (Definition of the
Comments on the collection of information are due by June 13, 2016.
Comments filed with OMB, identified by the OMB Control No. 1902–0259, should be sent via email to the Office of Information and Regulatory Affairs:
A copy of the comments should also be sent to the Commission, in Docket No. IC16–6–000, by either of the following methods:
•
•
Ellen Brown may be reached by email at
On March 24, 2016, Black Mountain Hydro, LLC, filed an application for a preliminary permit, pursuant to section 4(f) of the Federal Power Act (FPA), proposing to study the feasibility of the Southern Intertie Pumped Storage Project (Southern Intertie Project or project) to be located on Black Mountain, near Yerington, in Mineral and Lyon Counties, Nevada. The sole purpose of a preliminary permit, if issued, is to grant the permit holder priority to file a license application during the permit term. A preliminary permit does not authorize the permit holder to perform any land-disturbing activities or otherwise enter upon lands or waters owned by others without the owners' express permission.
The proposed closed-loop pumped storage project would consist of the following: (1) An upper reservoir in a natural depression having a total storage capacity of 4,460 acre-feet at a normal maximum operating elevation of 7,410 feet mean sea level (msl); (2) a 105-foot-tall, 1,500-foot-long lower dam of indeterminate construction; (3) a lower reservoir having a total storage capacity of 4,384 acre-feet at a normal maximum operating elevation of 5,500 feet msl; (4) a 2,200-foot-long, 16.5-foot-diameter, concrete low pressure tunnel; (5) a 7,850-foot-long 16.5-foot-diameter concrete and steel lined high pressure tunnel; (6) a 2,200-foot-long, 20-foot-diameter concrete lined tailrace; (7) a 300-foot-long, 80-foot-wide, 50-feet-high underground powerhouse containing three 200–MW pump-turbine generator units; (8) a 4.6-mile-long 230-kV transmission line; (9) a 230/500 kV substation; and (10) appurtenant facilities. The estimated annual generation of the Southern Intertie Project would be 1,577 gigawatt-hours.
Deadline for filing comments, motions to intervene, competing applications (without notices of intent), or notices of intent to file competing applications: 60 days from the issuance of this notice. Competing applications and notices of intent must meet the requirements of 18 CFR 4.36.
The Commission strongly encourages electronic filing. Please file comments, motions to intervene, notices of intent, and competing applications using the Commission's eFiling system at
More information about this project, including a copy of the application, can be viewed or printed on the “eLibrary” link of Commission's Web site at
Equal Employment Opportunity Commission.
Wednesday, May 18, 2016, 1:00 p.m. Eastern Time.
Jacqueline A. Berrien Conference Room on the First Floor of the EEOC Office Building, 131 “M” Street NE., Washington, DC 20507.
The meeting will be open to the public.
1. Announcement of Notation Votes, and
2. Innovation Opportunity: Examining Strategies to Promote Diverse and Inclusive Workplaces in the Tech Industry.
Please telephone (202) 663–7100 (voice) and (202) 663–4074 (TTY) at any time for information on these meetings. The EEOC provides sign language interpretation and Communication Access Realtime Translation (CART) services at Commission meetings for the hearing impaired. Requests for other reasonable accommodations may be made by using the voice and TTY numbers listed above.
Bernadette B. Wilson, Acting Executive Officer on (202) 663–4077.
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 Communications Commission (FCC or the Commission) invites the general public and other Federal agencies to take this opportunity to comment on the following information collection. 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 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 Office of Management and Budget (OMB) control number.
Written PRA comments should be submitted on or before July 11, 2016. 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 contact listed below as soon as possible.
Direct all PRA comments to Nicole Ongele, FCC, via email
For additional information about the information collection, contact Nicole Ongele at (202) 418–2991.
Also, respondents may request materials or information submitted to the Commission or to the Universal Service Administrative Company (USAC or Administrator) be withheld from public inspection under 47 CFR 0.459 of the FCC's rules. We note that USAC must preserve the confidentiality of all data obtained from respondents; must not use the data except for purposes of administering the universal service programs; and must not disclose data in company-specific form unless directed to do so by the Commission.
On April 27, 2016, the Commission released an order reforming its low-income universal service support mechanisms. Lifeline and Link Up Reform and Modernization; Telecommunications Carriers Eligible for Universal Service Support; Connect America Fund, WC Docket Nos. 11–42, 09–197, 10–90, Third Further Notice of Proposed Rulemaking, Order on Reconsideration, and Further Report and Order, (
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
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 May 26, 2016.
A. Federal Reserve Bank of Kansas City (Dennis Denney, Assistant Vice President) 1 Memorial Drive, Kansas City, Missouri 64198–0001:
1.
Board of Governors of the Federal Reserve System
On February 19, 2016, the Board published a notice of final approval of proposed information collections by the Board of Governors of the Federal Reserve System (Board) under OMB delegated authority. This document corrects the effective dates in the notice.
Federal Reserve Board Clearance Officer —Nuha Elmaghrabi—Office of the Chief Data Officer, Board of Governors of the Federal Reserve System, Washington, DC 20551 (202) 452–3829. Telecommunications Device for the Deaf (TDD) users may contact (202) 263–4869, Board of Governors of the Federal Reserve System, Washington, DC 20551.
Under the effective date for the Semiannual Report of Derivatives Activity correct the
Under the effective date for the Central Bank Survey of Foreign Exchange and Derivative Market Activity correct the
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 6, 2016.
A. Federal Reserve Bank of Atlanta (Chapelle Davis, Assistant Vice President) 1000 Peachtree Street NE., Atlanta, Georgia 30309:
1.
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 a meeting for the initial review of applications in response to PAR 13–129, Occupational Safety and Health Research, NIOSH Member Conflict Review.
The Director, Management Analysis and Services Office, has been delegated the authority to sign
The Centers for Disease Control and Prevention (CDC) has submitted 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 notice for the proposed information collection is published to obtain comments from the public and affected agencies.
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address any of the following: (a) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) Evaluate the accuracy of the agencies estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (c) Enhance the quality, utility, and clarity of the information to be collected; (d) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
To request additional information on the proposed project or to obtain a copy of the information collection plan and instruments, call (404) 639–7570 or send an email to
Mining Industry Surveillance System—New—National Institute for Occupational Safety and Health (NIOSH), Centers for Disease Control and Prevention (CDC).
The mission of the National Institute for Occupational Safety and Health (NIOSH) is to promote safety and health at work for all people through research and prevention. The Federal Mine Safety and Health Act of 1977, Section 501, enables NIOSH to carry out research relevant to the health and safety of workers in the mining industry. Surveillance of occupational injuries, illnesses, and exposures has been an integral part of the work of NIOSH since its creation by the Occupational Safety and Health Act in 1970. Surveillance activities at the Office of Mine Safety and Health Research (OMSHR), a division of NIOSH, are focused on the nation's mining workforce.
OMSHR is planning to develop the Mining Industry Surveillance System, a unique source of longitudinal information on U.S. mines and their employees. Its purpose will be to: (1) Track changes and emerging trends over time; (2) provide current data to guide research and training activities; (3) provide updated demographic and occupational data for the mining workforce; and (4) provide denominator data to help understand the risk of work-related injuries, disease, and fatalities in specific demographic and occupational subgroups.
The goal of the proposed project is to improve its surveillance capability related to the occupational risks in mining. NIOSH is requesting a three-year approval for this data collection.
NIOSH is planning to use the Mining Industry and Workforce Survey (MIWS) to collect data for the Mining Industry Surveillance System. Data will be collected through surveys conducted on a rotating basis in mining sectors aligned with national mining association. In Phase 1 of the project, the MIWS will be conducted in the stone/sand and gravel mining sector in year 1, the metal/nonmetal mining sector in year 2, and the coal mining sector in year 3. Data from this survey will provide denominator data so that accident, injury, and illness reports can be evaluated in relation to the population at risk. Additionally, NIOSH cannot separately determine the number of contractor employees working in metal, nonmetal, stone, or sand and gravel mines. The survey will collect mine-level data on contractor employees to allow NIOSH to determine the quantity of contract labor that mine operators use and the type of work these employees perform. NIOSH will also use the MIWS to collect mine-level data that will provide a valuable picture of the current working environment (work schedules and shift work practices) used in the U.S. mining industry.
The burden estimates were derived in the following manner. Based on the stratification and sample size allocation plan developed for this project 34% of all sampled mines have fewer than 10 employees. Mines with 10 or fewer employees will not have to do any sampling as they will be asked to provide data for all of their employees. Small mines will require up to 45 minutes to complete the survey. Mines with 11 or more employees will need up to 1.5 hours given their need to generate an employee roster and sample 10 of their employees. Thus, NIOSH is estimating that the average annual burden to complete the survey will be 1 hour. Non-responding mines will be asked to complete the Nonresponse Survey which consists of only seven questions. NIOSH estimates that the burden for this brief survey will be 10 minutes or less. The burden data are calculated based on a 60% response rate for the sampled mines. This does not take into account that some sampled mines may not be eligible to participate in the survey (
There is no cost to the respondents other than their time.
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:
Please note that the public comment period ends at the time indicated above or following the last call for comments, whichever is earlier. Members of the public who want to comment must sign up by providing their name by mail, email, or telephone, at the addresses provided below by May 29, 2016. Each commenter will be provided up to five minutes for comment. A limited number of time slots are available and will be assigned on a first come–first served basis. Written comments will also be accepted from those unable to attend the public session.
The two policies can be found at:
The agenda is subject to change as priorities dictate.
To view the notice, visit
In the event an individual cannot attend, written comments may be submitted. The comments should be
The Director, Management Analysis and Services Office, has been delegated the authority to sign
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 is hereby giving notice that the National Vaccine Advisory Committee (NVAC) will hold a meeting June 7–8, 2016. 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 7–8, 2016. 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, the Great Hall, 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. Phone: (202) 690–5566; email:
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 June 2016 NVAC meeting will continue important discussions on addressing the barriers and scientific challenges to the development of new and improved vaccines, with a presentation from the NVAC Maternal Immunization Working Group of their draft recommendations for overcoming barriers to research and development of vaccines for use in pregnant women. The NVAC will host a comprehensive discussion on the financial costs and perceived barriers to providing immunization services across the lifespan. Committee discussions will also include an update on immunization priorities at the local level, efforts to improve immunization coverage among adults and adolescents, and findings from a midcourse review of the 2010 National Vaccine Plan on the areas of greatest opportunity for strengthening the immunization system going forward. Please note that agenda items are subject to change as priorities dictate. Information on the final meeting agenda will be posted prior to the meeting on the NVAC Web site:
Public attendance at the meeting is limited to the available space. Individuals who plan to attend in person 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 webcast 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. Public comments made during the meeting will be limited to three minutes per person to ensure time is allotted for all those wishing to speak. Individuals are also welcome to submit their written comments. Written comments should not exceed three pages in length. Individuals submitting written comments should email their comments to the National Vaccine Program Office (
Office of Disease Prevention and Health Promotion, Office of the Assistant Secretary for Health, Office of the Secretary, U.S. Department of Health and Human Services.
Notice.
The U.S. Department of Health and Human Services (HHS) announces re-establishment of the Physical Activity Guidelines Advisory Committee and the Secretary's Advisory Committee on National Health Promotion and Disease Prevention Objectives. The new titles for the Committees are the 2018 Physical Activity Guidelines Advisory Committee and the Secretary's Advisory Committee on National Health Promotion and Disease Prevention Objectives for 2030, respectively. The 2018 Physical Activity Guidelines Advisory Committee and the Secretary's Advisory Committee on National Health Promotion and Disease Prevention Objectives have been established as discretionary federal advisory committees. Both committees have been established to perform single, time-limited tasks that will assist with furthering the mission of the HHS.
On April 26, 2016, the Secretary approved for the Physical Activity Guidelines Advisory Committee and the Secretary's Advisory Committee on National Health Promotion and Disease Prevention Objectives to be re-established. Both committees have been re-established to accomplish single, time-limited tasks.
The Physical Activity Guidelines Advisory Committee was first established in February 2007 to assist the Department in development of the first edition of the
Management and support services for the Committee will be provided within the Office of the Assistant Secretary for Health (OASH) by the Office of Disease Prevention and Health Promotion (ODPHP). The ODPHP is a program staff office within OASH; OASH is a staff division in the HHS Office of the Secretary.
ODPHP will collaborate with the Centers for Disease Control and Prevention (CDC), the National Institutes of Health (NIH), and the OASH program staff office for the President's Council on Fitness, Sports, and Nutrition (PCFSN). The ASH will appoint seven Co-Executive Secretaries to support the Committee, two each from the ODPHP, CDC, and NIH, and one from the OASH staff office for the PCFSN. The two ODPHP Co-Executive Secretaries will be appointed to serve as the DFO and Alternate DFO for the Committee.
The Department established the
The Committee will provide independent advice based on current scientific evidence for use by the Secretary of HHS or a designated representative in the development of
Members will be appointed to the Committee by the Secretary of HHS or a designated representative and invited to serve for the duration of the Committee. All appointed members of the Committee will be classified as special government employees (SGEs).
To comply with the provisions of FACA, the charters for the 2018 Physical Activity Guidelines Advisory Committee and the Secretary's Advisory Committee on National Health Promotion and Disease Prevention Objectives for 2030 will be filed with the appropriate Congressional committees and the Library of Congress fifteen calendar days after notice of this action being taken has been published in the
Periodically, the Substance Abuse and Mental Health Services Administration (SAMHSA) will publish a summary of information collection requests under OMB review, in compliance with the Paperwork Reduction Act (44 U.S.C. Chapter 35). To request a copy of these documents, call the SAMHSA Reports Clearance Officer on (240) 276–1243.
The Substance Abuse and Mental Health Services Administration's (SAMHSA) Center for Behavioral Health Statistics and Quality (CBHSQ) is requesting approval from the Office of Management and Budget (OMB) for new data collection activities associated with their Primary and Behavioral Health Care Integration (PBHCI) program.
This information collection is needed to provide SAMHSA with objective information to document the reach and impact of the PBHCI program. The information will be used to monitor quality assurance and quality performance outcomes for organizations funded by this grant program. The information will also be used to assess the impact of services on behavioral health and physical health services for individuals served by this program. .
Collection of the information included in this request is authorized by Section 505 of the Public Health Service Act (42 U.S.C. 290aa–4)—Data Collection.
SAMHSA launched the PBHCI program in FY 2009 with the understanding that adults with serious mental illness (SMI) experience heightened rates of morbidity and mortality, in large part due to elevated incidence and prevalence of risk factors such as obesity, diabetes, hypertension, and dyslipidemia. These risk factors are influenced by a variety of factors, including inadequate physical activity and poor nutrition; smoking; side effects from atypical antipsychotic medications; and lack of access to health care services. Many of these health conditions are preventable through routine health promotion activities, primary care screening, monitoring, treatment and care management/coordination strategies and/or other outreach programs.
The purpose of the PBHCI grant program is to establish projects for the provision of coordinated and integrated services through the co-location of primary and specialty care medical services in community-based behavioral health settings. The program's goal is to improve the physical health status of adults with serious mental illnesses (and those with co-occurring substance use disorders) who have or are at risk for co-occurring primary care conditions and chronic diseases.
As the largest federal effort to implement integrated behavioral and physical health care in community behavioral health settings, SAMHSA's PBHCI program offers an unprecedented opportunity to identify which approaches to integration improve outcomes, how outcomes are shaped by the characteristics of the treatment setting and community, and which models have the greatest potential for sustainability and replication. SAMHSA awarded the first cohort of 13 PBHCI grants in fiscal year (FY) 2009, and between FY 2009 and FY 2014, SAMHSA funded a total of seven cohorts comprising 127 grants. An eighth cohort, funded in fall 2015, included 60 new grants.
The data collection described in this request will build upon the first PBHCI evaluation and provide essential data on the implementation of integrated primary and behavioral health care, along with rigorous estimates of its effects on health.
The Center for Behavioral Health Statistics and Quality is requesting clearance for ten data collection instruments and forms related to the implementation and impact studies to be conducted as part of the evaluation:
The table below reflects the annualized hourly burden.
Written comments and recommendations concerning the proposed information collection should be sent by June 13, 2016 to the SAMHSA Desk Officer at the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB). To ensure timely receipt of comments, and to avoid potential delays in OMB's receipt and processing of mail sent through the U.S. Postal Service, commenters are encouraged to submit their comments to OMB via email to:
U.S. Customs and Border Protection, Department of Homeland Security.
30-Day notice and request for comments; Extension of an existing collection of information.
U.S. Customs and Border Protection (CBP) of the Department of Homeland Security 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: Delivery Ticket (CBP Form 6043). This is a proposed extension of an information collection that was previously approved. CBP is proposing that this information collection be extended with no change to the burden hours or to the information collected. This document is published to obtain comments from the public and affected agencies.
Written comments should be received on or before June 13, 2016 to be assured of consideration.
Interested persons are invited to submit written comments on this proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the OMB Desk Officer for Customs and Border Protection, Department of Homeland Security, and sent via electronic mail to
Requests for additional information should be directed to Tracey Denning, U.S. Customs and Border Protection, Regulations and Rulings, Office of Trade, 90 K Street NE., 10th Floor, Washington, DC 20229–1177, at 202–325–0265.
This proposed information collection was previously published in the
U.S. Customs and Border Protection, Department of Homeland Security (DHS).
Committee management; notice of federal advisory public committee meeting.
The U.S. Customs and Border Protection User Fee Advisory Committee (UFAC) will meet on Wednesday, June 1, 2016, in Washington, DC. The meeting will be open to the public.
The UFAC will meet on Wednesday, June 1, 2016, from 1:00 p.m. to 3:00 p.m. EDT. Please note that the meeting is scheduled for two hours and that the meeting may close early if the committee completes its business.
Feel free to share this information with other interested members of your organization or association.
Members of the public who are pre-registered and later require cancellation, please do so in advance of the meeting by accessing one (1) of the following links:
The meeting will be held at the U.S. International Trade Commission, 500 E Street SW.,
For information on facilities or services for individuals with disabilities, or to request special assistance at the meeting, contact Ms. Wanda Tate, Office of Trade Relations, U.S. Customs and Border Protection at (202) 344–1661 as soon as possible.
To facilitate public participation, we are inviting public comment on the topics to be discussed by the committee, prior to the meeting as listed in the “Agenda” section below.
Comments must be submitted in writing no later than May 23, 2016, and must be identified by Docket No. USCBP–2016–0018, and may be submitted by
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There will be two (2) public comment periods held during the meeting on June 1, 2016. Speakers are requested to limit their comments to two (2) minutes or less to facilitate greater participation. Contact the individual listed below to register as a speaker. Please note that the public comment periods for speakers may end before the times indicated on the schedule that is posted on the CBP Web page,
Ms. Wanda Tate, Office of Trade Relations, U.S. Customs and Border Protection, 1300 Pennsylvania Avenue NW., Room 3.5A, Washington, DC 20229; telephone (202) 344–1440; facsimile (202) 325–4290.
Pursuant to the Federal Advisory Committee Act (5 U.S.C. Appendix), the Department of Homeland Security (DHS) hereby announces the meeting of the U.S. Customs and Border Protection User Fee Advisory Committee (UFAC). The UFAC is tasked with providing advice to the Secretary of Homeland Security (DHS) through the Commissioner of U.S. Customs and Border Protection (CBP) on matters related to the performance of inspections coinciding with the assessment of an agriculture, customs, or immigration user fee.
1. Oath and Recognition of the incoming UFAC members.
2. The Financial Assessment and Options Subcommittee will review and discuss their Statement of Work and Next Steps.
3. Public Comment Period.
4. The Process Improvements Subcommittee will review and discuss their Statement of Work and Next Steps.
5. Public Comment Period.
U.S. Customs and Border Protection, Department of Homeland Security.
Notice of accreditation and approval of Saybolt LP as a commercial gauger and laboratory.
Notice is hereby given, pursuant to CBP regulations, that Saybolt LP has been approved to gauge petroleum and certain petroleum products and accredited to test petroleum and certain petroleum products for customs purposes for the next three years as of January 22, 2016.
Approved Gauger and Accredited Laboratories Manager, Laboratories and Scientific Services Directorate, U.S. Customs and Border Protection, 1300 Pennsylvania Avenue NW., Suite 1500N, Washington, DC 20229, tel. 202–344–1060.
Notice is hereby given pursuant to 19 CFR 151.12 and 19 CFR 151.13, that Saybolt LP, 16025–A Jacinto Port Blvd., Houston, TX 77015, has been approved to gauge petroleum and certain petroleum products and accredited to test petroleum and certain petroleum products for customs purposes, in accordance with the provisions of 19 CFR 151.12 and 19 CFR 151.13. Saybolt LP is approved for the following gauging procedures for petroleum and certain petroleum products from the American Petroleum Institute (API):
Saybolt LP is accredited for the following laboratory analysis procedures and methods for petroleum and certain petroleum products set forth by the U.S. Customs and Border Protection Laboratory Methods (CBPL) and American Society for Testing and Materials (ASTM):
Anyone wishing to employ this entity to conduct laboratory analyses and gauger services should request and receive written assurances from the entity that it is accredited or approved by the U.S. Customs and Border Protection to conduct the specific test or gauger service requested. Alternatively, inquiries regarding the specific test or gauger service this entity is accredited or approved to perform may be directed to the U.S. Customs and Border Protection by calling (202) 344–1060. The inquiry may also be sent to
U.S. Customs and Border Protection, Department of Homeland Security.
Notice of accreditation and approval of AmSpec Services, LLC, as a commercial gauger and laboratory.
Notice is hereby given, pursuant to CBP regulations, that AmSpec Services, LLC, has been approved to gauge petroleum and certain petroleum products and accredited to test petroleum and certain petroleum products for customs purposes for the next three years as of August 26, 2015.
Approved Gauger and Accredited Laboratories Manager, Laboratories and Scientific Services Directorate, U.S. Customs and Border Protection, 1300 Pennsylvania Avenue NW., Suite 1500N, Washington, DC 20229, tel. 202–344–1060.
Notice is hereby given pursuant to 19 CFR 151.12 and 19 CFR 151.13, that AmSpec Services, LLC, 1980 Oriziba Ave., Signal Hill, CA 90755, has been approved to gauge petroleum and certain petroleum products and accredited to test petroleum and certain petroleum products for customs purposes, in accordance with the provisions of 19 CFR 151.12 and 19 CFR 151.13. AmSpec Services, LLC is approved for the following gauging procedures for petroleum and certain petroleum products from the American Petroleum Institute (API):
AmSpec Services, LLC is accredited for the following laboratory analysis procedures and methods for petroleum and certain petroleum products set forth by the U.S. Customs and Border Protection Laboratory Methods (CBPL) and American Society for Testing and Materials (ASTM):
Anyone wishing to employ this entity to conduct laboratory analyses and gauger services should request and receive written assurances from the entity that it is accredited or approved by the U.S. Customs and Border Protection to conduct the specific test or gauger service requested. Alternatively, inquiries regarding the specific test or gauger service this entity is accredited or approved to perform may be directed to the U.S. Customs and Border Protection by calling (202) 344–1060. The inquiry may also be sent to
Fish and Wildlife Service, Interior.
Announcement of draft policy; reopening of comment period.
We, the U.S. Fish and Wildlife Service (Service), are reopening the comment period for our March 8, 2016, notice that announced proposed revisions to the Service Mitigation Policy. This action will allow interested persons additional time to comment on the proposed revisions. Comments previously submitted need not be resubmitted as they will be fully considered in preparation of the final policy.
We will accept comments from all interested parties until June 13, 2016. Please note that if you are using the Federal eRulemaking Portal (see
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We will post all comments on
Jason Miller, U.S. Fish and Wildlife Service, Branch of Conservation Planning Assistance, 5275 Leesburg Pike, Falls Church, VA 22041–3803; telephone 703–358–1756.
We will accept written comments during this reopened comment period on our notice announcing proposed revisions to the Service Mitigation Policy that published in the
If you have already submitted comments during the public comment period that began March 8, 2016, please do not resubmit them. We have incorporated them into the public record, and we will fully consider them in the preparation of our final policy.
You may submit your comments by one of the methods listed in
If you submit a comment via
On March 8, 2016, we published a notice (81 FR 12380) announcing proposed revisions to our Mitigation Policy (January 23, 1981; 46 FR 7644–7663). The revisions were motivated by changes in conservation challenges and practices since 1981, including accelerating loss of habitats, effects of climate change, and advances in conservation science. The revised policy provides a framework for applying a landscape-scale approach to achieve, through application of the mitigation hierarchy, a net gain in conservation outcomes, or at a minimum, no net loss of resources and their values, services, and functions resulting from proposed actions. The primary intent of the policy is to apply mitigation in a strategic manner that ensures an effective linkage with conservation strategies at appropriate landscape scales.
The revised policy integrates all authorities that allow the Service to recommend or require mitigation of impacts to federal trust fish and wildlife resources, and other resources identified in statute, during development processes. It is intended to serve as a single umbrella policy under which the Service may issue more detailed policies or guidance documents covering specific activities in the future.
Our March 8, 2016, notice stated that we would accept comments on the proposed revisions to our Mitigation Policy for 60 days, ending May 9, 2016. During the course of the comment period on the notice, we received requests to extend the public comment period. In order to provide all interested parties an opportunity to review and comment on the proposed revisions, we are reopening the comment period on the proposed revisions until the date specified in
The multiple authorities for this action include the: Endangered Species Act of 1973, as amended (16 U.S.C. 1531
Fish and Wildlife Service, Interior.
Notice of availability; request for comments; correction.
On May 6, 2016, we, the U.S. Fish and Wildlife Service, announced the availability of a Draft Comprehensive Conservation Plan (CCP) and Environmental Impact Statement (EIS) for Lower Klamath, Clear Lake, Tule Lake, Upper Klamath, and Bear Valley National Wildlife Refuges (Refuges) for review and comment. In one instance, we printed the incorrect docket number for interested parties to use to submit comments. The correct docket number is FWS–R8–NWRS–2016–0063. With this notice, we correct that error.
Klamath Refuge Planner, (916) 414–6464 (phone).
In the
U.S. Geological Survey, Department of the Interior.
Notice of intent to grant an exclusive license.
The Notice is hereby given that the U.S. Geological Survey intends to grant to Williamson and Associates, 1124 NW 53rd ST, Seattle, WA 98107, an exclusive license to practice the following: A system and method, to utilize induced polarization to locate and detect minerals, and oil plumes below the surface water.
Comments must be received fifteen (15) days from the effective date of this notice.
Benjamin Henry, Technology Enterprise Specialist, Office of Policy and Analysis, U.S. Geological Survey, 12201 Sunrise Valley Dr., MS 153, Reston, VA 20192, 703–648–4344.
It is in the public interest to license this invention, as Williamson and Associates, submitted a complete and sufficient application for a license. The prospective exclusive license will be royalty-bearing and will comply with the terms and conditions of 35 U.S.C. 209 and 37 CFR 404.7. The prospective exclusive license may be granted unless, within fifteen (15) days from the date of this published Notice, the U.S. Geological Survey Office of Policy & Analysis receives written evidence and argument which establishes that the grant of the license would not be consistent with the requirements of 35 U.S.C. 209 and 37 CFR 404.7.
Office of Surface Mining Reclamation and Enforcement, Interior.
Notice and request for comments.
In compliance with the Paperwork Reduction Act of 1995, the Office of Surface Mining Reclamation and Enforcement (OSMRE) is announcing that the information collection request for the Exemption for Coal Extraction Incidental to the Extraction of Other Minerals, has been submitted to the Office of Management and Budget (OMB) for review and approval. The information collection request describes the nature of the information collection and its expected burden and cost.
Comments must be submitted on or before June 13, 2016, to be assured of consideration.
Submit comments to the Office of Information and Regulatory Affairs, Office of Management and Budget, Department of the Interior Desk Officer, via email at
To receive a copy of the information collection request contact John Trelease at (202) 208–2783, or electronically at
OMB regulations at 5 CFR part 1320, which implement provisions of the Paperwork Reduction Act of 1995 (Pub. L. 104–13), require that interested members of the public and affected agencies have an opportunity to comment on information collection and recordkeeping activities [see 5 CFR 1320.8(d)]. OSMRE has submitted a request to OMB to renew its approval for the collection of information found at 30 CFR part 702—Exemption for Coal Extraction Incidental to the Extraction of Other Minerals. OSMRE is requesting a 3-year term of approval for this collection.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control number for this collection of information is 1029–0089 and is displayed at 30 CFR 702.10.
As required under 5 CFR 1320.8(d), a
Send comments on the need for the collection of information for the performance of the functions of the agency; the accuracy of the agency's burden estimates; ways to enhance the quality, utility and clarity of the information collection; and ways to minimize the information collection burden on respondents, such as use of automated means of collection of the information, to the offices listed in the
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that
Committee on Rules of Practice and Procedure, Judicial Conference of the United States.
Notice of open meeting.
The Committee on Rules of Practice and Procedure will hold a meeting on June 6, 2016, which will continue the morning of June 7, 2016, if necessary. The meeting will be open to public observation but not participation. An agenda and supporting materials will be posted at least 7 days in advance of the meeting at:
June 6–7, 2016.
Thurgood Marshall Federal Judiciary Building, Mecham Conference Center, One Columbus Circle NE., Washington, DC 20544.
Rebecca A. Womeldorf, Rules Committee Secretary, Rules Committee Support Office, Administrative Office of the United States Courts, Washington, DC 20544, telephone (202) 502–1820.
Notice is hereby given that, on April 21, 2016, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and CHEDE–VII intends to file additional written notifications disclosing all changes in membership.
On January 6, 2016, CHEDE–VII filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on March 15, 2016. A notice was published in the
Civil Rights Division, Department of Justice.
60-day notice.
The Department of Justice (DOJ), Civil Rights Division, Disability Rights Section (DRS), will submit 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 (PRA).
Comments are encouraged and will be accepted for 60 days until July 11, 2016.
If you have additional comments (especially on the estimated public burden or associated response time), suggestions, need a copy of the proposed information collection instrument with instructions, or need additional information, please contact Rebecca B. Bond, Chief, Disability Rights Section, Civil Rights Division, U.S. Department of Justice, by any one of the following methods: By email at
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:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the function of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Evaluate whether, and if so, how, the quality, utility, and clarity of the information to be collected can be enhanced; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
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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.
Notice.
The Department of Labor (DOL) is submitting the information collection request (ICR) proposal titled, “Department of Labor Generic Solution for Site Visits for Research Purposes,” to the Office of Management and Budget (OMB) for review and approval for use in accordance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501
The OMB will consider all written comments that agency receives on or before June 13, 2016.
A copy of this ICR with applicable supporting documentation; including a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained free of charge from the RegInfo.gov Web site at
Submit comments about this request by mail or courier to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL–OS, Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503; by Fax: 202–395–5806 (this is not a toll-free number); or by email:
Contact Michel Smyth by telephone at 202–693–4129 (this is not a toll-free number) or by email at
44 U.S.C. 3507(a)(1)(D).
This ICR seeks PRA authority for a DOL generic solution for site visits for research purposes information collection in order to be able to carry out evaluation data collection in a timely manner and to facilitate the gathering of critical information to support analysis around core research questions. Qualitative information will be collected from individuals who are familiar with, are administering or participating in, the intervention being evaluated. Site visits provide critical data for research and evaluation projects that can: (1) Describe implementation issues, the context in which the intervention was implemented, services, management and costs; (2) describe the experiences of service providers at each of the study sites, including site perspectives on implementation challenges and intervention effects; (3) describe the experiences and responses of individuals administering or participating in the intervention; (4) document the extent to which the intervention was implemented as planned; and (5) describe the extent to which treatment and control or comparison groups received the intended services of the intervention, if applicable. Sources of qualitative information proposed for collection include: (1) Exploratory discussions during site recruitment; (2) in-person or telephone discussions with individuals and/or groups from selected sites; and (3) focus groups.
This proposed information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless it is approved by the OMB under the PRA and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information if the collection of information does not display a valid Control Number.
Interested parties are encouraged to send comments to the OMB, Office of Information and Regulatory Affairs at the address shown in the
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Notice.
The Department of Labor (DOL) is submitting the Employment and Training Administration (ETA) sponsored information collection request (ICR) revision titled, “Occupational Code Assignment,” to the Office of Management and Budget (OMB) for review and approval for use in accordance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501
The OMB will consider all written comments that agency receives on or before June 13, 2016.
A copy of this ICR with applicable supporting documentation; including a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained free of charge from the RegInfo.gov Web site at
Submit comments about this request by mail or courier to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL–ETA, Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503; by Fax: 202–395–5806 (this is not a toll-free number); or by email:
Michel Smyth by telephone at 202–693–4129, TTY 202–693–8064, (these are not toll-free numbers) or sending an email to
44 U.S.C. 3507(a)(1)(D).
This ICR seeks approval under the PRA for revisions to the Occupational Code Assignment information collection. Information collected on Form ETA–741, Occupational Code Assignment, is necessary to help occupational information users relate an occupational specialty or job title to an occupational code and title within the framework of the Occupational Information Network. The form helps provide occupational codes for jobs where duties have changed to the extent that the published information is no longer appropriate or the user is unable to classify the job on his or her own. This information collection has been classified as a revision because of minor revisions to the form and because of additional respondents from the American Apprenticeship grant competition. Wagner-Peyser Act section 15 authorizes this information collection.
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless it is approved by the OMB under the PRA and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid Control Number.
Interested parties are encouraged to send comments to the OMB, Office of Information and Regulatory Affairs at
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
National Endowment for the Arts, National Foundation on the Arts and Humanities.
Notice of meetings.
Pursuant to the Federal Advisory Committee Act, as amended, notice is hereby given that 29 meetings of the Arts Advisory Panel to the National Council on the Arts will be held by teleconference.
All meetings are Eastern time and ending times are approximate:
National Endowment for the Arts, Constitution Center, 400 7th St. SW., Washington, DC 20506.
Further information with reference to these meetings can be obtained from Ms. Kathy Plowitz-Worden, Office of Guidelines & Panel Operations, National
The closed portions of meetings are for the purpose of Panel review, discussion, evaluation, and recommendations on financial assistance under the National Foundation on the Arts and the Humanities Act of 1965, as amended, including information given in confidence to the agency. In accordance with the determination of the Chairman of February 15, 2012, these sessions will be closed to the public pursuant to subsection (c)(6) of section 552b of title 5, United States Code.
In accordance with the Federal Advisory Committee Act (Pub. L. 92–463, as amended), the National Science Foundation announces the following meeting:
Nuclear Regulatory Commission.
Environmental assessment and finding of no significant impact; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is issuing an environmental assessment and finding of no significant impact regarding a partial site release for license Nos. DPR–1 (Vallecitos Boiling Water Reactor), R–33 (GE-Hitachi Nuclear Test Reactor), and DR–10 (Empire State Atomic Development Agency Vallecitos Experimental Superheat Reactor), issued to GE Hitachi Nuclear Energy at the Vallecitos Nuclear Center in Sunol, California.
The environmental assessment and finding of no significant impact set forth in this document is available on May 12, 2016.
Please refer to Docket ID NRC–2015–0169 when contacting the NRC about the availability of information regarding this document. You may obtain publicly-available information related to this document using any of the following methods:
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Jack Parrott, Division of Decommissioning, Uranium Recovery, and Waste Programs, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555–00001; telephone: 301–415–6634; email:
The NRC received, by letter dated April 24, 2015 (ADAMS Accession No. ML15114A437), a request from GE Hitachi Nuclear Energy (GEH or licensee) to approve a partial site release of a portion of its Vallecitos Nuclear Center (VNC) site located at 6705 Vallecitos Road, Sunol, California. The April 24, 2015 letter transmitted a report, entitled “Release of North Section of Vallecitos, California Site,” prepared by GEH evaluating the proposed release (ADAMS Accession No. ML15114A438). The VNC site contains four reactor units. Two of the four units are licensed as power reactors under part 50, “Domestic Licensing of Production and Utilization Facilities,”
The third reactor unit is a shutdown testing facility (also called a test reactor), the General Electric Test Reactor (GETR), NRC License TR–1, Docket 50–70. The GETR has also been defueled and is in a SAFSTOR status. The fourth reactor unit is a currently operating research reactor, the Nuclear Test Reactor (NTR), NRC License R–33, Docket 50–73. The NRC is considering a license amendment application for the NTR that would modify the site description to remove the portion of the site requested by the licensee for release (see the connected action section of this notice).
Research reactors and testing facilities are non-power reactors that are used for research and development, non-power commercial activities, medical therapy, education and training. Non-power reactors differ from power reactors in a number of significant ways. The purpose of a power reactor is to generate steam, which can be used to generate electricity; the purpose of a non-power reactor is to generate radiation for purposes of experimentation, research and development, commercial activities, medical therapy, education, and training. Therefore, non-power reactors operate at significantly lower power than power reactors and at lower temperatures and pressure. For these reasons, non-power reactors have smaller safety and environmental footprints than power reactors.
In accordance with 10 CFR 50.83, “Release of part of a power reactor facility or site for unrestricted use,” the licensee requested release from the NRC licenses, for unrestricted use, an approximately 247-hectare (610-acre) parcel in the northern section of the approximately 647-hectare (1,600 acre) VNC site. The licensee is declaring the parcel as a “non-impacted area,” which is defined in 10 CFR 50.2 to mean an area “with no reasonable potential for residual radioactivity in excess of natural background or fallout levels.” If approved, the 247-hectare (610-acre) parcel will no longer be considered part of the licensed site and thus, no longer under NRC jurisdiction. Once released, the 247-hectare (610-acre) parcel will be available for unrestricted use. In this regard, GEH has indicated that it intends to sell the 247-hectare (610-acre) parcel to a non-GEH controlled entity.
The NRC is considering approval of the requested partial site release for the VBWR and EVESR licenses at the VNC site. Therefore, in compliance with the National Environmental Policy Act, as amended, 42 U.S.C. 4321
The proposed action would approve the release of a 247-hectare (610-acre), non-impacted parcel, located in the northern section of the approximately 647-hectare (1,600) acre VNC site, for unrestricted use. Once released, the 247-hectare (610-acre) parcel would no longer be part of the licensed site and thus, no longer under NRC jurisdiction.
The licensee has requested the release of the 247-hectare (610-acre), non-impacted parcel as the licensee has no current or projected operational need for this parcel at the licensed site. In fact, the licensee has never used the 247-hectare (610-acre) parcel for licensed operations. The licensee intends to sell the parcel to a non-GEH controlled entity. Once the NRC has approved the release, the 247-hectare (610-acre) parcel can be made available for another use.
VNC is located near the center of the Pleasanton quadrangle of Alameda County, California. The site is east of San Francisco Bay, approximately 56 air kilometers (35 air miles) east-southeast of San Francisco and 32 air kilometers (20 air miles) north of San Jose. The properties surrounding the site are primarily used for agriculture and cattle raising, with some residences, which are mostly to the west of the property. The nearest sizeable towns are Pleasanton located 6.6 kilometers (4.1 miles) to the north-northwest and Livermore located 10 kilometers (6.2 miles) to the northeast.
The site is on the north side of Vallecitos Road (State Route 84), which is a two and four-lane paved highway. A Union Pacific railroad line lies about three kilometers (two miles) west of the site. There is light industrial activity within a 16-kilometer (10-mile) radius of the plant. San Jose (32 kilometers (20 miles) south), Oakland (48 kilometers (30 miles) northwest) and San Francisco (56 kilometers (35 miles) northwest) are major industrial centers. The property boundary, which has not changed since the original property purchase in 1956, is fenced and posted “No Trespassing.” A security gate at the entrance provides access control to the active area of the
The NRC staff evaluated the safety impacts of the proposed action and concludes that the requirements of 10 CFR 50.83, 10 CFR 50.59, and other applicable NRC regulations have been met (see ADAMS Accession No. ML16007A348).
The NRC staff evaluated the environmental impacts of the proposed action and concludes that the release of the 247-hectare (610-acre) parcel will not have any adverse environmental impacts. The 247-hectare (610-acre) parcel is located in the northern portion of the site. The parcel consists of undeveloped land and is currently used for cattle grazing. The land has not been used for the processing or storage of radioactive material. The properties surrounding the site are primarily used for agriculture and cattle raising, with some scattered residences mostly to the west of the property. The power reactors at the site have permanently ceased operations and are being maintained in a possession-only SAFSTOR status. The release of the 247-hectare (610-acre) parcel will not impact the shutdown reactors. The licensee notes that the 247-hectare (610-acre) parcel has never been used for licensed activity. The 247-hectare (610-acre) parcel is topographically uphill from the shutdown reactors so any surface or subsurface transport of liquid effluents from the active area of the site could not have impacted the parcel.
There is no evidence of any radiological impact on the 247-hectare (610-acre) parcel. Samples taken in the area do not indicate impact from licensed activities. The licensee measured direct dose in and around the 247-hectare (610-acre) parcel and found that all measurements were consistent with a background direct dose measurement of approximately 0.7 mSieverts/yr (70 mRem/yr) (GEH Annual Report for 2014, ADAMS Accession No. ML15069A472). The NRC verified that the area to be released was not radiologically impacted by licensed site activities, as described in NRC inspection report 050–00018/15–001 (ADAMS Accession No. ML15303A361) dated October 30, 2015.
The NRC staff reviewed the request and concluded that the environmental impacts associated with this request remain bounded by the environmental impacts evaluated in the previously issued “Final Generic Environmental Impact Statement on Decommissioning of Nuclear Facilities,” NUREG–0586, Supplement 1, Volume 1 (
The NRC has determined that the proposed release of the 247-hectare (610-acre) parcel is wholly procedural and administrative in nature, that the parcel is radiologically non-impacted, and that the licensee has no safety, physical security, or emergency preparedness need to retain the parcel. The environmental impacts associated with the shutdown power reactors will not change as a result of the proposed release of the 247-hectare (610-acre) parcel. The proposed release will not result in public or environmental exposure to radioactive contamination. There are no known records of any spills, leaks, or uncontrolled release of radioactive material on the 247-hectare (610-acre parcel). The 247-hectare (610-acre) parcel was not used for any activities that could have contaminated the property. Therefore, there are no significant radiological environmental impacts associated with the proposed action.
With regard to potential non-radiological impacts, the proposed release of the 247-hectare (610-acre) parcel from NRC jurisdiction does not involve or authorize any construction activities, renovation of buildings or structures, ground disturbing activities or other alteration to land. The proposed release of the 247-hectare (610-acre) parcel will not result in any change to current licensed activities on that portion of the site that will remain under NRC jurisdiction and therefore, will not result in any changes to the workforce or vehicular traffic. Furthermore, as the NRC has determined that the proposed release of the 247-hectare (610-acre) parcel is an administrative action, it is not a type of activity that has the potential to cause effects on historic properties or cultural resources, including traditional cultural properties. Similarly, the NRC staff has determined that the proposed release of the 247-hectare (610-acre) parcel will have no effect on listed species or critical habitat. In addition the proposed release of the 247-hectare (610-acre) parcel will not result in any change to non-radiological plant effluents and thus, will have no impact on either air or water quality. Therefore, there are no significant non-radiological environmental impacts associated with the proposed release of the 247-hectare (610-acre) parcel.
Accordingly, the NRC staff concludes that there are no significant environmental impacts associated with the proposed action.
In accordance with 10 CFR 50.90, GEH has also requested the amendment of its operating research reactor license for the NTR, NRC License R–33, Docket 50–73 to reflect the release of the 247-hectare (610-acre) parcel. Specifically, GEH has requested an amendment to the license's site description section. GEH submitted that license amendment request on February 16, 2015 (ADAMS Accession No. ML15048A008; attachments to the February 16, 2015 request are at ADAMS Accession Nos. ML15048A007, ML15048A009, ML15048A010, ML15048A011). The NRC approval or disapproval of the proposed NTR license amendment request will be handled administratively as a separate licensing matter. However, the NRC considers that this EA encompasses and otherwise bounds the environmental impacts of the proposed NTR license amendment request. As discussed in Section I, “Introduction,” of this notice, a non-power reactor has a much smaller safety and environmental footprint than a power reactor. In this regard, the NTR operates at a power level of 100 kilowatts-thermal. In contrast, the VBWR, the largest of the decommissioned power reactors at the site, operated at a much higher power level, 50 megawatts-thermal. As a further, comparison, a typical commercial nuclear power reactor is rated at 3000 megawatts-thermal, and provides enough electricity to power 200,000 households in the peak summer months. Because of this large difference in thermal power generated, the consequence of an accident at a non-power reactor is much lower when compared to a commercial power reactor. For this reason, the NTR research reactors' emergency planning zones (EPZ) to protect the public from potential radiological accidents is well within the owner-controlled areas—and is the boundary of the room in which the reactor is housed. In accordance
The shutdown, defueled testing facility, the GETR, NRC License TR–1, Docket 50–70 is not the subject of any license amendment request. The GETR is in SAFSTOR status. The GETR license does not contain a site description and as such, there is no need to amend the GETR license to reflect the release of the 247-hectare (610-acre) parcel. In any event, the NRC staff considers this EA to encompass and bound any environmental impacts resulting from the proposed release of the 247-hectare (610-acre) parcel in relation to the ongoing shutdown, SAFSTOR status of the GETR.
As an alternative to the proposed action, the NRC staff considered denial of the proposed release of the 247-hectare (610-acre) parcel (
The NRC staff has concluded that the proposed action will not significantly impact the quality of the human environment, and that the proposed action is the preferred alternative.
The NRC contacted the California Department of Public Health concerning this request. There were no comments, concerns or objections from the State official.
A public meeting to obtain comments on the release approval request was announced on the NRC public meeting Web site on July 7, 2015 (ADAMS Accession No. ML15188A344). A notice of GEH's request to release the 247-hectare (610-acre) parcel and the public meeting, including a request for comment, was also published in the Tri-Valley Herald, Livermore, CA on July 15, 2015 (ADAMS Accession No. ML15292A519). The NRC staff published a notice of the receipt of GEH's request, including a request for comment, in the
The NRC staff has prepared this EA as part of its review of the proposed action. On the basis of this EA, the NRC finds that there are no significant environmental impacts from the proposed action, and that preparation of an environmental impact statement is not warranted. Accordingly, the NRC has determined that a finding of no significant impact (FONSI) is appropriate. In accordance with 10 CFR 51.32(a)(4), this FONSI incorporates the EA set forth in this notice by reference.
For the Nuclear Regulatory Commission.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange is filing with the Securities and Exchange Commission (“Commission”) a proposed rule change to amend the Fee Schedule on the BOX Market LLC (“BOX”) options facility. While changes to the fee schedule pursuant to this proposal will be effective upon filing, the changes will become operative on May 2, 2016. The text of the proposed rule change is available from the principal office of the Exchange, at the Commission's Public Reference Room and also on the Exchange's Internet Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend the Fee Schedule for trading on BOX.
The Exchange first proposes to amend certain PIP and COPIP Transaction fees for Professional Customers, Broker Dealer and Market Makers in Section I.B of the BOX Fee Schedule. Specifically, the Exchange proposes to reduce the PIP and COPIP Order fees for Professional Customers and Broker Dealers from $0.37 to $0.15 and the PIP and COPIP Order Fees for Market Makers from $0.20 to $0.15.
The revised pricing structure for PIP and COPIP Transactions will be as follows:
The Exchange also proposes to make a clerical correction to Section I.B. of the BOX Fee Schedule. Specifically, the Primary Improvement Order row references ADV (Average Daily Volume). The Exchange no longer uses a Participant's ADV to determine volume based tiers for rebates and fees. Instead, the qualification thresholds are based on a percentage of the Participant's volume relative to the account type's overall total industry equity and ETF option volume. Therefore, the Exchange proposes to remove the reference ADV and only refer to Section I.B.1.
Under the BVR, the Exchange offers a tiered per contract rebate for all PIP Orders and COPIP orders of 100 contracts and under that do not trade solely with their contra order. Percentage thresholds are calculated on a monthly basis by totaling the Participant's PIP and COPIP volume submitted to BOX, relative to the total national Customer volume in multiply-listed options classes.
The Exchange proposes to establish an additional tier within the BVR for percentage thresholds of 1.250% and above. Participants whose PIP and COPIP volume submitted to BOX, relative to the total national Customer volume in multiply-listed options classes, is 1.250% or above will receive a per contract rebate of $0.18 in PIP transactions and $0.06 in COPIP transactions. With this, the Exchange also proposes to adjust the threshold in Tier 4 to end at 1.249%.
The new BVR set forth in Section I.B.2 of the BOX Fee Schedule will be as follows:
The Exchange then proposes to adjust certain fees within the Complex Order Pricing Structure in Section III.A. of the BOX Fee Schedule (All Complex Orders). The Exchange recently introduced a pricing structure where Complex Orders are assessed transaction fees and credits dependent upon three factors: (i) The account type of the Participant submitting the order; (ii) whether the Participant is a liquidity provider or liquidity taker; and (iii) the account type of the contra party.
The Exchange now proposes to adjust certain fees and rebates within the new pricing structure. Specifically, the Exchange proposes to replace the $0.10 credit applied to Market Makers, Professional Customer and Broker Dealers making liquidity against a Public Customer in Penny Pilot Classes. The Exchange proposes to instead assess Professional Customers or Broker Dealers $0.45 and Market Makers $0.40 when their Penny Pilot Complex Order makes liquidity against a Public Customer Complex Order.
For Complex Orders in Non-Penny Pilot Classes, the Exchange proposes to replace the $0.10 credit applied to Market Makers, Professional Customer and Broker Dealers making liquidity against a Public Customer. The Exchange proposes to instead assess Professional Customers and Broker Dealers $0.80 and Market Makers $0.75 when their Non-Penny Pilot Complex Order makes liquidity against a Public Customer Complex Order.
The revised Complex Order Pricing Structure will be as follows:
For example, if a Market Maker's Complex Order in a Penny Pilot Class interacted with a Public Customer's Complex Order, regardless of whether the Complex Order was making or taking liquidity, the Market Maker would now be charged $0.40 and the Public Customer would be credited $0.35.
The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Act, in general, and Section 6(b)(4) and 6(b)(5)of the Act,
The Exchange believes that reducing the PIP and COPIP Order Fees to $0.15 for Market Makers, Professional Customers and Broker Dealers is reasonable. Reducing these fees is meant to encourage auction order flow to the Exchange, which will benefit all market participants on the Exchange. BOX believes the $0.15 fee is equitable and not unfairly discriminatory, as it applies to all Market Marker, Professional Customers and Broker Dealers submitting PIP and COPIP Orders to these auction mechanisms. Further, the Exchange believes it is equitable and not unfairly discriminatory to charge Public Customers less than Non-Public Customers for their PIP and COPIP Orders. The practice of incentivizing increased Public Customer order flow is common in the options markets.
The Exchange believes the proposed amendments to the BVR in Section I.B.2 of the BOX Fee Schedule are reasonable, equitable and non-discriminatory. The BVR was adopted to attract Public Customer order flow to the Exchange by offering these Participants incentives to submit their PIP and COPIP Orders to the Exchange and the Exchange believes it is appropriate to now amend the BVR. The Exchange believes it is equitable and not unfairly discriminatory to establish an additional tier within the BVR, as all Participants have the ability to qualify for a rebate, and rebates are provided equally to qualifying Participants. Finally, the Exchange believes it is reasonable and appropriate to continue to provide incentives for Public Customers, which will result in greater liquidity and ultimately benefit all Participants trading on the Exchange.
BOX believes it is reasonable, equitable and not unfairly discriminatory to adjust the monthly Percentage Thresholds of National Customer Volume in Multiply-Listed Options Classes. The volume thresholds and applicable rebates are meant to incentivize Participants to direct order flow to the Exchange to obtain the benefit of the rebate, which will in turn benefit all market participants by increasing liquidity on the Exchange. Other exchanges employ similar incentive programs,
The Exchange believes amending the Complex Order pricing structure is reasonable, equitable and not unfairly discriminatory. The fee structure for Complex Orders was recently adopted and the Exchange believes it is now appropriate to adjust certain fees and credits. The Complex Order fee structure is generally intended to attract order flow to the Exchange by offering all market participants incentives to submit their Complex Orders to the Exchange.
The Exchange believes that the proposed fees for Professional Customers, Broker Dealers and Market Makers interacting with Public Customer Complex Orders are reasonable. A Professional Customer or Broker Dealer interacting against a Public Customer will now be charged $0.45 in Penny Pilot Classes and $0.80 Non-Penny Pilot Classes, regardless if it is making or taking liquidity. A Market Maker interacting against a Public Customer will now be charged $0.40 in Penny Pilot Classes and $0.75 Non-Penny Pilot Classes, regardless of whether it is making or taking liquidity. The Exchange believes these proposed Complex Order fees remain competitive when compared to the Complex Order fees on another exchange.
The Exchange believes that charging Professional Customers and Broker Dealers higher fees than Public Customers for Complex Orders is equitable and not unfairly discriminatory. Professional Customers, while Public Customers by virtue of not being Broker Dealers, generally engage in trading activity more similar to Broker Dealer proprietary trading accounts (submitting more than 390 standard orders per day on average). The Exchange believes that the higher level of trading activity from these Participants will draw a greater amount of BOX system resources than that of non-professional, Public Customers. Because this higher level of trading activity will result in greater ongoing operational costs, the Exchange aims to recover its costs by assessing Professional Customers and Broker Dealers higher fees for transactions.
The Exchange also believes it is equitable and not unfairly discriminatory for BOX Market Makers to be assessed lower fees than
The Exchange also believes it is reasonable, equitable and not unfairly discriminatory to charge Non-Public Customers a higher fee when their Complex Order interacts with a Public Customer's Complex Order, when compared to the fee assessed when their Complex Order interacts with a Non-Public Customer's Complex Order. To attract Public Customer order flow, Public Customers are given credit when their Complex Order executes against a non-Public Customer. The securities markets generally, and BOX in particular, have historically aimed to improve markets for investors and develop various features within the market structure for Public Customer benefit. Similar to payment for order flow and other pricing models that have been adopted by the Exchange and other exchanges to attract Public Customer order flow, the Exchange increases fees to non-Public Customers to provide incentives for Public Customers. The Exchange believes that providing incentives for Complex Orders by Public Customers is reasonable and, ultimately, will benefit all Participants trading on the Exchange by attracting Public Customer order flow.
Finally, the Exchange also believes it is reasonable to charge Professional Customers, Broker Dealers, and Market Makers less for certain executions in Penny Pilot issues compared to Non-Penny Pilot issues because these classes are typically more actively traded; assessing lower fees will further incentivize order flow in Penny Pilot issues on the Exchange, ultimately benefiting all Participants trading on BOX.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The Exchange is simply proposing to reduce PIP and COPIP Order fees and establish a new qualification tier in the BVR. The Exchange believes doing so will increase intermarket and intramarket competition by incenting Participants to direct their order flow to the exchange, which benefits all participants by providing more trading opportunities and improves competition on the Exchange. The Exchange also believes amending certain Complex Order fees and credits will enhance competition between exchanges because it is designed to allow the Exchange to better compete with other exchanges for Complex Order flow.
Finally, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing exchanges. In such an environment, the Exchange must continually review, and consider adjusting, its fees and credits to remain competitive with other exchanges. For the reasons described above, the Exchange believes that the proposed rule change reflects this competitive environment.
No written comments were either solicited or received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Exchange Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend the rule change if it appears to the Commission that the action is necessary or appropriate in the public interest, for the protection of investors, or would otherwise further the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or 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.
By letter dated May 6, 2016 (the “Letter”), as supplemented by conversations with the staff of the Division of Trading and Markets, counsel for IndexIQ ETF Trust (the “Trust”), on behalf of the Trust, the IQ Enhanced Core Bond U.S. ETF, IQ Enhanced Core Plus Bond U.S. ETF, IQ Leaders Bond Allocation Tracker ETF, and IQ Leaders GTAA Tracker ETF (each, a “Fund” and collectively the “Funds”), NYSE Arca or any national securities exchange on or through which shares issued by the Funds (“Shares”) may subsequently trade, ALPS Distributors, Inc. (the “Distributor”), and persons or entities engaging in transactions in Shares (collectively, the “Requestors”), requested exemptions, or interpretive or no-action relief, from Rule 10b–17 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), and Rules 101 and 102 of Regulation M, in connection with secondary market transactions in Shares and the creation or redemption of aggregations of Shares of at least 50,000 shares (“Creation Units”).
The Trust is registered with the Securities and Exchange Commission (“Commission”) under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. Each Fund is an index fund that seeks to track, as closely as possible, before fees and expenses, the performance of its stated index by holding a portfolio of investments selected to correspond generally to the price and yield performance of such index.
The IQ Enhanced Core Bond U.S. ETF and the IQ Enhanced Core Plus Bond U.S. ETF seek investment results that correspond (before fees and expenses) generally to the price and yield performance of their indices, the IQ Enhanced Core Bond U.S. Index and IQ Enhanced Core Plus Bond U.S. Index, respectively. These indices were designed to weight each of the various sectors of the investment grade fixed income market (and, in the case of the IQ Enhanced Core Plus Bond U.S. Index, the high yield fixed income securities market) based on each index's overall level of risk as measured by volatility and the total return momentum of each fixed income sector, so that each index will overweight fixed income sectors with high momentum and underweight fixed income sectors with low momentum, with constraints to maintain sector diversification.
The IQ Leaders Bond Allocation Tracker ETF and the IQ Leaders GTAA Tracker ETF seek investment results that correspond (before fees and expenses) generally to the price and yield performance of their indices, the IQ Leaders Bond Allocation Index and IQ Leaders GTAA Index, respectively. The IQ Leaders Bond Allocation Index seeks to track the “beta” portion of the returns of the ten leading bond mutual funds pursuing a global bond strategy and the IQ Leaders GTAA Index seeks to track the beta portion of the returns of the ten leading global allocation mutual funds based on fund performance and fund asset size.
At least 80% of each Fund's portfolio holdings are, and will be, shares of some or all of the exchange-traded products (“ETPs”) that are the index constituents of its stated index. Some or all of the remaining 20% may be invested in securities that are not index constituents which the advisor believes will help the Fund track its index, as well as cash, cash equivalents and various types of financial instruments including, but not limited to, futures contracts, swap agreements, forward contracts, reverse repurchase agreements, and options on securities, indices, and futures contracts. In no case will a Fund hold any non-ETP equity security issued by a single issuer in excess of 20% of such Fund's portfolio holdings.
Accordingly, each Fund intends to operate primarily as an “ETF of ETFs.” Except for the fact that each Fund intends to operate primarily as an ETF of ETFs, each Fund will operate in a manner very similar to that of the ETPs held in its portfolio.
The Requestors represent, among other things, the following:
• Shares of each Fund will be issued by the Trust, an open-end management investment company that is registered with the Commission;
• The Trust will continuously redeem Creation Units at net asset value (“NAV”), and the secondary market price of the Shares should not vary substantially from the NAV of such Shares;
• Shares of each Fund will be listed and traded on the NYSE Arca (the “Exchange”) or other exchange in accordance with exchange listing standards that are, or will become, effective pursuant to Section 19(b) of the Exchange Act;
• Each ETP in which each Fund is invested will meet all conditions set forth in a relevant class relief letter,
• All of the components of each Fund's underlying index will have publicly available last sale trade information;
• The intra-day proxy value of each Fund per share and the value of each Index will be publicly disseminated by a major market data vendor throughout the trading day;
• On each business day before the opening of business on the Exchange, each Fund's custodian, through the National Securities Clearing Corporation, will make available the list of the names and the numbers of securities and other assets of the Fund's portfolio that will be applicable that day to creation and redemption requests;
• The Exchange or other market information provider will disseminate every 15 seconds throughout the trading day through the facilities of the Consolidated Tape Association an amount representing the current value of the cash and securities held in the portfolio of a Fund but does not reflect corporate actions, expenses, and other adjustments made to such portfolio throughout the day (“Estimated NAV”);
• At least 80% of each Fund's portfolio holdings are, and will be, shares of some or all of the ETPs that are the index constituents of its stated index;
• Each Fund will invest in securities that will facilitate an effective and
• The Requestors believe that arbitrageurs can be expected to take advantage of price variations between each Fund's market price and its NAV;
• The arbitrage mechanism will be facilitated by the transparency of each Fund's portfolio and the availability of the Estimated NAV, the liquidity of securities and other assets held by each Fund, and the ability to acquire such securities, as well as arbitrageurs' ability to create workable hedges; and
• A close alignment between the market price of Shares and each Fund's NAV is expected.
While redeemable securities issued by an open-end management investment company are excepted from the provisions of Rule 101 and 102 of Regulation M, the Requestors may not rely upon that exception for the Shares.
Generally, Rule 101 of Regulation M is an anti-manipulation rule that, subject to certain exceptions, prohibits any “distribution participant” and its “affiliated purchasers” from bidding for, purchasing, or attempting to induce any person to bid for or purchase, any security which is the subject of a distribution until after the applicable restricted period, except as specifically permitted in the rule. Rule 100 of Regulation M defines “distribution” to mean any offering of securities that is distinguished from ordinary trading transactions by the magnitude of the offering and the presence of special selling efforts and selling methods. The provisions of Rule 101 of Regulation M apply to underwriters, prospective underwriters, brokers, dealers, or other persons who have agreed to participate or are participating in a distribution of securities. The Shares are in a continuous distribution and, as such, the restricted period in which distribution participants and their affiliated purchasers are prohibited from bidding for, purchasing, or attempting to induce others to bid for or purchase, extends indefinitely.
Based on the representations and facts presented in the Letter, particularly that the Trust is a registered open-end management investment company that will continuously redeem at the NAV Creation Unit size aggregations of the Shares of each Fund and that a close alignment between the market price of Shares and each Fund's NAV is expected, the Commission finds that it is appropriate in the public interest, and consistent with the protection of investors, to grant the Trust an exemption under paragraph (d) of Rule 101 of Regulation M with respect to each Fund, thus permitting persons participating in a distribution of Shares of each Fund to bid for or purchase such Shares during their participation in such distribution.
Rule 102 of Regulation M prohibits issuers, selling security holders, or any affiliated purchaser of such person from bidding for, purchasing, or attempting to induce any person to bid for or purchase a covered security during the applicable restricted period in connection with a distribution of securities effected by or on behalf of an issuer or selling security holder.
Based on the representations and facts presented in the Letter, particularly that the Trust is a registered open-end management investment company that will redeem at the NAV Creation Units of Shares of each Fund and that a close alignment between the market price of Shares and each Fund's NAV is expected, the Commission finds that it is appropriate in the public interest, and consistent with the protection of investors, to grant the Trust an exemption under paragraph (e) of Rule 102 of Regulation M with respect to the Funds, thus permitting each Fund to redeem Shares of each Fund during the continuous offering of such Shares.
Rule 10b–17, with certain exceptions, requires an issuer of a class of publicly traded securities to give notice of certain specified actions (for example, a dividend distribution) relating to such class of securities in accordance with Rule 10b–17(b). Based on the representations and facts in the Letter, and subject to the conditions below, we find that it is appropriate in the public interest, and consistent with the protection of investors, to grant the Trust a conditional exemption from Rule 10b–17 because market participants will receive timely notification of the existence and timing of a pending distribution, and thus the concerns that the Commission raised in adopting Rule 10b–17 will not be implicated.
This exemptive relief is subject to the following conditions:
• The Trust will comply with Rule 10b–17 except for Rule 10b–17(b)(1)(v)(a) and (b); and
• The Trust will provide the information required by Rule 10b–17(b)(1)(v)(a) and (b) to the Exchange as soon as practicable before trading begins on the ex-dividend date, but in no event later than the time when the Exchange last accepts information relating to distributions on the day before the ex-dividend date.
This exemptive relief is subject to modification or revocation at any time
This order should not be considered a view with respect to any other question that the proposed transactions may raise, including, but not limited to the adequacy of the disclosure concerning, and the applicability of other federal or state laws to, the proposed transactions.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
Nasdaq proposes to list and trade the shares of the First Trust Strategic Mortgage REIT ETF (the “Fund”) of First Trust Exchange-Traded Fund VIII (the “Trust”) under Nasdaq Rule 5735 (“Managed Fund Shares”).
In its filing with the Commission, Nasdaq included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. Nasdaq has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to list and trade the Shares of the Fund under Nasdaq Rule 5735, which governs the listing and trading of Managed Fund Shares
First Trust Advisors L.P. will be the investment adviser (“Adviser”) to the Fund. First Trust Portfolios L.P. (the “Distributor”) will be the principal underwriter and distributor of the Fund's Shares. The Bank of New York Mellon Corporation (“BNY”) will act as the administrator, accounting agent, custodian and transfer agent to the Fund.
Paragraph (g) of Rule 5735 provides that if the investment adviser to the investment company issuing Managed Fund Shares is affiliated with a broker-dealer, such investment adviser shall erect a “fire wall” between the investment adviser and the broker-dealer with respect to access to information concerning the composition and/or changes to such investment company portfolio.
The Fund intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended.
The investment objective of the Fund will be to generate high current income. Under normal market conditions,
The Fund may invest (in the aggregate) up to 20% of its net assets in the following securities and instruments.
The Fund may invest in the exchange-traded preferred shares of U.S. exchange-traded mortgage REITs.
The Fund may invest in (i) U.S. exchange-traded equity and preferred securities and (ii) domestic over-the-counter (“OTC”) preferred securities, in each case, of companies engaged in the U.S. real estate industry (other than mortgage REITs) (collectively, “Real Estate Companies”).
The Fund may invest in mortgage-backed securities,
The Fund may invest in exchange-traded and OTC options on mortgage REITs and Real Estate Companies; OTC options on mortgage TBA transactions; exchange-traded U.S. Treasury and Eurodollar futures contracts; exchange-traded and OTC interest rate swap agreements; exchange-traded options on U.S. Treasury and Eurodollar futures contracts; and exchange-traded and OTC options on interest rate swap agreements. The use of these derivative transactions may allow the Fund to obtain net long or short exposures to selected interest rates. These derivatives may also be used to hedge risks, including interest rate risks and credit risks, associated with the Fund's portfolio investments. The Fund's investments in derivative instruments will be consistent with the Fund's investment objective and the 1940 Act and will not be used to seek to achieve a multiple or inverse multiple of an index. The Fund will only enter into transactions in OTC derivatives (including OTC options on mortgage REITs, Real Estate Companies and mortgage TBA transactions; OTC interest rate swap agreements; and OTC options on interest rate swap agreements) with counterparties that the Adviser reasonably believes are capable of performing under the applicable contract or agreement.
The Fund may invest in short-term debt securities and other short-term debt instruments (described below), as well as cash equivalents, or it may hold cash.
The Fund may invest (but only, in the aggregate, up to 10% of its net assets) in the securities of money market funds and other ETFs
The Fund may enter into short sales as part of its overall portfolio management strategies or to offset a potential decline in the value of a security; however, the Fund will not engage in short sales with respect to more than 30% of the value of its net assets. To the extent required under applicable federal securities laws, rules, and interpretations thereof, the Fund will “set aside” liquid assets or engage in other measures to “cover” open positions and short positions held in connection with the foregoing types of transactions.
The Fund may hold up to an aggregate amount of 15% of its net assets in illiquid assets (calculated at the time of investment), including Rule 144A securities deemed illiquid by the Adviser.
The Fund may not invest 25% or more of the value of its total assets in securities of issuers in any one industry.
The Fund will issue and redeem Shares on a continuous basis at net asset value (“NAV”)
Creations and redemptions must be made by or through an Authorized Participant that has executed an agreement that has been agreed to by the Distributor and BNY with respect to creations and redemptions of Creation Units. All standard orders to create Creation Units must be received by the transfer agent no later than the closing time of the regular trading session on the NYSE (ordinarily 4:00 p.m., Eastern
The Fund's custodian, through the National Securities Clearing Corporation, will make available on each business day, prior to the opening of business of the Exchange, the list of the names and quantities of the instruments comprising the Creation Basket, as well as the estimated Cash Component (if any), for that day. The published Creation Basket will apply until a new Creation Basket is announced on the following business day prior to commencement of trading in the Shares.
The Fund's NAV will be determined as of Closing Time on each day the NYSE is open for trading. If the NYSE closes early on a valuation day, the NAV will be determined as of that time. NAV per Share will be calculated for the Fund by taking the value of the Fund's total assets, including interest or dividends accrued but not yet collected, less all liabilities, including accrued expenses and dividends declared but unpaid, and dividing such amount by the total number of Shares outstanding. The result, rounded to the nearest cent, will be the NAV per Share. All valuations will be subject to review by the Trust Board or its delegate.
The Fund's investments will be valued daily. As described more specifically below, investments traded on an exchange (
Certain securities in which the Fund may invest will not be listed on any securities exchange or board of trade. Such securities will typically be bought and sold by institutional investors in individually negotiated private transactions that function in many respects like an OTC secondary market, although typically no formal market makers will exist. Certain securities, particularly debt securities, will have few or no trades, or trade infrequently, and information regarding a specific security may not be widely available or may be incomplete. Accordingly, determinations of the value of debt securities may be based on infrequent and dated information. Because there is less reliable, objective data available, elements of judgment may play a greater role in valuation of debt securities than for other types of securities.
The information summarized below is based on the Valuation Procedures as currently in effect; however, as noted above, the Valuation Procedures are amended from time to time and, therefore, such information is subject to change.
The following investments will typically be valued using information provided by a Pricing Service: (a) Mortgage-Related Instruments; (b) OTC derivatives (including OTC options on mortgage REITs, Real Estate Companies and mortgage TBA transactions; OTC interest rate swap agreements; and OTC options on interest rate swap agreements); (c) OTC preferred securities of Real Estate Companies; and (d) except as provided below, short-term U.S. government securities, commercial paper, and bankers' acceptances, all as set forth under “Other Investments” (collectively, “Short-Term Debt Instruments”). Debt instruments may be valued at evaluated mean prices, as provided by Pricing Services. Pricing Services typically value non-exchange-traded instruments utilizing a range of market-based inputs and assumptions, including readily available market quotations obtained from broker-dealers making markets in such instruments, cash flows, and transactions for comparable instruments. In pricing certain instruments, the Pricing Services may consider information about an instrument's issuer or market activity provided by the Adviser.
Short-Term Debt Instruments having a remaining maturity of 60 days or less when purchased will typically be valued at cost adjusted for amortization of premiums and accretion of discounts, provided the Pricing Committee has determined that the use of amortized cost is an appropriate reflection of value given market and issuer-specific conditions existing at the time of the determination.
Certificates of deposit and bank time deposits will typically be valued at cost.
Repurchase agreements will typically be valued as follows: Overnight repurchase agreements will be valued at amortized cost when it represents the best estimate of value. Term repurchase agreements (
Common stocks and other equity securities (including mortgage REITs (both common and preferred shares); ETFs; and exchange-traded Real Estate Companies), as well as preferred securities of Real Estate Companies, that are listed on any exchange other than the Exchange will typically be valued at the last sale price on the exchange on which they are principally traded on the business day as of which such value is being determined. Such securities listed on the Exchange will typically be valued at the official closing price on the business day as of which such value is being determined. If there has been no sale on such day, or no official closing price in the case of securities traded on the Exchange, such securities will typically be valued using fair value pricing. Such securities traded on more than one securities exchange will be valued at the last sale price or official closing price, as applicable, on the business day as of which such value is being determined at the close of the exchange representing the principal market for such securities.
Money market funds will typically be valued at their net asset values as reported by such funds to Pricing Services.
Exchange-traded options on mortgage REITs and Real Estate Companies, exchange-traded U.S. Treasury and
The Fund's Web site (
The Fund's disclosure of derivative positions in the Disclosed Portfolio will include sufficient information for market participants to use to value these positions intraday. On a daily basis, the Fund will disclose on the Fund's Web site the following information regarding each portfolio holding, as applicable to the type of holding: Ticker symbol, CUSIP number or other identifier, if any; a description of the holding (including the type of holding, such as the type of swap); the identity of the security or other asset or instrument underlying the holding, if any; for options, the option strike price; quantity held (as measured by, for example, par value, notional value or number of shares, contracts or units); maturity date, if any; coupon rate, if any; effective date, if any; market value of the holding; and percentage weighting of the holding in the Fund's portfolio. The Web site information will be publicly available at no charge.
In addition, for the Fund, an estimated value, defined in Rule 5735(c)(3) as the “Intraday Indicative Value,” that reflects an estimated intraday value of the Fund's Disclosed Portfolio, will be disseminated. Moreover, the Intraday Indicative Value, available on the NASDAQ OMX Information LLC proprietary index data service,
The dissemination of the Intraday Indicative Value, together with the Disclosed Portfolio, will allow investors to determine the value of the underlying portfolio of the Fund on a daily basis and will provide a close estimate of that value throughout the trading day.
Investors will also be able to obtain the Fund's Statement of Additional Information (“SAI”), the Fund's annual and semi-annual reports (together, “Shareholder Reports”), and its Form N–CSR and Form N–SAR, filed twice a year. The Fund's SAI and Shareholder Reports will be available free upon request from the Fund, and those documents and the Form N–CSR and Form N–SAR may be viewed on-screen or downloaded from the Commission's Web site at
Pricing information for Mortgage-Related Instruments, OTC Real Estate Companies, Short-Term Debt Instruments, repurchase agreements, certificates of deposit, bank time deposits, OTC options on mortgage REITs, Real Estate Companies and mortgage TBA transactions, OTC interest rate swap agreements, and OTC options on interest rate swap agreements will be available from major broker-dealer firms and/or major market data vendors and/or Pricing Services. Pricing information for mortgage REITs (both common and preferred shares), exchange-traded Real Estate Companies, ETFs, exchange-traded options on mortgage REITs and Real Estate Companies, exchange-traded U.S. Treasury and Eurodollar futures contracts, exchange-traded interest rate swap agreements, exchange-traded options on U.S. Treasury and Eurodollar futures contracts, and exchange-traded options on interest rate swap agreements will be available from the applicable listing exchange and from major market data vendors. Money market funds are typically priced once each business day and their prices will be available through the applicable fund's Web site or from major market data vendors.
Additional information regarding the Fund and the Shares, including investment strategies, risks, creation and
The Shares will be subject to Rule 5735, which sets forth the initial and continued listing criteria applicable to Managed Fund Shares. The Exchange represents that, for initial and continued listing, the Fund must be in compliance with Rule 10A–3
With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Shares of the Fund. Nasdaq will halt trading in the Shares under the conditions specified in Nasdaq Rules 4120 and 4121, including the trading pauses under Nasdaq Rules 4120(a)(11) and (12). Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. These may include: (1) The extent to which trading is not occurring in the securities and/or the other assets constituting the Disclosed Portfolio of the Fund; or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. Trading in the Shares also will be subject to Rule 5735(d)(2)(D), which sets forth circumstances under which Shares of the Fund may be halted.
Nasdaq deems the Shares to be equity securities, thus rendering trading in the Shares subject to Nasdaq's existing rules governing the trading of equity securities. Nasdaq will allow trading in the Shares from 4:00 a.m. until 8:00 p.m., Eastern Time. The Exchange has appropriate rules to facilitate transactions in the Shares during all trading sessions. As provided in Nasdaq Rule 5735(b)(3), the minimum price variation for quoting and entry of orders in Managed Fund Shares traded on the Exchange is $0.01.
The Exchange represents that trading in the Shares will be subject to the existing trading surveillances, administered by both Nasdaq and also the Financial Industry Regulatory Authority (“FINRA”) on behalf of the Exchange, which are designed to detect violations of Exchange rules and applicable federal securities laws.
The surveillances referred to above generally focus on detecting securities trading outside their normal patterns, which could be indicative of manipulative or other violative activity. When such situations are detected, surveillance analysis follows and investigations are opened, where appropriate, to review the behavior of all relevant parties for all relevant trading violations.
FINRA, on behalf of the Exchange, will communicate as needed regarding trading in the Shares and the exchange-traded securities and instruments held by the Fund (including mortgage REITs (both common and preferred shares); exchange-traded Real Estate Companies; ETFs; exchange-traded options on mortgage REITs and Real Estate Companies; exchange-traded U.S. Treasury and Eurodollar futures contracts; exchange-traded interest rate swap agreements; exchange-traded options on U.S. Treasury and Eurodollar futures contracts; and exchange-traded options on interest rate swap agreements) with other markets and other entities that are members of the Intermarket Surveillance Group (“ISG”),
At least 90% of the Fund's net assets that are invested in exchange-traded derivatives (including exchange-traded options on mortgage REITs and Real Estate Companies; exchange-traded U.S. Treasury and Eurodollar futures contracts; exchange-traded interest rate swap agreements; exchange-traded options on U.S. Treasury and Eurodollar futures contracts; and exchange-traded options on interest rate swap agreements) (in the aggregate) will be invested in instruments that trade in markets that are members of ISG or are parties to a comprehensive surveillance sharing agreement with the Exchange. All of the Fund's net assets that are invested in exchange-traded equity securities (including mortgage REITs (both common and preferred shares); ETFs; and exchange-traded Real Estate Companies) (in the aggregate) will be invested in securities that trade in markets that are members of ISG or are parties to a comprehensive surveillance sharing agreement with the Exchange.
In addition, the Exchange also has a general policy prohibiting the distribution of material, non-public information by its employees.
Prior to the commencement of trading, the Exchange will inform its members in an Information Circular of the special characteristics and risks associated with trading the Shares. Specifically, the Information Circular will discuss the following: (1) The procedures for purchases and redemptions of Shares in Creation Units (and that Shares are not individually redeemable); (2) Nasdaq Rule 2111A, which imposes suitability obligations on Nasdaq members with respect to recommending transactions in the Shares to customers; (3) how information regarding the Intraday Indicative Value and the Disclosed Portfolio is disseminated; (4) the risks involved in trading the Shares during the Pre-Market and Post-Market Sessions when an updated Intraday Indicative Value will not be calculated or publicly disseminated; (5) the requirement that members deliver a prospectus to investors purchasing newly issued Shares prior to or concurrently with the confirmation of a transaction; and (6) trading information. The Information Circular will also
Additionally, the Information Circular will reference that the Fund is subject to various fees and expenses described in the Registration Statement. The Information Circular will also disclose the trading hours of the Shares of the Fund and the applicable NAV Calculation Time for the Shares. The Information Circular will disclose that information about the Shares of the Fund will be publicly available on the Fund's Web site.
All statements and representations made in this filing regarding (a) the description of the portfolio, (b) limitations on portfolio holdings or reference assets, or (c) the applicability of Exchange rules and surveillance procedures shall constitute continued listing requirements for listing the Shares on the Exchange. In addition, the issuer has represented to the Exchange that it will advise the Exchange of any failure by the Fund to comply with the continued listing requirements, and, pursuant to its obligations under Section 19(g)(1) of the Act, the Exchange will monitor for compliance with the continued listing requirements. If the Fund is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under the Nasdaq 5800 Series.
Nasdaq believes that the proposal is consistent with Section 6(b) of the Act in general and Section 6(b)(5) of the Act in particular in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and, in general, to protect investors and the public interest.
The Exchange believes that the proposed rule change is designed to prevent fraudulent and manipulative acts and practices in that the Shares will be listed and traded on the Exchange pursuant to the initial and continued listing criteria in Nasdaq Rule 5735. The Exchange represents that trading in the Shares will be subject to the existing trading surveillances, administered by both Nasdaq and also FINRA on behalf of the Exchange, which are designed to detect violations of Exchange rules and applicable federal securities laws.
The Adviser is not a broker-dealer, but it is affiliated with the Distributor, a broker-dealer, and is required to implement a “fire wall” with respect to such broker-dealer affiliate regarding access to information concerning the composition and/or changes to the Fund's portfolio. In addition, paragraph (g) of Nasdaq Rule 5735 further requires that personnel who make decisions on the open-end fund's portfolio composition must be subject to procedures designed to prevent the use and dissemination of material non-public information regarding the open-end fund's portfolio.
FINRA, on behalf of the Exchange, will communicate as needed regarding trading in the Shares and the exchange-traded securities and instruments held by the Fund (including mortgage REITs (both common and preferred shares); exchange-traded Real Estate Companies; ETFs; exchange-traded options on mortgage REITs and Real Estate Companies; exchange-traded U.S. Treasury and Eurodollar futures contracts; exchange-traded interest rate swap agreements; exchange-traded options on U.S. Treasury and Eurodollar futures contracts; and exchange-traded options on interest rate swap agreements) with other markets and other entities that are members of ISG, and FINRA may obtain trading information regarding trading in the Shares and such exchange-traded securities and instruments held by the Fund from such markets and other entities. In addition, the Exchange may obtain information regarding trading in the Shares and the exchange-traded securities and instruments held by the Fund from markets and other entities that are members of ISG, which includes securities and futures exchanges, or with which the Exchange has in place a comprehensive surveillance sharing agreement. Moreover, FINRA, on behalf of the Exchange, will be able to access, as needed, trade information for certain fixed income securities held by the Fund reported to FINRA's TRACE.
At least 90% of the Fund's net assets that are invested in exchange-traded derivatives (including exchange-traded options on mortgage REITs and Real Estate Companies; exchange-traded U.S. Treasury and Eurodollar futures contracts; exchange-traded interest rate swap agreements; exchange-traded options on U.S. Treasury and Eurodollar futures contracts; and exchange-traded options on interest rate swap agreements) (in the aggregate) will be invested in instruments that trade in markets that are members of ISG or are parties to a comprehensive surveillance sharing agreement with the Exchange. All of the Fund's net assets that are invested in exchange-traded equity securities (including mortgage REITs (both common and preferred shares); ETFs; and exchange-traded Real Estate Companies) (in the aggregate) will be invested in securities that trade in markets that are members of ISG or are parties to a comprehensive surveillance sharing agreement with the Exchange.
The investment objective of the Fund will be to generate high current income. Under normal market conditions, the Fund will seek to achieve its investment objective by investing at least 80% of its net assets (including investment borrowings) in the exchange-traded common shares of U.S. exchange-traded mortgage REITs. The Fund may invest up to 20% of its net assets in the exchange-traded preferred shares of U.S. exchange-traded mortgage REITs. Additionally, the Fund may invest up to 20% of its net assets in derivative instruments (including exchange-traded and OTC options on mortgage REITs and Real Estate Companies; OTC options on mortgage TBA transactions; exchange-traded U.S. Treasury and Eurodollar futures contracts; exchange-traded and OTC interest rate swap agreements; exchange-traded options on U.S. Treasury and Eurodollar futures contracts; and exchange-traded and OTC options on interest rate swap agreements). The Fund's investments in derivative instruments will be consistent with the Fund's investment objective and the 1940 Act and will not be used to seek to achieve a multiple or inverse multiple of an index. Also, the Fund may hold up to an aggregate amount of 15% of its net assets in illiquid assets (calculated at the time of investment), including Rule 144A securities deemed illiquid by the Adviser. The Fund will monitor its portfolio liquidity on an ongoing basis to determine whether, in light of current circumstances, an adequate level of liquidity is being maintained, and will consider taking appropriate steps in order to maintain adequate liquidity if, through a change in values, net assets, or other circumstances, more than 15% of the Fund's net assets are held in illiquid assets. Illiquid assets include securities subject to contractual or other restrictions on resale and other instruments that lack readily available markets as determined in accordance with Commission staff guidance.
The proposed rule change is designed to promote just and equitable principles of trade and to protect investors and the public interest in that the Exchange will obtain a representation from the issuer of the Shares that the NAV per Share will be calculated daily and that the
The Fund's Web site will include a form of the prospectus for the Fund and additional data relating to NAV and other applicable quantitative information. Trading in Shares of the Fund will be halted under the conditions specified in Nasdaq Rules 4120 and 4121 or because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable, and trading in the Shares will be subject to Nasdaq Rule 5735(d)(2)(D), which sets forth circumstances under which Shares of the Fund may be halted. In addition, as noted above, investors will have ready access to information regarding the Fund's holdings, the Intraday Indicative Value, the Disclosed Portfolio, and quotation and last sale information for the Shares.
The Fund's investments will be valued daily. Investments traded on an exchange (
The proposed rule change is designed to perfect the mechanism of a free and open market and, in general, to protect investors and the public interest in that it will facilitate the listing and trading of an additional type of actively-managed exchange-traded product that will enhance competition among market participants, to the benefit of investors and the marketplace. As noted above, FINRA, on behalf of the Exchange, will communicate as needed regarding trading in the Shares and exchange-traded securities and instruments held by the Fund (including mortgage REITs (both common and preferred shares); exchange-traded Real Estate Companies; ETFs; exchange-traded options on mortgage REITs and Real Estate Companies; exchange-traded U.S. Treasury and Eurodollar futures contracts; exchange-traded interest rate swap agreements; exchange-traded options on U.S. Treasury and Eurodollar futures contracts; and exchange-traded options on interest rate swap agreements) with other markets and other entities that are members of ISG, and FINRA may obtain trading information regarding trading in the Shares and such exchange-traded securities and instruments held by the Fund from such markets and other entities. In addition, the Exchange may obtain information regarding trading in the Shares and the exchange-traded securities and instruments held by the Fund from markets and other entities that are members of ISG, which includes securities and futures exchanges, or with which the Exchange has in place a comprehensive surveillance sharing agreement. Moreover, FINRA, on behalf of the Exchange, will be able to access, as needed, trade information for certain fixed income securities held by the Fund reported to FINRA's TRACE. Furthermore, as noted above, investors will have ready access to information regarding the Fund's holdings, the Intraday Indicative Value, the Disclosed Portfolio, and quotation and last sale information for the Shares.
For the above reasons, Nasdaq believes the proposed rule change is consistent with the requirements of Section 6(b)(5) of the Act.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes that the proposed rule change will facilitate the listing and trading of an additional type of actively-managed exchange-traded fund that will enhance competition among market participants, to the benefit of investors and the marketplace.
Written comments were neither solicited nor received.
Within 45 days of the date of publication of this notice in the
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.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange filed a proposal to amend the fee schedule applicable to Members
The text of the proposed rule change is available at the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
The Exchange determines the liquidity adding rebate that it will provide to Members using the Exchange's tiered pricing structure. Currently, the Exchange provides a $0.0027 per share rebate under footnote 2 of the Fee Schedule for a Member that adds an ADV
The Exchange now proposes to amend the Tape B Volume Tier to add an additional Tape B Volume Tier to provide two Tape B Volume Tiers. The Exchange proposes that the current Tape B Volume Tier be renamed Tape B Volume Tier 1. The Exchange proposes that the rebate and the required criteria for Tape B Volume Tier 1 remain substantively the same as the current Tape B Volume Tier. The Exchange also proposes a second Tape B Volume Tier named “Tape B Volume Tier 2.” The Exchange proposes to provide a rebate per share of $0.0030 pursuant to the Tier and proposes the required criteria to be that a Member adds an ADV of at least 0.15% of the TCV in Tape B securities. To accommodate this proposed change in its Fee Schedule, the Exchange proposes adding an additional row to the Tape B Volume Tier table to list the Tape B Volume Tier 2. The Exchange also proposes adding an additional column to separate Tape B Volume Tier 1 and Tape B Volume Tier 2. Finally, the Exchange proposes stating as a precursor that both Tape B Volume
The Exchange proposes to implement this amendment to its Fee Schedule effective May 2, 2016.
The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,
Volume-based rebates such as that proposed herein have been widely adopted by exchanges, including the Exchange, and are equitable because they are open to all Members on an equal basis and provide additional benefits or discounts that are reasonably related to: (i) The value to an exchange's market quality; (ii) associated higher levels of market activity, such as higher levels of liquidity provision and/or growth patterns; and (iii) introduction of higher volumes of orders into the price and volume discovery processes. The Exchange believes that the proposal is a reasonable, fair and equitable, and not unfairly discriminatory allocation of fees and rebates because it will provide Members with an additional incentive to reach certain thresholds on the Exchange.
In particular, the Exchange believes the addition of the proposed second, higher Tape B Volume Tier 2 is a reasonable means to encourage Members to increase the liquidity they provide on the Exchange. Further, Members will still be able to earn the currently offered rebate under Tape B Volume Tier 1. The addition of a second, higher tier merely incentivizes a Member to provide even greater liquidity. The Exchange further believes that the amendment to the Tape B Volume Tier represents an equitable allocation of reasonable dues, fees, and other charges because the thresholds necessary to achieve the tier continue to encourage Members to add displayed liquidity to the EDGX Book
The Exchange does not believe its proposed amendment to its Fee Schedule would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposed change represents a significant departure from previous pricing offered by the Exchange or pricing offered by the Exchange's competitors. Additionally, Members may opt to disfavor the Exchange's pricing if they believe that alternatives offer them better value. The Exchange does not believe that the proposed additional tier would burden competition, but instead, enhances competition, as it is intended to increase the competitiveness of and draw additional volume to the Exchange. The Exchange does not believe the amended tier would burden intramarket competition as it would apply to all Members uniformly. Accordingly, the Exchange does not believe that the proposed change will impair the ability of Members or competing venues to maintain their competitive standing in the financial markets.
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from Members or other interested parties.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to 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.
On March 2, 2016, each of the New York Stock Exchange LLC (“NYSE”), NYSE Arca, Inc. (“NYSE Arca”) and NYSE MKT LLC (“NYSE MKT” and, together with NYSE and NYSE Arca, “Exchanges”) filed with the Securities and Exchange Commission (“Commission”) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchanges propose to amend and restate the Bylaws to add a new Section 2.15 that would, subject to a number of requirements, permit stockholders to nominate director nominees for election to the Board of Directors of ICE (“Board”) and require ICE to include such director nominations in its proxy materials for the next annual meeting of stockholders (“Proxy Materials”). The Exchanges further propose to amend certain advance notice provisions in Section 2.13 of the Bylaws to account for the implementation of proxy access in proposed Section 2.15.
Proposed Section 2.15 of the Bylaws would enable an individual stockholder, or a group of up to 20 stockholders, to nominate director nominees for the Board and have them included in the Proxy Materials, so long as such stockholder or stockholders have collectively owned at least three percent of ICE's outstanding shares of common stock continuously for at least three years.
In order to nominate a director nominee to be included in the Proxy Materials under proposed Section 2.15, a stockholder would need to submit a notice (“Nomination Notice”) to the Secretary of ICE, no earlier than the close of business 150 calendar days, and no later than the close of business 120 calendar days, before the anniversary of the date that ICE mailed its Proxy Materials for the previous year's annual meeting.
• A Schedule 14N
• a written notice of the nomination
○ That the nominating stockholder did not acquire, and is not holding, securities of ICE for the purpose or with the effect of influencing or changing control of ICE;
○ that the nominee's candidacy or, if elected, membership on the Board would not violate applicable state or federal law or the rules of the principal national securities exchange on which ICE's securities are traded;
○ that the nominee does not have any direct or indirect relationship with ICE that will cause the nominee to be deemed not independent under the Board's Independence Policy;
○ that the nominee qualifies as independent under the rules of the principal national securities exchange on which ICE's common stock is traded and meets that exchange's audit
○ that the nominee is a “non-employee director” for the purposes of Rule 16b-3 under the Exchange Act,
○ that the nominating stockholder satisfies the eligibility requirements set forth in proposed Section 2.15 of the Bylaws and intends to continue to satisfy such requirements through the date of the annual meeting; and
○ that the nominating stockholder will not engage in a “solicitation” within the meaning of Rule 14a–1(l) under the Exchange Act
• an executed agreement,
○ To comply with all applicable laws, rules and regulations in connection with the nomination, solicitation, and election of a nominee;
○ to file any written solicitation or other communication with ICE stockholders relating to ICE directors, director nominees, or the nominating stockholder's nominee with the Commission;
○ to assume all liability stemming from an action, suit, or proceeding relating to any actual or alleged legal or regulatory violations arising out of any communication by the nominating stockholder or its nominee in connection with the nomination or election of directors, including the Nomination Notice;
○ to indemnify ICE and its directors, officers, and employees against any liability incurred in connection with any action, suit, or proceeding relating to a failure or alleged failure of the nominating stockholder or its nominees to comply with, or a breach or alleged breach of, its respective obligations, agreements, or representations under proposed Section 2.15; and
○ to promptly notify ICE and any other recipients of communications by the nominating stockholder in connection with the nomination or election of a director nominee if (1) any information included in such communications or in the Nomination Notice ceases to be true and accurate in all material respects or a material fact necessary to make a statement not misleading has been omitted or (2) the nominating stockholder has failed to continue to satisfy the eligibility requirements described in proposed Section 2.15(c); and
• an executed agreement,
○ to provide to ICE such other information and certifications, including completion of ICE's director questionnaire, as it may reasonably request;
○ that the nominee has read and agrees, if elected, to serve as a member of the Board and to adhere to ICE's Corporate Governance Guidelines and Global Code of Business Conduct and any other policies and guidelines applicable to directors; and
○ that the nominee is not and will not become a party to any (i) undisclosed financial agreement or arrangement with any person or entity other than ICE in connection with his or her service or action as a director of ICE, (ii) undisclosed agreement or arrangement with any person or entity as to how the nominee would vote or act on any issue or question as a director of ICE; or (iii) voting commitment that could reasonably be expected to interfere with the nominee's ability to comply, if elected, with his or her fiduciary duties under applicable law.
If so requested in the relevant Nomination Notice, and subject to the requirements set forth in proposed Section 2.15,
Notwithstanding the foregoing, ICE may omit from the Proxy Materials, or may supplement or correct, any information, including all or any portion of the statement in support of the nominee included in the Nomination Notice, if the Board determines that: (1) Such information is not true in all material respects or omits a material statement necessary to make the statements made not misleading; (2) such information directly or indirectly impugns the character, integrity, or personal reputation of, or directly or indirectly makes charges concerning improper, illegal, or immoral conduct or associations, without factual foundation, with respect to, any person; or (3) the inclusion of such information in the Proxy Materials would otherwise violate the federal proxy rules or any other applicable law, rule or regulation.
Under the proposal, there is a limit to the number of director nominees submitted pursuant to proposed Section 2.15 that may be included in the Proxy Materials. Specifically, ICE would not be required to include in the Proxy Materials more nominees submitted pursuant to proposed Section 2.15 than that number of directors constituting twenty percent of the total number of directors of the Board (rounded down to the nearest whole number, but not less
Proposed Section 2.15 would allow the Board to disregard director nominations submitted pursuant to proposed Section 2.15 in certain circumstances. If the Board determines that a nominee or nominating stockholder no longer satisfies the eligibility requirements, a nominating stockholder withdraws its nomination, or a nominee is unwilling or unable to serve as a director, the Board may disregard the nomination and ICE would not be required to include the nominee in the Proxy Materials and could affirmatively inform stockholders that the nominee would not be voted on at the annual meeting.
In addition, the proposal permits ICE to omit nominees submitted pursuant to proposed Section 2.15 from the Proxy Materials (and to prohibit any vote on such nominee) in the following situations:
• The nominating stockholder(s) (or representatives thereof) fail to present the nomination at the annual meeting or withdraw the nomination;
• the Board determines that the nomination or election of the nominee would result in ICE violating or failing to be in compliance with its certificate of incorporation, the Bylaws, or any applicable law, rule or regulation to which it is subject, including any rule or regulation of the principal national securities exchange on which ICE's securities are traded;
• the nominee was nominated for election to the Board pursuant to Section 2.15 at one of ICE's two preceding annual meetings of stockholders and withdrew, became ineligible, or failed to receive 20% of the vote;
• the nominee has been, within the past three years an officer or director of a competitor or is a U.S. Disqualified Person as defined in ICE's certificate of incorporation;
• ICE is notified, or the Board determines, that: (i) A nominating stockholder has failed to continue to satisfy the eligibility requirements of proposed Section 2.15; (ii) any of the representations and warranties made in the Nomination Notice cease to be true and accurate in all material respects (or omit a material fact necessary to make the statements made not misleading); (iii) the nominee becomes unwilling or unable to serve on the Board, or (iv) the nominee or nominating stockholder materially violate or breach the obligations, agreements, representations, or warranties made under proposed Section 2.15; or
• ICE receives a notice under Section 2.13 that a stockholder intends to nominate a candidate for director at the annual meeting.
Currently, Section 2.13 of the Bylaws sets forth a process by which ICE stockholders may nominate directors at their annual and special meetings, including certain advance notice requirements.
After careful review, the Commission finds that the proposed rule changes are consistent with the requirements of Section 6 of the Act
A shareholder who wishes to nominate his or her own candidate for director may initiate a proxy contest in order to solicit proxies from fellow shareholders, but doing so requires the preparation and dissemination of separate proxy materials and entails substantial cost. Proposed Section 2.15 of the Bylaws provides ICE shareholders an alternative path for having their nominees considered through the proxy process. This proposed rule change is intended to respond to a request made by ICE shareholders regarding proxy access.
The Exchanges state that the proposal, by providing a process for certain stockholders to nominate directors to be included in the Proxy Materials,
The proposed rule changes will require ICE to include in its Proxy Materials information regarding a director nominee nominated pursuant to proposed Section 2.15 in its Proxy Materials, including disclosures regarding the nominee and nominating stockholder(s), any statement in support of the nominee provided by the nominating stockholder(s), and any other information that ICE or the Board determines to include relating to the nomination. The Commission believes that the provision of such information could help stockholders to assess whether a nominee submitted pursuant to proposed Section 2.15 possesses the necessary qualifications and experience to serve as a director.
The proposed rule changes limit the availability of proxy access in certain circumstances. For example, in order to be eligible to submit a nomination to be included in the Proxy Materials pursuant to proposed Section 2.15, a shareholder (or group of shareholders) is required to own at least three percent of ICE's outstanding shares of common stock continuously for at least three years. Furthermore, a shareholder may not nominate a director to be included in the Proxy Materials pursuant to proposed Section 2.15 if he or she is holding ICE's securities with the intent of effecting a change of control of ICE. The proposed rule changes also generally would limit the number of director nominees submitted pursuant to proposed Section 2.15 that may be included in the Proxy Materials to twenty percent of the total number of directors of the Board. The proposed rule changes would allow ICE to disregard or omit nominees submitted pursuant to proposed Section 2.15 from the Proxy Materials in certain circumstances, including if the Board determines that the nomination or election of the nominee would result in ICE violating or failing to be in compliance with its governing documents or any applicable law, rule or regulation to which it is subject.
The Commission notes that the proposed proxy access provisions include safeguards to help verify that any director nominees submitted pursuant to proposed Section 2.15 would qualify as independent directors and that the nominating shareholder's nomination of the nominee, and the nominee's membership on the Board, if elected, would not violate any applicable laws, rules or regulations of any government entity or relevant self-regulatory organization. Specifically, the nominating stockholder must represent and warrant, among other things, that: (i) The nominee's candidacy or, if elected, membership on the Board would not violate applicable state or federal law or the rules of the principal national securities exchange on which ICE's securities are traded; (ii) the nominee does not have any direct or indirect relationship with ICE that will cause the nominee to be deemed not independent under the Board's Independence Policy;
The Commission notes that the safeguards and limitations described above should help to ensure ICE can comply with its bylaws and any applicable laws, rules, regulations, including, among others, the Board's Independence Policy and exchange listing standards on independent directors and audit committees, consistent with Section 6(b)(5) of the Act. Based on the foregoing, the Commission finds that the proposed rule changes filed by the Exchanges are consistent with the Act.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to the provisions of Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange is filing a proposal to amend the MIAX Options Fee Schedule (the “Fee Schedule”).
The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend its Fee Schedule to: (i) Offer to each Qualifying Member (as defined below) a rebate of $0.03 per contract executed within Tier 1 of the Priority Customer Rebate Program (the “PCRP”),
The Exchange proposes to amend Section (1)(a)(iii) of the Fee Schedule to offer a $0.03 rebate per contract executed within Tier 1 of the PCRP to each “Qualifying Member,” as defined below. Tier 1 of the PRCP [sic] currently offers no per contract credits to Members that execute a number of Priority Customer
In order to provide incentive for order flow providers to increase the volume of Professional
In order to qualify for the proposed monthly PRCP [sic] Tier 1 rebate, a Member must execute an increased percentage of contracts on MIAX in that same month for the account(s) of a Professional (not including mini-options, Non-Priority Customer-to-Non-Priority Customer Orders, QCC Orders, PRIME Orders, PRIME AOC Responses, PRIME Contra-side Orders, and executions related to contracts that are routed to one or more exchanges in connection with the Options Order Protection and Locked/Crossed Market Plan referenced in MIAX Rule 1400 (collectively, for purposes of the Professional Rebate Program, “Excluded Contracts”)) by greater than 0.065% of the number of contracts executed by the Member for the account(s) of a Professional during the fourth quarter of 2015 as a percentage of the total volume reported by the Options Clearing Corporation (“OCC”) in MIAX classes during the fourth quarter of 2015 (the “Baseline Percentage”). For the purpose of establishing a Baseline Percentage for any Member for whom no fourth quarter 2015 Baseline Percentage exists, MIAX will use 0.03% as that Member's Baseline Percentage, as described below.
A Member that qualifies to receive the proposed PRCP [sic] Tier 1 rebate will be known as a “Qualifying Member,” which is a Member or its affiliates of at least 75% common ownership between the firms as reflected on each firm's Form BD, Schedule A, that qualifies for the Professional Rebate Program and achieves a volume increase in excess of 0.065% over the applicable Baseline Percentage for Professional orders transmitted by that Member which are executed electronically on the Exchange in all multiply-listed option classes for the account(s) of a Professional and which qualify for the Professional Rebate Program during a particular month, relative to the appropriate Baseline Percentage (described below). The Exchange will aggregate the contracts resulting from orders of a Qualifying Member transmitted and executed electronically on the Exchange from affiliated Members of the Qualifying Member, provided there is at least 75% common ownership between the firms as reflected on each firm's Form BD, Schedule A.
The Exchange also proposes to establish a new “Baseline Percentage” for Members who did not execute contracts for the account(s) of a Professional during the fourth quarter of 2015 in order to permit such Members to benefit from all of the rebates offered under the Professional Rebate Program. Currently, the Professional Rebate Program affords a per contract credit based upon the increase in the total volume submitted by a Member and executed for the account(s) of a Professional on MIAX (not including Excluded Contracts) during a particular month as a percentage of the total volume reported by (OCC) in MIAX classes during the same month (the “Current Percentage”), less the total volume submitted by that Member and executed for the account(s) of a Professional on MIAX (not including Excluded Contracts) during the fourth quarter of 2015 as a percentage of the total volume reported by OCC in MIAX classes during the fourth quarter of 2015 (the “Baseline Percentage”). The Exchange proposes to define a Baseline Percentage for Members who did not execute contracts for the account(s) of a Professional during the fourth quarter of 2015. For such Members (with respect to all available rebates in the Professional Rebate Program), the “Baseline Percentage” will be .03%.
The purpose of the proposed rule change is to encourage Members to direct an increased level of Professional contract volume to the Exchange by
The Exchange is also proposing a minor technical amendment to Section (1)(a)(iii) of the Fee Schedule to refer specifically to “The Priority Customer rebate” payment instead of stating “This” payment in the third paragraph under the PRCP [sic] table. This is intended for clarity and ease of reference.
The credits paid out as part of the PCRP will be drawn from the general revenues of the Exchange.
The Exchange believes that its proposal to amend its Fee Schedule is consistent with Section 6(b) of the Act
The Exchange believes that the proposal to offer the rebate under the PCRP to Qualifying Members is fair, equitable and not unreasonably discriminatory, because it applies equally to all Qualifying Members. The proposed per contract rebate for Priority Customer orders is reasonably designed because it will encourage providers of Professional order flow to send increased Professional order flow to the Exchange in order to receive the per contract credit for achieving Tier 1 volume in contracts executed for Priority Customers. The Exchange thus believes that the proposed new rebate should improve market quality for all market participants by providing more execution opportunities. All Qualifying Members will receive the same rebate for Priority Customer contracts executed in PRCP [sic] Tier 1.
The Exchange believes that the proposal to amend the definition of Baseline Percentage is fair, equitable and not unreasonably discriminatory. The Exchange believes that the proposed definition of Baseline Percentage should provide an equal opportunity, and a beginning measuring percentage, for all Members that did not have a Baseline Percentage for the fourth quarter of 2015 to submit Professional order flow and thus become Qualifying Members for the Tier 1 Priority Customer contract rebate. This should in turn increase order flow, trading opportunities and improve the overall depth, liquidity and quality of the market for all MIAX participants.
Additionally, the proposed amended definition of Baseline Percentage is equitable and not unfairly discriminatory because it will benefit Members who did not execute orders for the account(s) of a Professional in the fourth quarter of 2015 and such Members will now be on an equal playing field with respect to the calculation of their potential increase in percentage of Professional contracts executed for purposes of becoming a Qualifying Member.
The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes that the proposed changes would increase both intermarket and intramarket competition by encouraging Members to direct their Professional and Priority Customer orders to the Exchange, which should enhance the quality of quoting and increase the volume of contracts traded on MIAX. The Exchange believes that the changes to each of the PCRP and the Professional Rebate Program should provide additional liquidity that enhances the quality of its markets and increases the number of trading opportunities on MIAX for all participants, who will be able to compete for such opportunities. This should benefit all market participants and improve competition on the Exchange.
The Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive. In such an environment, the Exchange must continually adjust its fees and rebates to remain competitive with other exchanges and to attract order flow to the Exchange. The Exchange believes that the proposed rule change reflects this competitive environment because it adds new rebates and thus encourages market participants to direct both their Professional and Priority Customer order flow to the Exchange. Given the robust competition for volume among options markets, many of which offer the same products, enhancing the existing volume-based PCRP and Professional Rebate Programs to attract order flow is consistent with the goals of the Act. The Exchange believes that the proposal will enhance competition, because market participants will have another additional pricing consideration in determining where to execute orders and post liquidity if they factor the benefits of the proposed amendments to the PCRP and Professional Rebate Program into the determination.
Written comments were neither solicited nor received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act,
Interested persons are invited to submit written data, views, and
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Brent J. Fields, 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.
Social Security Administration (SSA).
Notice of a renewal of an existing computer matching program that will expire on June 25, 2016.
In accordance with the provisions of the Privacy Act, as amended, this notice announces a renewal of an existing computer matching program that we are currently conducting with Fiscal Service.
We will file a report of the subject matching program with the Committee on Homeland Security and Governmental Affairs of the Senate; the Committee on Oversight and Government Reform of the House of Representatives; and the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB). The matching program will be effective as indicated below.
Interested parties may comment on this notice by either telefaxing to (410) 966–0869 or writing to the Executive Director, Office of Privacy and Disclosure, Office of the General Counsel, Social Security Administration, 617 Altmeyer Building, 6401 Security Boulevard, Baltimore, MD 21235–6401. All comments received will be available for public inspection at this address.
The Executive Director, Office of Privacy and Disclosure, Office of the General Counsel, as shown above.
The Computer Matching and Privacy Protection Act of 1988 (Pub. L. 100–503), amended the Privacy Act (5 U.S.C. 552a) by describing the conditions under which computer matching involving the Federal government could be performed and adding certain protections for persons applying for, and receiving, Federal benefits. Section 7201 of the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101–508) further amended the Privacy Act regarding protections for such persons.
The Privacy Act, as amended, regulates the use of computer matching by Federal agencies when records in a system of records are matched with other Federal, State, or local government records. It requires Federal agencies involved in computer matching programs to:
(1) Negotiate written agreements with the other agency or agencies participating in the matching programs;
(2) Obtain approval of the matching agreement by the Data Integrity Boards of the participating Federal agencies;
(3) Publish notice of the computer matching program in the
(4) Furnish detailed reports about matching programs to Congress and OMB;
(5) Notify applicants and beneficiaries that their records are subject to matching; and
(6) Verify match findings before reducing, suspending, terminating, or denying a person's benefits or payments.
We have taken action to ensure that all of our computer matching programs comply with the requirements of the Privacy Act, as amended.
SSA and Fiscal Service.
The purpose of this matching program sets forth the terms, conditions, safeguards, and procedures under which Fiscal Service will disclose savings security data to us. We will use the data to determine continued eligibility for Supplemental Security Income (SSI) applicants and recipients, or the correct benefit amount for recipients and deemors who did not report or incorrectly reported ownership of savings securities.
The legal authority for this matching program is executed under the Privacy Act of 1974, 5 United States Code (U.S.C.) 552a, as amended by the Computer Matching and Privacy Protection Act of 1988, as amended, and the regulations and guidance promulgated thereunder.
The legal authority for us to conduct this matching program is contained in 1631(e)(1)(B), and 1631(f) of the Social Security Act (Act), (42 U.S.C. 1383(e)(1)(B), and 1383(f)).
The relevant SSA system of records (SOR) is “Supplemental Security Income Record and Special Veterans Benefits, Social Security Administration, Office of Systems, Office of Disability and Supplemental Security Income Systems,” 60–0103, fully published on January 11, 2006 at 71 FR 1830 and updated on December 10, 2007 at 72 FR 69723. The relevant Fiscal Service SORs are Treasury/BPD.002, United States Savings Type Securities, and Treasury/BPD.008, Retail Treasury Securities Access Application. These SORs were last published on August 17, 2011 at 76 FR 51128.
The finder file we provide to Fiscal Service will contain approximately 10 million records of individuals for whom we request data for the administration of the SSI program. Fiscal Service will use files that contain approximately 185 million Social Security numbers (SSNs), with registration indexes, to match our records. Fiscal Service will provide a response record providing match results to us, which will contain approximately 1.8 million records.
Exchanges for this computer matching program will occur twice a year, in approximately February and August. We will furnish Fiscal Service with the SSN and name for each individual when requesting savings-securities registration information. When a match occurs on an SSN, Fiscal Service will disclose the following to us from Treasury/BPD.002:
a. The denomination of the security;
b. The serial number;
c. The series;
d. The issue date of the security;
e. The current redemption value; and
f. The return date of the finder file.
We will furnish Fiscal Service with the SSN and name for each individual when requesting savings-securities registration information. The finder file will contain the SSN associated with the account and report account holdings. When a match occurs on an SSN, Fiscal Service will disclose the following to us from Treasury/BPD.008:
a. The purchase amount;
b. The account number and confirmation number;
c. The series;
d. The issue date of the security;
e. The current redemption value; and
f. The return date of the finder file.
The effective date of this matching program is June 26, 2016, provided that the following notice periods have lapsed: 30 days after publication of this notice in the
Department of State.
Notice of Availability, solicitation of comments.
The U.S. Department of State (Department) announces availability for public review and comment of
The Department invites the public, governmental agencies, tribal governments, and all other interested parties to provide comments on the Draft EIS/EIR during the 45-day public comment period. The public comment period starts on May 12, 2016, with the publication of this
All comments received during the review period may be made public, no matter how initially submitted. Comments are not private and will not be edited to remove identifying or contact information. Commenters are cautioned against including any information that they would not want publicly disclosed. Any party soliciting or aggregating comments from other persons is further requested to direct those persons not to include any identifying or contact information, or information they would not want publicly disclosed, in their comments.
Comments on the Draft EIS/EIR may be submitted at
Project details for the Otay Water Pipeline project and a copy of the Presidential Permit application, as well as information on the Presidential Permit process are available on the following Web sites:
Executive Order 11423, as amended, delegates to the Secretary of State the President's authority to receive applications for permits for the construction, connection, operation, or maintenance of certain facilities at the borders of the United States, and to issue or deny such Presidential Permits upon a national interest determination. To make this determination, the Department considers many factors, including foreign policy; environmental, cultural and economic impacts; and compliance with applicable law and policy.
In November 2013, the District submitted an application to the Department for a Presidential Permit authorizing the construction, connection, operation, and maintenance of a cross-border water pipeline facility for the proposed project, which would convey desalinated seawater from Mexico to the District's Roll Reservoir in San Diego County, which is approximately four miles northeast of the border.
The proposed Mexican desalination plant (not a part of the proposed project) is envisioned to produce 100 million gallons per day (MGD) of desalinated sea water. The District intends to initially purchase approximately 20–25 MGD of desalinated sea water, and ultimately increase the amount to 50 MGD. Due to seasonal variation in demand, the District anticipates that 10 MGD would be conveyed in the winter months, and up to 50 MGD would be conveyed during peak demand periods in the summer months. Numerous alignment routes for the pipeline were considered; however, after initial consideration of environmental and engineering opportunities and constraints, the District, together with the Department, determined three alternative alignments, and addressed those alignments in the Draft EIR/EIS. The District's preferred alternative is approximately 21,810 linear feet and extends from the border in a northwesterly direction within established right-of-ways and terminates on the east side of the Roll Reservoir.
The District will be responsible for approving the expenditure of public funds for the proposed project and the Department will be responsible for determining whether the proposed project serves the national interest pursuant to Executive Order 11423, and if so, issuing a Presidential Permit authorizing the construction, connection, operation, and maintenance of the cross-border pipeline facility.
By virtue of the authority vested in the Secretary of State, including Section 1 of the State Department Basic Authorities Act, as amended (22 U.S.C. 2651a), and 5 U.S.C. 593, and delegated pursuant to Delegation of Authority 198, dated September 16, 1992, and to the extent authorized by law, I hereby designate the Department of State Legal Adviser as the Department of State government representative to the Administrative Conference of the United States.
This delegation of authority may be re-delegated, to the extent authorized by law.
Notwithstanding this delegation of authority, the Secretary, the Deputy Secretary, the Deputy Secretary for Management and Resources, and the Under Secretary for Management may exercise any function or authority delegated by this delegation of authority.
This Delegation of Authority will be published in the
By virtue of the authority vested in me as the Assistant Secretary of State for Educational and Cultural Affairs, including by Delegation of Authority No. 236–3, dated August 28, 2000, and Section 2(e)(2) of Delegation of Authority No. 293–2, dated October 23, 2011, and to the extent permitted by law, I hereby re-delegate to the Deputy Assistant Secretary for Policy and Evaluation, Bureau of Educational and Cultural Affairs, the functions in section 102 of the Mutual Educational and Cultural Exchange Act of 1961, as amended (22 U.S.C. 2452) relating to the provision by grant, contract or otherwise for a wide variety of educational and cultural exchanges.
This Delegation of Authority does not supersede or otherwise affect any other delegation of authority currently in effect. The functions and authorities re-delegated herein may not be further delegated without my approval.
Any reference in this Delegation of Authority to any statute or delegation of authority shall be deemed to be a reference to such statute or delegation of authority as amended from time to time.
This Delegation of Authority shall be published in the
By virtue of the authority vested in me as Secretary of State, including Section 1 of the Department of State Basic Authorities Act, as amended (22 U.S.C. 2651a), I hereby delegate to the Inspector General for the U.S. Department of State, to the extent authorized by law, the authority under 5 U.S.C. 5376 to determine and adjust pay for Senior Professional positions.
This delegation of authority is not intended to revoke, amend, or otherwise affect the validity of any other delegation of authority.
Any act, executive order, regulation, or procedure subject to, or affected by, this delegation shall be deemed to be such act, executive order, regulation, or procedure as amended from time to time.
Notwithstanding this delegation of authority, the Secretary may at any time exercise any authority or function delegated by this delegation of authority.
This delegation of authority shall be published in the
On April 22, 2016, Norfolk Southern Railway Company (NSR) filed with the Surface Transportation Board (Board) a petition under 49 U.S.C. 10502 for exemption from the prior approval requirements of 49 U.S.C. 10903 to abandon approximately 4.10 miles of rail line extending from milepost CT 3.7 to milepost CT 7.8 in Hamilton County, Ohio (the Line). The Line traverses U.S. Postal Zip Codes 45207, 45212, 45208, 45209, 45226, and 45227.
According to NSR, no traffic has moved over the Line in more than five years. NSR further states that there is no potential for new traffic. NSR seeks to abandon the Line and sell the property to the City of Cincinnati (City) for a public redevelopment project. NSR states that the City is undertaking a plan that would reduce/reroute vehicular traffic, create greenways, and provide alternative modal access to five major development sites, including sites at Xavier University and near Uptown. NSR asserts that the City would take ownership of, and assume responsibility for, the safety and maintenance of the 10 bridges on the Line.
In addition to an exemption from the provisions of 49 U.S.C. 10903, NSR also seeks an exemption from the offer of financial assistance (OFA) procedures of 49 U.S.C. 10904. In support, NSR states that the Line is needed for a public purpose, as it is of critical significance to the City's redevelopment plans. NSR further asserts that there is no overriding public need for continued freight rail service. NSR's request for exemption from § 10904 will be addressed in the final decision.
According to NSR, the Line does not contain federally granted rights-of-way. Any documentation in NSR's possession will be made available promptly to those requesting it.
The interest of railroad employees will be protected by the conditions set forth in
By issuing this notice, the Board is instituting an exemption proceeding pursuant to 49 U.S.C. 10502(b). A final decision will be issued by August 10, 2016.
Any OFA under 49 CFR 1152.27(b)(2) to subsidize continued rail service will be due by August 19, 2016, or 10 days after service of a decision granting the petition for exemption, whichever occurs first. Each OFA must be accompanied by a $1,600 filing fee.
All interested persons should be aware that, following abandonment, the Line may be suitable for other public use, including interim trail use. Any request for a public use condition under 49 CFR 1152.28 or for interim trail use/rail banking under 49 CFR 1152.29 will be due no later than June 1, 2016. Each interim trail use request must be accompanied by a $300 filing fee.
All filings in response to this notice must refer to Docket No. AB 290 (Sub-No. 381X) and must be sent to: (1) Surface Transportation Board, 395 E Street SW., Washington, DC 20423–0001; and (2) William A Mullins, Baker & Miller PLLC, 2401 Pennsylvania Ave. NW., Suite 300, Washington, DC 20037. Replies to the petition are due on or before June 1, 2016.
Persons seeking further information concerning abandonment procedures may contact the Board's Office of Public Assistance, Governmental Affairs, and Compliance at (202) 245–0238 or refer to the full abandonment or discontinuance regulations at 49 CFR part 1152. Questions concerning environmental issues may be directed to the Board's Office of Environmental Analysis (OEA) at (202) 245–0305. Assistance for the hearing impaired is available through the Federal Information Relay Service (FIRS) at 1–800–877–8339.
An environmental assessment (EA) (or environmental impact statement (EIS), if necessary) prepared by OEA will be served upon all parties of record and upon any agencies or other persons who commented during its preparation. Other interested persons may contact OEA to obtain a copy of the EA (or EIS). EAs in abandonment proceedings normally will be made available within 60 days of the filing of the petition. The deadline for submission of comments on the EA generally will be within 30 days of its service.
Board decisions and notices are available on our Web site at “
By the Board, Rachel D. Campbell, Director, Office of Proceedings.
Federal Aviation Administration (FAA), DOT.
Notice of a new task assignment for the Aviation Rulemaking Advisory Committee (ARAC).
The FAA has assigned the Aviation Rulemaking Advisory Committee (ARAC) a new task to provide recommendations regarding the certification of persons engaged in operations involving the loading of special cargo. Assignment of this task is in response to National Transportation Safety Board Recommendation A–15–014 which recommended that the FAA create a certification for personnel responsible for the loading, restraint, and documentation of special cargo loads on transport-category airplanes. This notice informs the public of the new ARAC activity and solicits membership for the new Loadmaster Certification Working Group.
Stephen Grota Cargo Focus Team, AFS–340 Federal Aviation Administration, 950 L'Enfant Plaza SW., 5th Floor, Washington, DC 20024,
As a result of its March 23, 2016, ARAC meeting, the ARAC accepted this tasking to establish the Loadmaster Certification Working Group. The Loadmaster Certification Working Group will serve as staff to the ARAC and provide advice and recommendations on the assigned task. The ARAC will review and accept the recommendation report and will submit it to the FAA.
The FAA established the ARAC to provide information, advice, and recommendations on aviation related
On April 29, 2013, a Boeing 747–400 BCF operated by an air carrier conducting all-cargo operations crashed shortly after takeoff from Bagram Air Base, Bagram, Afghanistan. The airplane was destroyed from impact forces and post-crash fire. The flight was a supplemental operation conducted under part 121 of Title 14, Code of Federal Regulations (14 CFR) and was being conducted under a multimodal contract with the US Transportation Command. The intended destination for the flight was Dubai World Central—Al Maktoum International Airport, Dubai, United Arab Emirates.
The airplane's cargo included five mine-resistant ambush-protected (MRAP) vehicles secured onto pallets with shoring. Two vehicles were 12-ton MRAP all-terrain vehicles (M–ATVs) and three were 18-ton Cougars. These vehicles were considered special cargo because they could not be placed in unit load devices (ULDs) and restrained in the airplane using the locking capabilities of the airplane's main deck cargo handling system. Instead, the vehicles were secured to centerline-loaded floating pallets and restrained to the airplane's main deck using tie-down straps. Special cargo is defined in appendix C of AC 120–85A, Air Cargo Operations, as “cargo not contained in a ULD certified for the airplane cargo loading system (CLS) or not enclosed in a cargo compartment certified for bulk loading. This type of cargo requires special handling and securing/restraining procedures.”
During takeoff, the airplane immediately climbed steeply, then descended in a manner consistent with an aerodynamic stall. The National Transportation Safety Board (NTSB) investigation found strong evidence that at least one of the rear MRAP vehicles moved aft into the tail section of the airplane, damaging hydraulic systems and horizontal stabilizer components and making it impossible for the flightcrew to maintain pitch control of the airplane. The NTSB determined that the probable cause of this accident was the air carrier's inadequate procedures for restraining special cargo loads, which resulted in the loadmaster's improper restraint of the cargo, which moved aft and damaged hydraulic systems numbers 1 and 2 and horizontal stabilizer drive mechanism components, rendering the airplane uncontrollable (NTSB Aircraft Accident Report NTSB/AAR–15/01 PB2015–104951).
As a result of this accident, the NTSB issued Safety Recommendation A–15–14 which recommended, in part, that the FAA “[c]reate a certification for personnel responsible for the loading, restraint, and documentation of special cargo loads on transport-category airplanes.” Currently, there is no certificated position for the loading of special cargo specified in the FAA's regulations. Therefore, there are no specific individual standards or training requirements to ensure adherence to operational limitations. Additionally, there is no specific FAA oversight of these personnel outside of that normally conducted of a certificate holder's operations. The FAA believes that such oversight is especially critical when special cargo is carried in an aircraft.
Persons performing special cargo loading functions typically prepare and validate the accuracy of aircraft load manifests and ensure the aircraft is loaded according to an approved schedule that ensures the aircraft's center of gravity is within approved limits. Proper performance of these functions is critical to ensure the flight characteristics of an aircraft are not adversely affected and that its structural limitations are not exceeded.
The Loadmaster Certification Working Group is tasked to:
1. Provide advice and recommendations to the ARAC on whether safety would be enhanced if persons engaged in the loading and supervision of the loading of special cargo, to include the preparation and accuracy of special cargo load plans, be certificated. If the Working Group recommends certification of these persons, it should also provide recommendations regarding which specific operations should require the use of these certificated persons. Additionally, it should also recommend appropriate knowledge, experience, and skill requirements for the issuance of the certificates and appropriate privileges and limitations.
2. Determine the effect of its recommendations on impacted parties.
3. Develop a report containing recommendations based upon its analysis and findings. The report should document both majority and dissenting positions on its recommendations and findings and the rationale for each position. Any disagreements should be documented, including the rationale for each position and the reasons for the disagreement.
In developing this report the Working Group shall familiarize itself with:
1. NTSB Aircraft Accident Report NTSB/AAR–15/01 PB2015–104951NTSB, with particular attention provided to Safety Recommendation A–15–14.
2. AC 120–85A, Air Cargo Operations.
3. Minutes of the June 30, 2015 B747 Special Cargo Load Meeting.
The working group may be reinstated to assist the ARAC by responding to FAA's questions or concerns after its recommendations have been submitted.
The recommendation report should be submitted to the FAA for review and acceptance no later than 24 months from the publication date of this notice in the
The Loadmaster Certification Working Group must comply with the procedures adopted by the ARAC and:
1. Conduct a review and analysis of the assigned tasks and any other related materials or documents.
2. Draft and submit a work plan for completion of the task, including the rationale supporting such a plan, for consideration by the ARAC.
3. Provide a status report at each ARAC meeting.
4. Draft and submit the recommendation report based on the review and analysis of the assigned tasks.
5. Present the recommendation report at the ARAC meeting.
The Loadmaster Certification Working Group will be comprised of technical experts having an interest in the assigned task. A working group member need not be a member representative of the ARAC. The FAA would like a wide range of members to ensure all aspects of the tasks are considered in development of the recommendations. The provisions of the August 13, 2014, Office of Management and Budget guidance, “Revised Guidance on Appointment of Lobbyists to Federal Advisory Committees, Boards, and Commissions” (79 FR 47482), continues the ban on registered lobbyists participating on Agency Boards and Commissions if participating in their “individual capacity.” The revised guidance now allows registered lobbyists to participate on Agency Boards and Commissions in a “representative capacity” for the “express purpose of providing a committee with the views of a nongovernmental entity, a recognizable group of persons or nongovernmental entities (an industry, sector, labor
If you wish to become a member of the Loadmaster Certification Working Group, contact the person listed under the caption
If you are chosen for membership on the working group, you must actively participate in the working group, attend all meetings, and provide written comments when requested. You must devote the resources necessary to support the working group in meeting any assigned deadlines. You must keep your management and those you may represent advised of working group activities and decisions to ensure the proposed technical solutions do not conflict with the position of those you represent. Once the working group has begun deliberations, members will not be added or substituted without the approval of the ARAC Chair, the FAA, including the Designated Federal Officer, and the Working Group Chair.
The Secretary of Transportation determined the formation and use of the ARAC is necessary and in the public interest in connection with the performance of duties imposed on the FAA by law. The ARAC meetings are open to the public. However, meetings of the Loadmaster Certification Working Group are not open to the public, except to the extent individuals with an interest and expertise are selected to participate. The FAA will make no public announcement of working group meetings.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of Unified Carrier Registration Plan Board of Directors Meeting.
The meeting will be held on June 8, 2016, from 9:00 a.m. to 1:00 p.m. Eastern Daylight Time.
The meetings will be open to the public at the Courtyard Providence Downtown by Marriott, 32 Exchange Terrace at Memorial Blvd., Providence, RI 02903, and via conference call. Those not attending the meetings in person may call 1–877–422–1931, passcode 2855443940, to listen and participate in the meetings.
Open to the public.
The Unified Carrier Registration Plan Board of Directors (the Board) will continue its work in developing and implementing the Unified Carrier Registration Plan and Agreement and to that end, may consider matters properly before the Board.
Mr. Avelino Gutierrez, Chair, Unified Carrier Registration Board of Directors at (505) 827–4565.
In accordance with part 211 of title 49 Code of Federal Regulations (CFR), this document provides the public notice that by a document dated April 28, 2016, Union Railroad (UR) petitioned the Federal Railroad Administration (FRA) for renewal of a waiver of compliance from certain provisions of the Federal railroad safety regulations contained at 49 CFR part 229—Railroad Locomotive Safety Standards. This regulatory relief was initially granted by FRA in 1980 and is due to expire in 2017 under the “sunset clause” added to 49 CFR 229.19—
The waiver in Docket Number LI–80–24 granted UR relief from the requirement of 49 CFR 229.123—
A copy of the petition, as well as any written communications concerning the petition, is available for review online at
Interested parties are invited to participate in these proceedings by submitting written views, data, or comments. FRA does not anticipate scheduling a public hearing in connection with these proceedings since the facts do not appear to warrant a hearing. If any interested party desires an opportunity for oral comment, they should notify FRA, in writing, before the end of the comment period and specify the basis for their request.
All communications concerning these proceedings should identify the appropriate docket number and may be submitted by any of the following methods:
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Communications received by June 27, 2016 will be considered by FRA before final action is taken. Comments received after that date will be considered as far as practicable.
Anyone is able to search the electronic form of any written communications and comments received into any of our dockets by the
In accordance with part 211 of Title 49 of the Code of Federal Regulations (CFR), this document provides the public notice that by a document dated April 8, 2016, Portland and Western Railroad (PNWR), owned by Genesee & Wyoming, has petitioned the Federal Railroad Administration (FRA) for a waiver of compliance from certain provisions of the Federal railroad safety regulations contained at 49 CFR 213.234,
PNWR requests a waiver of compliance from 49 CFR 213.234(b)(3), which requires an annual automated inspection of track constructed with concrete crossties. PNWR's proposal identifies a 16.8-mile segment of track constructed with concrete crossties and indicates that 160 commuter trains per week operate over it, as well as an annual 5 million gross tons of freight traffic.
PNWR submits that because there is relatively light wheel loading of commuter trains, which are limited to 60 mph, and freight operations, due to a 40 mph speed limit, it is unnecessary to conduct annual automated inspections on this concrete crosstie segment. In lieu of annual automated inspection, PNWR proposes to (1) provide annual training and inspection procedures to identify and report exceptions to conditions described in 49 CFR 213.109(d)(4) involving all 213.7-qualified persons responsible for supervision and inspection of the TriMet Westside Express Service track segment; (2) conduct bi-annual walking inspections to detect noncompliant track conditions including rail seat deterioration; and (3) supplement walking inspection with twice-annual inspections with a hi-rail vehicle instrumented with a Track Geometry Measurement System.
A copy of the petition, as well as any written communications concerning the petition, is available for review online at
Interested parties are invited to participate in these proceedings by submitting written views, data, or comments. FRA does not anticipate scheduling a public hearing in connection with these proceedings since the facts do not appear to warrant a hearing. If any interested party desires an opportunity for oral comment, they should notify FRA, in writing, before the end of the comment period and specify the basis for their request.
All communications concerning these proceedings should identify the appropriate docket number and may be submitted by any of the following methods:
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Communications received by June 27, 2016 will be considered by FRA before final action is taken. Comments received after that date will be considered as far as practicable.
Anyone is able to search the electronic form of any written communications and comments received into any of our dockets by the name of the individual submitting the comment (or signing the document, if submitted on behalf of an association, business, labor union, etc.). In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its processes. DOT posts these comments, without edit, including any personal information the commenter provides, to
In accordance with part 235 of Title 49 Code of Federal Regulations (CFR) and 49 U.S.C. 20502(a), this document provides the public notice that by a document dated April 27, 2016, Norfolk Southern Railway (NS) petitioned the Federal Railroad Administration (FRA) seeking approval for the discontinuance or modification of a signal system. FRA assigned the petition Docket Number FRA–2016–0048.
NS seeks approval of the modification of Control Point (CP) Cast East End on the New Castle District, CF Main Line, Milepost (MP) CF 101.8 at New Castle, IN.
CP Cast East End will be replaced with a hold-out signal, located at MP CF 102.38, and the power-operated switch will be replaced with a hand-operated switch with an electric lock.
These changes are being proposed to improve operations in the area.
A copy of the petition, as well as any written communications concerning the petition, is available for review online at
Interested parties are invited to participate in these proceedings by submitting written views, data, or comments. FRA does not anticipate scheduling a public hearing in
All communications concerning these proceedings should identify the appropriate docket number and may be submitted by any of the following methods:
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•
•
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Communications received by June 27, 2016 will be considered by FRA before final action is taken. Comments received after that date will be considered as far as practicable.
Anyone is able to search the electronic form of any written communications and comments received into any of our dockets by the name of the individual submitting the comment (or signing the document, if submitted on behalf of an association, business, labor union, etc.). In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its processes. DOT posts these comments, without edit, including any personal information the commenter provides, to
Maritime Administration, Department of Transportation.
Notice.
As authorized by 46 U.S.C. 12121, the Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before June 13, 2016.
Comments should refer to docket number MARAD–2016–0044. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. Department of Transportation, Docket Operations, M–30, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue SE., Washington, DC 20590. You may also send comments electronically via the Internet at
Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE., Room W23–453, Washington, DC 20590. Telephone 202–366–9309, Email
As described by the applicant the intended service of the vessel HAPPY TIME is:
The complete application is given in DOT docket MARAD–2016–0044 at
Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the
By Order of the Maritime Administrator.
Maritime Administration, Department of Transportation.
Notice.
As authorized by 46 U.S.C. 12121, the Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before June 13, 2016.
Comments should refer to docket number MARAD–2016 0045. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. Department of Transportation, Docket Operations, M–30, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue SE., Washington, DC 20590. You may also send comments electronically via the Internet at
Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE., Room W23–453, Washington, DC 20590. Telephone 202–366–9309, Email
As described by the applicant the intended service of the vessel SEAS THE MOMENT is:
The complete application is given in DOT docket MARAD–2016–0045 at
Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the
By Order of the Maritime Administrator.
Maritime Administration, Department of Transportation.
Notice.
As authorized by 46 U.S.C. 12121, the Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before June 13, 2016.
Comments should refer to docket number MARAD–2016–0042. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. Department of Transportation, Docket Operations, M–30, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue SE., Washington, DC 20590. You may also send comments electronically via the Internet at
Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE., Room W23–453, Washington, DC 20590. Telephone 202–366–9309, Email
As described by the applicant the intended service of the vessel OFF CAY is:
The complete application is given in DOT docket MARAD–2016–0042 at
Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the
By Order of the Maritime Administrator.
Maritime Administration, Department of Transportation.
Notice.
As authorized by 46 U.S.C. 12121, the Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before June 13, 2016.
Comments should refer to docket number MARAD–2016–0040. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. Department of Transportation, Docket Operations, M–30, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue SE., Washington, DC 20590. You may also send comments electronically via the Internet at
Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE., Room W23–453, Washington, DC 20590. Telephone 202–366–9309, Email
As described by the applicant the intended service of the vessel TIGRESS is:
The complete application is given in DOT docket MARAD–2016–0040 at
Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the
By Order of the Maritime Administrator.
Maritime Administration, Department of Transportation.
Notice.
As authorized by 46 U.S.C. 12121, the Secretary of Transportation, as represented by the Maritime Administration (MARAD), is authorized to grant waivers of the U.S.-build requirement of the coastwise laws under certain circumstances. A request for such a waiver has been received by MARAD. The vessel, and a brief description of the proposed service, is listed below.
Submit comments on or before June 13, 2016.
Comments should refer to docket number MARAD–2016–0043. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. Department of Transportation, Docket Operations, M–30, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue SE., Washington, DC 20590. You may also send comments electronically via the Internet at
Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE., Room W23–453, Washington, DC 20590. Telephone 202–366–9309, Email
As described by the applicant the intended service of the vessel PALADIN is:
Intended Commercial Use of Vessel: “Sport fishing day trips out of Ketchikan, AK”
Geographic Region: “Southeast Alaska(from Gore Point south to the Canadian border)”
The complete application is given in DOT docket MARAD–2016–0043 at
Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the
By Order of the Maritime Administrator.
Maritime Administration, Department of Transportation.
Notice.
As authorized by 46 U.S.C. 12121, the Secretary of Transportation, as represented by the Maritime
Submit comments on or before June 13, 2016.
Comments should refer to docket number MARAD–2016–0041. Written comments may be submitted by hand or by mail to the Docket Clerk, U.S. Department of Transportation, Docket Operations, M–30, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue SE., Washington, DC 20590. You may also send comments electronically via the Internet at
Bianca Carr, U.S. Department of Transportation, Maritime Administration, 1200 New Jersey Avenue SE., Room W23–453, Washington, DC 20590. Telephone 202–366–9309, Email
As described by the applicant the intended service of the vessel ORION is:
The complete application is given in DOT docket MARAD–2016–0041 at
Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the
By Order of the Maritime Administrator.
National Highway Traffic Safety Administration, DOT.
Receipt of petition.
This document announces receipt by the National Highway Traffic Safety Administration (NHTSA) of a petition for a decision that model year (MY) 2012 Jeep Wrangler multipurpose passenger vehicles (MPVs) that were manufactured for sale in the Mexican market and not originally manufactured to comply with all applicable Federal motor vehicle safety standards (FMVSS), are eligible for importation into the United States because they are substantially similar to vehicles that were originally manufactured for sale in the United States and that were certified by their manufacturer as complying with the safety standards (the U.S.-certified version of the 2012 Jeep Wrangler MPV) and they are capable of being readily altered to conform to the standards.
The closing date for comments on the petition is June 13, 2016.
Comments should refer to the docket and notice numbers above and be submitted by any of the following methods:
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Instructions: Comments must be written in the English language, and be no greater than 15 pages in length, although there is no limit to the length of necessary attachments to the comments. If comments are submitted in hard copy form, please ensure that two copies are provided. If you wish to receive confirmation that your comments were received, please enclose a stamped, self-addressed postcard with the comments. Note that all comments received will be posted without change to
George Stevens, Office of Vehicle Safety Compliance, NHTSA (202–366–5308).
Under 49 U.S.C. 30141(a)(1)(A), a motor vehicle that was not originally manufactured to conform to all applicable FMVSS shall be refused admission into the United States unless
Petitions for eligibility decisions may be submitted by either manufacturers or importers who have registered with NHTSA pursuant to 49 CFR part 592. As specified in 49 CFR 593.7, NHTSA publishes notice in the
Mesa Auto Wholesalers (Mesa), of Chandler, Arizona (Registered Importer R–94–018) has petitioned NHTSA to decide whether nonconforming 2012 Jeep Wrangler MPV's manufactured for the Mexican market are eligible for importation into the United States. The vehicles which Mesa believes are substantially similar are MY 2012 Jeep Wrangler MPV's sold in the United States and certified by their manufacturer as conforming to all applicable FMVSS.
The petitioner claims that it compared non-U.S. certified MY 2012 Jeep Wrangler MPV's that were manufactured for the Mexican market to their U.S.-certified counterparts, and found the vehicles to be substantially similar with respect to compliance with most FMVSS.
Mesa submitted information with its petition intended to demonstrate that non-U.S. certified MY 2012 Jeep Wrangler MPV's manufactured for the Mexican market, as originally manufactured, conform to many applicable FMVSS in the same manner as their U.S.-certified counterparts, or are capable of being readily altered to conform to those standards.
Specifically, the petitioner claims that the non U.S.-certified MY 2012 Jeep Wrangler MPV's manufactured for the Mexican market, as originally manufactured, conform to: Standard Nos. 102
The petitioner also contends that the subject non-U.S certified vehicles are capable of being readily altered to meet the following standards, in the manner indicated:
Standard No. 101
Standard No. 110
The petitioner additionally states that a vehicle identification plate must be affixed to the vehicle near the left windshield pillar to meet the requirements of 49 CFR part 565.
All comments received before the close of business on the closing date indicated above will be considered, and will be available for examination in the docket at the above addresses both before and after that date. To the extent possible, comments filed after the closing date will also be considered. Notice of final action on the petition will be published in the
49 U.S.C. 30141(a)(1)(A), (a)(1)(B), and (b)(1); 49 CFR 593.7; delegation of authority at 49 CFR 1.95 and 501.8.
Office of Hazardous Materials Safety, Pipeline and Hazardous Materials Safety Administration (PHMSA), DOT.
List of application delayed more than 180 days.
In accordance with the requirements of 49 U.S.C. 5117(c), PHMSA is publishing the following list of special permit applications that have been in process for 180 days or more. The reason(s) for delay and the expected completion date for action on each application is provided in association with each identified application.
Ryan Paquet, Director, Office of Hazardous Materials Special Permits and Approvals, Pipeline and Hazardous Materials Safety Administration, U.S. Department of Transportation, East Building, PHH–30, 1200 New Jersey Avenue Southeast, Washington, DC 20590–0001, (202) 366–4535
Office of Hazardous Materials Safety, Pipeline and Hazardous Materials Safety Administration (PHMSA), DOT.
List of applications for special permits.
In accordance with the procedures governing the application for, and the processing of, special permits from the Department of Transportation's Hazardous Material Regulations (49 CFR part 107, subpart B), notice is hereby given that the Office of Hazardous Materials Safety has received the application described herein. Each mode of transportation for which a particular special permit is requested is indicated by a number in the “Nature of Application” portion of the table below as follows: 1—Motor vehicle, 2—Rail freight, 3—Cargo vessel, 4—Cargo aircraft only, 5—Passenger-carrying aircraft.
Comments must be received on or before June 13, 2016.
Comments should refer to the application number and be submitted in triplicate. If confirmation of receipt of comments is desired, include a self-addressed stamped postcard showing the special permit number.
Ryan Paquet, Director, Office of Hazardous Materials Approvals and Permits Division, Pipeline and Hazardous Materials Safety Administration, U.S. Department of Transportation, East Building, PHH–30, 1200 New Jersey Avenue Southeast, Washington, DC 20590–0001, (202) 366–4535.
Copies of the applications are available for inspection in the Records Center, East Building, PHH–30, 1200 New Jersey Avenue Southeast, Washington, DC or at
This notice of receipt of applications for special permit is published in accordance with Part 107 of the Federal hazardous materials transportation law (49 U.S.C. 5117(b); 49 CFR 1.53(b)).
Office of Hazardous Materials Safety, Pipeline and Hazardous Materials Safety Administration (PHMSA), DOT.
Notice of actions on special permit applications.
In accordance with the procedures governing the application for, and the processing of, special permits from the Department of Transportation's Hazardous Material Regulations (49 CFR part 107, subpart B), notice is hereby given of the actions on special permits applications in (October to October 2014). The mode of transportation involved are identified by a number in the “Nature of Application” portion of the table below as follows: 1—Motor vehicle, 2—Rail freight, 3—Cargo vessel, 4—Cargo aircraft only, 5—Passenger-carrying aircraft. Application numbers prefixed by the letters EE represent applications for Emergency Special Permits. It should be noted that some of the sections cited were those in effect at the time certain special permits were issued.
Pursuant to Section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92–463; 5 U.S.C. App. I), notice is hereby given of a meeting of the Advisory Board of the Saint Lawrence Seaway Development Corporation (SLSDC). The meeting will be held from 10:00 a.m. to 12 noon (EDT) on Tuesday, June 14, 2016 via conference call at the SLSDC's Policy Headquarters, 55 M Street SE., Suite 930, Washington, DC 20003. The agenda for this meeting will be as follows: Opening Remarks; Consideration of Minutes of Past Meeting; Quarterly Report; Old and New Business; Closing Discussion; Adjournment.
Attendance at the meeting is open to the interested public but limited to the space available. With the approval of the Administrator, members of the public may present oral statements at the meeting. Persons wishing further information should contact, not later than Thursday, June 9, 2016, Charles Wipperfurth, Deputy Chief of Staff, Saint Lawrence Seaway Development Corporation, 1200 New Jersey Avenue SE., Washington, DC 20590; 202–366–0091.
Any member of the public may present a written statement to the Advisory Board at any time.
Office of the Comptroller of the Currency (OCC), Treasury.
Notice and request for comment.
The OCC, 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 a continuing information collection, as required by the Paperwork Reduction Act of 1995 (PRA).
In accordance with the requirements of the PRA (44 U.S.C. chapter 35), the OCC may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The OCC is soliciting comment concerning the renewal of its information collection titled, “Municipal Securities Dealers and Government Securities Brokers and Dealers—Registration and Withdrawal.” The OCC also is giving notice that it has sent the collection to OMB for review.
You should submit written comments by June 13, 2016.
Because paper mail in the Washington, DC area and at the OCC is subject to delay, commenters are encouraged to submit comments by email, if possible. Comments may be sent to: Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, Mail Stop 9W–11, Attention: 1557–0184, Washington, DC 20219. In addition, comments may be sent by fax to (571) 465–4326 or by electronic mail to
All comments received, including attachments and other supporting materials, are part of the public record and subject to public disclosure. Do not include any information in your comment or supporting materials that you consider confidential or inappropriate for public disclosure.
Additionally, please send a copy of your comments by mail to: OCC Desk Officer, 1557–0184, U.S. Office of Management and Budget, 725 17th Street NW., #10235, Washington, DC 20503, or by email to:
Shaquita Merritt, Clearance Officer, (202) 649–5490 or, for persons who are deaf or hard of hearing, TTY, (202) 649–5597, Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, 400 7th Street SW., Washington, DC 20219.
The OCC is proposing to extend OMB approval of the following information collection:
On March 1, 2016, the OCC published a notice regarding this collection for 60 days of comment, 81 FR 10716. No comments were received. Comments continue to be invited on:
(a) Whether the collection of information is necessary for the proper performance of the functions of the OCC, including whether the information has practical utility;
(b) The accuracy of the OCC's estimate of the information collection burden;
(c) Ways to enhance the quality, utility, and clarity of the information to be collected;
(d) Ways to minimize the burden of the collection on respondents, including through the use of automated collection techniques or other forms of information technology; and
(e) Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.
Occupational Safety and Health Administration (OSHA), Labor.
Final rule.
OSHA is issuing a final rule to revise its Recording and Reporting Occupational Injuries and Illnesses regulation. The final rule requires employers in certain industries to electronically submit to OSHA injury and illness data that employers are already required to keep under existing OSHA regulations. The frequency and content of these establishment-specific submissions is set out in the final rule and is dependent on the size and industry of the employer. OSHA intends to post the data from these submissions on a publicly accessible Web site. OSHA does not intend to post any information on the Web site that could be used to identify individual employees.
The final rule also amends OSHA's recordkeeping regulation to update requirements on how employers inform employees to report work-related injuries and illnesses to their employer. The final rule requires employers to inform employees of their right to report work-related injuries and illnesses free from retaliation; clarifies the existing implicit requirement that an employer's procedure for reporting work-related injuries and illnesses must be reasonable and not deter or discourage employees from reporting; and incorporates the existing statutory prohibition on retaliating against employees for reporting work-related injuries or illnesses. The final rule also amends OSHA's existing recordkeeping regulation to clarify the rights of employees and their representatives to access the injury and illness records.
This final rule becomes effective on January 1, 2017, except for §§ 1904.35 and 1904.36, which become effective on August 10, 2016. Collections of information: There are collections of information contained in this final rule (
In accordance with 28 U.S.C. 2112(a)(2), OSHA designates Ann Rosenthal, Associate Solicitor of Labor for Occupational Safety and Health, Office of the Solicitor, Room S–4004, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210, to receive petitions for review of the final rule.
The following table of contents identifies the major sections of the preamble to the final rule revising OSHA's Occupational Injury and Illness Recording and Reporting Requirements regulation (Improving tracking of workplace injuries and illnesses):
In this preamble, OSHA references documents in Docket No. OSHA–2013–0023, the docket for this rulemaking. The docket is available at
References to documents in this rulemaking docket are given as “Ex.” followed by the document number. The document number is the last sequence of numbers in the Document ID Number on
The exhibits in the docket, including public comments, supporting materials, meeting transcripts, and other documents, are listed on
OSHA's regulation at 29 CFR part 1904 requires employers with more than 10 employees in most industries to keep records of occupational injuries and illnesses at their establishments. Employers covered by these rules must record each recordable employee injury and illness on an OSHA Form 300, which is the “Log of Work-Related Injuries and Illnesses,” or equivalent. Employers must also prepare a supplementary OSHA Form 301 “Injury and Illness Incident Report” or equivalent that provides additional details about each case recorded on the OSHA Form 300. Finally, at the end of each year, employers are required to prepare a summary report of all injuries and illnesses on the OSHA Form 300A, which is the “Summary of Work-Related Injuries and Illnesses,” and post the form in a visible location in the workplace.
This final rule amends OSHA's recordkeeping regulations to add requirements for the electronic submission of injury and illness information employers are already required to keep under part 1904. First,
The electronic submission requirements in the final rule do not add to or change any employer's obligation to complete and retain injury and illness records under OSHA's regulations for recording and reporting occupational injuries and illnesses. The final rule also does not add to or change the recording criteria or definitions for these records.
OSHA intends to post the establishment-specific injury and illness data it collects under this final rule on its public Web site at
Additionally, OSHA's existing recordkeeping regulation requires employers to inform employees about how to report occupational injuries and illnesses (29 CFR 1904.35(a), (b)). This final rule amends OSHA's recordkeeping regulations to require employers to inform employees of their right to report work-related injuries and illnesses; clarifies the existing implicit requirement that an employer's procedure for reporting work-related injuries and illnesses must be reasonable and not deter or discourage employees from reporting; and incorporates the existing statutory prohibition on retaliating against employees for reporting work-related injuries or illnesses.
OSHA estimates that this final rule will have economic costs of $15 million per year, including $13.7 million per year to the private sector, with costs of $7.2 million per year for electronic submission for affected establishments with 250 or more employees and $4.6 million for electronic submission for affected establishments with 20 to 249 employees in designated industries. With respect to the anti-discrimination requirements of this final rule, OSHA estimates a first-year cost of $8.0 million and annualized costs of $0.9 million per year. When fully implemented, the first-year economic cost for all provisions of the final rule is estimated at $28 million. The rule will be phased in, which moves the annual cost for reporting case characteristic data from OSHA Forms 300 and 301 by 33,000 establishments from 2017 to 2018. This phase-in removes about $6.9 million from the first year costs, but those costs would reappear in years two through 10.
The Agency believes that the annual benefits, while unquantified, exceed the annual costs. These benefits include better compliance with OSHA's statutory directive “to assure so far as possible every working man and woman in the Nation safe and healthful working conditions and to preserve our human resources” (29 U.S.C. 651(b)). They also include increased prevention of workplace injuries and illnesses as a result of expanded access to timely, establishment-specific injury/illness information by OSHA, employers, employees, employee representatives, potential employees, customers, potential customers, and researchers. The benefits of the final rule also include promotion of complete and accurate reporting of work-related injuries and illnesses.
OSHA's regulations on recording and reporting occupational injuries and illnesses (29 CFR part 1904) were first issued in 1971 (36 FR 12612, July 2, 1971). This regulation requires the recording of work-related injuries and illnesses that involve death, loss of consciousness, days away from work, restriction of work, transfer to another job, medical treatment other than first aid, or diagnosis of a significant injury or illness by a physician or other licensed health care professional (29 CFR 1904.7).
On December 28, 1982, OSHA amended these regulations to partially exempt establishments in certain lower-hazard industries from the requirement to record occupational injuries and illnesses (47 FR 57699). OSHA also amended the recordkeeping regulations in 1994 (Reporting fatalities and multiple hospitalization incidents to OSHA, 29 CFR 1904.39) and 1997 (Annual OSHA injury and illness survey of ten or more employers, 29 CFR 1904.41).
In 2001, OSHA issued a final rule amending its requirements for the recording and reporting of occupational injuries and illnesses (29 CFR parts 1904 and 1902), along with the forms employers use to record those injuries and illnesses (66 FR 5916 (Jan. 19, 2001)). The final rule also updated the list of industries that are partially exempt from recording occupational injuries and illnesses. In 2014, OSHA again amended the part 1904 regulations to require employers to report work-related fatalities, in-patient hospitalizations, amputations, and losses of an eye to OSHA and to allow electronic reporting (79 FR 56130 (Sept. 18, 2014)). The final rule also revised the list of industries that are partially exempt from recording occupational injuries and illnesses.
On November 8, 2013, OSHA issued a proposed rule to amend its recordkeeping regulations to add requirements for electronic submission of injury and illness information that employers are already required to keep (78 FR 67254). In the preamble to the proposed rule, OSHA explained that, consistent with applicable Federal law, such as FOIA and specific provisions of part 1904, the Agency intended to post the recordkeeping data it collects on its public Web site. A public meeting on the proposed rule was held on January 9–10, 2014. A concern raised by many meeting participants was that the proposed electronic submission requirement might create a motivation for employers to under-report injuries and illnesses. Some participants also commented that some employers already discourage employees from reporting injuries or illnesses by disciplining or taking other adverse action against employees who file injury and illness reports. As a result, on August 14, 2014, OSHA issued a supplemental notice to the proposed rule seeking comments on whether to amend the part 1904 regulations to prohibit employers from taking adverse action against employees for reporting occupational injuries and illnesses. OSHA received 311 comments on the electronic submission section of the proposed rule and 142 comments on the supplemental notice to the proposed rule. The comments for the proposed rule and the supplemental notice to the proposed rule are addressed below.
OSHA is issuing this final rule pursuant to authority expressly granted by sections 8 and 24 of the Occupational Safety and Health Act (the “OSH Act” or “Act”) (29 U.S.C. 657, 673). Section 8(c)(1) requires each employer to “make, keep and preserve, and make available to the Secretary [of Labor] or the
Section 24 of the OSH Act (29 U.S.C. 673) contains a similar grant of authority. This section requires the Secretary to “develop and maintain an effective program of collection, compilation, and analysis of occupational safety and health statistics” and “compile accurate statistics on work injuries and illnesses which shall include all disabling, serious, or significant injuries and illnesses . . .” (29 U.S.C. 673(a)). Section 24 also requires employers to “file such reports with the Secretary as he shall prescribe by regulation” (29 U.S.C. 673(e)). These reports are to be based on “the records made and kept pursuant to section 8(c) of this Act” (29 U.S.C. 673(e)).
Further support for the Secretary's authority to require employers to keep and submit records of work-related illnesses and injuries can be found in the Congressional Findings and Purpose at the beginning of the OSH Act (29 U.S.C. 651). In this section, Congress declares the overarching purpose of the Act to be “to assure so far as possible every working man and woman in the Nation safe and healthful working conditions” (29 U.S.C. 651(b)). One of the ways in which the Act is meant to achieve this goal is “by providing for appropriate reporting procedures . . . [that] will help achieve the objectives of this Act and accurately describe the nature of the occupational safety and health problem” (29 U.S.C. 651(b)(12)).
The OSH Act authorizes the Secretary of Labor to issue two types of occupational safety and health rules: Standards and regulations. Standards, which are authorized by section 6 of the Act, specify remedial measures to be taken to prevent and control employee exposure to identified occupational hazards, while regulations are the means to effectuate other statutory purposes, including the collection and dissemination of records of occupational injuries and illnesses. For example, the OSHA requirements at 29 CFR 1910.95 are a “standard” because they include remedial measures to address the specific and already identified hazard of employee exposure to occupational noise. In contrast, a “regulation” is a purely administrative effort designed to uncover violations of the Act and discover unknown dangers.
Recordkeeping requirements promulgated under the Act are characterized as regulations (
This final rule does not infringe on employers' Fourth Amendment rights. The Fourth Amendment protects against searches and seizures of private property by the government, but only when a person has a “legitimate expectation of privacy” in the object of the search or seizure (
Even if there were an expectation of privacy, the Fourth Amendment prohibits only
OSHA notes that two courts have held, contrary to
The Act's various statutory grants of authority that address recordkeeping provide authority for OSHA to prohibit employers from discouraging employee reports of injuries or illnesses. If employers may not discriminate against workers for reporting injuries or illnesses, then discrimination will not occur to deter workers from reporting their injuries and illnesses, and their employers' records and reports may be more “accurate”, as required by sections 8 and 24 of the Act. Evidence in the administrative record establishes that some employers engage in practices that discourage injury and illness reporting, and many commenters provided support for OSHA's concern that the electronic submission requirements of this final rule and associated posting of data could provide additional motivation for employers to discourage accurate reporting of injuries and illnesses. Therefore, prohibiting employers from engaging in practices that discourage their employees from reporting injuries or illnesses, including discharging or in any manner discriminating against such employees, is “necessary to carry out” the recordkeeping requirements of the Act (
As noted by many commenters, section 11(c) of the Act already prohibits any person from discharging or otherwise discriminating against any employee because that employee has exercised any right under the Act (29 U.S.C. 660(c)(1)). Under this provision, an employee who believes he or she has been discriminated against may file a complaint with OSHA, and if, after investigation, the Secretary has reasonable cause to believe that section 11(c) has been violated, then the Secretary may file suit against the employer in U.S. District Court seeking “all appropriate relief,” including reinstatement and back pay (29 U.S.C. 660(c)(2)). Discriminating against an employee who reports a fatality, injury, or illness is a violation of section 11(c) (
The advantage of this new provision (§ 1904.35(b)(1)(iv)) is that it provides OSHA with additional enforcement tools to promote the accuracy and integrity of the injury and illness records employers are required to keep under part 1904. For example, under section 11(c), OSHA may not act against an employer unless an employee files a complaint. Under § 1904.35(b)(1)(iv) of the final rule, OSHA will be able to cite an employer for taking adverse action against an employee for reporting an injury or illness, even if the employee did not file a complaint. Moreover, citations can result in orders requiring employers to abate violations, which may be a more efficient tool to correct employer policies and practices than the remedies authorized under section 11(c), which are often employee-specific.
The fact that section 11(c) already provides a remedy for retaliation does not preclude the Secretary from implementing alternative remedies under the OSH Act. Where retaliation threatens to undermine a program that Congress required the Secretary to adopt, the Secretary may proscribe that retaliation through a regulatory provision unrelated to section 11(c). For example, under the medical removal protection (MRP) provision of the lead standard, employers are required to pay the salaries of workers who cannot work due to high blood lead levels (29 CFR 1910.1025(k);
OSHA regulations at 29 CFR part 1904 currently require employers with more than 10 employees in most industries to keep records of work-related injuries and illnesses at their establishments. Employers covered by these rules must prepare an injury and illness report for each case (Form 301), compile a log of these cases (Form 300), and complete and post in the workplace an annual summary of work-related injuries and illnesses (Form 300A).
OSHA currently obtains the injury and illness data entered on the three recordkeeping forms only through onsite inspections, which collect only the data from the individual establishment being inspected, or by inclusion of an establishment in a survey pursuant to the previous 29 CFR 1904.41,
The ODI collected only the aggregate data from the 300A annual summary form, and the data were not required to be submitted electronically. OSHA used the information obtained through the ODI to identify and target the most hazardous worksites.
The Department of Labor also collects occupational injury and illness data through the annual Survey of Occupational Injuries and Illnesses (SOII), which is conducted by the Bureau of Labor Statistics (BLS) pursuant to 29 CFR 1904.42,
OSHA's recordkeeping regulation currently covers more than 600,000 employers with approximately 1,300,000 establishments. Although the OSH Act gives OSHA the authority to require all employers covered by the Act to keep records of employee injuries and illnesses, two classes of employers are partially-exempted from the recordkeeping requirements in part 1904. First, as provided in § 1904.1, employers with 10 or fewer employees at all times during the previous calendar year are partially exempt from keeping OSHA injury and illness records. Second, as provided in § 1904.2, establishments in certain lower-hazard industries are also partially exempt. Partially-exempt employers are not required to maintain OSHA injury and illness records unless required to do so
The records required by part 1904 provide important information to OSHA, as well as to consultants in OSHA's On-Site Consultation Program. However, OSHA enforcement programs currently do not have access to the information in the records required by part 1904 unless the establishment receives an onsite inspection from OSHA or is part of an OSHA annual survey under the previous § 1904.41. At the beginning of an inspection, an OSHA representative reviews the establishment's injury and illness records to help focus the inspection on the safety and health hazards suggested by the records. (OSHA consultants conduct a similar review when an establishment has requested a consultation.) OSHA has used establishment-specific injury and illness information obtained through the ODI to help target the most hazardous worksites.
In the past, OSHA has used the authority in previous § 1904.41 to conduct injury and illness surveys of employers through the ODI. The purpose of the ODI was to collect data on injuries and acute illnesses attributable to work-related activities in private-sector industries from approximately 80,000 establishments in selected high-hazard industries. The Agency used these data to calculate establishment-specific injury/illness rates, and in combination with other data sources, to target enforcement and compliance assistance activities. The ODI consisted of larger establishments (20 or more employees) in the manufacturing industry and in an additional 70 non-manufacturing industries. These are industries with historically high rates of occupational injury and illness. Typically, there were over 180,000 unique establishments subject to participation in the ODI. The ODI was designed so that each eligible establishment received the ODI survey at least once every three-year cycle. In a given year, OSHA would send the ODI survey to approximately 80,000 establishments (1.1 percent of all establishments nationwide), which typically accounted for approximately 700,000 recordable injuries and illnesses (19 percent of injuries and illnesses recorded by employers nationwide).
The ODI survey collected the following data from the Form 300A (annual summary) from each establishment:
• Number of cases (total number of deaths, total number of cases with days away from work, total number of cases with job transfer or restrictions, and total number of other recordable cases);
• Number of days (total number of days away from work and total number of days of job transfer or restriction);
• Injury and illness types (total numbers of injuries, skin disorders, respiratory conditions, poisonings, hearing loss, and all other illnesses);
• Establishment information (name, street address, industry description, SIC or NAICS code, and employment information (annual average number of employees, and total hours worked by all employees));
• Contact information (Company contact name, title, telephone number, and date).
The primary purpose of the SOII is to provide annual information on the rates and numbers of work-related non-fatal injuries and illnesses in the United States, and on how these statistics vary by incident, industry, geography, occupation, and other characteristics. The Confidential Information Protection and Statistical Efficiency Act of 2002 (Pub. L. 107–347, Dec. 17, 2002) prohibits BLS from releasing establishment-specific data to the general public or to OSHA.
Each year, BLS collects data from the three recordkeeping forms from a scientifically-selected probability sample of about 230,000 establishments, covering nearly all private-sector industries, as well as state and local government. Employers may submit their data on paper forms or electronically. As stated above, the final rule will not affect the authority for the SOII.
OSHA currently has only a limited ability to obtain part 1904 records, or the establishment-specific injury and illness information included on these forms. Right now, OSHA can access the information in three limited ways.
First, OSHA is able to obtain establishment-specific injury and illness information from employers through workplace inspections. OSHA inspectors examine all records kept under part 1904, including detailed information about specified injuries and illnesses. However, each year, OSHA inspects only a small percentage of all establishments subject to OSHA authority. For example, in Fiscal Year 2014, OSHA and its state partners inspected approximately 1 percent of establishments under OSHA authority (approximately 83,000 inspections, out of approximately 8 million total establishments). As a result, the Agency is not able to compile a comprehensive and timely database of establishment-specific injury/illness information from inspection activities.
Second, OSHA has been able to obtain establishment-specific injury and illness information from employers through the ODI. However, because the ODI collected only summary data from the Form 300A, it did not enable OSHA to identify specific hazards or problems in establishments included in the ODI. In addition, the data were not timely. The injury/illness information in each year's Site-Specific Targeting Program came from the previous year's ODI, which collected injury/illness data from the year before that. As a result, OSHA's site-specific targeting typically was based on injury/illness data that were two or three years old. Additionally, the group of 80,000 establishments in a given year's ODI was a very small fraction of establishments subject to OSHA oversight.
Finally, OSHA is able to obtain limited establishment-specific injury and illness information from employers through 29 CFR 1904.39,
Given the above, OSHA currently obtains limited establishment-specific injury and illness information from an establishment in a particular year only if the establishment was inspected or was part of the ODI.
As noted above, OSHA does obtain aggregate information from the injury and illness records collected through the BLS SOII. SOII data have a time lag of almost a year, with data for a given year not available until November of the following year.
The main purpose of this section of the final rule is to prevent worker injuries and illnesses through the collection and use of timely, establishment-specific injury and illness data. With the information obtained through this final rule, employers, employees, employee representatives, the government, and researchers may be better able to identify and mitigate workplace hazards and thereby prevent worker injuries and illnesses.
This final rule will support OSHA's statutory directive to “assure so far as possible every working man and woman in the Nation safe and healthful working conditions and to preserve our human resources” (29 U.S.C. 651(b)) “by providing for appropriate reporting procedures with respect to occupational safety and health which procedures will help achieve the objectives of this Act and accurately describe the nature of the occupational safety and health problem” (29 U.S.C. 651(b)(12)).
The importance of this rule in preventing worker injuries and illnesses can be understood in the context of workplace safety and health in the United States today. The number of workers injured or made ill on the job remains unacceptably high. According to the SOII, each year employees experience more than 3 million serious (requiring more than first aid) injuries and illnesses at work, and this number is widely recognized to be an undercount of the actual number of occupational injuries and illnesses that occur annually. As described above, OSHA currently has very limited information about the injury/illness risk facing workers in specific establishments, and this final rule increases the agency's ability to target those workplaces where workers are at greatest risk. However, even with improved targeting, OSHA Compliance Safety and Health Officers can inspect only a small proportion of the nation's workplaces each year, and it would take many decades to inspect each covered workplace in the nation even once. As a result, to reduce worker injuries and illnesses, it is of great importance for OSHA to increase its impact on the many thousands of establishments where workers are being injured or made ill but which OSHA does not have the resources to inspect. The final rule may accomplish this, through application of advances made in the field of behavioral economics in understanding and influencing decision-making in order to prevent worker injuries and illnesses. Specifically, the final rule recognizes that public disclosure of data can be a powerful tool in changing behavior. In this case, the objective of disclosure of data on injuries and illnesses is to encourage employers to abate hazards and thereby prevent injuries and illnesses, so that the employer's establishment can be seen by members of the public, including investors and job seekers, as one in which the risk to workers' safety and health is low.
OSHA believes that disclosure of and public access to these data will (using the word commonly used in the behavioral sciences literature) “nudge” some employers to abate hazards and thereby prevent workplace injuries and illnesses, without OSHA having to conduct onsite inspections (
The application of behavioral science insights to the prevention injuries and illnesses is consistent with Executive Order 13707 “Using Behavioral Insights to Better Serve the American People,” which states, “(a) Executive departments and agencies (agencies) are encouraged to (i) identify policies, programs, and operations where applying behavioral science insights may yield substantial improvements in public welfare, program outcomes, and program cost effectiveness.”
This approach is also consistent with other Administration policies, including:
• Executive Order 13563, which states, “Where relevant, feasible, and consistent with regulatory objectives, and to the extent permitted by law, each agency shall identify and consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public. These approaches include warnings, appropriate default rules, and disclosure requirements as well as provision of information to the public in a form that is clear and intelligible.”
• The September 8, 2011 memorandum from Cass R. Sunstein, Administrator of the Office of Information and Regulatory Affairs, entitled “Informing Consumers through Smart Disclosure”, which provides guidance to agencies on how to promote smart disclosure, defined as “the timely release of complex information and data in standardized, machine readable formats in ways that enable consumers to make informed decisions.”
In addition, the rule is consistent with President Obama's Open Government Initiative. In his Memorandum on Transparency and Open Government, issued on January 21, 2009, President Obama instructed the Director of the Office of Management and Budget (OMB) to issue an Open Government Directive. On December 8, 2009, OMB issued a Memorandum for the Heads of Executive Departments and Agencies, Open Government Directive, which requires federal agencies to take steps to “expand access to information by making it available online in open formats.” The Directive also states that the “presumption shall be in favor of openness (to the extent permitted by law and subject to valid privacy, confidentiality, security, or other restrictions).” In addition, the Directive states that “agencies should proactively use modern technology to disseminate useful information, rather than waiting for specific requests under FOIA.”
A requirement for the electronic submission of recordkeeping data will help OSHA encourage employers to prevent worker injuries and illnesses by greatly expanding OSHA's access to the establishment-specific information employers are already required to record under part 1904. As described in the previous section, OSHA currently does not have systematic access to this information. OSHA has limited access to establishment-specific injury and illness information in a particular year. Typically, OSHA only had access if the establishment was inspected or was part of an OSHA injury and illness survey. In addition, the injury and illness data collected through the ODI were summary data only and not timely.
The final rule's provisions requiring regular electronic submission of injury and illness data will allow OSHA to obtain a much larger data set of more timely, establishment-specific information about injuries and illnesses in the workplace. This information will help OSHA use its enforcement and compliance assistance resources more effectively by enabling OSHA to identify
For example, OSHA will be better able to identify small and medium-sized employers who report high overall injury/illness rates for referral to OSHA's free on-site consultation program. OSHA could also send hazard-specific educational materials to employers who report high rates of injuries or illnesses related to those hazards, or letters notifying employers that their reported injury/illness rates were higher than the industry-wide rates. A recent evaluation by Abt Associates of OSHA's practice of sending referral letters to high-hazard employers identified by OSHA through the ODI confirmed the value of these letters in increasing the number of workplaces requesting a consultation visit (Ex. 1833). OSHA has also found that such high-rate notification letters were associated with a 5 percent decrease in lost workday injuries and illnesses in the following three years. In addition, OSHA will be able to use the information to identify emerging hazards, support an Agency response, and reach out to employers whose workplaces might include those hazards.
The final rule will also allow OSHA to more effectively target its enforcement resources to establishments with high rates or numbers of workplaces injuries and illnesses, and better evaluate its interventions. Prior to 1997, OSHA randomly selected establishments in hazardous industries for inspection. This targeting system was based on aggregated industry data. Relatively safe workplaces in high-rate industries were selected for inspection as well as workplaces that were experiencing high rates of injuries and illnesses. In 1997, OSHA changed its method of targeting general-industry establishments for programmed inspections. The Agency began using establishment-specific injury and illness data collected through the OSHA Data Initiative (ODI) to identify and target for inspection individual establishments that were experiencing high rates of injury and illness. OSHA's Site-Specific Targeting (SST) program has been OSHA's main programmed inspection plan for non-construction workplaces from 1997 through 2014. OSHA intends to use the data collected under this final rule in the same manner for targeting inspections. This rule greatly expands the number and scope of establishments that will provide the Agency with their injury and illness data. As a result, the Agency will be able to focus its inspection resources on a wider population of establishments. The data collection will also enable the Agency to focus its Emphasis Program inspections on establishments with high injury and illness rates, as it did for the National Emphasis Program (NEP) addressing hazards in Nursing Homes (
The new collection will provide establishment-specific injury and illness data for analyses that are not currently possible with the data sets from inspections, the ODI, and reporting of fatalities and severe injuries. For example, OSHA could analyze the data collected under this system to answer the following questions:
1. Within a given industry, what are the characteristics of establishments with the highest injury or illness rates (for example, size or geographic location)?
2. Within a given industry, what are the relationships between an establishment's injury and illness data and data from other agencies or departments, such as the Wage and Hour Division, the Environmental Protection Agency, or the Equal Employment Opportunities Commission?
3. Within a given industry, what are the characteristics of establishments with the lowest injury or illness rates?
4. What are the changes in types and rates of injuries and illnesses in a particular industry over time?
Furthermore, without access to establishment-specific injury and illness data, OSHA has had great difficulty evaluating the effectiveness of its enforcement and compliance assistance activities. Having these data will enable OSHA to conduct rigorous evaluations of different types of programs, initiatives, and interventions in different industries and geographic areas, enabling the agency to become more effective and efficient. For example, OSHA believes that some employers who have not been inspected, but who learn about the results (include monetary penalties) of certain OSHA's inspections in the same industry or geographic area, may voluntarily abate hazards out of concern that they will be the target of a future inspection. Access to these data will allow OSHA to compare injuries and illnesses at non-inspected establishments in the same industry or geographic areas as the inspected ones.
Publication of worker injury and illness data will encourage employers to prevent injuries and illnesses among their employees through several mechanisms:
First, the online posting of establishment-specific injury and illness information will encourage employers to improve workplace safety and health to support their reputations as good places to work or do business with. Many corporations now voluntarily report their worker injury and illness rates in annual “Sustainability Reports”, in order to show investors, stakeholders, and the public that they are committed to positive social values, including workplace safety and health. Public access to these data will help address a well-known information problem present in all voluntary reporting initiatives: Voluntary disclosure tends to lead those with the worst records to underreport outcomes. By requiring complete, accurate reporting, interested parties will be able to gauge the full range of injury and illness outcomes.
Second, these data will be useful to employers who want to use benchmarking to improve their own safety and health performance. Under OSHA's current recordkeeping regulation, employers have access only to their own data, aggregate injury/illness data in the SOII, historic summary data from establishments in the ODI, and other severe injury/illness event reports. Using data collected under this final rule, employers can compare injury and illness rates at their establishments to those at comparable establishments, and set workplace safety/health goals benchmarked to the establishments they consider most comparable.
Third, online availability of establishment-specific injury and illness information will allow employees to compare their own workplaces to the safest workplaces in their industries. Further, while the current access provisions of the part 1904 regulation provide employees the right to access the information on the part 1904 recordkeeping forms, evidence shows that few employees exercise this right. During 2,836 inspections conducted by OSHA between 1996 and 2011 to assess the injury and illness recordkeeping practices of employers, 2,599 of the recordkeepers interviewed (92 percent) indicated that employees never requested access to the records required under part 1904. OSHA believes that employees in establishments with 250 or more employees will access and make use of the data more frequently when the case-specific information is available without having to request the information from their employers. Uninhibited access to the information will allow employees in these establishments to better identify hazards within their own workplace and to take actions to have the hazards abated. In addition, if employees preferentially choose employment at the safest
Fourth, access to these data will improve the workings of the labor market by providing more complete information to job seekers, and, as a result, encourage employers to abate hazards in order to attract more desirable employees. Potential employees currently have access only to the limited injury/illness information currently available to the public, as discussed above. Injury and illness data for the vast majority of establishments are not publicly available. Using data newly accessible under this final rule, potential employees could examine the injury and illness records of establishments where they are interested in working, to help them make a more informed decision about a future place of employment. This would also encourage employers with more hazardous workplaces in a given industry to make improvements in workplace safety and health to prevent injuries and illnesses from occurring, because potential employees, especially the ones whose skills are most in demand, might be reluctant to work at more hazardous establishments. In addition, this would help address a problem of information asymmetry in the labor market, where the businesses with the greatest problems have the lowest incentive to self-disclose.
Fifth, access to data will permit investors to identify investment opportunities in firms with low injury and illness rates. If investors believe that firms that have low rates outperform firms with higher rates, presumably because the low-rate firms are better managed, and they preferentially invest in firms with low rates, then employers may take steps to improve workplace safety and health and prevent injuries and illnesses from occurring in order to attract investment.
Sixth, using data collected under this final rule, members of the public will be able to make more informed decisions about current and potential places with which to conduct business. For example, potential customers might choose to patronize only the businesses in a given industry with the lowest injury/illness rates. This is not possible at present because, as noted above, the general public has access only to very limited injury and illness data. Such decisions by customers would also encourage establishments with higher injury/illness rates in a given industry to improve workplace safety in order to become more attractive to potential customers.
Finally, in large construction contracts, particularly those involving work contracted for by state and local governments, preference is often given to subcontractors with lower injury and illness rates. In some cases, employers with rates above a certain level are not eligible for the contract work. Public disclosure of employers' injury and illness rates will be to enable corporate and individual customers to consider these rates in the selection of vendors and contractors. These data will also be useful to people who believe that low injury rates are correlated with high production quality, and who therefore prefer to purchase products made by manufacturers with low injury rates (Paul S. Adler, 1997) (Ex. 1832).
Disclosure of and access to injury and illness data have the potential to improve research on the distribution and determinants of workplace injuries and illnesses, and therefore to prevent workplace injuries and illnesses from occurring. Like the general public, researchers currently have access only to the limited injury/illness data described above. Using data collected under this final rule, researchers might identify previously unrecognized patterns of injuries and illnesses across establishments where workers are exposed to similar hazards. Such research would be especially useful in identifying hazards that result in a small number of injuries or illnesses in each establishment but a large number overall, due to a wide distribution of those hazards in a particular area, industry, or establishment type. Data made available under this final rule may also allow researchers to identify patterns of injuries or illnesses that are masked by the aggregation of injury/illness data in the SOII.
The availability of establishment-specific injury and illness data will also be of great use to county, state and territorial Departments of Health and other public institutions charged with injury and illness surveillance. In particular, aggregation of establishment-specific injury and illness reports and rates from similar establishments will facilitate identification of newly-emerging hazards that would not easily be identified without linkage to specific industries or occupations. There are currently no comparable data sets available, and these public health surveillance programs must primarily rely on reporting of cases seen by medical practitioners, any one of whom would rarely see enough cases to identify an occupational etiology.
Workplace safety and health professionals might use data published under this final rule to identify establishments whose injury/illness records suggest that the establishments would benefit from their services. In general, online access to this large database of injury and illness information will support the development of innovative ideas for improving workplace safety and health, and will allow everyone with a stake in workplace safety and health to participate in improving occupational safety and health.
Furthermore, because the data will be publicly available, industries, trade associations, unions, and other groups representing employers and workers will be able to evaluate the effectiveness of privately-initiated injury and illness prevention initiatives that affect groups of establishments. In addition, linking these data with data residing in other administrative data sets will enable researchers to conduct rigorous studies that will increase our understanding of injury causation, prevention, and consequences. For example, by combining these data with data collected in the Annual Survey of Manufactures (conducted by the United States Census Bureau), it will be possible to examine the impact of a range of management practices on injury and illness rates, as well as the impact of injury and illness rates on the financial status of employers.
Finally, public access to these data will enable developers of software and smartphone applications to develop tools that facilitate use of these data by employers, workers, researchers, consumers and others. Examples of this in other areas is the use of OSHA and Wage and Hour Division violation information in the “Eat/Shop/Sleep” smartphone application and, in public transit, the wide-scale private development of applications for real-time information on bus and subway arrivals using public information.
This final rule will also improve the accuracy of the recorded data. Section 1904.32 already requires company executives subject to part 1904 requirements to certify that they have examined the annual summary (Form 300A) and that they reasonably believe, based on their knowledge of the process by which the information was recorded, that the annual summary is correct and complete. OSHA recognizes that most employers are diligent in complying with this requirement. However, a minority of employers is less diligent; in recent years, one-third or more of violations of § 1904.32, and up to one-tenth of all recordkeeping (part 1904)
Finally, the National Advisory Committee on Occupational Safety and Health (NACOSH), composed of representatives of employers, workers, and the public, has expressed its support of the efforts of OSHA in consultation with NIOSH to modernize the system for collection of injury and illness data to assure that it is timely, complete, and accurate, as well as both accessible and useful to employers, employees, responsible government agencies, and members of the public.
As discussed above, OSHA intends to make the data it collects public. As discussed below, the publication of specific data elements will in part be restricted by applicable federal law, including provisions under the Freedom of Information Act (FOIA), as well as specific provisions within part 1904. OSHA will make the following data from the various forms available in a searchable online database:
While OSHA intends to make the information described above generally available, the Agency also wishes to emphasize that it does not intend to release personally identifiable information included on the forms. For example, in some cases, information entered in Column F (Describe injury or illness, parts of body affected, and object/substance that directly injured or made person ill) of the 300 Log contains personally-identifiable information, such as an employee's name or Social Security Number. As a result, OSHA plans to review the information submitted by employers for personally-identifiable information. As part of this review, the Agency will use software that will search for and de-identify personally identifiable information before OSHA posts the data.
It should also be noted that other federal agencies post establishment-specific health and safety data with personal identifiers, including names. For example, the Mine Safety and Health Administration (MSHA) publishes information gathered during the agency's investigations of fatal accidents. MSHA's Preliminary Report of Accident, Form 7000–13, provides information on fatal accidents including the employee's name, age, and a description of the accident. MSHA also publishes the written Accident Investigation Report, which details the nature and causes of the accident and includes the names of other employees involved in the fatal incident.
The Federal Railroad Administration (FRA) posts Accident Investigation Reports filed by railroad carriers under 49 U.S.C. 20901 or made by the Secretary of Transportation under 49 U.S.C. 20902; in the case of highway-rail grade crossing incidents, these reports include personally identifiable information (age and gender of the person(s) in the struck vehicle).
Finally, the Federal Aviation Administration (FAA) posts National Transportation Safety Board (NTSB) reports about aviation accidents. These reports include personally identifiable information about employees, including job history and medical information.
The proposed rule would have amended OSHA's existing recordkeeping regulation at § 1904.41 to add three new electronic reporting requirements. First, OSHA would have required establishments that are required to keep injury and illness records under part 1904, and had 250 or more employees in the previous calendar year, to electronically submit information from these records to OSHA or OSHA's designee, on a quarterly basis (
Second, OSHA would have required establishments that are required to keep injury and illness records under part 1904, had 20 or more employees in the previous calendar year, and are in certain designated industries, to electronically submit the information from the OSHA annual summary form (Form 300A) to OSHA or OSHA's designee, on an annual basis (
Third, OSHA would have required all employers who receive notification from OSHA to electronically submit specified information from their part 1904 injury and illness records to OSHA or OSHA's designee (
As previously discussed, in addition to the new requirements for electronic
There were many comments supporting the proposed rule. Many commenters commented that the collection of recordkeeping data would allow OSHA to improve workplace safety and health and prevent injuries and illnesses. Other commenters commented that publication of information provided by the electronic submission of recordkeeping data from covered establishments would allow employers, employees, researchers, unions, safety and health professionals, and the public to improve workplace safety and health. There were also comments that the proposed rule was consistent with the actions of other federal and state agencies, which already require the submission of health and safety data.
However, many commenters also raised potential concerns about the proposed rule. Some commenters expressed concerns about the implications of the publication of safety and health data for employee privacy. There were also comments about the implications of the proposed rule for employer privacy, especially with regard to confidential commercial information. Other commenters commented that OSHA underestimated the cost to businesses of implementing the proposed rule, especially the proposed requirement that would have required large establishments to submit data on a quarterly basis. In addition, some commenters commented that the data provided to OSHA and to the public as a result of this rule would not be beneficial.
OSHA addresses all of the issues raised by commenters below.
In the preamble to the proposed rule, in addition to providing proposed regulatory text, OSHA stated that it was considering several alternatives. [78 FR 67263–65270]. OSHA requested comment on the following regulatory alternatives.
In Alternative A, OSHA considered requiring monthly submission instead of quarterly submission from establishments with 250 or more employees.
However, almost all commenters opposed this alternative. Several commenters expressed concerns about the burdens of monthly submission on employers (Exs. 1211, 1112). Several commenters also expressed concerns about the effects of monthly submission on data quality (Exs. 1211, 1385, 1397). Other commenters commented that monthly reporting would not provide much, if any, benefit over quarterly reporting (Exs. 1384, 1391).
Ashok Chandran provided the only comment in support of this alternative. He commented that “[m]ore frequent reporting will actually prevent distortion, as fewer reports would increase the chance of a limited sample misrepresenting the conditions of an establishment. So long as OSHA does not use reports in isolation to trigger investigation, this risk is low” (Ex. 1393).
OSHA agrees with commenters who stated that monthly reporting would increase the burden on employers and could result in the submission of less accurate recordkeeping data. Given the potential extra burden without an added benefit, OSHA has decided not to adopt Alternative A from the proposed rule. As explained below, the final rule requires annual electronic submission of part 1904 records by establishments with 250 or more employees.
In Alternative B, OSHA considered requiring annual submission for establishments with 250 or more employees instead of quarterly submission.
Most commenters supported Alternative B, on grounds that annual reporting would provide better-quality, more useful data and would be less burdensome for both employers and OSHA.
Commenters provided various reasons to support the idea that annual reporting would provide better-quality data. First, some commenters commented that one quarter is too short a period of time to generate meaningful data (Exs. 0258, 1338, 1385, 1399, 1413). For example, the American Meat Institute commented that “breaking the data into quarterly `bites' will produce numbers with no comparative value . . . In fact, it is more likely to generate misleading, incorrect information because injury and illness incidents typically occur on a much more random basis than is reflected in what would amount to three-month `snapshots' ” (Ex. 0258).
Second, some commenters commented that quarterly reporting was more likely to lead to underreporting. The Allied Universal Corporation commented that “[w]ith quarterly reporting, employers are unlikely to record close cases because, in many instances, striking them later may be impossible as the information has already been reported and posted publicly by OSHA. Rather than assume such an additional burden, employers will likely err on the side of not recording those incidents where in doubt” (Ex. 1192). The American Chemistry Council, the Association of Energy Service Companies (AESC), and the International Association of Amusement Parks and Attractions (IAAPA) provided similar comments (Exs. 1092, 1323, 1427).
Third, several commenters commented that quarterly reporting would not provide enough time for employers to complete cases and catch data mistakes (Exs. 0035, 0247, 1110, 1206, 1214, 1339, 1379, 1385, 1389, 1399, 1405, 1406). For example, the Glass Packaging Institute commented that “[t]he data is not static but will be a moving data set and consequently of little value for evaluation or decisions. Cases are added, deleted, change with time as information and cases and/or treatment improve or worsen” (Ex. 1405).
ORCHSE Strategies, LLC commented that “[employers] also review the data at the end of the year to insure its accuracy before it is included in company reports or submitted to OSHA or to BLS. They check on outstanding cases; track day-counts for cases involving restricted work activity, job transfer, and days away from work; check on ongoing employee job limitations; prepare estimates of future days that will be lost or restricted (beyond the end of the year) etc.” (Ex. 1339). In addition, the American Petroleum Institute
As for the usefulness of data provided by quarterly reporting, many commenters stated that there is no evidence of benefits of quarterly reporting over annual reporting for worker safety and health (Exs. 0156, 0258, 1110, 1126, 1206, 1210, 1221, 1225, 1322, 1339, 1406, 1412). For example, the North American Insulation Manufacturers Association (NAIMA) commented that “OSHA has failed to demonstrate that the increased frequency of reporting will improve worker safety, especially by imposing a four-fold burden increase on both employer and agency personnel for quarterly rather than annual reporting. Indeed, it cannot document such a result because there is no connection between quarterly reporting and improved worker safety” (Ex. 1221). NAIMA also commented that “the delay for OSHA to scrub the data [of PII before publication] will likely obviate any perceived `timeliness' benefit OSHA might make in attempting to justify quarterly rather than annual data submission” (Ex. 1221). The Fertilizer Institute (TFI) and the Agricultural Retailers Association (ARA) provided similar comments (Ex. 1412).
OSHA also received comments that quarterly reporting would be overly burdensome for employers (Exs. 0247, 1112, 1126, 1206, 1210, 1214, 1221, 1332, 1338, 1339, 1379, 1389, 1390, 1405). For example, ORCHSE Strategies, LLC commented that “[v]erification is often an iterative process that involves back-and-forth between the corporate safety department and the site, with involvement of medical practitioners, the injured or ill employee, supervisors and others. Shifting from a single data submission to four data submissions per year would add substantially to the already significant cost and burden for these employers (at least by a factor of four). It would also complicate the process; employers would have to create estimated day counts for cases that are not closed at the time of each reporting and then correct them when the cases are finally resolved” (Ex. 1339).
The Association of Union Constructors (TAUC) commented that “[w]ith a proposed quarterly reporting frequency, often cases in the construction industry may not be resolved quickly and there is no method of recourse if the employer is found not at fault once the raw data is public . . . A lag in the period of time between updating and posting of injury/illness data could impose punitive consequences to the contractor if the public or customers are reviewing their data in real time” (Ex. 1389). In addition, the Environmental, Health & Safety Communications Panel (EHSCP) commented that quarterly reporting would be a burden for safety and health professionals and “strongly recommend[ed] that nothing more frequent than an annual submission be considered so as to minimize the time that safety and health professionals are required to devote to paperwork and data review rather than on proactive safety efforts” (Ex. 1331).
Commenters commented particularly about the resources needed for OSHA to remove PII from the collected data before publishing the data. For example, the North American Insulation Manufacturers Association (NAIMA) commented that “OSHA will tax its own resources to process, review, and scrub the data four times per year. This data will contain sensitive personal information, and OSHA will need to edit the data before making it public. To do this on a quarterly basis will be time consuming and resource intensive” (Ex. 1221). The Phylmar Regulatory Roundtable (PRR) questioned whether OSHA has the capacity to analyze quarterly data, commenting that “annual data submissions from 580,000 employers strike PRR as a large volume of data for OSHA to analyze. Multiplying that number by quarterly submissions has more potential for detriment than benefit” (Ex. 1110).
However, several commenters opposed Alternative B on grounds that quarterly data would be more useful and would not increase the burden on employers (Exs. 1211, 1381, 1384). The International Brotherhood of Teamsters commented that “[q]uarterly submissions will help identify emerging trends or serious incidents within a much more rapid timeframe than annual reporting, and allow for rapid intervention to stop such trends or respond to such incidents before they continue” (Ex. 1381). Similarly, the International Union (UAW) commented that “annual reporting would make it impossible to track seasonal variations in the type or rate of injuries and illnesses” (Ex. 1384).
In response, OSHA agrees with commenters who stated that annual reporting would lessen the burden on employers. OSHA believes that companies' review of the data at the end of the year will help to improve the accuracy of the submitted data, because employers are already required to certify their records at the end of the calendar year under current part 1904. In addition, OSHA agrees that annual reporting will provide more meaningful data, as well as higher-quality data, because employers will have more time to update and revise the data before reporting to OSHA. Finally, OSHA agrees with the commenters who stated that annual reporting would lessen the burden on OSHA, by reducing both the total volume of data and the amount of personally identifiable information to remove before publication. Therefore, unlike the proposed rule, which would have required quarterly submission by establishments with 250 or more employees, § 1904.41(a)(1) of the final rule requires annual electronic submission of part 1904 records by establishments with 250 or more employees.
In Alternative C, OSHA considered a phase-in of the electronic reporting requirement, under which establishments with 250 or more employees would have had the option of submitting data on paper forms for the first year the rule would have been in effect.
Several commenters opposed Alternative C on grounds that large companies affected by this rule should be able to electronically submit data in the first year, especially the Form 300 (Log) and 300A (annual summary). These commenters explained that submission of data in paper form would delay the processing and publication of the data (Exs. 1211, 1345, 1350, 1381, 1384, 1387, 1424). The International Brotherhood of Teamsters commented that “these companies are certainly large enough to handle the responsibility, and will receive the analytic benefits such a reporting system provides” (Ex. 1381). Other commenters stated that there should not be a phase-in of the electronic submission requirement because OSHA does not have the resources to process thousands of submitted paper forms (Exs. 1395, 1211).
However, other commenters supported Alternative C to provide time for employers and OSHA to come up with methods for protecting worker confidentiality. The International Union (UAW) commented that “OSHA may find it useful to have a phase-in period for submission of 301 reports by these employers to allow time for OSHA to come up with a method for scrubbing data to ensure worker confidentiality” (Ex. 1384). The United Food & Commercial Workers International
In response, OSHA agrees with commenters who stated that larger companies (those with 250 or more employees) have the resources to electronically submit injury and illness data to OSHA in the first year. According to commenters, in many cases, larger companies already keep OSHA injury and illness records electronically, so a requirement to submit such records electronically is not unduly burdensome (Exs. 1103, 1188, 1209, 1211, 1387, 1393, 1424) (
OSHA also agrees with commenters who stated that the Agency does not have the resources to handle the large volumes of non-electronic data that Alternative C would have produced. Based on OSHA's experience with paper submissions to the ODI, the Agency estimates that processing a paper submission might take 2 minutes for the data from Form 300A and 1 minute for processing the actual paper form. In addition, based on BLS's experience with paper submissions to the SOII, the Agency estimates that processing each reported case in a paper submission might take 2 minutes. OSHA estimates that 33,000 establishments will be subject to final § 1904.41(a)(1), accounting for 713,000 reported cases. In addition, roughly 30 percent of the establishments in the ODI submitted their data on paper. Based on these estimates (3 minutes per paper submission; 2 minutes per case; 30 percent of establishments submit on paper; 33,000 establishments; 713,000 cases), OSHA estimates that the one-year paper submission phase-in option in Alternative C would account for 495 hours for the Form 300A and 7,130 hours for the cases, for a total of 7,625 hours, or almost four full-time employees at 2,000 hours per full-time employee. Under a more optimistic scenario assuming 10 percent of establishments submitting on paper, the one-year paper submission phase-in option in Alternative C would account for 165 hours for the Form 300A and 2,377 hours for the cases, for a total of 2,542 hours, or more than one full-time employee. Under either scenario, OSHA would be unable to make timely use of the data.
Additionally, with respect to commenters who stated that a phase-in would provide more time for employers and OSHA to develop methods to protect employee confidentiality, OSHA notes that a requirement that only provides for electronic submission of data will help the Agency search for and redact confidential information. As noted elsewhere in this preamble, OSHA will use existing software to remove personally identifiable information before posting data on the publicly-accessible Web site. Also as noted above, the proposed rule would have required establishments with 250 or more employees to electronically submit data on a quarterly basis, whereas § 1904.41(a)(1) of the final rule requires annual submission. This change will provide large employers with additional time to prepare for the first electronic submission of recordkeeping data on March 2, 2017. Accordingly, the final rule requires electronic submission of part 1904 records by establishments with 250 or more employees, without a phase-in period for paper submission.
In Alternative D, OSHA considered a phase-in of the electronic reporting requirement, under which establishments with 20 or more employees in designated industries would have had the option of submitting data on paper forms for the first three years this rule would have been in effect.
All of the commenters who specifically commented on Alternative D supported a phased-in electronic submission requirement to allow smaller companies to adjust to electronic reporting. Different commenters supported a phase-in period of different lengths—one, two, or three years, or an unspecified “reasonable” period of time (Exs. 1206, 1211, 1338, 1350, 1353, 1384, 1387, 1424).
OSHA also received a comment from the American College of Environmental Medicine (ACEM) stating that OSHA should provide a phase-in for “employers who do not have access to the Internet pending full distribution of Internet services throughout the Nation” (Ex. 1327). The Dow Chemical Company commented that “a phase-in period should be provided for: At least one year after OSHA's web portal is created, debugged, tested and operational. However, a phase-in should consist of a period without a paper reporting requirement, so companies can deploy their resources toward developing the systems and information that will be necessary in order to report electronically” (Ex. 1189). The National Ready Mixed Concrete Association (NRMCA), International Association of Industrial Accident Boards and Commissions (IAIBC), and Bray International made similar comments (Exs. 0210, 1104, 1401).
OSHA agrees with the comments for Alternative C, above, that OSHA does not have the resources to handle the large volumes of non-electronic data that Alternative D would produce. As above, based on OSHA's experience with paper submissions to the ODI, the Agency estimates that processing a paper submission might take 2 minutes for the data from Form 300A and 1 minute for processing the actual paper. OSHA estimates that 430,000 establishments will be subject to final § 1904.41(a)(2). In addition, OSHA estimated that roughly 30 percent of the establishments in the ODI submitted their data on paper. Based on these estimates (3 minutes per paper submission; 30 percent of establishments submit on paper; 430,000 establishments), OSHA estimates that the three-year paper submission phase-in option in Alternative D would account for 6,450 hours per year for three years, or 19,350 hours total. Under a more optimistic scenario assuming 10 percent of establishments submitting on paper, the three-year paper submission phase-in option in Alternative D would account for 2,150 hours per year for three years, or 6,450 hours total. Under either scenario, OSHA would be unable to make timely use of the data.
As with Alternative C, immediate electronic reporting will make the data available to employers, the public, and OSHA in a timelier manner, because OSHA will not have to take the time to convert paper entries into electronic format. Also, an electronic format will make it much easier and faster for OSHA to prepare the data for publication. Therefore, the final rule requires annual electronic submission of the OSHA Form 300A by establishments with 20 or more employees, but fewer than 250 employees, in designated industries, without a phase-in period for paper submission.
With respect to commenters' concern about Internet availability, OSHA believes that establishments with 20 or more employees are highly likely to have access to the Internet, and the burden of electronic reporting is low.
In Alternative E, OSHA considered widening the scope of establishments required to report under this proposed section of the rule from establishments with 250 or more employees to establishments with 100 or more employees.
In support of Alternative E, commenters stated that increasing the number of establishments required to report would in turn increase public access to establishment-specific injury and illness data (Exs. 1211, 1395). There were also comments that lowering the size criterion to 100 employees would pose little burden on medium-sized facilities, because establishments of that size often already have standardized recordkeeping (Exs. 1211, 1358).
However, there were also comments opposing Alternative E due to employer burden and volume of data. For employer burden, the National Automobile Dealers Association (NADA) commented that “[u]nder no circumstances should the proposed threshold for quarterly reporting be expanded to include establishments with 100 or more employees. As noted above, the proposed mandate is unjustified at the proposed 250-employee threshold. Any expansion would just exacerbate the burden for a much larger universe of employers with no commensurate benefit” (Ex. 1392).
For volume of data, several commenters commented that OSHA should assess the effect of lowering the size criterion to 200 employees and that 250 employees should be the maximum size criterion. For example, the AFL–CIO commented that “the 250 employee cut-off should be the maximum cut-off for such reporting. We encourage the agency to examine the effect of lowering the establishment threshold to 200 employees to determine and assess the additional information that would be captured by such as change, particularly information from higher hazard industries that are of greater concern” (Ex. 1350). The International Brotherhood of Teamsters and the International Union, United Automobile, Aerospace and Agriculture Implement Workers of America (UAW) provided similar comments (Ex. 1381, 1384). The Service Employees International Union (SEIU) commented that “we believe 250 employees should be the maximum. We would support a phased in lowering of this number over several years to 100 employees as electronic reporting becomes even more routine and as the workforce continues to fragment into smaller units, as many expect” (Ex. 1387).
OSHA agrees with commenters who stated that reducing the size criterion to 100 would increase the burden on employers with diminishing benefit. The number of establishments that would be required to report under this proposed section under Alternative E would increase from 34,000 to 120,000. This alternative would also increase the number of injury and illness cases with incident report (OSHA Form 301) and Log (OSHA Form 300) data from 720,000 to 1,170,000. Therefore, like the proposed rule, the final rule requires electronic submission of all three recordkeeping forms by establishments with 250 or more employees.
In Alternative F, OSHA considered narrowing the scope of establishments required to report under this section of the rule from establishments with 250 or more employees to establishments with 500 or more employees.
Several commenters supported Alternative F, on grounds that it would lower the burden of the rule. The National Council of Farmer Cooperatives (NCFC) commented that “[w]e encourage OSHA to broaden the scope of establishments that fall under this section from 250 to 500 employees, reducing the number of establishments burdened by quarterly reporting requirements” (Ex. 1353). FedEx Corporation provided a similar comment (Ex. 1338), adding that raising the size criterion to 500 employees would still provide OSHA with a “statistically significant pool of injury and illness data” (Ex. 1338).
However, Logan Gowdey commented that raising the size criterion from 250 employees to 500 employees would reduce “establishments covered from 38,000 to 13,800 and reports from 890,000 to 590,000. While the number of reports does not decrease that much, the number of establishments decreases dramatically, which will limit the importance of the data collected” (Ex. 1211).
OSHA agrees that Alternative F's great reduction in the number of establishments and employees covered by § 1904.41(a)(1) would reduce the utility of the data. Under Alternative F, the number of establishments that would be required to report under § 1904.41(a)(1) would decrease from 34,000 to 12,000. This alternative would also decrease the number of injury and illness cases with incident report (OSHA Form 301) and Log (OSHA Form 300) data from 720,000 to 495,000. Therefore, like the proposed rule, the final rule requires electronic submission of part 1904 records by establishments with 250 or more employees.
In Alternative G, OSHA considered a three-step process of implementing the reporting requirements under the proposed § 1904.41(a)(1) and (2).
For this proposed alternative, high-hazard industry groups (four-digit NAICS) would have been defined as having rates of injuries and illnesses involving days away from work, restricted work activity, or job transfer (DART) that are greater than 2.0. High-hazard industry sectors (two-digit NAICS) would have been defined as agriculture, forestry, fishing and hunting; utilities; construction; manufacturing; and wholesale trade.
In the first step of this three-step implementation process, reporting would have been required only from the establishments in proposed § 1904.41(a)(1) and (2) that are in high-hazard industry groups (four-digit NAICS with a DART rate greater than or equal to 2.0).
In the second step of the three-step implementation process, OSHA would have conducted an analysis, after a specified period of time, to assess the effectiveness, adequacy, and burden of the reporting requirements in the first step. The results of this analysis would then have guided OSHA's next actions.
The third step of the three-step implementation process would therefore have depended on the results of OSHA's analysis.
The only comment in support of Alternative G was from Southern Company, which commented that “[a] smaller pilot group of employers in historically the highest incident rates will allow OSHA to determine if its system works as intended” (Ex. 1413). Other commenters opposed Alternative G for various reasons, including scope, effectiveness, and implementation (Exs. 1211, 1350, 1381, 1384, 1387). For example, the International Brotherhood of Teamsters commented that “[w]e support the proposed approach rather than this confusing 3-step alternative. The current approach is a better means for capturing higher hazard industries
In response, OSHA agrees that Alternative G would reduce the effectiveness of the rule, increase uncertainty for employers, and make implementation more difficult. Therefore, like the proposed rule, the final rule requires electronic submission of part 1904 records by establishments with 250 or more employees, and annual electronic submission of the Form 300A annual summary by establishments with 20 to 249 employees in designated industries, without the multi-step implementation process in this alternative.
The proposed § 1904.41(a)(1) would have applied to all establishments with 250 or more employees in all industries covered by the recordkeeping regulation. The proposed § 1904.41(a)(2) would have applied to establishments with 20 or more employees in designated,
In Alternative H, OSHA considered an alternative approach to defining the industry scope of these two sections of the proposed rule, by limiting the industry coverage to include only industry groups that meet a designated DART cut-off. This approach would not have included coverage of designated industry sectors as a criterion.
Some commenters supported Alternative H as a way for OSHA to focus its efforts on high-hazard industry groups. For example, FedEx Corporation supported Alternative H with a DART cut-off rate of 3.0, commenting that “this would focus OSHA's limited resources on high hazard industries and employers with high DART rates” (Ex. 1338). The American Coatings Association (ACA) and the Reusable Industrial Packaging Association (RIPA) made similar comments (Exs. 1329, 1367).
The National Retail Federation (NRF) commented, “In NRF's view, both the 2.0 as well as the 3.0 DART rate are too low. NRF believes that, if OSHA is going to promulgate this standard at all, it should revise the proposed threshold DART rate to ensure that this rule is designed to focus attention on true high hazard industries . . . A DART cut-off of 3.6 derives from current data and is reasonably connected to the goal of the Proposed Regulation and any inspection plan that originates from the data collection” (Ex. 1328).
However, other commenters opposed Alternative H because it would greatly reduce the coverage of the rule (Exs. 1211, 1350, 1374 1381, 1384, 1387). The International Brotherhood of Teamsters commented, “We support the proposed approach rather than the alternative. The current approach is a better means for capturing higher hazard industries and establishments. Lowering [coverage] to industries with a DART rate of greater than/equal to 2.0 would reduce the number of smaller establishments covered by about 100,000 and the number of larger establishments covered by 16,000” (Ex. 1381).
The AFL–CIO commented that “[T]hese thresholds are too restrictive and limited. Indeed, according to the preamble, employing a DART threshold of 3.0 would cover fewer establishments (152,000) than are covered under the current ODI (160,000). The current ODI has employed a combination of 2 digit and 4 digit thresholds similar to the proposed rule. There is no reason to change this approach” (Ex. 1350).
UNITE HERE also expressed concerns that Alternative H would leave vulnerable workers at risk, commenting that “the alternative proposals to limit coverage to a DART threshold of 3.0 at the four digit level would result in excluding NAICS 7211—Traveler Accommodation. This industry sector is a growing sector with a growing workforce. Certain job titles are predominantly female, women of color and immigrant workers. We believe excluding 7211 would result in increased workplace injuries and illnesses and decreased prevention” (Ex. 1374).
OSHA believes that Alternative H would overly limit the scope of the rule and agrees with commenters who stated that there is no compelling reason to change the approach OSHA used in the ODI of using a combination of industrial classification levels to identify high-hazard industry sectors and groups. In addition, using a DART cut-off of 3.0 would result in having less establishment-specific data for establishments with 20 or more employees available to OSHA and the public. As stated in the preamble to the proposed rule, the intention of this rulemaking is to increase the amount of establishment-specific data reported to OSHA. Therefore, like the proposed rule, the final rule requires electronic submission of part 1904 records by establishments with 250 or more employees, as well as annual electronic submission of the OSHA Form 300A by establishments with 20 to 249 employees in designated high-hazard industries (four-digit NAICS) and industry sectors (two-digit NAICS).
In the preamble to the proposed rule, OSHA stated that it was considering adding a provision that would have required some enterprises with multiple establishments to collect and submit some part 1904 data for those establishments. Alternative I would have applied to enterprises with a minimum threshold number of establishments (such as five or more) that are required to keep records under part 1904. These enterprises would have been required to collect OSHA Form 300A (annual summary) data from each of their establishments that are required to keep injury/illness records under part 1904. The enterprise would then have electronically submitted the data from each establishment to OSHA. For example, if an enterprise had seven establishments required to keep injury/illness records under part 1904, the enterprise would have submitted seven sets of data, one for each establishment.
OSHA also stated in the preamble to the proposed rule that Alternative I would have applied to enterprises with multiple levels within the organization. For example, if XYZ Chemical Inc. owns three establishments, but is itself owned by XYZ Inc., which has several wholly owned subsidiaries, then XYZ Inc. would have done the reporting for all establishments it controls. These requirements would have only applied to establishments within the jurisdiction of OSHA and subject to OSHA's recordkeeping regulation. Establishments within the corporate structure but located on foreign soil would not have been subject to the requirement in Alternative I.
There were general comments supporting Alternative I, opposing Alternative I, and providing suggestions about the implementation of Alternative I. The proposed rule also asked 16 specific questions related to Alternative I, and OSHA received comments addressing those questions as well.
Commenters who generally supported Alternative I did so for a variety of reasons, including more useful information, more corporate involvement in establishment-level prevention of workplace injuries and illnesses, and coordination with current OSHA enterprise-level efforts.
For more useful information, NIOSH commented that a 2006 study by Mendeloff
Several commenters commented that enterprise-level safety and health data would be extremely useful to OSHA as well as other groups (Exs. 0241, 1278, 1327, 1345, 1350, 1384, 1387). For example, Worksafe commented that this data would be “extremely useful, not only to OSHA but also to advocates, employers, employees, unions, and representatives to ensure improved identification and resolution of workplace health and safety hazards” (Ex. 1278). The National Safety Council (NSC) added that “[t]he value of benchmarking would be substantially enhanced if the Enterprise Wide Alternative is adopted. This option would allow for the calculation of enterprise wide rates and allow for more meaningful benchmarking among enterprises” (Ex. 0241).
There were also several comments about the scarcity of enterprise-level data, especially for OSHA. NIOSH commented that “few data are available at the enterprise level. This lack of data is a principal source of imprecision in defining small business. Greater clarity in measurement of both structure and size of employer would aid small business research and prevention efforts such as those conducted by the NIOSH Small Business Assistance and Outreach Program” (Ex. 0216). The AFL–CIO and Change to Win provided similar comments (Exs. 1350, 1380).
With respect to corporate involvement in establishment-level prevention of workplace injuries and illnesses, the American College of Occupational and Environmental Medicine commented that “enterprise-level reporting will increase the likelihood that the chief corporate officers are aware of potential variations in the safety of different business processes and establishment practices that put employees at risk. Greater corporate awareness may enhance corporate oversight and improve health and safety throughout all establishments” (Ex. 1327). The AFL–CIO and the Service Employees International Union (SEIU) provided similar comments (Exs. 1350, 1387).
For coordination with current OSHA enterprise-level efforts, the AFL–CIO commented that “[t]he concept of corporate level responsibility under the OSH Act is well-established. While the majority of OSHA's enforcement efforts are focused at the establishment level, the OSH Act itself and its obligations, including the recordkeeping requirements, apply to employers. For decades, OSHA has utilized corporate-wide settlements as a means to bring about compliance on a corporate-wide basis, and recently OSHA has attempted to utilize this corporate-wide approach in its initial enforcement actions. Under the current Severe Violator Enforcement Program (SVEP), violations at one establishment trigger expansion of oversight to other establishments of the same employer” (Ex. 1350). The Service Employees International Union (SEIU) provided a similar comment (Ex. 1387).
Finally, the United Steelworkers (USW) commented that “[e]nterprise wide data must retain discernible facility identification information so that stakeholders can determine which facility each injury or illness entry occurred [in]. This will provide stakeholders with the ability to determine where specific hazards exist and engage in efforts to eliminate or reduce these hazards” (Ex. 1424).
On the other hand, several commenters generally opposed implementation of Alternative I for various reasons, including the comparative ineffectiveness of enterprises versus establishments in promoting workplace health and safety, reduced data quality, employer burden, and legality (Exs. 1198, 1206, 1221, 1338).
For the effectiveness of enterprises versus establishments in promoting workplace health and safety, the Food Marketing Institute commented that “there are many corporate hierarchies in which there are `enterprises' above `establishments' that are not involved in or responsible for the safety controls in place at the establishments. Indeed, there are many instances in which a parent company may own 51% of the stock of a subsidiary but is in no way involved in that subsidiary's day-to-day activities” (Ex. 1198). The North American Insulation Manufacturers Association (NAIMA) provided a similar comment (Ex. 1221).
FedEx Corporation commented that “the safety resources in place at each FedEx operating company . . . are in the closest proximity to the unique day-to-day operations of their establishments, and are therefore best equipped to enhance the workplace safety of their employees” (Ex. 1338). Similarly, the Interstate Natural Gas Association of America (INGAA) also commented that “[i]t is well understood that separate establishments, even separate establishments that operate as part of a single larger enterprise, do not all operate the same: each establishment has different personnel, procedures, processes and protocols” (Ex. 1206).
There were also comments that enterprise-level data would not be useful for improving workplace safety and health (Exs. 1198, 1279, 1338, 1408, 1412). For example, the National Association of Home Builders (NAHB) commented that “OSHA claims that enterprise-wide submission of establishment data to the enterprise will improve communication and reporting between establishments and enterprises and this will lead to enterprise`s ability to solve establishment safety and health problems . . . Again, the agency has failed to establish any benefits for the proposed rulemaking . . . That is readily apparent here with OSHA`s proposed claims regarding the enterprise-wide alternative. OSHA fails to cite any example, research paper, case study, or journal article to support this claim” (Ex. 1408).
The National Association of Manufacturers (NAM) commented that “[t]here is no evidence suggesting that there is currently a lack of communication regarding safety and health between establishments and enterprises, nor is there any evidence that this alleged benefit will somehow reduce workplace injuries and illnesses” (Ex. 1279).
For data quality, the North American Insulation Manufacturers Association (NAIMA) commented that “[w]ith certain umbrella corporations holding levels upon levels of subsidiaries, it could conceivably turn into a never-ending task . . . OSHA will undoubtedly get multiple reports on the same sites, omitted reports, and have a massive burden trying to audit all that information. At best, it is impractical and imprudent to pursue enterprise-wide reporting (Ex. 1221). The
Several commenters commented that enterprise-wide submission would create confusion when applying OSHA's recordkeeping requirements (Exs. 1198, 1338, 1343, 1356, 1411). For example, the Food Marketing Institute commented that “new definitions will have to be created for all the core terminology (
In response, OSHA has decided not to include a requirement in the final rule for enterprise-wide collection and submission of recordkeeping data. OSHA based this decision on two main reasons. First, OSHA agrees with commenters who stated that it would be difficult to administer an enterprise-wide collection and submission requirement. Specifically, because there are wide variations in corporate structure, OSHA believes that it would be difficult to establish a part 1904 definition of enterprise. This is particularly a concern when some corporate structures include establishments that are otherwise legally separate entities. Also, the question of enterprise ownership or control of specific establishments can be an extremely complex legal issue, especially when parent companies have multiple divisions or subsidiaries. OSHA also believes that in some cases it may be difficult for larger enterprises to identify all of the establishments under its ownership or control.
Second, when the proposed rule for this rulemaking was issued in November 2013, OSHA's recordkeeping regulation included a list of partially-exempt industries based on the Standard Industrial Classification (SIC) system. On September 18, 2014, OSHA published a final rule in the
Compared to the SIC system, NAICS established several new industry categories, including specific categories for establishments conducting office or management activities. One of the industry classifications newly partially exempt from OSHA recordkeeping requirements is NAICS 5511, Company Management and Enterprises. Because of this change, OSHA believes it cannot now include a requirement in this final rule for enterprise-wide collection and submission of part 1904 data.
OSHA also wishes to point out that nothing in this final rule prevents enterprises or corporate offices from voluntarily collecting and submitting part 1904 data for their establishments. Based on the comments to Alternative I, as well as the Agency's own experience, OSHA believes that there are benefits for enterprise-wide collection and submission of recordkeeping data. As noted by commenters, large companies generally have more resources for protecting employee safety and health and reducing workplace hazards and exposures. Enterprise-level collection and submission of part 1904 data increases the likelihood that corporate offices will be aware of variations in establishment processes and practices that place employees at risk. OSHA believes that greater corporate involvement and oversight enhance safety and health at all establishments. Accordingly, OSHA encourages enterprises and corporate offices to voluntarily collect and electronically submit part 1904 records for their establishments required to submit such records under the final rule.
In addition to Alternatives A through I, the preamble to the proposed rule included several questions about specific issues in this rulemaking. Some of these issues are addressed elsewhere in this preamble. The remaining issues are addressed below.
In the preamble to the proposed rule, OSHA asked, “What are the implications of requiring all data to be submitted electronically? This proposed rule would be among the first in the federal government without a paper submission option.” [78 FR 67271].
Several commenters supported mandatory electronic submission. The Phylmar Regulatory Roundtable (PRR) commented that “PRR company establishments currently collect and record injury and illness data manually and electronically. Members prefer submitting data electronically over paper submission” (Ex. 1110). The United Food & Commercial Workers International Union (UFCW) commented that “large employers (those greater than 250) can meet requirements for mandatory electronic reporting once OSHA provides the technical means to do so” (Ex. 1345).
The American Federation of Teachers (AFT) commented, “Once the [electronic reporting] requirement is in place, OSHA will for the first time have the most comprehensive and timely data base on large and high hazard establishments. The agency will be able to do frequent and systematic comparisons between like establishments and better target consultation and enforcement. There will also be opportunities to track patterns of specific injuries and illnesses as we have never had before. This ability will be important for research as well as enforcement . . . Electronic reporting will assist us in not only identifying new hazards but also measuring their impact of in a timely manner (Ex. 1358). The AFL–CIO made a similar comment (Ex. 1350).
However, many other commenters expressed concern that only allowing electronic submission would burden small establishments without Internet access, especially those in rural areas, and that OSHA should continue to allow a paper-based reporting option (Exs. 0179, 0211, 0253, 0255, 1092, 1113, 1123, 1124, 1190, 1198, 1199, 1200, 1205, 1273, 1322, 1327, 1332, 1342, 1343, 1359, 1366, 1370, 1386, 1401, 1408, 1410, 1411, 1416, 1417). For example, the American Forest & Paper Association commented that “OSHA must continue to allow a paper-based reporting option. Many businesses, particularly small firms located in rural areas, do not have ready access to the Internet or may find electronic reporting burdensome because they currently have a paper-based record system” (Ex. 0179). The Texas Cotton Ginners Association (TCGA) made a similar comment (Ex. 0211). The Food Marketing Institute further commented that “OSHA acknowledges that 30% of 2010 ODI establishments did not electronically submit injury and illness information and that “most agencies” currently allow paper submission of information.
Several commenters expressed particular concern about the burden of mandatory electronic submission on farmers. The California Farm Bureau Federation (CFBF) commented that a
OSHA agrees with the commenters who supported electronic submission. Specifically, OSHA believes that electronic submission is necessary if a data system is to provide timely and useful establishment-specific information about occupational injuries and illnesses. In addition, as discussed in Section VI Final Economic Analysis and Regulatory Flexibility Analysis, OSHA believes that establishments with 20 or more employees are highly likely to have access to the Internet and that the burden of electronic reporting is low even for the few employers for whom it may be more difficult to access the Internet. Consequently, the final rule requires electronic submission of injury and illness records to OSHA.
Commenters also expressed several technical concerns about the electronic submission requirement. The Associated General Contractors of New York, LLC (AGC NYS) expressed the concern that “those that attempted to submit their information but failed due to a Web site that does not function properly may also be considered to be non-compliant with such regulations” (Ex. 1364). Both the National Ready Mixed Concrete Association (NRMCA) and the American Subcontractors Association (ASA) suggested that OSHA should maintain a paper submission option for establishments experiencing temporary technical difficulties with electronic submission (Exs. 0210, 1322).
In response, OSHA believes that there are more cost-effective ways to deal with Web site problems than maintaining a paper submission option. For example, OSHA plans to allocate resources to help employers who have difficulty submitting required information because of unforeseen circumstances. Specifically, OSHA intends to establish a help desk to support data collection and submission under the final rule. In addition, employers will be able to report the information from a different location, such as a public library. Further, for the data collection under the ODI, OSHA provided employers multiple chances after the due date to submit their data before issuing citations for non-response. OSHA expects to continue this practice when employers have technical issues and are unable to submit their information under this final rule.
In addition, OSHA will phase in implementation of the data collection system. In the first year, all establishments required to routinely submit information under the final rule will be required to submit only the information from the Form 300A (by July 1, 2017). In the second year, all establishments required to routinely submit information under the final rule will be required to submit all of the required information (by July 1, 2018). This means that, in the second year, establishments with 250 or more employees that are required to routinely submit information under the final rule will be responsible for submitting information from the Forms 300, 301, and 300A. In the third year, all establishments required to routinely submit under this final rule will be required to submit all of the required information (by March 2, 2019). This means that beginning in the third year (2019), establishments with 250 or more employees will be responsible for submitting information from the Forms 300, 301, and 300A, and establishments with 20–249 employees in an industry listed in appendix A to subpart E of part 1904 will be responsible for submitting information from the Form 300A by March 2 each year. This will provide sufficient time to ensure comprehensive outreach and compliance assistance in advance of implementation.
Finally, OSHA will use feedback from users of the data collection system from the first year of implementation to inform the development and improvement of the data collection system. OSHA will incorporate user experience and design improvements throughout the life of the data collection system, based on user feedback and emerging technology.
Section 1904.41(a)(2) of the proposed rule would have required establishments with 20 or more employees, but fewer than 250 employees, in designated industries, to electronically submit information from the 300A annual summary to OSHA or OSHA's designee on an annual basis. The list of designated industries subject to the annual submission requirement in proposed § 1904.41(a)(2) was included in proposed appendix A to subpart E. The designated industries in proposed Appendix A to Subpart E represented all industries covered by part 1904 with a 2009 DART rate in the BLS SOII of 2.0 or greater, excluding four selected transit industries where local government is a major employer.
In the preamble to the proposed rule, OSHA asked, “More current BLS injury and illness data will be available at the time of the final rulemaking. Use of newer data may result in changes to the proposed industry coverage. Should OSHA use the most current data available in determining coverage for its final rule? Would this leave affected entities without proper notice and the opportunity to provide substantive comment?” [78 FR 67271].
OSHA received several comments related to this question. Two commenters supported using 2009 BLS injury and illness data for determining coverage for high-hazard industries under the final rule, on grounds that more current data would leave affected entities without proper notice and the opportunity to provide comment (Exs. 1206, 1329). One commenter, the California Department of Industrial Relations (DIR), Office of the Director, recommended “ways of increasing the stability of the system, namely, not changing industries required to report, not using a phased in approach to reporting, and encouraging use of data through a successful data sharing Web site” (Ex. 1395). The International Brotherhood of Teamsters supported using the most current data available for determining coverage in the final rule, commenting that “[w]e recommend that OSHA use the latest BLS data. The results of the Survey of Occupational Injuries and Illnesses (SOII) are one year behind, but they may point to emerging or immediate hazards” (Ex. 1381). Another commenter supported OSHA's use of the most current BLS data available for determining coverage, and stated that OSHA should be able to use the new data without needing a new round of notice and comment because it discussed this possibility in the proposed rule. This commenter also commented that it would be counterproductive to limit OSHA to the BLS data available at the time of the proposed rule (Ex. 1211).
OSHA also received a comment from the National Automobile Dealers Association (NADA) stating that “OSHA should drop the proposal's use of a one
After carefully considering all of these comments, OSHA has decided to use a three-year average of BLS data from 2011, 2012, and 2013 to determine coverage for § 1904.41(a)(2) of the final rule. This three-year range represents the most current BLS data available at the time of this final rule. OSHA agrees with the International Brotherhood of Teamsters that using the most current BLS data available at the time of the final rule, rather than outdated data, is the most effective way to identify emerging workplace hazards, as well as the most effective way to identify the list of high hazard industries for inclusion in appendix A to subpart E. A three-year average will reduce the effects of natural year-to-year variation in industry injury/illness rates, and it is consistent with OSHA's current approach in determining the partial exemption of industries under existing § 1904.2. The alternative would have been to use a single year of BLS data from 2009 for a final rule that will go into effect in 2017.
OSHA also agrees with commenters who stated that the Agency provided sufficient notice and opportunity for comment in the NPRM by explicitly asking whether the Agency should use the most current data available when determining coverage for the final rule. The combination of OSHA's request for comment on the approach that it ultimately adopted in the final rule, and the comments and testimony received in response to the proposed rule, provided the regulated community with adequate notice regarding the outcome of the rulemaking.
Also in the preamble to the proposed rule, OSHA asked whether the list of designated industries in appendix A to subpart E should remain the same each year, or whether the list should be adjusted each year to reflect the most current BLS injury and illness data. OSHA also asked how OSHA could best inform affected establishments about the adjustments, if the list were adjusted.
One commenter supported adjusting the list of designated industries each year to reflect the most current BLS injury and illness data (Ex. 1211). Other commenters supported adjusting the list in other ways. For example, the International Union (UAW) commented that “annual updating is too frequent and would leave employers confused as to whether or not they need to report. Updating every three years would be more appropriate” (Ex. 1384). The International Brotherhood of Teamsters and the Service Employees International Union (SEIU) provided similar comments (Exs. 1381, 1387). The American Federation of Teachers (AFT) commented that “[t]he AFT recommends that new establishments that meet the requirement of a DART rate of 2.0 be added every year but that the original list of high hazard establishments be maintained regardless of changes to their DART that puts them below the threshold. Those original establishments should continue reporting for a minimum of ten years in order to ascertain if their DART rates are trending lower over the long term” (Ex. 1358).
On the other hand, the California Department of Industrial Relations (DIR), Office of the Director supported “increasing the stability of the system, namely, [by] not changing industries required to report” (Ex. 1395).
Finally, Thoron Bennett supported requiring establishments with 20 or more employees in all industries to report, rather than limiting the requirement to establishments with 20 or more employees on a list of designated high-hazard industries. He further commented that OSHA should “[f]orget the tiered reporting based on employment numbers or designated industries. Simply require electronic data submission for all employers who have to fill out the OSHA 300/300A/301 logs” (Ex. 0035).
OSHA agrees with the commenters who stated that the list of designated industries in appendix A to subpart E should not be updated each year. OSHA believes that moving industries in and out of appendix A to subpart E each year would be confusing. OSHA also believes that keeping the same industries in appendix A to subpart E each year will increase the stability of the system and reduce uncertainty for employers. Accordingly, OSHA will not, as part of this rulemaking, include a requirement to annually or periodically adjust the list of designated industries to reflect more recent BLS injury and illness data. Any such revision to the list of industries in appendix A to subpart E in the future would require additional notice and comment rulemaking.
The designated industries, which will be published in appendix A to subpart E of the final rule, will be as follows:
OSHA notes that 15 industries in appendix A to subpart E in the final rule were not included in proposed appendix A to subpart E. These industries are Specialty Food Stores (NAICS 4452), Vending Machine Operators (NAICS 4542), Urban Transit Systems (NAICS 4851), Interurban and Rural Bus Transportation (NAICS 4852), Taxi and Limousine Service (NAICS 4853), School and Employee Bus Transportation (NAICS 4854), Other Transit and Ground Passenger Transportation (NAICS 4859), Postal Service (NAICS 4911), Other Ambulatory Health Care Services (NAICS 6219), Community Food and Housing, and Emergency and Other Relief Services (NAICS 6242), Performing Arts Companies (NAICS 7111), Museums, Historical Sites, and Similar Institutions (NAICS 7121), RV (Recreational Vehicle) Parks and Recreational Camps (NAICS 7212), Rooming and Boarding Houses (NAICS 7213), and Special Food Services (NAICS 7223). Conversely, three industries that were included in proposed appendix A to subpart E are not included in the final Appendix A to Subpart E. These industries are Inland Water Transportation (NAICS 4832), Scenic and Sightseeing Transportation, Water (NAICS 4872), and Home Health Care Services (NAICS 6216).
The following table summarizes the changes in affected industries by using the three-year average of BLS data (2011, 2012, 2013) compared to using 2009 BLS data and provides the expected number of affected establishments in each industry based on the most recent 2012 County Business Patterns data:
In the preamble to the proposed rule, OSHA asked, “How should the electronic data submission system be designed? How can OSHA create a system that is easy to use and compatible with other electronic systems that track and report establishment-specific injury and illness data?” [78 FR 67271].
There were many comments with suggestions about the overall design of OSHA's electronic submission system. Several commenters commented that OSHA's electronic data submission system should be compatible with existing systems. The United Steelworkers (USW) commented that “[i]t is important that OSHA ensure that electronic systems put in place for this initiative are compatible with existing systems in common use. We also encourage OSHA to update their system as necessary to keep up with advances in technology and facilitate the transfer of employer data” (Ex. 1424). Rachel Armont; the California Department of Industrial Relations (DIR), Office of the Director; and Shawn Lewis provided similar comments (Exs. 0198, 1320, 1395).
The International Union (UAW) commented that “such a system should allow for employers [to] upload existing files” (Ex. 1384). Harvey Staple commented that “the states and OSHA [could] work together to develop a system whereby one entry into an electronic log could be used for multiple information reporting (
In response, OSHA notes that, because there are many commercial software products on the market for recording and managing information on workplace injuries/illnesses to support compliance with OSHA recordkeeping requirements, OSHA plans to coordinate with trade associations and health and safety consultants to identify the products in widest use. OSHA would then review available information about these products to help inform relevant considerations during development of the OSHA system for ensuring ease-of-use and compatibility with commercial products in common use.
When OSHA develops the data collection system, the Agency will consider commercial systems used by establishments to maintain their injury/illness records. This means that the Agency's system may provide a mechanism and protocol for employers to transmit their data electronically instead of completing online forms. For example, the system could allow employers to securely transfer encrypted data over the Web in an acceptable data file format (
Quick Incidents suggested the use of an Application Programming Interface (API), commenting that “Application Programming Interfaces (APIs) have gained widespread usage in the corporate world . . . Having this type of machine to machine communication ensures that data is transferred securely, accurately and quickly without any human intervention . . . An API would allow companies to connect their incident recording software directly to the OSHA reporting system. Incident reports would be transmitted seamlessly without any redundancy. For companies with an existing incident recording system this proposed API would allow
OSHA will explore this suggestion during development of the data collection system, in addition to the file transfer concept described above.
The Risk and Insurance Management Society suggested another approach, commenting that “[m]any employers have in place systems to report their injury and illness data through the Electronic Data Interchange . . . If OSHA decides to move forward with the proposed rule, then an effort should be made to accept data submitted through the current Electronic Data Interchange system” (Ex. 1222).
The International Association of Industrial Accident Boards and Commissions (IAIABC) suggested that OSHA should “consider the benefits of using the IAIABC's established First and Subsequent Reports of Injury Standard (IAIABC EDI Claims Standard). Implementation of an existing electronic standard would be much faster and easier than developing a brand new electronic reporting protocol . . . All of the IAIABC's EDI standards have been developed by workers' compensation business and technical experts and are widely used and actively supported. To date, 40 jurisdictions have implemented at least one of the IAIABC's EDI standards” (Ex. 1104).
In response, OSHA notes that IAIABC's EDI claim standards are used by many states for standardizing the submission of workers' compensation claims information. When OSHA develops the data collection system, the Agency will assess whether some variation of the standard or its basic logic might be appropriate for ensuring consistency in the submission and processing of data to OSHA.
However, the Dow Chemical Company commented that “[i]t is probably literally impossible for OSHA to design its web portal to be compatible with every electronic system that some employer may be using. Dow is not aware of any web portal that is compatible with SAP-based systems, Excel spreadsheets, Adobe Acrobat, Lotus Notes, Oracle, and the multitude of other options for keeping electronic records” (Ex. 1189).
Several commenters also expressed specific concerns about the electronic data submission system's compatibility with 301-equivalent forms. The U.S. Poultry & Egg Association commented that “OSHA does not appear to realize that many employers do not actually use the OSHA 301 Form. Instead, they use an equivalent form, often for workers compensation purposes. Presumably, OSHA would require employers to translate the information into the `301 Form' on the internet. This may not be as straightforward as OSHA makes it seem and certainly it may be more costly than OSHA anticipates. It also not only increases the risks of errors occurring in the translation but eliminates the usefulness of equivalent forms” (Ex. 1109). The National Association of Manufacturers and Littler Mendelson, P. C. provided similar comments (Exs. 1279, 1385).
OSHA's response is that, in developing the data collection system, OSHA may consider aspects of the IAIABC EDI standards that might inform and streamline data submission to the OSHA system, rather than designing the system to accept the workers' compensation forms or equivalent forms themselves. That is, because workers' compensation forms are for a specific purpose and can vary by state, the workers' compensation form data elements may not fit OSHA's reporting requirements.
The Association of Occupational Health Professionals in Healthcare (AOHP) commented about the importance of compatibility between existing systems and OSHA's electronic data submission system because “[t]he need to double enter the data is a significant concern. Double data entry was a significant concern when NIOSH was proposing the Occupational Safety Health Network (OHSN). NIOSH considered this concern and was able to create an interface to eliminate double data entry into this national database. Double data entry is costly in terms of time and the use of scarce human resources to manage these record keeping requirements (Ex. 0246). The Risk and Insurance Management Society provided a similar comment (Ex. 1222).
Several other commenters provided comments about making the electronic data submission system user-friendly. The Association of Occupational Health Professionals in Healthcare (AOHP) commented that “[c]onsideration should be given to a pilot to test the functioning of the Web site and the ease with which the data can be entered and submitted” (Ex. 0246). The California Department of Industrial Relations (DIR), Office of the Director commented that “[c]urrent OSHA guidelines for its forms are simple, easy-to-use, and are low-literacy friendly . . . Any electronic reporting system must balance the needs for uniform, easy to process data with the simplicity that paper records provided” (Ex. 1395).
The Phylmar Regulatory Roundtable (PRR) commented that “[t]he Proposed Rule calls for two methods of submitting data—use of online forms or batch submission of Excel or XML files. PRR supports this approach, as it appears to accommodate both establishment size (smaller establishments would likely use the online form) and the diverse software programs companies currently used to electronically manage injury and illness data” (Ex. 1210). The International Brotherhood of Teamsters provided a similar comment (Ex. 1381).
The Dow Chemical Company suggested that it is “vitally important for employers to receive immediate feedback as to whether their data entry was successful or unsuccessful. OSHA's web portal should respond to each and every attempt at data entry, by providing a confirmation of receipt or a confirmation of failure. The confirmation notice should describe what was received (or not received) with sufficient detail to be useful in resolving disputes in an enforcement context” (Ex. 1189).
The Allied Universal Corporation commented about potential technical issues, suggesting that “OSHA must also consider the heavy traffic flow as the submission deadline approaches, and ensure the Web site to submit electronically does not crash or cause further reporting problems” (Ex. 1192). Thoron Bennett noted another potential issue, commenting that “many companies have security measures that cause electronic reporting problems, particularly defense and research companies that safeguard their electronic information” (Ex. 0035).
Several commenters suggested that OSHA should consult on this issue with other governmental agencies that collect establishment-specific injury and illness data. Senator Tom Harkin commented that “OSHA's sister agency the Mine Safety and Health Administration (MSHA), along with other agencies like the Federal Railroad Administration (FRA) and Federal Aviation Administration (FAA), currently publish establishment-specific accident and injury and illness data. We believe that OSHA should consult with these agencies to learn about design problems and potential best practices to adopt before creating its database” (Ex. 1371). The International Brotherhood of Teamsters provided a similar comment (Ex. 1381).
In response, OSHA intends to use submitter registration, which would enable OSHA to issue a unique ID for reporting establishments. With user self-registration via an online submission form, the employer would have to complete an online registration form (available from a link on the electronic reporting system's home/login page) to obtain login information before gaining
In the preamble to the proposed rule, OSHA asked, “Should the electronic data submission system be designed to include updates? Section 1904.33(b) requires employers to update OSHA Logs to include newly-discovered recordable injuries or illnesses and to show any changes that have occurred in the classification of previously-recorded injuries and illnesses.” [78 FR 67271].
There were many comments about the benefits of allowing updates in the electronic data submission system. Several commenters noted that the data would be inaccurate without updates, because more information about cases often becomes available over time, after investigation (Exs. 1205, 1217, 1219, 1275, 1326, 1327, 1331, 1355, 1358, 1360, 1378, 1389, 1396, 1399, 1408). For example, the Pacific Maritime Association commented that “[i]t is common for an employer to record an employee's complaint at the time it is reported, prior to performing an evaluation of whether an injury has actually occurred or whether it is indeed workplace related. However, following an examination by a physician or consideration of the recordkeeping factors in Section 1904, recorded injuries regularly have to be removed or edited. The information submitted to OSHA and included on its database will be no different. Additionally, it is particularly troublesome that OSHA will base its enforcement and targeting efforts on this information, while at the same time conceding that there may be no way to update or amend information to ensure that it is accurate. Accordingly, if OSHA proceeds with this rule, PMA believes that it is imperative that this system be designed to allow for amendments” (Ex. 1326).
The U.S. Chamber of Commerce further commented that “OSHA acknowledges in its Notice for this Proposed Rule that the present recordkeeping rules require that employers update their OSHA Form 300 for five years.
Several other commenters commented that companies will look bad unfairly if an injury or illness is later found to be non-work-related and updates are not allowed. The National Marine Manufacturers Association commented that “it seems clear that companies will be held accountable for recordable incidents where either the actual cause was not under the employer's control or part of an employee's work or it is later discovered the injury was due to other causes. Based on the proposal, once these incidents are recorded and submitted to OSHA, NMMA understands that the reports cannot be amended. Both OSHA and the public would therefore have an inaccurate depiction of a company's safety record” (Ex. 1217). The National Electrical Contractors Association (NECA), Innovative Holdings of Iowa, Inc., and the Association of Union Constructors provided similar comments (Exs. 1125, 1275, 1389).
Other commenters commented that not allowing updates could lead to underreporting of marginally work-related cases. United Parcel Service, Inc. (UPS) commented that “[without updates] an employer would not want to err on the side of placing questionable entries onto the log. There would be no mechanism for striking through this data once it is publicly posted on OSHA's Web site. Rather than the rule promoting more revelations of injury and illness data, it would likely result in less data in circumstances where questions remained regarding recording of a case” (Ex. 1391). The International Warehouse Logistics Association (IWLA) provided a similar comment (Ex. 1360).
There were also commenters who opposed allowing updates. Several commenters believed that updates would be burdensome to employers. The Phylmar Regulatory Roundtable (PRR) commented that “updating quarterly submissions would be a major burden to employers. Consider the time involved for a record keeper at one establishment to communicate changes in status regarding particular injury cases on a regular basis to someone in an enterprise-level role who must then either access the online log or records to modify them or modify the enterprise database and resubmit it to the Web site” (Ex. 1110). The AFL–CIO, the International Warehouse Logistics Association (IWLA), the International Brotherhood of Teamsters, and the International Union (UAW) all provided similar comments (Exs. 1350, 1360, 1381, 1384). The Puget Sound Shipbuilders Association provided a comment that updates would be especially burdensome for certain establishments, such as those located on sea vessels (Ex. 1379).
The Dow Chemical Company commented that “[t]he system should not be designed to accept updates. This is because allowing updates is only half a step from requiring updates, and requiring updates would greatly increase the burden of the rule . . . . if the Agency ever wishes to see whether an employer has made any updates, OSHA already has the authority to pose that question to the employer—without imposing a universal obligation” (Ex. 1189).
The U.S. Chamber of Commerce commented that updates would also be burdensome for OSHA, stating that “any suggestion that OSHA will be able to keep up with this insurmountable task of maintaining an immediately accessible, accurate database is not credible” (Ex. 1396). The Pacific Maritime Association made a similar comment (Ex. 1326).
Finally, the Phylmar Regulatory Roundtable (PRR) suggested that the benefits of updates might be insignificant overall, since “[f]or large, established, legacy employers, many years of experience has shown that while updates are required by law, they are usually of minor consequence and/or correction and rarely, if ever, reflect a major and significant change in the safety performance of a company” (Ex. 1110).
Several commenters provided OSHA with suggestions about how to proceed with the question of whether or not the electronic data submission system should include updates. The American College of Occupational and Environmental Medicine (ACOEM) suggested that the system should allow but not require updates. They commented that “the accuracy of reported data could be optimized by permitting, though not requiring, employers to update their data after submission as new information becomes available about specific injuries, exposures, and diseases” (Ex. 1327). The International Brotherhood of Teamsters and Thoron Bennett provided similar comments (Exs. 0035, 1381).
Finally, the U.S. Chamber of Commerce commented that “if OSHA insists on pressing forward with a rule of this type, it must start over and reintroduce a proposed rule with an adequate system for updating submitted data that stakeholders may meaningfully consider and comment on” (Ex. 1396).
In response, OSHA agrees with the commenters who stated that allowing updates but not requiring updates would improve the accuracy of the data while limiting the burden on employers. Accurate data will help OSHA, researchers, employers, employees, and the public in their efforts to improve workplace safety and health. In addition, because the final rule requires annual submission of records for establishments with 250 or more employees, rather than quarterly submission as proposed in the NPRM, employers will be able to update information throughout the year before they certify the 300A. Annual reporting also reduces the likelihood that employers will need to update information after reporting to OSHA. Therefore, OSHA plans to design a reporting system that will allow but not require updates.
In the preamble to the proposed rule, OSHA asked, “How can OSHA use the electronic submission requirement to improve the accuracy of injury and illness records by encouraging careful reporting and recording of work-related injuries and illnesses?” [78 FR 67271].
Several commenters provided technical comments on ways for OSHA to improve the accuracy of injury and illness records collected through electronic submission. As mentioned in the previous section, many commenters commented that allowing updates could improve the accuracy of collected data (Exs. 1205, 1217, 1219, 1275, 1326, 1327, 1331, 1355, 1358, 1360, 1378, 1389, 1396, 1399, 1408). Rachel Armont further commented that “[o]n the data management side of things, perhaps [OSHA] could open up the site as a way to keep a real-time log of work-related injuries so it's not a one-time submission process” (Ex. 0198).
The Council of State and Territorial Epidemiologists (CSTE) commented that “[t]he proposed electronic collection of data, in the longer run, offers the opportunity to provide employers with electronic tools (prompts, definitions, consistency edits, and industry specific drop down lists) that have the potential to improve the quality of the data reported” (Ex. 1106). The American Federation of State, County, and Municipal Employees (AFSCME) provided a similar comment (Ex. 1103).
ORCHSE Strategies, LLC commented that OSHA should develop “a useful set of decision-making software to assist users in making accurate recordkeeping decisions. The current OSHA software does little more than summarize the text in the regulations. What is needed is software that employers can use to correctly answer their “what if” questions” (Ex. 1339).
The American College of Occupational and Environmental Medicine (ACOEM) commented that OSHA could provide “an electronic tool for employers to self-check their submitted information for recordkeeping errors and for deviance from industry averages (Ex. 1327). The American Federation of Teachers (AFT) provided a similar comment (Ex. 1358).
The American Federation of Teachers (AFT) also commented that “[t]he agency could provide training through consultation to employers on the importance and value of accurate record-keeping. Training could also be provided to trade associations, labor unions and other advocacy groups on the importance and value of encouraging employees to report their injuries and illnesses. As well, the agency might consider a special emphasis program of targeted inspections for record-keeping. The agency could target those establishments with the highest rates as well as the lowest rates to ascertain accuracy” (Ex. 1358).
Finally, the Phylmar Regulatory Roundtable (PRR) commented that “if OSHA seeks to encourage careful, accurate reporting and recording of injuries and illnesses, promulgating an
As mentioned in the previous section, OSHA agrees with the commenters who stated that allowing updates but not requiring updates would improve the accuracy of the data. Also as discussed above, although the proposed rule would have required quarterly reporting from companies with 250 or more employees, the final rule requires annual reporting. In addition, when OSHA develops the data collection system, the Agency will also incorporate a range of edit checks. Specifically, OSHA will leverage and expand on form validation routines and validation checks that were developed and refined over the years for the ODI online submission version of OSHA Form 300A (Form 196B). Edit checks can promote submission accuracy, for instance by alerting the submitter when input to a particular data field is outside the expected range or in conflict with other established parameters. The Agency also plans to program the data collection system so that, when the user logs in, the system will recognize the user and display appropriate user-specific information. For instance, for a first-time user, the system may present links for appropriate submission options (
Finally, OSHA notes that, as discussed above, § 1904.32 already requires company executives subject to part 1904 requirements to certify that they have examined the annual summary (Form 300A) and reasonably believe, based on their knowledge of the process by which the information was recorded, that the annual summary is correct and complete. OSHA recognizes that most employers are diligent in complying with this requirement. However, a minority of employers is less diligent; in recent years, one third or more of violations of § 1904.32, and up to one tenth of all recordkeeping (part 1904) violations, have involved this certification requirement. It is OSHA's hope that, if this minority of employers knows that their data must be submitted to the Agency and may also be examined by members of the public, they may pay more attention to the requirements of part 1904, which could lead both to improvements in the quality and accuracy of the information and to better compliance with § 1904.32.
In the preamble to the proposed rule, OSHA also asked, “How should OSHA design an effective quality assurance program for the electronic submission of injury and illness records?” [78 FR 67271].
Several commenters commented on how OSHA could design an effective quality assurance program for the
The International Union (UAW) commented that “[j]oint union-management methods of validating data through computerized systems have proven effective and can serve as a model for OSHA's modernization” (Ex. 1384). The American College of Occupational and Environmental Medicine (ACOEM) commented that OSHA should “increase medical record audits to assure accurate recordkeeping and reporting” and “increase the number of targeted inspections of companies deviating (positively or negatively) from the industry—norm incident and DART rates” (Ex. 1327). The American Federation of Teachers (AFT) provided similar comments (Ex. 1358).
The International Brotherhood of Teamsters commented that “OSHA may discuss [a quality assurance and audit program] with other government agencies that may have such programs. They would include FMCSA (SMS), MSHA and FRA, but could include other government agencies that receive electronic records as well” (Ex. 1381). Finally, the Coalition for Workplace Safety (CWS) commented that OSHA should implement “error screening and follow-back procedures to correct and/or verify questionable data reported” (Ex. 1411).
In response, OSHA plans to look at examples from other federal agencies. Two examples from the U.S. EPA are the Toxics Release Inventory (TRI) Program and the Greenhouse Gas Reporting Program. The TRI Program, which collects data from a wide range of facilities nationwide, takes steps to promote data quality, including analyzing data for potential errors, contacting TRI facilities concerning potentially inaccurate submissions, providing guidance on reporting requirements and, as necessary, taking enforcement actions against facilities that fail to comply with TRI requirements. For the Greenhouse Gas Reporting Program, quality assurance checks include evaluating submitted data against an extensive array of electronic checks that “flag” potential errors. For example, statistical checks are used to evaluate data from similar facilities and identify data that might be outliers. Also, algorithm checks consider the relationships between different pieces of entered information and compare the information to an expected value. These flags are then manually reviewed to assess the cause of the flag; if EPA finds a potential error, EPA follows up with the reporter. The GHGRP has given some consideration to conducting on-site audits of reporting facilities.
In addition, actions OSHA has taken in the past as part of data collection for the ODI included running programmed routines that checked establishment submissions and then, based on results, assigned a submission status code indicating whether the data submitted passed the edits and was considered usable or not usable. These routines were informed by routines the BLS used for the Survey of Occupational Injuries and Illnesses.
OSHA will form a working group with BLS to assess data quality, timeliness, accuracy, and public use of the collected data, as well as to align the collection with the BLS SOII.
In the preamble to the proposed rule, OSHA asked, “Which categories of information, from which OSHA-required form, would it be useful to publish?” [78 FR 67271].
OSHA received many comments about the benefits that would result from publishing all of the information that OSHA collects, except for PII, including improved research and analysis of injury and illness trends, improved motivation for employers to provide safe workplaces, more information for employees and potential employees, more information for customers and the public, injury and illness prevention, and various other benefits.
For improved research and analysis of injury and illness trends, there were many comments that publication of this information would allow employers, workers, researchers, unions, and the public to improve workplace safety by providing the data for better research and analysis of injury and illness trends (Exs. 0245, 0254, 1110, 1203, 1207, 1208, 1219, 1278, 1345, 1350, 1354, 1371, 1380, 1381, 1387, 1388, 1393, 1395, 1424). For example, the United Food & Commercial Workers International Union (UFCW) commented that publication of data would “enable the public, unions, employees, and other employers to search and analyze the data. Further, by making the data available electronically from OSHA, interested parties can much more easily analyze trends, assess effective health and safety programs and track ongoing hazards by establishment, enterprise and industry” (Ex. 1345). Andrew Sutton provided a similar comment (Ex. 0245).
There were also comments that publication of this data would improve the occupational safety and health surveillance capacity of the United States. The Council of State and Territorial Epidemiologists (CSTE) commented that “OSHA's proposal to electronically collect and make available the data employers already record on work-related injuries and illnesses would substantially enhance occupational health surveillance capacity in the United States” (Ex. 1106). The California Department of Industrial Relations (DIR), Office of the Director provided a similar comment (Ex. 1395).
Several commenters also commented that publication of the data would particularly help with identifying emerging hazards (Exs. 1106, 1211, 1327, 1330, 1347, 1371, 1382). For example, the Council of State and Territorial Epidemiologists (CSTE) commented that publication of establishment-level data “has the potential to facilitate timely identification of emerging hazards. These include both new and newly recognized hazards. A relatively recent case example is illustrative. In 2010, the Michigan Fatality Assessment and Control Evaluation program identified three deaths associated with bath tub refinishing, raising new concern about hazards of chemical strippers used in this process . . . These findings led to the development of educational information about the hazards associated with tub refinishing and approaches to reducing risks that was disseminated nationwide to companies and workers in the industry” (Ex. 1106).
For increased motivation for employers to provide safer workplaces, there were several comments that publication of the data would allow companies to benchmark their safety and health performance against similar companies (Exs. 0241, 0245, 1106, 1126, 1278, 1327, 1341, 1358, 1371, 1381, 1387, 1393). For example, the American Industrial Hygiene Association (AIHA) commented that data publication “should also enable employers to benchmark against others in their industry. The sharing of statistics could also identify solid performers who might help others upgrade their processes and outcomes” (Ex. 1126). Senator Tom Harkin made a similar comment (Ex. 1371).
Michael Houlihan further commented that “the disclosure requirement may improve the performance of managers
For more information for employees and potential employees, there were multiple comments that publication of the data would allow employees to use the data to make better decisions about where to work (Exs. 0145, 1219, 1278, 1327, 1341, 1350, 1371, 1395). For example, Worksafe commented that “electronic posting by OSHA of information related to fatality and injury and illness incidents would allow individuals who may be considering employment to assess the types, severity, and frequency of injuries and illnesses of a particular firm or workplace” (Ex. 1278). Professor Sherry Brandt-Rauf of the School of Public Health at the University of Illinois at Chicago provided a similar comment (Ex. 1341).
Many commenters stated that data publication would be especially helpful because employees would be able to get safety and health data from their workplace anonymously and without fear of retaliation (Exs. 1188, 1211, 1278, 1345, 1381, 1387, 1388, 1393, 1424). For example, the Southern Poverty Law Center commented that “[e]ven an employee's simple request to view an OSHA 300 log
For more information for customers and the public, there were comments that publication of the data could help customers and the public decide whom to do business with (Exs. 0248, 1114, 1278, 1327, 1341, 1371, 1395). For example, Worksafe commented that “there are potential benefits for current or potential suppliers, contractors for, and purchasers of a firm's goods or services. These parties would have the opportunity to consider the information in their business decisions, such as how a supplier's injury and illness experience would reflect on their own business” (Ex. 1278). Senator Tom Harkin also commented that data publication “may be of use not just to the public, but also by contracting officers at federal agencies when assessing prospective contractors' safety performance” (Ex. 1371).
For prevention of workplace injuries and illnesses, NIOSH commented that “electronically-collected and stored injury and illness data can be an asset to establishments/employers for planning prevention intervention activities” (Ex. 0216). The AFL–CIO made a similar comment (Ex. 1350).
The New York States Nurses Association commented that “having this data and information would greatly improve the ability to research trends which may contribute to preventing and mitigating workplace violence injuries” (Ex. 0254). The AFL–CIO provided a similar comment (Ex. 1350). The United Food & Commercial Workers International Union (UFCW) emphasized the role that labor unions could play in such research, commenting that “[a]nalysis of the information can identify trends among and between companies, and at specific sites within one company . . . Plant management in one location may be using effective strategies that result in a decrease in injuries and illnesses; these effective strategies can be passed on to sister plants in the same company. By examining other establishments' OSHA injury and illness data for those without declining injury rates, the [UFCW] has been able to target areas for improved prevention strategies” (Ex. 1345). The Service Employees International Union (SEIU) provided a similar comment (Ex. 1387).
The California Department of Industrial Relations (DIR), Office of the Director commented that the proposed rule “would specifically help identify and abate workplace hazards by improving the surveillance of occupational injury and illness. Complete and accurate surveillance of occupational injury and illness is essential for informed policy decisions and for effective intervention and prevention programs” (Ex. 1395). The Council of State and Territorial Epidemiologists (CSTE) provided a similar comment (Ex. 1106).
There were also comments about various other benefits of data publication. Lancaster Safety Consulting, Inc. commented that “[o]nline access to the injury and illness data will provide a means for occupational safety and health (OSH) professionals to reach out to companies that are in apparent need of assistance with their OSH programs” (Ex. 0022). The Council of State and Territorial Epidemiologists (CSTE) and the International Brotherhood of Teamsters provided similar comments (Exs. 1106, 1381).
Several commenters commented that data publication would make it easier for labor unions to access safety and health data when representing workers (Exs. 0245, 1209, 1350, 1381, 1387, 1424). For example, the AFL–CIO commented that “[i]t will assist unions in their efforts to collect injury and illness information from employers to assess conditions in individual workplaces and across employers and industries where they represent workers. Many unions already collect this information under their rights of access under the recordkeeping rule. But currently, this information must be requested and collected establishment by establishment, making the collection and analysis of this data difficult and time consuming and hindering prevention efforts” (Ex. 1350). The Council of State and Territorial Epidemiologists (CSTE) commented about the benefits for community health planning, stating that “[t]he availability of establishment specific information also offers a potential opportunity to incorporate occupational health concerns in community health planning, which is increasingly providing the basis for setting community health and prevention priorities” (Ex. 1106). Finally, the International Brotherhood of Teamsters commented that “[g]iven the difficulties that both union and non-union workers face, and OSHA's inability to fully enforce the 1904 rules, the public release of the data is actually necessitated since it would allow workers to have a subsidiary role in “enforcing” those requirements” (Ex. 1381).
On the other hand, the Interstate Natural Gas Association of America commented the “[i]njury and illness data contained in 300–A Summaries is the only information that may be useful, but this information is limited” (Ex. 1206).
In response, OSHA agrees with the commenters above who commented that the benefits that would result from publishing all of the information that OSHA collects, except for PII, include improved research and analysis of injury and illness trends, improved motivation for employers to provide safe workplaces, more information for employees and potential employees, more information for customers and the public, and injury and illness prevention.
There were also many comments that publishing the data would not be beneficial for various reasons, including the misleading nature of the published data and a focus on lagging instead of leading indicators.
For the misleading nature of the published data, many commenters commented that the published data will be misleading because the data do not tell the whole story and do not provide any context (Exs. 0138, 0162, 0163, 0171, 0174, 0179, 0181, 0188, 0189, 0194, 0218, 0224, 0234, 0242, 0255, 0256, 0258, 1084, 1090, 1091, 1092, 1093, 1109, 1111, 1112, 1113, 1116, 1123, 1187, 1190, 1192, 1193, 1194, 1195, 1196, 1198, 1199, 1200, 1201, 1204, 1205, 1206, 1210, 1214, 1215, 1217, 1218, 1222, 1225, 1272, 1273, 1275, 1276, 1279, 1318, 1321, 1322, 1323, 1324, 1326, 1327, 1328, 1329, 1332, 1333, 1334, 1336, 1338, 1340, 1342, 1343, 1349, 1355, 1356, 1359, 1360, 1363, 1364, 1365, 1368, 1370, 1373, 1376, 1378, 1379, 1385, 1386, 1389, 1390, 1391, 1392, 1394, 1396, 1397, 1399, 1400, 1402, 1406, 1408, 1409, 1410, 1411, 1416, 1426).
For example, the Coalition for Workplace Safety (CWS) commented that “[t]he data that OSHA will collect and make publicly available is not a reliable measure of an employer's safety record or its efforts to promote a safe work environment. Many factors outside of an employer's control contribute to workplace accidents, and many injuries that have no bearing on an employer's safety program must be recorded. Data about a specific incident is meaningless without information about the employer's injuries and illness rates over time as compared to similarly sized companies in the same industry facing the same challenges (even similar companies in the same industry may face substantially different challenges with respect to workplace safety based on climate, topography, population density, workforce demographics, criminal activity in the region, proximity and quality of medical care, etc.)” (Ex. 1411). The National Association of Manufacturers (NAM) provided a similar comment (Ex. 1279).
Many commenters also commented on a related concern that OSHA should not publish the data since the public will misinterpret the data (Exs. 0027, 0143, 0152, 0159, 0160, 0189, 0197, 0210, 0211, 0218, 0224, 0239, 0240, 0242, 0251, 0253, 0255, 0256, 0258, 1084, 1090, 1091, 1092, 1093, 1109, 1111, 1112, 1113, 1123, 1124, 1125, 1191, 1192, 1194, 1197, 1199, 1200, 1205, 1210, 1214, 1215, 1217, 1218, 1224, 1225, 1272, 1273, 1275, 1276, 1279, 1322, 1326, 1327, 1329, 1332, 1333, 1334, 1336, 1338, 1340, 1343, 1344, 1359, 1368, 1370, 1372, 1379, 1389, 1391, 1396, 1397, 1399, 1400, 1408, 1410, 1413, 1415, 1416). For example, the American Foundry Society commented that “[t]he public . . . could take the injury and illness data out of context, as they would not be privy to the details behind the injuries, the safety measures employers adopt, or any other relevant information related to the circumstances of the injury or illness” (Ex. 1397). The Puget Sound Shipbuilders Association also commented that “[w]e are concerned about the level of knowledge and understanding the general public has about OSHA recordable cases and believe it is very limited” (Ex. 1379).
Finally, there were comments that recordkeeping data collected under the proposed rule would not improve workplace safety and health since they are lagging indicators (Exs. 0163, 0250, 1194, 1279, 1342, 1363, 1389, 1408, 1410) and that leading indicators are necessary to improve future workplace safety and health outcomes (Exs. 0027, 0053, 0162, 0163, 0197, 1204, 1279, 1331, 1339, 1342, 1363, 1389, 1406, 1408, 1410, 1416, 1417).
For example, the Mechanical Contractors Association of America (MCAA) commented that “that lagging indicators, such as OSHA Incidence Rates, are poor indicators of safety performance. Many occupational safety and health professionals share this belief. For example, The American National Standards Institute's (ANSI) A10 Construction and Demolition Operations Committee is currently working on a technical report to help educate government agencies, construction owners, and construction employers about the relative ineffectiveness of lagging indicators” (Ex. 1363). The National Association of Manufacturers made a similar comment (Ex. 1279).
The National Association of Home Builders (NAHB) commented that “[l]eading indicators measure what`s happening right now and may be a better gauge of safety performance. The leading indicators attempt [to] measure safety performance by utilizing tools such as tracking safe or unsafe behaviors or workers, investigating near-miss incidents, performing workplace audits and inspections, and conducting safety training” (Ex. 1408).
The American Society of Safety Engineers (ASSE) commented that “ASSE and other leading safety and health organizations have put considerable work into developing resources and encouraging companies to move away from `trailing' and towards `leading' indicators for evaluating workplace safety. As OSHA itself knows, `trailing' indicators focus an organization on safety after the fact of an injury or fatality. `Leading' indicators better focus an organization on the best practices that prevent injuries and fatalities” (Ex. 1204). However, the Environmental, Health & Safety Communications Panel (EHSCP) commented that OSHA should promote “a balance of leading and lagging measures” to measure safety performance (Ex. 1331). The National Rural Electric Cooperative Association (NRECA) provided a similar comment (Ex. 1417).
Several commenters also commented that the proposed rule could harm workplace safety and health by shifting employers' focus from leading indicators to lagging indicators (Exs. 0027, 0157, 0163, 1109, 1124, 1194, 1204, 1372, 1389, 1406, 1408, 1410, 1416). For example, the American Society of Safety Engineers (ASSE) commented that “[p]ublic release of numbers and rates of injuries by establishment will cause many employers to use their resources to address `trailing,' not `leading' indicators . . . ASSE is concerned that this proposal, and the additional attention that a national database of injury rates and numbers will attract, works against the professions' [sic] years of effort in moving workplace safety towards `leading' indicators” (Ex. 1204). The American Feed Industry Association made a similar comment (Ex. 1372).
In response, OSHA does not agree that the publishing of recordkeeping data under this final rule will be misleading or that the public will misinterpret the data. The recordkeeping data represent real injuries and illnesses (injuries and illnesses that required more than first aid) that occurred at the workplace and were recordable under part 1904. While they do not, by themselves, provide a complete picture of workplace safety and health at that workplace, employers are free to post their own materials to provide context and explain their workplace safety and health programs. In addition, when OSHA publishes the data, the Agency will provide links to resources, such as industry rates from BLS, to help the public put the information in context. OSHA will also include language explaining the definitions and limitations of the data, as OSHA has done since the Agency began publishing establishment-specific injury and illness data from the OSHA Data Initiative on its public Web site in 2009. For the published ODI data, OSHA has included the following explanatory note on data quality: “While OSHA takes multiple steps to ensure the data collected is accurate, problems and errors invariably exist for a small percentage of establishments. OSHA does not believe the data for the
Similarly, OSHA does not agree that the part 1904 recordkeeping data will not improve workplace safety and health due to being lagging indicators instead of leading indicators. As stated above, the recordkeeping data represent real injuries and illnesses that occurred at the workplace and were recordable. In addition, as stated above, employers are free to post their own materials—including leading indicators—to provide context and explain their workplace safety and health programs. However, perhaps in a future rulemaking related to recordkeeping, OSHA might request information about leading indicators, including which leading indicators (if any) it would be most useful to add to the injury and illness records employers are required to keep under part 1904.
As discussed above, OSHA intends to make the data it collects public. The publication of specific data elements will in part be restricted by applicable federal law, including provisions under the Freedom of Information Act (FOIA), as well as specific provisions within part 1904. OSHA will make the following data from the various forms available in a searchable online database:
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In the preamble to the proposed rule, OSHA asked, “What analytical tools could be developed and provided to employers to increase their ability to effectively use the injury and illness data they submit electronically?” [78 FR 67271].
There were several comments about analytical tools that could be developed and provided to employers to increase their ability to effectively use the injury and illness data they submit electronically. NIOSH commented about their current pilot project that provides employers with a tool to analyze their safety and health data, stating, “NIOSH developed a web-portal and information system that accepts traumatic injury data electronically, including the fields/characteristics recorded on OSHA Form 300 . . . Participating establishments send all data voluntarily. The system does not accept personal data. Establishments are not identified and comparison data are in aggregate form. After receipt, the data undergo quality checks and are uploaded to an analyzable database that is available to the establishment via the web-portal in seven to 10 days. The establishment can use the online system to examine its injury patterns over time and to compare its rates with other establishments by size, region, type, and other variables. In addition, the system provides users with information on best practices for the industry, injury-reduction interventions, and other up-to-date health and safety information” (Ex. 0216). The American College of Occupational and Environmental Medicine (ACOEM) also commented about the desirability of a tool similar to the one that NIOSH is piloting (Ex. 1327).
The International Brotherhood of Teamsters commented that “two of our employers use injury/illness tracking systems to collect and record all OSHA-recordable occupational injuries/illnesses. We would encourage OSHA to provide tools that would bolster and enhance employer efforts aimed at preventing injuries and illnesses. These tools could be useful to our membership as well, especially at establishments that have joint labor- management health and safety committees” (Ex. 1381).
The International Association of Industrial Accident Boards and Commissions (IAIABC) commented that if OSHA “adopts an electronic reporting requirement, the IAIABC urges OSHA to consider the benefits of using the IAIABC's established First and Subsequent Reports of Injury Standard (IAIABC EDI Claims Standard). Implementation of an existing electronic standard would be much faster and easier than developing a brand new electronic reporting protocol. The IAIABC EDI Claims Standard fully supports differing types of transactions including new reports, updates/corrections to previous submissions, and even has the capacity to limit what data can be modified after it has been submitted. Furthermore, the IAIABC EDI Claims Standard includes an `upon request' type of report which OSHA has indicated a potential need to support” (Ex. 1104).
In response, OSHA notes that, in 2011, IAIABC and NIOSH signed a memorandum of understanding that outlined opportunities for collaboration, including utilizing workers' compensation data to identify emerging issues and trends in occupational safety and health. In addition, EPA's Toxics Release Inventory (TRI) Program provides a range of analytical tools that include the TRI Pollution Prevention (P2) Tool (users can explore and compare facility and parent company
OSHA is considering including reporting capabilities in future versions of the data collection system, so that employers can view useful outputs from their submitted data (
In the preamble to the proposed rule, OSHA also asked, “How can OSHA help employees and potential employees use the data collected under this proposed rule?” [78 FR 67271].
There were various comments about how OSHA could help employees and potential employees use the data collected under this rule. Many commenters supported provision of the data in a way that allows for easy analysis of the information. For example, the California Department of Industrial Relations (DIR), Office of the Director commented that “data sharing needs to be timely, user-friendly, user-accessible, and searchable by common fields including geography (ideally to county level or smaller), employer, and industry. Industry codes should be uniform and up-to-date. Posted data should ensure entity resolution and easy searching by establishment name. Multiple establishments that are the same company should be identifiable as a single company. Employees, employers, researchers, and community members all have different uses for the data, and each should be taken into account. The underlying data (once cleaned of personally identifiable information) should be downloadable (similar to American Fact Finder) for manipulation and statistical calculations” (Ex. 1395). The AFL–CIO, Senator Tom Harkin, Change to Win, the Service Employees International Union (SEIU), and the United Steelworkers provided similar comments (Exs. 1350, 1371, 1380, 1387, 1424).
Senator Harkin also commented that OSHA's “sister agency the Mine Safety and Health Administration (MSHA), along with other agencies like the Federal Railroad Administration (FRA) and Federal Aviation Administration (FAA), currently publish establishment-specific accident and injury and illness data. We believe that OSHA should consult with these agencies to learn about design problems and potential best practices to adopt before creating its database” (Ex. 1371). The Service Employees International Union (SEIU) provided a similar comment (Ex. 1387).
Other commenters had other ideas. For example, the Council of State and Territorial Epidemiologists (CSTE) commented that “[s]tandardized feedback to establishments and potential reports of establishment specific data could be programmed that would promote use of the data by employers and workers to set health and safety priorities and monitor progress in reducing workplace risks” (Ex. 1106).
The Building and Construction Trades Department, AFL–CIO commented that “the data should be organized and made available in different formats for different data users. For example, an individual employee may be interested in the establishment for which he/she works, while a researcher is more likely to get statistics in general. Therefore, the new data collection should include multiple levels of data access to meet different needs” (Ex. 1346).
In response, when OSHA develops the publicly-accessible Web site, the Agency will make the raw data available in multiple formats (after it has been scrubbed of PII) for use by employers, employees, researchers, and the public in evaluating opportunities to address workplace safety and health. The Agency may also provide reporting and analytics tools for employers to view useful outputs from their submitted data (
In the preamble to the proposed rule, OSHA asked, “How can OSHA help employers, especially small-business employers, to comply with the requirements of electronic data submission of their injury and illness records? Would training help, and if so, what kind?” [78 FR 67271].
There were five major issues addressed by commenters about how to help small employers comply with electronic data submission requirements: General characteristics of a system that would help small-business employers comply with electronic data submission requirements; capability for immediate feedback; connecting the recordkeeping system with the reporting system; training and outreach; and third-party capability.
For general characteristics, several commenters commented that careful overall design of its Web site and other technical support could help employers, especially small-business employers, comply with the requirements of electronic data submission. The Phylmar Regulatory Roundtable (PRR) commented that “the `user friendliness' of the Web site will be the key to success for this electronic data submission program. It should have an extensive and strong help menu, as well as a go-to phone number (as is currently provided in the BLS data request) for help with the system. A universal data language must be provided (
For immediate feedback after data submission, the Dow Chemical Company commented that “OSHA is proposing to require electronic reporting by strict deadlines. It is therefore vitally important for employers to receive immediate feedback as to whether their data entry was successful or unsuccessful. OSHA's web portal should respond to each and every attempt at data entry, by providing a confirmation of receipt or a confirmation of failure. The confirmation notice should describe
For connecting the recordkeeping and reporting systems, the AFL–CIO commented that “[t]o assist smaller employers in reporting workplace injury and illness data electronically, it would helpful for OSHA to provide basic software for workplace injury and illness recordkeeping from which the data can be easily uploaded/reported to OSHA through a secure Web site as OSHA envisions” (Ex. 1350). Ashok Chandran provided a similar comment, suggesting that OSHA provide “a mobile application that employers could use to submit their records” and “a web portal that allows employers to enter data directly” (Ex. 1393).
For outreach and training, the Allied Universal Corporation commented that “OSHA should also develop a training program [about the requirements of electronic data submission], hosting webinars or similar events across the United States and reach out to many trade associations” (Ex. 1192). The International Association of Industrial Accident Boards and Commissions (IAIABC) and the American Subcontractors Association (ASA) provided similar comments (Exs. 1104, 1322).
Other commenters commented that training on current OSHA requirements would also be helpful. The California Department of Industrial Relations (DIR), Office of the Director commented that “many employers could benefit from outreach and education on how and what to report, including reference to 29 CFR 1904.31, employees covered by the OSHA recordkeeping standard” (Ex. 1395). The Associated General Contractors of America (AGC) provided a similar comment (Ex. 1416).
For third-party capability, Veriforce also commented that third-party electronic submission capabilities could be helpful for employers. They commented that pipeline industry contractors could be helped if “3rd party companies with contractor permission [could] electronically upload [the contractor's] data into the new OSHA Injuries and Illnesses reporting Web site[.] It will become more difficult for contractors to have to continue to report electronically to 3rd party companies and then now have to enter the same information into this new OSHA system when the 3rd party companies which have a contract with the contractor can just electronically forward the information to the this new OSHA Web site” (Ex. 0243).
In addition to the comments related to the five major issues, some commenters commented with other ideas about how OSHA could help small-business employers comply with the new requirements. The United Food & Commercial Workers International Union (UFCW) commented that they support “making the new reporting requirements as simple as possible . . . In the UFCW's experience, keeping the requests as simple as possible for all of our employers (including those who fall into the smaller business category), results in greater data acquisition” (Ex. 1345). In addition, some commenters included comments about a phase-in period being helpful to employers, which were addressed above in comments to Alternatives C and D (Exs. 0210, 1104, 1322, 1401).
In response to these comments, when OSHA develops the data collection system, the Agency will make every effort to ensure ease of use with small-business employers in mind. To the extent possible, features will be incorporated to minimize the number of keystrokes and mouse-clicks required to complete a form (
In addition, OSHA plans to incorporate as many helper features as possible (
For third-party capability, if a small business, for instance, enlists a third-party (
Finally, OSHA will phase in implementation of the data collection system. In the first year, all establishments required to routinely submit information under the final rule will be required to submit only the information from the Form 300A (by July 1, 2017). In the second year, all establishments required to routinely submit under the final rule will be required to submit all of the required information (by July 1, 2018). This means that, in the second year, establishments with 250 or more employees that are required to routinely submit information under the final rule will be responsible for submitting information from the Forms 300, 301, and 300A. In the third year, all establishments required to routinely submit under this final rule will be required to submit all of the required information (by March 2, 2019). This means that beginning in the third year (2019), establishments with 250 or more employees will be responsible for submitting information from the Forms 300, 301, and 300A, and establishments with 20–249 employees in an industry listed in appendix A to subpart E of part 1904 will be responsible for submitting information from the Form 300A by March 2 each year. This will provide sufficient time to ensure comprehensive outreach and compliance assistance in advance of implementation.
In the preamble to the proposed rule, OSHA asked, “Should this data collection be limited to the records required under Part 1904? Are there other required OSHA records that could be collected and made available to the public in order to improve workplace safety and health?” [78 FR 67271].
Some commenters commented that OSHA should limit this rule to the collection of part 1904 data while making the rule flexible enough to allow for the collection of other information in the future. For example, the International Brotherhood of Teamsters commented that “[t]his rule should be limited to the 1904 data. However, OSHA should consider making this rule flexible enough to allow it to require reporting the other kinds of information in the future, particularly specific records (such as employee exposure data) that are already required by various OSHA standards. This would provide a better measure/indication of health risks faced by workers. In addition, OSHA may also wish to require employers to report other records currently mandated under other existing OSHA standards, such as employer reports of incidents investigated under the Process Safety Management (PSM) standard. The
The American College of Occupational and Environmental Medicine (ACOEM) also commented about the collection of more data in the future, stating that “[OSHA should] collaborate with the Bureau of Labor Statistics and The Council for State and Territorial Epidemiologists to publicize a broader suite of occupational health indicators, which, taken together, would provide a better picture of the true burden of occupational safety and health in the United States” (Ex. 1327).
However, the Phylmar Regulatory Roundtable (PRR) commented that “data collection should be limited to the records required under Part 1904” (Ex. 1110).
OSHA agrees that the scope of the final rule should be the same as the scope of the proposed rule and include only the records required under part 1904. While OSHA notes some advantages for the collection of other data, the Agency believes that it did not receive enough information on this issue during this rulemaking to include such a requirement in the final rule. However, OSHA is open to considering additional data collection ideas for future rulemakings.
Several commenters stated that OSHA lacks the statutory authority under the OSH Act to make raw injury and illness data available to the general public (Exs. 0218, 0224, 0240, 1084, 1093, 1123, 1198, 1218, 1225, 1272, 1279, 1332, 1336, 1342, 1344, 1356, 1359, 1360, 1372, 1385, 1393, 1394, 1396, 1404, 1408, 1411, 1412). These commenters acknowledged that Sections 8 and 24 of the OSH Act provide the Secretary of Labor with authority to issue regulations requiring employers to maintain accurate records of work-related injuries and illnesses. However, according to these commenters, nothing in the OSH Act authorizes OSHA to publish establishment-specific injury and illness records outside the employer's own workplace.
The U.S. Chamber of Commerce commented:
A fundamental axiom of the regulatory process is that an agency must have statutory authority for any rule which it wishes to promulgate.
Each of these sections upon which OSHA relies states that the information that OSHA is empowered to collect is for the use of the Secretary of Labor and the Secretary of Health and Human Services . . . Conspicuously absent from these provisions is any mention, let alone express or implied authority, that OSHA may create an online database meant for the public dissemination of an employer's injury and illness records containing confidential and proprietary information. Had Congress envisioned or intended that the Secretary of Labor would have the authority to publish this information it surely would have so provided. But of course, it did not and has not. (Ex. 1396)
The National Association of Manufacturers commented that Section 8(g)(1) of the OSH Act specifically and uniquely limits the information OSHA may publish to information that is “`compiled and analyzed.' This does not mean that OSHA can publish raw data from employer injury and illness records, but rather that it can compile information, analyze it, and then publish its analysis of the information in either summary or detailed form” (Ex. 1279).
NAM also commented that while the OSH Act does explicitly give OSHA the authority to release some information, the Act does not expressly permit the public release of recordkeeping data:
Section 8(c)(2) merely grants the Secretary the authority to promulgate regulations requiring employers to maintain injury and illness records. Nothing in this section expressly grants authority for the public dissemination of such information. 29 U.S.C. 657(c).
Moreover, had Congress intended to make such information available to the public they know how to do so. In various other sections of the OSH Act Congress explicitly granted authority requiring that other types of records be made available to the public. For example, section 12(g) requires the U.S. Occupational Safety and Health Review Commission records to be made publicly available. 29 U.S.C. 661(g).
In contrast, several commenters stated that the OSH Act does provide OSHA with authority to issue this final rule (Exs. 1208, 1209, 1211, 1219, 1371, 1382, 1424). Specifically, OSHA received comments from four members of Congress on this issue. A letter signed by Senator Tom Harkin, Senator Robert Casey, Representative George Miller, and Representative Joe Courtney stated:
When Congress passed the OSH Act, it expressly stated that the purpose of the law was `to assure so far as possible every working man and woman in the Nation safe and healthful working conditions.' 29 U.S.C. 651(b). In order to effectuate this purpose, the Secretary of Labor was given the authority to issue regulations `requiring employers to maintain accurate records of, and to make periodic reports on, work-related deaths, injuries and illnesses.' 29 U.S.C. 657(c)(2). Additionally, the Secretary `shall develop and maintain an effective program of collection, compilation, and analysis of occupational safety and health statistics.' 29 U.S.C. 673(a).
It is clear from the plain language of the OSH Act that Congress intended for OSHA to acquire and maintain accurate records from employers regarding workplace injuries and illnesses for the purpose of protecting workers' safety and health. This proposed rule not only improves upon the current system of reporting and tracking injuries and illnesses, it further strengthens the ability of OSHA to live up to its statutory mandate to ensure that workers have healthy and safe workplaces . . .
We agree with OSHA's proposal to post reported injury and illness data online so that employees, employers, researchers, consumers, government agencies, and other interested parties have easy access to that important information. This increased access to injury and illness data will allow employers to measure themselves against other employers' safety records so they know when they need to make improvements. Employees will similarly have greater knowledge about the hazards in their workplace and their employer's previous health and safety history . . . (Ex. 1371).
Additionally, Ashok Chandran commented, “The proposed regulation in no way expands the substantive information employers must provide to OSHA. 29 CFR 1904 already requires employers to report injuries resulting in death, loss of consciousness, days away from work, restriction of work, transfer to another job, medical treatment other than first aid, or diagnosis of a significant injury or illness by a physician or other licensed health care professional. For over 40 years now, OSHA has been collecting injury reports without incident. Thus any challenges to the legality of this data collection must fail” (Ex. 1393).
OSHA believes that the OSH Act provides statutory authority for OSHA to issue this final rule. As explained in the Legal Authority section of this preamble, the following provisions of the OSH Act give the Secretary of Labor broad authority to issue regulations that address the recording and reporting of occupational injuries and illnesses.
Section 2(b)(12) of the Act states that one of the purposes of the OSH Act is
Section 8(c)(1) requires each employer to “make, keep and preserve, and make available to the Secretary . . . such records . . . prescribe[d] by regulation as necessary or appropriate for the enforcement of th[e] Act or for developing information regarding the causes and prevention of occupational accidents and illnesses.” 29 U.S.C. 657(c)(1). The authorization to the Secretary to prescribe such recordkeeping regulations as he considers “necessary or appropriate” emphasizes the breadth of the Secretary's discretion in implementing the OSH Act. Section 8(c)(2) further provides that the “Secretary . . . shall prescribe regulations requiring employers to maintain accurate records of, and to make periodic reports on, work-related deaths, injuries and illnesses.” 29 U.S.C. 657(c)(2).
Section 8(g)(1) authorizes the Secretary “to compile, analyze, and publish, whether in summary or detailed form, all reports or information obtained under this section.” Section 8(g)(2) of the Act generally empowers the Secretary “to prescribe such rules and regulations as he may deem necessary to carry out his responsibilities under th[e] Act.” 29 U.S.C. 657(g)(2).
Section 24 contains a similar grant of regulatory authority. Section 24(a) states that “the Secretary . . . shall develop and maintain an effective program of collection, compilation and analysis of occupational safety and health statistics . . . [and] shall compile accurate statistics on work injuries and illnesses.” 29 U.S.C. 673(a). Section 24(e) provides that “[o]n the basis of the records made and kept pursuant to section 8(c) of th[e] Act, employers shall file such reports with the Secretary as he shall prescribe by regulation, as necessary to carry out his functions under th[e] Act.” 29 U.S.C. 673(e).
OSHA has made the determination that the provisions in this final rule requiring electronic submission and publication of injury and illness recordkeeping data are “necessary and appropriate” for the enforcement of the OSH Act and for gathering information regarding the causes or prevention of occupational accidents or illnesses. Where an agency is authorized to prescribe regulations “necessary” to implement a statutory provision or purpose, a regulation promulgated under such authority is valid “so long it is reasonably related to the enabling legislation.”
The Supreme Court recognizes a “familiar canon of statutory construction that remedial legislation should be construed broadly to effectuate its purposes.”
OSHA notes that not only are such recordkeeping regulations expressly called for by the language of Sections 8 and 24, but they are also consistent with Congressional intent and the purpose of the OSH Act. The legislative history of the OSH Act reflects Congress' concern about harm resulting to employees in workplaces with incomplete records of occupational injuries and illnesses. Most notably, a report of the Senate Committee on Labor and Public Welfare stated that “[F]ull and accurate information is a precondition for meaningful administration of an occupational safety and health program.” S. Rep. No. 91–1282, at 16 (1970),
OSHA further notes that, contrary to comments made by some commenters, and as explained elsewhere in this preamble, the final rule will not result in the publication of raw injury and illness recordkeeping data or the release of records containing personally identifiable information or confidential commercial and/or proprietary information. The release or publication of submitted injury and illness recordkeeping data will be conducted in accordance with applicable federal law. (
Some commenters stated that the proposed rule would violate the First Amendment of the U.S. Constitution because it would force employers to submit their confidential and proprietary information for publication on a publicly available government online database (Exs. 1360, 1396). These commenters noted that the First Amendment protects both the right to speak and the right to refrain from speaking.
The U.S. Chamber of Commerce commented:
While OSHA's stated goal of using the information it collects from employers “to improve workplace safety and health,” 78 FR at 67,254, is unobjectionable, “significant encroachments on First Amendment rights of the sort that compelled disclosure imposes cannot be justified by a mere showing of some legitimate governmental interest.”
Once subjected to strict scrutiny, the publication provision of this Proposed Rule must fail because it is not narrowly tailored towards accomplishing a compelling government interest.
On the other hand, Logan Gowdey commented that recordkeeping data has been collected by OSHA in the past through the OSHA Data Initiative (ODI).
In response, OSHA disagrees with the Chamber's comment that this rulemaking violates the First Amendment. OSHA notes that, contrary to the Chamber's comment, the decision in
In
This final rule only requires disclosure of purely factual and uncontroversial workplace injury and illness records that are already kept by employers. The rule does not violate the First Amendment because disclosure of workplace injury and illness records is reasonably related to the government's interest in assuring “so far as possible every working man and woman in the Nation safe and healthful working conditions.” 29 U.S.C. 651(b). The remainder of the Chamber's comment deals with “essential rights” that do not encompass an employer's minimal interest in non-disclosure of purely factual and uncontroversial information.
The U.S. Chamber of Commerce commented that, while OSHA addressed some issues related to the Fourth Amendment to the U.S. Constitution in the preamble to the proposed rule, the Agency neglected to consider other issues. Specifically, the Chamber stated that:
The Notice for this Proposed Rule cites several cases that OSHA asserts confirm that the requirement to report injury and illness records comports with the Fourth Amendment's prohibition against unreasonable searches and seizures. 78 FR at 67,255–56. In making this preemptive defense, however, OSHA has neglected to address the more pressing Fourth Amendment problem with this Proposed Rule: That OSHA's use of the information collected for enforcement purposes will fail to constitute a “neutral administrative scheme” and will thus violate the Supreme Court's holding in
Additionally, the Chamber stated that the raw data to be collected under the proposed rule would fail to provide any defensible neutral predicate for enforcement decisions: “Under this Proposed Rule, OSHA will be able to target any employer that submits a reportable injury or illness for any reason the agency chooses, or for no reason at all, under this unlimited discretion it has sought to grant itself to `identify workplaces where workers are at great risk’ ”
In response, OSHA notes that
Moreover, the final rule is limited in scope and leaves OSHA with limited discretion. The recordkeeping information required to be submitted is highly relevant to accomplishing OSHA's mission. The submission of recordkeeping data is accomplished through remote electronic transmittal, without any intrusion of the employer's premises by OSHA, and is not unduly burdensome. Also, all of the injury and illness information required to be submitted is taken from records employers are already required to create, maintain, post, and provide to employees, employee representatives, and government officials upon request, which means the employer has a reduced expectation of privacy in the information.
With respect to the issue of enforcement, OSHA disagrees with the Chamber's Fourth Amendment objection that the Agency will target employers “for any reason” simply because they submit injury and illness data. Instead, OSHA plans to continue the practice of using a neutral-based scheme for identifying industries for closer inspection. More specifically, the Agency will use the data submitted by employers under this final rule in the same manner OSHA has used data from the ODI over the last 15 years. In the past, OSHA's Site-Specific Targeting (SST) program and Nursing Home and Recordkeeping National Emphasis Programs (NEPs) all used establishment-specific injury and illness rates as selection criteria for inspection. In the future, OSHA plans to analyze the recordkeeping data submitted by employers to identify injury and illness trends and make appropriate decisions regarding enforcement efforts.
OSHA also notes that the Agency currently uses establishment-specific fatality, injury, and illness reports submitted by employers under Section 1904.39 to target enforcement and compliance assistance resources. As with the SST and NEP programs, a neutral-based scheme is used to identify which establishments are inspected and which fall under a compliance assistance program. Accordingly, OSHA's targeting of employers for inspection will not be arbitrary or unconstitutional under the Fourth Amendment.
Two commenters raised concerns about the proposed rule potentially violating an employer's due process protection under the Fifth Amendment of the U.S. Constitution. (Exs. 0245, 1360). Andrew Sutton commented “There is the possibility of a substantial
The International Warehouse Logistics Association commented that the proposed rule would deny their members the right to due process:
Citations will no doubt be issued under this standard for failures to report arguably work related injuries and illnesses accurately. Since the data reported will be published by OSHA, there will be a presumption of guilt attached to those injury reports. The proposed rulemaking acknowledges that this reporting may result in prospective employees and customers shunning businesses who report injuries and illnesses, so clearly the Department contemplates that the reported injuries create a presumption of guilt. Therefore, in every case where the employer is faced with an injury or illness that is not
In response, OSHA disagrees with commenters who suggested that this rulemaking will violate an employer's right to due process under the Fifth Amendment. The due process clause of the Fifth Amendment provides that no person shall be “deprived of life, liberty, or property, without due process of law.” The case cited above by the commenter,
In this circumstance, however, OSHA disagrees that the mere posting of injury and illness recordkeeping data on a publicly available Web site will adversely impact an employer's reputation. As the Note to § 1904.0 of OSHA's recordkeeping regulation makes clear, the recording or reporting of a work-related injury, illness, or fatality does not mean that an employer or employee was at fault, that an OSHA rule has been violated, or that the employee is eligible for workers' compensation or other benefits. OSHA currently publishes establishment-specific information on its Web site about reported work-related fatalities and hospitalizations. [
With respect to the issue of whether employers have adequate time to record and report injuries and illnesses, § 1904.29(b)(3) of OSHA's recordkeeping regulation provides that employers must enter each recordable injury or illness on the OSHA 300 Log and 301 Incident Report within seven (7) calendar days of receiving information that a recordable injury or illness has occurred. In the vast majority of cases, employers know immediately or within a short time that a recordable case has occurred. In a few cases, however, it may be several days before the employer is informed that an employee's injury or illness meets one or more of the recording criteria. This regulation also allows employers to revise an entry simply by lining it out or amending it if further information justifying the revision becomes available. Accordingly, OSHA believes that the existing seven-calendar-day requirement provides employers with sufficient time to receive information and record a case. OSHA has resources, including information on its Web site at
Additionally, as explained elsewhere in this document, unlike the proposed rule, the final rule does not require employers to submit their injury and illness data to OSHA on a quarterly basis. The final rule's requirement for the electronic submission of recordkeeping data on an annual basis should reduce the burden on all employers when they make decisions on whether to record certain cases.
A few commenters disagreed with OSHA's decision to hold an informal public meeting for this rulemaking. (Exs. 1332, 1396). Instead, these commenters recommended that, considering both the burden on employers and the far-reaching implications of publishing confidential information, OSHA should have held a formal public hearing pursuant to the Administrative Procedure Act (APA).
OSHA disagrees with these comments. The recordkeeping requirements promulgated under the OSH Act are regulations, not standards. Therefore, this rulemaking is governed by the notice and comment requirements in the APA (5 U.S.C. 553) rather than Section 6 of the OSH Act (29 U.S.C. 655) and 29 CFR part 1911. Section 6(b)(3) of the OSH Act (29 U.S.C. 655(b)(3)) and 29 CFR 1911.11, both of which state the requirement for OSHA to hold a public hearing on proposed rules, only apply to promulgating, modifying or revoking occupational safety and health “standards.”
Section 553 of the APA, which governs this rulemaking, does not require a public hearing; instead, it states that the agency must “give interested persons an opportunity to participate in the rulemaking through submission of written data, views, or arguments with or without opportunity for oral presentation” (5 U.S.C. 553(c)). As discussed elsewhere in this document, OSHA held a public meeting
The National Association of Home Builders commented that OSHA must seek input from the Advisory Committee on Construction Safety and Health (ACCSH) during this rulemaking: “NAHB strongly urges OSHA to seek input from ACCSH to better understand the impacts and consequences of its proposal” (Ex. 1408).
In response, and as pointed out by NAHB in their comments, ACCSH is a continuing advisory body established under Section 3704, paragraph (d), of the Contract Work Hours and Safety Standards Act (40 U.S.C. 3701
OSHA notes that both the Construction Safety Act and 29 CFR 1912.3 only require OSHA to consult with ACCSH regarding the setting of new construction “standards.” As discussed above, the requirements in 29 CFR part 1904 are regulations, not standards. In addition, and as discussed elsewhere in this preamble, OSHA did consult and received advice from NACOSH prior to issuing the proposed rule. NACOSH has indicated its support for OSHA's efforts in consultation with NIOSH to modernize the system for collection of injury and illness data to assure that the data are timely, complete, and accurate, as well as accessible and useful to employees, employers, responsible government agencies and members of the public.
In the preamble to the proposed rule, OSHA stated that OSHA plans to post the injury and illness data online, as encouraged by President Obama's Open Government Initiative.
Two commenters stated that the Open Government Initiative does not support publication of private establishment records (Exs. 1328, 1411). The National Retail Federation (NRF) commented, “OSHA has inappropriately relied on President Obama's `Open Government' initiative to support public disclosure of injury and illness records. The Administration's intention and purpose in issuing the Open Government initiative is to foster transparency in
In response, OSHA notes that in the Memorandum on Transparency and Open Government, issued on January 21, 2009, President Obama instructed the Director of OMB to issue an Open Government Directive. On December 8, 2009, OMB issued a Memorandum for the Heads of Executive Departments and Agencies, Open Government Directive, which requires federal agencies to take steps to “expand access to information by making it available online in open formats.” The Directive also states that the “presumption shall be in favor of openness (to the extent permitted by law and subject to valid privacy, confidentiality, security, or other restrictions).” In addition, the Directive states that “agencies should proactively use modern technology to disseminate useful information, rather than waiting for specific requests under FOIA.”
As noted elsewhere in this document, publication of recordkeeping data, subject to applicable privacy and confidentiality laws, will help disseminate information about occupational injuries and illnesses. Access to the data will help employers, employees, employee representatives, and researchers better identify and abate workplace hazards. Accordingly, OSHA believes that publication of injury and illness data on OSHA's Web site is consistent with President Obama's Open Government Initiative.
OSHA received several comments regarding the Freedom of Information Act (FOIA) 5 U.S.C. 552. (Exs. 1207, 1214, 1279, 1382, 1396). Some of these commenters claimed that the proposed rule was “arbitrary” and “capricious” under the Administrative Procedures Act (APA), 5 U.S.C. 706(2)(A), because OSHA has taken a different position during FOIA litigation. The U.S. Chamber of Commerce commented, “On numerous occasions, OSHA has asserted that the very information that it now seeks to publish on the internet should not be made public because it includes confidential and proprietary business information.
The Chamber went on to comment, “OSHA and the Chamber's position are, or at least were, the same: Total hours worked at individual establishments is confidential and proprietary information.
NAM commented, “Under the Freedom of Information Act (FOIA),
In response, OSHA notes that, as discussed in the preamble to the proposed rule, the information required to be submitted by employers under this final rule is not of a kind that would include confidential commercial information. The Secretary carefully considered the issues addressed in the
Many employers already routinely disclose information about the number of employees at an establishment. Since 2001, OSHA's recordkeeping regulation has required employers to record information about the average annual number of employees and total number of hours worked by all employees on the OSHA Form 300A. Section 1904.35 also requires employers to disclose to employees, former employees, and employee representatives non-redacted copies of the OSHA Form 300A. In addition, § 1904.32(a)(4) requires employers to publicly disclose information about the number of employees and total number of hours worked through the annual posting of the 300A in the workplace for three months from February 1 to April 30.
In the
As noted by commenters, during the
Sarah Wilensky commented that OSHA is required under FOIA to disclose much of the data it accesses from an inspection or visit to a covered establishment, and that this obligation would not change if OSHA receives information as part of this rulemaking. (Ex. 1382). This commenter also suggested that, similar to other information in OSHA's possession, employers' commercially valuable information submitted as part of this rulemaking should be subject to exemption for trade secrets under FOIA (Ex. 1382). Another commenter, MIT Laboratories, commented that FOIA is not of much use as a standard to protect privacy in this rule (Ex. 1207).
OSHA agrees with the commenters who suggested that recordkeeping information collected as part of this final rule should be posted on the Web site in accordance with FOIA. As discussed in the preamble to the proposed rule, the publication of specific data elements will in part be restricted by the provisions of FOIA. [78 FR 67259]. Currently, when OSHA receives a FOIA request for employer recordkeeping forms, the Agency releases all data fields on the OSHA 300A annual summary, including the annual average number of employees and total hours worked by employees during the year. With respect to the OSHA 300 Log, because OSHA currently obtains part 1904 records during onsite inspections, the Agency applies Exemption 7(c) of FOIA to withhold from disclosure information in Column B (the employee's name). (Note that OSHA will not collect or publish Column B under this final rule.) FOIA Exemption 7(c) provides protection for personal information in law enforcement records. [5 U.S.C. 552(b)(7)(c)]. OSHA currently uses Exemption 7(c) to withhold personal information included in Column B as well as other columns of the 300 Log. For example, OSHA would not disclose the information in Column C (Job Title), if such information could be used to identify the injured or ill employee.
Similarly, OSHA uses FOIA exemptions to withhold from disclosure Fields 1 through 9 on the OSHA 301 Incident Report. Fields 1 through 9 (the left side of the 301) includes personal information about the injured or ill employee as well as the physician or other health care professional. (Note that under this final rule, OSHA will not collect or publish Field 1 (employee name), Field 2 (employee address), Field 6 (name of treating physician or health care provider), or Field 7 (name and address of non-workplace treating facility). All fields on the right side of the 301 (Fields 10 through 18) are generally released by OSHA in response to a FOIA request.
OSHA generally uses FOIA Exemption 7(c) to withhold from disclosure any personally identifiable information included anywhere on the three OSHA recordkeeping forms. For example, although information in Field 15 of the 301 incident report (Tell us how the injury occurred) is generally released in response to a FOIA request, if that data field includes any personally-identifiable information, such as a name or Social Security number, OSHA will apply Exemption 6 or 7(c) and not release that information. FOIA Exemption 6 protects information about individuals in “personnel and medical and similar files” when the disclosure of such information “would constitute a clearly unwarranted invasion of personal privacy.” [5 U.S.C. 552(b)(6)].
Additionally, OSHA currently uses FOIA Exemption 4 to withhold from disclosure information on the three recordkeeping forms regarding trade secrets or privileged or confidential commercial or financial information. [5 U.S.C. 552(b)(4)]. However, it is OSHA's experience that the inclusion of trade
Again, OSHA wishes to emphasize that it will post injury and illness recordkeeping information collected by this final rule consistent with FOIA.
Several commenters raised concerns about a possible conflict between the proposed rule and the Privacy Act of 1974, 5 U.S.C. 552a. (Exs. 1113, 1342, 1359, 1370, 1393). The American Farm Bureau Federation (AFBF) commented, “OSHA must consider the privacy interests of farmers' names and home contact information and is obligated under federal law to do a review under the Privacy Act” (Ex. 1113). The Society of the Plastics Industry, Inc. (SPI) commented, “[G]iven the nature of the information that may be filed in the Section 1904 forms, OSHA's obligation to redact any personally identifiable medical information from those forms, and the fact that it will be infeasible to OSHA to meet that obligation, OSHA is precluded by the Federal Privacy Act from issuing the rule” (Ex. 1342). Ashok Chandran made a similar comment (Ex. 1393).
In response, OSHA notes that the Privacy Act regulates the collection, maintenance, use, and dissemination of personal identifiable information by federal agencies. Section 552a(e)(4) of the Privacy Act requires that all federal agencies publish in the
The Privacy Act only applies to records that are located in a “system of records.” As defined in the Privacy Act, a system of records is “a group of any records under the control of any agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual.”
The Coalition for Workplace Safety (CWS) commented that publication of information contained in the 300, 300A, and 301 forms would be a violation of 18 U.S.C. 1905—
OSHA notes that the Trade Secrets Act, 18 U.S.C. 1905, states: “Whoever, being an officer or employee of the United States, . . . publishes, divulges, discloses, or makes known in any manner or to any extent not authorized by law any information coming to him in the course of his employment or official duties . . . or record made to or filed with, such department or agency or officer or employee thereof, which information concerns or relates to the trade secrets, processes, operations, style of work, or apparatus, or to the identity, confidential status, amount or source of any income, profits, losses, or expenditures of any person, firm, partnership, corporation, or association; . . . shall be fined under this title, or imprisoned not more than one year, or both; and shall be removed from office or employment.”
As discussed elsewhere in this document, the information required to be submitted under the final rule is not of a kind that would include confidential commercial information. The information is limited to the number and nature of recordable injuries or illnesses experienced by employees at particular establishments, and the data necessary to calculate injury/illness rates,
Multiple commenters stated that the proposed rule would require employers to submit proprietary and confidential business data to OSHA (Exs. 0057, 0160, 0171, 0179, 0205, 0218, 0224, 0240, 0251, 0252, 0257, 0258, 1084, 1090, 1091, 1092, 1093, 1111, 1112, 1113, 1116, 1123, 1192, 1193, 1195, 1196, 1197, 1198, 1199, 1205, 1209, 1214, 1216, 1217, 1218, 1219, 1225, 1272, 1275, 1276, 1279, 1318, 1323, 1326, 1328, 1332, 1333, 1334, 1336, 1338, 1343, 1349, 1356, 1359, 1366, 1367, 1370, 1372, 1386, 1392, 1394, 1396, 1397, 1399, 1408, 1411, 1415, 1426, 1427, 1430). In addition to the comments addressed above regarding the average number of employees and total hours worked by employees, commenters expressed concern about the confidentiality of other data on the
On the other hand, the Associated General Contractors of Michigan commented that recordkeeping data are not proprietary and confidential business information: “Companies with over 20 employees during the reporting year must electronically report annually using the OSHA 300A Summary Form. This type of reporting would not be a burden on employers and would avoid `privacy issues', but would provide enough information for a more effective enforcement effort” (Ex. 0250). J. Wilson made a similar comment (Ex. 0238).
In response, OSHA again wishes to emphasize that it is not the Agency's intention to post proprietary or confidential commercial information on the publicly-accessible Web site. The purpose for the publication of recordkeeping data under this final rule is to disseminate information about occupational injuries and illnesses. OSHA agrees with commenters who stated that recordkeeping data generally do not include proprietary or commercial business information. Specifically, information on the 300A annual summary, such as the establishment's name, business address, and NAICS code, are already publicly available.
As discussed above, OSHA is prohibited from releasing proprietary or confidential commercial information under FOIA Exemption 4. The term “confidential commercial information” means “records provided to the government by a submitter that arguably contain material exempt from release under Exemption 4 of the Freedom of Information Act, 5 U.S.C. 552(b)(4), because its disclosure could reasonably be expected to cause substantial competitive harm.”
OSHA received several comments in support of electronic submission of part 1904 data with personally identifiable information (PII) (Exs. 0208, 1106, 1211, 1350, 1354, 1381, 1382, 1387, 1395). Many commenters commented that federal and state agencies require electronic submission of health and safety data without the misuse of personal identifiers (Exs. 0208, 1106, 1211, 1350, 1354, 1381, 1382, 1387, 1395). For example, the Department of Workplace Standards, Kentucky Labor Cabinet commented that they do “not foresee misuse of the information; other agencies require electronic submission of similar data and have accomplished the requirement without misuse of personal identifiers” (Ex. 0208). Sarah Wilensky, the Service Employees International Union (SEIU) and the California Department of Industrial Relations (DIR), Office of the Director provided similar comments (Exs. 1382, 1387, 1395).
The American Public Health Association (APHA) commented that OSHA's sister agency, the Mine Safety and Health Administration (MSHA), “has collected and posted on its Web site far more detailed and comprehensive information on work-place injuries than is being proposed by OSHA” (Ex. 1354). The AFL–CIO and the International Brotherhood of Teamsters provided similar comments (Exs. 1350, 1381).
However, there were also many comments opposing employer submission of certain data from the OSHA Form 300 and 301. Thoron Bennett commented that OSHA should not “collect [employee] names from OSHA 300 or 301 logs” (Ex. 0035). The International Association of Drilling Contractors (IADC) provided a similar comment (Ex. 1199).
The Phylmar Regulatory Roundtable commented that employers should “not be required to submit information including names, dates of birth, addresses, Social Security Number, etc. . . . Requiring electronic submissions containing PII to OSHA unnecessarily creates an opportunity for private information to accidentally become public” (Ex. 1110). The U.S. Poultry & Egg Association, Huntington Ingalls Industries—Newport News Shipbuilding, and Melinda Ward provided similar comments (Exs. 1109, 1196, 1223). Huntington Ingalls Industries—Newport News Shipbuilding also commented that employees could “have the ability to opt out of having their personally identifiable information provided to OSHA” (Ex. 1196).
MIT Laboratories commented that “OSHA should consider developing a toolkit or educational materials to help employers identify information that poses a re-identification risk in their workplace records, especially if OSHA expect [sic] that its recordkeeping forms will continue to elicit textual descriptions of injuries and illnesses in the future. Such materials could help mitigate the risk that employers will include identifying information in the form” (Ex. 1207).
OSHA partially agrees with commenters who stated that employers should submit their data to OSHA with PII about employees included on the 300 and 301 forms. In many cases, PII entered on the OSHA recordkeeping forms includes important information that the Agency uses for activities designed to increase workplace safety and health and prevent occupational injuries and illnesses, including outreach, compliance assistance, enforcement, and research. As discussed elsewhere in this preamble, other government agencies are able to handle vary large amounts of PII, and OSHA will follow accepted procedures and protocols to prevent the release of such information.
However, for some data fields, OSHA does not consider the data from these fields necessary to meet the various stated goals of the data collection. These fields primarily exist to help people doing incident investigations at the establishment. Collecting data from these fields would not add to OSHA's or any other user's ability to identify establishments with specific hazards or elevated injury and illness rates.
• Log of Work-Related Injuries and Illnesses (OSHA Form 300): Employee name (column B).
• Injury and Illness Incident Report (OSHA Form 301): Employee name (field 1), employee address (field 2), name of physician or other health care professional (field 6), facility name and address if treatment was given away from the worksite (field 7).
Additionally, several commenters expressed concern about the potential public release of personal information about employees from the OSHA recordkeeping forms. (Exs. 0171, 0189, 0209, 0210, 0215, 0250, 0253, 1091, 1113, 1199, 1201, 1206, 1207, 1276, 1329, 1359, 1370, 1386, 1408, 1410). These commenters stated that the OSHA recordkeeping forms contain private and highly confidential employee information, including medical information. Some commenters also raised concerns about previous OSHA rulemakings. For example, the National Association of Home Builders (NAHB) commented, “OSHA has made specific findings related to privacy interest of employees and the utility of making certain recordkeeping forms public. Having done so, OSHA must explain why it is deviating from its past practice and positions . . . OSHA is required to comply with the Administrative Procedure Act and provide a reasoned explanation for this change of policy, starting by recognizing past policy and a justification for the change. OSHA has not done so here and failure to do so here makes this change arbitrary and capricious” (Ex. 1408).
A few commenters suggested that OSHA should balance the public interest of disclosure with the employee's right to privacy (Exs. 1279, 1408, 1411). NAM commented:
In the
Further, OSHA recognized that “information about the state of a person's health, including his or her medical treatment, prescription drug use, HIV status and related matters is entitled to privacy protection” and that “there are few matters that are quite so personal as the status of one's health, and few matters the dissemination of which one would prefer to maintain greater control over.” 66 FR at 6054. OSHA went on to acknowledge that “[t]he right to privacy is not limited to medical records. Other types of records containing medical information are also covered.”
After recognizing that a right of privacy exists and is entitled to protection, OSHA applied a balancing test—weighing the individual's interest in confidentiality against the public interest in disclosure to employees and representatives.
The proposed regulation discussed in these comments, ignores this right of privacy and abandons any type of balancing test. OSHA does not allege any reasons that making such information available to the public outweighs the privacy interests of the individual employees. Merely redacting an employee's name does not provide sufficient protection from the release, even inadvertently, of other personally identifiable information or medical information that employees maintain a privacy interest in (Ex. 1279).
Other commenters raised a specific concern about the release of personal information in the agricultural industry, where many families live on farms where they work (Exs. 1113, 1359, 1370, 1386). Commenters stated that, under the proposed rule, a publicly-searchable database will include information about farmers' names, their home address, as well as other home contact information. These commenters also emphasized that the proposed rule would lead to serious security and privacy concerns that OSHA has not addressed.
Additionally, the American Health Care Association/National Center for Assisted Living (AHCA/NCAL) asked whether the proposed rule would compromise the privacy of patients in the health care industry. This commenter stated that they assist and care for people and that this involves day-to-day interactions with patients, residents, and their families—“who expect that their privacy will be protected and that personal information about them or their conditions will not be broadcast on OSHA's Web page” (Ex. 1194).
In response, OSHA disagrees with commenters who suggested that the Agency is deviating from its past practice regarding recordkeeping information and the privacy interest of employees. In the preamble to the 2001 final rule revising the part 1904 recordkeeping regulation, OSHA explained that it has historically recognized that the OSHA 300 Log and 301 Incident Report may contain information that an individual would wish to remain confidential. [66 FR 6055]. OSHA also acknowledged that although the entries on the 300 Log are typically brief, they may contain medical information, including diagnosis of specific illnesses.
OSHA acknowledges commenters' concerns about the potential posting of private employee information on a publicly-accessible Web site. However, the posting or disclosure of private or confidential information has never been the intent of this rulemaking. OSHA believes it has effective safeguards in place to prevent the disclosure of personal or confidential information contained in the recordkeeping forms and submitted to OSHA. Specifically, as discussed above, OSHA will neither collect nor publish the following information:
• Log of Work-Related Injuries and Illnesses (OSHA Form 300): Employee name (column B).
• Injury and Illness Incident Report (OSHA Form 301): Employee name (field 1), employee address (field 2), name of physician or other health care professional (field 6), facility name and address if treatment was given away from the worksite (field 7).
Also, OSHA's recordkeeping regulation at § 1904.29(b)(10) prohibits the release of employees' names and personal identifiers related to “privacy concern cases.” OSHA will also withhold from publication all of the information on the left-hand side of the OSHA 301 Incident Report that is submitted to OSHA (employee date of birth (Field 3), employee date hired
OSHA also acknowledges that certain data fields on the OSHA 300 and 301 may contain personally-identifiable information. It has been OSHA's experience that information entered in Column F of the 300 Log may contain personally-identifiable information. For example, when describing an injury or illness, employers sometimes include names of employees. As a result, OSHA plans to review the information submitted by employers for personally-identifiable information. As part of this review, the Agency will use software that will search for, and de-identify, personally identifiable information before the submitted data are posted.
In response to commenters who expressed concern about the posting of personal information from family farms, OSHA notes that it is extremely unlikely that personal information from family farms will be collected or posted under this final rule. Section 1904.41(a)(1) of the final rule requires only establishments with 250 or more employees to submit information from the three OSHA recordkeeping forms. In addition, § 1904.41(a)(2) of the final rule makes clear that only establishments in designated industries with 20 more employees, but fewer than 250 employees, must submit information from the OSHA 300A annual summary. As a result, in most cases, family farms will not be required to submit injury and illness recordkeeping data to OSHA under this final rule.
As discussed elsewhere in this preamble, under § 1904.41(a)(3) of the final rule, some employers with 19 or fewer employees (including small farms) may be required to submit their injury and illness recordkeeping data to OSHA. Farm address and contact information is already commercially available, and the information can be purchased from such companies as D&B and Experian. Also, address and contact information for small farms that have been inspected by OSHA is already on the Agency's public Web site.
A number of commenters suggested that, even though OSHA intended to delete employee names and other identifying information, enough information would remain in the published data for the public to identify the injured or ill employee (Exs. 0189, 0211, 0218, 0224, 0240, 0241, 0242, 0252, 0253, 0258, 1084, 1090, 1092, 1093, 1109, 1113, 1122, 1123, 1190, 1192, 1194, 1197, 1198, 1199, 1200, 1205, 1206, 1207, 1209, 1214, 1217, 1218, 1219, 1223, 1272, 1273, 1275, 1276, 1279, 1318, 1321, 1322, 1323, 1326, 1327, 1331, 1333, 1334, 1336, 1338, 1342, 1343, 1348, 1349, 1353, 1355, 1356, 1359, 1360, 1370, 1372, 1376, 1378, 1386, 1389, 1392, 1394, 1396, 1397, 1399, 1402, 1408, 1410, 1411, 1412, 1415, 1417, 1427, 1430). Some of these commenters were specifically concerned about the anonymity of injured or ill employees working at small establishments located in small communities. For example, commenters noted that information such as type of injury or illness, date and location of injury or illness, type of body part injured, treatment, and job title, could be used to identify the employee.
In response, OSHA notes that the final rule requires only establishments with 250 or more employees to submit information from all three OSHA recordkeeping forms. The Agency believes it is less likely that employees in such large establishments will be identified based on the posted recordkeeping data. By contrast, establishments with 20 to 249 employees that are required to submit recordkeeping data under this final rule are only required to submit their OSHA 300A annual summary. As discussed above, the OSHA Form 300A includes only aggregate injury and illness data from a specific establishment.
OSHA received multiple comments on the issue of safeguarding the information collected under this final rule. Several commenters commented that OSHA should use and specify procedures for cybersecurity measures to protect confidential information (Exs. 1210, 1333, 1334, 1364, 1409). For example, IPC—Association Connecting Electronics Industries commented that “IPC is concerned about the security of the injury and illness data reported to OSHA. IPC asks OSHA to specify the security measures that will be used to protect sensitive information” (Ex. 1334).
MIT Laboratories commented more generally about the misuse of collected data. They stated that there is a lack of “mechanisms that would provide accountability for harm arising from misuse of disclosed data . . . Accountability mechanisms should enable individuals to find out where data describing them has been distributed and used, set forth penalties for misuse, and provide harmed individuals with a right of action” (Ex. 1207). The American Road and Transportation Builders Association (ARTBA) provided a similar comment (Ex. 1409).
In response, when OSHA develops the data collection system, the Agency plans to maintain two data repositories in the system: One as OSHA's data mart (or warehouse) for prescribed data behind a secure firewall, and a separate but similarly secured repository of data that has been verified as scrubbed and available for public access. Both systems will have multi-tiered access controls, and the internal system will specifically be designed to limit access to PII to as few users as possible. In addition, OSHA will consider the possible need to encrypt sensitive data in the data mart repository as a safeguard, so that data would be scrubbed (and rendered unreadable and useless) in the case of unauthorized access. Also, as discussed above, OSHA will not collect data from certain fields that primarily exist to help people doing incident investigations at the establishment and that would not add to OSHA's or any other user's ability to identify establishments with specific hazards or elevated injury and illness rates.
Additionally, NAM commented that, in the preamble to the 2001 final rule, OSHA acknowledged the inability to protect personal information in part 1904: “In 2001, OSHA acknowledged that the agency had no means of protecting against unwarranted disclosure of private information contained in an employer's injury and illness records or that there were sufficient safeguards in place to protect against misuse of private information. But more importantly, OSHA acknowledged that “[t]he right to collect and use [private] data for public purposes is typically accompanied by a concomitant statutory or regulatory duty to avoid unwarranted disclosures.” 66 FR at 6056.” (Ex. 1279). Other commenters commented that there is no assurance that OSHA will be able to protect the privacy of the employee once the recordkeeping data is submitted (Exs. 0187, 1217, 1275).
In response, OSHA disagrees with commenters who suggested the Agency will not be able to protect employee information. As discussed above, two ways OSHA can protect the privacy of employee information are by not collecting certain information and by not releasing personally identifiable information on the publicly-accessible Web site. With respect to safeguarding the information submitted by employers, OSHA is strongly committed
Posting of the annual summary in the workplace is not public disclosure.
The International Association of Amusement Parks (IAAP) commented that OSHA only addressed the privacy concern by stating in the preamble to the proposed rule that an employer already has the obligation to publish recordkeeping data when they post the OSHA 300A. IAAP commented, however, that “[t]his posting of the annual summary data by an employer is not comparable to posting injury and illness data on a searchable, publicly accessible database. Employers can post the annual summary data on employee bulletin boards which are typically not located in places where the public has access” (Ex. 1427). The American Fuel & Petroleum Association (AFPA) also noted that “[w]ith respect to posting annual summary data, the information stays within the place of employment. Even if an employee decides to distribute the information, the reach would probably be limited to the immediate, surrounding area” (Ex. 1336).
In response, OSHA notes that one of the objectives of this rulemaking is to produce a wider public dissemination of information about recordable occupational injuries and illnesses. The Annual Summary does not include personally-identifiable information, and the posting of the information on the Web site should not involve privacy or confidentiality concerns. With respect to the posting on the Web site of information from the 300 Log and 301 Incident Report for establishments with 250 or more employees, such posting will not include personally-identifiable information. Again, the goal of the final rule is to disseminate injury and illness data, not to disseminate personal information about employers or employees.
Some commenters raised concerns about the proposed rule and the protection of personally identifiable employee information included in “privacy concern cases” (Exs. 0150, 1207, 1279, 1335, 1339). Under OSHA's existing recordkeeping regulation, § 1904.29(b)(6)) requires employers to withhold the injured or ill employee's name from the 300 Log for injuries and illnesses defined as “privacy concern cases.” Section 1904.29(b)(7) defines privacy concern cases as those involving (i) an injury or illness to an intimate body part or the reproductive system; (ii) an injury or illness resulting from a sexual assault; (iii) a mental illness; (iv) a work-related HIV infection, hepatitis case, or tuberculosis case; (v) needlestick injuries and cuts from sharp objects that are contaminated with another person's blood or other potentially infectious material, or (vi) any other illness, if the employee independently and voluntarily requests that his or her name not be entered on the log. Additionally, § 1904.29(b)(10) includes provisions addressing employee privacy if the employer decides voluntarily to disclose the OSHA 300 and 301 forms to persons other than those who have a mandatory right of access under § 1904.35. The paragraph requires employers to remove or hide employees' names or other personally identifiable information before disclosing the forms to persons other than government representatives, former employees, or authorized representatives, as required by §§ 1904.40 and 1904.35, except in three cases. The employer may disclose the forms, complete with personally-identifiable information, only to: (i) An auditor or consultant hired by the employer to evaluate the safety and health program; (ii) the extent necessary for processing a claim for workers' compensation or other insurance benefits; or (iii) a public health authority or law enforcement agency for uses and disclosures for which consent, an authorization, or opportunity to agree or disagree or object is not required under 45 CFR 164.512 (Privacy Rule).
In its comments, NAM stated that OSHA failed to address how § 1904.29(b)(6)–(10) would be affected by the proposed rule. NAM commented that there may be differences between employers and OSHA as to what is considered personally identifiable information.
Assume that an employer voluntarily provides its OSHA Forms 300 and 301 to an outside safety and health organization. In choosing to do so, the employer is required to redact the employees' names and “other personally identifying information.” Depending on a variety of factors, the employer chooses to redact certain information, including job titles and dates of injuries. Yet, months later when OSHA receives this employer's injury and illness records
Additionally, Portland Cement commented: “The Agency has not shown the regulated community in this proposal what a revised Form 300, if developed, would show, and explicit wording in the proposed 1904.41 would require the employee's name to be shown in the electronic submission to OSHA. Because the Agency has clearly defined “privacy concern cases” in part 1904.29(b)(6) for when employers may keep confidential the identity of the injured or ill employee, there are concerns about why OSHA did not more clearly and explicitly address naming the employee in the proposed electronic submission requirement found in proposed 1904.41, and why the Agency did not provide a revised OSHA Form 300 for review in the proposed regulation” (Ex. 1335).
In response, OSHA agrees with commenters who stated that the confidentiality of privacy concern cases is extremely important. The requirements in existing § 1904.29(b)(6) through (10) were issued by OSHA in 2001 as a result of the Agency's strong commitment to protect the identity of employees involved in privacy concern cases. As discussed above, the final rule requires employers at establishments with 250 or more employees to submit information about the employee and the employee's injury/illness recorded on the 300 and 301 forms, except employee name and address, treating physician name, and treating facility name and address. This includes the information related to privacy concern cases. Since OSHA will have the relevant information from the forms, employers are not required to submit the confidential list of privacy concern cases.
Also as discussed above, OSHA will not collect or post information from Column B (the employee's name) from the 300 Log or from Fields 1, 2, 6, or 7 from the 301 Incident Report. In addition, OSHA will not post information from Fields 3 through 5 of the 301 Incident Report. Information in items 14 through 17 will be scrubbed for PII before being released publicly. This will ensure that information about an employee's name, address, date of birth, date hired, and gender is not disclosed. OSHA also does not intend to post any other information on the Web site that could be used to identify an individual. Additionally, OSHA will conduct a special review of submitted privacy concern case information to ensure that the identity of the employee is protected.
With respect to NAM's comment regarding the definition of “personally-identifiable information,” OSHA uses the definition provided in the May 22, 2007, OMB Memorandum for the Heads of Executive Departments and Agencies, “Safeguarding Against and Responding to the Breach of Personally Identifiable Information.” The term “personally-identifiable information” refers to information which can be used to distinguish or trace an individual's identify, such as their name, Social Security number, biometric records, etc. alone, or when combined with other personal or identifying information which is linked or linkable to a specific individual, such as date and place of birth, mother's maiden name, etc. Based on this definition, certain information included on the OSHA recordkeeping forms is personally identifiable information. For example, an employee's name, address, date of birth, date hired, and gender would be personally identifiable information and not subject to posting on the publicly-accessible Web site as establishment-specific data. (However, note that OSHA will not collect information about the employee's name or address under this final rule.)
Other information included on the OSHA forms may also be personally identifiable information. As mentioned by a commenter, depending on the circumstances at a specific establishment, the information in Column C (Job Title) from the 300 Log could be used to identify an employee who was involved in a privacy concern case. In fact, OSHA's current recordkeeping Frequently Asked Question (FAQ) 29–3 permits an employer to delete information (such as Job Title) if they believe it will identify the employee. However, OSHA also believes that because only establishments with 250 or more employers will be required to submit the OSHA 300 Log and 301 Incident Report, it is less likely that information related to Job Title can be used to identify an employee.
OSHA further notes that comments that suggested additional categories for privacy concern cases are not within the scope of this rulemaking. Any revision to existing § 1904.29(b)(6) through (10) would require separate notice and comment rulemaking.
Several commenters stated that the online posting of covered employers injury and illness recordkeeping data violates the Confidential Information Protection and Statistical Efficiency Act of 2002 (CIPSEA) (Pub. L. 107–347, December 17, 2002) (Exs. 1225, 1392, 1399). These commenters noted that CIPSEA prohibits BLS from releasing establishment-specific injury and illness data to the general public or to OSHA, and that OSHA has not adequately addressed how the release of part 1904 information under this rulemaking is consistent with the Congressional mandate expressed in the law.
Two commenters also stated that publishing data from the OSHA recordkeeping forms would circumvent Congress's intent from 2002 (Exs. 1193, 1430). These commenters noted that data on the 300 and 301 forms are already reported to BLS, and when Congress passed CIPSEA, it made the determination that such information should be confidential and prohibited BLS from releasing establishment-specific data to the general public or to OSHA.
In response, OSHA notes that CIPSEA provides strong confidentiality protections for statistical information collections that are conducted or sponsored by federal agencies. The law prevents the disclosure of data or information in identifiable form if the information is acquired by an agency under a pledge of confidentiality for exclusively statistical purposes.
The provisions of CIPSEA apply when a federal agency both pledges to protect the confidentiality of the information it acquires and uses the information only for statistical purposes. Conversely, the provisions of CIPSEA do not apply if information is collected or used by a federal agency for any non-statistical purpose. As noted elsewhere in this document, the information collected and published by OSHA in the final rule will be used for several purposes, including for the targeting of OSHA enforcement activities. Therefore, the CIPSEA confidentiality provisions are not applicable to the final rule.
Peter Strauss commented that OSHA is entitled to collect the workplace injury and illness records as prescribed by the proposed rule, but the Data Quality Act assures against the mishandling of such data (Ex. 0187). Another commenter, Society of Plastics Industry, Inc., commented: “Let us assume, solely for purposes of further analysis, and contrary to its stated purpose, that the publication of this information was designed solely to inform affected employers and employees of workplace incidents, and implicitly workplace conditions, so they could take remedial and/or preventive measures to prevent incidents from happening again. OSHA would be publishing information that has not been investigated or otherwise verified through appropriate quality controls, that would be misleading (in that it would be published without any meaningful context and in a manner designed to convey employer responsibility notwithstanding any accompanying disclaimers), and that may very well contain personal identifiers or personally identifiable information that could effectively result in the unlawful disclosure of personal medical information. This type of publication would conflict with the goals of the OSH Act, the requirements of the Data Quality Act, and the requirements of the applicable privacy laws” (Ex. 1342).
In response, OSHA notes that the Data Quality Act, or Information Quality Act, was passed by Congress in Section 115 of the Treasury and General Government Appropriations Act for Fiscal Year 2001 (Pub. L. 106–554; H.R. 5658). The Act directs the Office of Management and Budget (OMB) to issue government-wide guidelines that “provide policy and procedural guidance to federal agencies for ensuring and maximizing the quality, objectivity, utility, and integrity of information (including statistical information) disseminated by federal agencies.” The Act also requires other federal agencies to publish their own implementation guidelines that include “administrative mechanisms allowing affected persons to seek and obtain correction of information maintained
The DOL Guidelines state that “dissemination” includes agency initiated or sponsored distribution of information to the public.” It does not include “agency citations to or discussion of information that was prepared by others and considered by the agency in the performance of its responsibilities, unless an agency disseminates it in a manner that reasonably suggests that the agency agrees with the information.” OSHA notes that it will make no determination as to whether the Agency agrees with the recordkeeping information electronically submitted under the final rule. In addition, with the exception of redacting personally identifiable information, OSHA will not amend the raw recordkeeping data submitted by employers. As a result, the provisions of the Information Quality Act, as well as the DOL information quality guidelines, do not apply to the recordkeeping information posted on the public Web site.
Although the provisions of the Information Quality Act do not apply, OSHA still wishes to emphasize that, as part of its efforts to ensure accuracy, the Agency encourages affected employers, employees, and other individuals to seek and obtain, where appropriate, correction of recordkeeping data posted on the public Web site. OSHA believes that in most cases, informal contacts with the Agency will be appropriate. However, OSHA will also make available on its Web site a list of officials to whom requests for corrections should be sent and where and how such officials may be contacted. The purpose of this correction process is to address inaccuracies in the posted information, not to resolve underlying substantive policy or legal issues.
Several commenters raised concerns about whether the proposed rule would hinder individual privacy rights under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), Public Law 104–191. Some of these commenters stated that the HIPAA privacy regulation at 45 CFR parts 160 and 164 (Privacy Rule), prohibits OSHA from public disclosure of personally-identifiable health information. Other commenters expressed the concern that employers would be in violation of the Privacy Rule if this rulemaking requires them to submit protected health information to OSHA (Exs. 0218, 0224, 0240, 0252, 1084, 1093, 1109, 1111, 1123, 1197, 1200, 1205, 1206, 1210, 1214, 1217, 1218, 1223, 1272, 1275, 1279, 1331, 1338, 1342, 1362, 1370, 1386, 1402, 1408).
In response, OSHA notes that on December 28, 2000, the U.S. Department of Health and Human Services (HHS) issued a final rule,
As required by HIPAA, the provisions of the Privacy Rule only apply to “covered entities.” The term “covered entity” includes health plans, health care clearinghouses, and health care providers who conduct certain financial and administrative transactions electronically.
Additionally, OSHA agrees with commenters who suggested that the Agency consider applying the principles set forth in the Privacy Rule for the de-identification of health information. OSHA believes that health information is individually identifiable if it does, or potentially could, identify the individual. As explained by commenters, once protected health information is de-identified, there may no longer be privacy concerns under HIPAA. Again, it is OSHA's policy under the final rule not to release any individually-identifiable information. As discussed elsewhere in this document, procedures are in place to ensure that individually-identifiable information, including health information, will not be publicly posted on the OSHA Web site.
With respect to the issue of whether HIPAA prevents covered entities from disclosing PHI to employers, and/or directly to OSHA, the Agency notes that the Privacy Rule specifically includes several exemptions for disclosures of health information without individual authorization. Of particular significance, is 45 CFR 164.512—
A covered entity may also disclose PHI without individual authorization to “public health authorities” and to “health oversight agencies.”
The Privacy Rule also permits a covered entity who is a member of the employer's workforce, or provides health care at the request of an employer, to disclose to employers protected health information concerning work-related injuries or illnesses or work-related medical surveillance in situations where the employer has a duty under the OSH Act, the Mine Act, or under a similar state law to keep records on or act on such information. Section 164.512(b)(1)(v)(C) specifically permits a covered entity to use or disclose protected health information if the employer needs such information in order to comply with obligations under 29 CFR parts 1904 through 1928.
The New York Farm Bureau (NYFB) commented that the Americans with Disabilities Act of 1990 (ADA), 42
In response, OSHA notes that Section 12112(d)(3)(B) of the ADA permits an employer to require a job applicant to submit to a medical examination after an offer of employment has been made but before commencement of employment duties, provided that medical information obtained from the examination is kept in a confidential medical file and not disclosed except as necessary to inform supervisors, first aid and safety personnel, and government officials investigating compliance with the ADA. Section 12112(d)(4)(C) requires that the same confidentiality protection be accorded health information obtained from a voluntary medical examination that is part of an employee health program.
By its terms, the ADA requires confidentiality for information obtained from medical examinations given to prospective employees, and from medical examinations given as part of a voluntary employee health program. The OSHA injury and illness records are not derived from pre-employment or voluntary health programs. The information in the OSHA injury and illness records is similar to that found in workers' compensation forms, and may be obtained by employers by the same process used to record needed information for workers' compensation and insurance purposes. The Equal Employment Opportunity Commission (EEOC), the agency responsible for administering the ADA, recognizes a partial exception to the ADA's strict confidentiality requirements for medical information regarding an employee's occupational injury or workers' compensation claim.
Even assuming that the OSHA injury and illness records fall within the literal scope of the ADA's confidentiality provisions, it does not follow that a conflict arises. The ADA states that “nothing in this Act shall be construed to invalidate or limit the remedies, rights, and procedures of any federal law.”
The EEOC has also recognized both in the implementing regulations at 29 CFR part 1630, as well as in interpretive guidelines, that the ADA yields to the requirements of other federal safety and health standards and regulations. The implementing regulation codified at 29 CFR 1630.15(e) explicitly states that an employer's compliance with another federal law or regulation may be a defense to a charge of violating the ADA.
Additionally, the EEOC Technical Assistance Manual on the ADA states that the “ADA does not override health and safety requirements established under other Federal laws . . . For example, . . . Employers also must conform to health and safety requirements of the U.S. Occupational Safety and Health Administration (OSHA).” For these reasons, OSHA does not believe that the mandatory submission and publication requirements in § 1904.41 of this final rule conflict with the confidentiality provisions of the ADA.
Some commenters commented that the requirement for electronic submission of part 1904 injury and illness data will lead to the elimination of alternate or equivalent recordkeeping forms by employers (Exs. 1385, 1399). Littler Mendelson, P.C. commented: “Many employers utilize equivalent forms—particularly insurance and accident investigation forms in place of the Form 301. In establishing a requirement for electronic reporting in a particular software format OSHA will be mandating the use of a specific form and eliminating the widespread use of equivalent forms by employers. This change has not been identified or evaluated (benefits, or lack thereof) under the Paperwork Reduction Act provisions applicable to this rulemaking. Littler believes that the incremental benefit (if any) proposed in this rulemaking is significantly outweighed by the increased paperwork duplication which would be created by the use of mandatory forms and elimination of equivalent forms” (Ex. 1385).
In response, OSHA notes that existing § 1904.29(a) provides that employers must use the OSHA 300 Log, 301 Incident Report, and 300A Annual Summary, or equivalent forms, when recording injuries and illnesses under part 1904. Section 1904.29(b)(4) states that an equivalent form is one that has the same information, is as readable and understandable, and is completed using the same instructions as the OSHA form it replaces. OSHA is aware that many employers use an insurance form instead of the 301 Incident Report, or supplement an insurance form by adding any additional information required by OSHA.
As discussed above, under the final rule, employers have two options for submitting recordkeeping data to OSHA's secure Web site. First, employers can directly enter data in a web form. Second, employers will be provided with a means of electronically transmitting the information, including information from equivalent forms, to OSHA. This is similar to how BLS collects data from establishments under the SOII. Accordingly, the final rule does not change the option for employers to use alternate or equivalent forms when recording OSHA injuries and illnesses.
There were many comments that the proposed rule would reverse OSHA's long-standing “no fault” recordkeeping policy (Exs. 0160, 0174, 0179, 0192, 0218, 0224, 0240, 0251, 0255, 1084, 1091, 1092, 1093, 1109, 1113, 1123, 1191, 1192, 1194, 1197, 1199, 1200, 1214, 1218, 1272, 1273, 1276, 1279, 1323, 1324, 1328, 1329, 1334, 1336, 1338, 1342, 1343, 1349, 1359, 1370, 1386, 1391, 1394, 1397, 1399, 1401, 1411, 1427). For example, the Coalition for Workplace Safety commented that “[i]n 2001, OSHA revised the recordkeeping requirements and the foundation of those revisions in what
In response, OSHA disagrees with commenters who commented that the Agency has reversed its “no fault” recordkeeping policy. The Note to § 1904.0 of OSHA's existing recordkeeping regulation continues to provide that the recording or reporting of a work-related injury, illness, or fatality does not mean that an employer or employee was at fault, that an OSHA rule has been violated, or that the employee is eligible for workers' compensation or other benefits. As noted elsewhere in this preamble, the purpose of this rulemaking is to improve workplace safety and health through the collection of useful, accessible, establishment-specific injury and illness data to which OSHA currently does not have direct, timely, and systematic access. The information acquired through this final rule will assist employers, employees, employee representatives, researchers, and the government to better identify and correct workplace hazards.
OSHA also disagrees with commenters who suggested that the Agency will use the “no fault” recordkeeping system to target employers for enforcement efforts. As discussed elsewhere in this preamble, and consistent with the Agency's longstanding practice, OSHA will use a neutral administrative plan when targeting employers for onsite inspection, similar to how the Agency has administered enforcement activities under the Site-Specific Targeting program.
Andrew Sutton commented that the language in proposed § 1904.41(a)(3) appears to give OSHA “unfettered discretion.” This section would have provided that upon notification, you must electronically send to OSHA or OSHA's designee the requested information, at the specified time interval, from the records that you keep under part 1904. According to the commenter, this section might be seen to give too much power to OSHA for
In response, OSHA notes that, like the proposed rule, § 1904.41(a)(3) of the rule requires that, upon request, employers must electronically submit their OSHA part 1904 records to OSHA or OSHA's designee. This section replaces OSHA's existing regulation at § 1904.41,
It has never been OSHA's intention to exercise unfettered discretion when collecting injury and illness records. Like the existing regulation, § 1904.41(a)(3) of the final rule provides OSHA with authority to conduct surveys of employers regarding their occupational injuries and illnesses. Historically, the information collected through these surveys has assisted OSHA in identifying trends in workplace hazards, evaluating the effectiveness of OSHA enforcement activities, and gathering information for the promulgation of new occupational safety and health standards and regulations.
OSHA further notes that data collection under final § 1904.41(a)(3) would be subject to the Paperwork Reduction Act, which provides that federal agencies generally cannot conduct or sponsor a collection of information, and the public is not required to respond to an information collection, unless it is approved by OMB and displays a valid OMB Control Number. Also, pursuant to the PRA, notice of information collections must be published in the
In addition, final § 1904.41(b)(7) provides that employers who are partially exempt from keeping injury and illness records under existing §§ 1904.1 and/or 1904.2 are required to submit recordkeeping data only if OSHA notifies them they will be required to participate in a particular information collection under § 1904.41(a)(3). OSHA will notify these employers in writing in advance of the year for which injury and illness records will be required.
The final rule is similar to the proposed rule in requiring employers to electronically submit part 1904 records to OSHA. However, there are also several differences from the proposed rule. The major differences between the final rule and the proposed rule include the following:
1. In the final rule, establishments with 250 or more employees that are required to keep part 1904 records must electronically submit some of the information from the three recordkeeping forms that they keep under part 1904 (OSHA Form 300A Summary of Work-Related Injuries and Illnesses, OSHA Form 300 Log of Work-Related Injuries and Illnesses, and OSHA Form 301 Injury and Illness Incident Report) to OSHA or OSHA's designee once a year. In the proposed rule, these establishments would have been required to electronically submit all of the information from the OSHA Form 300 and OSHA Form 301 quarterly, and electronically submit all of the information from the OSHA Form 300A annually.
2. In the final rule, for establishments with 20 to 249 employees, the list of designated industries who must report in appendix A to subpart E of part 1904
Under the final rule, employers have the following requirements:
1. § 1904.41(a)(1)—Establishments with 250 or more employees that are required to keep part 1904 records must electronically submit the required information from the three recordkeeping forms that they keep under part 1904 (OSHA Form 300A Summary of Work-Related Injuries and Illnesses, OSHA Form 300 Log of Work-Related Injuries and Illnesses, and OSHA Form 301 Injury and Illness Incident Report) to OSHA or OSHA's designee annually. This information must be submitted no later than March 2 of the year after the calendar year covered by the form. The establishments are not required to submit the following information:
a. Log of Work-Related Injuries and Illnesses (OSHA Form 300): Employee name (column B).
b. Injury and Illness Incident Report (OSHA Form 301): Employee name (field 1), employee address (field 2), name of physician or other health care professional (field 6), facility name and address if treatment was given away from the worksite (field 7).
2. § 1904.41(a)(2)—Establishments with 20–249 employees that are classified in a designated industry listed in appendix A to subpart E of part 1904 must electronically submit the required information from the OSHA Form 300A annually to OSHA or OSHA's designee. This information must be submitted no later than March 2 of the year after the calendar year covered by the form.
3. § 1904.41(a)(3)—Establishments must electronically submit the requested information from their part 1904 records to OSHA or OSHA's designee after notification from OSHA.
Overall, the final rule's provisions requiring regular electronic submission of injury and illness data will allow OSHA to obtain a much larger database of timely, establishment-specific information about injuries and illnesses in the workplace. This information will help OSHA use its resources more effectively by enabling OSHA to identify the workplaces where workers are at greatest risk. This information will also help OSHA establish a comprehensive database that the Agency, researchers, and the public can use to identify hazards related to reportable events and to identify industries and processes where these hazards are prevalent. The change from quarterly to annual reporting of information from OSHA Form 300 and OSHA Form 301 by establishments with 250 or more employees will also lessen the burden of data collection on both employers and OSHA.
Note that OSHA will phase in implementation of the data collection system. In the first year, all establishments required to routinely submit information under the final rule will be required to submit only the information from the Form 300A (by July 1, 2017). In the second year, all establishments required to routinely submit information under the final rule will be required to submit all of the required information (by July 1, 2018). This means that, in the second year, establishments with 250 or more employees that are required to routinely submit information under the final rule will be responsible for submitting information from the Forms 300, 301, and 300A. In the third year, all establishments required to routinely submit under this final rule will be required to submit all of the required information (by March 2, 2019). This means that beginning in the third year (2019), establishments with 250 or more employees will be responsible for submitting information from the Forms 300, 301, and 300A, and establishments with 20–249 employees in an industry listed in appendix A to subpart E of part 1904 will be responsible for submitting information from the Form 300A by March 2 each year. This will provide sufficient time to ensure comprehensive outreach and compliance assistance in advance of implementation.
In addition, consistent with E.O. 13563, OSHA plans to conduct a retrospective review, once the Agency has collected three full years of data. OSHA will use the findings of the retrospective review to assess the electronic submission requirements in the final rule and modify them as appropriate and feasible.
In 1997, OSHA issued a final rule at § 1904.17,
In 2001, § 1952.4(d) (now § 1902.7(d)) was added to the final rule to continue to provide the States with the flexibility to participate in the OSHA Data Initiative under the federal requirements or the State's own regulation (66 FR 5916–6135). At its outset, Federal OSHA conducted the OSHA data collection in all of the states, including those which administered approved State Plans. However, Federal OSHA then began to collect data only in the State-Plan States that wished to participate. The current § 1902.7(d) allowed the individual States to decide, on an annual basis, whether or not they would participate in the OSHA data collection. If the State elected to participate, the State could either adopt and enforce the requirements of current § 1904.41 as an identical or more stringent State regulation, or could defer to the federal regulation and federal enforcement with regard to the mandatory nature of the survey. If the State deferred to the current federal § 1904.41 regulation, OSHA's authority to implement the ODI was not affected either by operational agreement with a State-Plan State or by the granting of final State-Plan approval under section 18(e).
In this rulemaking, the proposed rule would have required State-Plan States to adopt requirements identical to those in 29 CFR 1904.41 in their recordkeeping and reporting regulations as enforceable State requirements, as provided in section 18(c)(7) of the OSH Act. The data collected by OSHA as authorized by § 1904.41 would have been made available to the State-Plan States. Nothing in any State Plan would have affected the duties of employers to comply with § 1904.41.
Three State-Plan States submitted comments on the proposed rule—Kentucky (Ex. 208), North Carolina (Ex. 1195), and California (Ex. 1395). However, they did not comment specifically on this part of the proposed rule. OSHA also did not receive any other comments on this part of the proposed rule.
The final rule is the same as the proposed rule. State-Plan States must adopt requirements identical to those in 29 CFR 1904.41 in their recordkeeping and reporting regulations as enforceable State requirements, as provided in section 18(c)(7) of the OSH Act. OSHA will make the data collected by OSHA under this final rule available to the State Plan States. Nothing in any State plan will affect the duties of employers to comply with § 1904.41.
One of the goals of the final rule is to ensure the completeness and accuracy
In the initial comment period and at the public meeting, many commenters expressed concern that the public availability of OSHA data would motivate some employers to under-record injuries and illnesses, in part by attempting to reduce the number of recordable injuries and illness their employees report to them.
Specifically, the rule makes three changes to §§ 1904.35 and 1904.36 consistent with the proposed changes set forth in the August 14, 2014 Supplemental Notice of Proposed Rulemaking. The final rule (1) requires employers to inform employees of their right to report work-related injuries and illnesses free from retaliation; (2) clarifies the existing implicit requirement that an employer's procedure for reporting work-related injuries and illnesses must be reasonable and not deter or discourage employees from reporting; and (3) prohibits employers from retaliating against employees for reporting work-related injuries or illnesses, consistent with the existing prohibition in section 11(c) of the OSH Act.
The final rule also makes a technical edit to § 1904.35(a)(3) to clarify that the rights of employees and their representatives to access injury and illness records are governed by § 1904.35(b)(2). Section 1904.35(a)(3) does not alter any of the substantive rights or limitations contained in § 1904.35(b)(2).
On January 9 and 10, 2014, OSHA held a public meeting to discuss the November 8, 2013 Notice of Proposed Rulemaking. Many meeting participants expressed concern that the proposal to publish establishment-specific injury and illness data on OSHA's publicly available Web site might cause an increase in the number of employers that adopt policies or practices that have the effect of discouraging or deterring employees from reporting, including policies that result in retaliation against employees who report work-related injuries and illnesses.
Therefore, on August 14, 2014, OSHA issued a Supplemental Notice of Proposed Rulemaking to address this issue. OSHA requested comment on “whether to amend the proposed rule to (1) require that employers inform their employees of their right to report injuries and illnesses; (2) require that any injury and illness reporting requirements established by the employer be reasonable and not unduly burdensome; and (3) prohibit employers from taking adverse action against employees for reporting injuries and illnesses.”
Some commenters took issue with procedural aspects of the supplemental notice to the propose rule. A few commenters asserted that the supplemental notice to the proposed rule denied the public the opportunity to meaningfully comment because it did not include proposed regulatory text and was not specific enough about what conduct was to be prohibited. Exs. 1566, 1650. However, under the Administrative Procedure Act, proposed regulatory text is not required; agencies must only include “either the terms or substance of the proposed rule or a description of the subjects and issues involved.” 5 U.S.C. 553(b)(3). Here, the proposal explained the substance of the proposed rule and the subjects and issues involved. In addition, the specificity and detail of the comments OSHA received indicate that commenters understood the issues under discussion. Furthermore, as discussed below, the final regulatory text closely tracks the concepts and language used in the proposal, meaning the proposal provided sufficient notice to the public of the conduct to be prohibited.
Other commenters, including the American Coatings Association, stated that the amendments suggested by the supplemental proposal were outside the scope of the original November 8, 2013 proposal (Ex. 1548). OSHA agrees that these changes to §§ 1904.35 and 1904.36 were outside the scope of the original proposal. That is why OSHA published a supplemental proposal and extended the public comment period. The final amendments to §§ 1904.35 and 1904.36 are within the scope of the supplemental proposal, and are therefore permissible under the Administrative Procedure Act.
The final rule includes three new provisions in § 1904.35. These provisions follow directly and logically from the August 14, 2014 Supplemental Notice of Proposed Rulemaking. First, the final rule amends paragraphs (a)(2) and (b)(1)(iii) to require employers to inform employees of their right to report work-related injuries and illnesses free from retaliation. Second, paragraph (b)(1)(i) of the final rule clarifies that the reporting method already implicitly required by this section must be reasonable and not deter or discourage employees from reporting. And third, paragraph (b)(1)(iv) of the final rule prohibits employers from retaliating against employees for reporting work-related injuries or illnesses under section 1904.35 consistent with the existing prohibition contained in section 11(c) of the OSH Act.
The final rule strengthens paragraph (a) of § 1904.35 by expanding the previous requirement for employers to inform employees how to report work-related injuries and illnesses so that the rule now includes a mandate to inform
The rulemaking record supports OSHA's determination that requiring employers to inform employees of their reporting rights will improve the quality of employers' injury and illness records. Commenters provided numerous examples and studies showing that many employees avoid reporting injuries and illnesses because they are afraid that doing so will result in retaliation. For example, Lipscomb
The final rule amends paragraph (b)(1)(i) of § 1904.35 to state explicitly that employer procedures for employee reporting of work-related illnesses and injuries must be reasonable. The previous version of § 1904.35(b)(1)(i) already required employers to set up a way for employees to report work-related injuries and illnesses promptly. The final rule adds new text to clarify that reporting procedures must be reasonable, and that a procedure that would deter or discourage reporting is not reasonable, as explained in a 2012 OSHA enforcement memorandum.
The rulemaking record supports OSHA's decision to include these clarifying revisions to paragraph (b)(1)(i) in the final rule. Commenters cited studies suggesting that employees are deterred from reporting injuries and illnesses where the procedure for doing so is too difficult. For example, Scherzer
Commenters also raised concerns about rigid prompt-reporting requirements in place at some workplaces that have resulted in employee discipline for late reporting even though employees could not reasonably have reported their injuries or illnesses earlier.
Many employers have policies that require the immediate reporting of a work-related injury by the worker, and for some employers failure to follow this requirement will result in discipline, regardless of the circumstances. In some cases workers may be unaware that they have suffered an injury, since the pain or symptoms do not manifest until later . . . This is particularly true for musculoskeletal injuries. The worker reports the injury when they recognize it has occurred, but are disciplined because the reporting did not occur until after the event that caused the injury occurred.
OSHA shares these concerns. Employer reporting requirements must account for injuries and illnesses that build up over time, have latency periods, or do not initially appear serious enough to be recordable. The United Food and Commercial Workers International Union provides several examples of food processing workers receiving discipline for “late” reporting where it was not reasonable to have expected the injured employee to report earlier. In one such case, a worker reported shoulder and neck pain that had developed gradually due to work-related repetitive motions beginning one week earlier. Although there was no single incident that precipitated the injury, the worker received a “final warning” for failure to “timely report an injury” (Ex. 1679). This policy was not reasonable because it did not allow for reporting within a reasonable time after the employee realized that he or she had suffered a work-related injury.
OSHA disagrees with comments that express support for employers who require immediate reporting of injuries and illnesses on the grounds that such requirements are necessary for accurate recordkeeping, to prevent fraud, and to address injuries before they get worse (Exs. 1449, 1658, 1663). OSHA recognizes that employers have a legitimate interest in maintaining accurate records and ensuring that employees are reporting genuine work-related injuries and illnesses in a reasonably prompt manner. These interests, however, must be balanced with fairness to employees who cannot reasonably discover their injuries or illnesses within a rigid reporting period and with the overriding objective of part 1904 to ensure that all recordable work-related injuries and illnesses are recorded. Accordingly, for a reporting procedure to be reasonable and not unduly burdensome, it must allow for reporting of work-related injuries and illnesses within a reasonable timeframe after the employee has realized that he or she has suffered a work-related injury or illness.
A few commenters questioned whether reporting of work-related injuries and illnesses is properly characterized as an employee right, as opposed to an employee obligation. The Act provides that employees and employers “have separate but dependent responsibilities and rights with respect to achieving safe and healthful working conditions.” 29 U.S.C. 651(b)(2). Part 1904 imposes the obligation to record and report work-related injuries and illnesses on the employer.
Some commenters expressed concern that the requirement described in the proposed rule—that reporting procedures “be reasonable and not unduly burdensome”—was ambiguous and vague.
The final rule adds paragraph (b)(1)(iv) to § 1904.35 to incorporate explicitly into part 1904 the existing prohibition on retaliating against employees for reporting work-related injuries or illnesses that is already imposed on employers under section 11(c) of the OSH Act. As discussed in the Legal Authority section of this preamble, paragraph (b)(1)(iv) of the final rule does not change the substantive obligations of employers. Rather, paragraph (b)(1)(iv) provides OSHA an enhanced enforcement tool for ensuring the accuracy of employer injury and illness logs. Section 1904.36 of the final rule further clarifies that section 11(c) also prohibits retaliating against employees for reporting work-related injuries or illnesses, as explained in the 2012 OSHA enforcement memorandum.
A number of commenters stated that there is no need to amend § 1904.35 to prohibit retaliating against employees for reporting injuries and illnesses because Section 11(c) of the Act already prohibits such retaliation.
Additionally, as noted by one commenter, adding a prohibition on retaliation to part 1904 provides clear notice to employers of what actions are prohibited, which will help to prevent retaliatory acts from occurring in the first place (Ex. 1561). In other words, the final rule serves a preventive purpose as well as a remedial one. The new rule also differs from section 11(c) because it is specifically designed to promote accurate recordkeeping. For comparison, under the medical removal protection (MRP) provision of the lead standard, if an employer denies MRP benefits in retaliation for an employee's exercise of a right under the Act, OSHA can cite the employer and seek the benefits as abatement, because payment of the benefits is important to vindicate the health interests underlying MRP; section 11(c) is not an exclusive remedy.
OSHA anticipates that feasible abatement methods for violations of paragraph (b)(1)(iv) will mirror some of the types of remedies available under section 11(c); the goal of abatement would be to eliminate the source of the retaliation and make whole any employees treated adversely as a result of the retaliation. For example, if an employer terminated an employee for reporting a work-related injury or illness, a feasible means of abatement would be to reinstate the employee with back pay.
Some commenters acknowledged that the proposed rule gives OSHA additional enforcement tools but argued that doing so impermissibly interferes with section 11(c) by infringing on an employee's right to bring a section 11(c) claim and by eliminating section 11(c)'s 30-day window for employees to bring complaints. The final rule does not abrogate or interfere with the rights or restrictions contained in section 11(c). An employee who wishes to file a complaint under section 11(c) may do so within the statutory 30-day period regardless of whether OSHA has issued, or will issue, a citation to the employer for violating the final rule. OSHA believes that many employees will continue to file 11(c) complaints because of the broader range of equitable relief and punitive damages available under that provision. Finally, one commenter suggested that retaliation cases are too complex and fact-based to be suitable subjects of enforcement citations. Ex. 1645. OSHA disagrees. OSHA regularly issues citations based on complex factual scenarios and will provide its staff with appropriate training about enforcing the final rule.
Discrimination citable under paragraph (b)(1)(iv) could include termination, reduction in pay, reassignment to a less desirable position, or any other adverse action that “could well dissuade” a reasonable employee from reporting a work-related injury or illness.
Commenters cited numerous examples of employers disciplining employees who report injuries regardless of whether the employee violated company safety policy.
In addition, the United Steel, Paper and Forestry, Manufacturing, Energy, Allied Industrial and Service Workers International Union (USW) identified a number of cases where employers engaged in pretextual disciplinary actions—asserting that an employee was being disciplined for violating a safety rule where the real reason was the employee's injury or illness report (Ex. 1675). This includes situations when reporting employees are disciplined more severely than other employees who worked in the same way, or when reporting employees are selectively disciplined for violation of vague work rules such as “work carefully” or “maintain situational awareness.” Vague work rules are particularly subject to abuse by the employer and would not be considered legitimate workplace safety rules when they are used disproportionately to discipline workers who have reported an injury or illness. In contrast, a legitimate workplace safety rule should require or prohibit specific conduct related to employee safety or health so it can be applied fairly and not used as a pretext for retaliation. The AFL–CIO identified a series of cases in which a Michigan administrative law judge upheld findings of the Michigan Occupational Safety and Health Administration that AT&T used these types of vague safety policies as pretext for retaliating against employees who reported workplace injuries.
OSHA believes that the majority of employers do not discipline employees unless they have actually broken a legitimate workplace safety or health rule and do not selectively discipline employees who violate legitimate work rules only when they also report a work-related injury or illness. But in the minority of workplaces where employers may sanction employees for reporting, it is no surprise that workers are deterred from reporting because they fear the consequences of doing so.
OSHA received a number of comments expressing concern that this section of the final rule will have a chilling effect on employers disciplining employees who violate safety rules, thereby contributing to a less safe work environment. It is important to note that the final rule prohibits employers only from taking adverse action against an employee
Commenters also pointed to policies mandating automatic post-injury drug testing as a form of adverse action that can discourage reporting.
OSHA believes the evidence in the rulemaking record shows that blanket post-injury drug testing policies deter proper reporting. Morantz and Mas (2008) conducted a study on a large retail chain and found that post-accident drug testing caused a substantial reduction in injury claims. The authors found suggestive evidence that at least part of that reduction was due to the reduced willingness of employees to report accidents (Ex. 1675). Crant and Bateman (1989) describe privacy concerns and other individual factors that can affect employee willingness to participate in drug testing programs and report accidents.
Some commenters stated their belief that drug testing of employees is important for a safe workplace; some expressed concern that OSHA planned a wholesale ban on drug testing (Exs. 1667, 1674). To the contrary, this final rule does not ban drug testing of employees. However, the final rule does prohibit employers from using drug testing (or the threat of drug testing) as a form of adverse action against employees who report injuries or illnesses. To strike the appropriate balance here, drug testing policies should limit post-incident testing to situations in which employee drug use is likely to have contributed to the incident, and for which the drug test can accurately identify impairment caused by drug use. For example, it would likely not be reasonable to drug-test an employee who reports a bee sting, a repetitive strain injury, or an injury caused by a lack of machine guarding or a machine or tool malfunction. Such a policy is likely only to deter reporting without contributing to the employer's understanding of why the injury occurred, or in any other way contributing to workplace safety. Employers need not specifically suspect drug use before testing, but there should be a reasonable possibility that drug use by the reporting employee was a contributing factor to the reported injury or illness in order for an employer to require drug testing. In addition, drug testing that is designed in a way that may be perceived as punitive or embarrassing to the employee is likely to deter injury reporting.
A few commenters also raised the concern that the final rule will conflict with drug testing requirements contained in workers' compensation laws. This concern is unwarranted. If an employer conducts drug testing to comply with the requirements of a state or federal law or regulation, the employer's motive would not be retaliatory and the final rule would not prohibit such testing. This is doubly true because Section 4(b)(4) of the Act prohibits OSHA from superseding or affecting workers' compensation laws. 29 U.S.C. 653(b)(4).
Finally, many commenters expressed concern with the retaliatory nature of the employee incentive programs at some workplaces, providing myriad examples.
In addition, in recent years, a number of government reports have raised concerns about the effect of incentive programs on injury and illness reporting. A 2012 GAO study found that rate-based incentive programs, which reward workers for achieving low rates of reported injury and illnesses, may discourage reporting. Ex. 1695. Other, more positive incentive programs, which reward workers for activities like recommending safety improvements, did not have the same effect. A previous GAO study had also highlighted incentive programs as a cause of underreporting of work-related injuries and illnesses (Exs. 1675, 1695). The 2008 House Report listed examples of problematic incentive programs and found that “depending on how an incentive program is structured, reluctance to lose the bonus or peer pressure from other crew members whose prizes are also threatened reduces the
OSHA has previously recognized that incentive programs that discourage employees from reporting injuries and illnesses by denying a benefit to employees who report an injury or illness may be prohibited by section 11(c).
Some commenters expressed satisfaction with existing safety incentive programs that provide monetary incentives to employees who maintain low blood lead levels, and requested that OSHA not undermine such programs (Exs. 1488, 1654, 1683). OSHA does not intend the final rule to categorically ban all incentive programs. However, programs must be structured in such a way as to encourage safety in the workplace without discouraging the reporting of injuries and illnesses.
The specific rules and details of implementation of any given incentive program must be considered to determine whether it could give rise to a violation of paragraph (b)(1)(iv) of the final rule. It is a violation of paragraph (b)(1)(iv) for an employer to take adverse action against an employee for reporting a work-related injury or illness, whether or not such adverse action was part of an incentive program. Therefore, it is a violation for an employer to use an incentive program to take adverse action, including denying a benefit, because an employee reports a work-related injury or illness, such as disqualifying the employee for a monetary bonus or any other action that would discourage or deter a reasonable employee from reporting the work-related injury or illness. In contrast, if an incentive program makes a reward contingent upon, for example, whether employees correctly follow legitimate safety rules rather than whether they reported any injuries or illnesses, the program would not violate this provision. OSHA encourages incentive programs that promote worker participation in safety-related activities, such as identifying hazards or participating in investigations of injuries, incidents, or “near misses.” OSHA's Voluntary Protection Program (VPP) guidance materials refer to a number of positive incentives, including providing t-shirts to workers serving on safety and health committees; offering modest rewards for suggesting ways to strengthen safety and health; or throwing a recognition party at the successful completion of company-wide safety and health training.
Executive Orders 12866 and 13563 require that OSHA estimate the benefits, costs, and net benefits of proposed and final regulations. Executive Orders 12866 and 13563, the Regulatory Flexibility Act, and the Unfunded Mandates Reform Act also require OSHA to estimate the costs, assess the benefits, and analyze the impacts of certain rules that the Agency promulgates. 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, reducing costs, harmonizing rules, and promoting flexibility.
In the proposal, OSHA estimated that this rule would have economic costs of $11.9 million per year, including $10.7 million per year to the private sector, with costs of $183 per year for affected establishments with 250 or more employees and $9 per year for affected establishments with 20 or more employees in designated industries. The Agency believed that the annual benefits, while unquantified, significantly exceed the annual costs.
In this final rule, OSHA estimates that the rule will have economic costs of $15.0 million per year, including $14 million per year to the private sector with costs of $214 per year to affected establishments with 250 or more employees and $11.13 per year for affected establishments with 20 to 249 employees in designated industries. The Agency continues to believe that the annual benefits, while unquantified, significantly exceed the annual costs.
The final rule is not an “economically significant regulatory action” under Executive Order 12866 or the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1532(a)), and it is not a “major rule” under the Congressional Review Act (5 U.S.C. 801
The final rule will make four changes to the existing recording and reporting requirements in part 1904. These changes in existing requirements differ somewhat from those in the proposed rule.
First, OSHA will require establishments that are required to keep injury and illness records under part 1904, and that had 250 or more employees in the previous year, to electronically submit the required information from all three OSHA recordkeeping forms to OSHA or OSHA's designee, on an annual basis.
Second, OSHA will require establishments that are required to keep injury and illness records under part 1904, had 20 to 249 employees in the previous year, and are in certain designated industries, to electronically submit the required information from the OSHA annual summary form (Form 300A) to OSHA or OSHA's designee, on an annual basis.
Third, OSHA will require all employers who receive notification from OSHA to electronically submit the requested information from their injury and illness records to OSHA or OSHA's designee. Any such notification will be subject to the approval process established by the Paperwork Reduction Act.
Fourth, OSHA will require employers to inform employees of their right to report injuries and illness and prohibit discrimination against employees who report injuries and illnesses.
The final rule does not add to or change any employer's obligation to complete, retain, and certify injury and illness records. The final rule also does not add to or change the recording criteria or definitions for these records. The only changes are that, under certain circumstances, employers will be obligated to submit information from these records to OSHA in an electronic format and to assure that employees have, and understand they have, a right to report injuries and illnesses without fear of discrimination. OSHA requested comments and received many helpful comments throughout this process. For example, one commenter suggested that OSHA should run a pilot program of electronic reporting (Ex. 1109). In many
As OSHA explained in the preamble to the proposed rule, the electronic submission of information to OSHA would be a relatively simple and quick matter. In most cases, submitting information to OSHA would require several basic steps: (1) Logging on to OSHA's web-based submission system; (2) entering basic establishment information into the system (the first time only); (3) copying the required injury and illness information from the establishment's records into the electronic submission forms; and (4) hitting a button to submit the information to OSHA. In many cases, especially for large establishments, OSHA data are already kept electronically, so step 3 would be less time-intensive relative to cases in which records are kept on paper. The submission system, as anticipated, would also save an establishment's information from one submission to the next, so step 2 might be eliminated for most establishments after the first submission.
Many commenters questioned whether the process would be this simple. OSHA will first examine the costs of the activities outlined above, and then address a wide variety of comments on other costs in addition to those for the activities outlined above.
In the Preliminary Economic Analysis (PEA), OSHA obtained the estimated cost of electronic data submission per establishment by multiplying the compensation per hour (in dollars) of the person expected to perform the task of electronic submission by the time required for the electronic data submission. OSHA then multiplied this cost per establishment by the estimated number of establishments that would be required to submit data, to obtain the total estimated costs of this part of the proposed rule. This methodology was retained in the FEA.
To estimate the compensation of the person expected to perform the task of electronic data submission in the PEA, OSHA suggested that recordkeeping tasks are most commonly performed by a Human Resource, Training, and Labor Relations Specialist, Not Elsewhere Classified (Human Resources Specialist). In the PEA, OSHA estimated compensation using May 2008 data from the BLS Occupational Employment Survey (OES), reporting a mean hourly wage of $28 for Human Resources Specialists, and June 2009 data from the BLS National Compensation Survey, reporting a mean fringe benefit factor of 1.43 for civilian workers in general. OSHA multiplied the mean hourly wage ($28) by the mean fringe benefit factor (1.43) to obtain an estimated total compensation (wages and benefits) for Human Resources Specialists of $40.04 per hour ([$28 per hour] × 1.43).
OSHA requested comments as to whether the Human Resources Specialist was a reasonable wage rate, and received only a few comments (Exs. 0211, 1110, 0194, 1198). Many comments on the subject of occupation performing the collection and submission stated that the use of a Human Resource Specialists was not reflective of their experience. For example, the Food Market Institute (FMI) commented, “For instance, while OSHA asserts the new responsibilities will be shouldered by human resources personnel, it is far more likely that each establishment's safety professionals will be burdened with the task.” (Ex. 1198) One comment from the American Subcontractors Association stated, “Instead, among small and mid-sized ASA member firms, tasks like these are performed by high level management personnel. In larger construction firms, such tasks are likely to be performed by safety and health professionals” (Ex. 1322). Other commenters suggested that a more senior person would be needed to go over the data. Aimee Brooks of Western Agricultural Processors Association (WAPA) stated, “It is highly likely that upper level management would be inputting this information, as giving this information sensitive task to office staff at the workplace would be a liability to the business. If such responsibility is given to office staff, it would need to be accompanied with training regarding protecting sensitive information and privacy” (Ex. 1273).
OSHA believes that throughout the economy, relatively low-wage employees handle sensitive information, including PII such as employee Social Security numbers, payroll information, and customers' credit card information. OSHA further believes that specialized training is not required before handling PII. For example, many restaurants do not train wait staff specifically in the handling of credit card information.
OSHA does agree with commenters who argued that the average compensation for recordkeepers might be greater than for a human resources specialist. For this Final Economic Analysis (FEA), OSHA updated those compensation numbers using the same sources, but a different occupational classification. This change was made so that this regulation will be consistent with OSHA's 2014 recordkeeping paperwork package and OSHA's September 2014 recordkeeping regulation. For the FEA, OSHA estimated compensation using May 2014 data from the BLS Occupational Employment Survey (OES), reporting a mean hourly wage of $33.88 for Industrial Health and Safety Specialists, and December 2014 data from the BLS National Compensation Survey, reporting a mean fringe benefit factor of 1.44 for civilian workers in general. OSHA multiplied the mean hourly wage ($33.88) by the mean fringe benefit factor (1.44) to obtain an estimated total compensation (wages and benefits) for Industrial Health and Safety Specialists of $48.78 per hour ([$33.88 per hour] × 1.44). This represents an increase in the wage rate of 22 percent over the wage used in the PEA.
OSHA recognizes that not all firms assign the responsibility for recordkeeping to an Industrial Health and Safety Specialist. For example, a smaller firm may use a bookkeeper or a plant manager, while a larger firm may use a higher level specialist. However, OSHA believes that the calculated cost of $48.78 per hour is a reasonable estimate of the hourly compensation of a typical recordkeeper. In the case of a very small firm, this wage rate may exceed the owner or proprietor's wage. BLS data from the Quarterly Census of Employment and Wages (2014) show that the average weekly wage for a worker in a firm with 20 to 49 employees is $848 per week, while the average wage for a worker in a firm with 1,000 or more employees is $1,699 per week—nearly twice as high as the smaller firm.
For time required for the data submission in the PEA, OSHA used the estimated unit time requirements reported by BLS in their paperwork burden analysis for the Survey of Occupational Injuries and Illnesses (SOII) (OMB Control Number 1220–
Many of the comments on the 10 minutes originally estimated by OSHA for submitting the requested data were general in nature and often conflated the time to submit the data with the time to audit the data (Exs. 1113, 1092, 1192, 1421, 1366). A typical statement was, “OSHA estimates the electronic submission process would take each establishment only 10 minutes for each OSHA 301 submission and 10 minutes for the submission of both the OSHA 300 and 300A. This fails to accurately account for the time it would take employees to familiarize themselves with the process and review reports to ensure compliance with all regulations” (Ex. 1421).
Some comments directly addressed the issue of the relevance of the BLS estimates to OSHA's requirements (Exs. 1328, 1411). Eric Conn, representing the National Retail Federation (NRF), commented on the use of BLS's time estimate for submitting data, stating, “The data submitted for the BLS survey, however, is more limited in terms of information requested. BLS requests only certain data for up to 15 cases, but the Proposed Regulation would require all relevant Form 300 and/or 300A information from the entire injury and illness record. Thus the time burden would actually be much greater than OSHA predicts” (Ex. 1328).
OSHA agrees that the final rule requires information on all individual cases and not just on 15 or fewer lost workday injuries and illnesses, as required by BLS. The requirement for information on all cases from Form 301 was addressed in the PEA by estimating ten minutes per form entered and multiplying this by the number of forms OSHA would require to be submitted, rather than the number BLS requires to be submitted. Such differences are trivial, with the possible exception of the individual injury/illness entries on Form 300. In the FEA, OSHA has added two minutes per injury or illness listed on the OSHA 300 Log to account for this difference. Along with the 10 minutes per 300A Summary, OSHA is estimating more time than the BLS paperwork burden. For example, in the simplest case, OSHA estimates that an establishment with more than 250 employees and a single injury will take (on average) 10 minutes to electronically submit the OSHA Summary (Form 300A), 10 minutes to submit the single injury report (Form 301) and 2 minutes to submit the one line that would be on the 300 Log for each recorded injury, for a total of 22 minutes. BLS estimates 20 minutes as the average time across all employers for any number of injuries.
In the PEA, using the information on estimated hourly compensation of recordkeepers and estimated time required for data submission, OSHA calculated that the estimated cost per establishment with 250 or more workers for quarterly data submission of the information on Forms 300 and 300A would be $26.69 per year ([10 minutes per data submission] × [1 hour per 60 minutes] × [$40.04 per hour] × [4 data submissions per year]). Because the final rule now requires data to be submitted once a year, rather than four times a year, the equation in the FEA for submitting the Form 300A data is: $8.13 per year ([10 minutes per data submission] × [1 hour per 60 minutes] × [$48.78 per hour] × [1 data submission per year]). Note that $8.13 per year is nearly 75 percent less than the annual cost in the PEA because OSHA will not require quarterly submission. In addition, the estimated cost per recordable injury/illness case in the final rule is $9.74 ([10 minutes per case for form 301 entries plus 2 minutes per case for entry of form 300 log entries] × [1 hour per 60 minutes] × [$48.78 per hour]).
To calculate the total estimated costs of this part of the rule in the PEA, OSHA used establishment and employment counts from the U.S. Census County Business Patterns (CBP), data from the U.S. Census Enterprise Statistics (ES), and injury and illness counts from the BLS Survey of Occupational Injuries and Illnesses (SOII).
For the PEA, the BLS data showed a total of 2,486,500 injuries and illnesses that occurred in the covered industries. For the FEA, more recent BLS data were aggregated, and a total of 1,992,458 injuries and illnesses were found in the covered industries.
In both the PEA and the FEA, to calculate the number of injuries and illnesses that will be reported by covered establishments with 250 or more employees, OSHA assumed that total recordable cases in establishments with 250 or more employees would be proportional to their share of employment within the industry. Thus in the PEA, OSHA estimated that 890,288 injury and illness cases would be reported per year by establishments with 250 or more employees that were covered by this section. In the FEA, using the same methodology and more recent data, OSHA estimates that 713,397 injury and illness cases will be reported per year by establishments with 250 or more employees covered by this section.
In the PEA, OSHA calculated an estimated total cost of quarterly data submission of non-case information of $1,016,729 ([38,094 establishments required to submit data quarterly] × [$26.69 for electronic data submission per year]). In addition, OSHA calculated an estimated total cost of quarterly data submission of case information of $5,938,221 ([890,288 injury/illness cases per year at affected establishments] × [$6.67 per injury/illness case]). Summing these two costs yielded a total cost of $6,954,950 per year for the proposed rule ($1,016,729 + $5,938,221), for an average cost per affected establishment of $183 per year.
In the FEA, OSHA used the same equations above, using newer data plus an additional two minutes per injury and illness case to enter Form 300 data, to estimate the total cost of annual data submission under this section of the final rule. OSHA estimates a total cost of annual data submission of non-case information of $273,770 ([33,674 establishments required to submit data annually] × [$8.13 for electronic data submission per year]). In addition, OSHA calculates an estimated total cost of annual data submission of case information of $6,948,487 ([713,397 injury/illness cases per year at affected establishments] × [$9.74 per injury/
OSHA requested comments on all aspects of the PEA, including examples of establishments with 250 or more employees that cannot report electronically with existing facilities and equipment or data sources showing that such establishments exist. Aimee Brooks commented on behalf of Western Agricultural Processors Association (WAPA): “. . . in some areas of California, tree nut hullers and processors do not have a computer or internet access” (Ex. 1273). Aimee Brooks also stated on behalf of California Cotton Ginners and Growers Association (CCGGA): “Cotton growers and ginners are usually remotely located and access to internet or a computer is not only limited, but both hardware and software are generally out of date, unreliable, and slow, meaning the online reporting process will take much longer than the OSHA estimate of 10 minutes per establishment” (Ex.1274).
As will be discussed below, many commenters were concerned that requiring electronic submission might be a problem for some small firms; however, no clear examples were provided of an establishment with over 250 employees that did not have computers and Internet access. Based on the comments to the proposed rule, and OSHA's own experience, the Agency continues to believe that large establishments with 250 or more employees have access to computers and the Internet.
OSHA's methodology for estimating the costs of this section of the proposed rule in the PEA was similar to the methodology for estimating the costs of the previous section. OSHA first obtained the estimated cost of electronic data submission per establishment by multiplying the compensation per hour (in dollars) for the person expected to perform the task of electronic data submission by the time required for the electronic data submission. OSHA then multiplied this cost by the estimated number of establishments that would be required to submit data, to obtain the total estimated costs of this part of the proposed rule.
In the PEA, for compensation per hour, OSHA used the calculated cost of $40.04 per hour as a reasonable estimate of the hourly compensation of a representative recordkeeper. In the FEA, as discussed above, OSHA has increased this per-hour wage to $48.78.
In the PEA, OSHA used the BLS estimate of 10 minutes per establishment for electronic submission of the information on Forms 300 and 300A (Summary of Work-Related Injuries and Illnesses) to estimate the time required for this submission. The estimated cost per establishment for electronic submittal under this part of the proposed rule was $6.67 per year ([$40.04 per hour] × [10 minutes per data submission] × [1 hour per 60 minutes] × [one data submission per year]).
For the FEA, the estimated cost per establishment for electronic submittal under this part of the proposed rule is $8.13 per year ([$48.78 per hour] × [10 minutes per data submission] × [1 hour per 60 minutes] × [one data submission per year]).
In the PEA, OSHA estimated that the number of establishments subject to this part of the proposed rule would be 440,863. OSHA noted in the PEA that many of these establishments were already submitting these data to OSHA through the ODI. 47,700 establishments of the 68,600 establishments in the 2010 ODI (70 percent) submitted their data electronically.
As a result, OSHA estimated that the direct labor cost of this part of the proposed rule would have been $2,622,397 ([$6.67 per establishment per year] × ([440,863 establishments affected under the proposed rule]−[47,700 establishments already submitting electronically to the ODI])).
This estimate is based on the assumption that all of the affected establishments have on-site access to a computer and an adequate Internet connection. However, as noted above, 30 percent of establishments in the 2010 ODI did not submit data electronically. One possible reason for this choice is that, for some of those establishments, it was difficult to submit data electronically. Most agencies currently allow non-electronic filing of information, and some businesses continue to use this option, despite strong encouragement by agencies to file electronically.
OSHA searched for but was unable to find information on the proportion of all businesses without access to a computer and the Internet. However, OSHA did find a survey, conducted by a contractor for the Office of Advocacy of the Small Business Administration (SBA) in the spring of 2010, on the use of Internet connectivity by small businesses, called “The Impact of Broadband Speed and Price on Small Business” (
It also needs to be noted that the minimum establishment size affected by this proposed rule is 20 employees. It is reasonable to assume that an even smaller percentage of firms with 20 or more employees lack a computer with an Internet connection.
OSHA was able to find only two current Federal Government data collection programs that require data to be submitted electronically.
• Effective January 1, 2010, the Department of Labor's Employee Benefits Security Administration requires the electronic filing of all Form 5500 Annual Returns/Reports of Employee Benefit Plan and all Form 5500–SF Short Form Annual Returns/Reports of Small Employee Benefit Plan for 2009 and 2010 plan years, as well as any required schedules and attachments, using EFAST2-approved third-party software or iFile. EFAST2 is an all-electronic system designed by the Department of Labor, Internal Revenue Service, and Pension Benefit Guaranty Corporation to simplify and expedite the submission, receipt, and processing of the Form 5500 and Form 5500–SF.
• Under the mandatory electronic filing provisions (11 CFR 104.18) of the Federal Election Commission (FEC), effective January 1, 2001, any political committee or other person that is required to file reports with the FEC and that receives contributions or makes expenditures in excess of $50,000 in the current calendar year, or has reason to expect to do so, must submit its reports electronically.
All other data collection programs identified by OSHA provide a non-electronic option for data submission, including the OSHA Data Initiative (ODI); various databases at the Environmental Protection Agency (EPA), including the Toxics Release Inventory Program (TRI); and programs administered by the Internal Revenue Service (IRS), the Bureau of Labor Statistics (BLS), and the U.S. Census Bureau (including business data).
As noted above, even a dated survey from 2010 found that 95 percent of small businesses with 5 or more employees had a computer with an Internet connection. The Department of Commerce estimated in 2009 that 69 percent and 64 percent of U.S. households, respectively, had some kind of Internet access and broad-band Internet access specifically (National Telecommunications and Information Administration, U.S. Department of Commerce, “Table 2 Households using the Internet in and outside the home, by selected characteristics: Total, Urban, Rural, Principal City, 2009 (Numbers in Thousands)”,
It seems reasonable to assume that business owners, as a group, have higher incomes and labor force participation rates than the U.S. population as a whole. And data from the 2007 Survey on Small Business Owners, conducted by the U.S. Census Bureau, show that business owners have higher levels of education; 74 percent of the business owners had at least some post-high school education and 45 percent had at least a bachelor's degree, compared to 55 percent and 30 percent among the general U.S. population aged 25 and older in 2010 (U.S. Census, “Table 1. Educational Attainment of the Population 18 Years and Over, by Age, Sex, Race, and Hispanic Origin: 2010”,
In the PEA, to account for the lack of direct data on computers and Internet access among small businesses and the presumed increase in Internet usage since the indirect data were obtained, OSHA estimated that 95 percent of the 440,863 establishments subject to this part of the proposed rule (
OSHA requested comments on all aspects of this preliminary estimate and received many comments. Some commenters requested that OSHA still provide a paper reporting option (Exs. 0179, 0211, 0253, 0255, 1092, 1112, 1123, 1190, 1192, 1199, 1205, 1322). The American Forest and Paper Association (AFPA) commented, “Many businesses, particularly small firms located in rural areas, do not have ready access to the Internet or may find electronic reporting burdensome because they currently have a paper-based record system and should not be burdened with the cost of converting to an electronic format” (Ex. 0179). Many commenters incorrectly asserted that OSHA had assumed everyone had a computer and kept records electronically (Exs. 1092, 1123, 1190, 1199, 1200, 1343, 1359, 1370, 1410, 1421). As discussed above, this assumption was inaccurate. Perhaps because of this inaccurate assumption, almost no commenters addressed OSHA's estimate of the number of establishments without computer access or OSHA's estimates of the costs for such establishments.
However, one commenter, the American Farm Bureau Federation (AFBF), provided information on computer use on farms: “. . . only 68 percent of farmers (both livestock/poultry and crop producers) have a computer and only 67 percent have internet access . . .” (Ex. 1113). Note that the figure of 67 percent of farms with Internet access is only a bit below the national average for households of 74 percent with Internet access. OSHA does not expect that many farms will be subject to reporting under this final rule, because few farms have 20 or more workers. Of the 2.2 million US farms, only about 550,000 have any hired help (about 25 percent). The 2012 Agricultural Census reports that there are just 40,661 farms with 10 or more workers in the U.S. OSHA believes that there are 20,623 farms with more than 20 hired workers that would be subject to this final rule. OSHA believes that farms with many workers are extremely large operations, heavily capitalized, and likely to have computers or smartphones and Internet access.
In the PEA, OSHA estimated the total costs of this part of the proposed rule as the direct labor cost of electronic submittal ($2,622,397) for the 393,163 establishments subject to the rule and not already electronically submitting the data to OSHA through the ODI, plus the additional cost for 5 percent of the affected 440,863 establishments of going off-site to submit the data electronically ($882,607). A last cost of $189,935 in the PEA, for those establishments that do not currently certify their records, is discussed below. Thus, the total cost of the proposed rule was $3,695,939 per year, or an approximate estimated average of $9.40 per affected establishment ([$3,695,939 per year]/
In the FEA, the estimate of affected establishments is smaller: 410,673 affected establishments versus 440,863 affected establishments with 20 or more employees in the PEA, or 6.8 percent less. Note that, since the ODI was not in effect in 2015, OSHA will not take an offset for establishments submitting data for the ODI.
The total costs of this part of the final rule are the direct labor cost of electronic submittal ($3,338,771) for the 410,673 non-farm establishments subject to the rule, plus the additional cost for 5 percent of the affected 410,673 establishments of going off-site to submit the data electronically ($1,001,631). A last cost of $231,192, for those establishments that do not currently certify their records, is discussed below. Thus, the total cost is $4,571,594 per year, or an approximate estimated average of $11.13 per affected establishment ([$4,571,594 per year]/([410,673 establishments affected under the proposed rule]).
In the PEA, OSHA recognized that a small percentage of establishments currently subject to part 1904 do not fully comply with the requirement in § 1904.32(a)(3) to certify the accuracy of each year's records. OSHA inspection data showed that in 2010, about 1.6 percent of establishments undergoing an inspection had a violation of the recordkeeping certification requirement. OSHA had previously estimated costs and a paperwork burden for the time these employers would spend reviewing their data for certification purposes (
In the FEA, OSHA updated the wage rate of the certifying official, using 2014 data. Thus the wage rate for the certifying official, based on the wage of an Industrial Production Manager (OES 11–3051), is $70.37, based on a mean hourly wage of $48.87 and a fringe benefit factor of 1.44 ($48.87 × 1.44 = $70.37). The estimated number of non-compliant establishments is 6,571 (1.6 percent of 410,673 non-farm establishments). The cost of certification for non-certifying establishments is $231,200 [(30 minutes) × (6,571 establishments) × ($70.37 per hour) × (1 hour per 60 minutes)].
OSHA believes, and current ICRs support, that 30 minutes is the appropriate amount of time required, on average, for certification. However, a range of time requirements is possible. For example, if the certifying officials are especially productive at certification, perhaps because the injury and illness records are well-maintained or because the officials are able to work off existing finalized summary reports sent to Workers' Compensation insurance agencies, then it may only take 15 minutes, on average, to complete the certification. In that case, the total cost would be just $115,596. On the other hand, perhaps the certifying officials have become less productive since the previous ICRs. If it now takes a certifying official one hour instead of 30 minutes to certify, then the total cost for non-complying establishments would be $462,384.
OSHA also notes that in the PEA, farms with 20 or more employees were not counted for cost purposes, though they were included in the scope of the regulation. A separate analysis follows for the FEA.
OSHA was not able to obtain a count of farms (crop and animal) with 20 or more employees. OSHA took the estimate of farms with 10 or more employees (41,246 farms), provided by the Census of Agriculture, and took 50 percent of that total (20,623 farms) as the best estimate of the number of farms with 20 or more employees. This is still possibly an over-estimate of the number of farms with 20 or more employees, because the inverse relationship between the number of farms and the number of farm employees rises geometrically. Other information, for example farm revenue data, also help to show that there are very few farms with revenues high enough to support 20 employees.
Following the methodology used elsewhere in the FEA, those 20,623 farms will on average take 10 minutes to submit their summary electronically to OSHA. OSHA has made two adjustments to this methodology for farms. First, OSHA estimates that five percent of farms subject to this section of the final rule (1,031 farms) will not have access to a computer, a smart phone, or the Internet. Second, OSHA estimates a travel time of one hour for data submitters at these establishments to travel off-site to an Internet connection.
OSHA estimates that 330 farms (1.6% × 20,623 farms) do not currently certify their injury/illness records, leading to an additional cost of $11,611 [(30 minutes) × (330 establishments) × ($70.37 per hour) × (1 hour per 60 minutes)]. The total cost for farms included in electronic reporting is $229,568, which is derived by multiplying [(20,623 farms) × ($48.78 per hour) × (10 minutes) × (1 hour per 60 minutes)] and adding [(1,031 farms without Internet) × ($48.78 per hour) × (1 hour)] and then adding [(330 farms that do not currently certify) × ($70.37 per hour) × (30 minutes) × (1 hour per 60 minutes)].
OSHA believes that the same computer ownership factor used in the PEA and FEA for general establishments also applies to farms. While there were comments, based on a USDA survey, that farms did not have as many computers or as much Internet access as the rest of the private sector, that survey was heavily weighted toward typical American farms,
Several commenters expressed concern that OSHA was not allowing enough time for initial startup or familiarization for establishments that will be newly required to report their data electronically (Exs.1338, 1276, 1351, 0160, 1112, 1205, 1394, 1190,
The last cost element is from the non-discrimination provisions of this final rule. In the economic analysis for the supplemental notice to the proposed rule, OSHA stated that “these provisions do not require employers to provide any new or additional records not already required in existing standards. (When the existing standards were promulgated, OSHA estimated the costs to employers of the records that would be required.) These provisions add no new rights to employees, but are instead designed to assure that employers recognize the existing right of employees to report work-related injuries and illnesses.”
After examining the rulemaking record and adjusting the final regulatory text, OSHA now anticipates that the implementation of the non-discrimination provisions will have one cost component, namely an informational component that employers can meet by posting the new OSHA poster (
This section of the FEA accounts for the costs, discusses the benefits, and in addition addresses comments provided by the public on the subject of this part of the final rule.
For the costs—although employers are required to post the OSHA poster, OSHA is not requiring employers to replace the existing poster with the new poster. Putting up the OSHA poster is therefore a new cost for this final rule. To calculate the cost of posting the new OSHA poster, OSHA used the following judgments. First, it will take an employer five minutes to obtain and post the poster. Second, this task will be undertaken by an industrial manager with an hourly wage of $70.37, as above. Third, there are 1,364,503 establishments subject to this requirement in the final rule (including farms with 10 or more employees). The estimated one-time cost for posting the new OSHA poster is thus $8,001,673 [(1,364,503 establishments) × $70.37 per hour) × (5 minutes) × (1 hour per 60 minutes)]. Annualized over 10 years at 3 percent interest, this is a total cost of $938,040 per year. OSHA believes this cost estimate is a significant over-estimate because many establishments routinely download and post newer versions of OSHA's poster even without regulatory guidance. In addition, although OSHA is using an estimate of five minutes in the FEA, OSHA wrote in the supplemental notice to the proposed rule that posting the sign could take as few as three minutes.
OSHA received a few comments relating to the costs of the non-discrimination provisions of the proposed rule. Some commenters noted that OSHA already requires employers to post an OSHA sign that informs workers of their right to not be discriminated against for reporting (Exs. 1547, 1600, 1603). For example, the Association Connecting Electronics Industries commented, “Employees must already be made aware that they are protected under the Act 'against discharge or discrimination for the exercise of their rights under Federal and State law.' Specifically, OSHA requires that employers post OSHA 3165, Job Safety and Health—It's the law! This posting clearly states that employees can file a complaint with OSHA within 30 days of retaliation or discrimination by an employer for making a safety or health complaint and employers must comply with the occupational safety and health standards under the OSH Act” (Ex. 1668). OSHA agrees that workplaces must post an OSHA poster, but there is no requirement that establishments download the latest OSHA poster, which is the one that contains the specific information on the right to report injuries and illnesses, as required by the final rule.
OSHA did not quantify the benefits of the non-discrimination requirement in the supplemental notice to the proposed rule, because OSHA believed that since there would be no additional costs, there would be no additional benefits. In the supplemental notice to the proposed rule, OSHA stated, “OSHA also expects that, because these three potential provisions will only clarify existing requirements, there are also no new economic benefits. The provisions will at most serve to counter the additional motivations for employers to discriminate against employees attempting to report injuries and illnesses.” [79 FR 47605–47610]
However, OSHA believes that posting the newest OSHA poster will encourage both employees and employers to accurately report and record workplace injuries and illnesses. Many commenters commented that informing workers of their right to report injuries and illnesses without fear of discrimination was beneficial (Exs. 1489, 1529, 1603, 1640, 1647, 1679, 1682, 1688, 1695, 1696). The Communications Workers of America (CWA) stated, “Employer notification to employees of their right to report occupational injuries and illnesses without fear of employer retaliation, employer development and implementation of reasonable injury and illness requirements, and the prohibition of employer's adverse action against the workers who report injuries and illnesses is extremely important towards improving and maintaining safe
This part of the final rule has no immediate costs or economic impacts. Under this part of the rule, an establishment will be required to submit data electronically if OSHA notifies the establishment to do so as part of a specified data collection. Each specified data collection would be associated with its own particular costs, benefits, and economic impacts, which OSHA would estimate as part of obtaining OMB approval for the specified data collection under the Paperwork Reduction Act of 1995.
While OSHA has not typically included the cost of administering a new regulation in the preliminary economic analysis, the Agency did include such costs in the PEA, because they represented a significant fraction of the total costs of the regulation. The program lifecycle costs can be categorized into IT hardware and software costs, helpdesk costs, and OSHA program management personnel costs. OSHA received estimates for the lifecycle costs from three sources: an OSHA contractor, the BLS, and the OSHA web-services office.
According to OSHA's Office of Web Services, the creation of the reporting system hardware and software infrastructure would have had an initial cost of $1,545,162. Annualized over 10 years at 3 percent interest, this is $181,140 per year.
BLS provided a unit cost estimate of 28 cents per transaction. This would have amounted to $372,000 per year for about 1.3 million transactions. Adding annual help desk costs of $200,000 would have made the total $572,000.
The contractor and OSHA's Office of Web Services provided higher budget estimates. The contractor suggested that annual costs could have been as high as $953,000, while the OSHA Office of Web Services suggested a cost of $626,000 per year.
Under the proposed rule, OSHA would have also continued to require three full-time-equivalent workers (FTEs) to administer the new electronic recordkeeping system. OSHA believed these FTEs would have cost the government $150,000 each, including salary and benefits, for a total of $450,000 per year. Added to the BLS cost of $572,000 and the annualized start-up cost of $220,000, this would have amounted to $1,242,000, or just over $1.2 million. Adding the FTE costs to the contractor and OSHA Office of Web Services estimates, along with the annualized start-up cost, would have yielded a range of between $1.2 million and $1.6 million per year. For its best estimate in the PEA, OSHA used the BLS estimated costs per transaction, because this estimate is based on actual experience with implementing a similar program.
For the FEA, OSHA used the estimate for costs to the government as published in the PEA and then adjusted the estimate by using the rate of inflation determined by the GDP deflator (source: St. Louis Federal Reserve Bank GDP deflator time series from January 2012 to January 2015: 3.0 percent) to adjust the estimated cost to the government. Thus the cost to the government for this final rule is $1,279,260.
Several commenters commented on the cost to the government. Several commenters expressed concerns that this data collection effort would strain the resources of OSHA by costing too much or requiring too many Federal employees to work on this project (Exs. 1187, 1193, 1199, 1204, 1219, 1336, 1339, 1382, 1389, 1399, 1430, 1461). A typical comment highlighting the possible additional costs to the government was submitted by the MYR Group: “Although not technically required for notice and comment rulemaking under the OSH Act, MYR Group believes that OSHA should evaluate the cost of its own resources which would be required to be dedicated to this rule instead of other compliance assistance or enforcement activities. OSHA would have to establish and continuously maintain a special government Web site for these data collections. This involves not only hardware and software expenses, but also ongoing salaries. To utilize the data for injury and illness prevention, or for enforcement, OSHA would have to establish positions for analysis to review and interpret the data. MYR Group believes that shifting resources from prevention activities to data management would be detrimental to making the workplaces safer and certainly not worth the minor potential for an incremental benefit in the collection of statistically insignificant data” (Ex. 1399).
In response, OSHA believes that the number of OSHA employees who will be assigned to collecting and analyzing the improved data will be the same number as those who worked on the ODI program. Based on examples of Web sites submitted by OSHA's contractor, OSHA believes that the data collection Web site will be a turn-key operation that will not require much human monitoring, just like the ODI data collection Web site. Further, OSHA believes that this data collection, even if it requires additional resources, will result in saving of other resources through better targeting of resources and better understanding of safety and health.
Some commenters suggested that there were other possible costs associated with the rule, including costs for computers and computer systems, for training, and for review of submissions. Others commented that there might be indirect costs, for example through loss of reputation to a firm (or, presumably, an establishment), loss of confidential business data, higher OSHA fines, additional union organizing, additional training, and opportunity costs, as well as perhaps higher labor costs as the labor supply gets better information on the safety and health of a workplace. Commenters also suggested that liability costs might rise, or that the security of dangerous materials or processes might be compromised. Finally, commenters suggested that an untrained public might naively misinterpret the data. Each of these groups of comments will be addressed briefly in this section.
Some commenters argued that OSHA was requiring the use of computerized record keeping. Troy Miller, a private citizen, commented, “The literature included with the proposed rule suggests that OSHA assumes a majority of employers already keep their injury and illness records electronically, so submission to OSHA should be doable without much extra time or expense” (Ex. 0160). A related set of comments suggested that many establishments or firms would need to buy new computer systems (Exs. 0035, 1205, 1225, 0179, 0210, 1092, 1123, 1189, 1190, 1192, 1199, 1275, 1281, 1092, 1113, 1279).
OSHA notes that nothing in this final rule, or in the existing part 1904 regulation, requires employers to create or maintain records electronically. Anyone who prefers to keep paper records for whatever reason may continue to do so. Employers who keep paper records will only have to enter the information from their paper records onto the forms on OSHA's Web site. OSHA estimates that this data entry will
Several commenters suggested that they would face additional training costs to train employees who already administer or keep OSHA 300-series forms to upload either summary or Log data to the OSHA Web site (Exs. 0160, 0179, 0194, 0196, 0210, 0215, 1091, 1092, 1326, 1339, 1340, 1372, 1393, 1394, 1396, 1401, 1408). A typical comment on training was submitted by the Pacific Maritime Association (PMA), which commented, “OSHA has failed to take into account the costs associated with having to train employees to record injuries in a manner suitable for publication . . .” (Ex. 1326).
OSHA continues to believe that additional training should not be necessary either to fill in a web form or to transmit records from an existing electronic system with which the employee is already familiar. This will be no more difficult than filling in order forms on private sites or other government forms online. It should be noted that more than 70 percent of respondents to the OSHA ODI and the BLS SOII collections choose to respond electronically. OSHA has already accounted for training for recordkeepers to understand the OSHA recordkeeping system and for the costs of familiarizing first-time recordkeepers with the Web site. No additional training will be necessary to transfer data from already-filled-in forms to a computer form. Note that OSHA's estimate of an hourly wage of $48.78 for the person entering the data assumes that the person is a technically-proficient employee; the hourly wage for an employee who is not technically proficient would typically be less.
Several commenters suggested that some establishments might undertake an extra level of review, or an extra review effort, before sending the information to OSHA (Exs. 0258, 1110, 1123, 1205, 1336, 1356, 1399, 1401, 1413, 1427). For example, the Phylmar Regulatory Roundtable (PRR) commented, “Online submission to OSHA will likely include the labor not just of record keepers, but of more senior health and safety staff to quality control the data before submission. Most members believe strongly that senior management would seek to review and approve all submissions (not just the 300A reports); again this would involve additional cost to comply” (Ex. 1110).
As discussed above, comments on this issue were often conflated with other issues, for example the confidentiality of employees' records. The Texas Cotton Ginners' Association (TCGA), represents very small establishments that “will have up to 20 or 30 employees during peak periods” (Ex. 0211). The TCGA suggested that, because of the possibility of revealing confidential employee information, a manager might instead subject the data to further review and upload it themselves: “The concern of management will be that this type of system will inherently set up situations where workers may feel their privacy is violated, and the worker is likely to blame their employer when this occurs. To minimize their liability, it is unlikely that a company will simply hand all the forms to a clerk and tell them to key the data into the public domain” (Ex. 0211).
In response, OSHA notes that OSHA's estimate of an hourly wage for the recordkeeper submitting the data is based on the assumption of a safety and health specialist familiar with the establishment's safety and health records, and that this hourly wage may be larger than the hourly wage for managers of small firms. Second, OSHA notes that a firm with 20–30 employees is required to submit only the information from Form 300A (the annual summary), which contains no employee-specific information.
OSHA believes that existing regulations already provide an entirely adequate incentive to employers to thoroughly review their records and that publication of establishment-specific data through the final rule will require little further review. After all, OSHA records can already be accessed by OSHA at the time of inspection, as well as by employees and their representatives (including unions and employee attorneys). In addition, employers are already required to certify records under possible penalties of perjury.
Some commenters were concerned about confidential business information or personal information (Exs. 0038, 0150, 0159, 0210, 0215, 0252, 1090, 1091, 1110). As discussed above, there is no need for confidential business information in OSHA records, and OSHA already urges employers to avoid including confidential business information in OSHA records because OSHA allows employees and their representatives access to these records and places no limitations on the use of these records. There is no need for such confidential business information in OSHA records, and confidential business information should already be excluded, as the records can be made public at any time. Employers concerned with the time required to expunge personal information should also consider that the information in question could already be made public and that recordkeeping should exclude as much personal information as possible, consistent with the use of the records. In addition, OSHA intends to exclude the names and other PII of individuals from the records before publishing the data.
Some commenters suggested that published injury and illness data will tarnish the reputations of some establishments, or enterprises, or perhaps their entire industry. The Pacific Maritime Association commented, “. . . an employee who has worked for one employer over a long period of time, and complains about a cumulative injury on his first day of work with a second employer will trigger an injury report that will be attributed to that second employer. Publication of this report is obviously unfair and inaccurate. Further, owing to contractual obligations and developing regional working rules, the standards and conditions at different ports change with a degree of frequency. Accordingly, without the proper context—something that OSHA has not proposed to provide as part of this database—it will be impossible for the public to even compare the injury rates of a single port” (Ex. 1326). OSHA agrees that it is important for users of the data to understand the rules under which the data was gathered, as shown by the “Explanatory Notes” OSHA includes with its currently-published ODI data. OSHA intends to include similar notes and explanations with the data collected under this rulemaking to minimize misunderstanding and misrepresentation of the data.
Many commenters wrote that they feared that publication of establishment-specific summaries of annual injuries and illnesses would harm the establishments' reputations, and therefore, their businesses (Exs. 0157, 0160, 0162, 0181, 0189, 0205, 0218, 0224, 0235, 0240, 0242, 0245, 0249, 0251, 0255, 1084, 1089, 1090, 1091, 1092, 1093, 1095, 1096, 1106, 1112, 1113, 1115, 1117, 1123, 1192, 1197, 1198, 1199, 1200, 1205, 1209, 1214, 1216, 1217, 1218, 1224, 1225, 1272, 1276, 1277, 1279, 1281, 1282, 1283, 1284, 1321, 1326, 1327, 1328, 1332,
Regarding the first comment, OSHA is not aware of damage to the reputations of establishments or firms from other, similar data collection efforts. For example, MSHA has been collecting and publishing individual mine injury data on the Web for 15 years. OSHA itself has, for many years, published establishment-specific results of its inspections and, more recently, establishment-specific data collected through the ODI. There are other types of web-published data, which include public safety information (for example police or fire responses to a business's location), health inspector reports, court records, and information about a firm's financial condition. All of these sorts of information are subject to misinterpretation by members of the public.
Regarding the second comment, OSHA strongly disagrees with the commenter that a strong illness and injury prevention program can be based on hiding basic information on injury and illness rates from either employees or the public. Illness and injury prevention programs work best when data on injuries and illnesses is collected and analyzed frequently and used as a tool to improve safety and health. As discussed above, this data collection effort will allow scholars and public health experts to analyze establishment data, discover patterns in injuries and illnesses, and recommend solutions.
Another comment about the proposed rule had to do with what one commenter explicitly identified as “opportunity costs”, that is, the value of effort forgone due to the compliance costs for this final rule. The Food Marketing Institute (FMI) commented, “Thus, time spent addressing the proposed rule's many requirements is time that the safety personnel cannot spend providing safety training, completing safety audits, or handling other matters critical to the ongoing safety of the workplace. The opportunity costs created by the proposed rule are potentially significant and must be accounted for in the proposal's overall cost to employers” (Ex. 1198).
In response, the comment above is true for any government rule or regulation, or for that matter, any internal firm regulation or operating procedure. Time spent on compliance with any regulation is, by definition, time that cannot be spent on something else. That is one reason why OSHA has kept the requirements for this final rule as simple and as economical as possible. OSHA does not believe that an extra ten minutes, or even an extra hour, every year will significantly affect the ability of an establishment to have a safety program or generate profits. In fact, OSHA believes that when an establishment has access to the injury and illness information for other firms that will be generated by this final rule, it should make an establishment's safety and health program more efficient. Further, in principal, the labor costs of affected workers reflect the opportunity costs of that labor. If the opportunity cost is significantly higher than the labor costs, the firm should consider hiring more of the kind of labor in question.
Last, many commenters stated that OSHA injury and illness data might be taken out of context or misinterpreted by the public. One commenter, the National Grain and Feed Association (NGFA), commented, “Providing raw data to those who do not know how to interpret it or without putting such data in context invites improper and false conclusions or assumptions to be drawn about the employer, which could lead to unnecessary damage to a company's reputation, related loss of business and jobs, and misallocation of resources by the public, government and industry” (Ex. 1351). OSHA strongly disagrees with comments criticizing the value of raw and un-interpreted injury and illness data. Standard economic principles show that information is valuable, even if it is difficult to interpret. As economists as early as Adam Smith, and including Friedrich Hayek and Milton Friedman, have shown, economic actors who have only a narrow view of the information available in the economy work together to efficiently allocate resources. Hayek wrote in “The Use of Knowledge in Society” (1945) that “The whole acts as one market, not because any of its members survey the whole field, but because their limited individual fields of vision sufficiently overlap so that through many intermediaries the relevant information is communicated to all. The mere fact that there is one price for any commodity—or rather that local prices are connected in a manner determined by the cost of transport, etc.—brings about the solution which (it is just conceptually possible) might have been arrived at by one single mind possessing all the information which is in fact dispersed among all the people involved in the process.”
In addition, OSHA believes that the best solution to the “problem of information” is more information. Establishments, corporations, and industry groups will now have access to competitors' information on injuries and illnesses, and they will be able to distinguish themselves from others in their industry.
As shown in the Table VI–1 below, the total costs of the final rule would be an estimated $15.0 million per year. These costs are shown in the middle column of Table VI–1. Also note that the last column, “First Year Costs”, is broken out separately, but is also included in the Final Rule Annual Costs column, having been amortized over 10 years at 3 percent interest. It would be double-counting to add the total of the second and third columns together.
First,
Second, employers are already required to examine and certify the information they collect. Employers who are already sufficiently satisfied with the accuracy of their records to accept the risk of a criminal penalty are unlikely to do more simply because they must electronically submit the records to OSHA. Therefore, the prospect of submitting their data to OSHA would not provide any additional incentive to carefully record injuries and illnesses.
Third, injury and illness records kept under part 1904 are already available to OSHA and the public in a variety of ways. The annual summary data must be posted where employees can see it. Employees or their representatives can also obtain and make public most of the information from these records at any time, if they wish. These are the people who are most likely to recognize if the records are inaccurate. Finally, OSHA Compliance Officers routinely review these records when they perform workplace inspections. While OSHA inspections are a rare event for the typical business, they are much more common for firms with over twenty employees in the kinds of higher-hazard industries subject to this rule.
OSHA requested comments on the issue of whether employers newly required to submit records to OSHA may spend additional time assuring the accuracy of their records, beyond what they spend now. If all 431,296 establishments were to spend an extra half hour for an industrial health and safety specialist to double-check the data prior to submission, then the costs of this final rule would increase by $10.5 million. While this would be a substantial addition to the costs of the rule, such an addition would not alter OSHA's conclusion that this is neither an economically-significant rule nor a rule that would impose significant costs on a substantial number of small businesses.
OSHA received two comments that provided alternative estimates of the total costs. OSHA will review these estimates here.
Miles Free at Precision Machined Products Association (PMPA) provided a detailed breakdown of estimated costs, itemizing the tasks firms would have to undertake due to the proposed regulation change (Ex. 194). The costs totaled $592 per firm. Most of these tasks were not included in OSHA's cost estimate. The total of $592 includes the use of a higher managerial wage ($30) and costs associated with reading the rule, reviewing, training, and development of IT resources; he notes “many of these costs are initial setup”. OSHA believes that many of these costs seem inflated. For example, the second largest single cost element is for “reading the rule” which will require 4 hours. Given that the rule itself takes up less than one page of text, and can be readily explained in less than another page of text, it is difficult to imagine how someone could spend 4 hours reading the rule. In addition, as noted above, review of records is already required; no additional IT resources are required to submit a form electronically; and it is difficult to see how technically-qualified personnel will need training in order to submit already-gathered data on an Internet form.
For the Final Economic Analysis, OSHA added 5 minutes of time for establishments that are required to keep records, but are not newly required to submit annual records summaries to OSHA under this rule. OSHA believes those establishments might need 5 minutes to check OSHA's Web site, or various other Web sites or sources of
The Chamber of Commerce asserts that “OSHA's cost-benefit analysis is deeply flawed” for multiple reasons and derives its own total costs of the regulation at over $1.1 billion (Ex. 1396). In the submitted comment, the Chamber states one of the sources of the higher cost would “result from companies more closely scrutinizing whether an injury or illness is recordable and hence reportable.” The discussion of this topic focused on the legal case of
In their discussion of costs, the Chamber provides its own estimates for three specific elements: reviewing the rule, re-programming information systems, and training. They state, “if each firm on average spent just one hour to review the rule's compliance requirements, the initial year cost would be over $342 million.” The Chamber based its cost estimate on the BLS 2013 average compensation for private sector managers and administrators, and a total count of 7.4 million separate establishments. It should be noted that the overwhelming majority of these establishments are very small firms with fewer than 11 employees and firms in low-hazard industries that are partially exempt from OSHA's recordkeeping requirements. These firms already know that this rulemaking does not apply to them, because they are not required to routinely keep OSHA injury and illness records under part 1904.
Using reports by companies surveyed about HR information systems that would need to be modified, the Chamber estimates an initial-year cost of over $440 million to re-program information systems and software. The Chamber's comments describe multiple challenges associated with the costs for electronic submissions, including the integration of software or databases, and up to 16 hours of professional labor to retool information systems and software. The Chamber states, “The majority of employers will find it necessary to change existing records systems and procedures in order to compile and submit information according to the format and periodicity of this proposed rule's reporting requirement.” The Chamber estimates startup software modification costs of over $5,000 for large firms and $1,000 for small firms. These estimates seem high. The typical large firm has to track an average of 21 one-page records. It is difficult to imagine how it would be possible to spend $5,000 on a system designed to track 21 one-page records. In any case, however, firms must already track these records, although they need not do so electronically, so there is no need for a new system of any kind as a result of the final rule. In the case of small firms, the Chamber estimated that there would be $1,000 in software costs associated with submitting data on a one-page form that the employer already is required to fill out. OSHA believes that it is extremely unlikely that a small firm would spend $1,000 for this purpose.
Lastly in the submitted cost comments, the Chamber estimates training costs at nearly $150 million, “based on just one hour of training plus the average cost for commercial occupational safety training materials.” The Chamber's estimated training cost would be for corporate managers who “will need to be trained to comply with the reporting formats, schedules and procedures.” As discussed above, OSHA believes that such training is unnecessary for a person competent in computer use (or smart phone use) to fill in an on-line form.
As OSHA explained in the preamble to the proposed rule, OSHA anticipates that establishments' electronic submission of establishment-specific injury/illness data will improve OSHA's ability to identify, target, and remove safety and health hazards, thereby preventing workplace injuries, illnesses, and deaths. In addition, OSHA believes that the data submission requirements of the final rule will improve the quality of the information and lead employers to increase workplace safety and health.
The Agency plans to make the injury and illness data public, as encouraged by President Obama's Open Government Initiative. Online access to these data will allow the public, including employees and potential employees, researchers, employers, unions, and workplace safety and health consultants, to use and benefit from the data. It will support the development of innovative ideas and allow everybody with a stake in workplace safety and health to participate in improving occupational safety and health.
The data collected by BLS is mostly used in the aggregate. While BLS makes micro data available in a restricted way to researchers, OSHA will make micro data, including case data, available to researchers and the public with far fewer restrictions.
The BLS SOII is used as a basis for much of the research on workplace safety and health in the US. Typical examples include Economic Burden of Occupational Injury and Illness in the United States, by J. Paul Leigh (2011); Analyzing the Equity and Efficiency of OSHA Enforcement, by Wayne B. Gray and John T. Scholz (1991); Establishment Size and Risk of Occupational Injury, by Dr. Arthur Oleinick MD, JD, MPH, Jeremy V. Gluck Ph.D., MPH, and Kenneth E. Guire (1995); and Occupational Injury Rates in the U.S Hotel Industry, by Susan Buchanan
The database resulting from this final rule will provide for the use of establishment-specific data without having to work under the restrictions imposed by BLS for the use of confidential data. It would also provide data on injury and illness classifications that are not currently available from any source, including the BLS SOII. Specifically, under this collection, there would be case-specific data for injuries and illnesses that do not involve days away from work. The BLS case and demographic data is limited to cases involving days away from work and a small subset of cases involving restricted work activity.
In order to determine possible monetary benefits to this rule, OSHA calculated the value of statistical life (VSL) using Viscusi & Aldy's (2003) meta-analysis of studies in the economics literature that use a willingness-to-pay methodology to
Many injuries, illnesses, and fatalities can be prevented at minimal cost. For example, the costs of greater use of already-purchased personal protective equipment are minimal, yet many fatalities described in OSHA's inspection data systems could have been prevented through the use of available personal protective equipment. This includes fatalities related to falls when a person was wearing fall protection but did not have the lanyard attached and to electric shocks where arc protection was available but unused or left in the truck. For such minimal-cost preventative measures, assuming they have costs of prevention of less than $1 million per fatality prevented and using the VSL of $9 million and other parameters typically used in OSHA benefits, if the final rule leads to either 1.5 fewer fatalities or 0.025 percent fewer injuries per year, the rule's benefits will be equal to or greater than the costs. Many accident-prevention measures will have some costs, but even if these costs are 75 percent of the benefits, the final rule will have benefits exceeding costs if it prevented 4.8 fatalities or 0.8 percent fewer injuries per year. OSHA expects the rule's beneficial effects to exceed these values.
OSHA received many comments concerning the possible benefits, or lack of benefits, for the final rule. Some of the benefit suggestions were innovative. One commenter suggested that having establishment-level injury and illness data on-line will be valuable for local medical care practitioners who can check to see whether their patient's illness or injury is because of their job (Ex. 1106). The Council of State and Territorial Epidemiologists (CSTE) commented, “Availability of on line data on work-related injuries and illnesses will allow health care practitioners to assess the occurrence of particular injuries and illnesses at the establishments where their patients work” (Ex. 1106).
CSTE provided an example of a similar regulation in Massachusetts which did reduce workplace injuries (Ex. 1106). The study by Laramie
Many commenters suggested that the benefits of this information collection and dissemination would be dissipated because of the poor quality of the information collected (Exs. 1219, 1333, 1391, 1199, 1343, 1342, 1110, 1110, 1402, 0258, 1359).
In response, OSHA notes that information is a unique good, which has special properties including non-exclusion and non-rivalness, and that the absence of information can create a market failure. The presence of some information can help to correct a market failure, even if the information is not perfect. The information can still provide a signal to the economic actors (firms, establishments, workers, etc.) even if the information stream is noisy.
The labor market may suffer from information asymmetries. If employers know the actual risk of performing a job and job applicants believe the job is safer than it actually is, then employees may accept a lower wage, in other words, a less efficient wage. The classic economics article on market information asymmetries is Akerlof's “The Market for Lemons”, which describes a theoretical model for the market for used cars. For employers, there is an incentive to misrepresent the safety of their workplace because it would allow them to hire labor for less than the market clearing wage.
As discussed above, a common complaint of commenters was that injury and illness summaries are lagging, rather than leading, indicators of safety problems (Exs. 0027, 0163, 0210, 0250, 0258, 1109, 1124, 1193, 1194, 1198, 1204, 1206, 1217, 1219, 1222, 1275, 1279, 1321, 1326, 1331, 1333, 1334, 1336, 1339, 1341, 1342, 1343, 1355,, 1360, 1363, 1373, 1376, 1380, 1389, 1390, 1391, 1392, 1393, 1396, 1399, 1400, 1402, 1406, 1408, 1409, 1410, 1411, 1413, 1416, 1417, 1430, 1467, 1489). One commenter, the American Health Care Association (AHCA) commented, “Despite OSHA's alleged position regarding the value of leading indicators as opposed to lagging indicators, OSHA continues to push employers into focusing resources and energy in the wrong direction” (Ex. 1194). Another commenter, the Mechanical, Electrical, Sheet Metal Alliance (MCAA), stated: “. . . OSHA Incidence Rates are poor indicators of safety performance” (Ex. 1363). MCAA writes further that “Construction owners often determine whether contractors are eligible to bid on their projects based on the owner's perception of the contractors' safety performance. Owner's evaluation of a company's lagging indicators on the OSHA's [sic] Web site would be misleading with regard to that company's safety culture and safety performance” (Ex. 1363). OSHA disagrees, instead believing that OSHA's Web site information is better than no information and that it won't be misleading in the context of hundreds or thousands of other similar establishments reporting their injury and illness rates, which will be available for comparison.
The nomenclature of leading versus lagging indicators is unfortunate. OSHA is not requiring an annual data collection to attempt to judge the safety performance of any particular establishment, but rather to collect annual injury and illness data to use in ways similar to how the data collected from the ODI was used already. OSHA does not have a strong opinion on the question of injury and illness data as a lagging indicator, but the Agency knows that on average, current-year injury/illness rates are related to past-year as well as future-year injury and illness rates. OSHA wants to collect this information; further, the Agency has been requiring many establishments to record this information for decades. As discussed elsewhere, this data collection effort is not an exercise in judging safety and health reputations.
Other commenters who commented that the collection and electronic publication of these records would be helpful included many labor unions. A representative comment is from the International Brotherhood of Teamsters (IBT), which wrote that they currently have great difficulty obtaining these records for their membership from unionized workplaces. The IBT wrote, “The cases are provided as an illustration of the fact that employers frequently deny union representatives access to this information, forcing the union to pursue charges with the NLRB” (Ex. 1381).
OSHA concludes that the final rule will be economically feasible. For the annual reporting requirement, affecting establishments with 250 or more employees, the average cost per affected establishment will be $215 per year. For the annual reporting requirement,
The part of the final rule requiring annual reporting for establishments with 250 or more employees will affect some small firms, according to the definition of small firm used by the Small Business Administration (SBA). In some sectors, such as construction, where SBA's definition only allows relatively smaller firms, there are unlikely to be any firms with 250 or more employees that meet SBA small-business definitions. In other sectors, such as manufacturing, a small minority of SBA-defined small businesses will be subject to this rule. Thus, this part of the final rule will affect only a small percentage of all small firms. However, because some small firms will be affected, especially in manufacturing, OSHA has examined the impacts on small businesses of the costs of this rule. OSHA's procedures for assessing the significance of final rules on small businesses suggest that costs greater than 1 percent of revenues or 5 percent of profits may result in a significant impact on a substantial number of small businesses. To meet this level of significance at an estimated annual average cost of $215 per affected establishment per year, annual revenues for an establishment with 250 or more employees would have to be less than $21,500, and annual profits would have to be less than $4,300. These are extremely unlikely combinations of revenue and profits for firms of this size and would only occur for a very small number of firms in severe financial distress.
The part of the final rule requiring annual electronic submission of data from establishments with 20 to 249 employees in designated industries will also affect some small firms. As stated above, costs greater than 1 percent of revenues or 5 percent of profits may result in a significant economic impact on a substantial number of small businesses. To meet this level of significance at an estimated annual average cost of $11.13 per affected establishment per year, annual revenues for an establishment with 20 to 249 employees would have to be less than $1,113, and annual profits would have to be less than $226. These are extremely unlikely combinations of revenue and profits for establishments of this size.
As a result of these considerations, per section 605 of the Regulatory Flexibility Act, OSHA proposes to certify that this final rule will not have a significant economic impact on a substantial number of small entities. Thus, OSHA did not prepare an initial regulatory flexibility analysis or conduct a SBREFA Panel. OSHA requested comments on this certification. Many commenters stated that OSHA should have held a SBREFA Panel (Exs. 0179, 0205, 0250, 0255, 1092, 1103, 1113, 1123, 1190, 1199, 1200, 1205, 1208, 1209, 1211, 1216, 1217, 1275, 1278, 1343, 1356, 1359, 1370, 1387, 1395, 1396, 1408, 1410, 1411, 1421). Other commenters stated that specific aspects of the proposed regulation brought it to the level that should require a SBREFA Panel review. The American Public Power Association (APPA) commented, “While OSHA representatives have asserted that the new elements of the proposed rule are only extensions of existing requirements, APPA is of the opinion that the proposed rule includes profound changes to the scope of the existing framework. As such, OSHA should have convened a Small Business Advocacy Review panel per the Small Business Regulatory Enforcement Fairness Act (“SBREFA”) to analyze the potential impact on the small business community” (Ex. 1410).
In response, OSHA continues to assert that this regulation is similar to the ODI, though with a larger number of participating establishments. That data collection initiative ran successfully for nearly 20 years.
In another example, the International Association of Drilling Contractors wrote, “While OSHA acknowledges a small portion of businesses do not have immediate access to computers or the Internet, the agency has not put the rule before a small business review panel as required under the Small Business Regulatory Enforcement Fairness Act of 1996 . . .” (Ex. 1199). OSHA's response to the issue of computer and Internet access is discussed above.
Despite the comments, OSHA continues to believe that even if the costs per small establishment were ten or twenty times higher than the tiny per establishment costs of about $10 per average small business, those costs would be nowhere near one percent of revenues or five percent of profits. OSHA does note that during its past two SBREFA Panel exercises, in 2012 (on Injury and Illness Prevention Programs) and again in 2014 (on Infectious Diseases), all small-business panel participants had access to computers, the Internet, and email.
For purposes of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1501
Section 3 of the Occupational Safety and Health Act makes clear that OSHA cannot enforce compliance with its regulations or standards on the U.S. government “or any State or political subdivision of a State.” Under voluntary agreement with OSHA, some States enforce compliance with their State standards on public sector entities, and these agreements specify that these State standards must be equivalent to OSHA standards. Thus, although OSHA may include compliance costs for affected public sector entities in its analysis of the expected impacts associated with the final rule, the rule does not involve any unfunded mandates being imposed on any State or local government entity.
Based on the evidence presented in this economic analysis, OSHA concludes that the final rule would not impose a Federal mandate on the private sector in excess of $100 million in expenditures in any one year. Accordingly, OSHA is not required to issue a written statement containing a qualitative and quantitative assessment of the anticipated costs and benefits of the Federal mandate, as required under Section 202(a) of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1532(a)).
The final rule has been reviewed in accordance with Executive Order 13132 (64 FR 43255 (Aug. 10, 1999)), regarding Federalism. The final rule is a “regulation” issued under Sections 8 and 24 of the OSH Act (29 U.S.C. 657, 673) and not an “occupational safety and health standard” issued under Section 6 of the OSH Act (29 U.S.C. 655). Therefore, pursuant to section 667(a) of the OSH Act, the final rule does not preempt State law (29 U.S.C. 667(a)). The effect of the final rule on states is discussed in section IX. State Plan States.
For the purposes of section 18 of the OSH Act (29 U.S.C. 667) and the requirements of 29 CFR 1904.37 and
There are 27 state plan states and territories. The states and territories that cover private sector employers are Alaska, Arizona, California, Hawaii, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Oregon, Puerto Rico, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, and Wyoming. Connecticut, Illinois, New Jersey, New York, and the Virgin Islands have OSHA-approved state plans that apply to state and local government employees only.
OSHA has reviewed the provisions of this final rule in accordance with the requirements of the National Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321
The final rule contains collection of information (paperwork) requirements that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501
OSHA's existing recordkeeping forms consist of the OSHA 300 Log, the 300A Summary, and the 301 Incident Report. These forms are contained in the Information Collection Request (ICR) (paperwork package) titled 29 CFR part 1904 Recording and Reporting Occupational Injuries and Illnesses, which OMB approved under OMB Control Number 1218–0176 (expiration date 01/31/2018).
The final rule affects the ICR estimates in two programmatic ways: (1) Establishments that are subject to the part 1904 requirements and have 250 or more employees must electronically submit to OSHA on an annual basis the required information recorded on their OSHA Forms 300, 301, and 300A; and (2) Establishments in certain designated industries that have 20 to 249 employees must electronically submit to OSHA on an annual basis the required information recorded on their OSHA Form 300A. In addition to submitting the required data, employers subject to either of these requirements will also be required to create an account and learn to navigate the collection system.
The final rule also requires employers subject to the part 1904 requirements to inform their employees of their right to report injuries and illnesses. This requirement can be met by posting a recently-revised version of the OSHA Poster. The public disclosure of information originally supplied by the Federal Government to the recipient for the purpose of disclosure to the public is not included within the definition of collection of information (5 CFR 1320.3(c)(2)).
The burden hours for the final rule are estimated to be 173,406 for the initial year of implementation and 254,029 for subsequent years. There are no capital costs for this collection of information.
The table below presents the new components of the rule that comprise the ICR estimates.
As required by 5 CFR 1320.5(a)(1)(iv) and 1320.8(d)(2), the following paragraphs provide information about this ICR.
1.
2.
3.
4.
5.
6.
7.
OSHA received a number of comments relating to the estimated time necessary to meet the paperwork requirements of the proposed changes published in the November 8, 2013 Improve Tracking of Workplace Injuries and Illnesses Notice of Proposed Rulemaking (78 FR 67254–67283) and its August 14, 2014 Supplemental Notice (79 FR 47605–47610). References to documents below are given as “Ex.” followed by the document number. The document number is the last sequence of numbers in the Document ID Number on
OSHA believes many large establishments subject to this requirement will already be keeping their records electronically and will export or transmit the required information rather than entering it into the web form. This will substantially reduce the time needed to comply with the reporting requirement. However, the estimates contained in the Final Economic Analysis (FEA) and the ICR are calculated with the assumption that all submissions will be made by manually entering the required data via the web form. No time savings are included in these estimates for employers that will submit their data through a batch file upload or electronic transmission. OSHA will adjust the estimates under renewed ICRs when we have solid information regarding the percentage of employers that take advantage of batch file upload or electronic transmission.
In addition to these five common topics, several comments were submitted on miscellaneous issues pertaining to paperwork burden.
Bill Taylor of the Public Agency Safety Management Association (PASMA)—South Chapter wrote, “. . . One of our member sites has approximately 2,600 employees and their estimated cost of compliance with this proposed quarterly reporting requirement is $7,250 . . . This employer also assumed labor costs of $50 per hour, which includes benefits” (Ex. 157). PASMA's labor cost estimate of $50 per hour including benefits is consistent with OSHA's estimate of $48.78 for an Occupational Health and Safety Specialist to perform the employer's day-to-day recordkeeping duties.
Michael Hall of the Pacific Maritime Association (PMA) wrote, “OSHA's estimates do not take into account the costs described above that are unique to the maritime industry. In particular, the man-hours that will have to be devoted to attempting to prevent, if possible, duplicative reporting will be enormous” (Ex. 1326). The costs of properly recording information on OSHA Forms 300, 301 and 300A are already accounted for in the current recordkeeping requirements burden estimates. The new reporting requirements under 1904.41 only require the employer to submit the data that is already recorded.
Marc Freedman of the Coalition for Workplace Safety (CWS) wrote, “Because of the consequences of recording an injury under this proposal, employers can be expected to involve more experts in some cases. This is particularly the case with musculoskeletal disorders (“MSD”) . . . employers are more likely to incur substantial costs to conduct evaluations similar to Caterpillar's in order to determine whether an injury is truly work-related. This is particularly the case with musculoskeletal disorder injuries. OSHA has not accounted for these additional costs that are likely to flow from this proposed regulation” (Ex. 1141). OSHA has not adjusted its estimate for the time it requires to determine the recordability of an injury or illness. Employers are already required to certify to the accuracy of the OSHA forms prior to submitting these data. The time required to record cases on the OSHA forms is already accounted for in the estimates. It should be noted that the “MSD” column Mr. Freedman references does not exist at this time. OSHA will account for burden associated with future rulemaking requirements in future ICRs. It should also be noted that OSHA currently publishes establishment-specific injury and illness rates on its Web site and has not observed any indication that publication of that data has increased the time needed to record injuries and illnesses. OSHA does not agree with Mr. Freedman's conjecture that publication of the data captured by these revised requirements will result in additional burden for recording injuries and illnesses.
The PRA specifies that Federal agencies cannot conduct or sponsor a collection of information unless it is approved by OMB and displays a currently valid OMB approval number (44 U.S.C. 3507). Also, notwithstanding any other provision of law, respondents are not required to respond to the information collection requirements until they have been approved and a currently valid control number is displayed. OSHA will publish a subsequent
OSHA reviewed this final rule in accordance with Executive Order 13175 (65 FR 67249 (Nov. 9, 2000)) and determined that it does not have “tribal implications” as defined in that order. This final rule does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
Health statistics, Occupational safety and health, Reporting and recordkeeping requirements, State plans.
Health statistics, Intergovernmental relations, Occupational safety and health, Reporting and recordkeeping requirements, State plans.
This document was prepared under the direction of David Michaels, Ph.D., MPH, Assistant Secretary of Labor for Occupational Safety and Health. It is issued under Sections 8 and 24 of the Occupational Safety and Health Act (29 U.S.C. 657, 673), Section 553 of the Administrative Procedure Act (5 U.S.C. 553), and Secretary of Labor's Order No. 41–2012 (77 FR 3912 (Jan. 25, 2012)).
For the reasons stated in the preamble, OSHA amends parts 1904 and 1902 of chapter XVII of title 29 as follows:
29 U.S.C. 657, 658, 660, 666, 669, 673, Secretary of Labor's Order No. 1–2012 (77 FR 3912, Jan. 25, 2012).
(a)
(1) You must inform each employee of how he or she is to report a work-related injury or illness to you.
(2) You must provide employees with the information described in paragraph (b)(1)(iii) of this section.
(3) You must provide access to your injury and illness records for your employees and their representatives as described in paragraph (b)(2) of this section.
(b)
(ii) You must inform each employee of your procedure for reporting work-related injuries and illnesses;
(iii) You must inform each employee that:
(A) Employees have the right to report work-related injuries and illnesses; and
(B) Employers are prohibited from discharging or in any manner discriminating against employees for reporting work-related injuries or illnesses; and
(iv) You must not discharge or in any manner discriminate against any employee for reporting a work-related injury or illness.
(2) [Reserved]
In addition to § 1904.35, section 11(c) of the OSH Act also prohibits you from discriminating against an employee for reporting a work-related fatality, injury, or illness. That provision of the Act also protects the employee who files a safety and health complaint, asks for access to the part 1904 records, or otherwise exercises any rights afforded by the OSH Act.
29 U.S.C. 657, 673, 5 U.S.C. 553, and Secretary of Labor's Order 1–2012 (77 FR 3912, Jan. 25, 2012).
(a)
(2)
(3)
(b)
(2)
(i) Log of Work-Related Injuries and Illnesses (OSHA Form 300): Employee name (column B).
(ii) Injury and Illness Incident Report (OSHA Form 301): Employee name (field 1), employee address (field 2), name of physician or other health care professional (field 6), facility name and address if treatment was given away from the worksite (field 7).
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(c)
(2) Beginning in 2019, establishments that are required to submit under paragraph (a)(1) or (2) of this section will have to submit all of the required information by March 2 of the year after the calendar year covered by the form or forms (for example, by March 2, 2019, for the forms covering 2018).
Sec. 18, 84 Stat. 1608 (29 U.S.C. 667); Secretary of Labor's Order No. 1–2012 (77 FR 3912, Jan. 25, 2012).
(d) As provided in section 18(c)(7) of the Act, State Plan States must adopt requirements identical to those in 29 CFR 1904.41 in their recordkeeping and reporting regulations as enforceable State requirements. The data collected by OSHA as authorized by § 1904.41 will be made available to the State Plan States. Nothing in any State plan shall affect the duties of employers to comply with § 1904.41.
Employee Benefits Security Administration, Labor.
Notice of proposed exemptions.
This document contains notices of pendency before the Department of Labor (the Department) of proposed exemptions from certain of the prohibited transaction restrictions of the Employee Retirement Income Security Act of 1974 (ERISA or the Act) and/or the Internal Revenue Code of 1986 (the Code). This notice includes the following proposed exemptions: D–11825, ABARTA, Inc. Pension Plan; D–11846 and D–11847, Sears Holdings 401(k) Savings Plan (the Savings Plan) and the Sears Holdings Puerto Rico Savings Plan (the PR Plan); D–11851 and D–11852, Sears Holdings 401(k) Savings Plan (the Savings Plan) and the Sears Holdings Puerto Rico Savings Plan (the PR Plan); and D–11871 and D–11872, Sears Holdings 401(k) Savings Plan (the Savings Plan) and the Sears Holdings Puerto Rico Savings Plan (the PR Plan).
All interested persons are invited to submit written comments or requests for a hearing on the pending exemptions, unless otherwise stated in the Notice of Proposed Exemption, within 45 days from the date of publication of this
Comments and requests for a hearing should state: (1) The name, address, and telephone number of the person making the comment or request, and (2) the nature of the person's interest in the exemption and the manner in which the person would be adversely affected by the exemption. A request for a hearing must also state the issues to be addressed and include a general description of the evidence to be presented at the hearing. All written comments and requests for a hearing (at least three copies) should be sent to the Employee Benefits Security Administration (EBSA), Office of Exemption Determinations, Room N–5700, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210. Attention: Application No.__, stated in each Notice of Proposed Exemption. Interested persons are also invited to submit comments and/or hearing requests to EBSA via email or FAX. Any such comments or requests should be sent either by email to:
Notice of the proposed exemptions will be provided to all interested persons in the manner agreed upon by the applicant and the Department within 15 days of the date of publication in the
The proposed exemptions were requested in applications filed pursuant to section 408(a) of the Act and/or section 4975(c)(2) of the Code, and in accordance with procedures set forth in 29 CFR part 2570, Subpart B (76 FR 66637, 66644, October 27, 2011).
The applications contain representations with regard to the proposed exemptions which are summarized below. Interested persons are referred to the applications on file with the Department for a complete statement of the facts and representations.
The Department is considering granting an exemption under the authority of section 408(a) of the Act (or ERISA) and section 4975(c)(2) of the Code, and in accordance with the procedures set forth in 29 CFR part 2570, subpart B (76 FR 46637, 66644, October 27, 2011).
If the exemption is granted, provided that the conditions and the definitions set forth below are satisfied, the restrictions of sections 406(a)(1)(A), 406(a)(1)(B), 406(a)(1)(D), 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a) of the Act, and the sanctions resulting from the application of section 4975 of the Code, by reason of section 4975(c)(1)(A), (B), (D) and (E) of the Code, shall not apply to the following proposed transactions (the Covered Transactions):
(a) The in-kind contribution by ABARTA Inc. (ABARTA) to the Plan (the Contribution) of ABARTA's 100% ownership interests (the LLC Interests) in two special purpose entities: Delabarta Pennsylvania Real Estate, LLC (Delabarta Pennsylvania LLC); and Delabarta New York Real Estate, LLC (Delabarta New York LLC) (together, the LLCs): Each of which owns, as its only asset, a parcel of improved real property (a Property);
(b) Following the Contribution: (1) the Plan's leasing of the Property owned 100% by the Delabarta Pennsylvania LLC to an ABARTA subsidiary, Coca-Cola Bottling Company of Lehigh Valley, Inc. (Coca-Cola Lehigh Valley), and a one-time renewal of that lease; and (2) the Plan's leasing of the Property owned 100% by the Delabarta New York LLC to another ABARTA subsidiary, Coca-Cola Bottling Company of Buffalo, Inc. (Coca-Cola Buffalo), and a one-time renewal of that lease. Hereinafter, these two leases are referred to as the Leases, and the two renewals of those Leases are referred to as the Lease Renewals;
(c) The guarantees by Coca-Cola Buffalo and Coca-Cola Lehigh Valley (the Tenants) to the Plan in connection with a make whole obligation (the Make Whole Obligation), and any payments to the Plan in fulfillment of that obligation;
(d) Each Tenant's indemnification of the Plan (the Indemnification) in connection with a Leases and a Lease Renewal; and
(e)(1) The Plan's granting of a right of first offer (the Right of First Offer) to each Tenant, whereby the Tenant may purchase a Property or LLC interest from the Plan; and (2) a sale by the Plan of a Property or LLC Interest to a Tenant in connection with a Tenant's exercise of that Right of First Offer.
(a) The Independent Fiduciary, as defined in Section X(c) of this proposed exemption, negotiates the terms and conditions of the Contribution, and approves the Contribution as being in the interest of the Plan;
(b) The LLC Interests are contributed to the Plan at their current fair market value, as determined by the Independent Fiduciary, following the Independent Fiduciary's review of an appraisal report (the Appraisal Report) prepared by the Independent Appraiser, as defined in Section X(d) of this proposed exemption;
(c) On the date of the Contribution, the aggregate contributed value of the LLC Interests is no less than the current fair market value of the Properties underlying the LLC Interests, as verified by the Independent Fiduciary;
(d) On the date of the Contribution, ABARTA contributes to the Plan a cash amount that is no less than $500,000;
(e) Immediately following the Contribution, the aggregate fair market value of employer real property and employer securities held by the Plan represents less than 20% of the Plan's assets;
(f) As long as the Properties and/or LLC interests are owned by the Plan, the Properties are not altered in any way that: (1) Diminishes the fair market value or remaining useful life of the Property; (2) affects the structure or systems of any building existing on the Property; or (3) affects an expansion of any building existing on the Property, without the prior written approval of the Independent Fiduciary; and
(g) Following the Contribution, the Plan does not transfer a portion of its ownership interests in the LLCs or in the Properties to a party in interest to the Plan.
(a) The Independent Fiduciary negotiates the terms and conditions of the each Lease and Lease Renewal, and approves the Plan's entering into each Lease and Lease Renewal, as being in the interest of, and protective of, the Plan;
(b) Each Lease and Lease Renewal remains, at all times, a bondable triple net lease, such that all costs attributable to a Property (including, among other things, taxes, insurance, utilities, and non-capital maintenance, repair, and capital improvements) are the responsibility of the Tenant, until the earlier of: (1) The date on which the Property or LLC Interest is first transferred to any person or entity that is not wholly-owned by the Plan; (2) the date on which the Plan sells a controlling interest in the LLC to an entity that is not wholly-owned by the Plan; or (3) the date the Lease or Lease Renewal terminates by operation of law;
(c) Any amendment to a Lease or Lease Renewal must be negotiated and approved by the Independent Fiduciary; however, in no event may any amendment be inconsistent with the terms of this exemption, if granted; and
(d) For each Lease Renewal, all provisions of the Lease on which the Lease Renewal is based, with the exception of the specific rent amount and any escalator provision, remain in effect.
(a) After the Contribution, as of the earlier of: (1) The date of a sale by the Plan of a Property (or an LLC Interest) (a Sale Date); or (2) the date that is five years from the date of the Contribution (hereinafter, a First Calculation Date), if (A)(i) the proceeds received from the fair market value sale of a Property (or LLC interest), in the case of a sale, or (ii) the current fair market value of the Property (or the LLC interest) as of the First Calculation Date, in the case in which there has not been a sale, plus (B) any income generated by the Property during that period, less (C) any expenses attributable to the Property (or the LLC Interest) paid by the Plan during that period, is less than (D) the fair market value of such Property (or the LLC Interest) at the time of the Contribution, plus (E) an amount equal to a 5% percent rate of return on such Contributed Value during that period, compounded annually; then the Tenant must contribute an amount of cash to the Plan equal to any such difference, within 60 days of the Sale Date or First Calculation Date;
(b) If the Plan continues to hold a Property or LLC Interest during all or a portion of any of the three consecutive five year periods that follow the First Calculation Date (each, a Lookback Period), with respect to any of these three Lookback Periods, as of the earlier of: (1) A Sale Date; or (2) a date that is five years from the first day of the Lookback Period (a Subsequent Calculation Date), if (A)(i) the proceeds received from the fair market value sale of a Property (or LLC interest), in the case of a sale, or (ii) the current fair market value of the LLC interest as of the applicable Subsequent Calculation Date, in the case in which there has not been a sale, plus (B) any income generated by the Property during that period, (C) less any expenses paid by the Plan during that period regarding the LLC interest or Property, is less than (D) the fair market value of such LLC Interest as of the first day of the applicable Lookback Period, plus (E) an amount equal to a 5% percent rate of return on such Contributed Value during that period, compounded annually; then the Tenant must contribute to the Plan an amount of cash equal to any such difference, within 60 days of the Sale Date or Subsequent Calculation Date; and
(c) The Plan receives the full amount that the Plan may be due under the Make Whole Obligation within 60 days of the applicable Sale Date, Calculation Date, or Subsequent Calculation Date, as verified by the Independent Fiduciary.
(a) In connection with each Lease and Lease Renewal, and as set forth in writing therein, the Tenant indemnifies, defends upon request, and holds the Plan harmless from any, and against all, losses, penalties and court costs related to: (1) The Tenant's use, repair, management, lease, sublease, maintenance or operation of a Property, (2) any violation of any applicable environmental laws, the Americans with Disabilities Act (the ADA), and other health and/or safety laws; and (3) any default by the Tenant under the Lease or Lease Renewal; and
(b) Any amount owed the Plan in connection with a Tenant's indemnification of the Plan, as described in the preceding paragraph, is negotiated and approved by the Independent Fiduciary, and paid to the Plan within the timeframe set forth by the Independent Fiduciary.
(a) During the term of the Lease and any Lease Renewal, the Independent Fiduciary is solely responsible for determining whether, when, and under what terms the Plan may prudently sell
(b) During the term of the Lease and any Lease Renewal, the Independent Fiduciary must approve any sale by the Plan of one or both of: (1) The Properties; or (2) the LLC Interests, as being in the interest of, and protective of, the Plan;
(c) The Independent Fiduciary may not implement the Right of First Offer unless the Independent Fiduciary has first negotiated the terms and conditions of a proposed sale of an LLC Interest (or a Property) to a party that is unrelated to ABARTA or any of its affiliates (the Unrelated Proposed Sale);
(d) Any sale of an LLC Interest or Property to ABARTA or any of its affiliates (hereinafter, ABARTA) pursuant to the Right of First Offer, must equal the greater of: (1) The price negotiated by the Independent Fiduciary, as between the Plan and the party that is unrelated to ABARTA; or (2) the current fair market value of the Property, as determined by the Independent Appraiser; and
(e) If ABARTA does not purchase the Property or LLC Interest under the same terms as the terms associated with the Unrelated Proposed Sale, the Plan may sell the Property or LLC Interest to the unrelated third party within 360 days without triggering a new Right of First Offer.
(a) The Independent Fiduciary represents the interests of the Plan for all purposes with respect to the Covered Transactions;
(b) The Independent Fiduciary must:
(1) Review, negotiate and approve the terms and conditions of each Covered Transaction;
(2) Review and approve the terms of the transfer agreement (the Transfer Agreement) that evidences the Contribution;
(3) Monitor and enforce the Plan's rights and interests with respect to the Properties;
(4) Monitor ABARTA's compliance with the terms of this exemption, including all obligations set forth under the Leases; and
(5) Take all steps that are necessary and proper to protect the Plan in the event of any non-compliance by ABARTA.
(a) The Plan does not pay any real estate fees, commissions, costs or other expenses in connection with the proposed transactions, including any fees that are currently charged, or any fees which accrue in the future; and
(b) The terms and conditions of the proposed transactions are no less favorable to the Plan than those obtainable under similar circumstances when negotiated at arm's-length with unrelated third parties.
(a) The term ABARTA means ABARTA, Inc., and any of its affiliates.
(b) The term “affiliate” means: (1) Any person directly or indirectly through one or more intermediaries, controlling, controlled by, or under common control with the person; (2) any officer, director, employee, relative, or partner in any such person; or (3) any corporation or partnership of which such person is an officer, director, partner, or employee.
For the purposes of clause (a)(1) above, the term “control” means the power to exercise a controlling influence over the management or policies of a person other than an individual.
(c) The term “Independent Fiduciary” means Evercore Trust Company (Evercore), or another fiduciary of the Plan who: (1) Is independent of or unrelated to ABARTA and the Tenants, and has the appropriate training, experience, and facilities to act on behalf of the Plan regarding the Covered Transactions in accordance with the fiduciary duties and responsibilities prescribed by the Act (including, if necessary, the responsibility to seek the counsel of knowledgeable advisors to assist in its compliance with the Act); and (2) if relevant, succeeds Evercore in its capacity as Independent Fiduciary to the Plan in connection with the Covered Transactions. The Independent Fiduciary will not be deemed to be independent of and unrelated to ABARTA and the Tenants if: (1) Such Independent Fiduciary directly or indirectly controls, is controlled by or is under common control, with ABARTA or the Tenants; (2) such Independent Fiduciary directly or indirectly receives any compensation or other consideration in connection with any transaction described in this exemption other than for acting as Independent Fiduciary in connection with the transactions described herein, provided that the amount or payment of such compensation is not contingent upon, or in any way affected by, the Independent Fiduciary's ultimate decision; and (3) the annual gross revenue received by the Independent Fiduciary, during any year of its engagement, from ABARTA and the Tenants, exceeds 2% of the Independent Fiduciary's annual gross revenue from all sources (for federal income tax purposes) for is prior tax year.
(d) The term “Independent Appraiser” means an individual or entity meeting the definition of a “Qualified Independent Appraiser” under Department Regulation 25 CFR 2570.31(i) retained to determine, on behalf of the Plan, the fair market value of the Properties as of the date of the Contribution.
1. ABARTA, which was founded in 1933 by Rolland Adams, currently maintains its headquarters in Pittsburgh, Pennsylvania. ABARTA is privately-owned and operates in the oil and gas, soft-drink bottling, and frozen food industries. Within its soft-drink bottling division, ABARTA owns and operates four Coca-Cola bottling companies, two of which are Coca-Cola Buffalo and Coca-Cola Lehigh Valley. As of March 31, 2015, ABARTA held assets totaling $238,824,000 and liabilities totaling $182,748,000.
Coca-Cola Lehigh Valley, which was purchased by ABARTA in 1963, owns the exclusive franchise rights in perpetuity to distribute products of the Coca-Cola Company throughout Lancaster, Northampton, and Lehigh counties, in Pennsylvania, and part of Warren County, in New Jersey. Coca-Cola Lehigh Valley has generated $3 million in average annual Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) since 2010.
Coca-Cola Buffalo, which was purchased by ABARTA in 1980, owns the exclusive franchise rights in perpetuity to distribute products of the Coca-Cola Company throughout eight counties in and around Buffalo, New York. Coca-Cola Buffalo has generated $2.5 million in average annual EBITDA since 2010.
2. The Plan, which was adopted by ABARTA on January 1, 1981, is a noncontributory, defined benefit pension plan which covers approximately 4,000 non-union employees of ABARTA. As of January 1, 2015, the Plan had 1,265 participants. As of July 31, 2015, the Plan held assets totaling $36,737,158. The Plan Administrator is a Committee, the members of which are designated by ABARTA's Board of Directors. Contributions required to fund the Plan are remitted to and held under the ABARTA, Inc. Defined Benefit Master
The Plan's trustees are John F. Blitzer III, Katherine W. Fedor, and William F. Holtz (the Trustees). Each of the Trustees serves concurrently as an officer of ABARTA: Mr. Blitzer, as Director, President and CEO; Ms. Fedor, as Secretary; and Mr. Holtz as Vice President, Treasurer, and Secretary. In addition, two Trustees, Mr. Holtz and Ms. Fedor, serve as officers for the LLCs, but, if this exemption is granted, they will not receive compensation from the Plan as officers of the LLCs following the Contribution.
The Trustees have delegated investment management discretion over Plan assets to Fidelity, subject to a written investment policy approved by the Trustees which specifies ranges for asset allocations (the Investment Policy Statement). The Investment Policy Statement expressly permits the in-kind contribution of employer real property to the Plan.
3. ABARTA is the sole member and 100% owner of both Delabarta New York LLC and Delabarta Pennsylvania LLC. The Applicant represents that the LLCs do not have any employees and there are no significant costs associated with ownership, other than a nominal annual administrative filing fee required by the State of New York, which ABARTA will continue to pay following the Contribution.
Each LLC owns, as its only asset, a parcel of unencumbered real property, as well as certain buildings situated on each. The sole asset of Delabarta Lehigh Valley LLC consists of unencumbered title to approximately 10.615 acres of land and one improvement thereon, located at 2150 Industrial Drive Bethlehem, Pennsylvania (the Pennsylvania Property). Coca-Cola Lehigh Valley purchased the Pennsylvania Property as a vacant parcel of land in 1980 and subsequently constructed a 116,751-square foot warehouse/distribution facility on the Property in 1981. Currently, the Pennsylvania Property is 100% occupied by Coca-Cola Lehigh Valley.
The sole asset of Delabarta New York LLC consists of unencumbered title to approximately 9.21 acres of land and two improvements thereon, located at 150 and 200 Milens Road in the Town of Tonawanda, New York (the New York Property). Coca-Cola Buffalo purchased the New York Property in 1959 and subsequently constructed the two warehouse facilities in 1960 and 1967. Currently, the New York Property is 100% occupied by Coca-Cola Buffalo.
Hereinafter, Coca-Cola Lehigh Valley and Coca-Cola Buffalo are referred to as the Tenants.
4. ABARTA has requested an administrative exemption from the Department in order to contribute the LLC Interests to the Plan. To evidence the Contribution, ABARTA and the Plan will enter into a written transfer agreement (the Transfer Agreement), which will govern the terms upon which the LLC Interests will be contributed to and held by the Plan.
As will be stated in the Transfer Agreement, the Independent Fiduciary must act on behalf of the Plan in connection with the Contribution, and must negotiate and approve the terms upon which the Plan will accept the LLC Interests. As also stated in the Transfer Agreement, the value of the Properties will be determined by the Independent Fiduciary based upon an appraisal of the Properties performed by the Independent Appraiser, as of the date of the Contribution.
The Plan will not pay any commissions, costs or other expenses in connection with the Contribution, including any fees that are currently charged, or any fees which are charged in the future, by the Independent Appraiser or the Independent Fiduciary.
5. In addition to the Contribution and in connection therewith, ABARTA will make a one-time, cash contribution of $500,000 to the Plan. Taken together with the appraised fair market value of the Properties underlying the LLC Interests (see Representations 18 and 19), the estimated aggregate value of the Contribution amounts to $6,900,000, and is in excess of ABARTA's 2015 minimum funding obligation under section 302 of the Act.
6. The Plan, through the LLCs, will enter into bondable, triple-net leases (the Leases) of the Properties with each Tenant. Each Lease will be substantially identical in all respects, other than the name of the Tenant, the name of the LLC Landlord,
The bondable, triple-net lease structure will ensure that all operating costs related to the Properties, including taxes, insurance, utilities, and non-capital maintenance, repair, and capital improvements will be the responsibility of the Tenants. Additionally, the triple-net lease structure ensures that the rent payable by the Tenants to the Plan will remain payable under all circumstances, with the exception of a partial condemnation of the underlying Properties.
The Leases will remain bondable until the earlier of: (a) The date on which Property or LLC Interest is first transferred to any person or entity that is not wholly owned by the Plan; (b) the date on which the Plan sells a controlling interest in the applicable LLC to an entity that is not wholly owned by the Plan; or (c) the date the Lease or Lease Renewal terminates by operation of law.
With regard to alterations to the Properties by the Tenants, the Tenants must secure consent from the Independent Fiduciary prior to affecting any alteration which would: (a) Diminish the fair market value or remaining useful life of the Properties; (b) affect the structure or systems of any building existing on the Properties, or (c) effect an expansion of any building existing on the Properties.
Further, any amendment to a Lease or Lease Renewal must be negotiated and approved by the Independent Fiduciary. However, in no event may an amendment be inconsistent with the terms of this exemption, if granted. Finally, each Lease or Lease Renewal prohibits the Plan from transferring a fractional part of its LLC Interests to ABARTA or a Tenant.
7. Under the Pennsylvania Property Lease, Coca-Cola Lehigh Valley will pay the Plan a base rental amount of $379,441, due in equal monthly installments of $31,620. In addition, on the first day of each Lease Year from and after the second Lease Year, the base rental amount under the Pennsylvania Property Lease will be increased by an amount equal to the product of the Base Rent then in effect multiplied by a 2.0% escalator adjustment.
Under the New York Property Lease, Coca-Cola Buffalo will pay the Plan a base rental amount of $348,563, due in equal monthly installments of $29,047.
8. Over the initial 10 year term of the Leases, the Plan will receive aggregate rental income totaling $7,640,403.05 ($4,154,773.05 in aggregate income under the Pennsylvania Lease and $3,485,630.00 in aggregate income under the New York Lease).
The Applicant represents that the rental rates under the Leases represent fair market value, as (a) they were agreed upon following arm's length negotiations between the Independent Fiduciary and the Tenants, and (b) are supported by a market rent analysis performed by the Independent Appraiser.
9. With respect to each Lease, the Tenant has the right to renew the term of the Lease for an additional Renewal Term of ten years by giving the Plan written notice (the Renewal Notice) not later than the last day of the ninth Lease year. During such time, the Plan will be represented by the Independent Fiduciary. Within 90 days of its receipt of the Tenant's Renewal Notice, the Independent Fiduciary will provide such Tenant with the Independent Fiduciary's determination of the fair market annual base rent, and the escalation factor which it desires to be applicable during the Renewal Term. The Independent Fiduciary and the Tenant will then have thirty days to agree upon a base rent amount and escalation factor for the purposes of the Renewal Term.
10. The Lease Agreements and any Lease Renewal Agreement will include a Make Whole Obligation, whereby each Tenant will ensure that the Plan receives at least a five percent annualized rate of return in connection with the Plan's ownership of the LLC Interests. After the Contribution, as of the earlier of: (i) A Sale Date; or (2) a First Calculation Date, if (A)(i) the proceeds received from the fair market value sale of a Property (or LLC interest), in the case of a sale, or (ii) the current fair market value of the Property (or the LLC interest) as of the First Calculation Date, in the case in which there has not been a sale, plus (B) any income generated by the Property during that period, less (C) any expenses attributable to the Property (or the LLC Interest) paid by the Plan during that period, is less than (D) the fair market value of such Property (or the LLC Interest) at the time of the Contribution, plus (E) an amount equal to a 5% percent rate of return on such Contributed Value during that period, compounded annually; then the Tenant must contribute an amount of cash to the Plan equal to any such difference, within 60 days of the Sale Date or First Calculation Date;
Additionally, if the Plan continues to hold a Property or LLC Interest during all or a portion of the three consecutive five year Lookback Periods that follow the First Calculation Date, with respect to any of these Lookback Periods, as of the earlier of: (1) A Sale Date; or (2) a Subsequent Calculation Date, if (A)(i) the proceeds received from the fair market value sale of a Property (or LLC interest), in the case of a sale, or (ii) the current fair market value of the LLC interest as of the applicable Subsequent Calculation Date, in the case in which there has not been a sale, plus (B) any income generated by the Property during that period, (C) less any expenses paid by the Plan during that period regarding the LLC interest or Property, is less than (D) the fair market value of such LLC Interest as of the first day of the applicable Lookback Period, plus (E) an amount equal to a 5% percent rate of return on such Contributed Value during that period, compounded annually; then the Tenant must contribute to the Plan an amount of cash equal to any such difference, within 60 days of the Sale Date or Subsequent Calculation Date; and
The Make Whole Obligation will remain in effect for up to twenty years, which is the maximum term of this proposed exemption, if granted, unless the Properties or LLC Interests are sold before then. The Independent Fiduciary will represent the interests of the Plan with respect to the Make Whole Obligation, and will ensure that the Plan receives any amount due under the Make Whole Obligation, within 60 days of the date that triggers the payment of such amount.
11. The Lease Agreements provide that each Tenant reimburse the Plan, and indemnify, defend upon request, and hold harmless the Plan from any, and against all losses, penalties and court costs related to: (a) The Tenant's use, repair, management, lease, sublease, maintenance or operation of a Property; (b) any violation of any applicable environmental laws, the ADA, and other health and/or safety laws; and (c) any default by a Tenant under the Lease. Any reimbursement paid to the Plan by a Tenant in connection with the Tenant's Indemnification, will be negotiated and approved by the Independent Fiduciary.
12. The Lease Agreements provide a Right of First Offer to the Tenants, which states that, in the event that the Plan desires to sell either a Property or an LLC Interest during the initial ten-year Lease term or during any Lease Renewal period, the Plan must first offer such Property or LLC Interest to the Tenant at terms the Plan intends to offer such Property or LLC Interest to an unrelated third party (the Unrelated Proposed Sale). Any sale of an LLC Interest or Property to ABARTA pursuant to the Right of First Offer must equal the greater of: (a) The price negotiated by the Independent Fiduciary, as between the Plan and the party that is unrelated to ABARTA; or (b) the current fair market value of the Property, as determined by the Independent Appraiser, as described herein in Representations 16–19.
If ABARTA does not purchase the Property or LLC Interest under the same terms as the terms associated with the Unrelated Proposed Sale, the Plan may sell the Property or LLC Interest to the unrelated third party within 360 days without triggering a new Right of First Offer.
During the term of the Lease and any Lease Renewal, the Independent Fiduciary is solely responsible for: (a) determining whether, when, and under what terms the Plan may prudently sell one or both of: (i) The LLC Interests; or (ii) the Properties; and (b) approving any such sale as being in the interest of, and protective of, the Plan. In addition, the Independent Fiduciary may not implement the Right of First Offer unless the Independent Fiduciary has first negotiated the terms and conditions of an Unrelated Proposed Sale.
13. The Act prohibits a wide range of transactions involving a plan. In this regard, section 406(a)(1)(A) of the Act provides that a fiduciary with respect to a plan shall not cause a plan to engage in a transaction if the fiduciary knows or should know that such transaction constitutes a direct or indirect sale or exchange, or leasing, of any property between a plan and a party in interest. Section 406(a)(1)(B) of the Act states that a fiduciary with respect to a plan shall not cause a plan to engage in a transaction if the fiduciary knows or has reason to know that such transaction constitutes a direct or indirect extension of credit between a plan and a party in interest. Section 406(a)(1)(D) of the Act provides that a fiduciary with respect to a plan shall not cause a plan to engage in a transaction if the fiduciary knows or should know that such transaction constitutes a direct or indirect transfer to, or use by or for the benefit of, a party in interest, of any assets of the plan. Section 406(b)(1) of the Act prohibits a fiduciary from dealing with the assets of the plan in such fiduciary's own interest or for such fiduciary's personal account. Section 406(b)(2) of the Act prohibits a fiduciary from acting in such fiduciary's individual or other capacity in any transaction involving the plan on behalf of a party (or from representing a party) whose interests are adverse to the interests of the Plan, or the interests of the Plan participants and beneficiaries.
14. The term “party in interest” is defined in section 3(14)(A) and (C) of the Act to include a fiduciary with respect to a plan, and an employer, any of whose employees are covered by such Plan. In addition, section 3(14)(G) of the Act defines the term “party in interest” to include any corporation of which 50% or more of the combined voting power of all classes of stock entitled to vote or the total value of shares of all classes of stock of such corporation is owned directly or indirectly, or held by such employer. As fiduciaries to the Plan, the Trustees are parties in interest with respect to the Plan pursuant to section 3(14)(A) of the Act. ABARTA, as an employer whose employees are covered by the Plan, and the Tenants, as wholly-owned subsidiaries of ABARTA, are parties in interest with respect to the Plan pursuant to section 3(14)(C) and (G) of the Act, respectively.
If this proposed exemption is granted, the Contribution, the Leases and the Lease Renewals would violate section 406(a)(1)(A), 406(b)(1) and (b)(2) of the Act. The Right of First Offer would violate section 406(a)(1)(A), 406(b)(1) and (b)(2) of the Act. A sale back of a Property or LLC interest by the Plan to ABARTA pursuant to the Right of First Offer would violate section 406(a)(1)(A) and (D) of the Act, as well as section 406(b)(1) and (b)(2) of the Act. In addition, the Indemnification and the Make Whole Obligation would violate section 406(a)(1)(C) of the Act, and section 406(b)(1) and (b)(2) of the Act.
15. In addition to the prohibited transaction provisions described above, sections 406(a)(1)(E) and 406(a)(2) of the Act prohibit a plan from acquiring or holding employer real property in violation of section 407(a) of the Act.
Given that: the acquisition and retention of the Properties by the Plan would not comply with the provisions of section 406 and 407 of the Act; and fair market values of the Properties immediately after acquisition would constitute approximately 18.7% of the fair market value of the Plan's assets, the Plan's acquisition and holding of the Properties would violate sections 406(a)(1)(E), 406(a)(2), and 407(a) of the Act.
16. The Independent Fiduciary has retained CBRE, Inc. (CBRE) to render an opinion as to the fair market value of the Properties. CBRE is a real estate appraisal firm that provides real estate financial advisory services and employs personnel with extensive experience providing valuation and appraisal services for real estate classified as warehouse/distribution.
Thomas H. Myers, Jr. and John B. Rush of CBRE's Valuation and Advisory Services prepared the appraisal report for the Pennsylvania Property (the Pennsylvania Property Appraisal Report) in November, 2014, and will update that report for purposes of this exemption, if granted. Mr. Myers is a Certified General Real Estate Appraiser in Pennsylvania and New Jersey, and an Affiliate Member of the Appraisal Institute (MAI). Mr. Myers has 43 years of relevant real estate experience, with a primary focus on major industrial properties. Mr. Rush is a Certified General Real Estate Appraiser in Delaware, New Jersey, and Pennsylvania, and has over 39 years of relevant real estate experience, including experience that encompasses a wide variety of property types including office, retail, and industrial. Mr. Rush also holds an MAI designation from the Appraisal Institute and a CRE designation from the Counselors of Real Estate.
Robert J. DiFalco and Joseph V. Ferranti of CBRE's Valuation and Advisory Services prepared an appraisal report for the New York Property (the New York Appraisal Report) in November, 2014, and will update that report for purposes of this exemption, if granted. Mr. DiFalco is a Certified General Real Estate Appraiser in New York, New Jersey, and Connecticut and an MAI.
17. As represented by CBRE, each Appraisal Report is self-contained and intended to comply with the reporting requirements set forth under Standards Rule 2–2(a) of USPAP. Additionally, CBRE represents that the intended use of the Appraisal Report is to assist the Independent Fiduciary appointed to oversee the proposed transactions to comply with its responsibilities under the Act in connection with the proposed transactions. Finally, CBRE represents that its fee for appraisal services provided in connection with the proposed transactions represents less than 0.5% of its annual revenues in 2014 and 2015, which are the years it has provided such services.
18. In the Pennsylvania Property Appraisal Report, CBRE describes the Pennsylvania Property as a 10.615 acre parcel of land improved by a 116,751 square foot warehouse/distribution
CBRE states that modern warehouse/distribution facilities, like the Pennsylvania Property, are a desirable commodity in the current marketplace. As explained by CBRE, this desirability is due to the general versatility of such facilities and a heightened demand for just-in-time delivery of products. CBRE also emphasizes that warehouse/distribution facilities are generally perceived to be a relatively stable asset class.
Pursuant to analysis based upon the Sales Comparison Approach and Income Capitalization Approach, CBRE concluded that the fair market value of the Pennsylvania Property was $4,400,000 as of November 7, 2014, in an appraisal report dated November 10, 2014. In addition, within its Income Capitalization analysis of the Pennsylvania Property, CBRE completed a market rent analysis and estimated that a base rental amount of $3.25 per square foot, or $379,441 per year was appropriate for the space.
19. In the New York Property Appraisal Report, CBRE describes the New York Property as a 9.05 acre parcel of land improved by two adjacent warehouse buildings which cover a combined 107,250 square feet of space. CBRE notes that the structures are in average overall condition and that there are no known factors that impact their marketability. CBRE determined that the New York Property's location in the Town of Tonawanda in Erie County, New York is suitable for the Property's current industrial use. In the Appraisal Report, CBRE notes that the New York Property's location places it in a stable industrial market, within an extensive transportation network near the United States-Canada border.
Pursuant to analysis based upon the Sales Comparison Approach and the Income Capitalization Approach, CBRE concluded that the fair market value of the New York Property was $2,500,000, as of November 3, 2014, in an Appraisal Report dated November 4, 2014. In addition, within its Income Capitalization analysis of the New York Property, CBRE completed a market rent analysis and estimated that a base rental amount of $3.25 per square foot on a triple-net basis, or $348,563 per year was appropriate for the space, as of November 4, 2014.
20. For the purposes of the Covered Transactions, the Trustees have retained Evercore Trust Company (Evercore) to serve as the Independent Fiduciary for the Plan. Evercore represents that it has provided independent fiduciary services to employee benefit plans since 1987, and that it has extensive experience in making and evaluating investment decisions and with transactions implicating the prohibited transaction provisions of the Act. Evercore also represents that it has significant experience with the management and disposition of Plan assets and transactions involving real estate.
In its Engagement Letter, Evercore represents that it is independent of and unrelated to ABARTA, and that it does not directly or indirectly control, is not controlled by, and is not under common control with ABARTA. Evercore also represents that it will not directly or indirectly receive any compensation or other consideration for its own account in connection with the Covered Transactions, except for fees received in connection with its duties as Independent Fiduciary. Further, Evercore represents that its annual compensation received as Independent Fiduciary has been less than 0.5% of its annual revenues in each of the years it has been working on this engagement.
Evercore states that it will perform the following duties as Independent Fiduciary of the Plan: (a) Determine whether the Covered Transactions are in the interest of the Plan and its participants and beneficiaries; (b) negotiate the terms and conditions of the Covered Transactions on behalf of the Plan, including the Transfer Agreements, the Leases, the Lease Renewals, the Make Whole Obligation, the Indemnification, and the Right of First Offer thereunder, and other documents which Evercore, together with its legal counsel, deems necessary and in the Plan's interest to proceed with the proposed transactions; (c) determine whether and on what terms the Plan should agree to the Covered Transactions; (d) determine whether the Plan will enter into the Covered Transactions; (e) determine, together with the Independent Appraiser, the fair market value of the Properties to be contributed to the Plan, as well as the fair market rental values of the Properties under the Leases; and (e) prepare a written report for submission to the Department in connection with the exemption, if it determines that the Covered Transactions are in the interest of the Plan.
Evercore will continue to serve as Independent Fiduciary to the Plan following the Contribution of the LLC Interests to the Plan. In this regard, Evercore will: (a) Review, negotiate, and approve the terms and conditions of such Covered Transactions; (b) ensure, for purposes of the Contribution, that the Appraisal Reports of the Properties are consistent with sound principles of valuation, and that the LLC interests are valued at fair market value as of the date of the Contribution, as determined by the the Independent Appraiser; (c) review and examine all aspects of the Properties and the LLC Interests under the provisions of the Transfer Agreement, and have the right to terminate such agreement on behalf of the Plan by providing appropriate written notice to ABARTA; (d) monitor and enforce the Plan's rights and interests with respect to the Properties under the terms of the Leases, the Lease Renewals, the Make Whole Obligation, the Indemnification, and the Right of First Offer, and any other agreements regarding the Properties or the LLCs; (e) propose, negotiate, and decide whether to enter into any agreements on behalf of the Plan to amend the Leases; (f) evaluate and decide whether to grant requests for alterations to the Properties, to the extent that such alterations would: (i) Diminish the fair market value or remaining useful life of the Properties; (ii) affect the structure or systems of any building existing on the Properties, or (iii) effect an expansion of any building existing on the Properties; (g) ensure compliance with all of the terms of the Leases throughout the initial term of such Leases and throughout the duration of any renewal of such Leases; (h) arrange for appraisals of the Properties as may be necessary to satisfy the Plan's responsibilities under ERISA and the terms of this exemption; (i) manage the disposition of the Properties or the LLC Interests in connection with the Right of First Offer, and ensure that the Plan does not transfer any portion of its LLC Interests to a party in interest, such as ABARTA or the Tenants; (j) determine whether the continued ownership of the LLC Interests or the Properties is in the interests of the Plan's participants and beneficiaries and whether, when and on what terms to seek prudently to sell one or both of the LLCs or to cause the respective LLCs to sell one or both of the Properties; (k) negotiate the terms and conditions of, and consummate such sale and disposition, in the event
To assist with the negotiation of the Leases and Transfer Agreements, Evercore engaged the law firms of Pillsbury Winthrop Shaw Pittman LLP (Pillsbury) and Chernow Kapustin LLC (Chernow). The fees and expenses of Evercore, as well as all fees and expenses of Pillsbury and Chernow, will be paid by ABARTA.
21. In the preliminary Independent Fiduciary Report, Evercore concludes that the Covered Transactions are prudent and in the interest of the Plan's participants and beneficiaries. In support of this conclusion, Evercore emphasizes that the Covered Transactions will immediately improve the Plan's actuarial position, diversify the Plan's overall portfolio of assets, and reduce the Plan's reliance on future cash contributions from ABARTA.
Specifically, Evercore notes that, absent receipt by the Plan of the LLC Interests and a $500,000 cash contribution, and assuming the Plan's future receipt of required minimum contributions, the Plan's AFTAP funding percentage would be 80.54% for Plan year 2016 and 83.14% for Plan year 2017. Evercore concludes that, with the acquisition of the LLC Interests and the $500,000 cash contribution from ABARTA, the Plan's projected funding levels will improve, on a MAP–21/HAFTA basis, to 83.37% for 2016 and 85.27% for 2017.
In further support of this conclusion, Evercore asserts that the Covered Transactions will improve the diversification of the Plan's investments. Evercore emphasizes that the Plan currently holds no real estate, and that its current investments consist entirely of liquid, marketable equity and fixed income securities. Evercore explains that the Plan's ownership and leasing of the Properties to creditworthy tenants will enhance the diversification of its portfolio in view of the low correlation of returns between real estate and other asset classes, such as the equity and fixed income securities in which the Plan's assets are currently invested. Based upon its analysis of the Plan's current investments, Evercore concludes that adding real estate exposure to the Plan's asset allocation can be expected to improve the Plan's overall risk adjusted return.
Evercore asserts that the terms of the Covered Transactions, as set forth in the Transfer Agreements and Leases, are both reasonable and consistent with terms negotiated between unrelated parties in a similar arm's-length transaction. Evercore emphasizes that its own representatives, as well as expert real estate counsel were directly involved in negotiations with ABARTA regarding the terms of the Transfer Agreements and the Leases. Evercore also emphasizes that the bondable structure of the Leases is advantageous to the Plan, as it (a) provides additional assurances that rent due under the Leases will be paid to the Plan; and (b) relieves the Plan of any obligation to expend Plan assets on the Properties for any purpose, including repairs and capital improvements.
Evercore concludes that the Covered Transactions do not place any financial burden on the Tenants. Evercore notes that the annual rent of $379,441 under the Pennsylvania Property Lease represents only 12.6% of the $3.0 million average EBITDA generated by Coca-Cola Lehigh Valley, and that the annual rent of $348,563 under the New York Lease represents only 13.9% of the $2.5 million average EBITDA generated by Coca-Cola Buffalo.
Evercore concludes that the rental rates and escalator clauses under the Leases are consistent with the Independent Appraiser's determination of fair market rental value in the Properties' respective markets. In this regard, Evercore asserts that the bondable structure of the Leases make them more marketable and financeable than a standard, non-bondable lease. With respect to the New York Lease, Evercore states that the bondable lease structure serves to mitigate the absence of an escalator clause.
Finally, Evercore concludes that there is no marketability limitation attributable to the LLC Interests, other than as provided generally by applicable law. In this regard, Evercore asserts that the Right of First Offer will not impair the Plan's ability to sell the LLC Interests or the Properties at fair market value. Evercore cites to the fact that the Right of First Offer is exercisable only at either: (a) Each Property's fair market value; or (b) the value of an unsolicited offer from an unrelated party. Evercore also emphasizes that ABARTA has agreed that if it declines to exercise the Right of First Offer and the Plan proceeds with a sale to an unrelated party, the purchaser will not have any Right of First Offer obligation with respect to ABARTA.
22. The Independent Fiduciary retained CBRE to render a Limited Subsurface Environmental Site Assessment Reports for the Properties. CBRE conducted a Phase II Limited Subsurface Environmental Site Assessment of the Pennsylvania Property on January 5, 2015 (the Pennsylvania Assessment). To complete the Pennsylvania Assessment, CBRE engaged EnviroProbe Service, Inc., a Pennsylvania-licensed drilling contractor, to collect seven soil borings from the Pennsylvania Property. Once collected, CBRE submitted the soil samples to TestAmerica Laboratories, Inc. for an analysis of volatile organic compounds (VOCs) and semi-volatile organic compounds (SVOCs). Following its analysis, TestAmerica, Inc. concluded that no concentrations of VOCs or SVOCs were detectable at concentrations exceeding the most stringent soil standards established by the Pennsylvania Department of Environmental Protection. At the conclusion of the Pennsylvania Assessment, CBRE notes that no further assessment, remediation, or reporting to the state of Pennsylvania is recommended.
On December 29, 2014, CBRE performed a Phase I Environmental Site Assessment of the New York Property (the New York Assessment). To complete the New York Assessment, CBRE engaged Nature's Way Environmental, a New York-licensed drilling contractor, to collect five soil borings from the Pennsylvania Property. Once collected, CBRE submitted the soil samples to ESC Lab Sciences, a New York-certified laboratory, for an analysis of VOCs and SVOCs. Following its analysis, ESC Lab Sciences concluded that concentrations of both VOCs and SVOCs were well below the commercial and industrial soil cleanup objectives promulgated by the New York State Department of Environmental Conservation. At the conclusion of the New York Assessment, CBRE states that no further assessment, remediation, or reporting to the state of New York is recommended.
23. The Applicant represents that Covered Transactions are administratively feasible because they will be carried out under the supervision and direction of the Independent Fiduciary. The Applicant emphasizes that the Independent Fiduciary will represent the Plan in all aspects of the transactions, including
The Applicant represents that the Covered Transactions are in the interest of the Plan and its participants and beneficiaries and are protective of their rights. In this regard, the Applicant emphasizes that the Contribution, which is well in excess of ABARTA's minimum required contribution amount, will significantly improve the Plan's funding status, as well as reduce the Plan's reliance on future cash contributions from ABARTA. Additionally, the Applicant emphasizes that the Plan will receive valuable, appreciating real property assets that will produce a steady stream of future income for the Plan.
24. The Applicant also represents that, in the event the exemption is denied, the Plan and its Participants will incur certain hardships. The Applicant asserts that a denial of the proposed exemption would cause the Plan to forego the benefit of a voluntary contribution that is in excess of the minimum required amount, and as such, would leave the Plan at a less-advantageous funding level. The Applicant further represents that a denial of the proposed exemption would deprive the Plan of two appreciating real property assets which produce a steady stream of reliable rental income.
25. In summary, it is represented that the Covered Transactions will satisfy the statutory criteria for an exemption under section 408(a) of the Act because:
(a) The Independent Fiduciary will negotiate the terms and conditions of the Contribution, and approve the Contribution as being in the interest of the Plan;
(b) The LLC Interests will be contributed to the Plan at their current fair market value, as determined by the Independent Fiduciary following its review of the Appraisal Report that has been prepared by the Independent Appraiser;
(c) On the date of the Contribution, the aggregate contributed value of the LLC Interests will be no less than the current fair market value of the Properties underlying the LLC Interests, as verified by the Independent Fiduciary;
(d) On the date of the Contribution, ABARTA will contribute to the Plan a cash amount that is no less than $500,000;
(e) Immediately following the Contribution, the aggregate fair market value of employer real property and employer securities held by the Plan will represent less than 20% of the Plan's assets;
(f) As long as the Properties and/or LLC Interests are owned by the Plan, the Properties will not be altered in any way that would: (i) Diminish their fair market value or remaining useful life; (ii) affect the structure or systems of any building existing on the Properties; or (iii) affect an expansion of any building existing on the Properties, without the prior written approval of the Independent Fiduciary;
(g) Following the Contribution, the Plan will not transfer a portion of its ownership interests in the LLCs or in the Properties to a party in interest to the Plan;
(h) The Independent Fiduciary will negotiate the terms and conditions of the each Lease and Lease Renewal, and approve the Plan's entering into each Lease and Lease Renewal, as being in the interest of, and protective of, the Plan;
(i) Each Lease and Lease Renewal will remain, at all times, a bondable triple net lease, such that all costs attributable to a Property (including, among other things, taxes, insurance, utilities, and non-capital maintenance, repair, and capital improvements) are the responsibility of the Tenant, until the earlier of: (i) The date on which the Property or LLC Interest is first transferred to any person or entity that is not wholly-owned by the Plan; (ii) the date on which the Plan sells a controlling interest in the LLC to an entity that is not wholly-owned by the Plan; or (iii) the date the Lease or Lease Renewal terminates by operation of law;
(k) Any amendment to a Lease or Lease Renewal will be negotiated and approved by the Independent Fiduciary; however, in no event will any amendment be inconsistent with the terms of this exemption, if granted;
(l) For each Lease Renewal, all provisions of the Lease on which the Lease Renewal is based, with the exception of the specific rent amount and any escalator provision, will remain in effect;
(m) After the Contribution, as of the earlier of: (i) A Sale Date; or (ii) a First Calculation Date, if (A)(1) the current fair market value of a Property (or LLC interest), in the case of a sale, or (2) the current fair market value of the Property (or the LLC interest) as of the First Calculation Date, in the case in which there has not been a sale, plus (B) any income generated by the Property during that period, less (C) any expenses attributable to the Property (or the LLC Interest) paid by the Plan during that period, is less than (D) the fair market value of such Property (or the LLC Interest) at the time of the Contribution, plus (E) an amount equal to a 5% percent rate of return on such Contributed Value during that period, compounded annually; then the Tenant will contribute an amount of cash to the Plan equal to any such difference, within 60 days of the Sale Date or First Calculation Date;
(n) If the Plan continues to hold a Property or LLC Interest during all or a portion of any of the three consecutive Lookback Periods, within 60 days of the earlier of: (i) A Sale Date; or (ii) a Subsequent Calculation Date, if (A)(1) the proceeds received from the fair market value sale of a Property (or LLC interest), in the case of a sale, or (2) the current fair market value of the LLC interest as of the applicable Subsequent Calculation Date, in the case in which there has not been a sale, plus (B) any income generated by the Property during that period, (C) less any expenses paid by the Plan during that period regarding the LLC interest or Property, is less than (D) the fair market value of such LLC Interest as of the first day of the applicable Lookback Period, plus (E) an amount equal to a 5% percent rate of return on such Contributed Value during that period, compounded annually; then the Tenant will contribute to the Plan an amount of cash equal to any such difference, within 60 days of the Sale Date or Subsequent Calculation Date;
(o) The Plan will receive the full amount that the Plan may be due under the Make Whole Obligation within 60 days of the applicable Sale Date, Calculation Date, or Subsequent Calculation Date, as verified by the Independent Fiduciary;
(p) In connection with each Lease and Lease Renewal, and as set forth in writing therein, the applicable Tenant will indemnify, defend upon request, and hold the Plan harmless from any, and against all, losses, penalties and court costs related to: (i) The Tenant's use, repair, management, lease, sublease, maintenance or operation of a Property, (ii) any violation of any applicable environmental laws, the ADA, and other health and/or safety laws; and (iii) any default by the Tenant under the Lease or Lease Renewal;
(q) Any amount owed the Plan in connection with a Tenant's Indemnification of the Plan, as described in the preceding paragraph, will be negotiated and approved by the Independent Fiduciary, and will be paid to the Plan within the timeframe set forth by the Independent Fiduciary;
(r) During the term of the Lease and any Lease Renewal, the Independent Fiduciary will be solely responsible for determining whether, when, and under what terms the Plan may prudently sell one or both of: (i) The LLCs; or (ii) the Properties;
(s) During the term of the Lease and any Lease Renewal, the Independent Fiduciary will approve any sale by the Plan of one or both of: (i) The Properties; or (ii) the LLC, as being in the interest of, and protective of, the Plan;
(t) The Independent Fiduciary will not implement the Right of First Offer unless the Independent Fiduciary has first negotiated the terms and conditions of a proposed sale of an LLC Interest (or a Property) to a party that is unrelated to ABARTA or any of its affiliates;
(u) Any sale of an LLC Interest or Property to ABARTA pursuant to the Right of First Offer, will equal the greater of: (1) The price negotiated by the Independent Fiduciary, as between the Plan and the party that is unrelated to ABARTA; or (2) the current fair market value of the Property, as determined by the Independent Appraiser;
(v) If ABARTA does not purchase the Property or LLC Interest under the same terms as the terms associated with the Unrelated Proposed Sale, the Plan may sell the Property or LLC Interest to the unrelated third party within 360 days without triggering a new Right of First Offer;
(w) The Independent Fiduciary will represent the interests of the Plan for all purposes with respect to the Covered Transactions;
(x) The Independent Fiduciary will: (i) Review, negotiate and approve the terms and conditions of each Covered Transaction; (ii) review and approve the terms of the Transfer Agreement that evidences the Contribution; (iii) monitor and enforce the Plan's rights and interests with respect to the Properties; (iv) monitor ABARTA's compliance with the terms of this exemption, including all obligations set forth under the Leases; and (v) take all steps that are necessary and proper to protect the Plan in the event of any non-compliance by ABARTA;
(y) The Plan will does not pay any real estate fees, commissions, costs or other expenses in connection with the proposed transactions, including any fees that are currently charged, or any fees which accrue in the future; and
(z) The terms and conditions of the Covered Transactions will be no less favorable to the Plan than those obtainable under similar circumstances when negotiated at arm's-length with unrelated third parties.
The persons who may be interested in the publication in the
All comments will be made available to the public.
Mr. Joseph Brennan of the Department at (202) 693–8456. (This is not a toll-free number.)
The Department is considering granting an exemption under the authority of section 408(a) of the Employee Retirement Income Security Act of 1974, as amended (ERISA or the Act), and section 4975(c)(2) of the Internal Revenue Code of 1986, as amended (the Code), and in accordance with the procedures set forth in 29 CFR part 2570, subpart B (76 FR 66637, 66644, October 27, 2011).
(a) If the proposed exemption is granted, the restrictions of sections 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) of the Act and the sanctions resulting from the application of section 4975 of the Code, by reason of section 4975(c)(1)(E) of the Code,
(b) If the proposed exemption is granted, the restrictions of sections 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) of the Act
(a) The receipt of the Rights by the Plans occurred in connection with the Offering, in which all shareholders of the common stock of Holdings (Holdings Stock), including the Plans, were treated in the same manner;
(b) The acquisition of the Rights by the Plans resulted from an independent act of Holdings, as a corporate entity;
(c) Each shareholder of Holdings Stock, including each of the Plans, received the same proportionate number of Rights based on the number of shares of Holdings Stock held by each such shareholder;
(d) All decisions with regard to the holding and disposition of the Rights by the Plans were made by a qualified independent fiduciary (the Independent Fiduciary) within the meaning of 29 CFR 2570.31(j);
(e) The Independent Fiduciary determined that it would be in the interest of the Plans to sell all of the Rights received in the Offering by the Plans in blind transactions on the NASDAQ Global Select Market;
(f) No brokerage fees, commissions, subscription fees, or other charges were paid by the Plans with respect to the acquisition and holding of the Rights, or were paid to any affiliate of Holdings, Sears Canada, or the Independent Fiduciary, with respect to the sale of the Rights.
(a) The term “affiliate” of a person includes:
(1) Any person directly or indirectly through one or more intermediaries, controlling, controlled by, or under common control with such person;
(2) Any officer, director, partner, employee, or relative, as defined in section 3(15) of the Act, of such person; and
(3) Any corporation or partnership of which such person is an officer, director, partner, or employee.
(c) The term “control” means the power to exercise a controlling influence over the management or policies of a person other than an individual.
1. Sears Holdings Corporation (Holdings), is the parent company of Kmart and Sears, Roebuck, & Co. (Sears Roebuck). Holdings was formed as a Delaware corporation in 2004 in connection with the merger of Kmart and Sears Roebuck on March 24, 2005. In August 2014, Sears Holdings operated a national network of stores with 1,870 full-line and specialty retail stores in the United States operating through Kmart and Sears Roebuck as well as full-line and specialty retail stores in Canada operating through Sears Canada, Inc. (Sears Canada). As of October 15, 2015, Holdings owned approximately 51% of Sears Canada.
2. Common stock issued by Holdings (Holdings Stock), par value $0.01 per share, is publicly-traded on the NASDAQ Global Select market under the symbol, “SHLD.” As of October 16, 2014, there were 12,293 shareholders of record and approximately 106,484,024 shares of Holdings Stock issued and outstanding.
ESL Investments, Inc. and its affiliates (ESL), including Edward S. Lampert (Mr. Lampert) owned approximately 48.5 percent of the Holdings Stock, issued and outstanding, as of October 16, 2014. Mr. Lampert is the Chairman of the Board of Directors and Chief Executive Officer of Holdings. He is also the Chairman and Chief Executive Officer of ESL.
3. Holdings and certain of its affiliates sponsor the Sears Holdings Savings Plan (the Savings Plan) and the Sears Holdings Puerto Rico Savings Plan (the PR Plan) (collectively the Plans). Each Plan is a participant-directed account plan that permits participants to invest in equity, fixed income, balanced funds, and an investment fund (the Stock Fund) comprised of Holdings Stock. The Plans are designed and operated to comply with the requirements of section 404(c) of the Act. The Savings Plan and the PR Plan assets are held together within the Sears Holdings 401(k) Savings Plan Master Trust (the Master Trust), which also holds the Stock Fund and consequently, shares of Holdings Stock.
4. Sears Roebuck and all of its wholly-owned (direct and indirect) subsidiaries and Sears Holdings Management Corporation (SHMC), a wholly-owned subsidiary of Holdings, with respect to certain employees, have adopted the Savings Plan and are employers under that Plan.
As of October 16, 2014 (the Record Date), there were 60,260 participants in the Savings Plan, and the Savings Plan's share of the total assets of the Master Trust was $2,825,371,014. Also, as of the Record Date, the Savings Plan's allocable share of the Holdings Stock held in the Stock Fund under the Master Trust was 1,515,803 shares, and the approximate percentage of the fair market value of the total assets of the Savings Plan invested in Holdings Stock was two percent, which amount constituted approximately one percent of the 106 million shares of Holdings Stock issued and outstanding.
The Savings Plan is administered by the Sears Holding Corporation Administrative Committee (the Administrative Committee), whose members are officers and/or employees of SHMC. The Sears Holdings Corporation Investment Committee (the Investment Committee), whose members are officers and/or employees of SHMC, has authority over decisions relating to the investment of the Savings Plan's assets.
5. The PR Plan was established by Holdings for employees of Sears Roebuck de Puerto Rico (Sears Roebuck PR) who reside in the Commonwealth of Puerto Rico. The Applicant represents that the fiduciaries of the PR Plan have not made an election under section 1022(i)(2) of the Act, whereby such plan would be treated as a trust created and organized in the United States for purposes of tax qualification under section 401(a) of the Code. Therefore, according to the Applicant, there is no jurisdiction under Title II of the Act. There is, however, jurisdiction under Title I of the Act.
As of December 31, 2014, there were 7,550 participants in the PR Plan. As of the Record Date there were 1,765 participants in the PR Plan with account balances, and the PR Plan's share of the total assets of the Master Trust was $17,023,422. Also, as of the Record Date, the PR Plan's allocable share of the Holdings Stock held in the Stock Fund under the Master Trust was 46,880 shares, and the approximate percentage of the fair market value of the total assets of the PR Plan invested in Holdings Stock was eight percent, which amount constituted less than one tenth of one percent of the 106 million shares of Holdings Stock issued and outstanding.
The PR Plan is administered by the Administrative Committee, and the Investment Committee makes investment decisions for the PR Plan. Banco Popular de Puerto Rico serves as the trustee of the PR Plan.
6. Sears Canada was incorporated in Canada in 1952 and its headquarters are in Toronto, Ontario. It is a multi-format retailer and, as of October 14, 2014, had a total network of 113 full-line department stores, 307 specialty stores, 1,378 catalogue merchandise pick-up locations, and 96 Sears Travel offices.
As of October 16, 2014, approximately 51% of SC Stock was held by Holdings. Prior to the Offering, SC Stock traded on the Canadian Toronto Stock Exchange (TSX) under the symbol “SCC” and, as of October 8, 2014, it was also listed and trading on the U.S. NASDAQ under the symbol “SRSC.”
7. On October 2, 2014, Holdings announced its intent to conduct a rights offering to shareholders (the Offering) as a means of disposing of a non-core asset (its Sears Canada holdings) and raising substantial cash proceeds for Holdings. Furthermore, in the opinion of Holdings, the Offering gave shareholders of Holdings Stock the ability to avoid dilution by retaining their ownership percentage in Holdings and in Sears Canada. On October 15, 2014, Holdings issued the final prospectus describing the Offering to shareholders of record, including the Plans, as of the Record Date.
Under the terms of the Offering, on October 16, 2014, all shareholders of record of Holdings Stock, including the Plans, automatically received one Right for each whole share of Holdings Stock held by each such shareholder. The Applicant represents that the Master Trust (the Trust) acquired 1,562,683 Rights through the Offering.
8. Each Right permitted the holder thereof to purchase 0.375643 shares of SC Stock from Holdings at a subscription price of $9.50 per whole share.
9. All shareholders of Holdings Stock held the Rights until such Rights expired, were exercised, or were sold. With regard to the exercise of the Rights, the Applicant represents that the Rights could only be exercised in whole numbers. Each shareholder of Holdings Stock needed to have at least three Rights to purchase a share of SC Stock, because only whole shares could be purchased by the exercise of the Rights. Fractional shares or cash in lieu of fractional shares were not issued in connection with the Offering.
10. With regard to the sale of the Rights, the Applicant represents that the Rights were transferable. Further, the Applicant represents that the Rights were traded on the NASDAQ Global Select Market under the symbol, “SHLDR.” The allocation of the Rights to shareholders was handled by Depository Trust Company (DTC). The Applicant represents that the public trading of Rights (the Trading Period) began on October 16, 2014, and continued until the close of business on November 4, 2014, the third business day prior to the close of the Offering. The Applicant further represents that this deadline applied uniformly to all holders of the Rights.
11. While the Plans generally permit participants to direct the investment of their own accounts, including their investments in Holdings Stock, all decisions regarding the holding and disposition of the Rights by each Plan were made, in accordance with the Plan provisions, by a qualified independent fiduciary acting solely in the interest of Plan participants.
12. The Offering closed at 5 p.m. eastern standard time on November 7, 2014. The Applicant represents that 40,000,000 shares of SC Stock were subscribed for by shareholders or their transferees at a price of $9.50 per whole share. During the Trading Period, the price of the SC Stock on the NASDAQ ranged from $9.06 to $10.00 with a volume-weighted average price (VWAP) of $9.75.
Following the Offering, Holdings' interest in Sears Canada was reduced to approximately 11.7 percent. Accordingly, the Applicant states that following the closing of the Offering, Sears Canada became independent of Holdings. The Applicant represents that the gross proceeds payable to and received by Holdings from the sale of the SC Stock pursuant to the Offering, net of any selling expenses, was approximately $380 million.
13. Fiduciary Counselors Inc. (FCI) was retained by the Investment Committee pursuant to an agreement (the Agreement), dated October 16, 2014, to act as the independent fiduciary on behalf of the Plans, in connection with the Offering and an exemption application. Pursuant to the terms of the Agreement, FCI's responsibilities were to determine whether or not and when to exercise or sell the Rights received by each Plan in the Offering.
The Applicant represents that hiring an independent fiduciary to manage the holding and disposition of the Rights was appropriate in this case for the following reasons: (i) There would have been a significant cost to developing and implementing a process under each Plan to administer a pass-through of the Rights to participants; (ii) It was not practicable to initiate and implement a pass-through of the Rights to participants given the limited notice provided to shareholders of the Offering and the short subscription period (16 days), because such process would have included establishment of a “rights fund” and a Sears Canada fund within each Plan, the design and testing of procedures for allocating the Rights among participant accounts, soliciting participant directions on the exercise or sale of the Rights and identifying the source of funding (
The Applicant represents that FCI is qualified to serve as the independent fiduciary for the Plans in connection with the Offering, because FCI is a registered investment adviser under the Investment Advisers Act of 1940, and FCI is an independent company whose primary focus is providing independent fiduciary services for employee benefit plans. FCI has served as an independent fiduciary to employee benefit plans since 2001.
In its “Report of Independent Fiduciary Regarding Sears Canada Rights Offering,” dated February 23, 2015 (The IF Report), FCI represents and warrants that it is independent and unrelated to Holdings. FCI further represents that it did not directly or indirectly receive any compensation or other consideration for its own account in connection with the Offering, except compensation from Holdings for performing services described in the Agreement. The percentage of FCI's 2014 revenue derived from any party in interest involved in the subject transaction or its affiliates was less than five percent of FCI's 2013 revenue.
FCI represents further that it understands and acknowledges its duties and responsibilities under the Act in acting as a fiduciary on behalf of the Plans in connection with the Offering. In the IF Report, FCI represents that it conducted a due diligence process in evaluating the Offering on behalf of the Plans. This process included numerous discussions and correspondence with representatives of the Plans and Holdings, Holdings' counsel, broker-dealers and representatives of the Plans' trustee enabling FCI to better understand a number of important elements related to the Offering. In addition, FCI reviewed publicly available information and information provided by Holdings.
As detailed in the IF Report, with regard to the Offering, FCI considered the following four options: (i) Continue holding the Rights within the Stock Fund; (ii) Exercising all of the Rights and acquiring SC Stock; (iii) Selling a portion of the Rights and using the proceeds to exercise the remaining Rights to acquire SC Stock; or (iv) Selling all of the Rights on the NASDAQ Global Select Market at the prevailing market price. Acting as the independent fiduciary on behalf of the Plans, FCI chose to sell all of the Rights on the NASDAQ Global Select Market.
In determining to sell all of the Plans' Rights, FCI represents that the proceeds from the sale would be invested in Holdings Stock, as per the governing documents of the Stock Fund. As described in the IF Report, FCI determined that the benefits of selling the Rights included simplicity, lower transaction costs, and less exposure to risk than the options that involved exercising any of the Rights. According to FCI, this option allowed the Plans to realize the benefits of the Rights in a timely manner while maintaining maximum exposure to shares of Sears Holdings within the Stock Fund, consistent with the purpose of the Stock Fund. FCI understood that the Plans would incur some transactions costs through this option, estimated at $0.015 to $0.05 per Right traded. Accordingly, FCI concluded that this sale of the Rights was in the interest of the Plans and the Plans' participants and beneficiaries and was protective of such participants and beneficiaries of the Plans.
14. The Trading Period ended on November 4, 2014. According to the IF Report, over the sixteen-day period that the Rights traded on the NASDAQ, the volume-weighted average price for the 58,546,218 Rights traded was $0.1239 according to data reported by Bloomberg. The IF Report provides that FCI completed the sale of the Plans' 1,562,683 Rights in blind transactions on the NASDAQ Global Select Market between October 22 and October 31, 2014, realizing an average selling price of $0.1333 per Right.
According to the Applicant, as a result of the Rights sale, the total net proceeds generated for the Savings Plan and the PR Plan was $200,557.36. These proceeds were credited to each Plan and the unit value of each participant's account balance reflected the addition of assets credited to the Plan.
15. The Applicant represents that no brokerage fees, commissions, subscription fees, or other charges were paid by the Plans with respect to the acquisition and holding of the Rights, or were paid to any broker affiliated with FCI, Holdings, or Sears Canada in connection with the sale of the Rights. In this regard, FCI represents that it selected State Street Global Markets as the broker for the sale of the Plans' Rights, based on FCI's confidence in the broker's execution ability and an attractive fee schedule of 0.005 cents per Right traded. In connection with the sale of the Rights, the Plans paid $7,813.42 in commissions to independent, third parties and $4.66 in SEC fees.
16. The Applicant represents that the subject transactions have already been consummated. In this regard, the Plans acquired the Rights pursuant to the Offering, and held such Rights until the Rights were sold by the independent fiduciary. The Applicant states that, because there was insufficient time between the dates when the Plans acquired the Rights and when such Rights were sold, to apply for and be granted an exemption, Holdings was required to request retroactive relief, effective as of October 16, 2014, the Record Date.
17. Section 406(a)(1)(E) of the Act prohibits a fiduciary from causing a plan to engage in a transaction, if he knows or should know that such transaction constitutes a direct or indirect acquisition, on behalf of a plan, of any employer security or employer real property in violation of section 407(a). Section 406(a)(2) of the Act prohibits a fiduciary who has authority or discretion to control or manage the assets of a plan from permitting a plan to hold any employer security or employer real property if he knows or should know that holding such security or real property violates section 407(a). The Applicant represents that because the Rights are non-qualifying employer securities, the acquisition and holding of the Rights violated sections 406(a)(1)(E), 406(a)(2), and 407(a) of the Act.
Furthermore, section 406(b)(1) of the Act prohibits a fiduciary from dealing with the assets of a plan in his own interest or for his own account. Section 406(b)(2) of the Act prohibits a fiduciary, in his individual or in any other capacity, from acting in any transaction involving the plan on behalf of a party (or representing a party) whose interests are adverse to the interests of the plan or the interests of its participants or beneficiaries. The Applicant states that, although Holdings retained an independent fiduciary to
Therefore, the Applicant requests an administrative exemption from sections 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) of the Act and section 4975 of the Code by reason of 4975(c)(1)(E) of the Code, with regard to the Savings Plan, and from sections 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) of the Act with regard to the PR Plan.
18. The Applicant represents that the requested exemption is administratively feasible because the acquisition, holding, and sale of the Rights by the Plans was a one-time transaction which will not require continued monitoring or other involvement by the Department.
19. The Applicant represents that the transactions which are the subject of this proposed exemption are in the interest of the Plans, because the Rights were automatically issued at no cost to all shareholders of Holdings Stock as of a specified Record Date, including the Plans. The Plans were then able to realize value through their sale.
20. The Applicant represents that the transactions were protective of the Plans and their respective participants and beneficiaries, as the Plans obtained the Rights as a result of an independent act of Holdings as a corporate entity. In addition, the acquisition of the Rights by the Plans occurred on the same terms made available to other holders of Holdings Stock and the Plans received the same proportionate number of Rights as other owners of Holdings Stock. The Plans were also protected in that all decisions regarding the holding and disposition of the Rights by the Plans were made, in accordance with Plan provisions, by the independent fiduciary. Furthermore, the independent fiduciary determined that it would be in the interest of the Plans to sell all of the Rights received in the Offering by the Plans in blind transactions on the NASDAQ Global Select Market.
21. In summary, the Applicant represents that the proposed exemption satisfies the statutory criteria for an exemption under section 408(a) of the Act and section 4975(c)(2) of the Code for the reasons stated above and for the following reasons:
(a) The receipt of the Rights by the Plans occurred in connection with the Offering, in which all shareholders of Holdings Stock, including the Plans, were treated in the same manner;
(b) The acquisition of the Rights by the Plans resulted from an independent act of Holdings, as a corporate entity, and without any participation on the part of the Plans;
(c) Each shareholder of Holdings Stock, including each of the Plans, received the same proportionate number of Rights based on the number of shares of Holdings Stock held by each such shareholder;
(d) All decisions with regard to the holding and disposition of the Rights by the Plans were made by a qualified, independent fiduciary within the meaning of 29 CFR 2570.31(j);
(e) The independent fiduciary determined that it would be in the interest of the Plans to sell all of the Rights received in the Offering by the Plans in blind transactions on the NASDAQ Global Select Market; and
(f) No brokerage fees, commissions, subscription fees, or other charges were paid by the Plans with respect to the acquisition and holding of the Rights, or were paid to any affiliate of Holdings, Sears Canada, or the independent fiduciary with respect to the sale of the Rights.
Notice of the proposed exemption will be given to all interested persons within 22 days of the publication of the notice of proposed exemption in the
Scott Ness of the Department, telephone (202) 693–8561. (This is not a toll-free number.)
The Department is considering granting an exemption under the authority of section 408(a) of the Employee Retirement Income Security Act of 1974, as amended (ERISA or the Act), and section 4975(c)(2) of the Internal Revenue Code of 1986, as amended (the Code), and in accordance with the procedures set forth in 29 CFR part 2570, subpart B (76 FR 66637, 66644, October 27, 2011).
(a) The restrictions of sections 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) of the Act and the sanctions resulting from the application of section 4975 of the Code, by reason of section 4975(c)(1)(E) of the Code,
(b) The restrictions of sections 406(a)(1)(E), 406(a)(2), 406(b)(1),
(a) The receipt of the Rights by the Plans occurred in connection with the Offering, in which all shareholders of the common stock of Holdings (Holdings Stock), including the Plans, were treated in the same manner;
(b) The acquisition of the Rights by the Plans resulted from an independent act of Holdings, as a corporate entity;
(c) Each shareholder of Holdings Stock, including each of the Plans, received the same proportionate number of Rights based on the number of shares of Holdings Stock held by each such shareholder;
(d) All decisions with regard to the holding and disposition of the Rights by the Plans were made by a qualified independent fiduciary (the Independent Fiduciary) within the meaning of 29 CFR 2570.31(j);
(e) The Independent Fiduciary determined that it would be in the interest of the Plans to sell all of the Rights received in the Offering by the Plans in blind transactions on the NASDAQ Global Select Market;
(f) No brokerage fees, commissions, subscription fees, or other charges were paid by the Plans with respect to the acquisition and holding of the Rights, or were paid to any affiliate of Holdings or the Independent Fiduciary in connection with the sale of the Rights.
(a) The term “affiliate” of a person includes:
(1) Any person directly or indirectly through one or more intermediaries, controlling, controlled by, or under common control with such person;
(2) Any officer, director, partner, employee, or relative, as defined in section 3(15) of the Act, of such person; and
(3) Any corporation or partnership of which such person is an officer, director, partner, or employee.
(c) The term “control” means the power to exercise a controlling influence over the management or policies of a person other than an individual.
1. Sears Holdings Corporation (Holdings), is the parent company of Kmart and Sears, Roebuck, & Co. (Sears Roebuck). Holdings was formed as a Delaware corporation in 2004 in connection with the merger of Kmart and Sears Roebuck on March 24, 2005. By August 2014, Holdings operated a national network of stores with 1,870 full-line and specialty retail stores in the United States operating through Kmart and Sears Roebuck. In October 2014, Holdings completed the spin-off of a substantial portion of Sears Canada, Inc., which allowed it to dispose of a non-core asset and raise substantial cash proceeds.
2. Common stock issued by Holdings (Holdings Stock), par value $0.01 per share, is publicly-traded on the NASDAQ Global Select market under the symbol, “SHLD.” As of October 30, 2014, there were 12,236 shareholders of record and approximately 106.5 million shares of Holdings Stock issued and outstanding.
3. ESL Investments, Inc. and its affiliates (ESL), including Edward S. Lampert (Mr. Lampert) owned approximately 48.5 percent of the Holdings Stock, issued and outstanding, as of October 30, 2014. Mr. Lampert is the Chairman of the Board of Directors and Chief Executive Officer of Holdings. He is also the Chairman and Chief Executive Officer of ESL.
4. Holdings and certain of its affiliates sponsor the Sears Holdings 401(k) Savings Plan (the Savings Plan) and the Sears Holdings Puerto Rico Savings Plan (the PR Plan) (collectively the Plans). Each Plan is a participant-directed account plan that permits participants to invest in equity, fixed income, balanced funds, and an investment fund (the Stock Fund) comprised of Holdings Stock. The Plans are designed and operated to comply with the requirements of section 404(c) of the Act. The Savings Plan and the PR Plan assets are held together within the Sears Holdings 401(k) Savings Plan Master Trust (the Master Trust), which also holds the Stock Fund and consequently, shares of Holdings Stock.
5. Sears Roebuck and all of its wholly-owned (direct and indirect) subsidiaries and Sears Holdings Management Corporation (SHMC), a wholly-owned subsidiary of Holdings, with respect to certain employees, have adopted the Savings Plan and are employers under that Plan.
6. As of October 30, 2014 (the Record Date), there were 60,260 participants in the Savings Plan, and the Savings Plan's share of the total assets of the Master Trust was approximately $2.95 billion. Also, as of the Record Date, the Savings Plan's allocable share of the Holdings Stock held in the Stock Fund under the Master Trust was 1,411,133 shares, and the approximate percentage of the fair market value of the total assets of the Savings Plan invested in Holdings Stock was 1.79 percent, which amount constituted approximately one percent of the 106.5 million shares of Holdings Stock issued and outstanding.
7. The Savings Plan is administered by the Sears Holding Corporation Administrative Committee (the Administrative Committee), whose members are officers and/or employees of SHMC. The Sears Holdings Corporation Investment Committee (the Investment Committee), whose members are officers and/or employees of SHMC, has authority over decisions relating to the investment of the Savings Plan's assets.
8. The PR Plan was established by Holdings for employees of Sears Roebuck de Puerto Rico (Sears Roebuck PR) who reside in the Commonwealth of Puerto Rico. The Applicant represents that the fiduciaries of the PR Plan have not made an election under section 1022(i)(2) of the Act, whereby such plan would be treated as a trust created and organized in the United States for purposes of tax qualification under section 401(a) of the Code. Therefore, according to the Applicant, there is no jurisdiction under Title II of the Act. There is, however, jurisdiction under Title I of the Act.
9. As of December 31, 2014, there were 7550 participants in the PR Plan. As of the Record Date, there were 1,766 participants with account balances, and the PR Plan's share of the total assets of the Master Trust was $17,859,181.57. Also, as of the Record Date, the PR Plan's allocable share of the Holdings Stock held in the Stock Fund under the Master Trust was 40,650 shares, and the approximate percentage of the fair
10. The PR Plan is administered by the Administrative Committee, and the Investment Committee makes investment decisions for the PR Plan. Banco Popular de Puerto Rico serves as the trustee of the PR Plan.
11. By late October 2014, Holdings had reduced its stake in Sears Canada, Inc. and raised significant cash through a rights offering. On October 20, 2014, Holdings announced its intent to conduct an additional rights offering to shareholders (the Offering) as a means of further evolving Holdings' capital structure and enhancing its financial flexibility. On October 20, 2014, Holdings issued a prospectus describing the Offering to shareholders of record, including the Plans, as of the Record Date. The prospectus was supplemented on October 30, 2014.
12. Under the terms of the Offering, on October 30, 2014, each shareholder of record of Holdings Stock, including the Plans, automatically received one (1) Right for every 85.1872 shares of Holdings Stock held by such shareholder. The Applicant represents that only whole Rights were distributed to shareholders, including the Plans, and the Master Trust acquired 17,189 Rights through the Offering. The allocation of the Rights to shareholders was handled by Depository Trust Company.
13. Each Right permitted the holder thereof to purchase for $500, one “Unit,” consisting of (a) a note issued by Holdings in the principal amount of $500 (Note),
14. All shareholders of Holdings Stock held the Rights until such Rights expired, were exercised, or were sold. With regard to the exercise of the Rights, the Applicant represents that the Rights could only be exercised in whole numbers. Furthermore, each shareholder of Holdings Stock needed to have at least eighty-six Rights to purchase a Unit, because only whole Units could be purchased through the exercise of the Rights. Fractional Units or cash in lieu of fractional Units were not issued in connection with the Offering.
15. With regard to the sale of the Rights, the Applicant represents that the Rights were transferable and that they traded on the NASDAQ Global Select Market under the symbol “SHLDZ.” The Applicant represents that the public trading of Rights (the Trading Period) began on or around October 31, 2014, and continued until the close of business on November 13, 2014, the third business day prior to the close of the Offering. The Applicant further represents that this deadline applied uniformly to all holders of the Rights.
16. While the Plans generally permit participants to direct the investment of their own accounts, including their investments in Holdings Stock, all decisions regarding the holding and disposition of the Rights by each Plan were made, in accordance with the Plan provisions, by a qualified independent fiduciary acting solely in the interest of Plan participants.
17. The Offering expired at 5 p.m. eastern standard time on November 18, 2014. The Applicant represents that Holdings issued 1,250,000 Units, including $625 million aggregated principal amount of Notes and Warrants to purchase 21,999,296 shares of Holdings Stock. Over the 10-day period that the Rights traded on the Nasdaq, the volume weighted average price per Right for the 751,041 Rights traded was $201.1554, according to data reported by Bloomberg. The Applicant represents that the gross proceeds payable to and received by Holdings from the sale of the Units pursuant to the Offering, net of any selling expenses, was approximately $625 million.
18. Fiduciary Counselors Inc. (FCI) was retained by the Investment Committee pursuant to an agreement (the Agreement), dated November 3, 2014, to act as the independent fiduciary on behalf of the Plans, in connection with the Offering and an exemption application. Pursuant to the terms of the Agreement, FCI's responsibilities were to determine: (a) Whether or not and when to exercise or sell the Rights received by each Plan in the Offering; or (b) if it determined to exercise any of a Plan's Rights to purchase the Units, to manage the investment in the Notes and Warrants within that Plan's Stock Fund, and determine when to liquidate or exercise the Notes and Warrants for the purpose of reinvesting the proceeds in Holdings Stock.
19. The Applicant represents that hiring an independent fiduciary to manage the holding and disposition of the Rights was appropriate in this case for the following reasons: (a) There would have been a significant cost to each Plan to develop and implement a process to administer a pass-through of the Rights to participants; (b) It was not practicable to initiate and implement a pass-through of the Rights to participants given the limited notice provided to shareholders of the Offering and the short subscription period (15
20. The Applicant represents that FCI is qualified to serve as the independent fiduciary for the Plans in connection with the Offering, because FCI is a registered investment adviser under the Investment Advisers Act of 1940, and over the past 13 years, FCI has served or is serving as an independent fiduciary on behalf of employee benefit plans in connection with more than 14 prohibited transaction exemption applications, not counting applications involving the Plans. Additionally, FCI represents that it is an independent company whose primary focus is providing independent fiduciary services for employee benefit plans.
21. In its “Report of Independent Fiduciary Regarding Sears Rights Offering for Debt and Warrants,” dated February 23, 2015 (the IF Report), FCI represents and warrants that it is independent and unrelated to Holdings. FCI further represents that it did not directly or indirectly receive any compensation or other consideration for its own account in connection with the Offering, except compensation from Holdings for performing services described in the Agreement. The percentage of FCI's 2014 revenue derived from any party in interest involved in the subject transaction or its affiliates was less than five percent of FCI's 2013 revenue.
22. FCI represents further that it understands and acknowledges its duties and responsibilities under the Act in acting as a fiduciary on behalf of the Plans in connection with the Offering. In the IF Report, FCI represents that it conducted a due diligence process in evaluating the Offering on behalf of the Plans. This process included numerous discussions and correspondence with representatives of the Plans and Holdings, Holdings' counsel, broker-dealers, and representatives of the Plans' trustee, enabling FCI to better understand a number of important elements related to the Offering. In addition, FCI reviewed publicly available information and information provided by Holdings.
23. As detailed in the IF Report, with regard to the Offering, FCI considered the following four (4) options: (a) Continue holding the Rights within the Stock Fund; (b) Exercising all of the Rights and acquiring the Notes and Warrants, then sell the Notes or use them to exercise Warrants, sell or exercise the Warrants, and use any remaining cash to acquire Holdings Stock in the market; (c) Selling all of the Rights on the NASDAQ Global Select Market at the prevailing market price; or (d) Selling a portion of the Rights and using the proceeds to exercise the remaining Rights, so as to acquire Notes and Warrants (then sell the Notes or use them to exercise Warrants, then sell or exercise the Warrants and use any remaining cash to acquire Holdings Stock in the market). Acting as the independent fiduciary on behalf of the Plans, FCI chose to sell all of the Rights on the NASDAQ Global Select Market.
24. In determining to sell all of the Plans' Rights, FCI represents that the proceeds from the sale would be invested in Holdings Stock, as per the governing documents of the Stock Fund. As described in the IF Report, FCI determined that the benefits of selling the Rights included simplicity, lower transaction costs, and less exposure to risk than the options that involved exercising any of the Rights. According to FCI, this option allowed the Plans to realize the benefits of the Rights in a timely manner at the best available market prices so that cash raised through the sale could be reinvested in Holdings Stock, consistent with the purpose and intent of the Stock Fund. FCI understood that the Plans would incur some transactions costs through this option, estimated at $0.015 to $0.05 per Right traded. Accordingly, FCI concluded that this sale of the Rights was in the interest of the Plans and the Plans' participants and beneficiaries and was protective of such participants and beneficiaries of the Plans.
25. At FCI's direction, the Plans sold the Rights over a period of days while trying not to be too high a percentage of the daily volume so as to avoid putting downward pressure on the price of the Rights. The Trading Period ended on November 13, 2014. According to the IF Report, and as noted above, over the ten-day period that the Rights traded on the NASDAQ, the volume-weighted average price for the 751,041 Rights traded was $201.1554 according to data reported by Bloomberg. The IF Report provides that FCI completed the sale of the Plans' 17,189 Rights in blind transactions on the NASDAQ Global Select Market between November 4 and November 7, 2014, realizing an average selling price of $211.6283 per Right.
26. According to the Applicant, as a result of the Rights sale, the total net proceeds generated for the Savings Plan and the PR Plan was $3,637,509.54. These proceeds were credited to each Plan and the unit value of each participant's account balance reflected the addition of assets credited to the Plan.
27. The Applicant represents that no brokerage fees, commissions, subscription fees, or other charges were paid by the Plans with respect to the acquisition and holding of the Rights, or were paid to any broker affiliated with FCI or Holdings in connection with the sale of the Rights. In this regard, FCI represents that it selected State Street Global Markets as the broker for the sale of the Plans' Rights, based on FCI's confidence in the broker's execution ability and an attractive fee schedule of 0.015 cents per Right traded. In connection with the sale of the Rights, the Plans paid $257.84 in commissions to independent, third parties and $80.42 in SEC fees.
28. The Applicant represents that the subject transactions have already been consummated. In this regard, the Plans acquired the Rights pursuant to the Offering, and held such Rights until the Rights were sold by the independent fiduciary. The Applicant states that, because there was insufficient time before the Plans acquired the Rights to apply for and be granted an exemption, Holdings was required to request retroactive relief, effective as of October 30, 2014, the Record Date.
29. Section 406(a)(1)(E) of the Act prohibits a fiduciary from causing a plan to engage in a transaction, if he knows or should know that such transaction constitutes a direct or indirect acquisition, on behalf of a plan, of any employer security or employer real property in violation of section 407(a). Section 406(a)(2) of the Act prohibits a fiduciary who has authority or discretion to control or manage the assets of a plan from permitting a plan to hold any employer security or employer real property if he knows or should know that holding such security or real property violates section 407(a).
30. Furthermore, section 406(b)(1) of the Act prohibits a fiduciary from dealing with the assets of a plan in his own interest or for his own account. Section 406(b)(2) of the Act prohibits a fiduciary, in his individual or in any other capacity, from acting in any transaction involving the plan on behalf of a party (or representing a party) whose interests are adverse to the interests of the plan or the interests of its participants or beneficiaries. The Applicant states that, although Holdings retained an independent fiduciary to represent the Plans in connection with the disposition of the Rights, by causing the participation of the Plans in the Offering, Holdings may have dealt with the assets of the Plans for its own account, and also may have acted in a transaction on behalf of itself and the Plans.
31. Therefore, the Applicant requests an administrative exemption from sections 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) of the Act and section 4975 of the Code by reason of 4975(c)(1)(E) of the Code, with regard to the Savings Plan, and from sections 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) of the Act with regard to the PR Plan.
32. The Applicant represents that the requested exemption is administratively feasible because the acquisition, holding, and sale of the Rights by the Plans was a one-time transaction which will not require continued monitoring or other involvement by the Department.
33. The Applicant represents that the transactions which are the subject of this proposed exemption are in the interest of the Plans, because the Rights were automatically issued at no cost to all shareholders of Holdings Stock as of a specified Record Date, including the Plans. The Plans were then able to realize value through their sale.
34. The Applicant represents that the transactions were protective of the Plans, and their respective participants and beneficiaries, as the Plans obtained the Rights as a result of an independent act of Holdings as a corporate entity. In addition, the acquisition of the Rights by the Plans occurred on the same terms made available to other holders of Holdings Stock and the Plans received the same proportionate number of Rights as other owners of Holdings Stock. The Plans were also protected in that all decisions regarding the holding and disposition of the Rights by the Plans were made, in accordance with Plan provisions, by the independent fiduciary. Furthermore, the independent fiduciary determined that it would be in the interest of the Plans to sell all of the Rights received in the Offering by the Plans in blind transactions on the NASDAQ Global Select Market.
35. In summary, the Applicant represents that the proposed exemption satisfies the statutory criteria for an exemption under section 408(a) of the Act and section 4975(c)(2) of the Code for the reasons stated above and for the following reasons:
(a) The receipt of the Rights by the Plans occurred in connection with the Offering, in which all shareholders of Holdings Stock, including the Plans, were treated in the same manner;
(b) The acquisition of the Rights by the Plans resulted from an independent act of Holdings, as a corporate entity, and without any participation on the part of the Plans;
(c) Each shareholder of Holdings Stock, including each of the Plans, received the same proportionate number of Rights based on the number of shares of Holdings Stock held by each such shareholder;
(d) All decisions with regard to the holding and disposition of the Rights by the Plans were made by a qualified, independent fiduciary within the meaning of 29 CFR 2570.31(j);
(e) The independent fiduciary determined that it would be in the interest of the Plans to sell all of the Rights received in the Offering by the Plans in blind transactions on the NASDAQ Global Select Market; and
(f) No brokerage fees, commissions, subscription fees, or other charges were paid by the Plans with respect to the acquisition and holding of the Rights, or were paid to any affiliate of Holdings or the independent fiduciary in connection with the sale of the Rights.
Notice of the proposed exemption will be given to all interested persons within 22 days of the publication of the notice of proposed exemption in the
Erin S. Hesse of the Department, telephone (202) 693–8546. (This is not a toll-free number.)
The Department is considering granting an exemption under the authority of section 408(a) of the Act (or ERISA), as amended, and section 4975(c)(2) of the Code, as amended, and in accordance with the procedures set forth in 29 CFR part 2570, subpart B (76 FR 66637, 66644, October 27, 2011).
(a) If the proposed exemption is granted, the restrictions of sections 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) of the Act and the sanctions resulting from the application of section 4975 of the Code, by reason of section 4975(c)(1)(E) of the Code,
(b) If the proposed exemption is granted, the restrictions of sections 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) of the Act
(a) The receipt of the Rights by the Plans occurred in connection with the Offering, in which all shareholders of the common stock of Holdings (Holdings Stock), including the Plans, were treated in the same manner;
(b) The acquisition of the Rights by the Plans resulted solely from an independent act of Holdings, as a corporate entity;
(c) Each shareholder of Holdings Stock, including each of the Plans, received the same proportionate number of Rights based on the number of shares of Holdings Stock held by each such shareholder;
(d) All decisions with regard to the holding and disposition of the Rights by the Plans were made by a qualified independent fiduciary (the Independent Fiduciary) within the meaning of 29 CFR 2570.31(j);
(e) The Independent Fiduciary determined that it would be in the interest of the Plans to sell all of the Rights received in the Offering by the Plans in blind transactions on the New York Stock Exchange (NYSE); and
(f) No brokerage fees, commissions, subscription fees, or other charges were paid by the Plans with respect to the acquisition and holding of the Rights; or were paid to any affiliate of the Independent Fiduciary or Holdings, in connection with the sale of the Rights.
(a) The term “Holdings” refers to Sears Holdings Corporation and its affiliates.
(b) The term “affiliate” of a person includes:
(1) Any person directly or indirectly through one or more intermediaries, controlling, controlled by, or under common control with such person;
(2) Any officer, director, partner, employee, or relative, as defined in section 3(15) of the Act, of such person; and
(3) Any corporation or partnership of which such person is an officer, director, partner, or employee.
(c) The term “control” means the power to exercise a controlling influence over the management or policies of a person other than an individual.
This proposed exemption, if granted, will be effective for the Offering period, beginning June 11, 2015, and ending July 2, 2015 (the Offering Period).
1. Employees of certain affiliates of Holdings participate in the Plans. The Plans consist of the Savings Plan and the PR Plan. The Plans are defined contribution, eligible individual account plans that are designed and operated to comply with the requirements of section 404(c) of the Act. The Plans allow participants to purchase units in certain stock funds which invest in Holdings Stock. In this regard, the Savings Plan and the PR Plan share a single stock fund (the Stock Fund) within the Sears Holdings 401(k) Savings Plan Master Trust (the Master Trust) to hold shares of Holdings Stock. As of June 11, 2015, the Master Trust held approximately $2.8 billion in total assets. State Street Bank and Trust Company (State Street) serves as the Master Trustee and Custodian for the Master Trust.
2. Sears, Roebuck and Co. (Sears Roebuck) and all of its wholly-owned (direct and indirect) subsidiaries (except Lands' End Inc. (Lands' End), Sears de Puerto Rico, Inc., Kmart Holding Corporation (Kmart), and its wholly-owned (direct and indirect) subsidiaries (excluding employees residing in Puerto Rico), and Sears Holdings Management Corporation, with respect to certain employees, have adopted the Savings Plan and are employers under such plan.
As of June 11, 2015, (the Record Date), there were 53,831 participants in the Savings Plan, and the Savings Plan's share of the total assets of the Master Trust was $2,820,235,014. Also, as of the Record Date, the Savings Plan's allocable portion of Holdings Stock held in the Stock Fund on behalf of 14,476 participants under the Master Trust was 1,286,302.45 shares, which constituted approximately 1.2% of the 106,603,021 shares of Holdings Stock issued and outstanding. The approximate percentage of the fair market value of the total assets of the Savings Plan invested in Holdings Stock was 1.3%.
The Savings Plan is administered by the Sears Holding Corporation Administrative Committee (the Administrative Committee), whose members are employees of Holdings. The Sears Holdings Corporation Investment Committee (the Investment Committee), whose members are officers and/or employees of Holdings and/or its subsidiaries, has authority over decisions relating to the investment of the Plans' assets.
3. The PR Plan, which is sponsored and maintained by Holdings, was originally established by Sears Roebuck for employees of Sears Roebuck de Puerto Rico Inc. (Sears Roebuck de Puerto Rico) and Kmart, who reside in the Commonwealth of Puerto Rico, upon the merger of the Kmart Corporation Retirement Savings Plan for Puerto Rico employees with and into the prior Sears Roebuck de Puerto Rico Savings Plan, as of March 31, 2012. According to the Applicant, the PR Plan has not made an election under section 1022(i)(2)of the Act, whereby such plan
As of the Record Date, there were 1,696 participants in the PR Plan, and the PR Plan's share of the total assets of the Master Trust was $17,324,339. Also, as of the Record Date, the PR Plan's allocable portion of Holdings Stock held in the Stock Fund under the Master Trust on behalf of 629 participants was 39,782,55 shares, which constituted approximately 0.04% of the 106,603,021 shares of Holdings Stock issued and outstanding, on June 11, 2015. The approximate percentage of the fair market value of the total assets of the PR Plan invested in Holdings Stock was 6.5%,
The PR Plan is administered by the Administrative Committee, and the Investment Committee makes investment decisions for such plan. Banco Popular de Puerto Rico serves as the PR Plan trustee.
4. Holdings, the sponsor of each of the Plans, is a retail merchant with full-line and specialty retail stores in the United States, Guam, Puerto Rico, the U.S. Virgin Islands, and Canada. Holdings was formed as a Delaware corporation in 2004 in connection with the merger of Kmart and Sears Roebuck, which took place on March 24, 2005. Holdings is the parent company of Kmart Holding Company and Sears Roebuck. The principal executive office of Holdings is located in Hoffman Estates, Illinois. According to the Form 10–K for the fiscal year ending January 31, 2015, Holdings and its subsidiaries had total assets of approximately $11.3 billion. Also as of January 31, 2015, Holdings and its subsidiaries employed approximately 196,000 employees.
5. Common stock issued by Holdings (
ESL Investments, Inc. and its affiliates, (ESL), including Edward S. Lampert (Mr. Lampert) owned approximately 53.2% of Holdings Stock issued and outstanding as of June 9, 2015. Mr. Lampert is the Chairman of the Board of Directors and Chief Executive Officer of Holdings. He is also the Chairman and Chief Executive Officer of ESL.
6. Seritage Growth is a publicly traded, self-administered, self-managed real estate investment trust that is primarily engaged in the real property business through its investment in its operating partnership, Seritage Growth Properties, L.P. Seritage Growth's portfolio contains 235 wholly-owned properties and 31 joint venture properties, consisting of approximately 42 million square feet of building space, which is broadly diversified by location across 49 states and Puerto Rico. Pursuant to a master lease, 224 of Seritage Growth's wholly-owned properties are leased to Holdings and are operated under either the Sears Roebuck or K-Mart brand. The master lease provides Seritage with rights to recapture certain space from Sears Holdings at each property.
Prior to the Offering described below, Seritage Growth Stock was owned exclusively by Benjamin Schall, the Chief Executive Officer of Seritage Growth. Immediately following the Offering, ESL owned 4% of Seritage Growth Stock, 100% of Seritage Growth's Class B non-economic shares, 9.8% of Seritage Growth's voting power, 43.5% of Seritage Growth (Operating Partnership) units, and 45.3% of the consolidated economics of Seritage Growth and the Operating Partnership.
7. On April 1, 2015, Holdings announced its intention to conduct a Rights Offering of 53,298,899 shares of Seritage Growth Stock to Holdings shareholders. Holdings issued a prospectus describing the Offering of certain subscription Rights to shareholders of record, including the Master Trust, as of June 11, 2015, the Record Date. The Holdings Board of Directors determined that the Offering was in the best interest of Holdings and its stockholders. According to the Applicant, the purpose of the Offering was to allow Seritage Growth to purchase a portfolio of Holdings real properties from Holdings using the proceeds obtained from the Offering.
Under the terms of the Offering, all shareholders of Holdings Stock automatically received the Rights, at no charge. Specifically, each shareholder as of the Record Date, received one Right for every whole share of Holdings Stock it held. Each Right entitled the holder to purchase one half of one share of Seritage Growth Stock at the subscription price of $29.58 per whole share. According to the Applicant, the Rights were distributed as practicable as possible after the June 11, 2015 Record Date.
8. Each Right also contained an over-subscription privilege permitting the holder to subscribe for additional Seritage Growth Stock, up to the number of common shares that were not subscribed for by the other holders of the Rights. The Plans were not eligible to participate in the over-subscription privilege because the Independent Fiduciary sold the Rights received by the Plan, as discussed more fully below.
9. All shareholders of Holdings Stock held the Rights until such Rights expired, were exercised, or were sold. A shareholder had the right to exercise some, all, or none of its Rights. However, its election to exercise the Rights had to be received by the subscription agent, Computershare Trust Company, N.A., by July 2, 2015. The election to exercise any of the Rights was irrevocable.
All shareholders of Holdings Stock held the Rights until such Rights expired, were exercised, or were sold. Each shareholder of the Holdings Stock needed to have at least two Rights to purchase one whole share of Seritage Growth Stock, because only whole shares could be purchased by the exercise of the Rights. Fractional shares or cash in lieu of fractional shares were not issued in connection with the Offering. Fractional shares of the Seritage Growth Stock resulting from the exercise of basic Rights, as to any holder of such Rights were rounded down to the nearest whole number.
10. With regard to the sale of the Rights, the Applicant represents that the Rights were transferable. The Applicant also represents that the Rights began to trade on the NYSE under the symbol “SRGRT” on or around June 12, 2015, and continued to trade until the trading deadline at the close of business on June 26, 2015. Further, the Applicant explains that the trading deadline applied uniformly to all holders of the Rights.
11. The Offering expired at 5 p.m. New York City time on July 2, 2015. The Applicant represents that the Offering was oversubscribed and all of the Rights were exercised at a price of U.S. $29.58 per share of Seritage Growth Stock. Accordingly, in connection with the Offering, Seritage Growth offered and issued up to 106,603,021 Rights to
12. All of the gross proceeds from the exercise of the Rights to purchase Seritage Growth Stock, approximately $1,576,581,444, net of any selling expenses, were payable to and received by Seritage Growth. The Applicant asserts that the proceeds were or will be used by Seritage Growth to purchase a portfolio of real properties from Holdings.
13. Based on the ratio of one Right for each share of Holdings Stock held, the Applicant explains that the Master Trust acquired 1,326,085 Rights as a result of the Offering. While the Plans generally permit participants to direct the investment of their own accounts, including their investments in Holdings Stock, the Applicant represents that all decisions regarding the holding and disposition of the Rights by each Plan were made, in accordance with the Plan provisions, by the Independent Fiduciary acting solely in the interest of Plan participants. According to the Applicant, participants in the Plans who were invested in Holdings Stock as of the Record Date were notified of the Offering, the engagement of the Independent Fiduciary, the fact that the Rights would be held in the Stock Fund, that the Independent Fiduciary would determine whether the Rights should be exercised or sold, and the means by which a participant could obtain more information. The Applicant further represents that Holdings communicated generally with employees regarding the Offering and with the public through public releases at
14. Evercore Trust Company, N.A. (Evercore) was retained by the Investment Committee, pursuant to an agreement (the Agreement) dated June 5, 2015, to act as the Independent Fiduciary on behalf of the Plans, in connection with the Offering and with the application for exemption submitted to the Department. Pursuant to the terms of the Agreement, Evercore's responsibilities were: (a) To determine whether and when to exercise or sell each of the Plan's Rights; and (b) if it determined to exercise any of a Plan's Rights to purchase Seritage Growth Stock, to manage the investment within that Plan's Stock Fund, and determine when to liquidate or exercise the shares for the purpose of reinvesting the proceeds in Holdings Stock.
The Applicant represents that hiring an Independent Fiduciary to manage the holding and disposition of the Rights was appropriate in this case for the following reasons: (a) There would have been a significant cost to develop and implement a process under each Plan to administer the pass-through of the Rights to participants; (b) it was not practicable to initiate and implement a pass-through of the Rights to participants given the limited notice provided to shareholders of the Offering and the short subscription period (21 days), because such process would have included the establishment of a “rights fund” and a Seritage Growth fund within each Plan, the design and testing of procedures for allocating the Rights among participant accounts, soliciting participant directions on the exercise or sale of the Rights and identifying the source of funding (
In the Agreement, Evercore represents that it is qualified to serve as the Independent Fiduciary for the Plans in connection with the Offering because it is a national trust bank chartered by the Office of the Comptroller of the Currency. Evercore states that it has provided specialized investment management, independent fiduciary, and trustee services to employee benefit plans since 1987. Evercore also represents that it has served or is serving as an independent fiduciary on behalf of employee benefit plans in connection with more than 50 prohibited transaction exemption applications that have been filed with the Department.
In the Agreement, Evercore further represents that it is independent and unrelated to Holdings, and that it did not directly or indirectly receive any compensation or other consideration for its own account in connection with the Offering, except compensation from Holdings for performing services described in the Agreement. According to the Agreement, Evercore states that the gross revenue it received (or expected to receive) in 2015 that was derived from any party in interest or an affiliate of such party in interest involved in the Seritage Growth transaction, would represent less than 2% its 2014 gross revenue. Also, in the Agreement, Evercore represents that it understood and acknowledged its duties and responsibilities under the Act in acting as a fiduciary on behalf of the Plans in connection with the Offering.
In addition, Evercore represents that it conducted a due diligence process in evaluating the Offering on behalf of the Plans. This process included discussions and correspondence with representatives of the Plans, Holdings, Holdings' counsel, broker-dealers, and representatives of the trustee of the Master Trust, enabling Evercore to improve certain elements related to the Offering. Evercore also states that it reviewed publicly available information and information provided by Holdings.
With regard to the Offering, Evercore explains that it considered four options on behalf of the Plans: (a) To continue holding the Rights within the Stock Fund; (b) to exercise all of the Rights to acquire Seritage Growth Stock; (c) to sell all of the Rights on the NYSE at the prevailing market price; or (d) to sell a portion of the Rights and use the proceeds to exercise the remaining Rights to acquire Seritage Growth Stock.
In determining to sell all of the Plans' Rights, Evercore represents that the proceeds from the sale would be invested in Holdings Stock, in accordance with the governing documents of the Stock Fund. Evercore reasoned that, although the Plans would incur some transaction costs by selling the Rights, estimated at $0.01 per Right traded, plus a similar expense in connection with the reinvestment of the proceeds into shares of Holdings Stock, the benefits of selling the Rights included the fact that the proceeds could be quickly redeployed into shares of Holdings Stock, lower transaction costs, and less exposure to risk than the
15. As a result of the sale of 1,326,085 Rights that were acquired by the Master Trust during the Offering, the total net proceeds generated for the Savings Plan and the PR Plan was $4,106,921.19. These proceeds were credited to the Stock Fund, and thus, to each Plan. The unit value of each participant's account balance in each Plan reflected the addition of the proceeds to the Stock Fund (as applicable).
The trading period for the sale of the Rights on the NYSE ended on June 26, 2015. Evercore sold the Plans' 1,326,085 Rights in blind transactions on the NYSE between June 16 and June 19, 2015, realizing an average selling price of $3.10 per Right. According to the Applicant, the volume-weighted average price for a total of 46,699,673 Rights that were sold during the trading period was $3.66, according to data reported by Factset.
16. Evercore represents that, as noted in the Independent Fiduciary Report, its goal in selling the Rights was to dispose of them in a timely manner at the best available market prices so that cash raised through the sale could be reinvested in shares of Holdings Stock as soon as possible and at the discretion of State Street, the Master Trustee and Custodian of the Master Trust. This, according to Evercore was consistent with the purpose and intent of the Stock Fund.
Evercore explains that it also believed it was prudent to take advantage of available liquidity early in the Offering Period, given the typical decline in trading volume experienced over the course of a rights offering period. Evercore states that it promptly began to sell the Rights once it was informed that the Rights had been delivered to the Stock Fund account. The liquidation lasted four days, beginning on June 16, 2015, and ending on June 19, 2015. The Rights continued to trade over five more days (June 22 to June 26), during which time the price of the Rights rose. This rise in price, Evercore asserts, was entirely unpredictable beforehand. Waiting for such a potential outcome, Evercore explains, would have been at odds with its goal of promptly realizing and reallocating proceeds, and further would have exposed the Plans to the risk of a significant decline in the price of the Rights over the course of the offering period.
17. In the opinion of Evercore, the actions outlined above in which it was engaged on behalf of the Plans, were in the interest of the Plans and the Plans' participants and beneficiaries, and were protective of the rights of such participants and beneficiaries of the Plans.
18. No brokerage fees, commissions, subscription fees, or other charges were paid by the Plans with respect to the acquisition and holding of the Rights, or were paid to any broker affiliated with Evercore, or Holdings, in connection with the sale of the Rights. In this regard, it is represented that Evercore selected State Street Global Markets to execute the trades for the sale of the Rights issued to the Master Trust, based on Evercore's confidence in that broker's execution ability and an attractive fee schedule of 0.01 cent per Right traded. In connection with the sale of the Rights, the Plans (through the Master Trust) paid $13,260.85 in commissions and $75.83 in SEC fees.
19. The application was filed by Holdings on behalf of itself and its affiliates. In this regard, Holdings has requested an exemption for the acquisition and holding of the Rights by the Plans in connection with the Offering of Seritage Growth Stock by Holdings. The Applicant represents that the subject transactions have already been consummated. In this regard, the Plans acquired the Rights pursuant to the Offering, and held such Rights until they were sold by the Independent Fiduciary. The Applicant states that, because there was insufficient time between the dates the Plans acquired the Rights and when the Rights were sold to apply for and be granted an administrative exemption by the Department, Holdings requested retroactive exemptive relief for the period June 11, 2015, through July 2, 2015.
20. Section 406(a)(1)(E) of the Act prohibits a fiduciary from causing a plan to engage in a transaction, if he knows or should know that such transaction constitutes a direct or indirect acquisition, on behalf of a plan, of any employer security or employer real property in violation of section 407(a). Section 406(a)(2) of the Act prohibits a fiduciary who has authority or discretion to control or manage the assets of a plan from permitting a plan to hold any employer security or employer real property if he knows or should know that holding such security or real property violates section 407(a). The Applicant represents that because the Rights are non-qualifying employer securities, the acquisition and holding of the Rights by the Plans violated sections 406(a)(1)(E), 406(a)(2), and 407(a) of the Act.
Furthermore, section 406(b)(1) of the Act prohibits a fiduciary from dealing with the assets of a plan in his own interest or for his own account. Section 406(b)(2) of the Act prohibits a fiduciary, in his individual or in any other capacity, from acting in any transaction involving the plan on behalf of a party (or representing a party) whose interests are adverse to the interests of the plan or the interests of its participants or beneficiaries. The Applicant states that, although Holdings retained the Independent Fiduciary to represent the Plans in connection with the disposition of the Rights, by causing the participation of the Plans in the Offering, Holdings may have dealt with the assets of the Plans for its own account, and also may have acted in a transaction on behalf of itself and the Plans.
Therefore, the Applicant requests an administrative exemption from sections 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) of the Act and section 4975 of the Code by reason of 4975(c)(1)(E) of the Code, with regard to the Savings Plan, and from sections 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) of the Act with regard to the PR Plan.
21. The Applicant represents that the proposed transactions are administratively feasible because the acquisition and holding of the Rights by the Plans were one-time transactions that involved an automatic distribution of the Rights to all shareholders, that would not require any continuing oversight by the Department.
The Applicant also represents that the subject transactions were in the interest of the Plans and their respective participants and beneficiaries, because the Rights were automatically issued at no cost to the shareholders of Holdings Stock, including the Plans, as of the Record Date.
Finally, the Applicant represents that the transactions were protective of the rights of the participants and beneficiaries of the respective Plans because the Plans obtained the Rights as a result of an independent act of Holdings as a corporate entity. In addition, the acquisition of the Rights by the Plans occurred on the same terms made available to other holders of Holdings Stock, and the Plans received the same proportionate number of Rights as other owners of Holdings Stock. The Plans were also protected in that all decisions regarding the holding and disposition of the Rights by the Plans were made, in accordance with Plan provisions, by the Independent Fiduciary. Furthermore, the Applicant represents that the Independent Fiduciary determined that it would be in the interest of the Plans to sell all of the Rights received in the Offering by the Plans in blind transactions on the NYSE.
22. In summary, Holdings represents that the subject transactions satisfy the statutory criteria for an exemption under of section 408(a) of the Act because:
(a) The receipt of the Rights by the Plans occurred in connection with the Offering in which all shareholders of Holdings Stock, including the Plans, were treated in the same manner;
(b) The acquisition of the Rights by the Plans resulted solely from an independent act of Holdings, as a corporate entity;
(c) Each shareholder of Holdings Stock, including each of the Plans, received the same proportionate number of Rights based on the number of shares of Holdings Stock held by each such shareholder;
(d) All decisions with regard to the holding and disposition of the Rights by the Plans were made by the Independent Fiduciary on behalf of the Plans;
(e) The Independent Fiduciary determined that it would be in the interest of the Plans to sell all of the Rights received in the Offering by the Plans in blind transactions on the NYSE;
(f) No brokerage fees, commissions, subscription fees, or other charges were paid by the Plans with respect to the acquisition and holding of the Rights; or were paid to any broker affiliated with the Independent Fiduciary or Holdings, in connection with the sale of the Rights; and
(g) The acquisition of the Rights by the Plans occurred on the same terms made available to other shareholders of Holdings Stock.
The persons who may be interested in the publication in the
It is represented that all such interested persons will be notified of the publication of the Notice by first class mail, to each such interested person's last known address within 22 days of publication of the Notice in the
All comments will be made available to the public.
Ms. Blessed Chuksorji-Keefe of the Department, telephone (202) 693–8567. (This is not a toll-free number.)
The attention of interested persons is directed to the following:
(1) The fact that a transaction is the subject of an exemption under section 408(a) of the Act and/or section 4975(c)(2) of the Code does not relieve a fiduciary or other party in interest or disqualified person from certain other provisions of the Act and/or the Code, including any prohibited transaction provisions to which the exemption does not apply and the general fiduciary responsibility provisions of section 404 of the Act, which, among other things, require a fiduciary to discharge his duties respecting the plan solely in the interest of the participants and beneficiaries of the plan and in a prudent fashion in accordance with section 404(a)(1)(b) of the Act; nor does it affect the requirement of section 401(a) of the Code that the plan must operate for the exclusive benefit of the employees of the employer maintaining the plan and their beneficiaries;
(2) Before an exemption may be granted under section 408(a) of the Act and/or section 4975(c)(2) of the Code, the Department must find that the exemption is administratively feasible, in the interests of the plan and of its participants and beneficiaries, and protective of the rights of participants and beneficiaries of the plan;
(3) The proposed exemptions, if granted, will be supplemental to, and not in derogation of, any other provisions of the Act and/or the Code, including statutory or administrative exemptions and transitional rules. Furthermore, the fact that a transaction is subject to an administrative or statutory exemption is not dispositive of whether the transaction is in fact a prohibited transaction; and
(4) The proposed exemptions, if granted, will be subject to the express condition that the material facts and representations contained in each application are true and complete, and that each application accurately describes all material terms of the transaction which is the subject of the exemption.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
This rulemaking would relieve burdens on pilots seeking to obtain aeronautical experience, training, and certification by increasing the allowed use of aviation training devices. These training devices have proven to be an effective, safe, and affordable means of obtaining pilot experience. This rulemaking also would address changing technologies by accommodating the use of technically advanced airplanes as an alternative to the use of older complex single engine airplanes for the commercial pilot training and testing requirements. Additionally, this rulemaking would broaden the opportunities for military instructors to obtain civilian ratings based on military experience, would expand opportunities for logging pilot time, and would remove a burden from sport pilot instructors by permitting them to serve as safety pilots. Finally, this rulemaking would include changes to some of the provisions established in an August 2009 final rule. These actions are necessary to bring the regulations in line with current needs and activities of the general aviation training community and pilots.
Send comments on or before August 10, 2016.
Send comments identified by docket number FAA–2016–6142 using any of the following methods:
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Marcel Bernard, Airmen Certification and Training Branch, Flight Standards Service, AFS–810, Federal Aviation Administration, 55 M Street SE., 8th Floor, Washington, DC 20003–3522; telephone (202) 267–1100; email
On January 18, 2011, the President signed Executive Order 13563, Improving Regulation and Regulatory Review. Among other things, Section 6 of that Executive Order directs agencies to conduct a retrospective analysis of existing rules. Specifically, Executive
Consistent with Executive Order 13563, the FAA routinely evaluates existing regulations and other requirements. The FAA works to identify unnecessary, duplicative, or ineffective regulations and to mitigate the impacts of those regulations, where possible, without compromising safety.
As part of the FAA's continuing obligation to review its regulations, the agency has conducted an analysis of 14 CFR parts 61, 91, and 141 to identify provisions that are outmoded, ineffective, or involve an unnecessary burden. This notice of proposed rulemaking (NPRM) is the result of the FAA's analysis of its regulations and includes proposed amendments that are consistent with the retrospective regulatory review requirements of Executive Order 13563. The proposed amendments reduce or relieve existing burdens on the general aviation community. Several of these proposed changes have resulted from suggestions from the general aviation community through petitions for rulemaking, industry/agency meetings, and requests for legal interpretation. The proposed changes include increases in the use of aviation training devices (ATDs), flight training devices (FTDs), and full flight simulators (FFSs); expanding opportunities for pilots in part 135 operations to log flight time, allowing an alternative to the complex airplane requirement for commercial pilot training, and permitting pilots to credit some of their sport pilot training toward a higher certificate. Because this rulemaking includes proposals that affect several disparate subject areas within the regulations, the FAA has provided the necessary background information in the separate sections of this document that discuss each proposed rule change.
Table 1 summarizes the provisions included in this rule, the sections affected, and the total cost savings (benefits) for a 5-year analysis period. All of the provisions proposed in this rule are either relieving or voluntary. For those provisions that are relieving, no person affected is anticipated to incur any costs associated with the relieving nature of the provision. The FAA assumes that as these provisions are relieving, all persons affected would use the provisions as they would be beneficial. For those proposed provisions that are voluntary, persons who wish to use the new provisions will do so only if the benefit they would accrue from their use exceeds any cost they might incur to comply with the new provision.
The FAA's authority to issue rules on aviation safety is found in Title 49 of the United States Code (49 U.S.C.). 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 49 U.S.C. 106(f), which establishes the authority of the Administrator to promulgate regulations and rules; 49 U.S.C. 44701(a)(5), which requires the Administrator to promote safe flight of civil aircraft in air commerce by prescribing regulations and setting minimum standards for other practices, methods, and procedures necessary for safety in air commerce and national security; and 49 U.S.C. 44703(a), which requires the Administrator to prescribe regulations for the issuance of airman certificates when the Administrator finds, after investigation, that an individual is qualified for, and physically able to perform the duties related to, the position authorized by the certificate. Consistent with this authority and with the retrospective regulatory review requirements of Executive Order 13563, this rulemaking includes certain proposed amendments that would reduce or relieve existing burdens on the general aviation community.
Since the 1970s, the FAA has gradually expanded the use of flight simulation for training—first permitting simulation to be used in air carrier training programs and eventually permitting pilots to credit time in devices toward the aeronautical experience requirements for airman certification and recency. Currently, Title 14 of the Code of Federal Regulations (14 CFR) part 60 governs the qualification of flight simulation training devices (FSTD) which include FFSs and FTDs levels 4 through 7. The FAA has, however, approved other devices including ATDs for use in pilot certification training, under the authority provided in 14 CFR 61.4(c).
For over 30 years, the FAA has issued letters of authorization (LOAs) to manufacturers of ground trainers, personal computer-based aviation training devices (PCATD), FTDs (levels 1 through 3), basic aviation training devices (BATD), and advanced aviation training devices (AATD). These LOAs were based on guidance provided in advisory circulars that set forth the qualifications and capabilities for the devices. Prior to 2008, most LOAs were issued under the guidance provided in advisory circular AC 61–126, Qualification and Approval of Personal Computer-Based Aviation Training Devices, and AC 120–45, Airplane Flight Training Device Qualification. Since July 2008, the FAA has been approving devices in accordance with Advisory Circular 61–136, FAA Approval of Basic Aviation Training Devices (BATD) and Advanced Aviation Training Devices (AATD).
In 2009, the FAA issued a final rule that for the first time introduced the term “aviation training device” into the regulations and placed express limits on the amount of instrument time that could be credited in an ATD toward the aeronautical experience requirements for an instrument rating.
Since the 2009 final rule, the regulations permit ATDs to be used for the purpose of satisfying instrument recency experience requirements. As set forth in § 61.57, pilots who complete instrument recency experience exclusively in ATDs must complete more tasks at more frequent intervals than those pilots who use aircraft, FFSs, and FTDs.
Despite the limitations on the use of ATDs that were set forth in the 2009 final rule, the FAA had issued hundreds of LOAs to manufacturers of devices that permitted ATDs (as well as ground trainers, PCATDs, and FTDs (levels 1 through 3)) to be used to a greater extent than were ultimately set forth in the regulations. Even after publication of the 2009 final rule, the FAA continued to issue LOAs in excess of the express limitations in the regulations. On January 2, 2014, the FAA published a notice of policy to reissue LOAs to reflect current regulatory requirements. 79 FR 20. The FAA concluded that it could not use LOAs to exceed express limitations that had been placed in the regulations through notice and comment rulemaking.
As discussed further in the following two sections, the FAA is proposing to amend the regulations governing the use of ATDs to increase the use of these devices for instrument training and instrument recency experience requirements above the levels established in the 2009 final rule. In developing this proposed rule, the FAA notes that ATD development has advanced to an impressive level of capability. Many ATDs can simulate weather conditions with variable winds, variable ceilings and visibility, icing, turbulence, high definition (HD) visuals, hundreds of different equipment failure scenarios, navigation specific to current charts and topography, specific navigation and communication equipment use, variable “aircraft specific” performance, and more. The visual and motion component of some of these devices permit maneuvers that require outside visual references in an aircraft to be successfully taught in an AATD. Many of these simulation capabilities were not possible in PCATDs and BATDs that the FAA approved for 10 hours of instrument time.
The FAA believes that permitting pilots to log increased time in ATDs would encourage pilots to practice maneuvers until they are performed to an acceptable level of proficiency. In an ATD, a pilot can replay the training scenario, identify any improper action, and determine corrective actions without undue hazard or risk to persons or property. In this fashion, a pilot can continue to practice tasks and maneuvers in a safe, effective, and cost efficient means of maintaining proficiency.
In a recent notice of proposed rulemaking (NPRM),
Based on the comments received to the NPRM, the final rule
The NPRM also addressed the use of ATDs in approved instrument rating courses. The NPRM proposed to amend appendix C to part 141 to increase the limit on the amount of training hours that may be accomplished in an ATD in an approved course for an instrument rating. The FAA proposed to allow ATDs to be used for no more than 40% of the total flight training hour requirements in an approved instrument rating course.
Based on the comments received to the NPRM, the final rule revised appendix C to part 141 to include a specified allowance of 25% of creditable time in BATDs
The FAA is now proposing to define ATD in § 61.1 as a training device, other than a full flight simulator or flight training device, that has been evaluated, qualified, and approved by the Administrator. The FAA is proposing to add a definition of aviation training device to 61.1 to differentiate ATDs from FFS and FTDs approved under
Currently, pilots who perform instrument recency experience requirements in an aircraft are not required to have an authorized instructor present to observe the time. Rather, the pilot can perform the required tasks in actual instrument conditions or in simulated instrument conditions with a safety pilot on board the aircraft. A pilot who accomplishes instrument recency experience in an FFS, FTD, or ATD, however, must have an authorized instructor present to observe the time and sign the pilot's logbook. 14 CFR 61.51(g)(4).
In revising § 61.57 in the 2009 final rule to include the option of using ATDs for meeting instrument recency experience, the preamble indicated that the FAA did not intend for an authorized instructor to be present during instrument recency experience performed in an FSTD or an ATD. It stated: “[A] person who is instrument current or is within the second 6-calendar month period * * * need not have a flight instructor or ground instructor present when accomplishing the approaches, holding, and course intercepting/tracking tasks of § 61.57(c)(1)(i), (ii), and (iii) in an approved flight training device or flight simulator.” 74 FR 42500, 42518. In 2010, the FAA issued a legal interpretation
The FAA is proposing to amend § 61.51(g) by revising paragraph (g)(4) and adding a new paragraph (g)(5) to allow a pilot to accomplish instrument recency experience when using an FAA-approved FFS, FTD, or ATD—just as he or she might do when completing instrument recency experience in an aircraft—without an instructor present. Because instrument recency experience is not training, the FAA no longer believes it is necessary to have an instructor present when instrument recency experience is accomplished in an FSTD or ATD. An instrument-rated pilot has demonstrated proficiency during a practical test with an examiner. It can be expensive to hire an instructor to observe a pilot performing the instrument experience requirements solely to verify that the instrument recency experience was performed.
As with instrument recency experience accomplished in an aircraft, the pilot would continue to be required to verify and document this time in his or her logbook. The FAA is retaining the requirement that an authorized instructor must be present in an FSTD or ATD when a pilot is logging time to meet the requirements of a certificate or rating, for example, under §§ 61.51(g)(4), 61.65 and 61.129.
Currently, under § 61.57(c), to act as pilot in command (PIC) of an aircraft under instrument flight rules (IFR) or in weather conditions less than the minimums prescribed for visual flight rules (VFR), an instrument-rated pilot must accomplish instrument experience (often described as instrument practice, currency or recency) within a certain period preceding the month of the flight.
If a pilot accomplishes the instrument recency experience in an aircraft, FFS, FTD, or a combination, then § 61.57(c)(1)–(2) requires that, within the preceding 6 months, the pilot must have performed: (1) Six instrument approaches; (2) holding procedures and tasks; and (3) intercepting and tracking courses through the use of navigational electronic systems.
If a pilot accomplishes the instrument recency experience using an ATD in combination with using an FFS or FTD, then the pilot must—when using an ATD—perform the additional tasks but the “look back” period to act as PIC is six months rather than two months. 14 CFR 61.57(c)(5). The FAA stated in 2009 that the more restrictive time limitations and additional tasks were based on the fact that, at the time, ATDs represented new technology.
Since the ATD provisions were added to § 61.57 in the 2009 final rule, the FAA has received numerous inquiries regarding the terms used in the rule and what might be acceptable combinations when using various aircraft or training devices to satisfy the currency requirements.
The FAA is proposing to amend § 61.57(c) to allow pilots to accomplish instrument experience in ATDs at the same 6-month interval allowed for FFSs and FTDs. In addition, the FAA is proposing to no longer require those pilots who opt to use ATDs exclusively to accomplish instrument recency experience to complete a specific number of additional hours of instrument experience or additional
Section 135.245(a) requires a person serving as SIC in a part 135 operation conducted under IFR to “meet the recent instrument experience requirements of part 61[.]” The FAA is proposing to remove the reference to part 61 in § 135.245(a) and move the current instrument experience requirements in § 61.57(c)(1) and (2) to new § 135.245(c). The use of aviation training devices is not currently permitted to satisfy requirements in part 135. As such, it is more appropriate for the express requirement for instrument recency experience to be listed in part 135 rather than by reference to another rule part.
Currently, a person may log second-in-command (SIC) flight time
In some situations, an airplane may be type certificated for operation either by two pilots or by a single pilot if the airplane has additional equipment specified in the operating limitations section of the FAA-approved airplane flight manual. For example, a Cessna 551 requires two pilots unless the airplane is equipped with an autopilot with approach coupling, flight director, boom microphone or headset mounted microphone, and a transponder ident switch on the pilot's control wheel. Likewise, certain operations conducted under part 135 require an SIC even when the type certification for the aircraft would not require a second pilot.
Over the years, several individuals have requested clarification from the FAA regarding whether a second pilot may log flight time when an aircraft is equipped for operation by a single pilot. The FAA responded that, because the aircraft—as equipped—requires a single pilot under the type certificate or regulation under which the flight is being conducted, then a second pilot is not a required flightcrew member. Accordingly, a second pilot may not log flight time under § 61.51(f) during those flights.
On December 18, 2007, Ameriflight, a part 119 certificate holder authorized to conduct operations under part 135, petitioned the FAA for an exemption from § 61.51(f)(2) to allow Ameriflight's SICs to log flight time during a flight that otherwise does not require an SIC.
In its petition, Ameriflight stated that granting this exemption would actively improve the level of safety because a properly trained and qualified SIC enhances safety in the cockpit by (1) providing a second set of eyes, (2) allowing for better implementation of crew resource management, (3) encouraging the use of standardized procedures, and (4) helping distribute flying tasks during periods of high workload. Ameriflight further stated that a grant of exemption would be in the public interest because SICs assigned to these operations would gain real-world line flying experience under supervision of a qualified PIC which it claimed was an important element in a smooth upgrade to PIC. Ameriflight also commented that future airline pilots currently below the § 135.243(c) threshold for PIC
The FAA issued a partial grant of exemption to allow Ameriflight's pilots to log SIC time in part 135 operations that did not otherwise require an SIC for the purposes of upgrading from SIC to PIC in those operations. The exemption, which has since been renewed,
The pilots are also required to meet other part 135 experience, qualifications, and crew pairing requirements. Specifically, the SIC must hold a commercial pilot certificate with appropriate category, class, and
In addition, Ameriflight is required under the exemption to meet certain recordkeeping requirements and outline all SIC ground and flight duties in its general operations manual and flightcrew operating manual.
To the extent that Ameriflight had petitioned to permit its pilots to log flight time to meet aeronautical experience requirements for pilot certification, the FAA denied that relief stating that the denial was based on a desire to maintain the integrity of the higher level airmen certification and rating requirements. The FAA granted partial relief because that relief was confined to operations conducted solely within a part 135 certificate holder's operation, and such flight time would only be used to gain experience that would allow an SIC to upgrade to a PIC position within part 135 operations. The FAA found that such experience has value in part 135 operations.
On February 7, 2013, Ameriflight petitioned the FAA to expand the relief provided in the original partial grant of exemption by again asking for relief to permit SICs who were not required by aircraft certification or the regulation under which the operation is conducted to log flight time to meet aeronautical experience requirements for pilot certification under part 61. Ameriflight restated its arguments regarding the value of the flight time and the benefit of building flight time under an experienced PIC. Ameriflight added that the relief was appropriate in light of Public Law 111–216 (August 1, 2010), which mandated FAA rulemaking to require SICs in part 121 operations to have an airline transport pilot (ATP) certificate.
The FAA published a notice of the petition in the
Eight commenters raised concerns about Ameriflight's petition including the possibility of part 135 operators exploiting and charging low-time pilots a fee to gain this SIC experience. Other commenters suggested that granting the relief was contrary to the new ATP certificate requirements and National Transportation Safety Board (NTSB) recommendations that are meant to increase the SIC qualifications for air carrier operations. One commenter stated that SIC flight time should not be allowed in aircraft type-certificated for single pilot operations.
The FAA denied Ameriflight's petition to expand the relief to permit pilots to log flight time for certification. Although the FAA believed that the petitioner and commenters raised valid points regarding the benefit of a second pilot in part 135 operations, Ameriflight did not need an exemption to place another pilot on board for increased safety. Further, the FAA stated that Ameriflight failed to demonstrate how it is unique to the general class of regulated entities and therefore somehow eligible for regulatory relief. The FAA has consistently denied petitions for exemption from certification requirements including those pertaining to flight time requirements. The FAA believes that any changes to the requirements for logging flight time for the purpose of meeting certification requirements are most appropriately achieved through notice and comment rulemaking.
Under certain conditions, the FAA believes that it would be appropriate to allow pilots in part 135 operations to log time in an airplane or operation that does not otherwise require an SIC.
The FAA is proposing to amend § 135.99 by adding paragraph (c) to permit a certificate holder to receive approval of an SIC professional development program (SIC PDP) via Ops Specs in order to allow the certificate holder's pilots to log time under this proposal. The FAA believes that a comprehensive SIC PDP can provide opportunities for beneficial flight experience that may not otherwise exist and also provide increased safety in operations for those flights conducted in a multicrew environment.
To ensure that the SIC PDP achieves these goals, the FAA has set forth in proposed § 135.99(c) the requirements for certificate holders, airplanes, and flightcrew members during operations conducted under an approved SIC PDP. In addition to the following discussion of the proposal, the FAA has placed a draft advisory circular (AC) in the docket to this rulemaking that provides additional guidance for part 135 operators regarding development and approval (via Ops Specs) of a SIC PDP. The FAA seeks comments on this proposed AC.
As proposed, under an approved SIC PDP, a certificate holder would have to be authorized to conduct operations under IFR in multiengine airplanes with dual controls and flight instruments. Because the FAA believes that it is important that the required flightcrew member (
Consistent with existing obligations under part 135, certificate holders would be required to have: (1) A manual containing standard operating procedures (SOP) for conducting operations with a two pilot flightcrew and setting forth the duties and responsibilities of an SIC; (2) approved SIC training curriculums;
As proposed in § 135.99(d), certificate holders who are authorized to operate as a basic operator, single PIC operator, or single pilot operator would not be permitted to obtain approval to conduct an SIC PDP. These certificate holders—either by regulation or deviation—are not required to develop and maintain manuals that describe the procedures and policies to be used by the flight, ground and maintenance personnel. 14 CFR 135.21. In addition, these certificate holders are not required to establish and maintain an approved pilot training program under § 135.341 or employ certain management personnel (
The FAA is also proposing in § 135.99(c)(1) to require a certificate holder with an approved SIC PDP to maintain records for each pilot consistent with the requirements in § 135.63 and provide training and testing records upon request to any pilot who the certificate holder has assigned to serve as SIC under its program. Additionally, the certificate holder would be required to establish and maintain a data collection and analysis process that would permit the certificate holder and FAA to determine whether the SIC PDP is accomplishing its objectives. The proposed data collection and analysis process could be based off a certificate holder's existing voluntary safety management system or internal evaluation program. As proposed in § 135.99(c)(1)(iv), a certificate holder who obtains approval of an SIC PDP would be required to conduct annual standardization meetings for all flight instructors serving as PIC during operations conducted under an SIC PDP. The FAA believes that standardization meetings would provide an additional mechanism to assess the effectiveness of the SIC PDP and review performance of participating SICs.
Under proposed § 135.99(c)(4), an assigned PIC in an operation conducted under an SIC PDP must be an authorized part 135 flight instructor for the certificate holder. To serve as an assigned SIC under an SIC PDP, a pilot would be required to meet the same certification, qualification, training, checking, and testing requirements in part 135 as a required SIC.
The FAA emphasizes that, under this proposal, an SIC assigned to duty under an SIC PDP would be subject to part 135 requirements as though the pilot were required by aircraft certification or regulation. For example, under the proposal, the assigned SIC would be subject to flight time and duty period limitations and rest requirements under subpart F of part 135. Under part 135, these requirements can differ based on the flightcrew complement. As such, a certificate holder would be expected to treat duty and rest periods for a two-pilot crew conducted under an SIC PDP no differently than those for pilots serving in operations requiring two pilots by aircraft certification or regulation. In addition, the FAA would consider a pilot assigned to serve as SIC under an SIC PDP to be a covered employee performing a safety sensitive function subject to drug and alcohol testing requirements in part 120.
The FAA emphasizes that the SIC PDP would be voluntary. This proposal would impose no new requirements on certificate holders conducting operations under part 135 if they choose not to seek approval of an SIC PDP. However, only pilots employed by a certificate holder that has an approved SIC PDP would be permitted to log SIC flight time in part 135 operations when a second pilot is not required by the aircraft certification or the regulation under which the flight is being conducted. If a certificate holder does not have an approved SIC PDP and assigns a second pilot to an operation that does not require two pilots, that pilot may not log flight time under § 61.51.
If conducted in accordance with an approved SIC PDP, the flight time accomplished by those pilots serving as SIC could be counted toward the total flight time required for an ATP certificate under §§ 61.159(a), 61.160,
In proposing this change to pilot time logging allowances, the FAA is acknowledging the value of the pilot experience gained by airmen who have been properly trained to serve as SIC in the air carrier environment. In Public Law 111–216, Congress directed the FAA to ensure that applicants for an ATP certificate have received flight training, academic training, or operational experience that will prepare the pilot to, among other things, function effectively in a multipilot environment, adhere to the highest professional standards, and function effectively in an air carrier operational environment. In addition, the Public Law directed that all part 121 flightcrew members must have an appropriate amount of multiengine flight experience, as determined by the Administrator.
The FAA believes, within an appropriate training and mentoring environment, this proposal would support the Congressional directive and provide an effective method to acquire experience for ATP certification and prepare pilots for a career as a professional pilot. The experience gained from working with and learning from a part 135 flight instructor in a crew configuration would create valuable experience. This proposal would provide an additional option for commercial pilots seeking to meet the minimum aeronautical experience requirements for the ATP certificate while also providing a strong foundational experience for a developing professional pilot.
The FAA is proposing to revise § 61.159(c)(1) to set forth the requirements for logging SIC pilot time in an operation that does not require an SIC by type certification of the aircraft or the regulations under which the flight is being conducted. Current § 61.159(c) (former § 61.145) was first added to the regulations in a 1969 final rule. 34 FR 17162 (October 23, 1969). Until that time, SICs were permitted to log only 50 percent of their flight time toward a certificate or rating. The 1969 final rule permitted SICs in part 121 operations to log 100 percent of their flight time in airplanes required to have more than one pilot by their approved airplane flight manual or airworthiness certificate.
In 1973, the FAA revised § 61.51 (former § 61.39) to permit all SICs—not just those in part 121 operations—to log 100 percent of flight time as SIC in aircraft on which more than one pilot is required by the type certification of the aircraft or the regulations under which the flight is conducted. 38 FR 3156 (February 1, 1973). When the FAA expanded § 61.51 to include all SICs, it did not remove the more limited provision that applied only to part 121 SICs in § 61.159(c)(1). Because that paragraph provides the same allowance for logging SIC flight time as is currently reflected in § 61.51(f), the FAA is proposing to revise § 61.159(c)(1) to address the logging requirements for SICs in part 135 operations who are not required by type certification or the regulations under which the flight is being conducted.
The FAA is also proposing to revise the definition of pilot time in § 61.1 and the logging requirements in § 61.51(f) to reflect the allowance for SICs to log flight time in part 135 operations when not serving as required flightcrew members under the type certificate or regulations.
Because of the ICAO limitation, it is important that flight time logged under this proposal is accurately recorded in the pilot's logbook. For that reason, the FAA has proposed § 61.159(c)(1)(ii) which would require the PIC to certify in the SICs logbook that the flight time was accomplished under the requirements in § 61.159(c)(1). As currently happens, a designated pilot examiner, aircrew program designee, or FAA inspector when validating the pilot's flight time would be responsible for noting an ICAO limitation on a temporary airman certificate (Form 8060–4). In addition, the FAA is proposing to revise Form 8710–1 (Airman Certification and/or Rating Application) to include this time in the record of pilot time section.
As proposed in § 61.159(c), an SIC logging time under this provision would not be permitted to log this flight time as PIC time even when he or she is the sole manipulator of the controls. The FAA is proposing, however, to revise § 61.51(e) to allow the part 135 flight instructor serving as PIC to log all of the flight time as PIC flight time even when the PIC is not the sole manipulator of the controls. Section 61.51(e)(1) permits a person who holds a sport, recreational, private, commercial, or airline transport pilot certificate to log PIC time when the pilot (1) is the sole manipulator of the controls of an aircraft for which the pilot is rated; (2) is the sole occupant of the aircraft, (3) is acting as PIC of an aircraft that requires more than one pilot by type certificate or the regulations under which the flight is being
Under the current requirements, an applicant for a commercial pilot certificate with airplane category single engine class rating must accomplish 10 hours of flight training in a complex airplane
Many pilots seeking a commercial pilot certificate in the airplane category take the initial practical test in a single engine airplane. Training providers have noted that there are far fewer single engine complex airplanes available to meet the practical test standards requirement, and the single engine complex airplanes that are available are older aircraft that are expensive to maintain. The FAA recognizes that accomplishing the required training in either a single engine complex airplane or turbine-powered airplane has become cost prohibitive for most flight schools.
Because § 61.45(b) requires a pilot to accomplish the practical test in an aircraft that is the appropriate category, class, and type (if applicable), pilots are not permitted to use a more readily available multiengine complex airplane during the single engine practical test at the commercial pilot level to accomplish the tasks and maneuvers that require a complex airplane.
On August 31, 2009, the FAA published a NPRM in the
The FAA received a variety of comments in response to the proposed change. Although several commenters supported the change based on the high cost of maintaining older single engine complex airplanes and the perceived value of requiring additional instrument training, other commenters opposed the change citing the potential for an increase in gear-up landing incidents and the fact that training in a complex airplane is essential for safety because most pilots will encounter a complex airplane during their careers. The FAA withdrew the proposed changes in the final rule citing the need to further analyze the comments received on the proposed revision. 76 FR 54096 (August 31, 2011). The FAA noted that it would consider the matter further and possibly publish an NPRM in the future.
Since the 2011 final rule, various pilot associations have made public statements on behalf of their members, expressing disappointment in the agency's decision to withdraw the proposal set forth in the 2009 NPRM. Various individuals and pilot organizations have reiterated concern over the costs associated with the upkeep of aging complex single engine airplanes that are unavailable (or are cost prohibitive) due to the decrease or discontinuance of manufacture of these aircraft. The FAA has also received multiple exemption requests that seek relief from § 61.45(b) and the requirement to use a single engine complex airplane during the commercial and flight instructor practical tests. While these requests have been denied because they have not met the regulatory criteria for an exemption, they provide additional
With the prominence of airplanes equipped with glass cockpits (
The FAA recognizes the emerging and continuing trend in general aviation aircraft manufacturing to produce most new aircraft with advanced avionics systems. The previously typical individual six-flight instrument configuration (six-pack) is becoming unavailable in current general aviation manufacturing. The NTSB safety study Introduction of Glass Cockpit Avionics Into Light Aircraft published in 2010 indicated that “the transition to glass cockpits in Federal Aviation Administration (FAA)-certified light aircraft” began in 2003 when Cirrus Design Corporation started delivering single-engine piston airplanes with electronic primary flight displays (PFD). Other manufacturers, including Cessna Aircraft Company, Piper Aircraft Incorporated, Mooney, and Hawker Beechcraft soon followed suit. The NTSB study further referenced General Aviation Manufacturers Association data showing that “by 2006, more than 90 percent of new piston-powered, light airplanes were equipped with full glass cockpit displays.”
This trend toward exclusive production of airplanes with glass cockpits (TAA) is due to an increase in demand for advanced avionics cockpit platforms by general aviation consumers.
To date, the FAA has primarily used the term “glass cockpits” when referring to airplanes equipped with these advanced avionics components such as a primary flight display (PFD) and multi-function display (MFD). For example, the
In an FAA-Industry Safety Study published in 2003, the FAA defined TAA as “a General Aviation aircraft that contains the following design features: Advanced automated cockpit such as MFD or PFD or other variations of a Glass Cockpit, or a traditional cockpit with GPS navigation capability, moving map display and autopilot.”
Notwithstanding the previous use of terms such as glass cockpit and electronic flight instrument displays, the FAA is proposing to adopt an updated definition of “technically advanced airplane” in § 61.1 based on the common and essential components of advanced avionics systems equipped on the airplane, including a PFD, MFD and an integrated two axis autopilot. These components would be required in order to ensure the TAA used to meet the aeronautical experience requirements for commercial pilots in § 61.129(a)(3)(ii) and appendix D to part 141, as well as the related practical test standards, as amended, have the necessary level of complexity comparable to the traditional single engine complex airplane.
TAA would be required to include a PFD that is an electronic display integrating all of the following flight instruments together: An airspeed indicator, turn coordinator, attitude indicator, heading indicator, altimeter, and vertical speed indicator. Additionally, an independent MFD must be installed that provides a GPS with moving map navigation system and an integrated two axis autopilot.
In addition to adding a definition of TAA to § 61.1, the FAA is proposing to amend the existing training requirements to permit the use of a TAA instead of a complex or turbine-powered airplane by commercial pilot applicants seeking an airplane category single engine class rating. In addition to the regulatory changes, the FAA would revise the practical test standards for commercial pilot applicants and flight instructors seeking an airplane category single engine class rating.
The FAA proposes to amend the current requirement found in § 61.129(a)(3)(ii) and appendix D to part 141 to complete 10 hours of training in a complex or turbine-powered airplane. As proposed, the FAA would permit a pilot seeking a commercial pilot certificate with an airplane category single engine class rating to complete the 10 hours of training in a TAA. With this amendment, a pilot seeking a commercial pilot certificate with a single engine class rating could complete all 10 hours in a complex airplane, a turbine-powered airplane, or a TAA, or could complete the 10 hours of training in any combination of these three airplanes. The FAA believes that demonstration of proficiency in an airplane that is electronically complex (
Providing the TAA alternative to the training requirements for a commercial pilot certificate with an airplane category single engine class rating is appropriate because advanced avionics in TAA create a level of complexity that would be equal to or greater than the mechanical complexity found in traditional complex airplanes. The FAA contends that, as avionics continue to advance, the need for training and checking in other categories of aircraft equipped with advanced avionics systems will continue to grow. Further, the FAA emphasizes the importance of pilot and flight instructor proficiency in the advanced aircraft systems that are essential to the FAA's NextGen initiatives.
Complex airplanes, turbine-powered airplanes, and TAA all require the commercial pilot applicant to have an understanding of aircraft systems that are more complicated than the aircraft systems found in more basic airplanes that most private pilots learn to fly. Operation of a complex airplane requires the pilot to perform advanced plans of action with the gear, flaps, and propeller control in certain phases of flight (such as takeoff, landing, and emergency procedures). Failure to perform the correct action in a complex airplane could result in a degradation of the safety of flight, such as a gear up landing or achieving maximum aircraft performance during climb after takeoff. Similarly, a TAA demands the pilot perform functions with the advanced avionics such as programing, entering flight plans and autopilot management. If not accomplished in an efficient, proper, and timely manner, there is the potential for a loss of safety during the flight.
As another example, the failure of the pilot to recognize and respond properly to a failure of either the PFD or the MFD at a critical phase of flight (especially during marginal VFR conditions or instrument meteorological conditions (IMC)) could result in the pilot losing situational awareness and possibly leading to loss of control jeopardizing the successful completion of the flight. The FAA believes that demonstrating proficiency when operating a TAA provides at least an equivalent level of complexity compared to a complex airplane. Indeed, newly hired operations aviation safety inspectors are required to complete three weeks of glass cockpit training (in TAA). This commitment to TAA training reflects the FAA's acknowledgment of the importance of developing skills, understanding the complexity, and demonstrating knowledge required to safely operate these airplanes.
The proposed amendments to § 61.129(a)(3)(ii) and appendix D to part 141 for single engine airplane ratings do not impose any new regulatory requirements on pilots or part 141 pilot schools.
The FAA notes that the proposed amendments to § 61.129(a)(3)(ii) and appendix D to part 141 necessitate coordinated revisions to the practical test standards for commercial pilots and flight instructors. The Commercial Pilot Practical Test Standards for Airplane require a pilot to use a complex airplane for takeoff and landing maneuvers and appropriate emergency tasks for the initial practical test for a commercial pilot certificate with an airplane category. Similarly, the Flight Instructor Practical Test Standards for Airplane require an instructor candidate to use a complex airplane for the performance of takeoff and landing maneuvers as well as appropriate emergency procedures.
Because an applicant for a commercial pilot certificate with an airplane category single engine class rating would no longer be required to complete training in a complex airplane, the FAA would revise the practical test standards to permit the use of a TAA in place of a complex or turbine-powered airplane during the single engine airplane practical test. The FAA would also revise the flight instructor single engine airplane practical test standards to permit the flight instructor applicant to use a TAA during the practical test. The FAA acknowledges that no longer requiring flight instructors seeking an airplane category single engine class rating to take the practical test in a complex airplane could result in a flight instructor not being evaluated specifically on complex airplane tasks and maneuvers.
Although under the proposed rule an instructor would not necessarily be evaluated during the practical test in a complex airplane, the FAA believes that the current training and endorsement required to act as PIC of a complex
Section 61.195 sets forth the limitations and qualifications for flight instructors. Under § 61.195(b), an instructor may not conduct flight training
In the 2009 final rule, the FAA modified § 61.195(c) to clarify that, in order to provide instrument training required for commercial pilot or ATP certification, an instructor must have an instrument rating on his or her flight instructor certificate. 74 FR 42500, 42561. In disposing of comments to the NPRM, the FAA made the following statement: “. . . a flight instructor who does not hold the appropriate airplane multiengine rating on his/her flight instructor certificate and the appropriate airplane category multiengine class rating on his/her pilot certificate may not conduct instrument training in a multiengine airplane unless that flight instructor holds the appropriate airplane category multiengine class rating on his/her pilot certificate and flight instructor certificate.” 74 FR 42500, 42536.
Shortly after the final rule published, the FAA received a request for legal interpretation seeking clarification of whether a flight instructor who holds only an instrument-airplane rating on his or her flight instructor certificate may conduct instrument training in a single or multiengine airplane if he or she holds those ratings only on his or her commercial pilot certificate but not on his or her flight instructor certificate.
Despite this conclusion, FAA regulations permit a pilot to receive an initial flight instructor certificate with an instrument-airplane or instrument-helicopter rating without a corresponding category (airplane or rotorcraft) and class rating (single engine, multiengine, helicopter) on the flight instructor certificate.
B. Class Ratings. Flight instructors who hold flight instructor certificates issued under part 61, which allow only instrument instructor privileges in airplanes, may give instrument flight instruction in any class airplane that is listed without restriction on their pilot certificate. Instructors holding only a helicopter instrument rating on their flight instructor certificate are limited to conducting instrument flight instruction in helicopters.
C. Ratings Limited to Instrument. Instructors with ratings limited to instrument may not give instrument flight instruction to students who do not hold category and class ratings in the aircraft used. This would be instruction for the addition of a rating that conveys other than instrument privileges. These instructors may not certify logbooks or recommend applicants for any aircraft category or class rating.
However, due to the confusion between the regulation and guidance regarding the qualifications of a flight instructor who is providing instrument training, the FAA is proposing to revise § 61.195. Specifically, the FAA is proposing to revise § 61.195(b) and (c) to permit a flight instructor who holds only an instrument-airplane rating or instrument-helicopter rating on his or her flight instructor certificate to provide instrument training in an aircraft, flight simulation training device (which includes full flight simulators and flight training devices), or in an aviation training device. As proposed, the authorized instructor and the pilot receiving instrument training would need to possess category and class ratings on their pilot certificates that are applicable to the aircraft in which the instrument training is accomplished. The flight instructor would need to hold the category and class rating on his or her pilot certificate appropriate to aircraft in which instrument training is given at the commercial pilot or ATP certificate level.
For example, a pilot who holds an airplane category single engine-land class rating on his or her private pilot certificate would be able to receive instrument training in a single engine-land airplane from a flight instructor who holds a single engine-land class rating on his or her commercial pilot (or ATP) certificate and an instrument-airplane rating on his or her flight instructor certificate. If the private pilot does not also hold a multiengine-land class rating, then in order to provide instrument training to that private pilot in a multiengine-land airplane, the flight instructor would be required to hold: (1) An instrument-airplane rating on his or her flight instructor certificate, and (2) an airplane category
Allowing a flight instructor with only an instrument rating on his or her flight instructor certificate to provide instrument training when the flight instructor and the pilot receiving instrument training hold the appropriate category and class ratings on their pilot certificates provides adequate assurance that instrument training can be conducted competently and safely because the pilot and the instructor would have each previously demonstrated proficiency during a practical test with an examiner in the category and class of aircraft in which the instrument training is conducted.
The FAA believes the fundamentals of instrument training (and the procedures) are a universal skill within a category of aircraft. The IFR procedures are fundamentally consistent within a particular category of aircraft and the same skills and rules apply to operate under IFR in the national airspace system. Obtaining a clearance, maintaining an attitude, altitude, speed, assigned course, following instructions from air traffic control (ATC), and other instrument skills are universal tasks for instrument flight in an aircraft. The ability of an instructor to teach instrument procedures in an aircraft for which he or she possesses an instrument rating on the flight instructor certificate would not be affected by the absence of aircraft category and class ratings on the flight instructor certificate.
In addition, a flight instructor with an instrument rating on his or her flight instructor certificate has demonstrated the required knowledge on the fundamentals of instruction (
To be eligible for a pilot certificate, a person must receive training from an authorized instructor on certain areas of operation. For instance, an applicant for a private pilot certificate with an airplane category single engine class rating must receive flight training on “basic instrument maneuvers” and “control and maneuvering an aircraft solely by reference to the instruments.” 14 CFR 61.107(b)(1)(ix); 61.109(a)(3). For that reason, a flight instructor authorized to provide flight training to a private pilot applicant (part 61, subpart H instructor) is evaluated during the flight instructor practical test on his or her instructional knowledge related to tasks and maneuvers performed solely by reference to the instruments.
Conversely, basic instrument maneuvers are not an area of operation for which sport pilot applicants must receive flight training. 14 CFR 61.311. As such, a sport pilot instructor (part 61, subpart K instructor) is not evaluated during the practical test on his or her instructional knowledge related to basic instrument maneuvers.
Notwithstanding this fact, there is a single circumstance under which a sport pilot must receive flight training on control and maneuvering solely by reference to the instruments. As with other student pilots, a sport pilot applicant must complete solo cross-country flight time to be eligible for the practical test for a sport pilot certificate. 14 CFR 61.313. Prior to accomplishing this solo cross-country flight time, sport pilot applicants must receive flight training from an authorized instructor on various maneuvers and procedures.
The FAA is proposing to authorize sport pilot instructors to provide training on control and maneuvering solely by reference to the instruments to sport pilot applicants receiving flight training for the purpose of solo cross-country requirements in an airplane that has a V
The proposed endorsement would require the sport pilot flight instructor to receive a minimum of 1 hour of ground training and 3 hours of flight training.
The FAA is proposing to add new § 61.412 that would establish training and endorsement requirements for those sport pilot flight instructors who want to provide training for sport-pilot applicants on control and maneuvering solely by reference to the flight instruments. This training is not required. Rather, the proposed change would allow a flight instructor with only sport pilot rating to provide all the training requirements for the sport pilot certificate. The FAA is proposing to revise § 61.415 by adding a new paragraph (h) to clarify that a sport pilot flight instructor may not conduct flight training on control and maneuvering an aircraft solely by reference to the instruments in an airplane that has a V
The FAA is proposing to make a corresponding change to § 91.109(c). Under that section, no person may operate a civil aircraft in simulated instrument flight unless the other control seat is occupied by a safety pilot who possesses at least a private pilot certificate with category and class ratings appropriate to the aircraft being flown. As such, a flight instructor with a sport pilot rating only (who holds no other pilot certificates) cannot currently act as safety pilot in simulated instrument flight. As proposed, the FAA would revise § 91.109(c) to permit a sport pilot instructor who has obtained the endorsement proposed in § 61.412 to serve as a safety pilot only for the purpose of providing flight training on control and maneuvering solely by reference to the instruments to a sport pilot applicant seeking a solo endorsement in an airplane with a V
In the NPRM that proposed to establish the certification and qualification requirements for sport pilots, the FAA indicated that a pilot would be able to credit “training time and aeronautical experience logged as a sport pilot” toward the requirements for higher certificates in accordance with the logging requirements in § 61.51. 67 FR 5368, 5411 (February 2, 2002). Under § 61.51(h), a person may log training time when that person receives training from an authorized instructor in an aircraft, full flight simulator, or flight training device.
A sport pilot instructor is authorized, within the limits of his or her certificate, to provide training and endorsements required for: (1) A student pilot seeking a sport pilot certificate; (2) a sport pilot certificate; (3) a flight instructor certificate with a sport pilot rating; (4) a powered parachute or weight-shift control aircraft rating; (5) sport pilot privileges; (6) a flight review or operating privilege for a sport pilot; (7) a knowledge test or practical test for a sport pilot certificate; (8) a private pilot certificate with a powered parachute or weight-shift-control aircraft rating or a flight instructor certificate with a sport pilot rating; and (9) a proficiency check for an additional category or class privilege for a sport pilot certificate or flight instructor certificate with a sport pilot rating. 14 CFR 61.413.
A sport pilot instructor, therefore, is not authorized to conduct training for a recreational pilot certificate or a private pilot certificate with airplane, rotorcraft, glider, or lighter-than-air category ratings. As such, under § 61.51(h), a pilot may not count flight training received from a flight instructor with only a sport pilot rating (subpart K instructor) towards the training requirements for a recreational pilot certificate or a private pilot certificate with category ratings other than powered parachute and weight-shift control aircraft.
Under current regulations, however, if a pilot receives flight training in a light-sport aircraft
In January 2011, the Aircraft Owners and Pilots Association, the Experimental Aircraft Association, the General Aviation Manufacturers Association and the National Association of Flight Instructors petitioned the FAA to allow pilots to credit the flight training received from a sport pilot instructor towards the training requirements for recreational pilot and private pilot certificates.
Under current regulations, to obtain a sport pilot certificate with airplane category single engine (land or sea) class privileges, rotorcraft category gyroplane class privileges, or lighter-than-air category airship class privileges, a pilot must complete 20 hours of flight time including at least 15 hours of flight training from an authorized instructor on various areas of operation.
An applicant for a recreational pilot certificate or a private pilot certificate must complete flight training on many of the same tasks and maneuvers required for a sport pilot certificate. In fact, many of the tasks and maneuvers outlined in the practical test standards for a sport pilot mirror the requirements in the practical test standards for recreational or private pilots. For example, ten of the twelve areas of operation required in the airplane practical test standards for private pilot are also listed in the airplane practical test standards for sport pilot. These areas of operation must be performed to identical proficiency standards. As with sport pilot applicants, the flight training for recreational and private pilot certificates includes cross-country flight time, takeoffs and landings to a full stop, and solo flight time. 14 CFR 61.99, 61.109.
Because of the common areas of operation and proficiency standards in flight training for sport pilots, recreational pilots, and private pilots, the FAA is proposing to revise § 61.99 and add new paragraph (l) to § 61.109 to allow flight training received from a sport pilot instructor who does not also hold a flight instructor certificate issued under the requirements in subpart H to be credited towards a portion of the flight training requirements for a recreational or private pilot certificate with airplane, rotorcraft, or lighter-than-air categories.
The following table reflects the current regulatory flight training hour requirements for recreational pilots and private pilots for specific categories and classes of aircraft. The last column reflects the sport pilot flight training hours that the FAA is proposing to allow a sport pilot to credit toward those higher certificates.
In proposing this change, the FAA acknowledges that, notwithstanding the number of common training tasks, a private pilot applicant is trained and tested on certain tasks and maneuvers above those that are required for a sport pilot certificate including 3 hours of night training, 3 hours of flight by reference to instruments, operations at an airport with an operating control tower, and some additional cross-country time requirements.
The FAA believes that there are sufficient safeguards including successful completion of a knowledge test and practical test to prevent any reduction in safety. The applicant for a recreational or private pilot certificate would still be required to complete all the requirements for that specific certificate or rating, including the appropriate aeronautical experience requirements, aeronautical knowledge requirements, flight proficiency standards, and preparation for the practical test. For example, a person
In addition to completing the aeronautical experience requirements with a flight instructor certificated under subpart H, an applicant for a recreational or private pilot certificate would be required to receive a minimum of three hours of training within 60 days of the practical test from a flight instructor certificated under subpart H. A flight instructor certificated under subpart H would be required to conduct training on all the areas of operation for a private pilot certificate and certify that the applicant is prepared for the practical test. 14 CFR 61.103(f). Moreover, only a subpart H flight instructor could recommend the applicant for the recreational or private pilot practical test. Ultimately, the practical test provided by an FAA designated pilot examiner would provide confirmation that the pilot has achieved the appropriate level of proficiency required for the higher pilot certification.
The FAA believes the additional training required and provided by a subpart H instructor, and the requirement for the applicant to pass a knowledge test and practical test to the standards required for that higher certificate, would ensure an appropriate level of experience, proficiency and safety.
As an alternative to this proposal, the FAA considered allowing all training received from a sport pilot instructor to be credited by an applicant seeking a recreational or private pilot certificate. An applicant would still be required to obtain a minimum of three hours of training in preparation for the practical test (within the preceding 2 calendar months) from a flight instructor under subpart H, as well as be endorsed by a flight instructor under subpart H as being prepared for the required practical test. The FAA solicits public comment, and any associated data, on this alternative.
The FAA may issue an initial pilot school certificate to a provisional pilot school or may renew a pilot school certificate provided the applicant meets the requirements of § 141.5. Section 141.5(d) currently requires, within the preceding 24 calendar months, the pilot school applicant to have established a pass rate of 80 percent or higher on the first attempt for all knowledge tests leading to a certificate or rating, practical tests leading to a certificate or rating, or end-of-course tests for an approved training course specified in appendix K of that part before the FAA may issue or reissue a pilot school certificate. In addition, § 141.5(e) requires the pilot school applicant to have graduated at least 10 different people from the school's approved training courses within the previous 24 calendar months. If an applicant for renewal does not meet the quality of training requirements in § 141.5(d) and the recent training ability requirements in § 141.5(e), the FAA may issue a provisional pilot school certificate in accordance with the requirements in § 141.7.
Section 141.53 prescribes the general procedures for a pilot school (or provisional pilot school) concerning the outline of each training course for which the school seeks FAA approval. Often these approved courses lead to a certificate or rating under part 61 or are specific courses set forth in appendix K to part 141 such as training for agricultural aircraft and rotorcraft external-load operations. Section 141.57 also permits a school to receive approval of a special curriculum course. The FAA has approved numerous special curricula courses under § 141.57 that do not lead to a pilot certificate or rating such as crew resource management, the use of night vision goggles, high performance aircraft training, complex airplane training, turbo-prop transition training, and tail-wheel training. While the FAA is able to approve these courses, and both provisional pilot schools and pilot schools are able to graduate students from these courses, they do not lead to a certificate or rating for the pilots nor are they listed in appendix K to part 141. Therefore, under § 141.5, the graduates that complete these special curricula courses currently may not be counted when calculating the 80 percent pass rate required for issuance or renewal of a pilot school certificate.
Although these special curricula courses do not result in a certificate or rating for the individual pilot, they do require the pilot school to develop a course curriculum, and an FAA Principal Operations Inspector must review and approve the course. In some instances the completion of the course leads to a required logbook endorsement such as a tail-wheel, complex, or high performance endorsement. In other cases, the course is designed to improve a pilot's skills in certain areas and environments such as crew resource management, aerobatics, or mountain flying. If a provisional pilot school is certificated on the basis of special curriculum courses alone, the school will not be able to meet the renewal criteria of § 141.5(d) because the courses do not involve testing for a certificate or rating and are not courses listed in appendix K of part 141.
Therefore, the FAA is proposing to amend § 141.5(d) to allow part 141 pilot schools that hold training course approvals for special curricula courses to renew their certificates based on their students' successful completion of an end-of-course test for these FAA approved courses. This proposed change would expand the opportunity for pilot schools to maintain part 141 certification and reduce the number of exemption requests submitted to the FAA. The FAA developed part 141 to allow for expanded oversight and the promotion of structured pilot training courses. The Principal Operations Inspector who approves the special curricula course would provide continued oversight and validity of these programs, as is done with any course approved under part 141. Allowing pilot schools to renew their certificates based on special curricula course graduations promotes this type of organized training and FAA oversight of pilot training activities.
If a student fails the end-of-course test for that special curricula course, the student would be recorded as a failure for purposes of calculating the 80 percent pass rate. The FAA believes that this is reasonable due to the fact that special curricula courses do not contain the specific training requirements found
Allowing this additional method of part 141 pilot school renewal would benefit schools that only provide special curricula courses, without requiring an additional certificate course approval that would add cost and complexity to the pilot school operation. Benefits would include promotion of FAA approved pilots schools and increase in available FAA-approved training courses.
The FAA notes that FAA web-based Operations Safety System (WebOPSS) authorizations are available for part 141 schools and can be a method of providing approvals for special curricula courses and other authorizations provided to pilot schools.
Current regulations require a person who serves as a required pilot flightcrew member of a United States civil aircraft to have a pilot certificate in his or her physical possession or readily accessible in the aircraft when exercising the privileges of that certificate. 14 CFR 61.3(a). The regulations also require a person who serves as a required pilot flightcrew member to have an appropriate medical certificate and government-issued photo identification in his or her physical possession or readily accessible in the aircraft. 14 CFR 61.3(c). In the case of a lost or stolen airman certificate or medical certificate, § 61.29(e) permits a pilot to request a document conveying temporary authority to exercise certificate privileges, which may be carried as an airman certificate or medical certificate for up to 60 days. Requests for these temporary documents can be made to the FAA Aeromedical Certification Branch or the Airman Certification Branch, as appropriate.
For airman certificates, this request can be accomplished online through Airman Online Services
Although the temporary document obtained from the Airman Certification Branch through the Airman Online Services Web site also reflects the airman's medical certificate information, this document is not a sufficient verification of an airman's medical certificate. An airman still must obtain 60-day temporary authority of medical certification from the Aeromedical Certification Branch, which is only available by fax or mail.
If a pilot does not have a pilot certificate (or a document issued under § 61.29 conveying temporary authority), medical certificate, and government-issued photo ID in his or her physical possession, a flight cannot be conducted with that person acting as PIC or SIC. Since 1992, the FAA has issued exemptions to part 119 certificate holders conducting operations under parts 121 and 135 to permit them to issue temporary verification documents to flightcrew members who do not have their airman certificates or medical certificates in their personal possession for a particular flight.
Under the terms of the exemption, a part 119 certificate holder may provide its pilots with a temporary 72-hour verification document when an airman certificate or medical certificate is lost, damaged, or destroyed. This method is known as the Air Carrier Certificate Verification Plan.
Additionally, the FAA places certain conditions and limitations on a certificate holder as part of the exemption including, but not limited to: Requiring the pilot to carry a copy of the exemption onboard when the relief is utilized, ensuring an alternate method for proper identification of the pilot, requiring the pilot to comply with § 61.29(e) and obtain a replacement certificate after the 72-hour period has elapsed if the original certificate remains unavailable, and limiting the relief in the exemption to operations conducted entirely within the District of Columbia and the 48 contiguous States of the United States.
Since the exemption process is not the appropriate method to provide continuing relief sought by these certificate holders, the FAA is proposing to amend §§ 121.383(c) and 135.95 to allow part 119 certificate holders conducting operations under part 121 or 135 to provide their pilot flightcrew members a temporary verification document (valid for 72 hours) without the need of an FAA exemption. The FAA is also proposing to amend § 61.3(a) to permit the documents provided by certificate holders to be carried as an airman certificate or medical certificate, as appropriate. As amended, § 61.3(a) would permit flightcrew members to carry documents provided by a certificate holder only on flights conducted for the part 119 certificate holder including ferry flights to reposition aircraft. If the pilot
A temporary verification document issued by the certificate holder would remain a short-term solution for a period not to exceed 72 hours. Placing this 72-hour time limitation on the verification document issued by the certificate holder would ensure that the airman obtains an official document from the Airman Certification Branch or Aeromedical Certification Branch under § 61.29(e) when a document remains unavailable after 72 hours.
Consistent with the conditions and limitations set forth in the exemptions, the FAA is proposing that a certificate holder would be required to obtain approval from the Principal Operations Inspector to exercise this privilege. The FAA intends to establish a process within the web-based Operations Safety System (WebOPSS)
When these exemptions were first granted in 1992, access to the Internet was limited or unavailable and obtaining a temporary document quickly from the FAA was difficult. This fact has changed with today's information technology revolution. The FAA believes that the current proliferation of personal electronic devices with 24/7 Internet information and email access will likely keep the use of this new provision at a minimum. If this rule is finalized as proposed, the FAA will provide updated FAA Order 8900.1 guidance regarding how a certificate holder may obtain authority to provide its pilots a temporary 72-hour certificate verification document. The FAA would continue to provide relief through exemptions until a final rule is published and the certificate holder has obtained authority under the regulation from its Principal Operations Inspector.
The current exemptions issued to part 119 certificate holders conducting part 121 operations also provide exemption from § 63.3(a) to allow certificate holders to issue temporary verification documents to flight engineer flightcrew members who do not have their airman certificates or medical certificates in their personal possession for a particular flight. Accordingly, the FAA is proposing to amend § 63.3(a) to permit the documents provided by certificate holders to be carried as an airman certificate or medical certificate, as appropriate. As amended, § 63.3(a) would permit flightcrew members to carry documents provided by a certificate holder only on flights conducted for the part 119 certificate holder including ferry flights to reposition aircraft. If the flight engineer flightcrew member's airman or medical certificate remains unavailable after 72 hours, the flight engineer flightcrew member would be required to comply with the requirements of § 63.16 and request a 60-day temporary confirmation document from the Airman Certification Branch or the Aeromedical Certification Branch until a replacement certificate is issued and in the possession of that airman.
The FAA notes that, as proposed, this relief for pilots and flight engineers is available only for flights conducted entirely within the United States.
The requirements for the issuance of a flight instructor certificate are set forth in subpart H of part 61. These requirements include receiving training appropriate to the flight instructor rating sought, successful completion of a knowledge test, and demonstration of instructional proficiency during a practical test with an examiner. In the 2009 final rule, the FAA promulgated § 61.73(g) (74 FR 42555), which for the first time allowed a current or former military instructor or military examiner to obtain an FAA flight instructor certificate based on experience obtained in the military (
Section 61.73(g) specifies that a current or former military instructor or examiner may apply for and be issued an initial flight instructor certificate with appropriate ratings or add a rating to an existing flight instructor certificate if he or she meets the following requirements:
• Hold at least a commercial pilot certificate with category and class ratings appropriate to the flight instructor certificate sought;
• Hold an instrument rating (or have instrument privileges) on his or her pilot certificate appropriate to the instructor rating sought;
• For applicants that currently do not hold a flight instructor certificate, pass a knowledge test on the aeronautical knowledge areas listed under § 61.185(a);
• Present a record that shows the person is or was qualified as a U.S. Armed Forces military instructor pilot or pilot examiner appropriate for the flight instructor rating sought;
• Present a record that shows the person completed a U.S. Armed Forces instructor pilot or pilot examiner training course and received an aircraft rating qualification as a military instructor pilot or pilot examiner that is appropriate to the flight instructor rating sought; and
• Present a record that shows that person passed a U.S. Armed Forces instructor pilot or pilot examiner proficiency check in an aircraft as a military instructor pilot or pilot examiner that is appropriate to the flight instructor rating sought.
The 2009 final rule did not impose any time restrictions for the qualifying military events described by
The holder of a flight instructor certificate must renew that certificate every 24 calendar months to continue to exercise instructor privileges. Section 61.197 describes the methods by which a flight instructor may accomplish that renewal, including: (1) Completing a flight instructor refresher course (FIRC); (2) providing a record showing that the instructor served as a check pilot in an air carrier operation; (3) providing a record showing within 24 calendar months 80% of the flight instructor's students have passed a practical test on the first attempt (five or more recommendations); (4) completing a practical test for additional flight instructor rating; or (5) providing a record showing that within the preceding 12 months from the month of application the flight instructor passed an official U.S. Armed Forces instructor pilot proficiency check. 14 CFR 61.197(a). The 2009 final rule that established military instructor competency added military instructor pilot proficiency checks to the list of renewal options for a flight instructor certificate.
If a flight instructor fails to accomplish one of the renewal requirements, the flight instructor certificate expires, and the instructor may no longer exercise the privileges of that certificate until it is reinstated. To reinstate an expired flight instructor certificate, a person must pass a practical test for a previously held instructor rating or a new rating.
Since the final rule was published in 2009, the FAA has received numerous comments from military instructors regarding renewal and reinstatement of their flight instructor certificates. For example, some military instructors—who had obtained their initial flight instructor certificate by completing the requirements in subpart H rather than through military competence—wanted to use § 61.73(g) to reinstate their expired flight instructor certificates. Unless the expired flight instructor certificate can be renewed in accordance with SFAR 100–2, the express language in § 61.199 requires the holder of an expired flight instructor certificate to reinstate that certificate by completing a practical test. Some military instructors noted that it seemed inequitable to allow military instructors who had not instructed for many years to obtain an initial flight instructor certificate without being required to demonstrate proficiency while at the same time requiring an active military flight instructor (who had obtained that certificate by meeting the requirements of subpart H) to pass a practical test to reinstate his or her expired flight instructor certificate.
As another example, some military instructors have sought to renew their certificates based on the addition of a military instructor rating obtained outside the 12-month window set forth in § 61.197(a). The FAA has stated through policy that, under § 61.73(g), a military instructor is eligible to add a new rating obtained in the military to a non-expired flight instructor certificate; however, the flight instructor certificate retains the existing expiration date unless the applicant added the rating within the 12-month period preceding the date of the application for renewal. As such, a person who holds a non-expired flight instructor certificate and obtained a new rating through a military proficiency check conducted outside of the 12-calendar month period preceding the month of application for renewal retains the original expiration date on the certificate rather than obtaining a new certificate valid for 24 months. Many military instructors commented that the addition of a rating during any time prior to expiration of a flight instructor certificate should result in the applicant receiving a certificate that is valid for an additional 24 calendar months.
Based on these concerns, the FAA is proposing some changes to §§ 61.197 and 61.199 to accommodate renewal and reinstatement of flight instructor certificates by military instructors and examiners. The FAA is proposing to expand the 12-calendar-month timeframe noted in § 61.197(a)(2)(iv) to 24 calendar months. This would allow a military instructor who has passed a U.S. Armed Forces military instructor pilot proficiency check within the 24 calendar months preceding the month of application to be eligible to renew his or her certificate based on that proficiency check. Expanding this timeframe would be consistent with the requirements for other methods of renewal found in §§ 61.197(a)(2)(i) and 61.197(a)(2)(ii). The FAA believes that there would be no reduction of safety based on this proposal as these instructors will have demonstrated knowledge and skill during the same timeframe as is recognized for other methods of renewal. Consistent with current regulations, those instructors who apply to renew their certificates based on a military instructor proficiency check completed more than 3 months from the date of expiration of their current flight instructor certificate would receive a certificate with an expiration date 24 months from the date that the instructor submits his or her application for renewal. If the flight instructor applies for renewal within 3 months of the expiration date of the current instructor certificate, then the new expiration date would be 24 months from the current date of expiration.
The FAA is also proposing to clarify in § 61.197(a)(2)(iv) that a flight instructor would be able to renew his or her certificate by providing a record demonstrating that, within the previous 24 calendar months, the instructor passed a military instructor pilot proficiency check for a rating that the instructor already holds or for a new rating. Consistent with current practice, an eligible military instructor that applies for renewal under this provision would receive a flight instructor certificate that reflects a date 24 calendar months from the month that application for renewal is made to the FAA.
The FAA is also proposing to revise § 61.199(a) to permit a military instructor to reinstate his or her expired flight instructor certificate by providing
The expiration date of the reinstated flight instructor certificate would be 24 calendar months from the date of the proficiency check (as opposed to the date of the application). In addition, the FAA would require the applicant to apply for reinstatement within 6 calendar months of the proficiency check. The FAA believes that this would provide the applicant adequate time to schedule an appointment with either an FAA Aviation Safety Inspector or designee authorized to issue a flight instructor certificate based on military competence. Allowing the applicant 6 calendar months to apply for the reinstatement following the proficiency check is consistent with the 6-calendar-month allowance described in SFAR 100–2.
The FAA is also proposing to add a temporary provision to § 61.199 (new paragraph (c)) that would allow military instructors who obtained their initial flight instructor certificate under subpart H to reinstate that instructor certificate based on military competence rather than by completing a practical test. Currently, those military instructors with an expired instructor certificate (that was obtained under subpart H) may only reinstate that certificate through an additional practical test. This situation is in contrast to military instructors that have never held a flight instructor certificate issued under subpart H who have the ability to receive an initial instructor certificate based on their military activity, even though their military activity may have been prior to the military activity of the individual that holds an expired instructor certificate. As noted previously, the FAA has received commentary that this situation, resulting from the current regulations, is inequitable.
This proposed temporary provision would provide a reinstatement method for military instructors and examiners who allowed their FAA instructor certificates to expire before the regulations permitted them to add a rating based on military instructor competence. This temporary provision in § 61.199(c) would allow for a military instructor or examiner that meets the following requirements to obtain a reinstated flight instructor certificate. As proposed, a military instructor or examiner who obtained his or her FAA flight instructor certificate before October 20, 2009 (the effective date of the current regulations that allow for the issuance of a flight instructor certificate based on military competence), would be required to: (1) Provide a record demonstrating that, since the initial flight instructor certificate was issued, the person passed a U.S. Armed Forces instructor or pilot examiner proficiency check for an additional military rating; and (2) pass the MCI knowledge test within 24 calendar months preceding the date of application for reinstatement. The FAA believes that requiring the applicant to pass the knowledge test ensures that the person has demonstrated recent knowledge of the areas found in the MCI test and is consistent with the requirements for a person seeking an initial flight instructor certificate based on military competence.
The temporary provision in § 61.199(c), as proposed, would remain in effect for one year to provide a military instructor or examiner with an expired FAA instructor certificate issued under subpart H enough time to reinstate their certificate based on military competence. The FAA believes that one year is a sufficient time frame to allow those individuals who would be affected by the provision to apply for a reinstated instructor certificate.
Basic certification requirements under 14 CFR part 21 state that an applicant is entitled to a type certificate for an aircraft in the restricted category for special purpose operations if the applicant shows that no feature or characteristic of the aircraft makes it unsafe when it is operated under the limitations prescribed for its intended use.
The special purpose operation for which the FAA certificates a restricted category aircraft is set forth in the “Certification Basis” section of the Type Certificate Data Sheet. This section will list the applicable special purpose operation(s) as described in § 21.25(b) and provides the only operations for which the restricted category aircraft can be utilized.
Section 91.313 places express limitations on the operations that may be conducted in a restricted category aircraft. The FAA first proposed regulations establishing the operating limitations of aircraft certificated in the restricted category in an NPRM on January 18, 1964. 29 FR 477. In the preamble, the FAA explained that it was
Section 91.39, later recodified as § 91.313,
The FAA recently determined that the operating limitations set forth in § 91.313 restrict operators from conducting flights necessary for their PICs to obtain the type rating designations required by § 61.31(a). Practical tests for the addition of a type rating designation to a pilot certificate, training in preparation for such practical tests, or other flights necessary for the conduct of such practical tests (such as observations required for designated pilot examiner designation and surveillance) are outside the scope of the special purpose operation(s) for which these restricted category aircraft are certificated and not allowed under § 91.313.
The FAA recognizes that this determination creates a regulatory barrier for operators seeking to conduct flights to meet the type rating requirements of § 61.31 when a standard category aircraft in the same category, class, and type is not reasonably available to the operator. Several models of surplus military aircraft have entered service as civil aircraft certificated in the restricted category. Additionally, civil aircraft previously certificated in the standard or transport category have been modified to take advantage of new technologies or modified to add equipment designed to specifically perform a mission covered by the special purpose operations outlined in § 21.25(b). The FAA has certificated these aircraft in the restricted category under new type certificates. There are multiple examples of aircraft certificated in the restricted category for which there is no equivalent standard category aircraft including the civil model CH–47D, the Lockheed P–2 Neptune (P2V), and the Air Tractor AT–802A.
After the FAA informed operators that flights pertaining to pilot certification were not expressly permitted by § 91.313, several operators applied for an exemption to this section. These petitions for exemption sought relief to conduct pilot training for certification, practical tests (for type rating designations), and PIC proficiency checks required by § 61.58 in aircraft certificated in the restricted category.
On January 13, 2015, Billings Flying Service (Billings), a part 119 certificate holder authorized to conduct operations under parts 133, 135, 137, and 91 petitioned the FAA for an exemption from § 91.313(a)
In its petition, Billings stated that it has conducted training and proficiency checks for many years, and that such operations are safe, present no additional risk to the public, and are in the public interest. Billings further noted that it would perform no additional maneuvers or operations, above what it had conducted in the past, and that the training would be in the same location for training previously used by Billings. The petitioner asserted that conducting these same operations, including those that would be under the oversight of an FAA Designated Pilot Examiner, Aviation Safety Inspector, or Pilot Proficiency Examiner, present no additional risk and are in the public interest.
The relief granted in the exemption allowed Billings to operate a restricted category aircraft for a practical test necessary for its pilots to obtain a type rating designation as required by § 61.31. In addition, the exemption allowed Billings to train pilots in preparation for these practical tests. The FAA limited this relief to those pilots employed by Billings who will participate in a special purpose operation for which the listed aircraft are certificated. The exemption also granted relief for any flights necessary to designate a designated pilot examiner in the aircraft types in order to conduct these practical tests.
The FAA noted that, although § 91.313 does not allow restricted category aircraft to be used for training for certification and the practical test for type ratings, this restriction does not extend to proficiency checks accomplished by those pilots that already hold the requisite type rating and whose duties are to perform a special purpose operation authorized by § 91.313(a). These flights, such as flights needed to satisfy the PIC proficiency checks required by § 61.58 (and associated pilot proficiency examiner observations), are considered necessary to accomplish the work activity directly associated with the aircraft's special purpose.
In addition to providing relief from § 91.313(a), the FAA found that an exemption from § 91.313(c) was required for Billings to conduct the operations described in the petition. Section 91.313(c) prohibits a person from operating a restricted category civil aircraft carrying persons or property for compensation or hire. An operation that involves the carriage of persons or material necessary to accomplish the special purpose and an operation for the purpose of providing flight crewmember training in the special purpose operation are not considered to be the carriage of persons or property for compensation or hire.
A recent legal interpretation by the FAA recognizes an instructor who is being paid to provide flight training in an aircraft is operating the aircraft for compensation or hire regardless of whether he or she is acting as pilot in command.
Subsequent to the grant of relief for Billings, the FAA received and granted several other petitions for exemption from § 91.313(a) and (c).
The FAA believes that, under certain conditions, it would be appropriate to permit owners/operators of aircraft certificated in the restricted category to operate those aircraft for the purpose of providing pilot training and testing that leads to a type rating designation required by § 61.31(a) (and an ATP certificate
The proposed § 91.313(h) would allow operators of restricted category aircraft to obtain a LODA for the purpose of conducting pilot training and testing that leads to a type rating designation required by § 61.31(a). As proposed, the LODA would permit operators to train and test only pilots employed by the operator who hold at least a commercial pilot certificate with the appropriate category and class ratings for the aircraft type. The FAA believes that requiring pilots to hold category and class ratings prior to the type rating practical test is appropriate because it would resolve the current regulatory obstacle faced by operators who need to provide their pilots with the proper ratings to perform special purpose operations while ensuring that historical limitations on the use of restricted category aircraft remain in place. As noted, the FAA has long acknowledged that restricted category aircraft “may not meet the airworthiness standards of standard category aircraft.” Because of the special nature of the intended usage of these aircraft, the airworthiness certification standards for them are not designed to provide the same level of safety that is required for aircraft certificated in the standard category and the operating limitations set forth in § 91.313 are designed to compensate for this and provide the necessary level of safety for special purpose operations. 30 FR 2531 (February 18, 1965).
Because of these airworthiness considerations, the FAA finds it necessary to limit the additional restricted category operations to those that are described in this proposal. The FAA finds that the proposal would permit the flights that can only be conducted in a restricted category aircraft. Other flights, such as obtaining a commercial pilot certificate or adding a category and/or class rating, can be conducted in an aircraft with other airworthiness certificate categories (
In addition, proposed § 91.313(h) would permit the FAA to provide deviation authority to conduct operations in restricted category aircraft that are necessary to designate examiners and training center evaluators and qualify aviation safety inspectors in the aircraft type and provide continuing oversight and observation of designees and training center evaluators. These flights would enable the FAA to conduct the appropriate practical tests for operators and ensure that the FAA fulfills its obligations to ensure that designees and FAA inspectors are performing their duties appropriately.
As proposed in § 91.313(h)(4), an operator would be required to submit a request for deviation authority in a form and manner acceptable to the Administrator at least 60 days before the intended operations would be conducted. Although the FAA will provide additional guidance on the process for obtaining a LODA, the FAA anticipates that—as with LODAs for experimental aircraft—an operator would submit a request for deviation authority to the Flight Standards District Office having jurisdiction over the location where the requested training would take place.
The application for a LODA under proposed § 91.313(h) would include:
• A letter identifying the name and address of the applicant which includes the name and contact information of the person responsible for the operation, and details of the type of training and/or checking to be conducted;
• A description of each aircraft, FFS, FTD, or ATD used in any associated training (if applicable). This information would include the specific aircraft make(s), and model(s), and type (if applicable) by N-number, to be utilized;
• An aircraft configuration analysis including, but not limited to, flight deck, flight manual, operating limitations, required placards, and procedures.
• The qualifications and current employment status of the applicant for which the training and/or checking is needed.
If an operator obtains a LODA, the training and testing for a type rating would be conducted consistent with existing requirements in part 61. Specifically, the flight training must be conducted by an appropriately rated flight instructor in accordance with the requirements set forth for type ratings in §§ 61.63(d) or 61.157(b). Additionally, the pilot would be required to complete the practical test consistent with the standards outlined in the Practical Test Standards with a designee or FAA inspector who holds the appropriate authority. For this reason, the operator would be required to demonstrate during the application process that, as configured, the restricted category aircraft is capable of performing all required procedures and maneuvers necessary to meet the requirements of the applicable aircraft type rating practical test standards.
If the operator is granted deviation authority, the operator would be permitted to provide pilot flight training and/or testing in their restricted category aircraft consistent with the
This proposed provision is not intended to allow operators to establish training schools utilizing restricted category aircraft for the purpose of issuing type ratings. Operators would only be granted deviation authority to conduct this training and testing for pilots that are employed by the operator and only when a type rating is required to complete the appropriate special purpose operation for which the aircraft was certificated and the operator is actively engaged in performing.
In addition to establishing a LODA process under proposed paragraph (h), the FAA is also proposing to revise § 91.313(b) to make clear that PIC proficiency checks and recent flight experience in a restricted category aircraft are permitted under § 91.313(a) when pilots hold the appropriate category, class, and type ratings and are employed by the operator to perform a special purpose operation. Under the proposal, properly rated pilots employed by the operators would be permitted to accomplish § 61.58 proficiency checks and recent flight experience requirements set forth in § 61.57. Additionally, the FAA is proposing to add relocation flights for maintenance to the list of operations considered necessary to accomplish the work activity directly associated with the special purpose operation. The FAA notes that other types of flight events not expressly allowed by the regulation would not be permitted and would require an exemption from the regulation.
The FAA has also proposed a change to § 91.313(c) to ensure that instructors providing flight training and designees conducting practical tests under a LODA may accept compensation for these operations. Likewise, the FAA is proposing to revise § 91.313(d) to permit persons to be carried on restricted category aircraft if necessary to accomplish a flight authorized by LODA under paragraph (h).
Currently, if an operator desires to conduct any operation outside of the special purpose operation(s) for which the aircraft was certificated, the operator is required to submit a petition for exemption. Requirements for how to submit a petition for exemption and what information must be included in the submission are outlined in 14 CFR 11.63 and 11.81 respectively. Additionally, in accordance with § 11.63, the operator is required to submit the petition for exemption 120 days prior to the need for the exemption to take effect. If approved, the petition for exemption may have conditions and limitations that will require ongoing interaction between the operator and the FAA. If this rule is finalized as proposed, the requirement to submit a request for a LODA locally to the Flight Standards District Office will relieve the operator of the burden of petitioning the FAA for exemption. The LODA process would enable an operator to obtain approval at the local Flight Standards District Office and would reduce the time requirements associated with filing a petition for exemption.
Section 91.531(a) prohibits a person from operating certain airplanes without a pilot who is designated as SIC. This restriction applies to large airplanes,
Certain former military aircraft and some experimental aircraft were designed to be flown by one pilot. Notwithstanding this fact, these airplanes are currently required to have an SIC in accordance with § 91.531(a) because they qualify as large airplanes. Furthermore, because these airplanes are not type certificated, they are not eligible for an LOA under § 91.531(b). Under the express language of the regulation, to obtain an LOA, the airplane must be both “designed for and type certificated with only one pilot station.”
On April 10, 2012, Experimental Aircraft Association, Warbirds of America, petitioned the FAA for an exemption from § 91.531 to permit the operation of large airplanes that possess special (experimental) airworthiness certificates that have been designed with only one pilot station, but which are not type-certificated, to be operated without a pilot who is designated as SIC.
On July 20, 2012, the FAA granted this exemption from § 91.531(a)(1) to allow members of the Experimental Aircraft Association, Warbirds of America, to operate certain large airplanes without an SIC. The FAA granted relief from § 91.531(a) for pilots operating: (1) The “trainer” versions of former military airplanes originally designed with one pilot station, but which were modified with a second pilot (instructor) station merely for the purpose of pilot training; and (2) former military aircraft that had a single pilot station and a required non-pilot flightcrew member station. In support of the relief provided in the exemption, the FAA stated that these airplanes were approved by the military to be flown with only one pilot. These airplanes are maintained, operated, and inspected in
The FAA is proposing to revise § 91.531(b) to allow certain large airplanes that are not type-certificated to be operated without a pilot who is designated as SIC, provided that those airplanes: (1) Were originally designed with only one pilot station; or (2) were originally designed with more than one pilot station for purposes of flight training or for other purposes, but were operated by a branch of the United States Armed Forces or the armed forces of a foreign contracting State to the Convention on International Civil Aviation with only one pilot.
The proposed amendment to § 91.531 would also reorganize the section by placing all affirmative requirements in paragraph (a) and all exceptions thereto in paragraph (b). Related amendments to § 91.531, as proposed, would also eliminate inconsistencies, redundancies, and obsolete provisions, including the language currently found at paragraph (a)(2) and paragraph (d) of this section. By virtue of the airplane type certificate, large airplane, or commuter category crew requirements, the rule would now capture all circumstances when an SIC is required and the specific circumstances when an exception applies. The FAA notes that the affirmative requirement for an SIC on a multiengine turbojet aircraft at current paragraph (a)(2) is captured by the proposed amendment to § 91.531(a)(1) and therefore no longer needs to be listed separately.
The proposed amendment to § 91.531(a)(1) would clarify that the requirement for an SIC is determined by the minimum flightcrew requirements established in the operating limitations of the aircraft flight manual or the type certificate data sheet—regardless of whether the airplane is large or small. The existing SIC requirement for large airplanes, which would be reflected at § 91.531(a)(2) as proposed, remains necessary because some older airplanes do not contain minimum flightcrew requirements in the operating limitations of the aircraft flight manual or the type certificate data sheet.
As proposed, the FAA would eliminate the need for pilots to obtain an LOA under § 91.531(b) to operate large airplanes designed for single pilot operation without an SIC. The FAA believes that an LOA is unnecessary due to pilot certification requirements and aircraft operating limitations in § 91.319(i).
For example, to fly a large former military or experimental airplane, the PIC must first hold either a type rating (if the airplane is type certificated) or an experimental aircraft authorization (if the airplane is not type certificated). These type ratings and authorizations are reflected on a person's pilot certificate after successful completion of the requisite practical test. In the case of former military and experimental airplanes designed for operation by a single pilot, a type rating or experimental aircraft authorization on a pilot certificate is evidence that the pilot has demonstrated to the FAA during a practical test or evaluation that he or she is competent to fly the airplane without an SIC.
The FAA believes the current requirement to obtain an LOA for operation of these airplanes with a single pilot, in addition to the authorization on the pilot certificate, creates a redundancy without a demonstrable benefit. Therefore, rulemaking is appropriate to remove the redundant provision requiring an LOA for operational purposes and to allow these airplanes to be flown in single pilot operations. The FAA further notes that these airplanes must be flown in accordance with any applicable operating limitation, including any limitation issued pursuant to the provisions of §§ 91.319 and 91.9.
As proposed, pilots seeking to operate these airplanes (that are not type certificated) as a single pilot would still be required to obtain a temporary LOA from the FAA allowing the pilot to serve as PIC, if necessary, for completion of the practical test. Once the pilot completes the practical test successfully, the examiner would update the pilot certificate to reflect the authorization to operate these airplanes as a single pilot. Based on this proposal, the FAA believes the current requirement in § 91.531(b) to obtain a permanent LOA for operational purposes is no longer necessary with regard to large airplanes or turbojet-powered multiengine airplanes since the authorization is reflected on the pilot certificate. The FAA notes further that since the type certificate for commuter category airplanes referenced in current § 91.531(a)(3) permits single pilot operations, an LOA is not necessary.
While considering the regulatory changes proposed in this rulemaking, the FAA became aware of the need for a technical correction in appendix I to part 141, additional Aircraft category and/or class rating course. In paragraph (k), course for an airplane additional multiengine class rating, subparagraph (2) discussing the requirements for the commercial pilot certificate, the FAA noted that two paragraphs are currently designated (iv):
(iv) One 2-hour cross country flight during nighttime conditions in a multiengine airplane and, a total straight-line distance of more than 100 nautical miles from the original point of departure; and
(iv) Three hours of flight training in a multiengine airplane within 2 calendar months before the date of the practical test.
The FAA is proposing to correct this typographical error to renumber the paragraphs as (k)(2)(iv) and (k)(2)(v), respectively.
Further, while considering these regulatory changes, the FAA noted that the nomenclature regarding flight simulators has changed. The definition as found in § 1.1 references a “full flight simulator” whereas the regulations often use the older nomenclature “flight simulator.” Therefore, in the sections
The FAA recognizes that many of the provisions in this rule are relieving and others are voluntary. If this rule is finalized as proposed, the FAA will work to ensure that the amendments which would provide regulatory relief and flexibility become effective as soon as practicable, while ensuring that persons seeking to benefit from the relief, as well as the FAA, have adequate time to prepare for implementation of the changes that would be finalized. The following discussion summarizes the FAA's proposal for when the various amendments included in this proposed rule would become effective. As explained, each proposed amendment would be effective either 30, 60 or 180 days after publication of the final rule in the
The FAA proposes that the following provisions be made effective 30 days after publication of any final rule associated with this NPRM. By making these provisions effective 30 days after the date of publication in the
The FAA proposes that the following provisions be made effective 60 days after publication of any final rule associated with this NPRM. By making these provisions effective 60 days after the date of publication in the
The FAA proposes that the following provisions be made effective 180 days after publication of any final rule associated with this NPRM. By making these provisions effective 180 days after the date of publication in the
To further implement this notice of proposed rulemaking, the FAA is proposing to revise or create the following Advisory Circulars and FAA Orders.
FAA Order 8900.1, Flight Standards Information Management System, Vol. 11, Chapter 10, Basic and Advanced Aviation Training Device, Sec. 1, Approval and Authorized Use under 14 CFR parts 61 and 141 guidance concerning ATD's would also be revised.
AC 135–PDP: This document would be a newly drafted AC (Part 135 SIC Professional Development Program) that would provide part 135 operators guidance on receiving FAA approval for training and qualifying pilots to act as an SIC and log that time for the ATP flight time requirements.
AC 61–65, Certification: Pilots and Flight and Ground Instructors would be revised to include endorsements and guidance pertaining to the sport pilot provisions. This would include the recommended endorsement for qualifying a sport pilot only instructor to give basic instrument flight instruction to sport pilot candidates only.
FAA Order 8900.1, Flight Standards Information Management System, Vol. 2, Air Operator, Air Agency Certification, Chapter 9, Certification of a Part 141 Pilot School guidance concerning pilot school 141 Special Curricula courses would be revised to permit those courses to be used for a pilot school to obtain a pilot school certificate.
FAA Order 8900.1, Flight Standards Information Management System, Vol. 5, Airman Certification, Chapter 1, Direction, Guidance and Procedures for
In part 61, certification: Pilots, flight instructors, and ground instructors, in § 61.1, the definition of “pilot time” would be revised. New definitions would also be added to § 61.1(b) for “aviation training device” and “technically advanced airplane.”
Section 61.3(a) would be revised to permit a pilot flightcrew member to carry a temporary document provided by a part 119 certificate holder under an approved certificate verification plan as a required pilot certificate for operating a civil aircraft of the United States.
Section 61.39 would be revised to add a provision that would require a pilot who has logged flight time under the SIC professional development program requirements of § 61.159(c)(1) to present a copy of the records required by § 135.63(a)(4)(vi) and (x) at the time of application for the practical test.
Section 61.51(e) would be revised to allow the part 135 flight instructor serving as PIC to log all of the flight time as PIC flight time even when the SIC is the sole manipulator of the controls and is logging time in an operation that does not require an SIC by type certification of the aircraft or the regulations under which the flight is being conducted. Section 61.51(f) would be revised to reflect the allowance for SICs to log flight time in part 135 operations when not serving as required flightcrew members under the type certificate or regulations. Section 61.51(g) would also be revised to allow a pilot to accomplish instrument experience when using an FAA-approved FFS, FTD, or ATD without an instructor present.
Section 61.57(c) would be revised to allow pilots to accomplish instrument experience in ATDs at the same 6-month interval allowed for FFSs and FTDs. In addition, the section would be revised to no longer require pilots, who opt to use ATDs for accomplishing instrument experience, to complete a specific number of additional instrument experience hours or additional tasks.
Section 61.99 would be revised to allow flight training received from a sport pilot instructor who does not also hold a flight instructor certificate issued under the requirements in subpart H of part 61 to be credited towards a portion of the flight training requirements for a recreational pilot certificate with airplane, rotorcraft, or lighter-than-air categories.
Section 61.109 would be revised by adding paragraph (l) to allow flight training received from a sport pilot instructor who does not also hold a flight instructor certificate issued under the requirements in subpart H of part 61 to be credited towards a portion of the flight training requirements for a private pilot certificate with airplane, rotorcraft, or lighter-than-air categories.
Section 61.129(a)(3)(ii) would be revised to allow a pilot seeking a commercial pilot certificate with a single engine class rating to complete the 10 hours of training, currently required in a complex or turbine-powered airplane, to also be completed in a TAA. Coordinated revisions would be made in § 61.129(b)(3)(ii) for clarity and consistency purposes only.
Section 61.159(c)(1) would be revised to set forth the requirements for logging SIC pilot time in an operation that does not require an SIC by type certification of the aircraft or the regulations under which the flight is being conducted.
Section 61.161 would be revised to permit flight time logged under an SIC PDP to be counted toward the 1,200 hours of total flight time required for an ATP certificate with a rotorcraft category helicopter class rating.
Section 61.195 paragraphs (b) and (c) would be revised to permit a flight instructor who holds only an instrument rating to provide instrument training without being required to hold aircraft category and class ratings on his or her flight instructor certificate.
Section 61.197(a)(2)(iv) would be revised to allow a military instructor who has passed a U.S. Armed Forces military instructor pilot proficiency check within the 24 calendar months preceding the month of application to be eligible to renew his or her FAA flight instructor certificate based on that proficiency check. The section would also be clarified to indicate that a flight instructor would be able to renew his or her certificate by providing a record demonstrating that, within the previous 24 calendar months, the instructor passed a military instructor pilot proficiency check for a rating that the instructor already holds or for a new rating.
Section 61.199 would be revised to permit a military instructor to reinstate his or her flight instructor certificate by providing a record showing that, within the previous six calendar months, the instructor passed a U.S. Armed Forces instructor pilot or pilot examiner proficiency check for an additional military rating.
Section 61.412 would be added to establish training and endorsement requirements for those sport pilot flight instructors who want to provide training for sport-pilot applicants on control and maneuvering solely by reference to the flight instruments.
Section 61.415 would be revised by adding new paragraph (h) to clarify that a sport pilot instructor may not conduct flight training on control and maneuvering an aircraft solely by reference to the instruments in an airplane that has a Vh greater than 87 knots CAS without meeting the requirements in proposed § 61.412.
In part 63, certification: Flight crewmembers other than pilots, § 63.3(a) would be revised to permit a flightcrew member to carry a temporary document provided by a part 119 certificate holder under an approved certificate verification plan as a required flight engineer certificate for operating a civil aircraft of the United States.
Section 63.16 would be revised to update the process for replacement of a lost or destroyed airman certificate or medical certificate and to add a process
In part 91, general operating and flight rules, § 91.109(c) would be revised to permit a sport pilot instructor who has obtained the proposed endorsement in § 61.412 to serve as a safety pilot only for the purpose of providing flight training on control and maneuvering solely by reference to the instruments to a sport pilot applicant seeking a solo endorsement in an airplane with a Vh greater than 87 knots CAS.
Section 91.313 would be revised to permit owners/operators of aircraft certificated in the restricted category to operate those aircraft for the purpose of providing pilot training and testing, to pilots employed by the operator to perform the special purpose operation, that leads to a type rating designation required by § 61.31(a) (and an ATP certificate obtained concurrently with a type rating). The section would also be amended to allow flights to be conducted in restricted category aircraft for the purpose of designating examiners and training center evaluators and qualifying FAA inspectors in the aircraft type and conducting oversight and observation of designated examiners and training center evaluators.
Section 91.531 would be revised to allow certain large airplanes that are not type-certificated to be operated without a pilot who is designated as SIC, provided that those airplanes: (1) Were originally designed with only one pilot station; or (2) were originally designed with more than one pilot station for purposes of flight training or for other purposes, but were operated by a branch of the United States armed forces or the armed forces of a foreign contracting State to the Convention on International Civil Aviation with only one pilot. The section would also be revised to eliminate redundancies and reorganized for purposes of clarification by placing all affirmative requirements for a SIC in paragraph (a) and all exceptions thereto in paragraph (b).
In part 121, operating requirements: domestic, flag, and supplemental operations, § 121.383(c) would be revised to permit a certificate holder to obtain approval to provide a temporary document verifying a flightcrew member's airman certificate and medical certificate privileges under an approved certificate verification plan set forth in the certificate holder's operations specifications.
In part 135, operating requirements: commuter and on demand operations and rules governing persons on board such aircraft, § 135.95 would be revised to permit a certificate holder to obtain approval to provide a temporary document verifying a flightcrew member's airman certificate and medical certificate privileges under an approved certificate verification plan set forth in the certificate holder's operations specifications.
Section 135.99 would be revised to add paragraph (c) to permit a part 135 certificate holder to receive approval of an SIC professional development program via operations specifications (Ops Specs) in order to allow their pilots to log time as SICs in an operation that does not require an SIC by type certification of the aircraft or the regulations under which the flight is being conducted. The paragraph includes requirements related to the certificate holder, aircraft, and pilots involved. Section 135.99(d) would state that certificate holders who are authorized to operate as a basic operator, single PIC operator, or single pilot operator would not be permitted to obtain approval to conduct an SIC professional development program.
Section 135.245 would be revised to remove the reference to part 61 in § 135.245(a) and move the current instrument experience requirements in § 61.57(c)(1) and (2) to new § 135.245(c).
In part 141, pilot schools, § 141.5(d) would be revised to add an end-of-course test for a special curricula course approved under § 141.57 to the list of activities a pilot school may use for the FAA to issue a pilot school certificate.
Appendix D to part 141, commercial pilot certification course, would be revised to allow commercial pilot certification courses to reflect the proposed relief in § 61.129(a)(3)(ii) that would permit a pilot seeking a commercial pilot certificate with a single engine class rating to complete the 10 hours of training in one, or a combination of, a TAA, a complex airplane, or a turbine-powered airplane.
Appendix I to part 141, additional aircraft category and/or class rating course, section 4, paragraph (k)(2) would be revised by renumbering two paragraphs, both of which are currently designated (iv).
Changes to Federal regulations must undergo several economic analyses. First, Executive Order 12866 and Executive Order 13563 direct that each Federal agency shall propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs. Second, the Regulatory Flexibility Act of 1980 (Pub. L. 96–354) requires agencies to analyze the economic impact of regulatory changes on small entities. Third, the Trade Agreements Act (Pub. L. 96–39) prohibits agencies from setting standards that create unnecessary obstacles to the foreign commerce of the United States. In developing U.S. standards, this Trade Act requires agencies to consider international standards and, where appropriate, that they be the basis of U.S. standards. Fourth, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4) requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more annually (adjusted for inflation with base year of 1995). This portion of the preamble summarizes the FAA's analysis of the economic impacts of this proposed rule. We suggest readers seeking greater detail read the full regulatory evaluation, a copy of which we have placed in the docket for this rulemaking.
In conducting these analyses, FAA has determined that this proposed rule: (1) Has benefits that justify its costs; (2) is not an economically “significant regulatory action” as defined in section 3(f) of Executive Order 12866; (3) is not “significant” as defined in DOT's Regulatory Policies and Procedures; (4) would have a positive significant economic impact on a substantial number of small entities; (5) would not create unnecessary obstacles to the foreign commerce of the United States; and (6) would not impose an unfunded mandate on state, local, or tribal governments, or on the private sector by exceeding the threshold identified above. These analyses are summarized below, and a full discussion of the benefits and costs is provided in the regulatory evaluation included in the docket for this rulemaking.
The people who benefit from this rule would be pilots, student pilots, flight instructors, military pilots seeking civilian ratings, and pilot schools.
This proposed rule has 12 separate provisions impacting different sections of parts 61, 63, 91, 121, 135, and 141 of the Federal Aviation Regulations. A
The following table shows the number and title of the twelve proposed rule provisions, the sections of the current Federal Aviation Regulations that would be affected by this proposed rulemaking, a summary of the impact for each of the twelve proposed provisions and the total cost savings, of the proposals with quantified benefits, over the analysis interval.
The Regulatory Flexibility Act of 1980 (Pub. L. 96–354) (RFA) establishes “as a principle of regulatory issuance that agencies shall endeavor, consistent with the objectives of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the businesses, organizations, and governmental jurisdictions subject to regulation. To achieve this principle, agencies are required to solicit and consider flexible regulatory proposals and to explain the rationale for their actions to assure that such proposals are given serious consideration.” The RFA covers a wide range of small entities, including small businesses, not-for-profit organizations, and small governmental jurisdictions.
Agencies must perform a review to determine whether a rule will have a significant economic impact on a substantial number of small entities. If the agency determines that it will, the agency must prepare a regulatory flexibility analysis as described in the RFA.
However, if an agency determines that a rule is not expected to have a significant economic impact on a substantial number of small entities, section 605(b) of the RFA provides that the head of the agency may so certify and a regulatory flexibility analysis is not required. The certification must include a statement providing the factual basis for this determination, and the reasoning should be clear.
Most of the parties affected by this proposed rule would be small businesses such as flight instructors, aviation schools, fixed base operators, and small part 135 air carriers. There are over 1,000 part 135 air carriers alone. The general lack of publicly available financial information from these small businesses precludes a financial analysis of these small businesses.
The FAA believes that this proposed rule would have a significant positive economic impact. The provisions of this proposed rule are largely cost-relieving. In fact, this proposed rule is expected to provide $112 million in cost relief. Therefore, this proposed rule would have a positive effect on a substantial number of small entities.
Therefore, as provided in section 605(b), the head of the FAA certifies that this proposed rulemaking would result in a significant positive economic impact on a substantial number of small entities, as it imposes no new costs.
The FAA solicits comments regarding this determination.
The Trade Agreements Act of 1979 (Pub. L. 96–39), as amended by the Uruguay Round Agreements Act (Pub. L. 103–465), prohibits Federal agencies from establishing standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. Pursuant to these Acts, the establishment of standards is not considered an unnecessary obstacle to the foreign commerce of the United States, so long as the standard has a legitimate domestic objective, such as the protection of safety, and does not operate in a manner that excludes imports that meet this objective. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards.
The FAA has assessed the potential effect of this proposed rule and determined that it would have only a domestic impact and therefore would not create unnecessary obstacles to the foreign commerce of the United States.
Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4) requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in an expenditure of $100 million or more (in 1995 dollars) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector; such a mandate is deemed to be a “significant regulatory action.” The FAA currently uses an inflation-adjusted value of $155.0 million in lieu of $100 million.
This proposed rule does not contain such a mandate. Therefore, the requirements of Title II of the Act do not apply.
The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires that the FAA consider the impact of paperwork and other information collection burdens imposed on the public. According to the 1995 amendments to the Paperwork Reduction Act, (5 CFR 1320.8(b)(2)(vi)), an agency may not collect or sponsor the collection of information, nor may it impose an information collection requirement unless it displays a currently valid Office of Management and Budget (OMB) control number. As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), the FAA has submitted these proposed information collection amendments to OMB for its review.
Title 5 CFR 1320.3(h) states that “* * * `Information' does not generally include items in the following categories; * * * (1) Affidavits, oaths,
The FAA has identified three provisions with PRA implications that, if finalized as proposed, will require amended OMB supporting statements as listed below:
• Instrument recency experience requirements (information collection 2120–0021),
• Second in command for part 135 operations (information collection 2120–0021, 2120–0593, 2120–0039),
• Include special curricula courses in renewal of pilot school certificate (information collection 2120–0009).
The FAA is proposing to reduce the frequency of instrument recent flight experience accomplished exclusively in ATDs from every two months to every six months. The FAA is further proposing to reduce the number of tasks required to be performed and remove flight time hour requirements when accomplishing instrument recent flight experience in ATDs. While the proposed requirements are addressed in § 61.57(c), the requirement that such time be logged is addressed in § 61.51. This provision would reduce the requirements for persons using ATDs to make those requirements equivalent to the requirements for persons using aircraft, FFS, or FTDs. However, the FAA is not requiring that any person use any particular method to conduct this training. The FAA does not have specific data on which to base an estimate of the use of aircraft, FFSs, FTDs, or ATDs for the conduct of this time, as the FAA does not require or receive information regarding how the experience was gained by each pilot. Thus, while this proposed provision would reduce recordkeeping requirements for those persons who choose to conduct experience solely in ATDs, the FAA can only estimate whether, and by how much, that burden might be reduced for the overall pilot population with an instrument rating as the FAA has no information to make an initial determination of the use of ATDs, FTDs, FFSs, or aircraft. The FAA further emphasizes that the pilot would still be required to log the time, but notes that for some pilots the frequency of logging instrument currency would be reduced from every two months to every six months.
As discussed in the regulatory evaluation accompanying this NPRM, as of June 30, 2015, there were 305,976 instrument-rated pilots,
The FAA is proposing to allow pilots to log SIC time in multi-engine airplanes that do not require an SIC in a part 135 operation. This would be creditable total flight time in pursuit of an ATP certificate. The FAA has no basis on which to determine the number of pilots who might choose to take advantage of a SIC PDP sponsored by a part 135 operator that is approved to conduct a SIC PDP. In the regulatory evaluation, the FAA is seeking comments, with supporting data, regarding the number of pilots who might choose to take advantage of a program to become a SIC in a part 135 operation using a SIC PDP.
The FAA is proposing to amend § 135.99 by adding paragraph (c) to permit a part 119 certificate holder to receive approval of an SIC professional development program via operations specifications (Ops Specs) in order to allow the certificate holder's pilots to log time under this proposal. This Ops Spec would outline the pilot qualification, training, and recordkeeping requirements necessary to receive approval of the program. Ops Specs are paragraphs written and issued to the operator to provide specific requirements for certain FAA approved operations. The burden for initial approval would be reflected in this part 119 information collection.
The information collection already accounts for an average of 50 Ops Spec amendments per operator annually under § 119.51(c). The FAA has determined that this annual estimate of Ops Spec changes is too high and is currently 25 per year. This new estimate would include the modification that is necessary to conduct the SIC training program. The FAA estimates that each Ops Spec change takes 0.2 hours (12 minutes).
The current overall burden for the average number of Op Specs per year is less and will be reflected under § 119.51(c) of the supporting statement for approved Information collection 2120–0593, “Part 119 Certification: Air Carriers and Commercial Operators.”
A certificate holder would submit for FAA approval of proposed curriculums for a SIC training that would need to meet the requirements specified in guidance (within an advisory circular) for the development of a SIC Professional Development Program. As discussed in the regulatory evaluation accompanying the NPRM, discussions with the Regional Air Cargo Carriers Association indicate that all of their air carrier members would be interested in providing such a program. RACCA has approximately 50 members who provide part 135 air cargo services. However, the FAA has no basis on which to estimate the number of air cargo carriers that might choose to either develop a SIC PDP, or implement and offer a SIC PDP based on existing operations. It is estimated that the operator would
This change would be reflected in the supporting statement for approved information collection 2120–0039, “Operating Requirements: Commuter and On Demand Operations.”
For those pilots who become qualified to log SIC time under this provision, this would increase the recordkeeping requirements by the addition of these logbook endorsements. The FAA estimates that the pilots logging SIC time would require approximately 1.0 hours annually to log the various endorsements proposed in this provision. In information collection 2120–0021, the FAA states: “Section 61.51, Pilot logbooks—requires pilots to enter flight time that is to be credited toward experience or training requirements for certificates or ratings in a reliable record.”
The FAA notes that this provision is voluntary and also considers this to be a minimum cost rule provision with positive, but unquantifiable, benefits. The time and burden estimated for the required logbook endorsement verifying the pilot is qualified to log this SIC time would be provided in approved information collection 2120–0021, “Pilots, Flight Instructors and Ground Instructors.”
The FAA is proposing to amend § 141.5(d) to allow part 141 pilot schools that hold training course approvals for special curricula courses to renew their certificates based on their students' successful completion of an end-of-course test for these FAA approved courses. There are currently hundreds of FAA approved special curricula courses in use by active pilot schools but it is likely that with this new allowance, some schools will request new special curricula course approvals. The FAA seeks comments regarding the number of schools that might use this provision.
The FAA notes that this provision is voluntary and also considers this to be a minimum cost rule provision with positive, but unquantifiable, benefits. The time and burden estimated for a Part 141 Pilot School to develop and submit for approval will be provided in the OMB supporting statement for approved information collection 2120–0009, “Operating Requirements: Pilot Schools—FAR Part 141.” The statement will also be adjusted for the current number of FAA certificated pilot schools currently listed at 581.
The below summarizes the changes made to each of the affected information collections.
The agency is soliciting comments to—
• Evaluate whether the proposed information requirement is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of collecting information on those who are to respond, including by using appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Individuals and organizations may send comments on the information collection requirement to the address listed in the
In keeping with U.S. obligations under the Convention on International Civil Aviation, it is FAA policy to conform to ICAO Standards and Recommended Practices to the maximum extent practicable. The FAA has reviewed the corresponding ICAO Standards and Recommended Practices and has identified the following differences with these proposed regulations.
The FAA notes that, under proposed § 61.159(c), pilots would be permitted to log second in command flight time in part 135 operations when a second pilot is not required. ICAO standards do not recognize the crediting of flight time when a pilot is not required by the aircraft certification or the operation under which the flight is being conducted. Accordingly, all pilots who log flight time under this provision and apply for an ATP certificate would have a limitation on the certificate indicating that the pilot does not meet the PIC aeronautical experience requirements of ICAO. This limitation may be removed when the pilot presents satisfactory evidence that he or she has met the ICAO standards.
FAA Order 1050.1F identifies FAA actions that are categorically excluded from preparation of an environmental assessment or environmental impact statement under the National Environmental Policy Act in the absence of extraordinary circumstances. The FAA has determined this rulemaking action qualifies for the categorical exclusion identified in paragraph 5–6.6f and involves no extraordinary circumstances.
The FAA has analyzed this proposed rule under the principles and criteria of Executive Order 13132, Federalism. The agency has determined that this action would not have a substantial direct effect on the States, or the relationship between the Federal Government and the States, or on the distribution of power and responsibilities among the various levels of government, and, therefore, would not have Federalism implications.
The FAA analyzed this proposed rule under Executive Order 13211, Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use (May 18, 2001). The agency has determined that it would not be a “significant energy action” under the executive order and would not be likely to have a significant adverse effect on the supply, distribution, or use of energy.
Executive Order 13609, Promoting International Regulatory Cooperation, (77 FR 26413, May 4, 2012) promotes international regulatory cooperation to meet shared challenges involving health, safety, labor, security, environmental, and other issues and to reduce, eliminate, or prevent unnecessary differences in regulatory requirements. The FAA has analyzed this action under the policies and agency responsibilities of Executive Order 13609, and has determined that this action would have no effect on international regulatory cooperation.
The FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views. The agency also invites comments relating to the economic,
The FAA will file in the docket all comments it receives, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, the FAA will consider all comments it receives on or before the closing date for comments. The agency may change this proposal in light of the comments it receives.
Commenters are encouraged to identify the provisions on which they are commenting based on the title of the provisions used in Table 1 of this preamble.
Under 14 CFR 11.35(b), if the FAA is aware of proprietary information filed with a comment, the agency does not place it in the docket. It is held in a separate file to which the public does not have access, and the FAA places a note in the docket that it has received it. If the FAA receives a request to examine or copy this information, it treats it as any other request under the Freedom of Information Act (5 U.S.C. 552). The FAA processes such a request under Department of Transportation procedures found in 49 CFR part 7.
An electronic copy of rulemaking documents may be obtained from the Internet by—
• Searching the Federal eRulemaking Portal (
• Visiting the FAA's Regulations and Policies Web page at
• Accessing the Government Publishing Office's Web page at
Copies may also be obtained by sending a request to the Federal Aviation Administration, Office of Rulemaking, ARM–1, 800 Independence Avenue SW., Washington, DC 20591, or by calling (202) 267–9677. Commenters must identify the docket or notice number of this rulemaking.
All documents the FAA considered in developing this proposed rule, including economic analyses and technical reports, may be accessed from the Internet through the Federal eRulemaking Portal referenced above.
Aircraft, Airmen, Aviation safety, Teachers.
Aircraft, Airman, Aviation safety.
Aircraft, Airmen, Aviation safety.
Air carriers, Aircraft, Airmen, Aviation safety.
Aircraft, Airmen, Aviation safety.
Airmen, Educational facilities, reporting and recordkeeping requirements, Schools.
In consideration of the foregoing, the Federal Aviation Administration proposes to amend chapter I of title 14, Code of Federal Regulations as follows:
49 U.S.C. 106(f), 106(g), 40113, 44701–44703, 44707, 44709–44711, 44729, 44903, 45102–45103, 45301–45302.
The revisions and additions read as follows:
(b) * * *
(i) Serves as a required pilot flight crewmember;
(ii) Receives training from an authorized instructor in an aircraft, full flight simulator, flight training device, or aviation training device;
(iii) Gives training as an authorized instructor in an aircraft, full flight simulator, flight training device, or aviation training device; or
(iv) Serves as second in command in operations conducted under part 135 of this chapter when a second pilot is not required under the type certification of the aircraft or the regulations under which the flight is being conducted, provided the requirements in § 61.159(c)(1) are satisfied.
(i) An electronic Primary Flight Display (PFD) that includes, at a minimum, an airspeed indicator, turn coordinator, attitude indicator, heading indicator, altimeter, and vertical speed indicator; and
(ii) An independent additional Multifunction Display (MFD) that includes, at a minimum, a Global Positioning System (GPS) with moving map navigation and an integrated two axis autopilot.
(a) * * *
(1) * * *
(iv) A document conveying temporary authority to exercise certificate privileges issued by the Airmen Certification Branch under § 61.29(e);
(v) When engaged in a flight operation within the United States for a part 119 certificate holder authorized to conduct operations under parts 121 or 135, a temporary document provided by that certificate holder under an approved certificate verification plan; or
(a) * * *
(3) Have satisfactorily accomplished the required training and obtained the aeronautical experience prescribed by this part for the certificate or rating sought, and if applying for the practical test with flight time accomplished under § 61.159(c)(1), present a copy of the records required by § 135.63(a)(4)(vi) and (x) of this chapter;
The revisions and additions read as follows:
(e) * * *
(1) * * *
(i) Except when logging flight time under § 61.159(c)(1), when the pilot is the sole manipulator of the controls of an aircraft for which the pilot is rated, or has sport pilot privileges for that category and class of aircraft, if the aircraft class rating is appropriate;
(5) An authorized flight instructor may log all flight time while acting as pilot in command of an operation under part 135 if the flight is conducted in accordance with an approved second-in-command professional development program that meets the requirements of § 135.99(c).
(f) * * *
(1) Is qualified in accordance with the second-in-command requirements of § 61.55 of this part, and occupies a crewmember station in an aircraft that requires more than one pilot by the aircraft's type certificate;
(2) Holds the appropriate category, class, and instrument rating (if an instrument rating is required for the flight) for the aircraft being flown, and more than one pilot is required under the type certification of the aircraft or the regulations under which the flight is being conducted; or
(3) Serves as second in command in operations conducted under part 135 of this chapter when a second pilot is not required under the type certification of the aircraft or the regulations under which the flight is being conducted, provided the requirements in § 61.159(c)(1) are satisfied.
(g) * * *
(4) A person may use time in a full flight simulator, flight training device, or aviation training device for acquiring instrument aeronautical experience for a pilot certificate or rating provided an authorized instructor is present to observe that time and signs the person's logbook or training record to verify the time and the content of the training session.
(5) A person may use time in a full flight simulator, flight training device, or aviation training device for satisfying instrument recency experience requirements provided a logbook or training record is maintained to specify the approved training device, time, and the content.
(h)
The revisions read as follows:
(c) * * *
(2)
(a) A person who applies for a recreational pilot certificate must receive and log at least 30 hours of flight time that includes at least—
(1) 15 hours of flight training from an authorized instructor on the areas of operation listed in § 61.98 of this part that consists of at least:
(i) Except as provided in § 61.100 of this part, 2 hours of flight training en route to an airport that is located more than 25 nautical miles from the airport where the applicant normally trains, which includes at least three takeoffs and three landings at the airport located more than 25 nautical miles from the airport where the applicant normally trains; and
(ii) Three hours of flight training with an authorized instructor in the aircraft for the rating sought in preparation for the practical test within the preceding 2 calendar months from the month of the test.
(2) Three hours of solo flying in the aircraft for the rating sought, on the areas of operation listed in § 61.98 of this part that apply to the aircraft category and class rating sought.
(b) The holder of a sport pilot certificate may credit 10 hours of flight training received from a flight instructor with a sport pilot rating toward the training requirements of this section provided the flight training is accomplished in the same category and class of aircraft as the recreational pilot certificate rating sought.
(l)
(1) For a private pilot certificate with an airplane category single engine class rating or private pilot certificate with a rotorcraft category gyroplane class rating, a person may credit 10 hours of flight training received from a flight instructor provided the flight training is accomplished in the same category and class of aircraft for the rating sought.
(2) For a private pilot certificate with a lighter-than-air category airship class rating, a pilot may credit 12.5 hours of flight training received from a flight instructor with a sport pilot rating provided that training was accomplished in an airship.
(3) For a private pilot certificate with a lighter-than-air category balloon class rating, a pilot may credit 5 hours of flight training including 3 training flights received from a flight instructor with a sport pilot rating provided that
(a) * * *
(3) * * *
(ii) 10 hours of training in a complex airplane, a turbine-powered airplane, or a technically advanced airplane (TAA); or for an applicant seeking a single-engine seaplane rating, 10 hours of training in a seaplane that has flaps and a controllable pitch propeller;
(b) * * *
(3) * * *
(ii) 10 hours of training in a multiengine complex or turbine-powered airplane; or for an applicant seeking a multiengine seaplane rating, 10 hours of training in a multiengine seaplane that has flaps and a controllable pitch propeller;
(a) * * *
(5) 250 hours of flight time in an airplane as a pilot in command, or when serving as a required second in command flightcrew member performing the duties of pilot in command while under the supervision of a pilot in command, or any combination thereof, which includes at least—
(c) A commercial pilot may log the following second-in-command pilot time or flight-engineer flight time toward the 1,500 hours of total time as a pilot required by paragraph (a) of this section and the total flight time requirements in § 61.160:
(1) Second-in-command pilot time in operations conducted under part 135 of this chapter when a second pilot is not required under the type certification of the aircraft or the regulations under which the flight is being conducted, provided—
(i) The experience is accomplished as part of a second-in-command professional development program approved by the Administrator under § 135.99 of this chapter;
(ii) The pilot in command of the operation certifies in the pilot's logbook that the second-in-command pilot time was accomplished under this section; and
(iii) The pilot time may not be logged as pilot-in-command time even when the pilot is the sole manipulator of the controls and may not be used to meet the aeronautical experience requirements in paragraphs (a)(1) through (a)(5) of this section.
(c) Flight time logged under § 61.159(c)(1) of this chapter may be counted toward the 1,200 hours of total time as a pilot required by paragraph (a) of this section.
(d) An applicant is issued an airline transport pilot certificate with the limitation, “Holder does not meet the pilot in command aeronautical experience requirements of ICAO,” as prescribed under Article 39 of the Convention on International Civil Aviation, if the applicant does not meet the ICAO requirements contained in Annex 1 “Personnel Licensing” to the Convention on International Civil Aviation, but otherwise meets the aeronautical experience requirements of this section.
(e) An applicant is entitled to an airline transport pilot certificate without the ICAO limitation specified under paragraph (d) of this section when the applicant presents satisfactory evidence of having met the ICAO requirements under paragraph (d) of this section and otherwise meets the aeronautical experience requirements of this section.
(b)
(1) A flight instructor certificate with the applicable category and class rating; and
(2) A pilot certificate with a type rating, if appropriate.
(c)
(1) Meets the requirements of paragraph (b) of this section; or
(2) Holds a commercial pilot certificate or airline transport pilot certificate with the appropriate category and class ratings for the aircraft in which the instrument training is provided if the pilot receiving instrument training holds a pilot certificate with category and class ratings appropriate to the aircraft in which the instrument training is being provided.
(a) * * *
(2) * * *
(iv) A record showing that, within the preceding 24 months from the month of application, the flight instructor passed an official U.S. Armed Forces proficiency check in an aircraft for which the military instructor already holds a rating or in an aircraft for an additional rating.
(c) The practical test required by paragraph (a)(1) of this section may be accomplished in a full flight simulator or flight training device if the test is accomplished pursuant to an approved course conducted by a training center certificated under part 142 of this chapter.
(a) * * *
(3) For military instructors, provide a record showing that, within the preceding 6 calendar months from the date of application for reinstatement, the person passed a U.S. Armed Forces instructor pilot or pilot examiner
(c) The holder of an expired flight instructor certificate issued prior to October 20, 2009, may apply for reinstatement of that certificate by presenting the following:
(1) A record showing that, since the date the flight instructor certificate was issued, the person passed a U.S. Armed Forces instructor pilot or pilot examiner proficiency check for an additional military rating; and
(2) A knowledge test report that shows the person passed a knowledge test on the aeronautical knowledge areas listed under § 61.185(a) appropriate to the flight instructor rating sought and the knowledge test was passed within the preceding 24 calendar months prior to the month of application.
(d) The requirements of paragraph (c) of this section will expire on [THE FAA WILL INSERT DATE ONE YEAR AFTER THE EFFECTIVE DATE OF FINAL RULE IN FEDERAL REGISTER].
To provide flight training on control and maneuvering an aircraft solely by reference to the instruments for the purpose of issuing a solo cross-country endorsement to a sport pilot applicant under § 61.93(e)(12), a sport pilot instructor must:
(a) Hold an endorsement under § 61.327;
(b) Receive and log a minimum of 1 hour of ground training and 3 hours of flight training from an authorized instructor in an airplane with a V
(c) Receive a one-time endorsement in the sport pilot instructor's logbook from an instructor authorized under subpart H of this part who certifies that the person is proficient in providing training on control and maneuvering solely by reference to the instruments in an airplane with a V
(h) You may not provide training on the control and maneuvering of an aircraft solely by reference to the instruments in a light sport aircraft with a V
49 U.S.C. 106(f), 106(g), 40113, 44701–44703, 44707, 44709–44711, 45102–45103, 45301–45302.
(a) Except as provided in paragraph (c), no person may act as a flight engineer of a civil aircraft of U.S. registry unless that person has in his or her personal possession or readily accessible in the aircraft:
(1) A current flight engineer certificate with appropriate ratings issued to that person under this part;
(2) A document conveying temporary authority to exercise certificate privileges issued by the Airman Certification Branch under § 63.16(d) of this part; or
(3) When engaged in a flight operation within the United States for a part 119 certificate holder authorized to conduct operations under parts 121, a temporary document provided by that certificate holder under an approved certificate verification plan.
(b) A person may act as a flight engineer of an aircraft only if that person holds a current second-class (or higher) medical certificate issued to him under part 67 of this chapter, or other documentation acceptable to the FAA, that is in that person's physical possession or readily accessible in the aircraft.
(c) When the aircraft is operated within a foreign country, a current flight engineer certificate issued by the country in which the aircraft is operated, with evidence of current medical qualification for that certificate, may be used. Also, in the case of a flight engineer certificate issued under § 63.42, evidence of current medical qualification accepted for the issue of that certificate is used in place of a medical certificate.
(d) No person may act as a flight navigator of a civil aircraft of U.S. registry unless he has in his personal possession a current flight navigator certificate issued to him under this part and a second-class (or higher) medical certificate issued to him under part 67 of this chapter within the preceding 12 months. However, when the aircraft is operated within a foreign country, a current flight navigator certificate issued by the country in which the aircraft is operated, with evidence of current medical qualification for that certificate, may be used.
(e) Each person who holds a flight engineer or flight navigator certificate, or medical certificate, shall present either or both for inspection upon the request of the Administrator or an authorized representative of the National Transportation Safety Board, or of any Federal, State, or local law enforcement officer.
(a) An application for a change of name on a certificate issued under this part must be accompanied by the applicant's current certificate and the marriage license, court order, or other document verifying the change. The documents are returned to the applicant after inspection.
(b) A request for a replacement of a lost or destroyed airman certificate issued under this part must be made—
(1) By letter to the Department of Transportation, Federal Aviation Administration, Airman Certification Branch, Post Office Box 25082, Oklahoma City, OK 73125 and must be accompanied by a check or money order for the appropriate fee payable to the FAA; or
(2) In any other form and manner approved by the Administrator including a request to Airman Services at
(c) A request for the replacement of a lost or destroyed medical certificate must be made:
(1) By letter to the Department of Transportation, FAA, Aerospace Medical Certification Division, P.O. Box 26200, Oklahoma City, OK 73125, and must be accompanied by a check or money order for the appropriate fee payable to the FAA; or
(2) In any other manner and form approved by the Administrator and must be accompanied by acceptable form of payment for the appropriate fee.
(d) A request for the replacement of a lost or destroyed knowledge test report must be made:
(1) By letter to the Department of Transportation, FAA, Airmen
(2) In any other manner and form approved by the Administrator and must be accompanied by acceptable form of payment for the appropriate fee.
(e) The letter requesting replacement of a lost or destroyed airman certificate, medical certificate, or knowledge test report must state:
(1) The name of the person;
(2) The permanent mailing address (including ZIP code), or if the permanent mailing address includes a post office box number, then the person's current residential address;
(3) The certificate holder's date and place of birth; and
(4) Any information regarding the—
(i) Grade, number, and date of issuance of the airman certificate and ratings, if appropriate;
(ii) Class of medical certificate, the place and date of the medical exam, name of the Airman Medical Examiner (AME), and the circumstances concerning the loss of the original medical certificate, as appropriate; and
(iii) Date the knowledge test was taken, if appropriate.
(f) A person who has lost an airman certificate, medical certificate, or knowledge test report may obtain in a form or manner approved by the Administrator, a document conveying temporary authority to exercise certificate privileges from the FAA Aeromedical Certification Branch or the Airman Certification Branch, as appropriate, and the—
(1) Document may be carried as an airman certificate, medical certificate, or knowledge test report, as appropriate, for a period not to exceed 60 days pending the person's receiving a duplicate under paragraph (b), (c), or (d) of this section, unless the person has been notified that the certificate has been suspended or revoked.
(2) Request for such a document must include the date on which a duplicate certificate or knowledge test report was previously requested.
49 U.S.C. 106(f), 106(g), 1155, 40101, 40103, 40105, 40113, 40120, 44101, 44111, 44701, 44704, 44709, 44711, 44712, 44715, 44716, 44717, 44722, 46306, 46315, 46316, 46504, 46506–46507, 47122, 47508, 47528–47531, 47534, articles 12 and 29 of the Convention on International Civil Aviation (61 Stat. 1180), (126 Stat. 11).
(c) * * *
(1) The other control seat is occupied by a safety pilot who possesses at least:
(i) A private pilot certificate with category and class ratings appropriate to the aircraft being flown; or
(ii) For purposes of providing training for a solo cross-country endorsement under § 61.93 of this chapter, a flight instructor certificate with an appropriate sport pilot rating and an endorsement under § 61.412 of this chapter.
(b) For the purpose of paragraph (a) of this section, the following operations are considered necessary to accomplish the work activity directly associated with a special purpose operation:
(1) Flights conducted for flight crewmember training in a special purpose operation for which the aircraft is certificated and flights conducted to satisfy proficiency check and recent flight experience requirements under part 61 of this chapter provided the flight crewmember holds the appropriate category, class, and type ratings and is employed by the operator to perform the appropriate special purpose operation; and
(2) Flights conducted to relocate the aircraft for maintenance.
(c) No person may operate a restricted category civil aircraft carrying persons or property for compensation or hire. For the purposes of this paragraph, a special purpose operation involving the carriage of persons or material necessary to accomplish that operation, such as crop dusting, seeding, spraying, and banner towing (including the carrying of required persons or material to the location of that operation), an operation for the purpose of providing flight crewmember training in a special purpose operation, and an operation conducted under the authority provided in paragraph (h) of this section are not considered to be the carriage of persons or property for compensation or hire.
(d) * * *
(3) Performs an essential function in connection with a special purpose operation for which the aircraft is certificated;
(4) Is necessary to accomplish the work activity directly associated with that special purpose; or
(5) Is necessary to accomplish an operation under paragraph (h) of this section.
(h)
(i) Flight training and the practical test for issuance of a type rating provided the pilot being trained and tested holds at least a commercial pilot certificate with the appropriate category and class ratings for the aircraft type and is employed by the operator to perform a special purpose operation; and
(ii) Flights to designate an examiner or training center evaluator or qualify an FAA inspector in the aircraft type and flights necessary to provide continuing oversight and evaluation of an examiner or inspector.
(2) The FAA will issue this deviation authority as a letter of deviation authority.
(3) The FAA may cancel or amend a letter of deviation authority at any time.
(4) An applicant must submit a request for deviation authority in a form and manner acceptable to the Administrator at least 60 days before the date of intended operations. A request for deviation authority must contain a complete description of the proposed operation and justification that establishes a level of safety equivalent to that provided under the regulations for the deviation requested.
(a) Except as provided in paragraph (b) of this section, no person may operate the following airplanes without a pilot designated as second in command:
(1) Any airplane that is type certificated for more than one required pilot.
(2) Any large airplane unless the type certification requirements for that airplane permit operation by a single pilot.
(3) Any commuter category airplane.
(b) A person may operate the following airplanes without a pilot designated as second in command:
(1) A large airplane certificated under SFAR 41 if that airplane is certificated for operation with one pilot.
(2) A commuter category airplane, that has a passenger seating configuration, excluding pilot seats, of
(3) A large or turbojet-powered multiengine airplane that holds a special airworthiness certificate, if:
(i) the airplane was originally designed with only one pilot station, or
(ii) the airplane was originally designed with more than one pilot station, but single pilot operations were permitted by the airplane flight manual or were otherwise permitted by a branch of the United States armed forces or the armed forces of a foreign contracting State to the Convention on International Civil Aviation.
(c) No person may designate a pilot to serve as second in command, nor may any pilot serve as second in command, of an airplane required under this section to have two pilots unless that pilot meets the qualifications for second in command prescribed in § 61.55 of this chapter.
49 U.S.C. 106(f), 106(g), 40103, 40113, 40119, 41706, 42301 preceding note added by Pub. L. 112–95, sec. 412, 126 Stat. 89, 44101, 44701–44702, 44705, 44709–44711, 44713, 44716–44717, 44722, 44729, 44732; 46105; Pub. L. 111–216, 124 Stat. 2348 (49 U.S.C. 44701 note); Pub. L. 112–95, 126 Stat. 62 (49 U.S.C. 44732 note).
(c) A certificate holder may obtain approval to provide a temporary document verifying a flightcrew member's airman certificate and medical certificate privileges under an approved certificate verification plan set forth in the certificate holder's operations specifications. A document provided by the certificate holder may be carried as an airman certificate or medical certificate on flights within the United States for up to 72 hours.
49 U.S.C. 106(f), 106(g), 41706, 40113, 44701–44702, 44705, 44709, 44711–44713, 44715–44717, 44722, 44730, 45101–45105; Pub. L. 112–95, 126 Stat. 58 (49 U.S.C. 44730).
(a) No certificate holder may use the services of any person as an airman unless the person performing those services—
(1) Holds an appropriate and current airman certificate; and
(2) Is qualified, under this chapter, for the operation for which the person is to be used.
(b) A certificate holder may obtain approval to provide a temporary document verifying a flightcrew member's airman certificate and medical certificate privileges under an approved certificate verification plan set forth in the certificate holder's operations specifications. A document provided by the certificate holder may be carried as an airman certificate or medical certificate on flights within the United States for up to 72 hours.
(c) Except as provided in paragraph (d), a certificate holder authorized to conduct operations under instrument flight rules may receive authorization from the Administrator through its operations specifications to establish a second-in-command professional development program. As part of that program, a pilot employed by the certificate holder may log time as second in command in operations under this part that do not require a second pilot by type certification of the aircraft or the regulation under which the flight is being conducted, provided—
(1) The certificate holder:
(i) Maintains records for each assigned second in command consistent with the requirements in § 135.63 of this part;
(ii) Provides a copy of the records required by § 135.63(a)(4)(vi) and (x) of this part to the assigned second in command upon request and within a reasonable time;
(iii) Establishes and maintains a data collection and analysis process that will enable the certificate holder and the FAA to determine whether the professional development program is accomplishing its objectives; and
(iv) Conducts flight instructor standardization meetings at least once every 12 calendar months for all flight instructors serving as pilot in command during operations with a second in command serving under the professional development program.
(2) The aircraft is a multiengine airplane that has an independent set of controls for a second pilot flightcrew member which may not include a throwover control wheel and the following equipment and independent instrumentation for a second pilot:
(i) An airspeed indicator;
(ii) Sensitive altimeter adjustable for barometric pressure;
(iii) Gyroscopic bank and pitch indicator;
(iv) Gyroscopic rate-of-turn indicator combined with an integral slip-skid indicator;
(v) Gyroscopic direction indicator;
(vi) For IFR operations, a vertical speed indicator;
(vii) For IFR operations, course guidance for en route navigation and instrument approaches; and
(viii) A microphone, transmit switch, and headphone or speaker.
(3) The pilot assigned to serve as second in command satisfies the following requirements:
(i) The second in command qualifications in § 135.245 of this part;
(ii) The flight time and duty period limitations and rest requirements in subpart F of this part;
(iii) The crewmember testing requirements for second in command in subpart G of this part; and
(iv) The crewmember training requirements for second in command in subpart H of this part; and
(4) The assigned pilot in command is a flight instructor (aircraft) qualified under §§ 135.338 and 135.340 of this part.
(d) The following certificate holders are not eligible to receive authorization for a second-in-command professional development program under paragraph (c):
(1) A certificate holder that uses only one pilot in its operations; and
(2) A certificate holder that has been approved to deviate from the requirements in §§ 135.21(a), 135.341(a), or 119.69(a) of this chapter.
(a) Except as provided in paragraph (b), no certificate holder may use any person, nor may any person serve, as second in command of an aircraft unless that person holds at least a commercial pilot certificate with appropriate category and class ratings and an instrument rating.
(c) No certificate holder may use any person, nor may any person may serve, as second in command under IFR unless
(1) Use of an airplane or helicopter for maintaining instrument experience. Within the 6 calendar months preceding the month of the flight, that person performed and logged at least the following tasks and iterations in-flight in an airplane or helicopter, as appropriate, in actual weather conditions, or under simulated instrument conditions using a view-limiting device:
(i) Six instrument approaches;
(ii) Holding procedures and tasks; and
(iii) Intercepting and tracking courses through the use of navigational electronic systems.
(2) Use of an FSTD for maintaining instrument experience. A person may accomplish the requirements in paragraph (c)(1) of this section in an approved FSTD provided:
(i) The FSTD represents the category of aircraft for the instrument rating privileges to be maintained;
(ii) The person performs the tasks and iterations in simulated instrument conditions; and
(iii) An authorized instructor observes the tasks and iterations and signs the person's logbook or training record to verify the time and content of the session.
49 U.S.C. 106(f), 106(g), 40113, 44701–44703, 44707, 44709, 44711, 45102–45103, 45301–45302.
(d) Has established a pass rate of 80 percent or higher on the first attempt for all:
(1) Knowledge tests leading to a certificate or rating,
(2) Practical tests leading to a certificate or rating,
(3) End-of-course tests for an approved training course specified in appendix K of this part; and
(4) End-of-course tests for special curricula courses approved under § 141.57 of this part.
4.
(b) * * *
(1) * * *
(ii) Ten hours of training in a complex airplane, a turbine-powered airplane, or a technically advanced airplane;
(2) * * *
(ii) 10 hours of training in a multiengine complex or turbine-powered airplane;
4.
(k) * * *
(2) * * *
(iv) One 2-hour cross country flight during nighttime conditions in a multiengine airplane and, a total straight-line distance of more than 100 nautical miles from the original point of departure; and
(v) Three hours of flight training in a multiengine airplane within 2 calendar months before the date of the practical test.