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Office of Personnel Management.
Final rule.
This final rule makes Federal employee health insurance accessible to employees of certain Indian tribal entities. Section 409 of the Indian Health Care Improvement Act (codified at 25 U.S.C. 1647b) authorizes Indian tribes, tribal organizations, and urban Indian organizations that carry out certain programs to purchase coverage, rights, and benefits under the Federal Employees Health Benefits (FEHB) Program for their employees. Tribal employers and tribal employees will be responsible for the full cost of benefits, plus an administrative fee.
The final rule is effective February 27, 2017.
Padma Shah, Senior Policy Analyst at (202) 606–0004.
The Office of Personnel Management (OPM) is issuing a final rule to extend coverage, rights, and benefits under the Federal Employees Health Benefits (FEHB) Program to certain employees of certain Indian tribal employers.
Section 10221 of the Patient Protection and Affordable Care Act (Pub. L. 111–148) incorporated, amended, and enacted the entire text of S. 1790 as reported on December 16, 2009 by the Senate Committee on Indian Affairs. Bill S. 1790 revised and extended the Indian Health Care Improvement Act (IHCIA), including adding a new section 409. Under IHCIA section 409, an Indian tribe or tribal organization carrying out programs under the Indian Self-Determination and Education Assistance Act (ISDEAA), or an urban Indian organization carrying out programs under title V of IHCIA, is entitled to purchase coverage, rights, and benefits under the FEHB Program for their employees.
In 2011 and 2012, OPM consulted with tribal groups to develop sub-regulatory guidance
On August 31, 2016, OPM issued a Notice of Proposed Rulemaking (NPRM) (81 FR 59907) codifying previously issued guidance to adopt the FEHB Program, as set forth in 5 U.S.C. chapter 89 and its implementing regulations, for employees of certain tribal employers with slight variations to meet the needs of the tribal population (the Tribal FEHB Program). OPM proposed to amend title 5 of the Code of Federal Regulations (CFR) part 890 to add new subpart N, setting forth the conditions for coverage, rights, and benefits under the FEHB Program for employees of certain Indian tribal employers. The proposed rule had a 60 day comment period during which OPM received 2 comments. This final rule adopts subpart N, as proposed, with one clarification as noted below.
OPM received comments from two tribal employers that have elected to participate in the FEHB Program.
One commenter expressed concern about the lack of consultation with a specific tribal entity, on the same basis as Indian tribes under Executive Order No. 13175, prior to the publication of the NPRM.
OPM has engaged in regular and meaningful consultation and collaboration with all tribal officials, including a representative from this specific tribal entity during the tribal consultative process in 2011 and 2012.
OPM published a series of policy papers
A Tribal Technical Workgroup
OPM representatives have attended more than 20 tribal conferences and meetings to provide information and consultation about the Tribal FEHB Program since its inception. In addition, OPM has hosted training sessions for interested tribes and tribal organizations on numerous occasions.
Tribal Benefits Administration Letters (TBAL) are released and distributed to participating tribal employers regularly, just as they are for Federal agencies. Questions following the release of a TBAL are directed to OPM's dedicated Tribal Desk. The Tribal Desk is available during regular business hours and questions are answered by OPM staff who administer the program. OPM has created direct lines of communication and fostered collaboration between tribal employers and OPM employees.
When important program changes occur, OPM issues Dear Tribal Leader Letters (DTLL) to notify tribes, tribal organizations and urban Indian organizations. An example was the DTLL
OPM views its ongoing engagement with tribal employers, participating in the FEHB Program, as a form of consultation. OPM also considers the public comment period for the NPRM as an important consultation period. Upon publication of the NPRM, OPM sent an email message to all Tribal Benefits Officers alerting them of the publication of the proposed rule and the process for submitting formal comments. A DTLL will also be issued in tandem with the publication of this final rule. OPM will continue to provide assistance to tribal employers even after the final rule is in effect.
OPM also believes that steady enrollment increases in the Tribal FEHB Program, with an average of about 25 percent per year since the first year, is another indicator suggesting that tribal employers and employees are satisfied with current policies, now codified in this final rule.
A second commenter was generally pleased with the proposed rule, but made two recommendations. First, the commenter recommended that OPM reconsider the limitation at § 890.1407(a) prohibiting tribal employers from accessing FEHB if the tribal employer contributes toward an alternative employer-sponsored health insurance plan (
A second recommendation by the commenter was a suggestion that OPM waive FEHB co-payments for tribal employees when they are served by health programs operated by the Indian Health Service (IHS), Indian tribes, tribal organizations, and urban Indian organizations (as those terms are defined in § 1603 of the IHCIA). The commenter also requested OPM require FEHB plans pay the cost of co-payments if a tribal employee is furnished an item or service directly by the IHS, an Indian tribe, tribal organization, or urban Indian organization. To support its recommendations, the commenter references § 1402(d) of the Patient Protection and Affordable Care Act. However, this provision relates to individual coverage in the health insurance exchanges and not employer-sponsored insurance such as FEHB. Therefore, the regulatory text has not been changed.
OPM is clarifying that different portions of a tribal employer's payment are credited in different ways. One portion of a tribal employer's payment consists of the premium payment,
OPM is also revising § 890.1407 to express existing policy more clearly: A tribal employer may neither contribute towards, nor offer, an alternative employer-sponsored health insurance plan for tribal employees within the billing unit(s) for which the employer seeks to purchase FEHB coverage, with the exception of a collectively bargained alternative plan.
OPM is also making a technical correction to § 890.1404 by moving language appearing previously in subparagraph (e)(2) to new paragraph (f).
Finally, OPM is correcting a typographical error at § 890.1411(c) by changing the term “following” to “follows.”
This final rule establishes how FEHB enrollment under the Tribal FEHB Program will be administered, including eligibility, tribal employer and tribal employee contribution to premiums, the process by which tribal employers will access the program, the process by which tribal employees will elect coverage, and circumstances for termination and cancellation of enrollment. Where practicable, this regulation provides for the administration of benefits by and for tribal employers and tribal employees in the same manner as these benefits are administered by and for Federal agencies and Federal employees. There may be some instances for which there is no established procedure in place for the Federal Government, such as the procedure and timeline by which tribal employers certify entitlement to purchase FEHB. When there are no established procedures in place, OPM has established a procedure.
Section 890.1402 defines several terms used in the new subpart N of part 890. This section also includes a series of deemed references. Defining these terms and identifying deemed references are necessary to make clear how OPM will modify and apply existing regulations to govern tribal employers' purchase of FEHB for tribal employees.
This final rule refers to tribes, tribal organizations, and urban Indian organizations that are entitled to access insurance under IHCIA section 409 as “tribal employers.” Moreover, because the term “employee” as used in 5 U.S.C. chapter 89 is a statutorily defined term, OPM refers to a tribal employer's employees who are eligible to enroll in FEHB as “tribal employees.”
The new subpart N refers to and incorporates many other subparts of part 890 that govern how the FEHB Program functions. The deemed references make it clear that references to statutory terms such as “employee” and other terms used throughout part 890 will be deemed references to “tribal employee” and other terms, as appropriate, in context, to govern tribal employers' purchase of FEHB for its tribal employees.
Entitlement to offer FEHB coverage, rights, and benefits will be available to any tribe, tribal organization, or urban Indian organization carrying out at least one of the programs under the ISDEAA or title V of the IHCIA as specified in section 409 of the IHCIA. The terms “tribe,” “tribal organization,” and “urban Indian organization” are defined in the IHCIA. Those definitions, set forth below, are incorporated by reference in the regulatory text at
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For purposes of this regulation, tribes and tribal organizations carrying out at least one program under the ISDEAA, and urban Indian organizations carrying out at least one program under title V of the IHCIA, are entitled to purchase FEHB for their employees. If the tribal employer ceases to carry out one of these programs, entitlement to purchase FEHB ceases at the end of the calendar year in which the tribal employer ceased to carry out one of those programs.
If OPM determines that a tribal employer is not entitled to purchase FEHB, the tribal employer may appeal that decision to OPM. OPM retains sole authority for deciding entitlement.
OPM has defined the term “tribal employee” in § 890.1402 broadly to mean a common law employee of a tribal employer. This section incorporates the regulatory standard under the Federal employment tax regulations (which, for this purpose, includes Federal Insurance Contributions Act tax and Federal income tax withholding) that generally provide that an individual is a common law employee if the tribal employer has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as to the details and means by which that result is accomplished. This determination is based on all the facts and circumstances. The section then indicates that this determination is to be guided by a list of 20 factors
OPM recognizes that there may be cases in which a tribal employer has determined that a worker is not a common law employee for purposes of establishing a Federal employment tax obligation, and the tribal employer meets all the requirements for relief from Federal employment taxes under § 530 of the Revenue Act of 1978 with respect to such worker. Under these circumstances, as long as the tribal employer continues to meet the requirements for such relief, OPM will defer to the tribal employer's reasonable determination that its worker is not a common law employee for purposes of eligibility to enroll in FEHB.
OPM recognizes that there may be very limited cases in which a tribal employer has determined that a worker is a common law employee but has also determined that no Federal employment taxes are due with respect to the worker. Under these circumstances, OPM will defer to the tribal employer's reasonable determination that the worker is a common law employee for purposes of eligibility to enroll in FEHB.
Each tribal employer entitled to access Federal insurance will be able to offer FEHB coverage, rights, and benefits to all of its tribal employees, not just those carrying out functions under the ISDEAA or IHCIA title V programs. OPM has determined that tribal employees (who, by definition, are common law employees) engaged in governmental or commercial operations, such as casino or hospitality operations, will be eligible to enroll in FEHB if it is purchased by their tribal employer. As discussed below, individuals who retire from employment with a tribal employer lose their status as tribal employees upon retirement and their enrollment will terminate.
A tribal employer carrying out programs under the ISDEAA or title V of the IHCIA may purchase FEHB for employees of one or more billing units carrying out programs or activities under their contract. Once a tribal employer has enrolled at least one billing unit carrying out programs or activities under ISDEAA or IHCIA, the tribal employer may enroll one or more billing units that are not carrying out programs or activities under ISDEAA or IHCIA. Section 890.1405 establishes that all eligible full-time and part-time tribal employees of each participating billing unit of a tribal employer must be offered the opportunity to enroll in FEHB. Intermittent, seasonal, and temporary tribal employees will be treated similarly to intermittent, seasonal and temporary Federal employees. However, under § 890.102(k), the tribal employer may choose not to extend coverage to certain intermittent, seasonal, and temporary employees if written notification is provided to the Director of OPM.
Tribal employers may not segment tribal employee populations by offering a different set of health benefits to different groups of tribal employees within a single billing unit. An exception to this rule is if tribal employees within a billing unit are offered alternative coverage as part of a collective bargaining agreement.
As described in § 890.1405(e), family members of tribal employees will be eligible for coverage in FEHB under substantially the same terms as family members of Federal employees. One exception is that former spouses of tribal employees may not enroll in FEHB under the Civil Service Retirement Spouse Equity Act. This is
Section 890.1406 states that correction of enrollment errors will take place according to the same terms as for Federal employees. Requirements for tribal employees' appeals of eligibility and enrollment decisions are described in § 890.1415.
Section 890.1403 explains that a tribal employer is entitled to purchase FEHB if premium payments are currently deposited in the Employees Health Benefits Fund, as required by the authorizing statute, and if it timely pays administrative fees. This section provides that a premium payment will be considered “currently deposited” if it is received by the Employees Health Benefits Fund before, during, or within fourteen days after the end of the calendar month covered by the premium payment. Likewise, an administrative fee will be considered “timely paid” if it is received before, during, or within fourteen days after the end of the calendar month covered by the administrative fee.
Section 890.1413 describes how payments will work for tribal employers participating in FEHB. Tribal employer and tribal employee contributions for FEHB will be handled similarly for tribal employees as for Federal employees, with the tribal employer responsible for contributing a share of premium that is at least equivalent to the share of premium that the Federal Government contributes for Federal employees. The percentage contribution requirements are described in 5 U.S.C. 8906. The FEHB contributions for part-time tribal employees working between 16 and 32 hours per week may be pro-rated in accordance with the terms applicable to part-time Federal employees. FEHB enrollment for tribal employees on unpaid leave may be continued in a manner similar to Federal employees on unpaid leave under § 890.502(b), as long as the full premium is paid.
The tribal employer's FEHB contribution percentage must equal or exceed the contribution that the Federal Government would make each month for a Federal employee for the same plan. Tribal employers may elect to pay a greater tribal employer contribution, but may not pay a lesser amount than the Federal Government contribution for each plan. There is no cap on the percentage of premium that a tribal employer may contribute. The tribal employer may vary the contribution by type of enrollment (self only, self plus one, self and family) but must treat tribal employees in a uniform manner. As an example, a tribal employer could contribute 100 percent for all tribal employees in self only or self plus one enrollments and 90 percent for all tribal employees in self and family enrollments. Tribal employers may not vary the tribal employer contribution in order to encourage or discourage enrollment in any particular plan or plan option. Tribal employers may choose to vary the contribution amounts for each billing unit, provided each billing unit meets the requirements set forth above.
In addition, the tribal employer is required to pay an administrative fee, in an amount set by OPM each year, for each tribal employee's enrollment on a monthly basis. This fee covers the costs of a paymaster to perform the collection and remittance functions that is performed for Federal employees by Federal payroll offices. The paymaster is the entity designated by OPM as responsible for receiving FEHB premiums from the tribal employer, forwarding premiums to the Employees Health Benefits Fund, and maintaining enrollment records for all participating tribal employers. Tribal employers may not charge this fee to tribal employees. The total aggregate amount for tribal employees' and tribal employer's share of the premium, and the administrative fee must be available for receipt by the paymaster on an agreed upon date set in the agreement with the tribal employer.
Section 890.1404 establishes a process by which tribal employers may demonstrate entitlement and elect to purchase FEHB for their tribal employees. The tribal employer must notify OPM by email or telephone of the intention to purchase FEHB. Through an agreement described in § 890.1404(b), OPM will confirm the following:
(1) The tribal employer's contact information;
(2) The date that FEHB coverage will begin;
(3) The approximate number of tribal employees eligible to enroll;
(4) The tribal employer's agreement not to make available to FEHB-eligible tribal employees alternate tribal employer-sponsored health insurance coverage concurrent with FEHB;
(5) The tribal employer is entitled to participate in FEHB by carrying out at least one program under ISDEAA or title V of IHCIA;
(6) The tribal employer's acknowledgement that participation in FEHB makes the tribal employer subject to Federal Government audit with respect to such participation and to OPM authority to direct the administration of the program;
(7) The tribal employer's agreement to establish or identify an independent dispute resolution panel to adjudicate appeals of determinations made by a tribal employer regarding an individual's status as a tribal employee;
(8) The tribal employer's agreement to supply necessary enrollment information, payment of the tribal employer and tribal employee share of premium and payment of an administrative fee to the paymaster;
(9) The tribal employer's agreement to notify OPM in the event that the tribal employer is no longer carrying out at least one program under the ISDEAA or title V of IHCIA; and
(10) The tribal employer's agreement to abide by other terms and conditions of participation.
Section 890.1404(c) allows a tribal employer to elect to purchase FEHB at any time. The election to purchase FEHB will commit the tribal employer to purchase FEHB at least through the remainder of the calendar year in which the election is made. Elections will be automatically renewable year to year unless revoked by the tribal employer or terminated by OPM. Section 890.1404(d) allows a tribal employer to revoke its election to purchase FEHB with 60 days' notice to OPM. If a tribal employer revokes an election to purchase FEHB, that tribal employer may only re-elect to purchase FEHB during the first annual open enrollment season that occurs at least twelve months after the election is revoked. If the tribal employer revokes an election to participate a second time, the tribal employer may only re-elect to purchase FEHB during the first open season that falls at least twenty-four months after the second revocation. Section 890.1404(e) states that OPM maintains final authority to determine entitlement of a tribal employer to purchase FEHB. Section 890.1404(f) states that if a tribe, tribal organization or urban Indian organization believes it has been improperly denied the entitlement to
A tribal employer that begins to carry out a program under ISDEAA or title V of IHCIA after this rule is effective may notify OPM of its intention to purchase benefits after the entitlement is established. Section 890.1407 states that a tribal employer electing to purchase FEHB for its employees may not concurrently make contributions toward, or offer, an alternative employer-sponsored health insurance plan for tribal employees within the billing unit(s) for which the employer seeks to purchase FEHB coverage, with the exception of a collectively bargained alternative plan. A stand-alone dental, vision, or disability plan is not considered alternative health insurance. A tribal employee may have other comprehensive health care insurance coverage, as long as it is not provided by or purchased through the tribal employer.
Section 890.1405(f) establishes that eligibility to enroll in FEHB does not cause any tribal employee to be identified or characterized as a Federal employee, nor does it convey any additional rights or privileges of Federal employment. There may be circumstances in which a tribal employee is also an FEHB-eligible Federal employee. In such a case, the tribal employee may participate in FEHB through either employer. A tribal employee who is also a Federal employee cannot enroll in FEHB through both employers. FEHB enrollments may be transferred between Federal employing offices and tribal employers in a similar manner as transfer of enrollments between Federal agencies.
Section 890.1405 describes tribal employee eligibility for enrollment in FEHB. Tribal employees will be able to enroll in FEHB after an agreement between the tribal employer and OPM is signed. The effective date of coverage will be decided by the tribal employer and OPM. A third party paymaster will handle payroll functions including remitting tribal employer and tribal employee contributions to FEHB premiums.
The enrollment process for tribal employees into FEHB is described in § 890.1407. Tribal employers must establish an initial enrollment opportunity for tribal employees. After that initial enrollment opportunity, for plan years during which a tribal employer's election to offer FEHB is in place, the FEHB enrollment period for tribal employees will be the same as for Federal employees—up to 60 days after becoming a new tribal employee or changing to an eligible position, during the annual open season, or 31 days before and up to 60 days after experiencing a qualifying life event. The effective date of enrollment for tribal employees will be the same as for Federal employees under parts 890 or 892, depending on premium conversion status. Upon enrollment in the FEHB Program, tribal employees will choose among the same nationwide and local FEHB plans that are available to Federal employees.
Section 890.1408 describes the circumstances under which a tribal employee may change enrollment type, plan, or option. These changes are allowed and will take effect under the same circumstances as for Federal employees. Changes may be restricted if the tribal employer has a premium conversion plan in effect (pre-tax treatment of premiums) and the tribal employee has elected premium conversion.
Section 890.1409 establishes that a tribal employee may cancel his or her FEHB coverage or decrease his or her enrollment only under the same circumstances as a Federal employee. If the tribal employee has elected premium conversion, this cancellation or change is restricted.
Section 890.1410 establishes that FEHB enrollment will terminate when employment with the tribal employer ends due to resignation, dismissal, or retirement, or when the tribal employer discontinues its purchase of FEHB. Termination of enrollment does not refer to a voluntary cancellation by the tribal employee during a period of continued employment. Upon termination of enrollment, the tribal employee will receive a 31-day temporary extension of coverage without premium contribution from the tribal employee or tribal employer and will have an opportunity to convert to an individual policy. Tribal employees whose FEHB enrollment terminates due to separation from tribal employment (unless the separation is for gross misconduct) are also eligible for temporary continuation of FEHB coverage (TCC), described at 5 U.S.C. 8905a and 5 CFR part 890, subpart K.
If an FEHB enrollment is terminated due to the death of the tribal employee, the tribal employee's spouse and covered children are entitled to a 31-day temporary extension of coverage and opportunity to convert to an individual policy. Covered children, if any, may elect TCC and may cover the tribal employee's surviving spouse as a member of family.
Section 890.1410(f) establishes that insufficient payment from the tribal employer to the paymaster can result in termination of enrollment for all of the tribal employer's tribal employees affected by the paymaster's failure to obtain current deposit. In such a case, FEHB enrollment for all affected tribal employees will be terminated according to a process determined by OPM. The FEHB enrollment of all tribal employees affected by the paymaster's failure to obtain current deposit will be terminated effective as of midnight on the last day of the month for which premium payment was received. These tribal employees will be entitled to a 31-day temporary extension of coverage without additional premium contribution and the opportunity to convert to an individual policy. In the event that a tribal employer elects to purchase FEHB and does not pay premiums for the first month in which payment is due, no 31-day temporary extension of coverage or opportunity to convert to an individual policy will be provided. Termination of enrollment due to non-payment of premiums in either case will not result in an opportunity to enroll in TCC since current tribal employees do not meet the conditions for TCC enrollment. Tribal employers will have full responsibility for communicating notice of termination of enrollment, and accompanying rights and obligations, to their tribal employees. Any outstanding premium due for coverage in arrears will be treated as a debt owed solely by the tribal employer.
Tribal employees and certain family members whose FEHB coverage terminates under certain circumstances can elect to purchase temporary continuation of coverage (TCC) for up to 18 or 36 months. Section 890.1411 establishes the criteria for TCC participation for tribal employees and their family members. In general, tribal employees who are enrolled in FEHB and separate from tribal employment, except for reasons of gross misconduct, may elect to purchase TCC. Certain formerly covered family members, including children or stepchildren who
Section 890.1412 establishes that a tribal employee in non-pay status or with insufficient pay to cover the premium costs may continue FEHB enrollment for up to 365 days. Tribal employees in non-pay status due to uniformed service are entitled to continue FEHB enrollment for up to 24 months. After termination, the tribal employee and covered family members are entitled to a 31-day temporary extension of coverage without premium contribution, and conversion to an individual policy.
Section 890.1412 also establishes that a temporary tribal employee who has insufficient pay to cover the employee share of FEHB premiums may choose a less expensive plan. If the tribal employee does not or cannot move to a less expensive plan, the FEHB enrollment will be terminated and the enrollee is entitled to a 31-day temporary extension of coverage without premium contribution and may convert to an individual policy.
If a tribal employee moves from an FEHB-eligible to a FEHB ineligible position, the FEHB enrollment can continue if there has not been a break in service of more than 3 days. If there has been a break in service of longer than 3 days, FEHB enrollment will terminate at midnight of the last day of the pay period in which the employment status changed. Such a tribal employee will be entitled to a 31-day temporary extension of coverage without premium contribution and may convert to an individual policy.
Section 890.1414 describes the responsibilities of the tribal employer. These include premium payment, eligibility determinations, enrollment, establishment of appeals process, communications regarding FEHB, and notification requirements.
Section 890.1415 requires that a tribal employer establish or identify an independent panel to resolve disputes about eligibility of individuals for FEHB enrollment. This panel must be authorized to adjudicate such disputes and enforce eligibility and enrollment determinations. The tribal employer must inform tribal employees of this avenue for dispute resolution. Decisions of the independent panel must be written, a record of evidence considered by the panel must be retained and available for OPM review, and the panel decisions remain subject to final OPM authority.
Section 890.1416 describes the procedures for: (1) Filing claims for payment or service; and (2) invoking the provisions for court review of disputed claims. Both situations will follow the established procedures for Federal employees.
Section 890.1417 states that an FEHB enrollment cannot be continued into retirement from employment with a tribal employer. This is a statutory requirement as the law entitles tribal employers to purchase FEHB for employees, but it does not extend that entitlement to permit tribal employers to purchase FEHB for retirees.
A Federal annuitant may continue FEHB into retirement and any enrollment in, or coverage as a family member under FEHB during employment with a tribal employer will count toward the “5-year rule.” The “5-year rule” generally requires 5 years of pre-retirement FEHB enrollment or coverage as a family member in order to continue FEHB into retirement. Section 890.1417 further states that a Federal annuitant who has continued FEHB into retirement and who begins post-retirement employment with a tribal employer that has elected to purchase FEHB may transfer the FEHB enrollment with his or her Federal retirement system to an enrollment with the tribal employer in a similar manner as that used for Federal annuitants re-employed by Federal agencies.
Section 890.1418 establishes that tribal employees who are not also Federal employees, but are receiving worker's compensation benefits in leave without pay status for more than 365 days under programs run by the U.S. Department of Labor, may not be enrolled in FEHB.
OPM has examined the impact of this final rule as required by Executive Order 12866 and Executive Order 13563, which 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), and based on that analysis, it has determined that it is an economically significant rule. A regulatory impact analysis must be prepared for economically significant rules.
Section 10221 of the Patient Protection and Affordable Care Act incorporated and enacted S. 1790, the Indian Health Care Improvement Reauthorization and Extension Act of 2009, resulting in the addition of section 409 to the IHCIA. Section 409 allows tribes, tribal organizations and urban Indian organizations carrying out specific programs under Federal law to purchase the rights and benefits of the FEHB Program for their employees. As the administrator of the FEHB, OPM has extended eligibility to entitled tribal employees within the meaning of section 409. Federal regulations are necessary to protect the interests of all stakeholders, memorialize processes and procedures, and provide transparency.
The costs, benefits and transfers assessed in remaining portions of this regulatory impact analysis reflect existing FEHB coverage of tribal employees. This analysis is consistent with the guidance provided in OMB Circular A–4.
Health insurance coverage improves access to health care services, including preventive services, improves clinical outcomes, financial security, and decreases uncompensated care.
While the exact benefits of health insurance are difficult to quantify, evidence supports that American Indians and Alaska Natives could benefit more from health insurance than the average population. According to a 2013 Kaiser Family Foundation report, American Indians and Alaska Natives were more likely than other nonelderly adult Americans to report being in fair or poor health, being overweight or obese, having diabetes and cardiovascular disease, and experiencing frequent mental distress.
IHS, which provides services through a network of hospitals, clinics, and health stations to about 2.2 million American Indians and Alaska Natives, has historically been underfunded. Access to services varies significantly by location and funds are insufficient to meet health care needs. According to the Federal Disparity Index, in 2010 the IHS funds covered less than 60 percent of those needed to pay for coverage equivalent to that of Federal employees.
Health services not available through direct care must be purchased through the Purchased/Referred Care (PRC) (formerly Contract Health Services)
The sources referenced above illustrate the health disparities specific to the Native American population. Expanding healthcare access to this group not only addresses this disparity and generates benefits to the individual, but also generates societal benefits in the form of decreased healthcare costs for chronic illnesses, increased employee productivity, and a healthier population that are the result of expanding access to healthcare to any group.
In the following section, costs associated with this rule are analyzed for the following groups:
1. Tribal employers;
2. Tribal employees;
3. The Tribal Insurance Processing System (TIPS—the system used by the current paymaster);
4. OPM; and
5. FEHB carriers.
Most of the costs described below either result in a direct benefit to the individual or are transfers from one group to another. For example, costs incurred by tribal employees (premiums, deductibles, copays, etc.) result in individual benefits in the form of improved health outcomes. Costs incurred by tribal employers to cover premiums are a benefit to tribal employees. OPM has determined that the total dollar amounts do meet the threshold for this to be considered an economically significant rule.
OPM analyzed actual fiscal year 2015 enrollment data for the over 16,000 tribal employees then enrolled in the FEHB Program and found the annual cost of enrollment to be $168.5 million. This includes both premiums and the administrative fee added to each tribal FEHB enrollment. The administrative fee covers the costs of program administration for the paymaster.
Premiums in the FEHB Program have increased between 3–6 percent each year for the last 5 years, below increases in the commercial market. As enrollment increases, total spending on premium costs will increase. However, the administrative fee will most likely decrease as administrative costs are spread among a growing number of enrollments.
To cover the cost of program administration, this final rule includes an administrative fee assessed on a per contract basis, paid by the tribal employer.
For fiscal year 2015, the administrative fee was $15.15 per
The cost of coverage for each tribal employer depends upon the number of enrollees covered, the health plans selected by those enrollees, and the portion of the premium paid by the employer.
For fiscal year 2015, the largest number of employees enrolled for one tribal employer was just under 4,000 and the smallest tribal employers have just one employee enrolled.
The average cost per enrollment in the program, including the administrative fee, is estimated at approximately $10,172.
Tribal employers are required by this rule to contribute to the premium for tribal employees at least the same as the Federal government does for its employees and may contribute more, up to 100 percent of the premium costs. The Federal government contribution is statutorily defined as the lesser of 72 percent of the weighted average of all premiums or 75 percent of the plan premium.
Based on averages for fiscal year 2015, a tribal employer may pay from just over $7,000 to over $40 million, depending on the number of tribal employees covered and percentage of premium contributed by the tribal employer. Of course, actual costs will vary based on plan selection.
Tribal employers assess the cost of participating and recognize that participation in the FEHB Program is a business decision made by the employers themselves. It often is a decision made by comparing the cost of other forms of health coverage and coverage through the FEHB Program. For those tribes that choose to participate it can be assumed that the benefits outweigh the costs of participation.
Costs for tribal employees depend upon the plan selected, enrollment type, and the percentage of premium contributed by the tribal employer. Based on FY15 data, the average cost for an annual enrollment is approximately $10,035
Other costs such as co-payments, deductibles, and coinsurance are also the responsibility of the tribal employee, to the extent that such cost sharing is not otherwise prohibited by Federal law. These costs differ based on plan selection and utilization. Individual enrollment in the FEHB Program is voluntary so it can be assumed that the benefits to the individual of enrolling in tribal employer-sponsored coverage outweigh the costs of enrollment.
Annual costs for administering TIPS, incurred by the paymaster, are described in the chart below. These costs are covered by the administrative fee paid by tribal employers.
Implementation of the Tribal FEHB Program began in fiscal year 2011. In addition to policy development and tribal consultation costs, OPM contracted with a paymaster to develop an electronic enrollment portal for tribal employers. Development of TIPS cost approximately $3.9 million. OPM received approximately $3 million in funds from the Department of Health and Human Services' (HHS) Health Insurance Reform Implementation Fund and covered the remaining costs from funds appropriated to OPM.
OPM continues to incur costs associated with managing the Tribal FEHB Program. These costs are not covered by the administrative fee included in each tribal enrollment. See the chart below for Full Time Equivalent (FTE) in FY2012 through FY2015.
The impact on carriers is relatively small, as tribal enrollments are a very small percentage of the over 4 million FEHB enrollments. Premiums cover claims costs, administrative costs, plus a small profit known as the service charge.
While this rule meets the thresholds in Executive Orders 12866 and 13563 to be deemed an economically significant rule, many of the associated costs constitute transfers among involved parties. Under the provisions of this rule, participation in the FEHB Program is voluntary for both tribal employers and tribal employees. This, in conjunction with the relationship between costs incurred and the benefits of offering coverage, indicates that the benefits of this rule outweigh the costs.
I certify that these regulations would not have a significant economic impact on a substantial number of small entities because they establish a voluntary program for certain Indian tribal employers.
We have examined this rule in accordance with Executive Order 13132, Federalism, and have determined that this rule will not have any negative impact on the rights, roles, and responsibilities of State, local, or Tribal governments.
Administrative practice and procedure, Government employees,
For the reasons set forth in the preamble, OPM amends 5 CFR part 890 as follows:
5 U.S.C. 8913; Sec. 890.301 also issued under sec. 311 of Pub. L. 111–03, 123 Stat. 64; Sec. 890.111 also issued under section 1622(b) of Pub. L. 104–106, 110 Stat. 521; Sec. 890.112 also issued under section 1 of Pub. L. 110–279, 122 Stat. 2604; 5 U.S.C. 8913; Sec. 890.803 also issued under 50 U.S.C. 403p, 22 U.S.C. 4069c and 4069c–1; subpart L also issued under sec. 599C of Pub. L. 101–513, 104 Stat. 2064, as amended; Sec. 890.102 also issued under sections 11202(f), 11232(e), 11246(b) and (c) of Pub. L. 105–33, 111 Stat. 251; and section 721 of Pub. L. 105–261, 112 Stat. 2061; Pub. L. 111–148, as amended by Pub. L. 111–152.
This subpart sets forth the conditions for coverage, rights, and benefits under Chapter 89 of title 5, United States Code, according to the provisions of 25 U.S.C. 1647b.
(a) In this subpart—
(b) In this subpart, wherever reference is made to other subparts of part 890—
(1) A reference to employee is deemed a reference to tribal employee;
(2) A reference to employer is deemed a reference to tribal employer;
(3) A reference to enrollee is deemed a reference to a tribal employee in whose name the enrollment is carried;
(4) A reference to employing agency, employing office, or agency is deemed a reference to tribal employer, and/or if the reference involves the subject of a paymaster function, the paymaster, as appropriate;
(5) A reference to United States, Federal Government, or Government in the capacity of an employer is deemed a reference to tribal employer;
(6) A reference to Federal Service or Government Service is deemed a
(7) A reference to annuitant, survivor annuitant, or an individual with entitlement to an annuity is deemed inapplicable in the context of this subpart; and
(8) A reference incorporated into this subpart that does not otherwise apply to tribal employees and tribal employers shall have no meaning and is deemed inapplicable in the context of this subpart.
(a) A tribal employer shall be entitled to purchase coverage, rights, and benefits for its tribal employees under Chapter 89 of title 5, United States Code, if premium payment for the coverage, rights, and benefits for the period of employment with such tribal employer is currently deposited in the Employees Health Benefits Fund, and if the administrative fee is timely paid to the paymaster.
(b) Premium payment will be considered currently deposited if received by the Employees Health Benefits Fund before, during, or within fourteen days after the end of the month covered by the premium payment.
(c) Administrative fee will be considered timely paid if received by the paymaster before, during, or within fourteen days after the end of the month covered by the administrative fee.
(d) Purchase of FEHB coverage by a tribal employer confers all the rights and benefits of FEHB as set forth in Subpart N to the tribal employer and tribal employee.
(a) A tribal employer that intends to purchase FEHB for its tribal employees shall notify OPM by email or telephone.
(1) A tribal employer must purchase FEHB for at least one billing unit carrying out programs or activities under the tribal employer's ISDEAA or IHCIA contract.
(2) For so long as a tribal employer continues to purchase FEHB for at least one billing unit carrying out programs or activities under a tribal employer's ISDEAA or IHCIA contract, the tribal employer may purchase FEHB for one or more billing units without regard to whether they are carrying out programs or activities under the tribal employer's ISDEAA or IHCIA contract.
(b) A tribal employer must enter into an agreement with OPM to purchase FEHB. This agreement will include—
(1) The name, job title, and contact information of the individual responsible for health insurance coverage decisions for the tribal employer;
(2) The date on which the tribal employer will begin to purchase FEHB coverage;
(3) The approximate number of tribal employees who will be eligible to enroll;
(4) A certification that the eligible tribal employees within the enrolling billing unit will not have alternate tribal employer-sponsored health insurance coverage available concurrent with FEHB;
(5) A certification and documentation demonstrating that the tribal employer is entitled to purchase FEHB as either: An Indian tribe or tribal organization carrying out at least one program under the Indian Self-Determination and Education Assistance Act; or an urban Indian organization carrying out at least one program under title V of the Indian Health Care Improvement Act;
(6) Agreement by the tribal employer that its purchase of FEHB makes the tribal employer responsible for administering the program in accordance with this subpart, subject to Federal Government audit with respect to such purchase and administration, and subject to OPM authority to direct the administration of the program, including but not limited to the correction of errors;
(7) Agreement that the tribal employer will establish or identify an independent dispute resolution panel to adjudicate appeals of determinations made by a tribal employer regarding an individual's status as a tribal employee eligible to enroll in FEHB, eligibility of family members, and eligibility to change enrollment. This panel must have authority to enforce eligibility decisions;
(8) A certification that the tribal employer will supply necessary enrollment information and payment to the paymaster;
(9) Agreement to provide notice to OPM in the event that the tribal employer is no longer carrying out at least one program under the ISDEAA or title V of IHCIA; and
(10) Other terms and conditions as appropriate.
(c) A tribal employer may make an initial election to purchase FEHB at any time. A tribal employer purchasing FEHB shall commit to purchase FEHB for at least the remainder of the calendar year in which the agreement is signed. Elections will be automatically renewable year to year unless revoked by the tribal employer or terminated by OPM.
(d) If a tribal employer revokes the initial election, OPM must be given 60 days notice. The tribal employer may not re-elect to purchase FEHB until the first annual open season that falls at least twelve months after the revocation. If the tribal employer revokes an election to participate a second time, the tribal employer may not re-elect to purchase FEHB until the first open season that falls at least twenty-four months after the second revocation.
(e) OPM maintains final authority, in consultation with the United States Department of the Interior and the United States Department of Health and Human Services, to determine whether a tribal employer is entitled to purchase FEHB as either—
(1) An Indian tribe or tribal organization carrying out at least one program under the Indian Self-Determination and Education Assistance Act; or
(2) An urban Indian organization carrying out at least one program under title V of the Indian Health Care Improvement Act.
(f) If a tribe, tribal organization or urban Indian organization believes it has been improperly denied the entitlement to purchase FEHB, it may appeal the denial to OPM. The appeal will be given an independent level of review within OPM and the decision on review will be final.
(a) A tribal employee who is a full-time or part-time common law employee of a tribal employer is eligible to enroll in FEHB if that tribal employer has elected to purchase FEHB coverage for the tribal employees of that tribal employer's billing unit, except that a tribal employee described in paragraph (b) of this section is not eligible to enroll in FEHB.
(b) Status as a tribal employee under § 890.1402(a) for purposes of eligibility to enroll in FEHB is initially made based on a reasonable determination by the tribal employer. OPM maintains final authority to correct errors regarding FEHB enrollment as set forth at § 890.1406.
(c) Retirees, annuitants, volunteers, compensationers under Federal worker's disability programs past 365 days, and others who are not common law employees of the tribal employer are not eligible to enroll under this subpart.
(d) The following tribal employees are not eligible to enroll in FEHB—
(1) A tribal employee whose employment is limited to one year or less and who has not completed one year of continuous employment, including any break in service of 5 days or less;
(2) A tribal employee who is expected to work less than 6 months in one year;
(3) An intermittent tribal employee—a non-full-time tribal employee without a prearranged regular tour of duty;
(4) A beneficiary or patient employee in a Government or tribal hospital or home; and
(5) A tribal employee paid on a piecework basis, except one whose work schedule provides for full-time service or part-time service with a regular tour of duty.
(e) Notwithstanding paragraphs (d)(1), (2), and (3) of this section a tribal employee working on a temporary appointment, a tribal employee working on a seasonal schedule of less than 6 months in a year, or a tribal employee working on an intermittent schedule, for whom the tribal employer expects the total hours in pay status (including overtime hours) plus qualifying leave without pay hours to be at least 130 hours per calendar month, is eligible to enroll in FEHB according to terms described in § 890.102(j) unless the tribal employer provides written notification to the Director as described in § 890.102(k).
(f) The tribal employer initially determines eligibility of a tribal employee to enroll in FEHB, eligibility of family members, and eligibility of tribal employee to change enrollment. The tribal employer's initial decision may be appealed pursuant to § 890.1415.
(g) A tribal employee who is eligible and enrolls in FEHB under this subpart will have the option of enrolling in any FEHB open fee-for-service plan or health maintenance organization (HMO), consumer driven health plan (CDHP), or high deductible health plan (HDHP) available to Federal employees in the same geographic location as the tribal employee. The tribal employee will have the same choice of self only, self plus one, or self and family enrollment as is available to Federal employees.
(h) Family members of tribal employees will be covered by FEHB according to terms described at § 890.302. Children of tribal employees, whether married or not married, and whether or not dependent, are covered under a self and family enrollment or a self plus one enrollment (if the child is the designated covered family member) up to the age of 26. Former spouses of tribal employees are not former spouses as described at 5 U.S.C. 8901(10) and are not eligible to elect coverage under subpart H.
(i) Eligibility for FEHB under this subpart does not identify an individual as a Federal employee for any purpose, nor does it convey any additional rights or privileges of Federal employment.
Correction of errors regarding FEHB enrollment for tribal employees takes place according to the terms described in § 890.103.
(a)
(b) Opportunities for tribal employees to enroll—
(1) Upon electing to purchase FEHB, a tribal employer will establish an initial enrollment opportunity for tribal employees. A tribal employee's enrollment upon an initial enrollment opportunity becomes effective as prescribed by OPM.
(2) After the initial enrollment opportunity, described in § 890.1407(b)(1), tribal employees are subject to the same initial enrollment period, belated enrollment rules, enrollment by proxy, and open season as Federal employees, as described at § 890.301(a), (b), (c), and (f).
(3) A tribal employee who enrolls after the initial enrollment opportunity and who does not elect premium conversion through his or her tribal employer's premium conversion plan, if one is available, will be subject to the enrollment and qualifying life event rules described at § 890.301 and effective dates described at § 890.301(b) and (f).
(4) A tribal employee who enrolls after the initial enrollment opportunity and who elects premium conversion through his or her tribal employer's premium conversion plan, if one is available, will be subject to the enrollment rules, qualifying life event rules and effective dates described at §§ 892.207, 892.208 and 892.210 of this chapter (together with § 890.301 as referenced therein).
(a) A tribal employee enrolled under this subpart may increase or decrease his or her enrollment, or may change enrollment from one plan or option to another, as described in § 890.301 (for tribal employees who did not elect premium conversion) or part 892 of this chapter (for tribal employees who did elect premium conversion).
(b) A change in enrollment type, plan, or option under this section becomes effective as described in § 890.301 (for tribal employees who did not elect premium conversion) or part 892 of this chapter (for tribal employees who did elect premium conversion).
(a) A tribal employee enrolled under this subpart may cancel enrollment as described at § 890.304(d) or decrease his or her enrollment as described at § 890.301. A tribal employee who does not participate in premium conversion may cancel his or her enrollment or decrease his or her enrollment at any time by request to the tribal employer, unless there is a legally binding court or administrative order requiring coverage of a child as described at § 890.301(g)(3). A tribal employee who participates in premium conversion may cancel his or her enrollment as provided by § 892.209 or decrease his or her enrollment as provided by § 892.208 of this chapter only during open season or because of and consistent with a qualifying life event.
(b) A cancellation of enrollment becomes effective as described at § 890.304(d). A decrease in enrollment becomes effective as described in § 890.301(e)(2).
(c) A tribal employee who cancels his or her enrollment under this section or decreases his or her enrollment may reenroll or increase his or her enrollment only during open season or because of and consistent with a qualifying life event.
(a) Tribal Employee Separation—
(1) Enrollment of a tribal employee under this subpart terminates due to separation from employment with the tribal employer for reasons of resignation, dismissal, or retirement. Termination of enrollment is effective at midnight of the last day of the pay period in which the tribal employee separates from employment.
(2) A former tribal employee who is separated under this subpart due to resignation, dismissal, or retirement and covered family members are entitled to a 31-day temporary extension of coverage without premium contribution and may convert to an individual policy as described at § 890.401.
(b) Death of tribal employee—
(1) Enrollment of a tribal employee terminates at midnight of the last day of the pay period in which the tribal employee dies.
(2) If, at the time of death, the deceased tribal employee was enrolled in self and family FEHB coverage:
(i) The surviving spouse is entitled to a 31-day temporary extension of coverage without premium contribution and may convert to an individual policy as described at § 890.401;
(ii) The covered children of the deceased tribal employee are entitled to a 31-day temporary extension of coverage without premium contribution and may convert to an individual policy as described at § 890.401.
(3) If, at the time of death, the deceased tribal employee was enrolled in self plus one FEHB coverage, only the designated covered family member is entitled to a 31-day temporary extension of coverage without premium contribution and may convert to an individual policy as described at § 890.401.
(c) Termination of family member coverage—
(1) Coverage of a family member of a tribal employee who was covered under this subpart terminates, subject to the 31-day temporary extension of coverage, for conversion, at midnight of the earlier of the following dates:
(i) The day on which he or she ceases to be a family member; or
(ii) The day the tribal employee's enrollment terminates, unless the family member is entitled to continued coverage under the enrollment of another.
(2) Family members who lose coverage under this subsection are entitled to a 31-day temporary extension of coverage without premium contribution and may convert to an individual policy as described at § 890.401.
(d) Tribal employer loses entitlement to purchase FEHB—
(1) Coverage of a tribal employee and family members under this subpart, except TCC that is already elected and in effect, terminates at midnight of the last day of the calendar year in which a tribal employer is no longer entitled to purchase FEHB. FEHB can terminate earlier at the request of the tribal employer.
(2) Following the termination described in § 890.1410(d)(1), enrolled tribal employees and covered family members are entitled to a 31-day temporary extension of coverage without premium contribution and may convert to an individual policy as described at § 890.401.
(e) Tribal employer revokes election to purchase FEHB—
(1) If a tribal employer voluntarily revokes its election to purchase FEHB, tribal employees will be entitled to a 31-day temporary extension of coverage and may convert to an individual policy as described at § 890.401. In such a case, the FEHB enrollment terminates effective the first day for which premium payment is not received and the 31-day temporary extension of coverage, for conversion begins immediately thereafter.
(2) [Reserved]
(f) Failure to currently deposit premium payment—
(1) If premium payment is not currently deposited in the Employees Health Benefits Fund, the tribal employer's entitlement to purchase FEHB can be terminated, and all enrollments affected by the paymaster's failure to obtain current deposit of premium payment will be terminated, for non-payment.
(2) Enrollments of all of the tribal employer's tribal employees affected by the paymaster's failure to obtain current deposit of premium payment will be terminated effective midnight of the last day of the month for which payment was received.
(3) In the case of termination of enrollment due to non-payment, affected tribal employees will be entitled to a 31-day temporary extension of coverage without premium contribution and may convert to an individual policy as described at § 890.401. The 31-day extension of coverage begins immediately upon termination of enrollment.
(4) In the event that a tribal employer elects to purchase FEHB for its tribal employees but does not currently deposit premium payment in the first month that it is due, the enrollment of tribal employees affected by the paymaster's failure to obtain current deposit of premium payment will be terminated effective midnight of the last day of the month for which premium payment was not currently deposited. Tribal employees affected by the paymaster's failure to obtain current deposit of premium payment will not be entitled to a 31-day temporary extension of coverage and may not convert to an individual policy as described at § 890.401.
(5) Any outstanding premium due for coverage in arrears will be treated as a debt owed solely by the tribal employer.
(a) For purposes of this subpart, temporary continuation of coverage (TCC) is described by 5 U.S.C. 8905a and subpart K of this part. The administrative fee for TCC for tribal employees is the same as for Federal employees, with no specific tribal administrative fee as described in § 890.1413(e).
(b) A former tribal employee who is separated under this subpart due to resignation, dismissal, or retirement may elect TCC, unless the separation is due to gross misconduct as defined in § 890.1102.
(c) Eligibility for TCC for tribal employees follows procedures provided in § 890.1103 of subpart K of this part, except that former spouses of tribal employees are not eligible for TCC.
(a)
(b)
(c)
(d)
(e) Non-pay status due to Uniformed Service—
(1) Enrollment of a tribal employee and coverage of family members terminates at midnight of the earliest of the dates described at § 890.304(a)(1)(vi) through (viii). The tribal employee and covered family members are entitled to a 31-day temporary extension of coverage without premium contribution and may convert to an individual policy as described at § 890.401.
(2) Enrollment is reinstated on the date the tribal employee is restored to duty in an eligible position with the tribal employer upon return from Uniformed Service, pursuant to applicable law, provided that the tribal employer continues to purchase FEHB for its tribal employees in the affected tribal employee's billing unit on that date.
(a) Premium contributions and withholdings described at §§ 890.501 and 890.502 must be paid by the tribal employer and the tribal employee, except that the term OPM as used in § 890.502(c) is deemed to be a reference to the paymaster, as appropriate, for purposes of this subpart. There is no Government contribution as that term is used in 5 U.S.C. 8906.
(b)
(2) There is no cap on the percentage of premium that a tribal employer may contribute, as long as the contribution and withholding arrangement is not designed to encourage or discourage enrollment in any particular plan or plan option;
(3) A tribal employer may vary the contribution amount by type of FEHB enrollment (self only, self plus one, self and family), providing it is done in a uniform manner and meets the requirements described in § 890.1413(b)(1) and (2); and
(4) A tribal employer may vary the contribution amount by billing unit, providing each billing unit meets the requirements described in § 890.1413(b)(1) through (3).
(c) A tribal employer may, but is not required to, prorate the tribal employer and tribal employee share of premium attributable to enrollment of its part-time tribal employees working between 16 and 32 hours per week by prorating shares in proportion to the percentage of time that a tribal employee in a comparable full time position is regularly scheduled to work.
(d) Tribal employee and tribal employer contributions to premiums under this subpart will be aggregated by the tribal employer. The tribal employee and tribal employer contributions must be available for receipt by the paymaster on an agreed upon date. The paymaster will receive the premium contributions together with the fee described at paragraph (e) of this section and will deposit only the premium payment into the Employees Health Benefits Fund described in 5 U.S.C. 8909.
(e) A fee determined annually by OPM will be charged in addition to premium for each enrollment of a tribal employee. The fee may be used for other purposes as determined by OPM. The fee must be paid entirely by the tribal employer as part of the payment to purchase FEHB for tribal employees, and must be available for collection by the paymaster, together with the aggregate tribal employee and tribal employer contributions.
(a) The tribal employer pays premiums for tribal employees enrolled under this subpart pursuant to §§ 890.1403 and 890.1413.
(b) The tribal employer must determine the eligibility of individuals who attempt to enroll for coverage under this subpart and enroll those it finds eligible.
(c) The tribal employer must determine whether eligible tribal employees have eligible family member(s) and allow coverage under a self plus one or self and family enrollment as described in § 890.302 for those it finds eligible.
(d) The tribal employer must establish or identify an independent dispute resolution panel for reconsideration of enrollment and eligibility decisions as described in § 890.1415.
(e) The tribal employer has the following notification responsibilities. The tribal employer must—
(1) Notify OPM and tribal employees in writing of intent to revoke election to purchase FEHB at least 60 days before such revocation described at § 890.1404(d);
(2) Promptly notify tribal employees and OPM if there is a change in the tribal employer's entitlement to purchase FEHB described at § 890.1410(d);
(3) Promptly notify affected tribal employees of termination of enrollment due to non-payment, the 31-day temporary extension of coverage and its ending date described at § 890.1410(f)(2) through (3); and
(4) Promptly notify affected tribal employees of termination of enrollment due to non-payment described at § 890.1410(f)(4).
(a) The tribal employer shall establish or identify an independent dispute resolution panel to adjudicate appeals of determinations made by a tribal employer denying an individual's status as a tribal employee eligible to enroll in FEHB or denying a change in the type of enrollment (
(b) Under procedures set forth by the tribal employer, an individual may file a written request to the independent dispute resolution panel to reconsider an initial decision of the tribal employer under this subpart. A reconsideration decision made by the panel must be issued to the individual in writing and must fully state the findings and reasons for the findings. The panel may consider information from the tribal employer, the individual, or another source. The panel must retain a file of its documentation until December 31 of the 3rd year after the year in which the decision was made, and must provide the file to OPM upon request.
(c) If the panel determines that the individual is ineligible to enroll in FEHB as a tribal employee or to change enrollment, the individual may request that OPM reconsider the denial. Such a request must be made in writing and any decision by OPM will be binding on the tribal employer.
(d) OPM may request a panel decision file during the retention period described at paragraph (b) of this section. Panel decisions remain subject
(a) Tribal employees may file claims for payment or service as described at § 890.105.
(b) Tribal employees may invoke the provisions for court review described at § 890.107(b) through (d).
(a) An FEHB enrollment cannot be continued into retirement from employment with a tribal employer.
(b) A Federal annuitant may continue FEHB enrollment into retirement from Federal service if the requirements of 5 U.S.C. 8905(b) for carrying FEHB coverage into retirement are satisfied through enrollment, or coverage as a family member, either through a Federal employing office or a tribal employer, or any combination thereof.
(c) A Federal annuitant who is employed after retirement by a tribal employer in an FEHB eligible position may participate in FEHB through the tribal employer. In such a case, the Federal annuitant's retirement system will transfer the FEHB enrollment to the tribal employer, in a similar manner as for a Federal annuitant who is employed by a Federal agency after retirement.
(d) A tribal employee who becomes a survivor annuitant as described in § 890.303(d)(2) is entitled to reinstatement of health benefits coverage as a Federal employee would under the same circumstances.
A tribal employee who is not also a Federal employee who becomes eligible for one of the Department of Labor's disability compensation programs may not continue FEHB coverage in leave without pay status past 365 days.
Nuclear Regulatory Commission.
Rulemaking activities; discontinuation.
The U.S. Nuclear Regulatory Commission (NRC) is discontinuing the rulemaking activities associated with potential changes to its radiation protection and reactor effluents regulations. The purpose of this action is to inform members of the public that these rulemaking activities are being discontinued and to provide a brief discussion of the NRC's decision to discontinue them. These rulemaking activities will no longer be reported in the NRC's portion of the Unified Agenda of Regulatory and Deregulatory Actions (the Unified Agenda).
Effective December 28, 2016, the rulemaking activities discussed in this document are discontinued.
Please refer to Docket IDs NRC–2009–0279 and NRC–2014–0044 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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•
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Carolyn Lauron, Office of New Reactors, telephone: 301–415–2736, email:
In SECY–16–0009, “Recommendations Resulting from the Integrated Prioritization and Re-Baselining of Agency Activities,” dated January 31, 2016 (ADAMS Accession No. ML16028A208), the NRC staff requested Commission approval to implement recommendations on work to be shed, de-prioritized, or performed with fewer resources. Two of the items listed to be shed (
A discussion of the NRC's decision to discontinue these two rulemaking activities is provided in Sections III and IV of this document.
When the NRC staff identifies a rulemaking activity that can be discontinued, the NRC staff requests approval from the Commission to discontinue it. The Commission provides its decision in an SRM. If the Commission approves discontinuing the rulemaking activity, the NRC staff will inform the public of the Commission's decision.
A rulemaking activity may be discontinued at any stage in the rulemaking process. For a rulemaking activity that has received public comments, the NRC staff will consider those comments before discontinuing the rulemaking activity; however, the NRC staff will not provide individual comment responses.
After Commission approval to discontinue a rulemaking activity, the NRC staff will update the next edition of the Unified Agenda to indicate that the rulemaking is discontinued. The rulemaking activity will appear in the completed actions section of that edition of the Unified Agenda but will not appear in future editions.
The NRC staff provided an analysis of the potential need to update the radiation protection regulation in SECY–08–0197, “Options to Revise Radiation Protection Regulations and Guidance with Respect to the 2007 Recommendations of the International Commission on Radiological Protection,” dated December 18, 2008 (ADAMS Accession No. ML091310193), to the Commission. SECY–08–0197 presented the regulatory options of more closely aligning the NRC's radiation protection regulatory framework (primarily set forth in 10 CFR part 20) with the 2007 recommendations of the International Commission on Radiological Protection (ICRP) contained in ICRP Publication 103. In the SRM for SECY–08–0197, dated April 2, 2009 (ADAMS Accession No. ML090920103), the Commission approved the NRC staff's recommendation to begin engagement with stakeholders and interested parties to initiate development of the technical basis
After extensive stakeholder engagement, the NRC staff determined that an additional evaluation of the substantive policy issues was needed. This additional policy evaluation was provided as SECY–12–0064, “Recommendations for Policy and Technical Direction to Revise Radiation Protection Regulations and Guidance,” dated April 25, 2012 (ADAMS Accession No. ML121020108). The paper summarized the NRC staff's interactions with stakeholders as directed by the SRM for SECY–08–0197, and provided recommendations for potential revisions to the NRC's radiation protection regulations.
In the SRM for SECY–12–0064, dated December 17, 2012 (ADAMS Accession No. ML12352A133), the Commission approved in part and disapproved in part the NRC staff's recommendations. Specifically, the Commission approved the NRC staff's development of a draft regulatory basis for a revision to 10 CFR part 20 to align with the most recent methodology and terminology for dose assessment in ICRP Publication 103, including consideration of any conforming changes to all NRC regulations. The Commission directed the NRC staff to develop improvements in the NRC's guidance for those segments of the regulated community that would benefit from more effective implementation of the As Low As is Reasonably Achievable (ALARA) strategies and programs to comply with regulatory requirements. The Commission also directed the NRC staff to continue discussions with stakeholders regarding dose limits for the lens of the eye and the embryo/fetus.
In addition, the Commission directed the NRC staff to continue discussions with stakeholders on alternative approaches to deal with individual protection at or near the current dose limit. Finally, the Commission directed the NRC staff to improve reporting of occupational exposure by the NRC and Agreement State licensees to the NRC's Radiation Exposure Information Reporting System database. In the SRM for SECY–12–0064, the Commission disapproved the NRC staff's recommendations to develop a draft regulatory basis to reduce the occupational total effective dose equivalent from 5 rem (50 mSv) per year to 2 rem (20 mSv) per year. The Commission also disapproved the elimination of traditional or “English” dose units to measure radiation exposure from the NRC's regulations. Rather, the Commission directed the continuation of the use of both traditional and International System (SI) units in the NRC's regulations.
In response to the Commission's direction in the SRM for SECY–12–0064, the NRC staff published an advance notice of proposed rulemaking (ANPR) in the
The NRC received over 90 individual comment letters and almost 3,000 form letters on the 10 CFR part 20 ANPR. Although some comments supported a potential revision of the NRC's regulations to align more closely with ICRP Publication 103 methodology and terminology for dose assessment, the majority of comments did not support revising the 10 CFR part 20 regulations. The major reasons given for not revising the NRC's regulations were the following: (1) The NRC's current regulations remain protective of both occupational workers and members of the public; (2) the ICRP Publication 103 recommendations propose measures that go beyond what is needed to provide adequate protection and are unlikely to yield a substantial increase in safety that is justified in light of its cost; (3) the industry's current operating procedures and practices protect both occupational workers and members of the public and go beyond the applicable regulatory requirements; (4) amending the applicable regulations would place significant resource burdens on licensees resulting in costly modifications to existing facilities that would result in little, if any, improvement in occupational or public radiological safety; (5) the cumulative effect of regulation (CER) resulting from the changes described in the ANPR for 10 CFR part 20, in conjunction with the prospective U.S. Department of Environmental Protection Agency's (EPA) changes to 40 CFR part 190 and to 10 CFR part 50, appendix I, will place substantial resource burdens on licensees, while yielding little or no additional protection of occupational workers or the public; and (6) the NRC actions are premature without the publication of the peer approved implementation documents for the ICRP Publication 103 recommendations.
While some commenters supported the changes described in the ANPR to more closely align with the ICRP Publication 103 methodology and terminology, these commenters also acknowledged that consideration should be given to the resource burden associated with implementation. Some commenters supported the incorporation of the ICRP Publication 103 dose methodology in the form of revisions to include the weighting factors for eight organs, which are the colon, stomach, bladder, liver, esophagus, skin, brain, and salivary glands, but did not support changes to
As explained in SECY–16–0009, the additional resource expenditure in this area did not result in a recommendation for a revised rule. The current NRC regulatory framework continues to provide adequate protection of the health and safety of workers, the public, and the environment. In addition, a majority of the comments submitted and meeting feedback from stakeholders did not support the proposed changes. Therefore, the NRC staff believes that there is minimal adverse impact on the NRC's mission, principles, or values by discontinuing this rulemaking. In the SRM for SECY–16–0009, the Commission approved the NRC staff's recommendation to discontinue this rulemaking.
The NRC published an ANPR in the
The NRC received 20 comment letters on the 10 CFR part 50, appendix I, ANPR. The comments, in addition to feedback from the August 24, 2015, NRC public meeting held in Rockville, MD, included the following: (1) The potential revisions will result in intangible benefits such as transparency in the regulatory process, consistent terminology and methodology, and comparison of technologies and operations across international borders and environmental media; (2) implementation of the potential revisions will result in a resource burden; (3) the potential revisions are unlikely to be cost-beneficial with little to no incremental improvement in the health and safety of occupational workers, the public, or the environment; (4) in lieu of the potential revisions, limited changes in the NRC guidance to address changes in methodology and terminology would require fewer licensee resources; and (5) should the NRC proceed with rulemaking, consideration of on-going work on the accuracy of the effluent doses to members of the public could further inform the proposed rulemaking.
Overall, the commenters recognized a need to update the NRC's regulations based on the advances in science and technology; however, the implementation costs would be a significant burden to the industry that would not be justified by improvements in public and occupational protection. In addition, some commenters provided additional options for the NRC to consider, should it continue with rulemaking, including limited scope updates to existing NRC guidance.
As explained in SECY–16–0009, the staff recommended that this rulemaking activity be discontinued because during the development of the regulatory basis for the proposed rule change, the staff determined that the regulations do not require changes at this time. Therefore, based on this determination and consideration of the comments received, the NRC staff believes that there is minimal adverse impact on the NRC's mission, principles, or values by discontinuing this rulemaking. In the SRM for SECY–16–0009, the Commission approved the NRC staff's recommendation to discontinue this rulemaking.
The NRC is no longer pursuing the revisions to regulations in 10 CFR part 20 and 10 CFR part 50, appendix I, for the reasons discussed in this document. In the next edition of the Unified Agenda, the NRC will update the entry for these rulemaking activities and reference this document to indicate that they are no longer being pursued. These rulemaking activities will appear in the completed actions section of that edition of the Unified Agenda but will not appear in future editions. If the NRC decides to pursue similar or related rulemaking activities in the future, it will inform the public through new rulemaking entries in the Unified Agenda.
For the Nuclear Regulatory Commission.
Federal Deposit Insurance Corporation.
Final rule.
The Federal Deposit Insurance Corporation (FDIC) is adjusting the maximum amount of each civil money penalty (CMP) within its jurisdiction to account for inflation. This action is required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (2015 Adjustment Act). The FDIC is also amending its rules of practice and procedure to correct a technical error from the previous inflation-adjustment rulemaking.
This rule is effective on January 15, 2017.
Seth P. Rosebrock, Supervisory Counsel, Legal Division (202) 898–6609, or Graham N. Rehrig, Senior Attorney, Legal Division (202) 898–3829.
The Final Rule changes the maximum limit for CMPs according to inflation as mandated by Congress in the 2015 Adjustment Act.
The FDIC assesses CMPs under section 8(i) of the Federal Deposit Insurance Act (FDIA), 12 U.S.C. 1818, and a variety of other statutes.
In 1990, Congress determined that the assessment of CMPs plays “an important role in deterring violations and furthering the policy goals embodied in such laws and regulations” and concluded that “the impact of many civil monetary penalties has been and is diminished due to the effect of inflation.”
In 2015, Congress revised the process by which federal agencies adjust applicable CMPs for inflation.
Although the 2015 Adjustment Act increases the maximum penalty that may be assessed under each applicable statute, the FDIC possesses discretion to impose CMP amounts below the maximum level in accordance with the severity of the misconduct at issue. When making a determination as to the appropriate level of any given penalty, the FDIC is guided by statutory factors set forth in section 8(i)(2)(G) of the FDIA, 12 U.S.C. 1818(i)(2)(G), and those factors identified in the
While the 2015 Adjustment Act required the FDIC to initially adjust its maximum CMP amounts through an interim final rulemaking, for subsequent adjustments, the FDIC “shall adjust [CMPs] and shall make the adjustment
Moreover, the FDIC is correcting a technical error found at 12 CFR 308.132(c). During the last CMP-adjustment process, the FDIC sought to revise 12 CFR 308.132(c) to articulate the FDIC Board's authority to assess CMPs. The FDIC also intended to transfer the substance of current 12 CFR 308.132(c)(2) through 12 CFR 308.132(c)(3)(xvii) to current 12 CFR 308.132(d), and to remove the now-duplicative language of 12 CFR 308.132(c)(2) through 12 CFR 308.132(c)(3)(xvii). The Final Rule amends 12 CFR 308.132(c) accordingly by removing 12 CFR 308.132(c)(2) through 12 CFR 308.132(c)(3)(xvii) and retitling current 12 CFR 308.132(c)(1).
The FDIC believes that all of these changes are technical and ministerial in character, and therefore, the FDIC is not soliciting public comment on the changes.
The Final Rule modifies the maximum limit for CMPs according to inflation as mandated by Congress in the 2015 Adjustment Act. The 2015 Adjustment Act directs federal agencies to follow guidance issued by the Office of Management and Budget (OMB) on December 16, 2016 (OMB Guidance), when calculating new maximum penalty levels.
In keeping with the OMB Guidance, the FDIC multiplied each of its CMP amounts by the relevant inflation factor.
The following chart displays the adjusted CMP amounts for each CMP identified in 12 CFR part 308.
The CMP Adjustments are expected to more precisely adjust CMP maximums relative to inflation. These adjustments are expected to minimize any year-to-year distortions in the real value of the CMP maximums. These adjustments will promote a more consistent deterrent effect in the structure of CMPs. As previously noted, the FDIC retains discretion to impose CMP amounts below the maximum level. The actual number and size of CMPs assessed in the future will depend on the propensity and severity of the violations committed by banks and institution-affiliated parties, as well as the particular statute that is at issue. Such future violations cannot be reliably forecast. It is expected that the FDIC will continue to exercise its discretion to impose CMPs that are appropriate to their severity.
The 2015 Adjustment Act will likely result in a minimal increase in administrative costs for the FDIC in order to establish new inflation-adjusted maximum CMPs each year. Because these calculations are relatively simple, the number of labor hours necessary to perform this task is likely to be insignificant relative to total enforcement labor hours for the Corporation.
The 2015 Adjustment Act mandates the frequency of the inflation adjustment and the measure of inflation to be used in making these adjustments. This statute also provides that the FDIC is not required to proceed through notice-and-comment rulemaking under the Administrative Procedure Act in making annual CMP adjustments. Therefore, the FDIC has not considered alternatives to the CMP Adjustments.
The 2015 Adjustment Act requires the FDIC to adjust its maximum CMP amounts “notwithstanding section 553 of title 5, United States Code,”
Section 302 of the Riegle Community Development and Regulatory Improvement Act
This Final Rule does not impose any new or additional reporting, disclosures, or other requirements on insured depository institutions. Therefore, the Final Rule is not subject to the requirements of this statute.
An initial regulatory flexibility analysis under the Regulatory Flexibility Act
The OMB has determined that the Final Rule is not a “major rule” within the meaning of the relevant sections of the Small Business Regulatory Enforcement Act of 1996 (SBREFA).
The FDIC determined that the Final Rule will not affect family wellbeing within the meaning of section 654 of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999.
The Final Rule does not create any new, or revise any existing, collections of information under section 3504(h) of the Paperwork Reduction Act of 1980.
Section 722 of the Gramm-Leach-Bliley Act requires the FDIC to use plain language in all proposed and final rules published after January 1, 2000.
Administrative practice and procedure, Banks, Banking, Claims, Crime, Equal access to justice, Ex parte communications, Hearing procedure, Lawyers, Penalties, State nonmember banks.
For the reasons set forth in the preamble, the FDIC amends 12 CFR part 308 as follows:
5 U.S.C. 504, 554–557; 12 U.S.C. 93(b), 164, 505, 1464, 1467(d), 1467a, 1468, 1815(e), 1817, 1818, 1819, 1820, 1828, 1829, 1829(b), 1831i, 1831m(g)(4), 1831
(b) * * *
(4)
(i) Any person who has engaged in a violation as set forth in paragraph (b)(1) of this section shall forfeit and pay a civil money penalty of not more than $9,623 for each day the violation continued.
(ii) Any person who has engaged in a violation, unsafe or unsound practice or breach of fiduciary duty, as set forth in paragraph (b)(2) of this section, shall forfeit and pay a civil money penalty of not more than $48,114 for each day such violation, practice or breach continued.
(iii) Any person who has knowingly engaged in a violation, unsafe or unsound practice or breach of fiduciary duty, as set forth in paragraph (b)(3) of this section, shall forfeit and pay a civil money penalty not to exceed:
(A) In the case of a person other than a depository institution—$1,924,589 per day for each day the violation, practice or breach continued; or
(B) In the case of a depository institution—an amount not to exceed the lesser of $1,924,589 or one percent of the total assets of such institution for each day the violation, practice or breach continued.
(c)
(d)
(1)
(i)
(A)
(B)
(C)
(D)
(ii)
(iii)
(B)
(C)
(iv)
(2)
(3)
(i)
(A)
(B)
(C)
(D)
(ii)
(iii)
(B)
(C)
(iv)
(4)
(5)
(i) Pursuant to 7(j)(16) of the FDIA (12 U.S.C. 1817(j)(16)), a civil money penalty may be assessed for violations of change in control of insured depository institution provisions pursuant to section 8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)) in the amounts set forth in this paragraph (d)(5).
(ii) Pursuant to the International Banking Act of 1978 (IBA) (12 U.S.C. 3108(b)), civil money penalties may be assessed for failure to comply with the requirements of the IBA pursuant to
(iii) Pursuant to section 1120(b) of the Financial Institutions Recovery, Reform, and Enforcement Act of 1989 (FIRREA) (12 U.S.C. 3349(b)), where a financial institution seeks, obtains, or gives any other thing of value in exchange for the performance of an appraisal by a person that the institution knows is not a state certified or licensed appraiser in connection with a federally related transaction, a civil money penalty may be assessed pursuant to section 8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)) in the amounts set forth in this paragraph (d)(5).
(iv) Pursuant to the Community Development Banking and Financial Institution Act (Community Development Banking Act) (12 U.S.C. 4717(b)) a civil money penalty may be assessed for violations of the Community Development Banking Act pursuant to section 8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)), in the amount set forth in this paragraph (d)(5).
(v) Civil money penalties may be assessed pursuant to section 8(i)(2) of the FDIA in the amounts set forth in this paragraph (d)(5) for violations of various consumer laws, including, but not limited to, the Home Mortgage Disclosure Act (12 U.S.C. 2804
(6)
(7)
(8)
(9)
(ii)
(A) The failure to pay an assessment is due to a dispute between the insured depository institution and the Corporation over the amount of such assessment; and
(B) The insured depository institution deposits security satisfactory to the Corporation for payment upon final determination of the issue.
(iii)
(iv)
(10)
(11)
(12)
(13)
(14)
(15)
(16)
(17)
(18)
By order of the Board of Directors.
U.S. Small Business Administration.
Final rule.
The U.S. Small Business Administration (SBA) is revising the regulations for the Small Business Investment Company (SBIC) program to expand permitted investments in passive businesses and provide further clarification with regard to investments in such businesses. SBICs are generally prohibited from investing in passive businesses under the Small Business Investment Act of 1958, as amended (Act). SBIC program regulations provide for two exceptions that allow an SBIC to structure an investment utilizing a passive small business as a pass-through. The first exception provides conditions under which an SBIC may structure an investment through up to two levels of passive entities to make an investment in a non-passive business that is a subsidiary of the passive business directly financed by the SBIC. The second exception, prior to this final rule, enabled a partnership SBIC, with SBA's prior approval, to provide financing to a small business through a passive, wholly-owned C corporation (commonly known as a blocker corporation), but only if a direct financing would cause the SBIC's investors to incur Unrelated Business Taxable Income (UBTI). This final rule clarifies several aspects of the first exception and in the second exception eliminates the prior approval requirement and expands the purposes for which a blocker corporation may be formed. The final rule also adds new reporting and other requirements for passive investments to help protect SBA's financial interests and ensure adequate oversight and makes minor technical amendments. Finally, this rule makes a conforming change to the regulations regarding the amount of leverage available to SBICs under common control. This change is necessary for consistency with the Consolidated Appropriations Act, 2016, which increased the maximum amount of such leverage to $350 million.
This rule is effective January 27, 2017.
Theresa Jamerson, Office of Investment and Innovation, (202) 205–7563 or
The SBIC Program is an SBA financing program authorized under Title III of the Small Business Investment Act of 1958, 15 U.S.C. 681
SBICs are generally prohibited from investing in passive businesses under the Small Business Investment Act of 1958. Prior to this final rule, the SBIC program regulations provided for the following two exceptions that allowed an SBIC to structure an investment utilizing a passive small business as a pass-through:
A.
B.
On October 5, 2015, SBA published a proposed rule (80 FR 60077) to further expand the permitted use of passive businesses, provide clarification with regard to investments in such businesses, and make minor technical clarifications. SBA received three comments on the proposed rule, not including one comment that generally questioned the fairness of the Act as a whole and did not provide any specific comments on the rule. The three comments pertinent to the rule are addressed in Section II.
Section II also discusses a conforming regulatory change to implement Section 521 of the Consolidated Appropriations Act, 2016 which increased the maximum leverage available to two or more SBICs under common control from $225 million to $350 million.
1.
SBA received 2 comments on § 107.720(b)(2) indicating that the proposed changes would be more effective if the passive business directly financed was not required to own at least 50 percent of the underlying active business. Commenters suggested that SBICs be allowed to structure investments using passive investment vehicles “irrespective of the number of parent entities involved so long as the parent entities in question directly or indirectly own or control at least 50 percent of the voting or economic interests of the active business.” SBA received similar comments as part of the rulemaking process when it last proposed expanding the permitted use of passive businesses. SBA reconsidered these previous suggestions in developing this current rule; however, in light of the additional protections added in this final rule (see the discussion of § 107.720(b)(4) in paragraph II.A.3 of this preamble), neither set of comments was adopted. Although the new § 107.720(b)(4) should help address some of SBA's credit concerns, SBA believes that controlling ownership provisions are needed to facilitate access to information and records needed to effectively monitor these transactions and to aid in the recovery of assets in the event of a default. SBA also continues to maintain its position that effective monitoring of transactions with unlimited levels of passive companies would require resources well beyond those available to the Agency. Proposed § 107.720(b)(2) is adopted without change.
2.
a. Removing the requirement to obtain SBA's prior approval to form a blocker corporation;
b. Permitting an SBIC to form a blocker corporation to enable any foreign investors to avoid effectively connected income (ECI) under the Internal Revenue Code;
c. Permitting a blocker corporation to provide financing to a second passive small business that passes the proceeds through to a non-passive small business in which it owns at least 50 percent of the outstanding voting securities (effectively permitting an investment structured with two levels of passive companies, one of which is the blocker corporation); and
d. Removing outdated language indicating that an SBIC's ownership of a blocker corporation formed under § 107.720(b)(3) will not constitute a violation of § 107.865(a). This provision was rendered unnecessary by a rule change in 2002 (67 FR 64789) that revised § 107.865(a) to permit an SBIC to exercise control over a small business for up to seven years without SBA approval.
SBA received comments on proposed § 107.720(b)(3) as discussed below:
a. Regulated Investment Company (RIC) Exception. All 3 commenters asked that the regulations provide an additional exception for SBICs that are wholly owned subsidiaries of Business Development Companies (BDCs). A BDC typically elects to be taxed as a RIC pursuant to Subchapter M of the Internal Revenue Code of 1986. In general, a RIC is not subject to U.S. federal income taxes on income and gains that it distributes to stockholders, provided that it satisfies certain minimum distribution requirements. To qualify as a RIC, a BDC must satisfy certain source of income and asset-diversification tests; among other things, a RIC must generally derive at least 90% of its gross income for each taxable year from certain types of investment. In particular, the commenters explained that equity interests in pass-through tax entities generate operating income that, if received or deemed received directly by a BDC, could disqualify the BDC from maintaining RIC status, and therefore, such interests must often be held through a blocker corporation. The commenters requested that § 107.720(b)(3) be revised to permit an SBIC to form a blocker corporation to avoid adverse tax consequences to an investor that has elected to be taxed as a RIC. This final rule adopts the suggestion.
b. Blocker Entity Form of Organization. SBA also received two comments suggesting that non-corporate forms of organization should be permitted for blocker entities. The commenters explained that these structures are often “more streamlined in terms of corporate formalities than a C corporation” and suggested the regulations allow “any entity that elects to be taxed as a corporation for Federal income tax purposes.” SBA considered this suggestion to be overly broad, but partially adopted this suggestion in the final rule by allowing a blocker entity to be structured as an LLC that elects to be taxed as a corporation.
c. Two Level Holding Company Financing. Two commenters indicated that § 107.720(b)(3) should allow SBICs to structure a financing with a blocker entity and then two levels of passive holding companies as defined in § 107.720(b)(2). The commenters stated
d. SBA did not receive any comments on the proposed change to § 107.720(b)(3) regarding the removal of outdated language. This rule adopts the change as proposed.
3.
a. “Substantially All” Definition. Clarifying the meaning of “substantially all” in § 107.720(b)(2) and (b)(3) to mean 99 percent of the financing proceeds after deduction of actual application fees, closing fees, and expense reimbursements, which may not exceed those permitted under § 107.860.
b. Fee Requirements. Requiring fees charged by an SBIC or its Associate under §§ 107.860 and 107.900 to not exceed those permitted if the SBIC had directly financed the eligible Small Business and requiring any such fees received by an SBIC's Associate to be paid to the SBIC in cash within 30 days of receipt.
c. “Portfolio Concern” Clarification. Clarifying that both passive and non-passive businesses included in a financing are “Portfolio Concerns” and therefore subject to record keeping and reporting obligations with respect to any “Portfolio Concern,” defined in § 107.50 as “a Small Business Assisted by a Licensee.”
SBA received 3 comments on proposed § 107.720(b)(4) as discussed below:
a. “Substantially All” Definition. Commenters suggested that the definition of “substantially all” be lowered to 95 percent of the proceeds instead of 99% of the proceeds because they were concerned that the 99 percent threshold “may be too limiting and pose issues in deal structuring.” SBA did not adopt this comment. The definition already excludes allowable fees and expense reimbursements permitted under §§ 107.860 and 107.900, and SBA believes that a 95 percent threshold could result in excessive expenses being charged in the passive businesses that is diverted from the intended operating business. Although this percentage may seem inconsequential, 4% of a $20 million financing represents $800,000 that could be diverted from the operating business.
b. Fee Requirements. Two commenters suggested removing the requirement that fees received by an Associate must be paid over in cash to the SBIC. They noted that SBIC program policy guidance known as TechNote 7a, which provides guidelines concerning allowable management expenses for leveraged SBICs (see
c. “Portfolio Concern” Clarification. Two commenters indicated that the clarification of Portfolio Concern should be revised to apply only “for the purposes of this part 107.720” to avoid any unintended effects arising from the use of the term “Portfolio Concern” in other sections of the regulations. The commenters indicated that this adjustment would still allow SBA to retain the necessary information rights contemplated by the proposed rule. A search for the term “Portfolio Concern” within the regulations identified the following instances.
• § 107.50 defines “Portfolio Concern” as “a Small Business Assisted by a Licensee.”
• §§ 107.600–107.660 describe record keeping and information requirements, including those for a Portfolio Concern.
• § 107.730 discusses conflicts of interest with regards to Portfolio Concerns.
• § 107.760 discusses how a change in size or activity affect the Licensee with regards to a Portfolio Concern.
• § 107.850 discusses restrictions on redemption of Equity Securities of a Portfolio Concern.
SBA believes that all of the requirements in these sections are applicable to passive business financings. Therefore, this suggestion was not adopted.
4.
Although SBA received no comments on proposed § 107.610, because SBA adopted the suggestion to allow SBICs that are BDC subsidiaries to form blocker entities in order to maintain the BDC's RIC status under § 107.720 (b)(3), the language in the final rule adds compliance with this tax election as a permissible basis for a passive business formed under § 107.720(b)(3).
SBA also proposed the following technical changes to the regulations.
1.
2.
3.
4.
5.
None of the comments SBA received in response to the proposed rule were related to these technical changes. The final rule incorporates these changes as proposed.
Section 521 of the Consolidated Appropriations Act, 2016, Public Law 114–113, 129 Stat. 2242, (December 22, 2015) amended section 303(b)(2) of the Small Business Investment Act of 1958 to increase the maximum amount of Leverage available to two or more SBICs under Common Control from $225 million to $350 million. SBA defines Common Control to mean a condition where two or more persons, either through ownership, management, contract, or otherwise, are under the control of one group or person. Under 13 CFR 107.50, SBA presumes that two or more SBICs are under Common Control if, among other things, they have common officers, directors, or general partners. Currently, 13 CFR 107.1150(b) limits two or more SBICs under Common Control to the maximum aggregate amount of outstanding Leverage of $225 million, which amount is subject to further limitations under SBA's credit policies. Solely as a conforming change, this rule increases the maximum amount set forth in the regulation from $225 million to $350 million. This statutory change was not addressed previously because it had not yet been enacted when the rule was proposed. Now that it has, the technical change is necessary to avoid public confusion and ensure consistency between the regulations and the current law.
The Office of Management and Budget has determined that this rule is not a “significant” regulatory action under Executive Order 12866. This is also not a “major” rule under the Congressional Review Act, 5 U.S.C. 801,
This action meets applicable standards set forth in section 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. The action does not have retroactive or presumptive effect.
The final rule would not have substantial direct effects on the States, or the distribution of power and responsibilities among the various levels of government. Therefore, for the purposes of Executive Order 13132, Federalism, SBA determines that this rule has no federalism implications warranting the preparation of a federalism assessment.
This final rule was developed in response to comments received on previously proposed amendments to these regulations on investments in passive businesses.
SBA has determined that this rule would impose additional reporting and recordkeeping requirements under the Paperwork Reduction Act. In particular, this rule implements changes to the Portfolio Financing Report, SBA Form 1031 (OMB Control Number 3245–0078), to clarify information to be reported in Parts A, B, and C of the form. The changes, described in detail below, also include designating current Part D as Part F and adding new Parts D and E.
The title, description of respondents, description of the information collection and the changes to it are discussed below with an estimate of the revised annual burden. Included in the estimate is the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing each collection of information.
(1)
(2)
(3)
(a)
(b)
(c)
(4)
SBA did not receive any comments on the changes; therefore, they are adopted as proposed.
Neither the number of respondents nor the number of responses per year is expected to be affected by this rule. However, SBA estimates a slight increase in the burden hour as a result of the additional reporting in new Parts D (Impact Investments) and Part E (Passive Business).
Impact Fund Reporting. This reporting is expected to have minimal impact. The estimated eight SBICs making impact investments would complete new Part D an estimated total 56 times annually. At an estimated 2 minutes per response, this additional reporting would add 2 hours to the annual burden for Form 1031.
Passive Business Reporting. SBA believes that the SBIC should be able to provide the passive business information since it should be readily available as part of the financing. SBA estimates that providing the information will take on average an additional 30 minutes for those financings utilizing passive businesses, with no incremental burden for those financings that do not use a passive business. SBA estimates that about 12% of the annual responses relate to passive businesses financings (based on financing data in 2014). Based on the number of SBICs reporting such financings the total estimated annual hour burden resulting from new Part E reporting would be 122.
Therefore the total estimated annual hour burden for all SBICs submitting SBA Form 1031s in a year would be 528 hours.
The current cost estimate for completing SBA Form 1031 uses a rate of $35 per hour for an accounting manager to fill out the form. Using that same rate, the cost per form would change from $7 per form to $9.14 per form. However, SBA has increased its estimate of an hourly rate for an accounting manager to $43 per hour (estimated using
This final rule also identifies information that an SBIC must maintain in its files to support the required changes. SBA believes that the SBICs should already be maintaining this information since a passive business by definition is a Portfolio Concern and the SBIC should be maintaining all documents needed to support each financing. The rule makes this expectation explicit. Furthermore, currently, an SBIC must maintain this information for it to effectively monitor and evaluate an investment that uses a passive business to finance a non-passive business. Therefore, SBA does not believe this recordkeeping requirement increases the burden.
The rule also requires a certification under § 107.610 when the SBIC makes a financing using the exemption in § 107.720(b)(3). This includes maintaining records supporting the certification. Since this regulation effectively replaces the requirement for SBICs to seek prior SBA approval and maintain these records, SBA does not believe this change will increase the burden.
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601, requires administrative agencies to consider the effect of their actions on small entities, small non-profit businesses, and small local governments. Pursuant to the RFA, when an agency issues a rule, the agency must prepare an Initial Regulatory Flexibility Act (IRFA) analysis which describes whether the impact of the rule will have a significant
SBA asserts that the economic impact of the rule, if any, would be minimal and beneficial to small SBICs. Accordingly, the Administrator of the SBA certifies that this rule would not have a significant economic impact on a substantial number of small entities.
Investment companies, Loan programs-business, Reporting and recordkeeping requirements, Small businesses.
For the reasons stated in the preamble, the Small Business Administration amends 13 CFR part 107 as follows:
15 U.S.C. 681, 683, 687(c), 687b, 687d, 687g, 687m.
(a)
(a) * * * These guidelines may be obtained from SBA's SBIC Web site at
(g) For each passive business financed under § 107.720(b)(3), a certification by you, dated as of the closing date of the Financing, as to the basis for the qualification of the Financing under § 107.720(b)(3) and identifying one or more limited partners for which a direct Financing would cause those investors:
(1) To incur “unrelated business taxable income” under section 511 of the Internal Revenue Code (26 U.S.C. 511);
(2) To incur “effectively connected income” to foreign investors under sections 871 and 882 of the Internal Revenue Code (26 U.S.C. 871 and 882); or
(3) For an investor that has elected to be taxed as a regulated investment company, to receive or be deemed to receive gross income that does not qualify under Section 851(b)(2) of the Internal Revenue Code (26 U.S.C. 851(b)(2)).
(b) * * *
(2)
(i) Directly owns, or will own as a result of the Financing, at least 50 percent of the outstanding voting securities; or
(ii) Indirectly owns, or will own as a result of the Financing, at least 50 percent of the outstanding voting securities (by directly owning the outstanding voting securities of another passive Small Business that is the direct owner of the outstanding voting securities of the subsidiary company).
(3)
(i) Directly to one or more eligible non-passive Small Businesses; or
(ii) Directly to a passive Small Business that passes substantially all the proceeds directly to (or uses substantially all the proceeds to acquire) one or more eligible non-passive Small Businesses in which the passive Small Business directly owns, or will own as a result of the Financing, at least 50% of the outstanding voting securities.
(4)
(i) For the purposes of this paragraph (b), “substantially all” means at least ninety-nine percent of the Financing proceeds after deduction of actual application fees, closing fees, and expense reimbursements, which may not exceed those permitted by § 107.860.
(ii) If you and/or your Associate charge fees permitted by § 107.860 and/or § 107.900, the total amount of such fees charged to all passive and non-passive businesses that are part of the same Financing may not exceed the fees that would have been permitted if the Financing had been provided directly to a non-passive Small Business. Any such fees received by your Associate must be paid to you in cash within 30 days of the receipt of such fees.
(iii) For the purposes of this part 107, each passive and non-passive business included in the Financing is a Portfolio Concern. The terms of the financing must provide SBA with access to Portfolio Concern information in compliance with this part 107, including without limitation §§ 107.600 and 107.620.
Federal Aviation Administration (FAA), DOT.
Final rule; request for comments.
We are publishing a new airworthiness directive (AD) for Sikorsky Aircraft Corporation (Sikorsky) Model S–92A helicopters, which was sent previously to all known U.S. owners and operators of these helicopters. This AD requires inspecting certain bearings. This AD is prompted by a report of a failed bearing. We are issuing this AD to address the unsafe condition on these products.
This AD is effective January 12, 2017 to all persons except those persons to whom it was made immediately effective by Emergency AD 2016–24–51, issued on November 16, 2016, which contains the requirements of this AD.
We must receive comments on this AD by February 27, 2017.
You may send comments by any of the following methods:
•
•
•
You may examine the AD docket on the Internet at
For service information identified in this final rule, contact Sikorsky Aircraft Corporation, Customer Service Engineering, 124 Quarry Road, Trumbull, CT 06611; telephone 1–800-Winged-S or 203–416–4299; email:
Blaine Williams, Aerospace Engineer, Boston Aircraft Certification Office, Engine & Propeller Directorate, 1200 District Avenue, Burlington, Massachusetts 01803; telephone (781) 238–7161; email
This AD is a final rule that involves requirements affecting flight safety, and we did not provide you with notice and an opportunity to provide your comments prior to it becoming effective. However, we invite you to participate in this rulemaking by submitting written comments, data, or views. We also invite comments relating to the economic, environmental, energy, or federalism impacts that resulted from adopting this AD. The most helpful comments reference a specific portion of the AD, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should send only one copy of written comments, or if comments are filed electronically, commenters should submit them only one time. We will file in the docket all comments that we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning this rulemaking during the comment period. We will consider all the comments we receive and may conduct additional rulemaking based on those comments.
On November 16, 2016, we issued Emergency AD 2016–24–51 to correct an unsafe condition on Sikorsky Model S–92A helicopters with a TR pitch change shaft (TRPCS) assembly part number (P/N) 92358–06303–041 or P/N 92358–06303–042. Emergency AD 2016–24–51 was sent previously to all known U.S. owners and operators of these helicopters. Emergency AD 2016–24–51 requires removing TRPCS assemblies
Emergency AD 2016–24–51 was prompted by a report of an operator losing TR control while in a hover. A preliminary investigation determined that binding in the TRPCS assembly double row angular contact bearing (bearing) resulted in reduced TR control. The investigation also found signs of excessive heat, which is an indicator of a binding bearing. Because binding will result in bearing failure rapidly, we limited Emergency AD 2016–24–51 to TRPCS assemblies with less than 80 hours time-in-service (TIS). The actions in Emergency AD 2016–24–51 are intended to detect a binding bearing and prevent loss of TR control and possible loss of control of the helicopter.
We are issuing 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.
We reviewed Sikorsky Alert Service Bulletin 92–64–009, Basic Issue, dated November 2, 2016 (ASB 92–64–009). ASB 92–64–009 describes procedures for inspecting the TRPCS and bearing assemblies for damaged bearings and seals, purged grease with any metallic particles from the bearings, radial play in the bearings, and correct installation of the white Teflon seals, snap rings, and cotter pin.
For helicopters with a TRPCS assembly P/N 92358–06303–041 or P/N 92358–06303–042 with less than 80 hours TIS installed, this AD requires:
• Removing from service TRPCS assemblies with less than 5 hours TIS since new or overhaul;
• For TRPCS assemblies with 5 or more hours TIS since new or overhaul, borescope inspecting the TRPCS bearing for damaged, incorrectly installed, or missing seals and inspecting the angular contact bearing for free rotation, purged grease with metallic particles, and damaged seals. If the TRPCS assembly has less than 10 hours TIS, performing a ground operation until the TRPCS assembly accumulates 10 hours TIS before performing the inspection on the angular contact bearing; and
• Replacing the TRPCS assembly if there is a missing, damaged, or incorrectly installed seal, snap ring, or cotter pin or if the bearing does not rotate freely, or if there is any purged grease with metallic particles.
This AD does not apply to helicopters with a TRPCS assembly manufactured or overhauled on or after November 3, 2016.
ASB 92–64–009 requires operators to contact Sikorsky if there are any discrepancies, and this AD does not. ASB 92–64–009 allows 20 hours TIS to perform the visual bearing inspection if the borescope inspection has already been performed, while this AD allows 20 hours TIS for TRPCS assemblies with 15 or more hours TIS.
We estimate that this AD will affect 80 helicopters of U.S. Registry.
We estimate that operators may incur the following costs in order to comply with this AD. At an average labor rate of $85 per hour, borescope and visually inspecting the TRPCS assembly will require 16 work-hours, for a cost per helicopter of $1,360 and a cost of $108,800 for the U.S. fleet. If required, replacing a TRPCS assembly will require 16 work-hours and required parts will cost $4,000, for a cost per helicopter of $5,360.
According to Sikorsky's service information, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage by Sikorsky. Accordingly, we have included all costs in our cost estimate.
Providing an opportunity for public comments prior to adopting these AD requirements would delay implementing the safety actions needed to correct this known unsafe condition. Therefore, we found and continue to find that the risk to the flying public justifies waiving notice and comment prior to the adoption of this rule because the previously described unsafe condition can result in loss of TR control and certain actions must be accomplished before further flight or within 20 hours TIS, a very short interval for these helicopters.
Since it was found that immediate corrective action was required, notice and opportunity for prior public comments before issuing this AD were impracticable and contrary to public interest and good cause existed to make the AD effective immediately by Emergency AD 2016–24–51, issued on November 16, 2016, to all known U.S. owners and operators of these helicopters. These conditions still exists and the AD is hereby published in the
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed, I certify that this AD:
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
3. Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction; and
4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities
We prepared an economic evaluation of the estimated costs to comply with this AD and placed it in the AD docket.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This AD applies to Sikorsky Aircraft Corporation (Sikorsky) Model S–92A helicopters, certificated in any category, with a tail rotor pitch change shaft (TRPCS) assembly part number (P/N) 92358–06303–041 or P/N 92358–06303–042 with less than 80 hours time-in-service (TIS) installed, except those TRPCS assemblies manufactured or overhauled on or after November 3, 2016.
This Emergency AD defines the unsafe condition as a binding TRPCS bearing. This condition could result in loss of tail rotor (TR) control and possible loss of control of the helicopter.
This AD is effective January 12, 2017 to all persons except those persons to whom it was made immediately effective by Emergency AD 2016–24–51, issued on November 16, 2016, which contains the requirements of this AD.
You are responsible for performing each action required by this AD within the specified compliance time unless it has already been accomplished prior to that time.
(1) For TRPCS assemblies with less than 5 hours TIS since new or overhaul, before further flight, remove the TRPCS assembly from service.
(2) For TRPCS assemblies with between 5 and 15 hours TIS since new or overhaul, before further flight, and for TRPCS assemblies with more than 15 hours TIS, within 20 hours TIS or before reaching 80 hours TIS, whichever occurs first:
(i) Borescope inspect the TRPCS assembly as follows, unless done within the previous 15 hours TIS.
(A) On the TR side of the TRPCS bearing, remove the plug from the end of the TRPCS, insert the borescope into the TRPCS, and determine whether the white Teflon seal and snap ring are installed. If the white Teflon seal or snap ring is missing, or if there is a rip, tear, or heat damage on the seal or if there is no gap in the snap ring, before further flight replace the TRPCS assembly.
(B) On the TR servo side of the TRPCS bearing, insert the borescope through the oil filler cap hole and determine whether the white Teflon seal, snap ring, and cotter pin are installed. If the white Teflon seal, snap ring, or cotter pin is missing, if there is a rip, tear, or heat damage on the seal, or if there is no gap in the snap ring, before further flight replace the TRPCS assembly.
(ii) If the TRPCS assembly has less than 10 hours TIS, perform ground operation with the rotor turning at 105% (N
(iii) Remove the TRPCS and inspect the SB2310 angular contact bearing for free rotation, purged grease with metal particles, a nick or a dent, and any cut, tear, or distortion on the bearing seal. If the bearing does not rotate freely; the bearing sounds rough or chatters; there is any purged grease with metal particles; a nick or dent; or if there is a cut, tear, or distortion in the bearing seal, before further flight, replace the TRPCS assembly.
(1) The Manager, Boston Aircraft Certification Office, FAA, may approve AMOCs for this AD. Send your proposal to: Blaine Williams, Aerospace Engineer, Boston Aircraft Certification Office, Engine & Propeller Directorate, 1200 District Avenue, Burlington, Massachusetts 01803; telephone (781) 238–7161; email
(2) For operations conducted under a 14 CFR part 119 operating certificate or under 14 CFR part 91, subpart K, we suggest that you notify your principal inspector, or lacking a principal inspector, the manager of the local flight standards district office or certificate holding district office before operating any aircraft complying with this AD through an AMOC.
Sikorsky Alert Service Bulletin 92–64–009, Basic Issue, dated November 2, 2016, which is not incorporated by reference, contains additional information about the subject of this final rule. For service information identified in this final rule, contact Sikorsky Aircraft Corporation, Customer Service Engineering, 124 Quarry Road, Trumbull, CT 06611; telephone 1–800–Winged–S or 203–416–4299; email:
Joint Aircraft Service Component (JASC) Code: 6720 Tail Rotor Control System.
Federal Aviation Administration (FAA), DOT.
Final rule.
This action establishes Class E airspace extending upward from 700 feet above the surface at Healy River Airport, Healy, AK, to support the development of Area Navigation (RNAV) Global Positioning System (GPS) Instrument Flight Rules (IFR) operations under standard instrument approach and departure procedures at the airport, and for the safety and management of controlled airspace within the National Airspace System.
Effective 0901 UTC, March 2, 2017. The Director of the Federal Register approves this incorporation by reference action under Title 1, Code of Federal Regulations, part 51, subject to the annual revision of FAA Order 7400.11 and publication of conforming amendments.
FAA Order 7400.11A, Airspace Designations and Reporting Points, and subsequent amendments can be viewed on line at
FAA Order 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
Tom Clark, Federal Aviation Administration, Operations Support Group, Western Service Center, 1601 Lind Avenue SW., Renton, WA 98057; telephone (425) 203–4511.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it establishes controlled airspace at Healy River Airport, Healy, AK.
On October 14, 2016, the FAA published in the
Class E airspace designations are published in paragraph 6005 of FAA Order 7400.11A, dated August 3, 2016, and effective September 15, 2016, which is incorporated by reference in 14 CFR part 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.
This document amends FAA Order 7400.11A, Airspace Designations and Reporting Points, dated August 3, 2016, and effective September 15, 2016. FAA Order 7400.11A is publicly available as listed in the
This amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 establishes Class E airspace extending upward from 700 feet above the surface within a 3.5-mile radius of Healy River Airport, with segments extending from the 3.5-mile radius to 11.5 miles northwest of the airport, and 10.5 miles south of the airport. This airspace is established to accommodate new RNAV Global Positioning System standard instrument approach and departure procedures developed for IFR operations the airport.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5–6.5a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.
Airspace, Incorporation by reference, Navigation (Air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–1963 Comp., p. 389.
That airspace extending upward from 700 feet above the surface within a 3.5-mile radius of Healy River Airport, and that airspace 2 miles either side of the 333° bearing from the airport extending from the 3.5 mile radius to 11.5 miles northwest of the airport, and that airspace 0.6 miles west and 2.5 miles east of the 169° bearing from the airport extending from the 3.5 mile radius to 10.5 miles south of the airport.
Federal Aviation Administration (FAA), DOT.
Final rule.
This action amends Class E en route domestic airspace extending upward from 1,200 feet above the surface near the Blue Mesa VHF Omni-Directional Radio Range/Distance Measuring Equipment (VOR/DME), Blue Mesa, CO. The FAA has transitioned to a more accurate method of measuring, publishing, and charting airspace areas that has revealed some small areas of
Effective 0901 UTC, March 2, 2017. The Director of the Federal Register approves this incorporation by reference action under Title 1, Code of Federal Regulations, part 51, subject to the annual revision of FAA Order 7400.11 and publication of conforming amendments.
FAA Order 7400.11A, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
FAA Order 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
Tom Clark, Federal Aviation Administration, Operations Support Group, Western Service Center, 1601 Lind Avenue SW., Renton, WA 98057; telephone (425) 203–4511.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends Class E airspace at the Blue Mesa VOR/DME, Blue Mesa, CO.
On August 8, 2016, the FAA published in the
Class E airspace designations are published in paragraph 6006 of FAA Order 7400.11A, dated August 3, 2016, and effective September 15, 2016, which is incorporated by reference in 14 CFR part 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.
This document amends FAA Order 7400.11A, Airspace Designations and Reporting Points, dated August 3, 2016, and effective September 15, 2016. FAA Order 7400.11A is publicly available as listed in the
The FAA is amending Title 14 Code of Federal Regulations (14 CFR) Part 71 by modifying Class E En route domestic airspace extending upward from 1,200 feet above the surface in the vicinity of the Blue Mesa VOR/DME, Blue Mesa, CO. One small airspace area northwest, near Montrose, CO, and one small airspace area southeast, near Trinidad, CO, are added for the safety and management of IFR operations, specifically point-to-point, en route operations outside of the established airway structure, and Air Traffic Control vectoring services.
Class E airspace designations are published in paragraph 6006 of FAA Order 7400.11A, dated August, and effective September 15, 2016, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5–6.5a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.
Airspace, Incorporation by reference, Navigation (Air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–1963 Comp., p. 389.
That airspace extending upward from 1,200 feet above the surface within an area bounded by lat. 35°39′30″ N., long. 107°25′27″ W.; to lat. 36°14′38″ N., long. 107°40′25″ W.; to lat. 37°16′00″ N., long. 108°22′00″ W.; to lat. 37°58′51″ N, long.
Federal Aviation Administration (FAA), DOT.
Final rule.
This action modifies Class E airspace designated as an extension to a Class C surface area, and modifies Class E airspace extending upward from 700 feet above the surface at Kahului Airport, Kahului, HI. Due to changes to the available instrument flight procedures since the last airspace review and advances in Global Positioning System (GPS) mapping accuracy, modifications are necessary to ensure the safety and management of Instrument Flight Rules (IFR) operations at the airport.
Effective 0901 UTC, March 2, 2017, The Director of the Federal Register approves this incorporation by reference action under Title 1, Code of Federal Regulations, part 51, subject to the annual revision of FAA Order 7400.11 and publication of conforming amendments.
FAA Order 7400.11A, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
FAA Order 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
Tom Clark, Federal Aviation Administration, Operations Support Group, Western Service Center, 1601 Lind Avenue SW., Renton, WA 98057; telephone (425) 203–4511.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it modifies controlled airspace at Kahului Airport, Kahului, HI.
On August 12, 2016, the FAA published in the
Class E airspace designations are published in paragraph 6003 and 6005, respectively, of FAA Order 7400.11A, dated August 3, 2016, and effective September 15, 2016, which is incorporated by reference in 14 CFR part 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.
This document amends FAA Order 7400.11A, Airspace Designations and Reporting Points, dated August 3, 2016, and effective September 15, 2016. FAA Order 7400.11A is publicly available as listed in the
The FAA is amending Title 14 Code of Federal Regulations (14 CFR) Part 71 by modifying the Kahului Airport, Kahului, HI, Class E airspace area designated as an extension to a Class C surface area, to include that area within 3 miles each side of the airport 203° bearing extending from the airport 5-mile radius to 7 miles southwest of the airport, and removing the extension to the northeast as it is no longer required.
This action also modifies the Class E airspace area extending upward from 700 feet above the surface by slightly expanding that airspace within 3.6 miles each side of the 038° bearing from the airport extending from the 5-mile radius to 11.7 miles northeast of the airport. This modification is necessary to contain IFR arrival operations descending below 1,500 feet above the surface, and IFR departure operations below 1,200 feet above the surface. Also, the Maui VORTAC navigation aid is removed from the legal descriptions in the Class E airspace areas noted above. Changes to the available instrument flight procedures, advances in GPS mapping accuracy, and a reliance on precise geographic coordinates to define airport and airspace reference points have made this action necessary for the safety and management of Instrument Flight Rules (IFR) operations at the airport.
Class E airspace designations are published in paragraphs 6003, and 6005, respectively, of FAA Order 7400.11A, dated August 3, 2016, and effective September 15, 2016, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic
The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5–6.5a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.
Airspace, Incorporation by reference, Navigation (Air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–1963 Comp., p. 389.
That airspace extending upward from the surface within 3 miles each side of the Kahului Airport 203° bearing extending from the 5-mile radius of the airport to 7 miles southwest of the airport. This Class E airspace area is effective during the specific dates and times established in advance by a Notice to Airmen. The effective date and time will thereafter be continuously published in the Pacific Chart Supplement.
That airspace extending upward from 700 feet above the surface within a 5-mile radius of Kahului Airport, and within 3.6 miles each side of the airport 038° bearing extending from the 5-mile radius of the airport to 11.7 miles northeast of the airport, and within 2 miles each side of the airport 065° bearing extending from the 5-mile radius of the airport to 10 miles northeast of the airport, and within 3 miles each side of the airport 203° bearing extending from the 5-mile radius of the airport to 10.3 miles southwest of the airport, and within the area bounded by the airport 318° bearing clockwise to the airport 013° bearing extending from the 5-mile radius of the airport to 8.5-miles northeast of the airport.
Federal Aviation Administration (FAA), DOT.
Final rule, technical amendment.
This action amends the legal descriptions for Class E surface airspace and Class E airspace upward from 700 feet above the surface to correct the airport name for Cedar City Regional Airport (formerly Cedar City Municipal Airport), Cedar City, UT, and amends the airport reference point (ARP) geographic coordinates to coincide with the FAA's aeronautical database. This action also changes the name of the VHF Omnidirectional Range Distance Measuring Equipment (VOR/DME) noted in the Class E surface area airspace legal description to the Enoch VOR/DME (formerly Cedar City VOR/DME). These changes do not affect the charted boundaries or operating requirements of the airspace.
Effective 0901 UTC, March 2, 2017. The Director of the Federal Register approves this incorporation by reference action under title 1, Code of Federal Regulations, part 51, subject to the annual revision of FAA Order 7400.11 and publication of conforming amendments.
FAA Order 7400.11A, Airspace Designations and Reporting Points, and subsequent amendments can be viewed on line at
FAA Order 7400.11, Airspace Designations and Reporting Points, is published yearly and effective on September 15.
Robert LaPlante, Federal Aviation Administration, Operations Support Group, Western Service Center, 1601 Lind Avenue SW., Renton, WA 98057; telephone (425) 203–4566.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends Class E airspace descriptions at Cedar City Regional Airport, Cedar City, UT.
The FAA identified that Cedar City Regional Airport and the geographic coordinates of the airport's ARP listed in the Class E airspace legal descriptions above are not coincidental with the FAA's aeronautical database. Also, in accordance with FAA policy, the FAA has changed the Cedar City VOR/DME name to the Enoch VOR/DME, to avoid any potential confusion resulting from an off-airport navigation aid with the same name as the associated airport.
Class E airspace designations are published in paragraph 6002 and 6005,
This document amends FAA Order 7400.11A dated August 3, 2016, and effective September 15, 2016, which is incorporated by reference in 14 CFR part 71.1. FAA Order 7400.11A is publicly available as listed in the
This action amends the legal descriptions for Class E surface area airspace and Class E airspace upward from 700 feet above the surface to correct the airport name to Cedar City Regional Airport, Cedar City, UT, (formerly Cedar City Municipal Airport), and geographic coordinates from (lat. 37°42′06″ N., long. 113°05′53″ W.) to (lat. 37°42′03″ N., long. 113°05′56″ W.) to coincide with the FAA's aeronautical database. This action also corrects the navigation aid noted in the Class E surface area airspace legal description from the Cedar City VOR/DME to the Enoch VOR/DME. This is an administrative change and does not affect the boundaries, altitudes, or operating requirements of the airspace, therefore, notice and public procedure under 5 U.S.C. 553(b) is unnecessary.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5–6.5a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exists that warrant preparation of an environmental assessment.
Airspace, Incorporation by reference, Navigation (Air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–1963 Comp., p. 389.
Within a 4.2-mile radius of Cedar City Regional Airport, and within 1.8 miles each side of the Enoch VOR/DME 195° radial extending from the 4.2-mile radius to the VOR/DME, and within 1.8 miles each side of Meggi LOM 214° bearing extending from the 4.2-mile radius to the LOM.
That airspace extending upward from 700-feet above the surface bounded by a line beginning at lat. 38°03′00″ N., long. 113°13′30″ W.; to lat. 38°05′30″ N., long. 112°58′30″ W.; to lat. 37°58′30″ N., long. 112°45′30″ W.; to lat. 37°45′00″ N., long. 112°56′45″ W.; to lat. 37°47′30″ N., long. 113°15′00″ W.; thence to point of beginning. That airspace extending upward from 1,200-feet above the surface bounded by a line beginning at lat. 38°00′00″ N., long. 113°45′30″ W.; to lat. 38°19′00″ N., long. 112°51′30″ W.; to lat. 37°58′32″ N., long. 112°38′00″ W.; to lat. 37°37′00″ N., long. 112°53′30″ W.; to lat. 37°38′15″ N., long. 113°22′18″ W.; thence to point of origin; and excluding that airspace within Federal airways; the Midford, UT, and St. George, UT, Class E airspace areas.
Office of the Chief Financial Officer and Assistant Secretary for Administration, Department of Commerce.
Final rule.
This final rule is being issued to adjust for inflation each civil monetary penalty (CMP) provided by law within the jurisdiction of the United States Department of Commerce (Department of Commerce). The Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996 and the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, requires the head of each agency to adjust for inflation its CMP levels in effect as of November 2, 2015, under a revised methodology that was effective for 2016 which provided for initial catch up adjustments for inflation in 2016, and under a revised methodology for each year thereafter. The initial catch up adjustments for inflation to CMPs to the Department of Commerce's CMPs were published in the
This rule is effective January 15, 2017.
Stephen Kunze, Deputy Chief Financial Officer and Director for Financial Management, Office of Financial Management, at (202) 482–1207, Department of Commerce, 1401 Constitution Avenue NW., Room D200, Washington, DC 20230. The Department of Commerce's Civil Monetary Penalty Adjustments for Inflation are available for downloading from the Department of Commerce, Office of Financial Management's Web site at the following address:
The Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101–410; 28 U.S.C. 2461), as amended by the Debt Collection Improvement Act of 1996 (Pub. L. 104–134), provided for agencies' adjustments for inflation to CMPs to ensure that CMPs continue to maintain their deterrent value and that CMPs due to the Federal Government were properly accounted for and collected. On October 24, 1996, November 1, 2000, December 14, 2004, December 11, 2008, and December 7, 2012, the Department of Commerce published in the
A CMP is defined as any penalty, fine, or other sanction that:
1. Is for a specific monetary amount as provided by Federal law, or has a maximum amount provided for by Federal law; and,
2. Is assessed or enforced by an agency pursuant to Federal law; and,
3. Is assessed or enforced pursuant to an administrative proceeding or a civil action in the Federal courts.
On November 2, 2015, the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Section 701 of Pub. L. 114–74) further amended the Federal Civil Penalties Inflation Adjustment Act of 1990 to improve the effectiveness of CMPs and to maintain their deterrent effect. This amendment requires agencies to: (1) Adjust the CMP levels in effect as of November 2, 2015, with initial catch up adjustments for inflation through a final rulemaking that shall take effect no later than August 1, 2016; and (2) make subsequent annual adjustments for inflation to CMPs that shall take effect not later than January 15.
The Department of Commerce's initial catch up adjustments for inflation to CMPs were published in the
The Department of Commerce's 2017 adjustments for inflation to CMPs apply only to CMPs with a dollar amount, and will not apply to CMPs written as functions of violations. These 2017 adjustments for inflation to CMPs apply only to those CMPs, including those whose associated violation predated such adjustment, which are assessed by the Department of Commerce after the effective date of the new CMP level.
This regulation adjusts for inflation CMPs that are provided by law within the jurisdiction of the Department of Commerce. The actual CMP assessed for a particular violation is dependent upon a variety of factors. For example, the National Oceanic and Atmospheric Administration's (NOAA) Policy for the Assessment of Civil Administrative Penalties and Permit Sanctions (Penalty Policy), a compilation of NOAA internal guidelines that are used when assessing CMPs for violations for most of the statutes NOAA enforces, will be interpreted in a manner consistent with this regulation to maintain the deterrent effect of the CMPs. The CMP ranges in the Penalty Policy are intended to aid enforcement attorneys in determining the appropriate CMP to assess for a particular violation. The Penalty Policy is maintained and made available to the public on NOAA's Office of the General Counsel, Enforcement Section Web site at:
The Department of Commerce's 2017 adjustments for inflation to CMPs set forth in this regulation were determined pursuant to the revised methodology prescribed by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, which requires the maximum CMP, or the minimum and maximum CMP, as applicable, to be increased by the cost-of-living adjustment. The term “cost-of-living adjustment” is defined by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. For the 2017 adjustments for inflation to CMPs, the cost-of-living adjustment is the percentage for each CMP by which the Consumer Price Index for the month of October 2016 exceeds the Consumer Price Index for the month of October 2015.
Pursuant to 5 U.S.C. 553(b)B, there is good cause to issue this rule without prior public notice or opportunity for public comment because it would be impracticable and unnecessary. The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Section 701(b)) requires agencies, effective 2017, to make annual adjustments for inflation to CMPs notwithstanding section 553 of title 5, United States Code. Additionally, the methodology used, effective 2017, for adjusting CMPs for inflation is given by statute, with no discretion provided to agencies regarding the substance of the adjustments for inflation to CMPs. The Department of Commerce is charged only with performing ministerial computations to determine the dollar amount of adjustments for inflation to CMPs. Accordingly, prior public notice and an opportunity for public comment are not required for this rule.
The provisions of the Paperwork Reduction Act of 1995, Public Law 104–13, 44 U.S.C. Chapter 35, and its implementing regulations, 5 CFR part 1320, do not apply to this rule because there are no new or revised recordkeeping or reporting requirements.
This rule is not a significant regulatory action as that term is defined in Executive Order 12866.
Because notice of proposed rulemaking and opportunity for comment are not required pursuant to 5 U.S.C. 553, or any other law, the analytical requirements of the Regulatory Flexibility act (5 U.S.C. 601,
Law enforcement, Civil monetary penalties.
Pub. L. 101–410, 104 Stat. 890 (28 U.S.C. 2461 note); Pub. L. 104–134, 110 Stat. 1321 (31 U.S.C. 3701 note); Sec. 701 of Pub. L. 114–74, 129 Stat. 599 (28 U.S.C. 1 note; 28 U.S.C. 2461 note).
(a) The
(b)
(1) Is for a specific monetary amount as provided by Federal law, or has a maximum amount provided for by Federal law; and
(2) Is assessed or enforced by an agency pursuant to Federal law; and
(3) Is assessed or enforced pursuant to an administrative proceeding or a civil action in the Federal courts.
The purpose of this part is to make adjustments for inflation to civil monetary penalties, as required by the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101–410; 28 U.S.C. 2461), as amended by the Debt Collection Improvement Act of 1996 (Pub. L. 104–134) and the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Section 701 of Pub. L. 114–74), of each civil monetary penalty provided by law within the jurisdiction of the United States Department of Commerce (Department of Commerce).
The civil monetary penalties provided by law within the jurisdiction of the Department of Commerce, as set forth in paragraphs (a) through (f) of this section, are hereby adjusted for inflation in 2017 in accordance with the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended, from the amounts of such civil monetary penalties that were in effect as of July 7, 2016, to the amounts of such civil monetary penalties, as thus adjusted. The year stated in parenthesis represents the year that the civil monetary penalty was last set by law or adjusted by law (excluding adjustments for inflation).
(a)
(2) 31 U.S.C. 3802(a)(2), Program Fraud Civil Remedies Act of 1986 (1986), violation, maximum from $10,781 to $10,957.
(3) 31 U.S.C. 3729(a)(1)(G), False Claims Act (1986); violation, minimum from $10,781 to $10,957; maximum from $21,563 to $21,916.
(b)
(2) 22 U.S.C. 6761(a)(1)(A), Chemical Weapons Convention Implementation Act (1998), violation, maximum from $36,256 to $36,849.
(3) 22 U.S.C. 6761(a)(l)(B), Chemical Weapons Convention Implementation Act (1998), violation, maximum from $7,251 to $7,370.
(4) 50 U.S.C. 1705(b), International Emergency Economic Powers Act (2007), violation, maximum from $284,582 to $289,238.
(5) 22 U.S.C. 8142(a), United States Additional Protocol Implementation Act (2006), violation, maximum from $29,464 to $29,946.
(c)
(2) 13 U.S.C. 305(b), Collection of Foreign Trade Statistics (2002), violation, maximum from $13,118 to $13,333.
(d)
(e)
(2) 19 U.S.C. 1677f(f)(4), U.S.-Canada FTA Protective Order (1988), violation, maximum from $197,869 to $201,106.
(f)
(2) 51 U.S.C. 60148(c), Land Remote Sensing Policy Act of 2010 (2010), violation, maximum from $10,874 to $11,052.
(3) 16 U.S.C. 773f(a), Northern Pacific Halibut Act of 1982 (2007), violation, maximum from $227,666 to $231,391.
(4) 16 U.S.C. 783, Sponge Act (1914), violation, maximum from $1,625 to $1,652.
(5) 16 U.S.C. 957(d), (e), and (f), Tuna Conventions Act of 1950 (1962):
(i) Violation of 16 U.S.C. 957(a), maximum from $81,250 to $82,579.
(ii) Subsequent violation of 16 U.S.C. 957(a), maximum from $175,000 to $177,863.
(iii) Violation of 16 U.S.C. 957(b), maximum from $2,750 to $2,795.
(iv) Subsequent violation of 16 U.S.C. 957(b), maximum from $16,250 to $16,516.
(v) Violation of 16 U.S.C. 957(c), maximum from $350,000 to $355,726.
(6) 16 U.S.C. 957(i), Tuna Conventions Act of 1950,
(7) 16 U.S.C. 959, Tuna Conventions Act of 1950,
(8) 16 U.S.C. 971f(a), Atlantic Tunas Convention Act of 1975,
(9) 16 U.S.C. 973f(a), South Pacific Tuna Act of 1988 (1988), violation, maximum from $494,672 to $502,765.
(10) 16 U.S.C. 1174(b), Fur Seal Act Amendments of 1983 (1983), violation, maximum from $23,548 to $23,933.
(11) 16 U.S.C. 1375(a)(1), Marine Mammal Protection Act of 1972 (1972), violation, maximum from $27,500 to $27,950.
(12) 16 U.S.C. 1385(e), Dolphin Protection Consumer Information Act,
(13) 16 U.S.C. 1437(d)(1), National Marine Sanctuaries Act (1992), violation, maximum from $167,728 to $170,472.
(14) 16 U.S.C. 1540(a)(1), Endangered Species Act of 1973:
(i) Violation as specified (1988), maximum from $49,467 to $50,276.
(ii) Violation as specified (1988), maximum from $23,744 to $24,132.
(iii) Otherwise violation (1978), maximum from $1,625 to $1,652.
(15) 16 U.S.C. 1858(a), Magnuson-Stevens Fishery Conservation and Management Act (1990), violation, maximum from $178,156 to $181,071.
(16) 16 U.S.C. 2437(a), Antarctic Marine Living Resources Convention Act of 1984,
(17) 16 U.S.C. 2465(a), Antarctic Protection Act of 1990,
(18) 16 U.S.C. 3373(a), Lacey Act Amendments of 1981 (1981):
(i) 16 U.S.C. 3373(a)(1), violation, maximum from $25,464 to $25,881.
(ii) 16 U.S.C. 3373(a)(2), violation, maximum from $637 to $647.
(19) 16 U.S.C. 3606(b)(1), Atlantic Salmon Convention Act of 1982,
(20) 16 U.S.C. 3637(b), Pacific Salmon Treaty Act of 1985,
(21) 16 U.S.C. 4016(b)(1)(B), Fish and Seafood Promotion Act of 1986 (1986); violation, minimum from $1,078 to $1,096; maximum from $10,781 to $10,957.
(22) 16 U.S.C. 5010, North Pacific Anadromous Stocks Act of 1992,
(23) 16 U.S.C. 5103(b)(2), Atlantic Coastal Fisheries Cooperative Management Act,
(24) 16 U.S.C. 5154(c)(1), Atlantic Striped Bass Conservation Act,
(25) 16 U.S.C. 5507(a), High Seas Fishing Compliance Act of 1995 (1995), violation, maximum from $154,742 to $157,274.
(26) 16 U.S.C. 5606(b), Northwest Atlantic Fisheries Convention Act of 1995,
(27) 16 U.S.C. 6905(c), Western and Central Pacific Fisheries Convention Implementation Act,
(28) 16 U.S.C. 7009(c) and (d), Pacific Whiting Act of 2006,
(29) 22 U.S.C. 1978(e), Fishermen's Protective Act of 1967 (1971):
(i) Violation, maximum from $27,500 to $27,950.
(ii) Subsequent violation, maximum from $81,250 to $82,579.
(30) 30 U.S.C. 1462(a), Deep Seabed Hard Mineral Resources Act (1980), violation, maximum, from $70,117 to $71,264.
(31) 42 U.S.C. 9152(c), Ocean Thermal Energy Conversion Act of 1980 (1980), violation, maximum from $70,117 to $71,264.
(32) 16 U.S.C. 1827a, Billfish Conservation Act of 2012,
(33) 16 U.S.C. 7407(b)(1), Port State Measures Agreement Act of 2015,
(34) 16 U.S.C. 1826g(f), High Seas Driftnet Fishing Moratorium Protection Act,
The Department of Commerce's 2017 adjustments for inflation made by § 6.3, of the civil monetary penalties there specified, are effective on January 15, 2017, and said civil monetary penalties, as thus adjusted by the adjustments for inflation made by § 6.3, apply only to those civil monetary penalties, including those whose associated violation predated such adjustment, which are assessed by the Department of Commerce after the effective date of the new civil monetary penalty level, and before the effective date of any future adjustments for inflation to civil monetary penalties thereto made subsequent to January 15, 2017 as provided in § 6.5.
The Secretary of Commerce or his or her designee by regulation shall make subsequent adjustments for inflation to the Department of Commerce's civil monetary penalties annually, which shall take effect not later than January 15, notwithstanding section 553 of title 5, United States Code.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Final rule.
NMFS issues regulations to implement Amendment 101 to the Fishery Management Plan for Groundfish of the Gulf of Alaska (GOA FMP) for the sablefish individual fishing quota (IFQ) fisheries in the Gulf of Alaska (GOA). This final rule authorizes the use of longline pot gear in the GOA sablefish IFQ fishery. In addition, this final rule establishes management measures to minimize potential conflicts between hook-and-line and longline pot gear used in the sablefish IFQ fisheries in the GOA. This final rule also includes regulations developed under the Northern Pacific Halibut Act of 1982 (Halibut Act) to authorize harvest of halibut IFQ caught incidentally in longline pot gear used in the GOA sablefish IFQ fishery. This final rule is necessary to improve efficiency and provide economic benefits for the sablefish IFQ fleet and minimize potential fishery interactions with whales and seabirds. This action is intended to promote the goals and objectives of the Magnuson-Stevens Fishery Conservation and Management Act, the Halibut Act, the GOA FMP, and other applicable laws.
Effective January 27, 2017.
Electronic copies of Amendment 101 and the Environmental Assessment (EA)/Regulatory Impact Review (RIR) prepared for this action (collectively the “Analysis”), and the Initial Regulatory Flexibility Analysis (IRFA) prepared for this action are available from
Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this rule may
Rachel Baker, 907–586–7228.
NMFS manages U.S. groundfish fisheries of the GOA under the GOA FMP. The North Pacific Fishery Management Council (Council) prepared, and the Secretary of Commerce (Secretary) approved, the GOA FMP under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), 16 U.S.C. 1801
The International Pacific Halibut Commission (IPHC) and NMFS manage fishing for Pacific halibut (
The IFQ Program was implemented in 1995 (58 FR 59375, November 9, 1993). Under the IFQ Program, access to the non-trawl sablefish and halibut fisheries is limited to those persons holding quota share. The IFQ Program allocates sablefish and halibut harvesting privileges among U.S. fishermen. NMFS manages the IFQ Program pursuant to regulations at 50 CFR part 679 and 50 CFR part 300 under the authority of section 773c of the Halibut Act and section 303(b) of the Magnuson-Stevens Act. The proposed rule to implement Amendment 101 (81 FR 55408, August 19, 2016) and Sections 3.1 and 4.5 of the Analysis (see
The Council recommended Amendment 101 to amend provisions of the GOA FMP applicable to the sablefish IFQ fishery. The Council also recommended implementing regulations applicable to the sablefish IFQ fisheries. FMP amendments and regulations developed by the Council may be implemented by NMFS only after approval by the Secretary. This final rule also includes regulations developed by the Council under the Halibut Act to authorize harvest of halibut IFQ caught incidentally in longline pot gear used in the GOA sablefish IFQ fishery. Halibut fishery regulations developed by the Council may be implemented by NMFS only after approval of the Secretary in consultation with the United States Coast Guard.
NMFS published a Notice of Availability for Amendment 101 in the
A detailed review of the provisions of Amendment 101, the proposed regulations to implement Amendment 101 and to authorize harvest of halibut IFQ caught in longline pot gear used in the GOA sablefish IFQ fishery, and the rationale for these regulations is provided in the preamble to the proposed rule (81 FR 55408, August 19, 2016) and is briefly summarized in this final rule preamble.
Amendment 101 and this final rule apply to the sablefish IFQ fisheries in the GOA. The IFQ fisheries are prosecuted in accordance with catch limits established by regulatory area. The regulatory areas for the sablefish IFQ fishery in the GOA are the Southeast Outside District of the GOA (SEO), West Yakutat District of the GOA (WY), Central GOA (CGOA), and Western GOA (WGOA). The sablefish regulatory areas are defined and shown in Figure 14 to part 679. This preamble refers to these areas collectively as sablefish areas.
This final rule implements provisions that affect halibut IFQ fisheries in the GOA. The halibut regulatory areas (halibut areas) are defined by the IPHC, described in Section 6 of the annual management measures (81 FR 14000, March 16, 2016), and shown in Figure 15 to part 679. The halibut areas in the GOA include Areas 2C, 3A, 3B, and part of Area 4A. All of these areas except Area 4A are completely contained in the GOA. The portion of Area 4A in waters south of the Aleutian Islands, west of Area 3B and east of 170° W. longitude, is included in the WGOA sablefish area. This area includes the western part of the WGOA sablefish area and a small strip along the eastern border (east of 170° W. longitude) of the Aleutian Islands sablefish area in the Bering Sea and Aleutian Islands Management Area (BSAI). This final rule applies to the harvest of halibut IFQ when a vessel operator is using longline pot gear to fish sablefish IFQ in all areas of the GOA. For additional information on the sablefish and halibut areas in the GOA see the proposed rule (81 FR 55408, August 19, 2016) and Figure 1 and Figure 11 in the Analysis.
This final rule revises regulations to add longline pot gear as a new authorized gear for catcher vessels and catcher/processors participating in the GOA sablefish IFQ fishery. Prior to this final rule, § 679.2 authorized vessels in the GOA sablefish IFQ fishery to use only longline gear (
Beginning in 2009, the Council and NMFS received reports from sablefish IFQ fishermen that depredation was adversely impacting the sablefish IFQ fleet in the GOA. The reports indicated that whales were removing or damaging sablefish caught on hook-and-line gear
Participants in the GOA sablefish IFQ fishery told the Council and NMFS that authorizing longline pot gear in the GOA sablefish IFQ fishery would reduce the adverse impacts of depredation for those vessel operators who choose to switch from hook-and-line gear. Depredation negatively impacts the sablefish IFQ fleet through reduced catch rates and increased operating costs. Depredation also has negative consequences for whales through increased risk of vessel strike, gear entanglement, and altered foraging strategies. Longline pot gear prevents depredation because whales cannot remove or damage sablefish enclosed in a pot. The Council and NMFS determined that interactions with whales throughout the GOA could affect the ability of sablefish IFQ permit holders to harvest sablefish by reducing catch per unit of effort and decreasing fishing costs. Section 1.2 of the Analysis provides additional information on the Council's development and recommendation of Amendment 101 and this final rule.
The following sections describe: (1) The sablefish IFQ fishery provisions implemented with Amendment 101 and this final rule, (2) the changes from proposed to final rule, and (3) NMFS' response to comments.
The objective of Amendment 101 and this final rule is to improve efficiency in harvesting sablefish IFQ and reduce adverse economic impacts on harvesters that occur from depredation. Amendment 101 and this final rule will also mitigate impacts on sablefish IFQ harvesters using hook-and-line gear by minimizing the potential for interactions between hook-and-line gear and longline pot gear. Finally, Amendment 101 and this final rule will reduce whale and seabird interactions with fishing gear in the GOA sablefish IFQ fishery.
This final rule implements regulations for the sablefish IFQ fisheries in the GOA and regulations to authorize harvest of halibut IFQ caught incidentally in longline pot gear used in the GOA sablefish IFQ fishery.
This final rule revises regulations at 50 CFR parts 300 and 679 to (1) authorize longline pot gear in the GOA sablefish IFQ fishery, (2) minimize the potential for gear conflicts and fishing grounds preemption, and (3) require retention of halibut IFQ caught in longline pot gear used in the GOA sablefish IFQ fishery. This final rule also includes additional regulatory revisions to facilitate the administration, monitoring, and enforcement of these provisions. This section describes the changes to current regulations implemented by this final rule.
This final rule revises §§ 300.61, 679.2, 679.24, and 679.42 to authorize longline pot gear for use in the GOA sablefish IFQ fishery. Additionally, this final rule revises the definition of “Fixed gear” under the definition of “Authorized fishing gear” at § 679.2(4)(i) to include longline pot gear as an authorized gear in the GOA sablefish IFQ fishery and as an authorized gear for halibut IFQ harvested in halibut areas in the GOA. Fixed gear is a general term that describes the multiple gear types allowed to fish sablefish IFQ and halibut IFQ under the IFQ Program and is referred to throughout 50 CFR part 679. This final rule adds § 679.42(b)(1)(i) to further clarify that trawl gear is not authorized for use in the sablefish and halibut IFQ fisheries in the GOA and the BSAI. This final rule also adds § 679.42(b)(1)(ii) to clarify that pot-and-line gear is not authorized for use in the GOA sablefish IFQ fishery. Pot-and-line gear is pot gear with a stationary, buoyed line with a single pot attached.
This final rule revises the definition of “Fishing” at § 300.61 to specify that the use of longline pot gear in any halibut area in the GOA to harvest halibut IFQ will be subject to halibut regulations at part 300. This final rule also revises the definition of “IFQ halibut” at § 300.61 to specify that halibut IFQ may be harvested with longline pot gear while commercial fishing in any halibut area in the GOA. As described in the
This final rule revises Table 15 to part 679 to specify that authorized gear for sablefish IFQ harvested from any GOA reporting area includes longline pot gear in addition to all longline gear (
This final rule adds provisions at § 679.42(l) to minimize the potential for gear conflicts and grounds preemption and to create general requirements for using longline pot gear in the GOA sablefish IFQ fishery.
This final rule establishes pot limits in each GOA sablefish area at § 679.42(l)(5) and requirements for vessel operators to request pot tags from NMFS at § 679.42(l)(3). Under this final rule, a vessel operator must annually request pot tags from NMFS by submitting a complete IFQ Sablefish Longline Pot Gear: Vessel Registration and Request for Pot Gear Tags form, which will be available on the NMFS Alaska Region Web site at
This final rule adds specific requirements for longline pot gear deployment and retrieval in the GOA sablefish IFQ fishery. This final rule implements § 679.24(a)(3) to require a vessel operator to mark each end of a set of longline pot gear with a cluster of four or more marker buoys, including one hard buoy marked with the capital letters “LP,” a flag mounted on a pole, and a radar reflector. This requirement is in addition to current requirements at § 679.24(a)(1) and (2) for all hook-and-line, longline pot, and pot-and-line marker buoys to be marked with the vessel's Federal Fisheries Permit (FFP) number or Alaska Department of Fish and Game (ADF&G) vessel registration number.
Under this final rule, a vessel operator may deploy longline pot gear in the
This final rule adds § 679.42(l)(5)(iii) to establish gear retrieval requirements for longline pot gear in each GOA sablefish area. This final rule requires a vessel operator using longline pot gear to redeploy longline pot gear within a certain amount of time after being deployed, or to remove the gear from the fishing grounds when making a sablefish landing.
This final rule allows multiple vessels to use the same longline pot gear during one fishing season but prevents use of the same longline pot gear simultaneously. To prevent use of the same longline pot gear simultaneously, this final rule adds § 679.42(l)(5)(iv) to require a vessel operator to: (1) Remove longline pot gear assigned to the vessel and deployed to fish sablefish IFQ from the fishing grounds, (2) return the gear to port, and (3) remove the pot tags that are assigned to that vessel from each pot before the gear may be used on another vessel. The operator of the second vessel is required to attach pot tags assigned to his or her vessel to each pot before deploying the gear to fish for GOA sablefish IFQ. This final rule requires that only one set of the appropriate vessel-specific pot tags may be attached to the pots at any time.
This final rule revises the definition of “IFQ halibut” in § 679.2 to specify that halibut IFQ may be harvested with longline pot gear while commercial fishing in any halibut area in the GOA. Additionally, this rule adds § 679.42(l)(6) to require a vessel operator using longline pot gear in the GOA sablefish IFQ fishery to retain legal size halibut caught incidentally if any IFQ permit holder on board has sufficient halibut IFQ pounds for the retained halibut for that halibut area. Additionally, this final rule revises § 679.7(a)(13) to specify the requirements for handling and release of halibut that apply to vessels using longline pot gear in the GOA sablefish IFQ fishery.
This final rule adds § 679.42(l)(7) to require a vessel operator using longline pot gear in the GOA sablefish IFQ fishery to comply with logbook reporting requirements at § 679.5(c) and vessel monitoring system (VMS) requirements at § 679.42(k).
The following table describes the revisions to § 679.5.
This final rule revises § 679.7(a)(6) to prohibit deployment of longline pot gear in the GOA outside of the sablefish fishing period. Additionally, this final rule revises § 679.7(a)(6)(i) to clarify that vessels in the halibut IFQ fishery are subject to gear deployment requirements specified by the IPHC in the annual management measures pursuant to § 300.62.
This final rule prohibits a vessel operator in the GOA from using longline pot gear to harvest sablefish IFQ or halibut IFQ in the GOA sablefish areas without having an operating VMS on board the vessel. Additionally, this final rule revises § 679.42(k)(2)(ii) to require a vessel operator using longline pot gear to fish sablefish IFQ in the GOA to contact NMFS to confirm that VMS transmissions are being received from the vessel. The vessel operator is required to receive a VMS confirmation number from NMFS before fishing in the sablefish IFQ fishery.
This final rule revises § 679.20(a)(4) to replace an incorrect reference to the sablefish total allowable catch (TAC) allocation to hook-and-line gear with the correct reference to fixed gear, as defined at § 679.2, which includes hook-and-line and longline pot gear. This final rule does not change the percent of the TAC allocated to the sablefish IFQ fishery in the GOA. NMFS will continue to allocate 95 percent of the sablefish TAC in the Eastern GOA sablefish area, which includes the SEO and WY, to vessels using fixed gear, and allocate 80 percent of the sablefish TACs in each of the CGOA and WGOA sablefish areas to vessels using fixed gear.
This final rule revises § 679.42(b)(2) to specify that an operator of a vessel using hook-and-line gear to harvest sablefish IFQ, halibut IFQ, or halibut Community Development Quota (CDQ) must comply with seabird avoidance measures set forth in § 679.24(e). This final rule clarifies that vessel operators using longline pot gear in the GOA sablefish
This final rule revises § 679.51(a), which contains requirements for vessels in the partial coverage category of the North Pacific Groundfish and Halibut Observer Program. This final rule removes a specific reference to hook-and-line gear for vessels fishing for halibut. This revision is needed because this final rule authorizes the retention of halibut IFQ by vessels using longline pot gear in the GOA. It is not necessary to specify authorized gear for halibut IFQ in § 679.51(a) because § 679.50(a)(3) currently states that, for purposes of subpart E, when the term halibut is used it refers to both halibut IFQ and halibut CDQ, and the authorized gear for halibut is specified in § 679.2.
NMFS made four changes to this final rule. The first change is in response to comments received on the proposed rule. NMFS added § 679.42(l)(5)(i)(C) to specify that the gear retrieval requirements in § 679.42 (l)(5)(iii) and (iv) apply to all longline pot gear that is assigned to a vessel and deployed to fish sablefish IFQ and to all other fishing equipment attached to longline pot gear that is deployed in the water by the vessel to fish sablefish IFQ. This final rule also specifies that “all other fishing equipment attached to longline pot gear” includes, but is not limited to, equipment used to mark longline pot gear as required in this final rule at § 679.24(a)(3). This change is described in more detail in the response to Comment 23 in the
The second change clarifies the definition of
The third change clarifies § 679.42(l)(6)(i)(A) to specify that a vessel operator using longline pot gear in the GOA sablefish IFQ fishery must retain legal size halibut if the halibut is caught in the GOA sablefish IFQ fishery in accordance with the provisions established at § 679.42(l) for the use of longline pot gear and an IFQ permit holder on board the vessel has unused halibut IFQ for the appropriate regulatory area and vessel category. As described for the second change to this final rule in the previous paragraph, this change clarifies that the requirement to retain halibut caught in longline pot gear used in the GOA sablefish IFQ fishery in accordance with § 679.42(l) is limited to the GOA sablefish IFQ fishery and does not apply to other groundfish fisheries in the GOA.
The fourth change replaces “and” with “or” in § 679.7(f)(18)(i) in this final rule. This change clarifies that it is prohibited for a vessel operator to deploy, conduct fishing with, retrieve, or retain IFQ sablefish or IFQ halibut from longline pot gear in the GOA either in excess of the pot limits specified in § 679.42(l)(5)(ii) or without a pot tag attached to each pot in accordance with § 679.42(l)(4). The proposed rule incorrectly specified that a vessel operator would be in violation of § 679.7(f)(18) only if he or she deployed, conducted fishing with, or retrieved longline pot gear in the GOA in excess of the pot limits specified and without a pot tag attached to each pot. Changing “and” to “or” in § 679.7(f)(18)(i) in this final rule is necessary to implement the Council's and NMFS' intent that vessel operators are required to comply with both the pot limit and pot tag requirements, and that failure to comply with either of these requirements would be a violation of the regulations.
NMFS received 15 comment letters containing 29 specific comments, which are summarized and responded to below. The commenters consisted of individuals, sablefish IFQ fishery participants and industry groups representing fishermen using hook-and-line gear in the GOA, and an environmental organization.
Section 3.4 of the Analysis describes that the current GOA groundfish fisheries, which includes the sablefish IFQ fishery, do not have an adverse impact on marine mammals. The Council and NMFS considered the impacts of Amendment 101 and this final rule on marine mammals and determined that they do not have an effect on marine mammals beyond those already expected from the GOA groundfish fisheries (see the response to Comment 2).
The summary of information available in Section 3.4 of the EA does not affect NMFS' decision-making process or add critical new information to the record that would require NMFS to publish a new proposed rule or extend the public comment period.
Permits authorizing the incidental take of ESA-listed species in U.S. commercial fisheries may be granted under MMPA section 101(a)(5)(E). One criterion required to issue such permits is a NID. A NID is issued if NMFS determines that all commercial fisheries identified in the annual LOF, collectively, have a negligible impact on any ESA-listed marine mammal stock for which a take permit is proposed to be issued. A negligible impact is defined (50 CFR 216.103) as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.
NMFS issued a NID for fishery impacts on marine mammals in Alaska on June 23, 2016, and NMFS issued permits under the authority of section 101(a)(5)(E) of the MMPA for the incidental taking of ESA-listed species effective for a three-year period (June 23, 2016, 81 FR 40870). Because the new GOA sablefish IFQ longline pot gear fishery has not yet commenced, information is not available to make a NID on the impacts of this fishery on ESA-listed marine mammals in Alaska. The use of the U.S. west coast sablefish pot fishery as a surrogate for the GOA sablefish IFQ longline pot gear fishery in a NID, as suggested by the comment, would be inappropriate due to differences in geography, fishery operations, and marine mammal species distribution. Information on marine mammal interactions with the new GOA sablefish IFQ longline pot gear fishery will be incorporated and considered when NMFS begins analysis during the review of the current NID applicable to Alaskan fisheries.
This final rule requires the use of logbooks to record data on pot gear deployment and loss at § 679.5(c). Specifically, a vessel operator using longline pot gear in the GOA must record the length of a longline pot set, the size of the pot, the spacing of pots, number of pots set, number of pots lost, and number of pots left on the fishing grounds still fishing, in addition to the other information required under current regulations. Additionally, this final rule at § 679.42(k) requires a vessel operator to use a VMS while using longline pot gear to fish for sablefish in the GOA. VMS monitors the location and movement of commercial fishing vessels in Federal fisheries off Alaska. Further, a vessel operator using longline pot gear in the GOA is subject to observer coverage under the North Pacific Groundfish and Halibut Observer Program.
NMFS has developed analytical tools and databases to analyze all fishery data that NMFS collects, including the new data collected under this final rule. NMFS is able to assess the amount of catch, effort, and areas where longline pot gear is deployed in the GOA sablefish IFQ fishery with existing analytic methods. NMFS will have the fishery data necessary to compare longline pot gear deployment with available information on areas of large whale migrations. The Council and NMFS are currently analyzing the use of electronic monitoring for pot gear. Under a separate analytical and regulatory process, the Council and NMFS may consider the use of electronic monitoring for vessels using longline pot gear in the GOA sablefish IFQ fishery.
Amendment 101 and this final rule are consistent with National Standard 1 of the Magnuson-Stevens Act, which requires conservation and management measures to prevent overfishing while achieving optimum yield on a continuing basis (section 301(a) of the Magnuson-Stevens Act). Optimum yield is based on maximum sustainable yield, reduced as appropriate for social and economic factors for the relevant fishery (81 FR 71858, October 18, 2016). The Council and NMFS achieve optimum yield in the GOA sablefish IFQ fishery by establishing annual catch limits at sustainable levels and establishing management measures for the fishery that meet a number of social and economic goals, including maintaining a diverse fleet of fishing vessels and a broad distribution of economic benefits to fishermen, processors, and communities that participate in the fishery (see Sections 3.1 and 4.5 of the Analysis). As described in the response to Comment 1, Amendment 101 and this final rule do not change the current process for establishing annual catch limits or the management measures that have been established to meet specific social and economic goals for the GOA sablefish IFQ fishery.
As described in the response to Comment 1, the proposed rule, and Sections 3.4 and 3.5 of the Analysis, the Council and NMFS have determined that the current GOA sablefish IFQ fishery prosecuted with hook-and-line gear does not adversely affect whales and seabirds. Amendment 101 and this final rule do not change the management measures established for the hook-and-line sablefish IFQ fishery in the GOA that are intended to reduce fishery interactions with whales and seabirds.
The proposed rule and Section 2.1.1 of the Analysis describe that sablefish can be caught efficiently with hook-and-line and pot gear. In recommending Amendment 101 and this final rule, the Council and NMFS recognized that hook-and-line gear will continue to be an effective harvesting method for many vessels in the sablefish IFQ fishery. Authorizing fishermen to use longline pot or hook-and-line gear in the GOA sablefish IFQ fishery provides each vessel operator with the choice to determine which type of gear is appropriate for their operation and gives them the flexibility to determine the most cost effective method for harvesting sablefish IFQ. The proposed rule and Section 4.9.2 of the Analysis describe that the costs of converting to longline pot gear can be substantial, and some vessels in the sablefish IFQ fishery will not be able to convert because of vessel length or other factors. Amendment 101 and this final rule balance the needs of sablefish IFQ fishery participants by providing vessel operators with the opportunity to use longline pot gear if it would benefit their harvesting operation by reducing interactions with whales.
NMFS acknowledges that while the costs of harvesting operations could impact the price that consumers pay for sablefish in the market, fishing gear is just one cost component for a harvesting operation. NMFS does not have information indicating the sablefish harvested with longline pot gear will result in reduced consumer prices relative to sablefish caught with hook-and-line gear.
One commenter acknowledged that the use of longline pot gear likely would reduce depredation, but opposed the reintroduction of longline pot gear to the GOA sablefish fishing grounds, particularly in the SEO and WY. The commenter stated that the potential negative impacts of introducing longline pot gear on vessel operators that continue to use hook-and-line gear would outweigh the benefits because the proposed rule did not contain adequate measures to mitigate the negative impacts of introducing longline pot gear to the GOA sablefish IFQ fishery.
The proposed rule (81 FR 55408, August 19, 2016) and the Analysis (see
Section 4.10 of the Analysis indicates that the Council recognized that pot gear had previously been permitted in the GOA sablefish fishery but was prohibited in 1985 by Amendment 14 to the GOA FMP (50 FR 43193, October 24, 1985). During deliberation on Amendment 101 and this final rule, the Council noted that its decision to prohibit pot gear in Amendment 14 was based on fishery data and scientific information on depredation that is not reflective of the present fishery. Reports and observations of depredation of hook-and-line gear have increased since 1985 (see Section 3.4 of the Analysis), and the fishery has been managed under the Halibut and Sablefish IFQ Program since 1995. The existing management program for the fishery provides substantially more flexibility on when and where to harvest sablefish and allows for coordination and cooperation within the fleet. In addition, all fishermen have an economic incentive to avoid gear conflicts on the fishing grounds because these conflicts can result in costs through lost gear and lost fishing time (see Section 4.10 of the Analysis).
In spite of these factors mitigating the potential for gear conflicts, the Council and NMFS received public testimony noting the potential negative impacts of
The proposed rule and Section 4.9.2 of the Analysis describe that it is highly likely that a portion of the existing GOA sablefish IFQ fleet will continue to use hook-and-line gear, due to cost constraints, vessel size constraints, or both. NMFS agrees with the commenters that the costs of reconfiguration likely will be prohibitive for many vessel operators and this outcome is supported by the proposed rule and Section 4.9.8.1 of the Analysis. The proposed rule and the Analysis also describe the feasibility of converting to longline pot gear with respect to vessel size. Section 4.9.8.1 of the Analysis notes that based on information from other groundfish pot fisheries, vessels less than 50 feet LOA may be less likely to use longline pot gear in the GOA sablefish IFQ fishery than larger vessels. After considering this information, the Council determined and NMFS agrees that the number of vessels that convert to longline pot gear is likely to be small in comparison to those that will continue using hook-and-line gear, which will reduce the potential for gear conflicts and grounds preemption under Amendment 101 and this final rule.
The proposed rule and Section 4.10 of the Analysis describe that in recommending Amendment 101 and this final rule the Council expressed its intent to monitor the use of longline pot gear in the GOA sablefish IFQ fishery to determine if Amendment 101 and this final rule are meeting its objectives. The Council requested that NMFS provide an annual report on the use of longline pot gear in the GOA sablefish IFQ fishery following implementation of this final rule. The Council also indicated that it will conduct a review of the effects of authorizing longline pot gear three years following implementation of this final rule. The Council stated that the intent of the review is to evaluate the impacts of this action on sablefish harvesting, depredation, and vessels that continue to harvest sablefish with hook-and-line gear. During deliberation on Amendment 101 and this final rule, the Council specifically noted that its three-year review will evaluate whether the use of longline pot gear has impacted fishing community participation in the fishery or prices of sablefish quota share that might adversely affect new entrants or small-scale operators looking to grow their business. This review will provide the Council and NMFS the opportunity to assess potential gear conflicts under this final rule. Nothing in Amendment 101 or this final rule would preclude the Council and NMFS from considering action to further reduce gear conflicts through a subsequent action if the review indicates that such action is necessary.
The foreign fishing fleets (active prior to the 1980s) lost or abandoned a substantial amount of pot gear in the SEO many years ago and despite continued efforts by the fishing fleet to remove it from the fishing grounds, the lost and abandoned pot gear continues to preempt grounds off Sitka. Longline gear set near these lost pots still on occasion drift to tangle with the lost pots. Attempts to retrieve gear tangled with these pots are dangerous, with tremendous strain on the boat trying to haul the gear, and the end result is more lost gear and lost fish.
Letters submitted to the Pacific Fishery Management Council provide evidence of present gear conflicts, safety issues, and grounds preemption driven by the entrance of three boats using longline pot gear in what has historically been hook-and-line grounds. This issue is clearly important because the Council's Sablefish Gear Committee spent most of its time talking about gear conflicts and how to minimize anticipated conflicts.
The proposed rule and Section 5.1 of the Analysis describe that the Council and NMFS carefully considered the impacts of Amendment 101 and this final rule on the safety of human life at sea, consistent with National Standard 10 of the Magnuson-Stevens Act. The impacts of Amendment 101 and this final rule on safety are also considered in Section 4 of the Analysis. While some participants in the hook-and-line fleet raised safety concerns to the Council and NMFS related to carrying longline pot gear on small vessels, the use of longline pot gear will be voluntary, not mandatory, under this final rule. Section 2.4 of the Analysis describes that the Council and NMFS considered the impacts of this action on safety in developing the requirements for vessels to use longline pot gear instead of pot-and-line gear at § 679.2 and the gear retrieval requirements at § 679.42(l)(5)(iii).
The response to Comment 11 details the management measures included in this final rule to minimize the potential for gear conflicts and grounds preemption. This final rule limits the amount of longline pot gear that may be deployed to limit potential gear conflicts on an area-specific basis, and defines the maximum amount of time that longline pot gear may be left on the fishing grounds in the WY, CGOA and WGOA. This final rule requires vessels fishing in the SEO to remove their longline pot gear from the fishing grounds when making a delivery. In developing that recommendation for the SEO, the Council noted that SEO sablefish fishing grounds are limited relative to other areas, and allowing longline pot gear to be left on the grounds when a vessel leaves the fishing grounds to make a delivery may create safety hazards by increasing the likelihood of gear conflict relative to other areas in the GOA.
In addition, the Council recommended and NMFS is
The Council recommended and this final rule implements gear deployment and retrieval requirements that balance the objectives of Amendment 101 and this final rule.
The Analysis identifies a number of unknown potential impacts on the use of longline pot gear on both the sablefish survey (conflicts between the survey and pots have occurred in the past) and potential impacts on the sablefish stock of increased harvest with pots. The Analysis notes that sablefish length and possibly age composition information would be needed for harvests in pot gear before the stock assessment authors could evaluate the potential effects of introducing pot gear on the sablefish stock and stock assessment. These unknowns argue for a cautious, phased-in and experimental approach to allowing this new gear type.
The Analysis describes that killer whale interactions are most common in the BSAI and the WGOA, while sperm whale interactions are most common in the CGOA, WY, and SEO. Section 3.4.1.1 of the Analysis provides best available information on depredation in this fishery. While depredation events are difficult to observe, fishery participants have testified to the Council that depredation continues to be a major cost to the sablefish IFQ fishery, and appears to be occurring more frequently. Industry groups have tested gear modifications to limit the impact of depredation on hook-and-line gear catch per unit effort, and reported those efforts to the Sablefish Gear Committee and the Council. Nevertheless, depredation continues to result in lost sablefish catch, increased fishing time as vessel operators wait for whales to leave the area before hauling gear, or increased time and fuel to relocate to avoid whales. Section 4.7 of the Analysis includes a summary of efforts to mitigate depredation in Alaska and elsewhere.
NMFS agrees with the commenter that the sablefish stock is not overfished and is not subject to overfishing. The Council and NMFS considered the impacts of Amendment 101 and this final rule on the sablefish stock. The proposed rule and Section 3.1.1.2 of the Analysis describe that Amendment 101 and this final rule are not expected to have significant impacts on the sablefish stock. The Analysis describes that although some benefit likely will occur because unaccounted fishing mortality due to depredation will be reduced as sablefish IFQ fishermen voluntarily switch from hook-and-line longline gear to longline pot gear, the potential impact of reduced depredation may be difficult to measure given overall trends in sablefish recruitment.
Section 3.1.1.2 of the Analysis notes that the sablefish stock assessment authors considered the impacts of the introduction of longline pot gear on the sablefish stock assessment. The stock assessment authors considered whether the fish size selectivity of longline pot gear would be different from hook-and-line gear using information from the BSAI, where pot gear has been authorized in the sablefish IFQ fishery since 2008 (73 FR 28733, May 19, 2008). Some evidence exists to suggest a difference in the length frequency of sablefish caught with pot gear compared to hook-and-line gear, with hook-and-line gear producing slightly larger sablefish on average (see Figure 6 in Section 3.1.1.2 of the Analysis). However, the Analysis concludes that this difference in sizes was observed at the BSAI area-wide level and the size differences likely can be attributed to differences in sablefish sizes among sub-areas of the BSAI. The Analysis also notes that longline pot and hook-and-line gear are set at similar depths in the BSAI and the sex ratio of the catch is comparable for both gears. After considering this information, the sablefish stock assessment authors determined that the difference in lengths selected by longline pot and hook-and-line gear is not significant enough to affect population recruitment. Overall, existing evidence does not suggest that the introduction of longline gear pot under Amendment 101 and this final rule will impact the annual sablefish stock assessment.
NMFS notes that this final rule does not change observer coverage requirements for vessels fishing in the sablefish IFQ fisheries (§§ 679.50 through 679.55). Therefore, NMFS will collect information on length and age composition for sablefish caught in longline pot gear in the GOA sablefish IFQ fishery, and this information will be used in the annual assessment to determine that status of the sablefish stock.
The Council received public testimony from sablefish fishermen in all areas of the GOA indicating that depredation had reduced catch per unit effort and increased costs for their fishing operations. The Council determined and NMFS agrees that Amendment 101 and this final rule will improve harvesting efficiency and reduce adverse economic impacts from depredation to harvesters in all GOA sablefish areas (see Section 4.10 of the Analysis).
Although pots are likely to reduce seabird takes, hook-and-line fisheries in the GOA typically account for only 10 percent to 20 percent of overall incidental catch of seabirds in the BSAI and GOA groundfish fisheries. The incidental catch of seabirds has been reduced significantly by the use of streamer lines in the hook-and-line fishery.
Section 5.1 of the Analysis describes that the Council's objectives for this action implicitly recognize the importance of the sablefish fishery to GOA fishing communities and their residents. Amendment 101 and this final rule could reduce depredation and interactions, reduce bycatch of some species, reduce incidental catch of seabirds, and improve the long-term management of the resource by providing another harvesting option that likely will increase harvesting efficiency. Amendment 101 and this final rule are structured in a manner that does not inherently disadvantage fishery participants who choose not to switch from hook-and-line to longline pot gear. This final rule implements area-specific pot limits, gear redeployment and removal requirements, gear marking, and recordkeeping reporting requirements intended to minimize the potential for gear conflicts and grounds preemption.
Section 4.9.8 of the Analysis describes the impacts of Amendment 101 and this final rule on individual harvesters and fishing communities. The Analysis did not identify adverse impacts on individual harvesters or fishing communities because it does not anticipate a significant shift in the communities to which sablefish products are delivered, or from which sablefish vessels depart. The Analysis notes that Amendment 101 and this final rule will not alter the IFQ Program management measures that are designed to maintain a diverse fleet to benefit individual fishermen and communities that participate in the GOA sablefish IFQ fishery. These measures include area-specific quota share and IFQ, different quota share and IFQ allocations for vessel size categories, quota share use caps, and vessel IFQ caps.
Section 4.9.8.1 of the Analysis describes the potential for fleet consolidation following implementation of Amendment 101 and this final rule. The Analysis describes that if longline pot gear becomes the dominant gear in the sablefish IFQ fishery, it is possible that depredation would be concentrated on vessels that continue to use hook-and-line gear. This increased concentration could increase costs for these participants and, in the extreme, reduce profitability from fishing with hook-and-line gear. If profitability is substantially reduced, some operators that are unable to convert to longline pot gear might choose to sell their sablefish quota share, which could lead to consolidation in the fleet. However, as described in Section 4.9.2 of the Analysis and in the response to Comment 11, it is unlikely that a substantial number of vessel operators will switch to longline pot gear for economic or operational reasons. This makes it unlikely that Amendment 101 will cause fleet consolidation in the GOA sablefish IFQ fishery.
Section 4.9.8.1 of the Analysis describes that the Council received public testimony expressing concern that increased concentration of depredation onto remaining hook-and-line gear and fleet consolidation were more likely in the SEO area due to the more constrained fishing grounds. The Council and NMFS determined that these outcomes were unlikely based on the estimated cost for converting a vessel to use longline pot gear (see Section 4.9.2 of the Analysis). As described in the response to Comment 11, the majority of fishermen in the SEO are not likely to switch to longline pot gear and would continue to use hook-and-line gear in the sablefish IFQ fishery.
As described in the response to Comment 11, it is not possible to determine how many vessels will use longline pot gear, but the existing economic and operations constraints of converting to longline pot gear make it likely that a limited number of vessels will convert under this action. Based on this information, the Council determined and NMFS agrees that the impacts on vessels that continue to use hook-and-line gear likely will be limited. Nevertheless, this final rule includes a number of provisions to mitigate the potential negative impacts on sablefish IFQ fishery participants that continue to use hook-and-line gear.
As described in the response to Comment 11, the Council and NMFS reviewed this information and determined that the likelihood of gear conflicts and grounds preemption is low under Amendment 101 and this final rule. However, the Council and NMFS recognize that the likelihood of gear conflicts and grounds preemption is not possible to determine with certainty. Several stakeholders requested that the Council recommend specific measures to address this uncertainty and further minimize the likelihood of gear conflicts and grounds preemption. This final rule implements the measures recommended by the Council.
The proposed rule and Section 4.9.3 of the Analysis describe that the Council recommended area-specific pot limits to account for the physical nature of the sablefish fishing grounds and the composition of the IFQ sablefish fleet in each sablefish area. The Council also considered public testimony on the number of pots that vessels in the GOA could feasibly deploy in the sablefish IFQ fishery.
Section 4.9.3 of the Analysis shows that the Council considered options for pot limits that ranged from 60 to 400 pots for each sablefish area. Considering area-specific pot limits allowed the Council to develop pot limits that are appropriate for the make-up of the fleet and the physical nature of the fishing grounds in each sablefish area. The Council determined that smaller pot limits are appropriate in the SEO and WY because the fishing grounds are spatially concentrated and the potential for grounds preemption may be greater. The Council also determined that smaller pot limits are appropriate for the SEO because the local fleet has a historically participating component of small, short-range vessels lacking the capacity to deploy and retrieve longline pots or pack a large hold of sablefish for an extended period. The proposed rule and Section 4.9.8.1 of the Analysis show that approximately 30 percent of sablefish IFQ fishermen in the SEO use vessels 50 feet (15.2 m) or less LOA.
The Council determined and NMFS agrees that larger pot limits are appropriate in the CGOA and WGOA because Section 4.5.4.3 of the Analysis and public testimony indicated there are relatively more options for productive fishing grounds in the CGOA and WGOA than in the SEO and WY. In addition, Section 4.5.2 of the Analysis shows that the average size of vessels
In recommending pot limits for each GOA sablefish area, the Council and NMFS balanced the objectives to minimize the potential for gear conflicts and grounds preemption and improve harvesting efficiency of sablefish IFQ by authorizing longline pot gear. Section 4.9.3 of the Analysis describes that limiting the number of pots a vessel can use reduces operational efficiency if the limit is lower than what a vessel operator deems optimal for his or her vessel. A pot limit that is too low might increase variable fishing costs such as fuel and time. If the limit is too low, there may be little or no incentive for vessel owners to purchase new longline pot gear and invest in vessel reconfigurations. The Council and NMFS used the best available information to determine that the pot limits implemented by this final rule achieve the objectives of this action.
This final rule implements regulations at § 679.42(l)(5)(iv) applicable to vessel operators who want to share longline pot gear during the fishing season to help reduce operating costs. To minimize the potential for grounds preemption by multiple vessels using the same longline pot gear, this final rule allows multiple vessels to use the same longline pot gear during one fishing season but prohibits use of the same longline pot gear simultaneously. In order for more than one vessel to use the same longline pot gear, this final rule requires a vessel operator to remove longline pot gear from the fishing grounds, return the gear to port, and remove the pot tags assigned to the vessel before pot tags assigned to another vessel are attached to the pots and used on that vessel in the GOA sablefish IFQ fishery.
The Council and NMFS determined that vessel operators using longline pot gear have an incentive to reduce the likelihood of gear conflicts, or lost gear because fishing gear is expensive to purchase and replace (see Section 4.8.2 of the Analysis). This final rule establishes specific gear retrieval requirements to provide an additional incentive for operators using longline pot gear to closely monitor the amount of time their gear is left on the grounds and further minimize potential for gear conflicts or grounds preemption. The Council recommended and NMFS is implementing these provisions to balance the objectives of this action to improve harvesting efficiency and reduce depredation with the further objective to minimize potential negative impacts on fishermen that continue to use hook-and-line gear.
This final rule implements three additional recordkeeping and reporting requirements to monitor and enforce provisions that are intended to minimize gear conflicts and grounds preemption. First, § 679.5(c)(3)(B) requires all vessel operators using longline pot gear in the GOA sablefish IFQ fishery to report specific information in logbooks about fishing gear used and catch for all sablefish IFQ fishing trips. Second, § 679.42(k)(2) requires all vessel operators using longline pot gear in the GOA sablefish IFQ fishery to have an operating VMS while fishing for sablefish IFQ. Third, this final rule adds additional Prior Notice of Landing (PNOL) reporting requirements at § 679.5(l)(1)(iii) for vessel operators using longline pot gear in the GOA sablefish IFQ fishery. These tools will provide NMFS with information on vessel activity during the sablefish fishing season. The Council and NMFS determined that these requirements will provide sufficient monitoring and enforcement
Although the Council and NMFS determined that the potential for grounds preemption is low under this final rule (see response to Comment 11), NMFS agrees with the commenter that the gear retrieval and removal requirements in the proposed rule applied to “longline pot” gear. Section 679.2 defines longline pot as “a stationary, buoyed, and anchored line with two or more pots attached.” This definition does not include buoys, flags, or radar reflectors that must be used to mark longline pot gear in this final rule (§ 679.24(a)(3)) or other equipment that vessel operators may use to mark their gear. Although it is unlikely that vessel operators will remove only pots and leave other equipment to preempt fishing grounds as suggested by the commenter, NMFS agrees that the intent of this final rule is to require vessel operators using longline gear to retrieve or remove all fishing gear from the fishing grounds to minimize the potential for gear conflicts and grounds preemption. This revision to this final rule clarifies that the gear retrieval and removal requirements apply to all pots and associated equipment deployed by a vessel using longline pot gear in all sablefish areas of the GOA.
Under the proposed rule, a vessel operator in the WY, CGOA, or WGOA could deploy pots on the fishing grounds, leave the fishing grounds to pick up an IFQ permit holder in port, and then retrieve the pot gear and collect the sablefish while the IFQ permit holder is on board the vessel. Hook-and-line gear is not generally left on the fishing grounds unattended, so the proposed rule would allow a longline pot gear vessel to operate differently than a hook-and-line vessel.
Section 4.9.3 of the Analysis describes that the pot limits specified in § 679.42(l)(5)(ii) limit the amount of longline pot gear that each vessel may deploy, which limits the footprint of that vessel on the fishing grounds. The Analysis describes that the Sablefish Gear Committee estimated that a vessel deploying from 180 to 300 longline pots would cover grounds similar to a hook-and-line set in the sablefish fishery, or approximately 10 to 12 miles. The Analysis also notes that current regulations do not limit the amount of hook-and-line gear that a vessel fishing IFQ sablefish may deploy. Based on information in the Analysis, the Council and NMFS determined that it is possible that the footprint of longline pot gear used by some vessels could be greater than the footprint of hook-and-line gear used by other vessels under this final rule. The Analysis describes that the Sablefish Gear Committee reviewed available information on the likely length of longline pot gear sets on the fishing grounds and considered whether gear specifications in addition to pot limits were necessary to minimize the potential for gear conflicts and grounds preemption. The Sablefish Gear Committee, Council, and NMFS considered the potential impacts of additional gear specifications on operations and monitoring and enforcement, and determined that additional gear specifications were not necessary to meet the objectives of this action. In addition, additional gear specifications could unnecessarily constrain individual fishing operations and reduce harvesting efficiency.
This final rule implements the following additional gear marking requirements: Each vessel operator using longline pot gear in the GOA sablefish IFQ fishery must attach a cluster of four or more marker buoys, a flag mounted on a pole, and a radar reflector to each end of a longline pot set.
The Council received recommendations from the Sablefish Gear Committee, its advisory bodies, and public testimony to develop the gear marking requirements implemented by this final rule. The Council and NMFS considered a broad suite of gear marking options during the development of Amendment 101 and this final rule. Section 4.9.5 of the Analysis describes the options considered, and Section 4.10 describes the anticipated impacts of the additional gear marking requirements implemented by this final rule.
The Council received public testimony that the marking requirements implemented by this final rule would enhance the visibility of the ends of a longline pot gear set to other vessels that are on the fishing grounds. As described in Section 4.9.5 of the Analysis, public testimony indicated that the gear marking equipment required by this final rule is commonly used by vessel operators that deploy pot gear in fisheries in Alaska and requiring the use of this equipment would not impose a substantial cost on vessel operators using longline pot gear in the GOA sablefish IFQ fishery. Section 4.9.5 of the Analysis describes public testimony indicating that using buoy clusters could be a viable method to keep surface gear from being submerged during strong tides and would minimize the potential for longline pot gear to move a substantial distance from its deployed location. The testimony indicated that buoy clusters add buoyancy to surface gear by putting additional buoys on the main anchor line. The Analysis also describes that requiring a vessel operator to use a flag mounted on a pole and a radar reflector to mark each end of a longline pot gear set would enhance the visibility of the location of the gear and minimize the potential for gear conflicts. This was supported by public testimony from vessel operators who indicated they planned to use longline pots in the GOA sablefish IFQ fishery.
As described in the response to Comment 11, the Council intends to review the use of longline pot gear in the GOA sablefish IFQ fishery three years after the implementation of this final rule. NMFS anticipates that if the gear marking requirements in this final rule impose substantial costs on vessel operators or could be revised to better meet the Council's objectives, the Council will consider potential changes to the gear marking requirements in the future.
Section 4.9.4 of the Analysis describes the key challenges involved in requiring the use of AIS as a buoy transponder. The challenges include limited operational time due to limited battery capacity, potentially inadequate seaworthiness, and the requirement for regulatory approval by the United States Coast Guard and international oversight bodies. The Analysis notes that implementing a longline pot gear tracking system using technology such as AIS or a scannable pot tag to locate longline pot gear on the fishing grounds is beyond the scope of available NMFS resources in the Alaska Region. In addition, anecdotal reports suggest that AIS or other scannable systems may not be effective in all weather and sea conditions (
The Analysis describes that the Council did not adopt the option to require AIS transponders in this final rule due to the current challenges related to using AIS transponders in the GOA sablefish IFQ fishery and stakeholder willingness to pursue a voluntary program to report longline pot gear locations (see the response to Comment 29). The Council intends to review the use of longline pot gear three years following implementation of this final rule. This review will provide an opportunity for the Council and NMFS to evaluate whether additional gear marking requirements may be necessary for longline pot gear in the future.
The statement on page 55416 of the proposed rule preamble should have stated that most vessel operators in the GOA sablefish IFQ fishery currently complete logbooks. The commenter is correct that most vessels in the sablefish IFQ fleet are less than 60 feet (18.3m) LOA, and these vessels are not required to complete a logbook (§ 679.5(a)(4)(i)). In 2015, 85 percent of the vessels participating in the BSAI and GOA sablefish IFQ fishery were less than 60 feet LOA. While these vessels are not required to complete a logbook for sablefish fishing, Section 4.9.3.2 of the Analysis notes that many vessel operators voluntarily complete and submit logbooks. Logbook participation increased sharply in 2004 in all areas primarily because the IPHC collects, edits, and enters logbooks electronically. In 2015, 68 percent of the 252 vessels less than 60 feet LOA in the sablefish IFQ fishery submitted logbooks.
The Council and NMFS determined that this final rule should include a requirement for all vessels using longline pot gear in the GOA sablefish IFQ fishery to complete a logbook. The proposed rule and Section 4.9 of the Analysis describe that NMFS uses logbooks to collect detailed information from vessel operators participating in the IFQ fisheries. The proposed rule and Analysis also describe that NMFS will use logbooks as one tool to monitor and enforce the management measures in this final rule intended to minimize the potential for gear conflicts and grounds preemption, such as the gear redeployment and removal requirements.
This final rule adds a requirement at § 679.5(c)(3)(i)(B) for an operator of a vessel using longline pot gear in the GOA sablefish IFQ fishery to report in a Daily Fishing Logbook (for catcher vessels) or Daily Cumulative Production Logbook (for catcher/processors) the number of pots and location of longline pot sets deployed on a fishing trip. This final rule removes the exemption from the logbook submission requirements for the operator of a vessel less than 60 feet LOA using longline pot gear in the GOA sablefish IFQ fishery. While this is a new regulatory requirement for these vessels, Section 4.9.3.2 of the Analysis explains that many operators of vessels less than 60 feet (18.3 m) in the sablefish IFQ fishery voluntarily complete and submit logbooks. Therefore, the Council and NMFS anticipate this additional reporting requirement will not negatively impact operators of vessels less than 60 feet (18.3 m) that choose to use longline pot gear.
Section 4.9.4 of the Analysis describes a proposal for a voluntary pot gear reporting program for vessels that use longline pot gear in the GOA sablefish IFQ fishery. GOA sablefish IFQ fishery participants who advocated before the Council for the ability to use longline pot gear presented the proposal to assure the Council of their ability and willingness to report the location of longline pot gear on the fishing grounds, in as close to real-time as is practicable, and without placing additional cost burdens on the hook-and-line fleet. These proponents presented a voluntary measure in the form of a written agreement that would set out expectations of, and best practices by, those who opt to use longline pot gear.
While the Council did not recommend the formalization of a voluntary pot gear reporting program in its recommendation of Amendment 101 and this final rule, Section 4.10 of the Analysis describes that the Council encouraged fishery participants to work cooperatively to develop electronic reporting protocols for reporting the location of pots being fished and/or pots left on the fishing grounds, as well as any other methods that may enhance the GOA sablefish IFQ longline pot fishery. The Council determined and NMFS agrees that the expressed willingness of fishermen who intend to use longline pot gear to work beyond the gear specifications and gear retrieval requirements specified in this final rule, combined with the Council's commitment to review the use of longline pot gear three years after implementation of this final rule, will minimize the potential for gear conflicts and grounds preemption.
This final rule requires vessel operators using longline pot gear to report the number of lost pots to NMFS in the vessel's PNOL submitted prior to landing. In addition, if a vessel operator loses pots and intends to replace those pots to harvest IFQ sablefish, they must request replacement pot tags from NMFS consistent with the requirements at § 679.42(l)(3)(iii). The vessel owner will be required to provide NMFS with the pot tag numbers that were lost and describe the circumstances under which the pot tags were lost.
The Administrator, Alaska Region, NMFS, determined that this rule is necessary for the conservation and management of the GOA sablefish IFQ fishery and that it is consistent with the Magnuson-Stevens Act, the Halibut Act, and other applicable law.
This final rule has been determined to be not significant for the purposes of Executive Order 12866.
Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule or group of related rules for which an agency is required to prepare a final regulatory flexibility analysis, the agency shall publish one or more guides to assist small entities in complying with the rule, and shall designate such publications as “small entity compliance guides.” The agency shall explain the actions a small entity is required to take to comply with a rule or group of rules. The preamble to the proposed rule (81 FR 55408, August 19, 2016) and the preamble to this final rule serve as the small entity compliance guide for this action.
Section 604 of the Regulatory Flexibility Act (RFA) requires an agency to prepare a final regulatory flexibility analysis (FRFA) after being required by that section or any other law to publish a general notice of proposed rulemaking and when an agency promulgates a final rule under section 553 of Title 5 of the U.S. Code. The following paragraphs constitute the FRFA for this action.
This FRFA incorporates the Initial Regulatory Flexibility Analysis (IRFA) (see
1. A statement of the need for, and objectives of, the rule;
2. A statement of the significant issues raised by the public comments in response to the IRFA, a statement of the assessment of the agency of such issues, and a statement of any changes made in the proposed rule as a result of such comments;
3. The response of the agency to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration (SBA) in response to the proposed rule, and a detailed statement of any change made to the proposed rule in the final rule as a result of the comments;
4. A description and an estimate of the number of small entities to which the rule will apply, or an explanation of why no such estimate is available;
5. A description of the projected reporting, recordkeeping, and other compliance requirements of the rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record; and
6. A description of the steps the agency has taken to minimize the significant economic impact on small entities consistent with the stated objectives of applicable statutes, including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each one of the other significant alternatives to the rule considered by the agency which affect the impact on small entities was rejected.
The “universe” of entities to be considered in a FRFA generally includes only those small entities that can reasonably be expected to be directly regulated by the action. If the effects of the rule fall primarily on a distinct segment of the industry, or portion thereof (
In preparing a FRFA, an agency may provide either a quantifiable or numerical description of the effects of a rule (and alternatives to the rule), or more general descriptive statements, if quantification is not practicable or reliable.
A statement of the need for and objectives of this rule is contained earlier in the preamble and is not repeated here. This FRFA incorporates the IRFA (see
NMFS published the proposed rule to implement Amendment 101 on August 19, 2016 (81 FR 55408), with comments invited through September 19, 2016. An IRFA was prepared and summarized in the Classification section of the preamble to the proposed rule. No comments were received that raised significant issues in response to the IRFA specifically; therefore, no changes were made to this rule as a result of comments on the IRFA. NMFS received several comments on the potential impacts of this final rule on the operators of sablefish vessels that cannot convert to longline pot gear due to economic or operational constraints. Several comments expressed concerns about the impacts of this action on small fishing operations that will continue to use hook-and-line gear to fish for sablefish in specific areas of the GOA. NMFS summarized and responded to these comments in the section above titled “Comments and Responses.” The Chief Counsel for Advocacy of the SBA did not file any comments on the proposed rule.
NMFS estimates that there are a total of 310 small catcher vessels and 1 small catcher/processor that participate in the GOA sablefish IFQ fishery using hook-and-line gear. These entities will be directly regulated by this rule because they will be subject to the requirements for using longline pot gear if they choose to use longline pot gear in the GOA sablefish IFQ fishery. Thus, NMFS estimates that 311 small entities are directly regulated by this rule.
Several aspects of this rule directly regulate small entities. Small entities will be required to comply with the requirements for using longline pot gear in the GOA sablefish IFQ fishery, which include using only longline pot gear, pot limits, and gear retrieval and gear marking requirements. Authorizing longline pot gear in this rule provides an opportunity for small entities to choose whether to use longline pot gear to increase harvesting efficiencies and reduce operating costs in the GOA sablefish IFQ fishery.
Based on public testimony to the Council and NMFS, and Section 4.9 of the Analysis, the requirements for using pot gear are not expected to adversely impact small entities because each entity can choose to use longline pot gear or continue to use hook-and-line gear. In addition, the requirements for using longline pot gear are not expected to unduly restrict sablefish harvesting operations. The Council and NMFS considered requirements that would impose larger costs on directly regulated small entities. These alternatives included requiring all vessels to remove gear from the fishing grounds each time the vessel made a landing and requiring more sophisticated and costly satellite-based gear marking systems. The Council and NMFS determined that these additional requirements were not necessary to meet the objectives of this action. These additional requirements could adversely impact small entities by reducing sablefish harvesting efficiency and increasing sablefish harvesting costs, contrary to the intent of this rule. This rule implements pot limits and gear retrieval and gear marking requirements that meet the objectives of this action while minimizing adverse impacts on fishery participants.
Small entities will be required to comply with additional recordkeeping and reporting requirements under this rule if they choose to use longline pot gear in the GOA sablefish IFQ fishery. Section 4.9 of the Analysis notes that directly regulated small entities using longline pot gear will be required to request pot tags from NMFS, maintain and submit logbooks to NMFS, have an operating VMS on board the vessel, and report additional information in a PNOL. The Analysis notes that these additional recordkeeping and reporting requirements are not expected to adversely impact directly regulated small entities because the costs of complying with these requirements is de minimis to total gross fishing revenue. In addition, NMFS anticipates that many of the vessels that choose to use longline pot gear under this rule currently comply with the logbook and VMS reporting requirements when participating in the sablefish IFQ fishery and in other fisheries. The Council and NMFS considered alternatives to implement additional requirements to
Thus, there are no significant alternatives to this rule that accomplish the objectives to authorize longline pot gear in the GOA sablefish IFQ fishery and minimize adverse economic impacts on small entities.
The recordkeeping, reporting, and other compliance requirements will be increased slightly under this rule. This rule contains new requirements for vessels participating in the longline pot fishery for sablefish IFQ in the GOA.
Prior to this final rule, NMFS required catcher vessel operators, catcher/processor operators, buying station operators, tender vessels, mothership operators, shoreside processor managers, and stationary floating processor managers to record and report all FMP species in logbooks, forms, eLandings, and eLogbooks. This rule revises regulations to require all vessels using longline pot gear in the GOA sablefish IFQ fishery to report information on fishery participation in logbooks, forms, and eLandings.
NMFS currently requires vessels in the BSAI to have an operating VMS on board the vessel while participating in the sablefish IFQ fishery. This rule revises regulations to extend this requirement to vessels using longline pot gear in the GOA sablefish IFQ fishery.
NMFS currently requires all vessels in the sablefish and halibut IFQ fisheries to submit a PNOL to NMFS. This rule revises regulations to require vessels using longline pot gear in the GOA sablefish IFQ fishery to report the number of pots deployed, the number of pots lost, and the number of pots left deployed on the fishing grounds in the PNOL, in addition to other required information.
This rule contains collection-of-information requirements subject to the Paperwork Reduction Act (PRA) and which have been approved by the Office of Management and Budget (OMB). The collections are listed below by OMB control number.
Public reporting burden is estimated to average 35 minutes per individual response for Catcher Vessel Longline and Pot Gear Daily Fishing Logbook; and 50 minutes for Catcher/processor Longline and Pot Gear Daily Cumulative Production Logbook.
Public reporting burden is estimated to average 15 minutes per individual response for Prior Notice of Landing.
Public reporting burden is estimated to average 15 minutes per individual response to mark longline pot gear; 15 minutes for IFQ Sablefish Longline Pot Gear: Vessel Registration and Request for Pot Gear Tags; and 15 minutes for IFQ Sablefish Longline Pot Gear: Request for Replacement of Longline Pot Gear Tags.
Public reporting burden is estimated to average 2 hours per individual response for VMS operation; and 12 minutes for VMS check-in report.
The cost recovery program is mentioned in this rule. The cost to implement and manage the sablefish IFQ longline pot gear fishery, including the cost of the pot tags, will be included in the annual calculation of NMFS' recoverable costs. These costs will be part of the total management and enforcement costs used in the calculation of the annual fee percentage. For example, when the pot gear tags are ordered, the payment of those tags is charged 100 percent to the IFQ Program for cost recovery purposes. This rule will not change the process that harvesters use to pay cost recovery fees.
The public reporting burden includes the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.
Send comments regarding these burden estimates or any other aspect of this data collection, including suggestions for reducing the burden, to NMFS (see
Notwithstanding any other provision of the 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 PRA, unless that collection of information displays a currently valid OMB control number. All currently approved NOAA collections of information may be viewed at:
Reporting and recordkeeping requirements.
Administrative practice and procedure, Antarctica, Canada, Exports, Fish, Fisheries, Fishing, Imports, Indians, Labeling, Marine resources, Reporting and recordkeeping requirements, Russian Federation, Transportation, Treaties, Wildlife.
Alaska, Fisheries, Reporting and recordkeeping requirements.
For the reasons set out in the preamble, NMFS amends 15 CFR part 902 and 50 CFR parts 300 and 679 as follows:
44 U.S.C. 3501
The additions and revisions read as follows:
(b) * * *
16 U.S.C. 773–773k.
(1) The deployment of any amount or component part of setline gear anywhere in the maritime area; or
(2) The deployment of longline pot gear as defined in § 679.2 of this title, or component part of that gear in Commission regulatory areas 2C, 3A, 3B, and that portion of Area 4A in the Gulf of Alaska west of Area 3B and east of 170°00' W. long.
16 U.S.C. 773
The additions and revisions read as follows:
(4) * * *
(i) For sablefish harvested from any GOA reporting area, all longline gear, longline pot gear, and, for purposes of determining initial IFQ allocation, all pot gear used to make a legal landing.
(iii) For halibut harvested from any IFQ regulatory area, all fishing gear composed of lines with hooks attached, including one or more stationary, buoyed, and anchored lines with hooks attached.
(iv) For halibut harvested from any GOA reporting area, all longline pot gear, if the vessel operator is fishing for IFQ sablefish in accordance with § 679.42(l).
The additions and revisions read as follows.
(a) * * *
(4) * * *
(i)
(c) * * *
(1) * * *
(vi) * * *
(B) * * *
CP = catcher/processor; CV = catcher vessel; pot = longline pot or pot-and-line; lgl = longline; trw = trawl; MS = mothership.
(2) * * *
(iii) * * *
(A) If a catcher vessel, record vessel name, ADF&G vessel registration number, FFP number or Federal crab vessel permit number, operator printed name, operator signature, and page number.
(3) * * *
(i) * * *
(B)
(
(
(
(
(ii) * * *
(A) * * *
(B) * * *
(iv) * * *
(A) * * *
(
(B) * * *
(
(v) * * *
(G)
(l) * * *
(1) * * *
(iii) * * *
(F) IFQ regulatory area(s) in which the IFQ halibut, CDQ halibut, or IFQ sablefish were harvested;
(G) IFQ permit number(s) that will be used to land the IFQ halibut, CDQ halibut, or IFQ sablefish;
(H) Gear type used to harvest the IFQ sablefish or IFQ halibut (see Table 15 to this part); and
(I) If using longline pot gear in the GOA, report the number of pots set, the number of pots lost, and the number of pots left deployed on the fishing grounds.
The additions and revisions read as follows:
(a) * * *
(6)
(i) Deployment of fixed gear, as defined in § 679.2 under “Authorized fishing gear,” by an operator of a vessel fishing for IFQ halibut during the fishing period prescribed in the annual management measures published in the
(13)
(ii) Release halibut caught with longline gear by any method other than—
(iv) Allow halibut caught with longline gear to contact the vessel, if such contact causes, or is capable of causing, the halibut to be stripped from the hook.
(f) * * *
(17) Deploy, conduct fishing with, or retrieve longline pot gear in the GOA before the start or after the end of the IFQ sablefish fishing period specified in § 679.23(g)(1).
(18) Deploy, conduct fishing with, retrieve, or retain IFQ sablefish or IFQ halibut from longline pot gear in the GOA:
(i) In excess of the pot limits specified in § 679.42(l)(5)(ii); or
(ii) Without a pot tag attached to each pot in accordance with § 679.42(l)(4).
(19) Deploy, conduct fishing with, or retain IFQ sablefish or IFQ halibut in the GOA from a pot with an attached pot tag that has a serial number assigned to another vessel or has been reported lost, stolen, or mutilated to NMFS in a request for a replacement pot tag as described in § 679.42(l)(3)(iii).
(20) Deploy longline pot gear to fish IFQ sablefish in the GOA without marking the gear in accordance with § 679.24(a).
(21) Fail to retrieve and remove from the fishing grounds all deployed longline pot gear that is assigned to, and used by, a catcher vessel to fish IFQ sablefish in the Southeast Outside District of the GOA when the vessel makes an IFQ landing.
(22) Fail to redeploy or remove from the fishing grounds all deployed longline pot gear that is assigned to, and used by, a catcher/processor within five days of deploying the gear to fish IFQ sablefish in the Southeast Outside District of the GOA.
(23) Fail to redeploy or remove from the fishing grounds all deployed longline pot gear that is assigned to, and used by, a catcher vessel or a catcher/processor within five days of deploying the gear to fish IFQ sablefish in the West Yakutat District of the GOA and the Central GOA regulatory area.
(24) Fail to redeploy or remove from the fishing grounds all deployed longline pot gear that is assigned to, and used by, a catcher vessel or a catcher/processor within seven days of deploying the gear to fish IFQ sablefish in the Western GOA regulatory area.
(25) Operate a catcher vessel or a catcher/processor using longline pot gear to fish IFQ sablefish or IFQ halibut in the GOA and fail to use functioning VMS equipment as required in § 679.42(k)(2).
(a) * * *
(4) * * *
(i)
(B)
(ii)
(g) * * *
(2) Except for catches of sablefish with longline pot gear in the GOA, catches of sablefish by fixed gear during other periods may be retained up to the amounts provided for by the directed fishing standards specified at § 679.20 when made by an individual aboard the vessel who has a valid IFQ permit and unused IFQ in the account on which the permit was issued.
The additions and revisions read as follows.
(a) * * *
(3) Each end of a set of longline pot gear deployed to fish IFQ sablefish in the GOA must have attached a cluster of four or more marker buoys including one hard buoy ball marked with the capital letters “LP” in accordance with paragraph (a)(2) of this section, a flag mounted on a pole, and radar reflector floating on the sea surface.
(b) * * *
(1) * * *
(iii) While directed fishing for IFQ sablefish in the GOA.
(c) * * *
(2) * * *
(i) * * *
(A) No person may use any gear other than hook-and-line, longline pot, and trawl gear when fishing for sablefish in the Eastern GOA regulatory area.
(B) No person may use any gear other than hook-and-line gear and longline pot gear to engage in directed fishing for IFQ sablefish.
(3)
The addition and revisions read as follows:
(b) * * *
(1)
(i)
(ii)
(2)
(k) * * *
(1)
(ii)
(B) The operator of the vessel must contact NMFS at 800–304–4846 (option 1) between 0600 and 0000 A.l.t. and receive a VMS confirmation number at least 72 hours prior to fishing for IFQ sablefish in the Bering Sea or Aleutian Islands.
(2)
(ii)
(B) The operator of the vessel must contact NMFS at 800–304–4846 (option 1) between 0600 and 0000 A.l.t. and receive a VMS confirmation number at least 72 hours prior to using longline pot gear to fish for IFQ sablefish in the Gulf of Alaska.
(l)
(1)
(2)
(i) Request and be issued pot tags from NMFS as specified in paragraph (l)(3);
(ii) Use pot tags as specified in paragraph (l)(4);
(iii) Deploy and retrieve longline pot gear as specified in paragraph (l)(5);
(iv) Retain IFQ halibut caught in longline pot gear if sufficient halibut IFQ is held by persons on board the vessel as specified in paragraph (l)(6); and
(v) Comply with other requirements as specified in paragraph (l)(7).
(3)
(B) The vessel owner must specify the number of requested pot tags for each vessel for each IFQ regulatory area in the GOA (up to the maximum number of pots specified in paragraph (l)(5)(ii) of this section) on the IFQ Sablefish Longline Pot Gear Vessel Registration and Request for Pot Gear Tags form.
(ii)
(B) Each pot tag will be a unique color that is specific to the IFQ regulatory area in the GOA in which it must be deployed and imprinted with a unique serial number.
(C) NMFS will send the pot tags to the vessel owner at the address provided on the IFQ Sablefish Longline Pot Gear Vessel Registration and Request for Pot Gear Tags form.
(iii)
(B) The vessel owner to whom the lost, stolen, or mutilated pot tag was issued must submit a complete IFQ Sablefish Request for Replacement of Longline Pot Gear Tags form according to form instructions. The form is located on the NMFS Alaska Region Web site at
(C) A complete form must be signed by the vessel owner and is a sworn
(D) NMFS will review a request to replace a pot tag or tags and will issue the appropriate number of replacement pot tags. The total number of pot tags issued to a vessel owner for an IFQ regulatory area in the GOA cannot exceed the maximum number of pots authorized for use by a vessel in that IFQ regulatory area specified in paragraph (l)(5)(ii) of this section. The total number of pot tags issued to a vessel owner for an IFQ regulatory area in the GOA equals the sum of the number of pot tags issued for that IFQ regulatory area that have not been replaced plus the number of replacement pot tags issued for that IFQ regulatory area.
(iv)
(B) To register a vessel and assign pot tags, the vessel owner must annually submit a complete IFQ Sablefish Longline Pot Gear Vessel Registration and Request for Pot Gear Tags form to NMFS.
(
(
(4)
(A) Issued by NMFS according to paragraph (l)(3) of this section;
(B) The color specific to the regulatory area in which it will be used; and
(C) Inscribed with a legible unique serial number.
(ii) A valid pot tag must be attached to each pot on board the vessel to which the pot tags are assigned before the vessel departs port to fish.
(iii) A valid pot tag must be attached to a pot bridge or cross member such that the entire pot tag is visible and not obstructed.
(5)
(A) A vessel operator must mark longline pot gear used to fish IFQ sablefish in the GOA as specified in § 679.24(a).
(B) A vessel operator must deploy and retrieve longline pot gear to fish IFQ sablefish in the GOA only during the sablefish fishing period specified in § 679.23(g)(1).
(C) The gear retrieval and removal requirements in paragraphs (l)(5)(iii) and (iv) of this section apply to all longline pot gear that is assigned to the vessel and deployed to fish IFQ sablefish and to all other fishing equipment attached to longline pot gear that is deployed in the water by the vessel to fish IFQ sablefish. All other fishing equipment attached to longline pot gear includes, but is not limited to, equipment used to mark longline pot gear as required in § 679.24(a)(3).
(ii)
(A) In the Southeast Outside District of the GOA, a vessel operator is limited to deploying a maximum of 120 pots.
(B) In the West Yakutat District of the GOA, a vessel operator is limited to deploying a maximum of 120 pots.
(C) In the Central GOA regulatory area, a vessel operator is limited to deploying a maximum of 300 pots.
(D) In the Western GOA regulatory area, a vessel operator is limited to deploying a maximum of 300 pots.
(iii)
(B) In the Southeast Outside District of the GOA, a catcher/processor must redeploy or remove from the fishing grounds all longline pot gear that is assigned to the vessel and deployed to fish IFQ sablefish within five days of deploying the gear.
(C) In the West Yakutat District of the GOA and the Central GOA regulatory area, a vessel operator must redeploy or remove from the fishing grounds all longline pot gear that is assigned to the vessel and deployed to fish IFQ sablefish within five days of deploying the gear.
(D) In the Western GOA regulatory area, a vessel operator must redeploy or remove from the fishing grounds all longline pot gear that is assigned to the vessel and deployed to fish IFQ sablefish within seven days of deploying the gear.
(iv)
(6)
(A) The IFQ halibut is caught in any GOA reporting area in accordance with paragraph (l) of this section; and
(B) An IFQ permit holder on board the vessel has unused halibut IFQ for the IFQ regulatory area fished and IFQ vessel category.
(ii) [Reserved]
(7)
(i) Complete a longline and pot gear Daily Fishing Logbook (DFL) or Daily Cumulative Production Logbook (DCPL) as specified in § 679.5(c); and
(ii) Comply with Vessel Monitoring System (VMS) requirements specified in paragraph (k)(2) of this section.
(a) * * *
(1) * * *
(i)
(B) A catcher vessel when fishing for halibut while carrying a person named on a permit issued under § 679.4(d)(1)(i), (d)(2)(i), or (e)(2), or for IFQ sablefish, as defined at § 679.2, while carrying a person named on a permit issued under § 679.4(d)(1)(i) or (d)(2)(i); or
14. In Table 15 to part 679, revise entries for “Pot”, “Authorized gear for
Securities and Exchange Commission.
Final rule; technical correction.
This document makes technical corrections to a rule that was published in the
Effective December 28, 2016.
Steven G. Hearne, Senior Special Counsel, at (202) 551–3430, Division of Corporation Finance, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549.
We are making technical corrections to Rule 12g–1
Reporting and recordkeeping requirements, Securities.
For the reasons set out above, title 17, chapter II of the Code of Federal Regulations is amended as follows:
15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z–2, 77z–3, 77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78c–3, 78c–5, 78d, 78e, 78f, 78g, 78i, 78j, 78j–1, 78k, 78k–1, 78
(b)(1) The class of equity securities was held of record by fewer than 2,000 persons and fewer than 500 of those persons were not accredited investors (as such term is defined in § 230.501(a) of this chapter, determined as of such day rather than at the time of the sale of the securities); or
Internal Revenue Service (IRS), Treasury.
Final regulations and removal of temporary regulations.
This document contains final regulations that provide guidance on determining ownership of a passive foreign investment company (PFIC) and on certain annual reporting requirements for shareholders of PFICs to file Form 8621, “Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund.” In addition, the final regulations provide guidance on an exception to the requirement for certain shareholders of foreign corporations to file Form 5471, “Information Return of U.S. Persons with Respect to Certain Foreign Corporations.” The regulations finalize proposed regulations and withdraw temporary regulations published on December 31, 2013. The final regulations affect United States persons that own interests in PFICs, and certain United States shareholders of foreign corporations.
Jeffery G. Mitchell at (202) 317–6934 (not a toll-free number).
On December 31, 2013, the Treasury Department and the IRS published final and temporary regulations (2013 temporary regulations) under sections 1291, 1298, 6038, and 6046 (T.D. 9650) in the
On April 28, 2014, the Treasury Department and the IRS issued Notice 2014–28 (2014–18 I.R.B. 990), which announced that the regulations under section 1291 would provide that a United States person that owns stock of a PFIC through a tax-exempt organization or account is not treated as a shareholder of the PFIC with respect to the stock. In addition, on September 29, 2014, the Treasury Department and the IRS issued Notice 2014–51 (2014–40 I.R.B. 594), which announced that the regulations under section 1298 would provide guidance concerning United States persons that own stock in a PFIC that is marked to market under a provision of chapter 1 of the Code other than section 1296.
This Treasury decision adopts the 2013 proposed regulations with the changes described below as final regulations, including implementing the rules described in Notice 2014–28 and Notice 2014–51, and removes the corresponding 2013 temporary regulations.
The final regulations retain the basic approach and structure of the 2013 temporary regulations, with certain revisions. This Summary of Comments and Explanation of Revisions section discusses those revisions as well as comments received in response to the solicitation of comments in the notice of proposed rulemaking accompanying the 2013 temporary regulations. Several comments were received that did not pertain to the rules in the 2013 temporary regulations. These comments are beyond the scope of this rulemaking and are not addressed in this preamble. The Treasury Department and the IRS will consider these comments in connection with any future guidance projects addressing the issues discussed in the comments.
As described in Notice 2014–28, the application of the PFIC rules to a United States person treated as owning stock of a PFIC through a tax-exempt organization or account described in § 1.1298–1(c)(1) would be inconsistent with the tax policies underlying the PFIC rules and the treatment of tax-exempt organizations and accounts. For example, applying the PFIC rules to a United States person that owns stock of a PFIC through an individual retirement account (IRA) described in section 408(a) would be inconsistent with the principle of deferred taxation provided by IRAs. Notice 2014–28 provides that the regulations incorporating the guidance described in the notice will be effective for taxable years of United States persons that own stock of a PFIC through a tax-exempt organization or account ending on or after December 31, 2013.
The final regulations modify the definition of shareholder in § 1.1291–1 as announced in Notice 2014–28. Under new § 1.1291–1(e)(2), a United States person is not treated as a shareholder of a PFIC to the extent the person owns PFIC stock through a tax-exempt organization or account described in § 1.1298–1(c)(1).
On April 1, 1992 (57 FR 11024) the Treasury Department and the IRS issued proposed regulations (1992 proposed regulations) that, among other things, included rules for determining when a United States person is treated as indirectly owning stock of a PFIC. Consistent with section 1298(a)(2)(A), § 1.1291–1(b)(8)(ii)(A) of the 1992 proposed regulations provided that a United States person who directly or indirectly owns 50 percent or more in value of the stock of a foreign corporation that is not a PFIC is considered to own a proportionate amount (by value) of any stock (including PFIC stock) owned directly or indirectly by the foreign corporation. Thus, for example, if a United States person owned 100 percent of the shares of FC, a foreign corporation that is not a PFIC but that owns 50 shares of a PFIC, the United States person would be treated as indirectly owning the 50 PFIC shares under § 1.1291–1(b)(8)(ii)(A) of the 1992 proposed regulations.
By contrast, section 1298(a)(1)(B) provides that PFIC stock owned by a domestic corporation (which generally would be treated as a PFIC shareholder itself) is not attributed to any other person, except to the extent provided in regulations. Pursuant to this grant of regulatory authority, § 1.1291–1(b)(8)(ii)(C) of the 1992 proposed regulations provided that, if stock of a section 1291 fund was not treated as owned indirectly by a United States person under the other attribution rules provided in the proposed regulations,
Both § 1.1291–1(b)(8)(ii)(A) and (C) of the 1992 proposed regulations were withdrawn and reissued under the 2013 temporary regulations as § 1.1291–1T(b)(8)(ii)(A) and (C), respectively.
The purpose of § 1.1291–1(b)(8)(ii)(C) of the 1992 proposed regulations and § 1.1291–1T(b)(8)(ii)(C), as explained in the preamble to the 1992 proposed regulations, was to attribute stock through a domestic C corporation in certain circumstances if, absent such attribution, the stock of a PFIC would not be treated as owned by any United States person. In particular, because § 1.1291–1T(b)(8)(ii)(A) provides that a United States person who directly or indirectly owns 50 percent or more in value of the stock of a foreign corporation that is not a PFIC is considered to own a proportionate amount (by value) of any stock owned directly or indirectly by the foreign corporation, without § 1.1291–1T(b)(8)(ii)(C), a United States person could interpose a domestic C corporation into an ownership structure to avoid shareholder status with respect to stock of a PFIC that the United States person indirectly owned through one or more foreign corporations that were not PFICs. In other words, § 1.1291–1T(b)(8)(ii)(C) provides guidance as to when a United States person is treated as indirectly owning stock of a foreign corporation through a domestic corporation for purposes of § 1.1291–1T(b)(8)(ii)(A).
For example, assume that A, a United States person, owns 49 percent of the stock of FC1, a foreign corporation that is not a PFIC, and separately all the stock of DC, a domestic corporation that is not an S corporation. DC, in turn, owns the remaining 51 percent of the stock of FC1, and FC1 owns 100 shares of stock in a PFIC (which is not a controlled foreign corporation within the meaning of section 957(a)). DC is an indirect shareholder with respect to 51 percent of the PFIC stock held by FC1 under § 1.1291–1T(b)(8)(ii)(A). Absent the application of § 1.1291–1T(b)(8)(ii)(C), because A directly or indirectly owns less than 50 percent of the value of the stock of FC1 and thus § 1.1291–1T(b)(8)(ii)(A) does not apply, A would not be treated as an indirect shareholder with respect to any of the PFIC stock directly owned by FC1 when, from an economic perspective, A indirectly owns all the PFIC stock held by FC1. Therefore, without a rule treating A as owning DC's stock in FC1, the remaining 49 percent of the PFIC stock held by FC1 would not be treated as owned by any United States person.
On the other hand, the literal language of § 1.1291–1T(b)(8)(ii)(C) could have been interpreted to create overlapping ownership by two or more United States persons in the same stock of a section 1291 fund. Thus, in the foregoing example, A may have been considered as owning 100 percent of the stock of FC1, and therefore as indirectly owning all 100 shares of the PFIC stock held by FC1, even though 51 of those shares are considered indirectly owned by DC, a United States person. This outcome is inconsistent with the intended purpose of the rule to attribute stock through a domestic C corporation in certain circumstances if, absent such attribution, the stock of a PFIC would not be treated as owned by any United States person.
To address this concern, the final regulations include a non-duplication rule. Specifically, the final regulations provide under § 1.1291–1(b)(8)(ii)(C)(
Applying the non-duplication rule to the example above, to the extent that the 51 shares of PFIC stock are indirectly owned by DC (a United States person) under § 1.1291–1(b)(8)(ii)(A), those shares are not also treated as indirectly owned by A (other than for purposes of determining whether A satisfies the ownership threshold of § 1.1291–1(b)(8)(ii)(A)). Only the remaining 49 shares of PFIC stock are considered to be indirectly owned by A.
Lastly, the final regulations make two additional clarifications with respect to this rule. First, the final regulations clarify, under § 1.1291–1(b)(8)(ii)(C)(
A number of comments requested that the final regulations expand the exceptions to section 1298(f) reporting provided in the 2013 temporary regulations or add new exceptions.
Two comments requested an exception to section 1298(f) reporting for PFIC stock that is marked to market under a provision of chapter 1 of the Code other than section 1296 (a non-section 1296 MTM provision), such as section 475(f). In response to these comments, the Treasury Department and the IRS issued Notice 2014–51, which announced that the regulations under section 1298 would be amended to provide that United States persons that own stock in a PFIC that is marked to market under a non-section 1296 MTM regime generally are not subject to section 1298(f) reporting. In addition, the notice states that the regulations would provide that a shareholder's PFIC stock that is marked to market under a non-section 1296 MTM provision is not taken into account in determining whether the shareholder qualifies for the exceptions from reporting set forth in § 1.1298–1T(c)(2)(i)(A)(
The final regulations, in accordance with Notice 2014–51, add § 1.1298–1(c)(3), which provides that United States persons that own PFIC stock that is marked to market under a non-section 1296 MTM provision are not subject to section 1298(f) reporting unless they are subject to section 1291 under the coordination rule in § 1.1291–1(c)(4)(ii). Generally, under § 1.1291–1(c)(4)(ii), when a United States person's PFIC stock is marked to market under a non-section 1296 MTM provision in a taxable year after the year in which the United States person acquired the stock, the United States person is subject to section 1291 for the first taxable year in which the United States person marks to market the PFIC stock. Thus, the United States person is subject to section 1291 with respect to any unrealized gain in the stock as of the last day of the first taxable year in which the stock is marked to market, as if the person disposed of the stock on that day.
Also consistent with Notice 2014–51, the final regulations add § 1.1298–1(c)(2)(ii)(C), pursuant to which a United States person's PFIC stock that is marked to market under a non-section 1296 MTM provision is not taken into account in determining whether the person qualifies for the exceptions from section 1298(f) reporting set forth in § 1.1298–1(c)(2)(i)(A)(
A comment requested that the final regulations add a new exception from the section 1298(f) filing requirements for domestic partnerships in which all of the partners are tax-exempt organizations (or other partnerships, all of the partners of which are tax-exempt organizations) that are not subject to the PFIC rules with respect to a PFIC held by the partnership because any income derived with respect to the PFIC would not be taxable to the tax-exempt partners under subchapter F of Subtitle A of the Code. The comment pointed out that a tax-exempt organization is subject to section 1298(f) reporting with respect to PFIC stock under § 1.1298–1(c)(1) only if the income derived by the organization with respect to the PFIC stock would be taxable to the organization under subchapter F of Subtitle A of the Code. However, under the 2013 temporary regulations, a domestic partnership (such as a domestic partnership that exclusively pools the funds of tax-exempt organizations to invest in PFICs) is required to file a Form 8621 with respect to PFIC stock even when none of its partners are subject to the PFIC rules with respect to the PFIC stock.
Requiring reporting under section 1298(f) by a domestic partnership when none of its direct and indirect owners are subject to the PFIC rules may result in undue compliance costs and burdens. Accordingly, consistent with the exception in § 1.1298–1(c)(1), the final regulations adopt and expand upon this comment and provide a final rule in § 1.1298–1(c)(6) that exempts a domestic partnership from section 1298(f) reporting with respect to an interest in a PFIC for a taxable year when none of its direct or indirect partners are required to file Form 8621 (or successor form) with respect to the PFIC interest under section 1298(f) and these regulations because the partners are not subject to the PFIC rules.
Thus, for example, if all the partners of a domestic partnership are tax-exempt organizations exempt from PFIC taxation under § 1.1291–1(e) with respect to PFIC stock held by the partnership, and accordingly are exempt from reporting pursuant to § 1.1298–1(c)(1), the partnership, in turn, is exempt from filing Form 8621 under section 1298(f) with respect to the PFIC stock held by the partnership. Likewise, if all the partners of a domestic partnership are foreign corporations that are not considered to be shareholders under § 1.1291–1(b)(7) of PFIC stock held by the partnership, and no United States person is an indirect shareholder of the PFIC stock under § 1.1291–1(b)(8), the partnership, in turn, is exempt from filing Form 8621 under section 1298(f) with respect to the PFIC stock held by the partnership.
In contrast, a domestic partnership is not exempt from filing Form 8621 under § 1.1298–1(c)(6) with respect to stock it holds in a section 1291 fund when some or all of its partners are exempt from filing Form 8621 with respect to that stock but otherwise would be subject to tax on distributions on, or dispositions of, that stock. PFIC information reporting by the domestic partnership in these circumstances is appropriate because it furthers PFIC tax compliance and enforcement.
In general, § 1.1298–1T(b)(3)(ii) exempts a United States person from section 1298(f) reporting with respect to PFIC stock that is owned by the United States person through a foreign trust that is a foreign pension fund operated principally to provide pension or retirement benefits, when, pursuant to the provisions of a U.S. income tax treaty, the income earned by the pension fund may be taxed as the income of the United States person only when, and to the extent, the income is paid to, or for the benefit of, the United States person.
As a threshold matter, this rule applies only when the United States person owns the PFIC through a foreign pension fund that is treated as a foreign trust under section 7701(a)(31)(B). However, the applicable provisions of U.S. income tax treaties apply generally to foreign pension funds, regardless of whether the foreign pension fund is treated as a trust for U.S. income tax purposes.
The Treasury Department and the IRS have concluded that the treaty-based exception in § 1.1298–1T(b)(3)(ii) should be expanded to apply to PFICs held by United States persons through all applicable foreign pension funds (or equivalents, such as exempt pension trusts or pension schemes referred to in certain U.S. income tax treaties), regardless of their entity classification for U.S. income tax purposes. Accordingly, the final regulations revise the treaty-based exception for PFIC stock held by a United States person through certain foreign pension funds under § 1.1298–1T(b)(3)(ii) to eliminate the requirement that the foreign pension fund be treated as a foreign trust under section 7701(a)(31)(B). The final rule, which is renumbered § 1.1298–1(c)(4), clarifies that a foreign pension fund (or equivalent) covered by this exception may be any type of arrangement, including but not limited to one of the arrangements listed in § 1.1298–1(c)(4). The final rule also applies in the case of an income tax treaty that provides the relevant benefit by election (or other procedure), such as under paragraph 7 of Article 18 of the U.S.-Canada income tax treaty, to the extent that the election is in effect (or other procedure properly satisfied).
A comment requested that an exception from the section 1298(f) filing
Nonresident aliens are not subject to tax under the PFIC provisions (sections 1291 through 1298) because the PFIC rules apply only to “United States persons,” and nonresident aliens are not United States persons within the meaning of section 7701(a)(30). However, dual resident taxpayers treated as residents of a treaty country for U.S. income tax purposes generally are treated as United States residents under the Code for purposes other than the computation of their income tax liability. § 301.7701(b)–7(a)(3). Accordingly, dual resident taxpayers who are treated as residents of a treaty country under a tie-breaker rule and who own PFICs are subject to the section 1298(f) reporting rules set forth in the 2013 temporary regulations even though they are not subject to tax under the PFIC provisions.
The requirement to file Form 8621 under section 1298(f) increases taxpayer awareness of, and compliance with, the PFIC rules. However, because dual resident taxpayers treated as nonresident aliens for purposes of computing their U.S. tax liability are not subject to tax under the PFIC rules, section 1298(f) reporting by these dual resident taxpayers is not essential to the enforcement of the PFIC provisions. Thus, the Treasury Department and the IRS have determined that it is appropriate to provide an exception from the section 1298(f) reporting rules for dual resident taxpayers who are treated as residents of a treaty country, and, accordingly, not subject to tax under the PFIC provisions.
Accordingly, the final regulations add § 1.1298–1(c)(5), which sets forth an exception from section 1298(f) reporting for a dual resident taxpayer for a taxable year, or the portion of a taxable year, during which the dual resident taxpayer determines any U.S. income tax liability as a nonresident alien under § 301.7701(b)–7, and complies with the filing requirements of § 301.7701(b)–7(b) and (c) and, if applicable, § 1.6012–1(b)(2)(ii)(
Under the 2013 temporary regulations, a shareholder who owns stock in a section 1291 fund for only a short period of time during a year, and does not recognize an excess distribution (or gain treated as an excess distribution) with respect to the section 1291 fund during the year may still have a filing obligation under section 1298(f). Assume, for example, that during a shareholder's taxable year, its section 1291 fund (upper-tier PFIC) acquires all of the stock of another section 1291 fund (lower-tier PFIC), which is liquidated into the upper-tier PFIC a few days after it is acquired. The lower-tier PFIC does not make any distributions to the upper-tier PFIC before the liquidation, and the upper-tier PFIC does not recognize any gain upon the liquidation of the lower-tier PFIC. On the last day of its taxable year, the shareholder owns PFIC stock with a value of more than $25,000, and thus the exception in § 1.1298–1T(c)(2) is not applicable. (See Section B.7 of this preamble for an explanation of the reporting exception in § 1.1298–1T(c)(2).) Accordingly, under the 2013 temporary regulations, the shareholder is required to report its ownership in the lower-tier PFIC, even though it only owned the PFIC for a few days during the year and did not recognize any income with respect to the PFIC.
The Treasury Department and the IRS have concluded that compliance with, and enforcement of, the PFIC regime would not be adversely impacted by allowing a reporting exception for transitory ownership of section 1291 funds when there is no taxation under section 1291 with respect to the short period of ownership. Thus, the final regulations provide an exception for section 1298(f) reporting for certain shareholders with respect to PFICs that were owned for a short period of time during which no PFIC taxation was imposed on the shareholders. Specifically, under § 1.1298–1(c)(7), a shareholder is not required to file a Form 8621 under section 1298(f) with respect to stock of a section 1291 fund that it acquired either during its taxable year or the immediately preceding year, when the shareholder (i) does not own any stock of the section 1291 fund for more than 30 days during the period beginning 29 days before the first day of the shareholder's taxable year and ending 29 days after the close of the shareholder's taxable year and (ii) did not receive an excess distribution (including gain treated as an excess distribution) with respect to the section 1291 fund.
A bona fide resident (within the meaning of section 937(a)) of a possession of the United States (U.S. territories) (namely, American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the United States Virgin Islands) may include an individual who is also a United States person, and thus the bona fide resident may be a shareholder of a PFIC.
Under the 2013 temporary regulations, the general section 1298(f) reporting requirements in § 1.1298–1T(b)(1) apply regardless of whether a shareholder is required to file a U.S. income tax return. As a result, under the 2013 temporary regulations, bona fide residents of U.S. territories who were shareholders of PFICs were subject to the section 1298(f) filing requirements set forth in the 2013 temporary regulations even when they were not required to file a U.S. income tax return. As described in greater detail in this Section B.6, the final regulations change this result for bona fide residents of Guam, the Northern Mariana Islands, and the United States Virgin Islands and, as provided in § 1.1298–1(h)(1), the final regulations apply to taxable years
Three of the five U.S. territories (Guam, the Northern Mariana Islands, and the United States Virgin Islands) have a mirror code system of taxation, which means that their income tax laws generally are identical to the Code (except for the substitution of the name of the relevant territory for the term “United States,” where appropriate). Bona fide residents of U.S. territories that are mirror code jurisdictions have no income tax obligation (or related filing obligation) with the United States provided, generally, that they properly report income and fully pay their income tax liability to the tax administration of their respective U.S. territory. See sections 932 and 935. Thus, for example, a bona fide resident of Guam who is a shareholder of a PFIC would generally not have a U.S. income tax obligation even in a year when the shareholder is treated as receiving an excess distribution (or recognizing gain treated as an excess distribution) with respect to the PFIC.
Bona fide residents of non-mirror code jurisdictions (American Samoa and Puerto Rico) generally exclude territory-source income from U.S. federal gross income under sections 931 and 933, respectively. (American Samoa currently is the only territory to which section 931 applies because it is the only territory that has entered into an implementing agreement under sections 1271(b) and 1277(b) of the Tax Reform Act of 1986.) However, unlike mirror code jurisdictions, these bona fide residents generally are subject to U.S. income taxation, and have a related income tax return filing requirement with the United States, to the extent they have non-territory-source income or income from amounts paid for services performed as an employee of the United States or any agency thereof. See sections 931(a) and (d) and 933. Further, under the 1992 proposed regulations, certain excess distributions (or gains treated as excess distributions) from a PFIC would be exempt from taxation with respect to a shareholder who is a bona fide resident of Puerto Rico if the amounts distributed were derived from sources in Puerto Rico. Section 1.1291–1(f) of the 1992 proposed regulations. Accordingly, for example, if a bona fide resident of Puerto Rico is a shareholder of a PFIC and is treated as receiving an excess distribution (or recognizing gain treated as an excess distribution) with respect to the PFIC that is from sources outside of Puerto Rico, such shareholder would be subject to U.S. income tax under the PFIC provisions with respect to such amounts.
The Treasury Department and the IRS have concluded that relieving section 1298(f) reporting for PFIC stock held by an individual who is a bona fide resident of a U.S. territory that is a mirror code jurisdiction who is not required to file a U.S. income tax return for one or more taxable years would not adversely impact tax enforcement efforts related to PFICs. This is because such individuals are not subject to U.S. income tax in such years, given that they have properly reported income and fully paid their income tax liability to the tax administration of their respective U.S. territory, and it is unlikely such individuals will ever be subject to tax under the PFIC provisions in the years they receive excess distributions (or recognize gain treated as excess distributions). As a result, these final regulations add § 1.1298–1(c)(8) to provide an exception from reporting under section 1298(f) for a taxable year in which the individual is a bona fide resident of Guam, the Northern Mariana Islands, or the United States Virgin Islands and is not required to file a U.S. income tax return.
However, no exception from reporting is provided with respect to bona fide residents of Puerto Rico and American Samoa. Bona fide residents of Puerto Rico and American Samoa who are not required to file U.S. income tax returns in a given year may still be subject to tax under the PFIC provisions if they are shareholders of a PFIC and receive excess distributions (or recognize gain treated as excess distributions) in a later year. Thus, PFIC information reporting by these individuals can reasonably be expected to further PFIC tax compliance and enforcement.
Under § 1.1298–1T(c)(2)(i), a shareholder generally is not required to file Form 8621 with respect to a section 1291 fund when the shareholder is not treated as receiving an excess distribution (or recognizing gain treated as an excess distribution) with respect to the section 1291 fund stock, and, as of the last day of the shareholder's taxable year, either the value of all PFIC stock considered owned by the shareholder is $25,000 (or $50,000 for shareholders that file a joint return) or less, or, if the stock of the section 1291 fund is owned indirectly, the value of the indirectly owned stock is $5,000 or less. Stock in a PFIC that is indirectly owned through another PFIC or United States person that is a shareholder of the PFIC is not taken into account in determining if the $25,000 (or $50,000 for joint returns) threshold is met. § 1.1298–1T(c)(2)(ii).
A comment generally requested that the reporting exception thresholds in § 1.1298–1T(c)(2)(i) be increased for U.S. individuals living abroad. The apparent concern underlying the comment is the commenter's view that such persons often are not aware of the PFIC provisions. The Treasury Department and the IRS have determined that adopting an exception to the reporting requirements on this basis would adversely affect compliance with, and enforcement of, the PFIC provisions, because such individuals remain subject to tax under section 1291 regardless of the value of their PFIC stock, and a benefit of requiring reporting with respect to a section 1291 fund in a year in which a shareholder is not subject to tax under section 1291 is to enhance the shareholder's awareness of the PFIC requirements with respect to the section 1291 fund. The Treasury Department and the IRS proposed the dollar amounts for the reporting exception thresholds in the 2013 temporary regulations in order to balance administrative burdens with compliance and enforcement concerns. No comments were submitted that recommended a specific higher dollar amount or that provided a basis, consistent with the purposes of the PFIC provisions, for increasing the monetary thresholds. Accordingly, the final regulations do not increase the monetary thresholds for these exceptions.
A separate comment requested that the reporting exceptions under § 1.1298–1T(c)(2) be expanded to apply when a United States person recognizes an excess distribution under section 1291 in a taxable year with respect to one or more PFICs, to the extent the PFICs are indirectly held through domestic pass-through entities and the total excess distribution income from the PFICs in the taxable year is less than $1,000, indexed for inflation. The comment explained that many United States persons hold indirect interests in section 1291 funds, particularly through partnerships, that generate only small amounts of excess distribution income, and exempting reporting for these PFIC shareholders would simplify PFIC reporting compliance. However, the section 1291 rules apply when a PFIC shareholder receives (or is treated as receiving) an excess distribution, regardless of the dollar amount of the excess distribution. After consideration of this comment, the Treasury Department and the IRS concluded that the request should not be adopted because of the potential for such a
Section 1.1298–1T(d) generally provides that a United States person required to file Form 8621 under section 1298(f) with respect to a PFIC for a taxable year must attach the form to the person's U.S. income tax return (or information return, if applicable) for the relevant taxable year. The instructions for Form 8621 further provide that a United States person who is required to file Form 8621 for a taxable year in which the person does not file an income tax return (or other return) must send the Form 8621 to the IRS at a mailing addressed designated in the instructions.
These final regulations clarify how a United States person files a Form 8621 (or successor form) when the United States person is not otherwise required to file a U.S. income tax return (or information return, if applicable). Section 1.1298–1(d) of the final regulations states that a United States person that is not otherwise required to file a U.S. income tax return must file the Form 8621 (or successor form) in accordance with the instructions for the form.
A comment requested that the final regulations allow a “protective” Form 8621 to be filed under section 1298(f) with respect to a foreign corporation when a shareholder is unsure of its PFIC status due to factors beyond the control of the shareholder that prevent access to the books and records of the corporation necessary to make a PFIC determination. The purpose of the protective filing is to defer any potential section 1298(f) filing requirements so that the assessment period for the shareholder's entire return under section 6501(c)(8) would not be suspended if the foreign corporation is subsequently determined to have been a PFIC in the year to which the protective filing relates. The comment proposed that if the foreign corporation subsequently is determined to be a PFIC for a taxable year for which the protective filing was made, the shareholder would be subject to PFIC taxation in that year, and thus would be required to file Form 8621 for that year.
The failure to file Form 8621 to properly report PFIC information under section 1298(f) for a taxable year suspends the period of limitation on assessment under section 6501(c)(8)(A) with respect to any tax return, event, or period to which the information relates until three years after the information is reported. However, if the failure to file the information is due to reasonable cause and not willful neglect, the period of limitation on assessment under section 6501(c)(8)(B) is suspended only with respect to items related to such failure. The Treasury Department and the IRS have concluded that the reasonable cause exception under section 6501(c)(8)(B) provides appropriate relief for a failure to file Form 8621. When a taxpayer can establish reasonable cause for a failure to file Form 8621, the assessment period is suspended only with respect to items related to the PFIC that were required to be reported on the Form 8621. Thus, the recommendation to add a protective filing rule to the final regulations is not adopted.
Two comments requested that the final regulations allow a United States person to file a consolidated Form 8621 that would include all of the person's PFICs and relevant information on a supporting schedule attached to the Form 8621. One of the comments explained that foreign investment partnerships commonly hold multiple PFIC investments, and, in such cases, a United States person who is a partner in the foreign partnership is required to file multiple Forms 8621 to report each underlying PFIC. This comment further noted that at least two commonly used commercial tax return preparation products, as of 2012, did not allow for electronic filing of a Form 1040 containing more than five Forms 8621, which is contrary to the IRS's goal of increasing e-filings of tax returns.
The Treasury Department and the IRS have concluded that the expenditures needed to redesign and reprogram the IRS's processing system to gather, compile, and cross-reference information from a consolidated Form 8621 outweigh the marginal administrative burden for United States persons to file a separate Form 8621 with respect to each of their PFICs. Accordingly, the final regulations do not adopt the comment to permit consolidated filings.
The final regulations adopt the 2013 temporary regulations with respect to the removal of the requirement under sections 6038 and 6046 that certain United States persons file a statement in circumstances where the United States person qualifies for the constructive ownership exception, with certain clarifying changes to the language of the regulations.
Notice 2014–28, 2014–18 I.R.B. 990, is obsolete as of December 28, 2016.
Notice 2014–51, 2014–40 I.R.B. 594, is obsolete as of December 28, 2016.
Certain IRS regulations, including these, are exempt from the requirements of Executive Order 12866, as supplemented and reaffirmed by Executive Order 13563. Therefore, a regulatory assessment is not required. Pursuant to section 7805(f) of the Code, the notice of proposed rulemaking preceding these regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small businesses.
It is hereby certified that the collection of information in these regulations will not have a significant economic impact on a substantial number of small entities within the meaning of section 601(6) of the Regulatory Flexibility Act (5 U.S.C. chapter 6). This certification is based on the fact that most small entities do not own an interest in a PFIC. Moreover, those small entities that are shareholders of a PFIC generally either make a qualified electing fund election under section 1295 or make a mark to market election under section 1296 and were therefore required to file Form 8621 with respect to the PFIC stock under the rules that preceded the 2013 temporary regulations. Thus, there is a limited class of small entities that are PFIC shareholders that were required to file Forms 8621 under the 2013 temporary regulations and that were not required to do so prior to the issuance of those regulations. The final regulations, as compared to the 2013 temporary regulations, provide additional exceptions that exempt certain PFIC shareholders, some of which could include certain small entities, from filing Form 8621. Accordingly, the collection of information required by these final regulations does not affect a substantial number of small entities.
Further, the collection of information required under these final regulations will not have a significant economic impact on a substantial number of small entities because neither the time nor the costs necessary for shareholders to comply with the collection of information requirements is significant. Therefore, a Regulatory Flexibility
The principal author of these regulations is Stephen M. Peng of the Office of Associate Chief Counsel (International). However, other personnel from the Treasury Department and the IRS participated in their development.
Income taxes, Reporting and recordkeeping requirements.
Accordingly, 26 CFR part 1 is amended as follows:
26 U.S.C. 7805 * * *
Sections 1.1291–1, 1.1291–9, and 1.1298–1 also issued under 26 U.S.C. 1298(a) and (g).
Section 1.1298–1 also issued under 26 U.S.C. 1298(f).
Section 1.6038–2 also issued under 26 U.S.C. 6038(d).
Section 1.6046–1 also issued 26 U.S.C. 6046(b).
The revisions read as follows:
(a) through (b)(2)(i) [Reserved]
(ii) Pedigreed QEF.
(b)(2)(iii) and (iv) [Reserved]
(v) Section 1291 fund.
(3) through (6) [Reserved]
(7) Shareholder.
(8) Indirect shareholder.
(i) In general.
(ii) Ownership through a corporation.
(A) Ownership through a non-PFIC foreign corporation.
(B) Ownership through a PFIC.
(C) Ownership through a domestic corporation.
(iii) Ownership through pass-through entities.
(A) Partnerships.
(B) S Corporations.
(C) Estates and nongrantor trusts.
(D) Grantor trusts.
(iv) Examples.
(c) Coordination with other PFIC rules.
(1) and (2) [Reserved]
(3) Coordination with section 1296: Distributions and dispositions.
(4) Coordination with mark to market rules under chapter 1 of the Internal Revenue Code other than section 1296.
(i) In general.
(ii) Coordination rule.
(d) [Reserved]
(e) Exempt organization as shareholder.
(1) In general.
(2) Ownership through certain tax-exempt organizations and accounts.
(f) through (i) [Reserved]
(j) Applicability dates.
(k) Effective/applicability dates.
The revisions and additions read as follows:
(b) * * *
(2) * * *
(ii)
(v)
(7)
(8)
(ii)
(B)
(C)
(
(
(iii)
(B)
(C)
(D)
(iv)
A is a United States person who owns 49 percent of the stock of FC1, a foreign corporation that is not a PFIC, and separately all the stock of DC, a domestic corporation that is not an S corporation. DC, in turn, owns the remaining 51 percent of the stock of FC1, and FC1 owns 100 shares of stock in a PFIC that is not a controlled foreign corporation (CFC) within the meaning of section 957(a). DC is an indirect shareholder with respect to 51 percent of the PFIC stock held by FC1 under paragraph (b)(8)(ii)(A) of this section. In determining whether A owns 50 percent or more of the value of FC1 for purposes of applying paragraph (b)(8)(ii)(A) of this section, A is considered under paragraph (b)(8)(ii)(C)(
(e) * * *
(2)
(j)
(2) Paragraph (e)(1) of this section is applicable on and after April 1, 1992.
(3) Paragraphs (b)(2)(ii), (b)(2)(v), (b)(7), (b)(8), and (e)(2) of this section apply to taxable years of shareholders ending on or after December 31, 2013.
(j) * * *
(3) A shareholder is a United States person that is a shareholder as defined in § 1.1291–1(b)(7) or an indirect shareholder as defined in § 1.1291–1(b)(8), except as provided in § 1.1291–1(e).
(k) * * *
(3) Paragraph (j)(3) of this section applies to taxable years of shareholders ending on or after December 31, 2013.
The revisions and additions read as follows:
This section contains a listing of the paragraph headings for §§ 1.1298–1 and 1.1298–3.
(a) Overview.
(b) Requirement to file.
(1) General rule.
(2) Additional requirement to file for certain indirect shareholders.
(i) General rule.
(ii) Exception to indirect shareholder reporting for certain QEF inclusions and MTM inclusions.
(3) Special rules for estates and trusts.
(i) Domestic liquidating trusts and fixed investment trusts.
(ii) Beneficiaries of foreign estates and trusts.
(c) Exceptions.
(1) Exception if shareholder is a tax-exempt entity.
(2) Exception if aggregate value of shareholder's PFIC stock is $25,000 or less, or value of shareholder's indirect PFIC stock is $5,000 or less.
(i) General rule.
(ii) Determination of the $25,000 threshold in the case of indirect ownership.
(iii) Application of the $25,000 exception to shareholders who file a joint return.
(iv) Reliance on periodic account statements.
(3) Exception for PFIC stock marked to market under a provision other than section 1296.
(4) Exception for PFIC stock held through certain foreign pension funds.
(5) Exception for certain shareholders who are dual resident taxpayers.
(i) General rule.
(ii) Dual resident taxpayer filing as nonresident alien at end of taxable year.
(iii) Dual resident taxpayer filing as resident alien at end of taxable year.
(6) Exception for certain domestic partnerships.
(7) Exception for certain short-term ownership of PFIC stock.
(8) Exception for certain bona fide residents of U.S. territories.
(9) Exception for taxable years ending before December 31, 2013.
(d) Time and manner for filing.
(e) Separate annual report for each PFIC.
(1) General rule.
(2) Special rule for shareholders who file a joint return.
(f) Coordination rule.
(g) Examples.
(h) Applicability date.
(a)
(b)
(i) Directly owns stock of the PFIC;
(ii) Is an indirect shareholder under § 1.1291–1(b)(8) that holds any interest in the PFIC through one or more entities, each of which is foreign; or
(iii) Is an indirect shareholder under § 1.1291–1(b)(8)(iii)(D) that is treated under sections 671 through 678 as the owner of any portion of a trust described in section 7701(a)(30)(E) that owns, directly or indirectly through one or more entities, each of which is foreign, any interest in the PFIC.
(2)
(A) Treated as receiving an excess distribution (within the meaning of section 1291(b)) with respect to the PFIC;
(B) Treated as recognizing gain that is treated as an excess distribution (under section 1291(a)(2)) as a result of a disposition of the PFIC;
(C) Required to include an amount in income under section 1293(a) with respect to the PFIC (QEF inclusion);
(D) Required to include or deduct an amount under section 1296(a) with respect to the PFIC (MTM inclusion); or
(E) Required to report the status of a section 1294 election with respect to the PFIC (see § 1.1294–1T(h)).
(ii)
(3)
(ii)
(c)
(2)
(A) On the last day of the shareholder's taxable year:
(
(
(B) The shareholder is not treated as receiving an excess distribution (within
(C) An election under section 1295 has not been made to treat the section 1291 fund as a qualified electing fund with respect to the shareholder.
(ii)
(A) Owned through another United States person that itself is a shareholder of the PFIC (including a domestic partnership or S corporation treated as a shareholder of a PFIC for purposes of information reporting requirements applicable to a shareholder);
(B) Owned through a PFIC under section 1298(a)(2)(B) and § 1.1291–1(b)(8)(ii)(B); or
(C) Marked to market for the shareholder's taxable year under any provision of chapter 1 of the Internal Revenue Code other than section 1296, provided the rules of § 1.1296–1(i)(2) and (3) do not apply to the shareholder with respect to the PFIC stock pursuant to § 1.1291–1(c)(4)(ii) for the shareholder's taxable year.
(iii)
(iv)
(3)
(4)
(5)
(ii)
(iii)
(6)
(i) Not a shareholder of the PFIC as defined by § 1.1291–1(b)(7);
(ii) A tax-exempt entity or account not required to file Form 8621 with respect to the stock of the PFIC under paragraph (c)(1) of this section;
(iii) A dual resident taxpayer not required to file Form 8621 with respect to the stock of the PFIC under paragraph (c)(5) of this section; or
(iv) A domestic partnership not required to file Form 8621 with respect to the stock of the PFIC under this paragraph (c)(6).
(7)
(i) Acquires the section 1291 fund in the taxable year or the immediately preceding taxable year;
(ii) Is a shareholder of the section 1291 fund for a total of 30 days or less during the period beginning 29 days before the first day of the shareholder's
(iii) Is not treated as receiving an excess distribution (within the meaning of section 1291(b)) with respect to the section 1291 fund, including any gain recognized that is treated as an excess distribution under section 1291(a)(2) as a result of the disposition of the section 1291 fund.
(8)
(i) Is a bona fide resident (as defined by section 937(a)) of Guam, the Northern Mariana Islands, or the United States Virgin Islands; and
(ii) Is not required to file an income tax return with the Internal Revenue Service with respect to such taxable year.
(9)
(d)
(e)
(2)
(f)
(g)
(ii)
(ii)
(ii)
(ii)
(ii)
(h)
(2) Paragraph (c)(9) of this section applies to taxable years of shareholders ending before December 31, 2013.
(j) * * *
(3)
(m)
(e) * * *
(5)
(l) * * *
(3) Paragraph (e)(5) of this section applies to returns filed on or after December 31, 2013. See paragraph (e)(5) of § 1.6046–1, as contained in 26 CFR part 1 revised as of April 1, 2012, for returns filed before December 31, 2013.
Internal Revenue Service (IRS), Treasury.
Final regulations; correction.
This document contains corrections to the final regulations (TD 9792) that were published in the
This correction is effective December 28, 2016 and is applicable on or after November 3, 2016.
Rose E. Jenkins, at (202) 317–6934 (not a toll-free number).
The final regulations (TD 9792) that are the subject of this correction are
As published, the final regulations (TD 9792) contain errors that may prove to be misleading and are in need of clarification.
Accordingly, the final regulations (TD 9792), that are the subject of FR Doc. 2016–26425, are corrected as follows:
1. On page 76499, third column, in the preamble, the eighth line from the bottom of the last paragraph, the language “generally is consistent with § 1.956–” is corrected to read “generally is consistent with existing § 1.956–”.
2. On page 76500, first column, in the preamble, the fourth line from the top of the page, the language “that is not included in the final or” is corrected to read “that is not included in the existing final or”.
3. On page 76500, first column, in the preamble, the seventh line in the first full paragraph, the language “§ 1.956–2(a)(3) nor proposed § 1.956–” is corrected to read “existing § 1.956–2(a)(3) nor proposed § 1.956–”.
4. On page 76500, first column, in the preamble, the eighth line in the first full paragraph, the language “4(b) include the limitation. A comment” is corrected to read “4(b) includes the limitation. A comment”.
5. On page 76500, third column, in the preamble, the eleventh line from the top of the first full paragraph, the language is corrected to read “book-up”.
6. On page 76501, first column, in the preamble, the eighth line of the first full paragraph, the language is corrected to read “§ 1.956–4(b)(2)(ii)”.
Internal Revenue Service (IRS), Treasury.
Correcting amendment.
This document contains corrections to the final regulations (TD 9792) that were published in the
This correction is effective December 28, 2016 and is applicable on or after November 3, 2016.
Rose E. Jenkins, at (202) 317–6934 (not a toll-free number).
The final regulations (TD 9792) that are the subject of these corrections are under sections 954 and 956 of the Internal Revenue Code.
As published, the final regulations (TD 9792) contain errors that may prove to be misleading and are in need of clarification.
Income taxes, Reporting and recordkeeping requirements.
Accordingly, 26 CFR part 1 is corrected by making the following correcting amendments:
26 U.S.C. 7805 * * *
(a) * * *
(5)
(f)
The revisions read as follows:
(b) * * *
(2) * * *
(ii)
(3)
(c) * * *
(3) * * *
(i)
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is taking final action to approve revisions to the South Coast Air Quality Management District (SCAQMD) portion of the California State Implementation Plan (SIP). These revisions concern emissions of oxides of nitrogen (NO
These rules will be effective on January 27, 2017.
The EPA has established a docket for this action under Docket ID No. EPA–R09–OAR–2016–0444. All documents in the docket are listed on the
Nicole Law, EPA Region IX, (415) 947–4126,
Throughout this document, “we,” “us” and “our” refer to the EPA.
On September 16, 2016, the EPA proposed to approve the following rules into the California SIP. 81 FR 63732.
We proposed to approve these rules because we determined that they complied with the relevant CAA requirements. Our proposed action contains more information on the rules and our evaluation.
The EPA's proposed action provided a 30-day public comment period. During this period, we received one comment regarding EPA's proposed approval of Rule 1153.1 that was submitted anonymously.
No comments were submitted that change our assessment of the rules as described in our proposed action. Therefore, as authorized in section 110(k)(3) of the Act, the EPA is fully approving these rules into the California SIP.
In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR
Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this action merely approves state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4);
• does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and
• does not provide the EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, the SIP is not approved to 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. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by February 27, 2017. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements (see section 307(b)(2)).
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements.
Part 52, Chapter I, Title 40 of the Code of Federal Regulations is amended as follows:
42 U.S.C. 7401
(c) * * *
(379) * * *
(i) * * *
(A) * * *
(
(428) * * *
(i) * * *
(D) * * *
(
(461) * * *
(i) * * *
(C) * * *
(
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is taking final action to approve a revision to the Great Basin Unified Air Pollution Control District (GBUAPCD) portion of the California State Implementation Plan (SIP). This revision concerns emissions of particulate matter at Owens Lake, CA.
This rule will be effective on January 27, 2017.
The EPA has established a docket for this action under Docket ID No. EPA–R09–OAR–2016–0393. All documents in the docket are listed on the
Christine Vineyard, EPA Region IX, (415) 947–4125,
Throughout this document, “we,” “us” and “our” refer to the EPA.
On September 13, 2016 (81 FR 62849), the EPA proposed to approve the following rule into the California SIP.
We proposed to approve this rule because we determined that it complied with the relevant CAA requirements. Our proposed action contains more information on the rule and our evaluation.
The EPA's proposed action provided a 30-day public comment period. During this period, we received one comment that was submitted anonymously.
Comment: The comment begins, “I don't see why this would not be approved right away,” and generally supports the EPA's proposal to approve Rule 433. The comment also includes general statements and questions such as “the fact that `Indian' is still the term being used in this proposed rule is troublesome,” “it would be nice to see them go above and beyond the EPA's suggested guidelines,” “what does this mean for the Indigenous land,” “who is in charge of regulation,” “how will this alter the particle [sic] matters given off by this lakebed,” “what happened to cause this lakebed to behave in such a way . . . shouldn't that be looked into instead of altering the way nature is now,” and “instead of being a reactive society we should be more proactive and investigate into `unintended consequences' more so than we do now.”
Response: The comment generally supports EPA's proposed approval of Rule 433. The comment does not provide specific information related to the basis for EPA's proposed approval and does not request any changes to our proposed action. In addition, most of the statements and questions in the comment are not relevant to EPA's action approving Rule 433 or are outside of the scope of this action. For those reasons, the EPA is finalizing its proposed approval of Rule 433 without change based on the comment.
No comments were submitted that change our assessment of the rule as described in our proposed action. Therefore, as authorized in section 110(k)(3) of the Act, the EPA is fully approving this rule into the California SIP.
In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of the GBUAPCD rule described in the amendments to 40 CFR part 52 set forth below. The EPA has made, and will continue to make, these documents available through
Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this action merely approves state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104–4);
• does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and
• does not provide the EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, the SIP is not approved to 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. In those areas of
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by February 27, 2017. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements (see section 307(b)(2)).
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Particulate matter, Reporting and recordkeeping requirements.
Part 52, Chapter I, Title 40 of the Code of Federal Regulations is amended as follows:
42 U.S.C. 7401
(c) * * *
(483) A new regulation was submitted on June 9, 2016 by the Governor's Designee.
(i) Incorporation by Reference.
(A) Great Basin Unified Air Pollution Control District.
(
Environmental Protection Agency (EPA).
Direct final rule.
Under the Clean Air Act (CAA), the Environmental Protection Agency (EPA) is approving a state submission as a revision to the Illinois State Implementation Plan (SIP). The revision amends the Illinois Administrative Code (IAC) by updating the definition of volatile organic material (VOM), otherwise known as volatile organic compounds (VOC), to exclude 2-amino-2-methyl-1-propanol (AMP). This revision is in response to an EPA rulemaking in 2014 which exempted this compound from the Federal definition of VOC on the basis that the compound makes a negligible contribution to tropospheric ozone formation.
This direct final rule will be effective February 27, 2017, unless EPA receives adverse comments by January 27, 2017. If adverse comments are received, EPA will publish a timely withdrawal of the direct final rule in the
Submit your comments, identified by Docket ID No. EPA–R05–OAR–2016–0502 at
Michelle Becker, Life Scientist, Attainment Planning and Maintenance Section, Air Programs Branch (AR–18J), Environmental Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604, (312) 886–3901,
Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This supplementary information section is arranged as follows:
The Illinois Environmental Protection Agency (IEPA) submitted a revision to the Illinois SIP to EPA for approval on August 9, 2016. The SIP revision excludes the chemical compound 2-amino-2-methyl-1-propanol (AMP) from the definition of VOM or VOC at 35 IAC Part 211, Subpart B, Section 211.7150(a).
The Illinois Pollution Control Board (IPCB) held a public hearing on the proposed SIP revision on January 8, 2015. There were no public comments received at the public hearing. IPCB received one comment from the American Coatings Association in a letter dated December 16, 2014, supporting the exemption of AMP from
In 2012, EPA received a petition requesting that AMP be exempted from VOC control based on its low reactivity to ethane. On March 27, 2014 (79 FR 17037), EPA responded to the petition by amending 40 CFR 51.100(s)(1) to exclude this chemical compound from the definition of VOC for purposes of preparing SIPs to attain the national ambient air quality standard for ozone under title I of the CAA (78 FR 9823). Based on the mass maximum incremental reactivity value for the compound being equal to or less than that of ethane, EPA concluded that this compound makes negligible contributions to tropospheric ozone formation. (79 FR 17037). Additionally, EPA considered risks not related to tropospheric ozone associated with currently allowed uses of the chemical to be acceptable. EPA's action became effective on June 25, 2014. IEPA's SIP revision is consistent with EPA's action amending the definition of VOC at 40 CFR 51.100(s).
EPA is approving into the Illinois SIP revisions to 35 IAC 211 contained in the August 9, 2016, submittal. We are publishing this action without prior proposal because we view this as a noncontroversial amendment and anticipate no adverse comments. However, in the proposed rules section of this
In this rule, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of the Illinois Regulations described in the amendments to 40 CFR part 52 set forth below. EPA has made, and will continue to make, these documents generally available through
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104–4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by February 27, 2017. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.
40 CFR Part 52 is amended as follows:
42 U.S.C. 7401
(c) * * *
(209) On August 9, 2016, the state submitted a proposed revision to the Illinois SIP updating the definition of Volatile Organic Material (VOM) or Volatile Organic Compound (VOC) to exclude the chemical compound 2-amino-2-methyl-1-propanol (AMP), along with minor administrative revisions.
(i)
Environmental Protection Agency (EPA).
Direct final rule.
Pursuant to the Federal Clean Air Act (CAA or Act), the Environmental Protection Agency (EPA) is approving revisions to the Louisiana State Implementation Plan (SIP) that address requirements in CAA Section 128 regarding State Board composition and Conflict of Interest and Disclosure requirements.
This rule is effective on February 27, 2017 without further notice, unless the EPA receives relevant adverse comment by January 27, 2017. If the EPA receives such comment, the EPA will publish a timely withdrawal in the
Submit your comments, identified by Docket No. EPA–R06–OAR–2014–0513, at
Tracie Donaldson, 214–665–6633,
Throughout this document “we,” “us,” and “our” means the EPA.
Section 128 of the CAA requires SIPs to comply with the requirements regarding State Boards. Section 110(a)(2)(E)(ii) of the CAA also references these requirements. Section 128(a) of the CAA requires SIPs to contain provisions that: (1) Any board or body which approves permits or enforcement orders under the CAA have at least a majority of its members represent the public interest and not derive any significant portion of their income from persons subject to permits or enforcement orders under the CAA; and (2) any potential conflict of interest by members of such board or body or the head of an executive agency with similar powers be adequately disclosed.
The requirements of CAA section 128(a)(1) are not applicable to Louisiana because it does not have any board or body which approves air quality permits or enforcement orders. The requirements of CAA section 128(a)(2), however, are applicable to Louisiana because LDEQ's cabinet level Secretary (
On April 30, 1997 Louisiana submitted a SIP revision that contains revisions to the Louisiana Revised Statutes for inclusion into the SIP. The revisions that are necessary for inclusion into the State's SIP address the requirements of CAA section 128 in
CAA section 128 requires that each state's SIP demonstrate how State Boards or the head of an executive agency who approves CAA permits or enforcement orders disclose any potential conflicts of interest. The LDEQ Secretary is subject to the requirements of the relevant conflict of interest and disclosure provisions as the head of an Executive Agency.
LDEQ approves all CAA permits and enforcement orders in Louisiana. LDEQ is an executive agency that acts through its Secretary. LDEQ submits that public disclosure of any potential conflict in the SIP as required by CAA sections 128 and 110(a)(2)(E)(ii) pursuant to the requirements that if such person derives anything of economic value that such person should be aware, he/she must disclose specified elements under Title 42; Chapter 15: Code of Governmental Ethics; Section 1114(A)(1)–(4) and (C) “Financial disclosure.” In addition, if the Secretary of LDEQ receives or had received, during the previous two years, a significant portion of income directly or indirectly from a permit applicant, among other specified prohibitions, such individual must be recused from the permit approval process for that permit under Title 30; Chapter 2, Sections 2014.1(A)–(D): Permit review; Prohibition. The SIP revision through submittal of these relevant revised statutes demonstrates that Louisiana complies with the requirements of CAA sections 128 and 110(a)(2)(E)(ii).
It is necessary to act on the above-cited provisions to meet the requirements of the CAA Section 128 which sets forth requirements for State Boards and Agency Head and Conflicts of Interest/Disclosure. We find that the cited provisions are approvable and meet the requirements of CAA Section 128. This submittal included other Louisiana Revised Statutes that are unnecessary for inclusion into the Louisiana SIP as they do not relate to the CAA 128 and the Conflict of Interest/Disclosure provisions and thus not relevant for inclusion into the SIP.
We are also approving a ministerial change to remove language from 40 CFR part 52.2270(e) concerning Title 40: Chapter 12, EPA Approved Statutes in the Louisiana SIP. This will correct a citation that was included in the CFR when the format of part 52 was converted and was not previously approved into the SIP.
We are approving revisions to the Louisiana SIP that contain several provisions of the Louisiana Revised Statutes to update the federally approved Louisiana SIP. Those are the following: Louisiana Revised Statutes at Title 30; Chapter 2 Sections 2014.1(A)–(D): Permit review; Prohibition; Title 42; Chapter 15: Code of Governmental Ethics; Part 1, General Provisions, Section 1102 Definitions, Section 1102(3) “Agency Head;” Section 1102(13) “Immediate Family;” Section 1102(22)(a) “Thing of Economic Value;” Section 1102(19) “Public Servant;” Section 1102(23), “Transaction involving governmental entity;” Section 1112 “Participation in Certain Transaction Involving the Governmental Entity;” Sections 1114(A)(1)–(4) and (C) “Financial disclosure.” We are also approving a ministerial change to remove language from 40 CFR part 52.2270(e).
The EPA is publishing this rule without prior proposal because we view this as a non-controversial amendment and anticipate no adverse comments. However, in the proposed rules section of this
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human
In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by February 27, 2017. 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).)
Samuel Coleman was designated the Acting Regional Administrator on December 21, 2016 through the order of succession outlined in Regional Order R6–1110.1, a copy of which is included in the docket for this action.
Environmental protection, Air pollution control, Incorporation by reference, Government employees.
40 CFR part 52 is amended as follows:
42 U.S.C. 7401
The amendments read as follows:
(e) * * *
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is taking this action to approve the Commonwealth of Kentucky's Underground Injection Control (UIC) Class II Program for primacy. EPA determined that the state's program represents an effective program to prevent underground injection activities that endanger underground sources of drinking water (USDWs), as required under section 1425 of the Safe Drinking Water Act (SDWA). EPA's approval allows the state to implement and enforce state regulations for UIC Class II injection wells located within the state. The Commonwealth's authority excludes the regulation of injection well Classes I, III, IV, V and VI and all wells on Indian lands, as required by rule under the SDWA.
This rule is effective on January 27, 2017. For judicial purposes, this final rule is promulgated as of January 27, 2017. The incorporation by reference of certain publications listed in the rule is approved by the Director of the
The EPA has established a docket for this action under Docket ID No. EPA–HQ–OW–2015–0372, to the
Holly S. Green, Drinking Water Protection Division, Office of Ground Water and Drinking Water (4606M), U.S. Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460; telephone number: (202) 566–0651; fax number: (202) 564–3754; email address:
On October 28, 2016, EPA published Kentucky's Class II primacy approval via a direct final rule with a parallel proposal. The EPA stated in the direct final rule that if we received adverse comment, the direct final rule would not take effect and we would publish a timely withdrawal in the
EPA has responded in detail to the public comments received and has placed the response to comment document in the docket for this action. A summary of the comments received and EPA response can be found in section V of this action.
This table is intended to be a guide for readers regarding entities likely to be regulated by this action. This table lists the types of entities that EPA is now aware could potentially be regulated by this action. If you have questions regarding the applicability of this action to a particular entity, consult the persons listed in the preceding
The state applied to EPA for primacy (primary implementation and enforcement authority) under section 1425 of the SDWA, 42 U.S.C. Sections
EPA's approval is based on a legal and technical review of the state's primacy application as directed at 40 CFR part 145 and the requirements for state permitting and compliance evaluation programs, enforcement authority and information sharing to determine that the state's program is effective. EPA oversees the state's administration of the UIC program; part of the agency's oversight responsibility requires quarterly reports of non-compliance and annual UIC performance reports pursuant to 40 CFR 144.8. The Memorandum of Agreement between EPA and the Commonwealth of Kentucky, signed by the Regional Administrator on October 20, 2015, provides EPA with the opportunity to review and comment on all permits. Under section 1422 of the SDWA, EPA continues to administer the UIC program for Class I, III, IV, V and VI injection wells in the state and all wells on Indian lands (if any such lands exist in the state in the future).
As part of the primacy application requirements, the state held a public hearing on the state's intent to apply for primacy. The hearing was held on September 23, 2014, in the city of Frankfort, Kentucky. Both oral and written comments received for the hearing were generally supportive of the state pursuing primacy for the UIC Class II injection well program.
On November 10, 2015, EPA published a notice of the state's application in the
This final rule amends 40 CFR part 147 and incorporates by reference EPA-approved state statutes and regulations. The provisions of the Commonwealth of Kentucky Code that contain standards, requirements and procedures applicable to owners or operators of UIC Class II wells are incorporated by reference into 40 CFR part 147. Any provisions incorporated by reference, as well as all permit conditions or permit denials issued pursuant to such provisions, will be enforceable by EPA pursuant to the SDWA, section 1423 and 40 CFR 147.1(e).
In order to better serve the public, the agency is reformatting the codification of the EPA-approved state statutes and regulations. Instead of codifying the Commonwealth of Kentucky's Statutes and Regulations as separate paragraphs in the text of 40 CFR part 147, EPA is now codifying a binder that contains the “EPA-Approved Commonwealth of Kentucky Safe Drinking Water Act § 1425 Underground Injection Control (UIC) Program Statutes and Regulations for Class II wells.” This binder will be incorporated by reference into 40 CFR part 147 and available at
Commenters believe that Kentucky does not have adequate resources to implement the Class II UIC Program. Kentucky is planning on filling two new positions once primacy is granted. Kentucky has 16 inspectors as compared to EPA's 2 full-time inspectors. EPA evaluated proposed resources and determined that they are adequate for an effective program to prevent endangerment to USDWs.
One commenter does not believe that Kentucky has the same regulatory requirements as the EPA for providing public participation in the permitting process. The commenter has concerns that the public was not provided access to the draft permit or statement of basis and that Kentucky was not required to provide a written response to comments received during the public comment period. For primacy approval under Section 1425, the state's regulations do not have to be as stringent as the federal regulations; therefore, Kentucky's public notice process does not need to mirror EPA's public notice process. Kentucky's public notice, which is included in the Program Description, provides the opportunity to request a copy of the draft permit and statement of basis. Commenters and those that attend a public hearing are notified if their comments do not result in a change to the final permit. An additional public notice is issued if comments do result in a change to the final permit. The public notice also provides an opportunity to petition the state for review of the permit and any conditions therein. Accordingly, the EPA has determined that Kentucky's administrative permitting procedures are effective for protecting USDWs.
One commenter is concerned that Kentucky does not have criteria for the applicant to use in determining whether the minimum
Commenters are concerned with how the state would regulate hydraulic fracturing activities. Under the SDWA, only wells that use diesel fuels for hydraulic fracturing are subject to regulation under the federal underground injection control program. Therefore, this Class II UIC primacy approval would give the state primacy only over this small subset of hydraulic fracturing wells. To the extent that there are any such wells, they would be subject to Kentucky's Class II program regulations, which EPA has found to be effective to prevent endangerment to USDWs. In addition, Kentucky has indicated in its application that it will consider, as appropriate, EPA's permitting guidance on diesel fuels hydraulic fracturing in regulating these wells. The state has regulatory authority over all other types of hydraulic fracturing.
This action is exempt from review by the Office of Management and Budget (OMB) because OMB has determined that the approval of state UIC primacy for Class II rules are not significant regulatory actions.
This action does not impose any new information collection burden. EPA determined that there is no need for an Information Collection Request under the Paperwork Reduction Act because this final rule does not impose any new federal reporting or recordkeeping requirements. Reporting or recordkeeping requirements are based on the Commonwealth of Kentucky's UIC Regulations, and the state is not subject to the Paperwork Reduction Act. However, OMB has previously approved the information collection requirements contained in the existing UIC regulations at 40 CFR parts 144–148 for SDWA section 1422 states and also for section 1425 states under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501
I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. In making this determination, the impact of concern is any significant adverse economic impact on small entities. An agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, has no net burden or otherwise has a positive economic effect on the small entities subject to the rule. This action does not impose any new requirements on any regulated entities. It simply codifies the Commonwealth of Kentucky's UIC Program regulations, which meets the effectiveness standard under SDWA section 1425 for regulating a Class II well program. I have therefore concluded that this action will have no net regulatory burden for any directly regulated small entities.
This action does not contain an unfunded mandate as described in UMRA, 2 U.S.C. 1521–1538. The action imposes no enforceable duty on any state, local or tribal governments or the private sector.
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 as explained in section V.C. Thus, Executive Order 13175 does not apply to this action.
EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that 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 it approves a state action as explained in section V.C.
This action is not subject to Executive Order 13211 because it is not a significant regulatory action under Executive Order 12866.
This rulemaking does not involve technical standards.
EPA believes the human health or environmental risk addressed by this action will
This action is subject to the CRA, and 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).
Environmental protection, Appeals, Incorporation by reference, Penalties, Protection for USDWs, Requirements for plugging and abandonment, Underground injection control.
For the reasons set out in the preamble, title 40 of the Code of Federal Regulations is amended as follows:
42 U.S.C. 300h–4.
The UIC program for Class II injection wells in the Commonwealth of Kentucky, except for those on Indian lands, is the program administered by the Kentucky Department of Natural Resources, Division of Oil and Gas approved by the EPA pursuant to section 1425 of the SDWA. Notification of this approval was published in the
(a)
(b)
(c)
(d)
(a)
(a) This section identifies any aquifers or their portions exempted in accordance with §§ 144.7(b) and 146.4 of this chapter. These aquifers are not being proposed for exemption under the Commonwealth of Kentucky's primacy approval. Rather, the exempted aquifers listed below were previously approved while EPA had primary enforcement authority for the Class II UIC program in the Commonwealth of Kentucky and are included here for reference. Additional information pertinent to these exempted aquifers or their portions resides in EPA Region 4.
(1) The following eight aquifers (underground sources of drinking water) in the Commonwealth of Kentucky have been exempted in accordance with the provisions of §§ 144.7(b) and 146.4 of this chapter for Class II injection activities only: A portion of the Tar Springs sandstone formation that has a quarter mile radius areal extent (125.6 acres) that is located at latitude 37.7261 and longitude −86.6914. The formation has a true vertical depth from surface of 280 feet.
(2) A portion of the Tar Springs sandstone formation that has a quarter mile radius areal extent (125.6 acres) that is located at latitude 37.7294 and longitude −867212. The formation has a true vertical depth from surface of 249 feet.
(3) A portion of the Tar Springs sandstone formation that has a quarter mile radius areal extent (125.6 acres) that is located at latitude 37.7055 and longitude −86.7177. The formation has a true vertical depth from surface of 210 feet.
(4) A portion of the Pennsylvanian Age sandstone formation that has a quarter mile radius areal extent (125.6 acres) that is located at latitude 37.5402 and longitude −87.2551. The formation has a true vertical depth from surface of 1,050 feet.
(5) A portion of the Tar Springs sandstone formation that has a quarter mile radius areal extent (125.6 acres) that is located at latitude 37.7301 and longitude −87.6922. The formation has a true vertical depth from surface of 240 feet.
(6) A portion of the Caseyville sandstone formation that has a quarter mile radius areal extent (125.6 acres) that is located at latitude 37.5776 and longitude −87.1321. The formation had a true vertical depth from surface of 350 feet.
(7) A portion of the Caseyville sandstone formation that has a quarter mile radius areal extent (125.6 acres) that is located at latitude 37.5778 and longitude −87.1379. The formation has a true vertical depth from surface of 1,080 feet.
(8) A portion of the Caseyville sandstone formation that has a quarter mile radius areal extent (125.6 acres) that is located at latitude 37.5652 and longitude −87.1222. The formation has a true vertical depth from surface of 1,060 feet.
(b) [Reserved]
Environmental Protection Agency (EPA).
Withdrawal of direct final rule.
Because the U.S. Environmental Protection Agency (EPA) received adverse comment, we are withdrawing the direct final rule approving the Commonwealth of Kentucky's Underground Injection Control (UIC) Class II Program for primacy, published on October 28, 2016.
Effective December 28, 2016, EPA withdraws the direct final rule published at 81 FR 74927, on October 28, 2016.
Holly S. Green, Drinking Water Protection Division, Office of Ground Water and Drinking Water (4606M), U.S. Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460; telephone number: (202) 566–0651; fax number: (202) 564–3754; email address:
Because EPA received adverse comment, we are withdrawing the direct final rule approving the Commonwealth of Kentucky's Underground Injection Control Class II (UIC).
Program for primacy, published on October 28, 2016. We stated in that direct final rule that if we received adverse comment by November 28, 2016, the direct final rule would not take effect and we would publish a timely withdrawal in the
Accordingly, the direct final rule published on October 28, 2016, (81 FR 74927) is withdrawn effective December 28, 2016.
Environmental Protection Agency (EPA).
Final rule.
This regulation establishes exemptions from the requirement of a tolerance for residues of methyl isobutyrate (CAS Reg. No. 547–63–7) and for residues of isobutyl isobutyrate (CAS Reg. No. 97–85–8) when used as inert ingredients (solvents) applied to growing crops or raw agricultural commodities after harvest. Jeneil Biosurfactant Company submitted a petition to EPA under the Federal Food, Drug, and Cosmetic Act (FFDCA), requesting establishment of an exemption from the requirement of a tolerance. This regulation eliminates the need to establish a maximum permissible level for residues of methyl isobutyrate and isobutyl isobutyrate when used in accordance with the conditions.
This regulation is effective December 28, 2016. Objections and requests for hearings must be received on or before February 27, 2017, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the
The docket for this action, identified by docket identification (ID) number EPA–HQ–OPP–2015–0776 and EPA–HQ–OPP–2015–0831, is available at
Michael Goodis, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460–0001; main telephone number: (703) 305–7090; email address:
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
You may access a frequently updated electronic version of 40 CFR part 180 through the Government Printing Office's e-CFR site at
Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA–HQ–OPP–2015–0776 and EPA–HQ–OPP–2015–0831 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before February 27, 2017. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).
In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA–HQ–OPP–2015–0776 and EPA–HQ–OPP–2015–0831, by one of the following methods:
•
•
•
Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
In the
Inert ingredients are all ingredients that are not active ingredients as defined in 40 CFR 153.125 and include, but are not limited to, the following types of ingredients (except when they have a pesticidal efficacy of their own): Solvents such as alcohols and hydrocarbons; surfactants such as polyoxyethylene polymers and fatty acids; carriers such as clay and diatomaceous earth; thickeners such as carrageenan and modified cellulose; wetting, spreading, and dispersing agents; propellants in aerosol dispensers; microencapsulating agents; and emulsifiers. The term “inert” is not intended to imply nontoxicity; the ingredient may or may not be chemically active. Generally, EPA has exempted inert ingredients from the requirement of a tolerance based on the low toxicity of the individual inert ingredients.
Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the exemption is “safe.” Section 408(c)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”
EPA establishes exemptions from the requirement of a tolerance only in those cases where it can be clearly demonstrated that aggregate exposure to pesticide chemical residues under reasonably foreseeable circumstances will pose no appreciable risks to human health. In order to determine the risks from aggregate exposure to pesticide inert ingredients, the Agency considers the toxicity of the inert in conjunction with possible exposure to residues of the inert ingredient through food, drinking water, and through other exposures that occur as a result of pesticide use in residential settings. If EPA is able to determine that a finite tolerance is not necessary to ensure that there is a reasonable certainty that no harm will result from aggregate exposure to the inert ingredient, an exemption from the requirement of a tolerance may be established.
Consistent with FFDCA section 408(c)(2)(A), and the factors specified in FFDCA section 408(c)(2)(B), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for methyl isobutyrate and isobutyl isobutyrate including exposure resulting from the exemption established by this action. EPA's assessment of exposures and risks associated with methyl isobutyrate and isobutyl isobutyrate follows.
EPA has evaluated the available toxicity data and considered their validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. Specific information on the studies received and the nature of the adverse effects caused by methyl isobutyrate and isobutyl isobutyrate as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies are discussed in this unit.
Methyl isobutyrate and isobutyl isobutyrate are rapidly metabolized through hydrolysis to form an alcohol and carboxylic acid in the body. Many of the supporting data for methyl isobutyrate comes directly from the closely related and similarly metabolized compound isobutyl isobutyrate. Where separate information for methyl isobutyrate and isobutyl isobutyrate is available, the studies will be presented along with information for their common metabolite isobutanol.
An LD
No repeat-dose studies of methyl isobutyrate were identified in a search of the toxicological literature. In an 18-week oral gavage study in rats with isobutyl isobutyrate, there were no treatment related effects in hematology, clinical chemistry parameters, urinalysis, histological examination, behavior, appearance, body weight, or food/water consumption. The NOAEL was 1,000 mg/kg/day; the highest dose tested. In a 90-day oral toxicity study in rats with isobutanol, treatment related effects were seen only at 1,000 mg/kg bw/day, and included hypoactivity, which was significant during week one and decreased markedly after week 4, and lower body weight gain (18% below that of control rats) in males during week one. The NOAEL was 316 mg/kg bw/day.
In a 90-day study toxicity study in rats exposed to isobutanol in drinking water, no effects on body weight, food/water consumption, and clinical signs of toxicity and organ weights (livers, kidneys, adrenal glands, and testes) were observed at doses up to 1,450 mg/kg/day. The NOAEL for isobutanol was 1,450 mg/kg/day.
In a 90-day isobutanol inhalation study, no differences were found in body weight, food consumption, ophthalmoscopic examination, clinical observation, clinical chemistry, neurobehavioral observations, organ weights, gross pathology, and histopathology. The NOAEL for repeat-dose effects including neurotoxicity was 2,500 ppm.
In two prenatal developmental toxicity studies via inhalation, female rats and Himalayan rabbits were exposed to vapor of isobutanol. In rats, no mortality or significant differences in clinical signs, body weight development, or gross pathology between controls and treated groups and no effects on development were noted. The maternal and developmental rat NOAELs were 3,030 ppm. In rabbits, no mortality or significant differences in clinical signs, body weight development, or gross pathology between controls and treated groups and no effects on development were noted. The maternal no observed adverse effect level (NOAEL) for rabbits was 758 ppm. Fetuses exhibited no signs of developmental changes in response to isobutanol. Therefore, the developmental NOAEL was 3,030 ppm, the highest dose.
In a 2-generation reproduction study in rats with isobutanol via inhalation, no exposure-related effects were observed on F0 and F1 parental survival or on F0 and F1 reproductive performance, body weights, food
There were no adequate studies on the carcinogenic potential of methyl isobutyrate or isobutanol isobutyrate. Methyl isobutyrate did not significantly induce chromosome loss in mitotically growing
Metabolism of aliphatic esters such as methyl isobutyrate and isobutyl isobutyrate proceeds rapidly through hydrolysis to form an alcohol and carboxylic acid. These are reactions of the carboxylesterases or esterases, which predominate in hepatocytes but are present in most tissues throughout the body, including small intestine, colon, kidney, trachea and lung. Hydrolysis of methyl isobutyrate is extensive and will form methanol and isobutyric acid. Isobutyric acid is metabolized to propionic acid which, in turn, is converted to succinic acid and ultimately to glucose and glycogen. Methanol is oxidized and excreted ultimately as CO
Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see
EPA has not identified any toxicological points of departure for assessing methyl isobutyrate and isobutyl isobutyrate. On the basis of the metabolism of as methyl isobutyrate and isobutyl isobutyrate proceeding rapidly through hydrolysis to form an alcohol and carboxylic acid and ultimately to glucose and glycogen, low acute toxicity for animals via the dermal, inhalation, and oral routes of exposure, and low toxicity of the metabolite isobutyl alcohol, no adverse effect is expected from methyl isobutyrate and isobutyl isobutyrate as a result of exposure by any route.
1.
Acute and chronic dietary assessments take into account exposure estimates from dietary consumption of food and drinking water. Because no adverse effects attributable to a single or repeat exposures to methyl isobutyrate and isobutyl isobutyrate were seen in the toxicity databases, quantitative dietary risk assessments are not appropriate. Due to expected use of methyl isobutyrate and isobutyl isobutyrate in pesticide formulations applied to growing crops and raw agricultural commodities after harvest, it is reasonable to expect that there will be some exposure to these substances from their use in pesticide products. In addition, FDA has approved the use of methyl isobutyrate and isobutyl isobutyrate as synthetic flavoring substances in food for direct human consumption (21 CFR 172.515), so there is expected to be additional dietary exposure to these substances from non-pesticidal sources.
2.
3.
It is possible that methyl isobutyrate or isobutyl may be used as an inert ingredient in pesticide products that may result in residential exposures, although no residential uses are currently proposed.
4.
Because methyl isobutyrate and isobutyl isobutyrate do not have a toxic mode of action or a mechanism of toxicity, this provision does not apply.
1.
Because methyl isobutyrate and isobutyl isobutyrate do not have threshold effects and because of the lack of safety factors needed for this qualitative assessment, this provision does not apply to the assessment of methyl isobutyrate and isobutyl isobutyrate.
An analytical method is not required for enforcement purposes since the Agency is establishing an exemption from the requirement of a tolerance without any numerical limitation.
Therefore, exemptions from the requirement of a tolerance are established under 40 CFR 180.910 for methyl isobutyrate (CAS Reg. No. 547–63–7) and isobutyl isobutyrate (CAS Reg. No. 97–85–8) when used as inert ingredients (solvents) in pesticide formulations applied to growing crops or raw agricultural commodities after harvest.
This action establishes exemptions from the requirement of a tolerance under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501
Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the exemptions in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501
This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).
Pursuant to the Congressional Review Act (5 U.S.C. 801
Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.
Therefore, 40 CFR chapter I is amended as follows:
21 U.S.C. 321(q), 346a and 371.
National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).
Final rule; response to petition for reconsideration; response to petition for rulemaking.
On July 5, 2016, NHTSA published an interim final rule updating the maximum civil penalty amounts for violations of statutes and regulations administered by NHTSA, pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. This decision responds to a petition for partial reconsideration of that interim final rule. After carefully considering the issues raised, the Agency grants some aspects of the petition, and denies other aspects. This decision amends the relevant regulatory text accordingly. This decision also responds to a petition for rulemaking on a similar topic.
Ms. Rebecca Yoon, Office of the Chief Counsel, NHTSA, telephone (202) 366–2992, facsimile (202) 366–3820, 1200 New Jersey Avenue SE., Washington, DC 20590.
The National Highway Traffic Safety Administration (NHTSA) administers Corporate Average Fuel Economy (CAFE) standards under 49 U.S.C. 32901
Congress has prescribed the formula for calculating a civil penalty for violation of a CAFE standard. That formula multiplies the penalty rate times the number of tenths-of-a-mile-per-gallon by which a non-compliant fleet falls short of an applicable CAFE standard, times the number of vehicles in that non-compliant fleet.
The Federal Civil Penalties Inflation Adjustment Act Improvements Act (November 2, 2015) (the “Act”) prescribed an inflation adjustment for many civil monetary penalties, including CAFE's civil penalty rate. In that Act, Congress generally required Federal agencies that administer civil monetary penalties to make an initial “catch-up” adjustment for inflation through an interim final rule by July 1, 2016, and then to make subsequent annual adjustments for inflation (
The Auto Alliance and Global Automakers jointly petitioned NHTSA for reconsideration of the interim final rule with regard to the inflation adjustment for CAFE non-compliance penalties (hereafter, the Alliance and Global petition will be referred to as the “Industry Petition”) on August 1, 2016. The Industry Petition asked that NHTSA not apply the penalty increase to non-compliances associated with “model years that have already been completed or for which a company's compliance plan has already been set.” Specifically, the Industry Petition stated that:
Our most significant concern with the IFR is that it would apply retroactively to the 2014 and 2015 Model Years (which have been completed for all manufacturers but for which the compliance files are not all closed), to the 2016 Model Year (which is complete for many manufacturers) and to the 2017 and 2018 Model Years (for which manufacturers have already set compliance plans based on guidance from NHTSA, including the [historical penalty amounts of $5.50 per tenth of an mpg]). Applying the increased civil penalties in this manner is profoundly unfair to manufacturers, does not improve the effectiveness of this penalty, and does nothing to further the policies underlying the CAFE statute.
In the alternative, the Industry Petition requested that if NHTSA decided to apply the penalty increase to MYs 2014–2018, the Agency should recalculate the adjusted penalty rate
The Center for Biological Diversity (CBD) petitioned NHTSA on October 1, 2015, just over a month prior to passage of the Act, to conduct a rulemaking to raise the civil penalty rate for CAFE standard violations under NHTSA's then-existing statutory authority. The CBD petition stated correctly that NHTSA had not adjusted the $5.50 civil penalty rate for inflation since 1997, and requested that the Agency follow the procedure laid out at 49 U.S.C. 32912(c) to undertake a rulemaking to raise the amount to the maximum then allowed by Congress, $10 per tenth-of-an-mpg. A month later, Congress changed the statutory landscape by enacting the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.
Having carefully considered the issues raised by the petitioners, NHTSA will grant the Industry Petition in part and deny it in part. Beginning with model year 2019, NHTSA will apply the full penalty prescribed by the Federal Civil Penalties Inflation Adjustment Improvements Act of 2015. NHTSA is required by the Act to continue adjusting the civil penalty for inflation each year, so the penalty rate applicable to MY 2019 and after fleets will be $14 per tenth-of-an-mpg,
NHTSA agrees with the Industry Petitioners that applying the $14 civil penalty rate to violations of CAFE standards in model years prior to the enactment of the Act would not result in additional fuel savings, and thus would seem to impose retroactive punishment without accomplishing Congress' specific intent in establishing the civil penalty provision of the Energy Policy and Conservation Act (“EPCA”). Model years typically begin prior to their respective calendar year. By November 2, 2015 (the date of enactment of the civil penalties adjustment Act), nearly all manufacturers subject to the CAFE standards had completed both model years 2014 and 2015, and no further vehicles in those model years were being produced in significant numbers. This argument is even stronger considering that all manufacturers would have completed these model years prior to July 5, 2016, the date of the IFR. If all the vehicles for a model year have already been produced, then there is no way for their manufacturers to raise the fuel economy level of those vehicles in order to avoid higher penalty rates for non-compliance.
In the specific context of EPCA as amended, the purpose of civil penalties for non-compliance is to encourage manufacturers to comply with the CAFE standards.
The Industry Petition asserts that manufacturers have set their product and compliance plans for MY 2017 and 2018 based on the CAFE penalty provisions in place prior to July 2016, and that it is too late at this juncture to make significant changes to those plans and avoid non-compliances (for the manufacturers already intending not to comply). The Agency determined above that it is not appropriate to apply an increased penalty rate to CAFE non-compliance in past model years,
For immediate future model years (
Here, the Industry Petitioners assert that their plans for what technology to put on which MYs 2017 and 2018 vehicles are, at the point the IFR was issued, fixed and inalterable. NHTSA takes manufacturers' product cycles into account when NHTSA sets fuel economy standards. For example,
In an analogous context, EPCA provides that when DOT amends a fuel economy standard to make it more stringent, that new standard must be promulgated “at least 18 months before the beginning of the model year to which the amendment applies.” 49 U.S.C. 32902(a)(2). The 18 months' notice requirement for increases in fuel economy standards represents a congressional acknowledgement of the importance of advance notice to vehicle manufacturers to allow them the lead time necessary to adjust their product plans, designs, and compliance plans to address changes in fuel economy standards. Similarly here, affording manufacturers lead time to adjust their products and compliance plans helps them to account for such an increase in the civil penalty amount. In this unique case, the 18-month lead time for increases in the stringency of fuel economy standards provides a reasonable proxy for appropriate advance notice of the application of substantially increased—here nearly tripled—civil penalties.
Given that NHTSA issued the IFR in July 2016, 18 months from that date would be January 2018, which would encompass MY 2017 for most manufacturers and models and part of MY 2018. Based on the Industry Petition, comments, and agency expertise, NHTSA believes that, in this instance, applying the adjusted penalties only for MY 2019 and after provides a reasonable amount of lead time for manufacturers to adjust their plans and products to take into account the substantial change in penalty level.
For future model years for which the vehicles to be produced and their technologies are essentially fixed (
In order to reconcile competing statutory objectives in the unique context of multi-year vehicle product cycles, NHTSA will grant the Industry Petition insofar as it seeks to apply the penalty increase only for model years 2019 and after. For CAFE standard non-compliances that occur(ed) for model years 2014–2018, NHTSA intends to assess civil penalties at the rate of $5.50 per tenth of an mpg. Beginning with model year 2019, NHTSA will apply the full penalty prescribed by the Federal Civil Penalties Inflation Adjustment Improvements Act of 2015. NHTSA is required by the Act to continue adjusting the civil penalty for inflation each year, so the penalty rate applicable to MY–2019-and-after fleets will be $14 per tenth-of-an-mpg,
NHTSA believes this approach appropriately harmonizes the two congressional directives of adjusting civil penalties to account for inflation and maintaining attribute-based, consumer-demand-focused standards, applied in the context of the presumption against retroactive application of statutes.
In summary, NHTSA partially grants the Industry Petition for Reconsideration insofar as it seeks implementation of the civil penalties adjustment only to MY 2019 and after, and denies the Industry Petition in all other respects.
This action also effectively responds to the petition for rulemaking from CBD to increase the civil penalty rate as permitted by EPCA/EISA. The civil penalty rate beginning in MY 2019 will be substantially higher than the CBD petition requested, and NHTSA believes that the increased penalty will accomplish CBD's goal of encouraging manufacturers to apply more fuel-saving technologies to their vehicles in those future model years. To the extent that the CBD Petition requests an earlier penalty rate increase, it is denied for the reasons set forth in this decision.
NHTSA has considered the impact of this rulemaking action under Executive Order 12866, Executive Order 13563, and the Department of Transportation's regulatory policies and procedures. This rulemaking document was not reviewed under Executive Order 12866 or Executive Order 13563, and has been determined not to be “significant” under the Department of Transportation's regulatory policies and procedures and the policies of the Office of Management and Budget.
NHTSA has also considered the impacts of this rule under the Regulatory Flexibility Act. I certify that this rule will not have a significant impact on a substantial number of small entities. The following provides the factual basis for this certification under 5 U.S.C. 605(b). The amendments only affect manufacturers of motor vehicles. Low-volume manufacturers can petition NHTSA for an alternate CAFE standard under 49 CFR part 525, which lessens the impacts of this rulemaking on small businesses by allowing them to avoid liability for potential penalties under 49 CFR 578.6(h)(2). Small organizations and governmental jurisdictions will not be significantly affected as the price of motor vehicles and equipment ought not change as the result of this rule.
Executive Order 13132 requires NHTSA to develop an accountable process to ensure “meaningful and timely input by State and local officials
This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. The reason is that this rule applies to motor vehicle manufacturers. Thus, the requirements of Section 6 of the Executive Order do not apply.
The Unfunded Mandates Reform Act of 1995, Public Law 104–4, requires agencies to prepare a written assessment of the cost, 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 more than $100 million annually. Because NHTSA does not believe that this rule will necessarily have a $100 million effect, no Unfunded Mandates assessment will be prepared.
This rule does not have a retroactive or preemptive effect. Judicial review of this rule may be obtained pursuant to 5 U.S.C. 702. That section does not require that a petition for reconsideration be filed prior to seeking judicial review.
In accordance with the Paperwork Reduction Act of 1980, we state that there are no requirements for information collection associated with this rulemaking action.
Please note that 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
Fuel economy, Motor vehicles, Penalties.
In consideration of the foregoing, 49 CFR part 578 is amended as set forth below.
Pub. L. 101–410, Pub. L. 104–134, Pub. L. 109–59, Pub. L. 114–74, Pub L. 114–94, 49 U.S.C. 32902 and 32912; delegation of authority at 49 CFR 1.81, 1.95.
(h)
(2) Except as provided in 49 U.S.C. 32912(c), beginning with model year 2019, a manufacturer that violates a standard prescribed for a model year under 49 U.S.C. 32902 is liable to the United States Government for a civil penalty of $14, plus any adjustments for inflation that occurred or may occur (for model years before model year 2019, the civil penalty is $5.50), multiplied by each .1 of a mile a gallon by which the applicable average fuel economy standard under that section exceeds the average fuel economy—
(i) Calculated under 49 U.S.C. 32904(a)(1)(A) or (B) for automobiles to which the standard applies produced by the manufacturer during the model year;
(ii) Multiplied by the number of those automobiles; and
(iii) Reduced by the credits available to the manufacturer under 49 U.S.C. 32903 for the model year.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; inseason adjustment.
This action increases the possession and trip limits for Southern New England/Mid-Atlantic yellowtail flounder and reduces the possession and trip limits for Georges Bank cod in place for Northeast multispecies common pool vessels for the remainder of the 2016 fishing year. The Regional Administrator is authorized to adjust possession and trip limits for common pool vessels to facilitate harvesting, or prevent exceeding, the pertinent common pool quotas during the fishing year. Increasing the possession and trip limits on Southern New England/Mid-Atlantic yellowtail flounder is intended to provide additional fishing opportunities and help allow the common pool fishery to catch its allowable quota for the stock, while reducing the possession and trip limits for Georges Bank cod is necessary to prevent overharvest of the common pool quota for that stock.
The action increasing the possession and trip limits for Southern New England/Mid-Atlantic yellowtail flounder is effective December 22, 2016, through April 30, 2017. The action decreasing the possession and trip limits for Georges Bank cod is effective January 1, 2017, through April 30, 2017.
Kyle Molton, Fishery Management Specialist, 978–281–9236.
The regulations at 50 CFR 648.86(o) authorize the Regional Administrator to adjust the possession and trip limits for common pool vessels in order to
On November 15, 2016, we reduced possession and trip limits for Georges Bank (GB) cod to prevent an overage of the common pool's quota for the stock. These reduced possession and trip limits were set to expire on December 31, 2016, and return to the initial limits set by Framework Adjustment 55 to the Northeast Multispecies Fishery Management Plan (FMP). We project that if the current possession and trip limits were to expire there will likely be a significant overage of the common pool quota for this stock before the end of the fishing year. As of December 1, 2016, the common pool had caught approximately 76 percent of its sub-ACL of GB cod. To prevent the common pool fishery from exceeding its quota for this stock during the remainder of the fishing year, effective January 1, 2017, the possession and trip limits for GB cod will remain at the current limits (see Table 1) instead of returning to the initial limits set by Framework Adjustment 55 to the Northeast Multispecies FMP. We are also setting a new 25-lb (11.3-kg) per trip GB cod trip limit on common pool vessels fishing with a small vessel category permit. As a result, effective January 1, 2017, it is unlawful for a common pool vessel to exceed the possession and trip limits listed in Table 1.
Weekly quota monitoring reports for the common pool fishery can be found on our Web site at:
This action is required by 50 CFR part 648 and is exempt from review under Executive Order 12866.
The Assistant Administrator for Fisheries, NOAA, finds good cause pursuant to 5 U.S.C. 553(b)(B) and 5 U.S.C. 553(d)(3) to waive prior notice and the opportunity for public comment and the 30-day delayed effectiveness period because it would be impracticable and contrary to the public interest.
The regulations at § 648.86(o) authorize the Regional Administrator to adjust the Northeast multispecies possession and trip limits for common pool vessels to prevent the overharvest and facilitate utilization of common pool sub-ACLs. The catch data used to justify increasing the SNE/MA yellowtail flounder possession and trip limits and maintaining current possession and trip limits for GB cod only recently became available. The possession and trip limit increase implemented through this action allows for increased harvest of SNE/MA yellowtail flounder, to help ensure that the fishery may achieve the optimum yield (OY) for this stock. As a result, the time necessary to provide for prior notice and comment, and a 30-day delay in effectiveness, would prevent us from increasing the possession and trip limit for SNE/MA yellowtail flounder in a timely manner, which could prevent the fishery from achieving the OY. Further, the same delay would prevent us from implementing measures to prevent overutilization of the GB cod sub-ACL, leading to further negative impacts on the fishery. Either outcome would undermine management objectives of the Northeast Multispecies FMP and cause unnecessary negative economic impacts to the common pool fishery. There is additional good cause to waive the delayed effective period because this action in part relieves restrictions on fishing vessels by increasing a trip limit on SNE/MA yellowtail flounder and also limits regulatory confusion by maintaining status quo restrictions to more effectively prevent overharvest of the GB cod sub-ACL.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary final rule; adjustment of specifications.
In accordance with the regulations implementing the Atlantic Herring Fishery Management Plan, this action adjusts the 2017 catch limits in the four herring management areas (Areas 1A, 1B, 2, and 3) to account for underages in those areas during 2015. In order to ensure that the carryover of underages do not cause overfishing of the herring resource, management area-specific carryover does not increase the stock-wide annual catch limit. This action is necessary to ensure that NMFS accounts for herring catch consistent with the requirements of the Atlantic Herring Fishery Management Plan.
Effective December 28, 2016, through December 31, 2017.
Copies of supporting documents, including the 2013–2015 Specifications/Framework 2 and the 2016–2017 Specifications to the Atlantic Herring Fishery Management Plan (FMP), are available from the Sustainable Fisheries Division, Greater Atlantic Regional Fisheries Office, 55 Great Republic Drive, Gloucester, MA 01930, telephone (978) 281–9315, or online at:
Shannah Jaburek, Fishery Management Specialist, 978–282–8456, fax 978–281–9135.
The Atlantic herring harvest in the United States is managed under the FMP developed by the New England Fishery Management Council (Council). The FMP divides the stock-wide herring annual catch limit (ACL) among three management areas, one of which has two sub-areas. It divides Area 1 (located in the Gulf of Maine (GOM)) into an inshore section (Area 1A) and an offshore section (Area 1B). Area 2 is located in the coastal waters between Massachusetts and North Carolina, and Area 3 is on Georges Bank (GB). The FMP considers the herring stock complex to be a single stock, but there are inshore (GOM) and offshore (GB) stock components. The GOM and GB stock components segregate during spawning and mix during feeding and migration. Each management area has its own sub-ACL to allow greater control of the fishing mortality on each stock component.
NMFS issued a final rule that implemented Amendment 4 to the FMP (76 FR 11373, March 2, 2011) to address ACL and accountability measure (AM) requirements. As a way to account for ACL/sub-ACL overages in the herring fishery, Amendment 4 established an AM that requires NMFS to deduct any ACL/sub-ACL overages from the corresponding ACL/sub-ACL in the year following the catch overage determination. Amendment 4 also specified that NMFS will announce overage deductions in the
NMFS also published a final rule implementing Framework 2 to the FMP and the 2013–2015 specifications for the herring fishery on October 4, 2013 (78 FR 61828). Among other measures, Framework 2 allowed for the carryover of unharvested allocations (underages) in the year immediately following the catch determination. Up to 10 percent of each sub-ACL may be carried over and added to the following year's sub-ACL, provided total catch did not exceed the stock-wide ACL. The carryover provision allows a sub-ACL increase for a management area, but it does not allow a corresponding increase to the stock-wide ACL.
NMFS published the 2016–2018 specifications for the herring fishery on November 1, 2016 (81 FR 75731). Table 1 outlines the 2017 herring sub-ACLs, minus deductions for research set-aside catch (RSA), that will be effective on January 1, 2017. RSA equal to 3 percent of each sub-ACL has been awarded to two research projects.
NMFS completed the 2015 catch determination in December 2016, and determined that the herring fishery caught less than its allocated catch in 2015 in all four herring management areas (Areas 1A, 1B, 2, and 3). As a result, this action carries over unharvested 2015 catch to the 2017 herring sub-ACL in all four areas. This carryover equals to the amount of each area's underages (or up to ten percent of the allocated 2015 sub-ACL, whichever is less) for Areas 1A, 1B, 2, and 3. Table 2 provides catch details for 2015 and corresponding adjustments for 2017 sub-ACLs.
NMFS calculated the amount of herring landings in 2015 based on dealer reports (Federal and state) of herring purchases, supplemented by vessel trip reports (VTRs) and vessel monitoring system (VMS) reports (Federal and State of Maine) of herring landings. NMFS generally uses dealer reports to estimate herring landings. However, if the amount of herring reported via VTR exceeded the amount of herring reported by the dealer by 10 percent or more, NMFS assumes the dealer report for that trip was in error and uses the VTR report instead. NMFS assigns herring landings to individual herring management areas using VMS reports or using latitude and longitude coordinates from VTR reports when a VMS report is not available. NMFS uses recent fishing activity to assign landings to a management area if dealer reports do not have a corresponding VTR or VMS catch report.
NMFS estimates herring discards by extrapolating discards from herring trips observed by the Northeast Fisheries Observer Program to all herring trips (observed and unobserved) according to gear and herring management area. Because RSA is removed from management area sub-ACLs at the beginning of the fishery year, NMFS tracks RSA catch but does not count it towards the herring sub-ACLs.
Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Fishery Conservation and Management Act (MSA), the NMFS Assistant Administrator has determined that this final rule is consistent with the FMP, other provisions of the MSA, and other applicable law.
Pursuant to 5 U.S.C. 553(b)(B), there is good cause to waive prior notice and an opportunity for public comment on this action. Notice and comment are impracticable and contrary to the public interest because a delay would potentially impair achievement of the management plan's objectives of preventing overfishing and achieving optimum yield due by impairing a vessel's ability to harvest available catch allocations. Allowing for prior notice and public comment on this adjustment is also impracticable because regulations require notification of adjustments, if possible, before the herring fishing year begins on January 1, 2017. Further, this is a nondiscretionary action required by provisions of Amendment 4 and Framework 2, which were previously subject to public notice and comment. The adjustments required by these regulations are formulaic. This action simply effectuates these mandatory calculations. The proposed and final rules for Framework 2 and Amendment 4 explained the need and likelihood for adjustments to the sub-ACLs based on final catch amounts. Framework 2, specifically, provided prior notice of the need to distribute carryover catch. These actions provided a full opportunity for the public to comment on the substance and process of this action.
For the same reasons as noted above, there is good cause under 5 U.S.C. 553(d)(3) to waive the 30-day delay in effective date and make the rule effective upon publication in the
This action is required by 50 CFR part 648 subpart K and is exempt from review under Executive Order 12866.
This final rule does not contain a collection-of-information requirement for purposes of the Paperwork Reduction Act.
Because prior notice and opportunity for public comment are not required for this rule by 5 U.S.C. 553, or any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601
16 U.S.C. 1801
Federal Deposit Insurance Corporation (FDIC).
Notice of proposed rulemaking.
The FDIC proposes to amend its regulations regarding Recordkeeping Requirements for Qualified Financial Contracts (“Part 371”), which require insured depository institutions (“IDIs”) in a troubled condition to keep records relating to qualified financial contracts (“QFCs”) to which they are party. The proposed rule would expand the scope of QFC records required to be maintained by an IDI that is subject to the FDIC's recordkeeping requirements and that has total consolidated assets equal to or greater than $50 billion or is a member of a corporate group where one or more affiliates is subject to the QFC recordkeeping requirements set forth in the regulations adopted by the Department of the Treasury (a “full scope entity”); for all other IDIs subject to the FDIC's QFC recordkeeping requirements, add and delete a limited number of data requirements and make certain formatting changes with respect to the QFC recordkeeping requirements; require full scope entities to keep QFC records of certain of their subsidiaries; and include certain other changes, including changes that would provide additional time for certain IDIs in a troubled condition to comply with the regulations.
Comments must be received on or before February 27, 2017.
You may submit comments by any of the following methods:
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Legal Division: Phillip E. Sloan, Counsel, (703) 562–6137; Joanne W. Rose, Counsel, (917) 320–2854. Division of Resolutions and Receiverships: Marc Steckel, Deputy Director, (571) 858–8824; George C. Alexander, Assistant Director, (571) 858–8182.
The proposed rule would enhance and update recordkeeping requirements as to QFCs of IDIs in troubled condition in order to facilitate the orderly resolution of IDIs with QFC portfolios. The proposed rule would revise the format of records required to be maintained in order to provide more ready access to expanded QFC portfolio data. Additionally, the proposed rule would require that more comprehensive information be maintained to facilitate the FDIC's understanding of complex QFC portfolios in receivership. The proposed changes to both the formatting and the quantity of information would enable the FDIC, as receiver, to make better informed and efficient decisions as to whether to transfer some or all of a failed IDI's QFCs during the one-business-day stay period for the transfer of QFCs. This would help the FDIC achieve a least costly resolution.
Part 371 was adopted in 2008 pursuant to 12 U.S.C. 1821(e)(8)(H) (the “FDIA Recordkeeping Provision”) to enable the FDIC to have prompt access to detailed information about the QFC portfolios of IDIs for which the FDIC is appointed receiver.
In July 2010, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act
On October 31, 2016, in implementation of Section 210(c)(8)(H), the Department of the Treasury published regulations (Part 148) that require large U.S. financial holding
The proposed rule would harmonize the recordkeeping requirements under Part 371 for large IDIs and IDIs that are affiliates of financial companies subject to Part 148 with the recordkeeping requirements of Part 148. The harmonization would support the policy objective of enabling the FDIC to make judicious QFC transfer decisions and would enable the FDIC, as receiver of an IDI that is a member of a corporate group subject to Part 371, to rapidly obtain a complete picture of the QFC positions of the entire group by combining the records maintained under the two regulations. Such harmonization would also have the indirect benefit of reducing costs to IDIs that become subject to Part 371 and that are members of a corporate group subject to Part 148 by enabling such IDIs to utilize the information technology infrastructure established by their corporate group for purposes of complying with Part 148.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
In the eight years since it was adopted, Part 371 has proved very useful to the FDIC in connection with QFCs of IDIs for which it was appointed receiver. While these institutions, in general, had limited QFC portfolios, several large IDIs with significant QFC portfolios also became in a troubled condition and were required to comply with the recordkeeping requirements of Part 371. The process of working with these IDIs to achieve compliance with Part 371, in addition to being very useful in resolution planning for these institutions, was instructive for the FDIC and caused the FDIC to identify areas where additional data in a more accessible format would provide the FDIC, as receiver, with important benefits in making determinations as to whether to transfer the institution's QFCs in a manner that would help preserve the value of the receivership and minimize losses to the Deposit Insurance Fund. The FDIC also gained experience with respect to the length of time that sometimes is necessary to complete QFC recordkeeping requirements, and identified areas where the requirements could be made clearer.
As previously noted, Part 148 requires more extensive record keeping than that required by Part 371 as currently in effect (“Current Part 371”). The additional data include, among other data points, information on underlying QFCs where the QFC in question is a guarantee, additional information as to whether a QFC is guaranteed, information as to positions for which a QFC serves as a hedge, certain information as to the netting sets to which the QFCs pertain, information as to cross-default provisions in QFCs, information as to location of collateral, whether the collateral is segregated by the entity holding the collateral, whether the collateral is subject to re-hypothecation, and information as to the value of QFC positions in the currency applicable to the QFCs. This additional information could greatly assist the FDIC as receiver in making decisions as to the treatment of the receivership's QFCs under the Dodd-Frank Act within the same, short one-business-day stay period that applies where the FDIC is appointed as receiver
The proposed rule would amend and restate Part 371 in its entirety. The proposed rule would require full scope entities to maintain the full complement of data required by Part 148.
The FDIC decided that the $50 billion total consolidated asset threshold for full scope entities was appropriate for several reasons. Institutions with this higher threshold are more likely to have larger and more complex QFC portfolios. Also, this is the threshold used in 12 CFR part 360 to identify institutions that are required to file resolution plans
The proposed rule makes only limited additions to the data required Current Part 371 for IDIs other than full scope entities (“limited scope entities”) because the data from the tables with the limited additions set forth in the proposed rule will provide sufficient information for the FDIC as receiver to take necessary actions with respect to QFC portfolios of all but the largest IDIs and IDIs that are part of a large group, with extensive QFC portfolios, that are subject to Part 148. It is unlikely that most limited scope entities will have QFC positions of a magnitude and complexity that would justify the added burden of being subject to the full scope of data requirements imposed by Part 148. In assessing what additions to information should be required for limited scope entities, FDIC staff was informed by its experience in administering Part 371.
Only certain portions of Current Part 371would be substantively changed by the proposed rule. The changes include the following: (i) The recordkeeping requirements for full scope IDIs would be expanded; (ii) full scope IDIs would be required to keep records on the QFC activity of certain of their subsidiaries; (iii) the required format for QFC records for limited scope IDIs would be revised and a limited number of additional data fields would be added for these IDIs; (iv) the length of time that certain IDIs have to comply with the rule would be increased; (v) changes to the process for obtaining extensions and to the permitted duration of extensions for certain types of IDIs; (vi) clarifications relating to records access requirements; and (vii) certain other changes relating to transition and other matters.
Section 371.1 sets forth the scope and purpose of the proposed rule, as well as required compliance dates. The expressed purpose of Part 371—to establish recordkeeping requirements with respect to QFCs for IDIs in a troubled condition—would not change from Current Part 371.
Under Current Part 371, an IDI is required to comply with Part 371 after receiving written notice from the IDI's appropriate Federal banking agency or the FDIC that it is in troubled condition under Part 371. Section 371.1(a) of the proposed rule would provide that Part 371 applies to an IDI that is a “records entity.” A records entity is an IDI that has received notice from its appropriate Federal banking agency or the FDIC that it is in a troubled condition
Section 371.1(c)(1) of the proposed rule would require that, within three business days of receiving notice that it is a records entity, an IDI must provide the FDIC with the contact information of the person who is responsible for the QFC recordkeeping under Part 371 and a directory of the electronic files that will be used by the IDI to maintain the information required to be kept under Part 371. These requirements are substantially similar to those set forth in Current Part 371, although the proposed rule would clarify that the contact person must be the person responsible for the recordkeeping system, rather than simply a knowledgeable person. The electronic file directory consists of the file path or paths of the electronic files located on the IDI's systems.
The proposed rule would set forth a different compliance date schedule than that set forth in Current Part 371. Under Current Part 371, an IDI is required to comply with Part 371 within 60 days of being notified that it is in troubled condition under Part 371, unless it obtains an extension of this deadline. It has been the FDIC's experience that some IDIs with significant QFC portfolios that were subject to Part 371 needed up to 270 days to establish systems that enabled them to maintain QFC records in accordance with Part 371. Because extensions under Current Part 371 are limited to 30 days, several extensions were necessary.
Under section 371.1(c)(2)(i) of the proposed rule, all IDIs except for an IDI that is an accelerated records entity (as defined in the next paragraph) would have 270 days to comply with Part 371. In addition, § 371.1(d)(1) of the proposed rule would authorize the FDIC to provide extensions of up to 120 days to records entities other than accelerated records entities. This proposed change would reduce or eliminate the need for repeated extensions for IDIs that are not accelerated records entities and thus would reduce the burden on such IDIs.
Accelerated records entities are IDIs with a composite rating of 4 or 5 or that are determined to be experiencing a significant deterioration of capital or significant funding difficulties or liquidity stress. In view of the increased risk of near-term failure of IDIs that are
Section 371.1(d)(3) of the proposed rule would retain the requirement of Current Part 371 that written extension requests be submitted not less than 15 days prior to the deadline for compliance, accompanied by a statement of the reasons why the deadline cannot be met. In order to reflect the FDIC's past practice in considering extension requests under Part 371, the proposed rule would also expressly require that all extension requests include a project plan for achieving compliance (including timeline) and a progress report.
Section 371.2 contains definitions used in Part 371. The proposed rule would add new definitions that reflect the proposed changes to the text and tables of Part 371.
Newly defined terms include “records entity,” which is added for clarity and conciseness to denote an IDI that is subject to Part 371. As previously discussed, the definition would provide that in order to be a records entity, and thus subject to Part 371, an IDI must receive notice from its appropriate Federal banking agency or the FDIC that it is in a troubled condition and must also receive notice from the FDIC that it is subject to the recordkeeping requirements of Part 371. The definition of records entity would include an IDI already subject to the recordkeeping requirements of Part 371 as of the effective date of the final rule.
Current Part 371 defines “troubled condition” to mean any IDI that (1) has a composite rating, as determined by its appropriate Federal banking agency in its most recent report of examination, of 3 (only for IDIs with total consolidated assets of $10 billion dollars or greater), 4, or 5 under the Uniform Financial Institution Rating System, or in the case of an insured branch of a foreign bank, an equivalent rating; (2) is subject to a proceeding initiated by the FDIC for termination or suspension of deposit insurance; (3) is subject to a cease-and-desist order or written agreement issued by the appropriate Federal banking agency, as defined in 12 U.S.C. 1813(q), that requires action to improve the financial condition of the IDI or is subject to a proceeding initiated by the appropriate Federal banking agency which contemplates the issuance of an order that requires action to improve the financial condition of the IDI, unless otherwise informed in writing by the appropriate Federal banking agency; (4) is informed in writing by the IDI's appropriate Federal banking agency that it is in troubled condition for purposes of 12 U.S.C. 1831i on the basis of the IDI's most recent report of condition or report of examination, or other information available to the IDI's appropriate Federal banking agency; or (5) is determined by the appropriate Federal banking agency or the FDIC in consultation with the appropriate Federal banking agency to be experiencing a significant deterioration of capital or significant funding difficulties or liquidity stress, notwithstanding the composite rating of the IDI by its appropriate Federal banking agency in its most recent report of examination.
While the proposed rule would make no change to the definition of troubled condition, the FDIC notes that the third prong of the definition, which addresses IDIs subject to a cease-and-desist order or written agreement issued by the appropriate Federal banking agency that requires action to improve the financial condition of the IDI
As discussed previously, the proposed rule would define an “accelerated records entity” as a records entity with a composite rating of 4 or 5 under the Uniform Financial Institution Rating System (or in the case of an insured branch of a foreign bank, an equivalent rating system), or that is determined to be experiencing a significant deterioration of capital or significant funding difficulties or liquidity stress, notwithstanding the composite rating of the institution by its appropriate Federal banking agency in its most recent report of examination.
The proposed rule would require different recordkeeping requirements for “full scope entities” and “limited scope entities,” and adds definitions of those terms for clarity and conciseness. The rule would define a full scope entity as a records entity that has total consolidated assets equal to or greater than $50 billion or that is a Part 148 affiliate. “Part 148 affiliate” is defined as a records entity that is a member of a corporate group one or more other members of which are required to maintain QFC records pursuant to Part 148. A limited scope entity would be defined as a records entity that is not a full scope entity. As discussed previously, the proposed rule would require full scope entities to keep more detailed QFC records than limited scope entities.
The proposed rule would require that full scope entities include, among other items, records for their reportable subsidiaries. A reportable subsidiary would be defined to include a subsidiary of an IDI that is not a functionally regulated subsidiary as defined in 12 U.S.C. 1844(c)(5), a security-based swap dealer as defined in 15 U.S.C. 78c(a)(71), or a major security-based swap participant as defined in 15 U.S.C. 78c(a)(67). Since QFC data for reportable subsidiaries is not required to be maintained under Part 148, requiring this information in Part 371 would provide the FDIC as receiver with more
The proposed rule would also add a definition for “business day” that is consistent with the definition of this term used in 12 U.S.C. 1821(e)(10)(D) and a definition for “control” (used in the definition of the term “affiliate”), which is defined consistently with the definition of this term in the FDI Act.
Minor drafting changes to the definition of “qualified financial contract” are included in the proposed rule. These changes are for clarity only and are not intended to make substantive changes in the meaning of this term.
The proposed rule would also add certain terms in order to clarify portions of Part 371, including terms used in the proposed new data tables. These terms include “parent entity,” “corporate group,” “counterparty,” “amendment effective date,” “legal entity identifier” (LEI), and “subsidiary.”
Section 371.3 of the proposed rule would set forth the requirements for maintaining QFC records. As under Current Part 371, paragraph (a) of the proposed rule would require that QFC records be maintained in electronic form in the format set forth in the Appendices to Part 371, unless the records entity qualifies for the exemption from electronic recordkeeping for institutions with fewer than 20 QFC positions, and that all such records in electronic form be updated on a daily basis. In recognition of the value to the FDIC of consistency of recordkeeping through an entire corporate group, the proposed rule would add a new requirement, in § 371.3(a)(4), that records maintained by a Part 148 affiliate are compiled consistently with records compiled by its affiliates pursuant to Part 148. This would require that an IDI subject to Part 371 use the same data inputs (for example, counterparty identifier) as the inputs used for reporting pursuant to Part 148. The proposed rule would clarify that these updates be based on the previous end-of-day values. The proposed rule would require that the records entity be capable of providing the preceding day's end-of-day values to the FDIC no later than 7:00 a.m. (Eastern Time) each day. The 7:00 a.m. deadline is proposed in light of the limited stay period for transfer of QFCs by the FDIC as receiver, which ends at 5:00 p.m. (Eastern Time) on the business day following the date of the appointment of the receiver.
The proposed rule would also add a new requirement that electronic records be compiled in a manner that permits aggregation and disaggregation of such records by counterparty, and if a records entity is maintaining records in accordance with Appendix B, by records entity and reportable subsidiary. The proposed rule would add a requirement that a records entity maintain daily records for a period of not less than five business days in order to ensure that there are records available to the FDIC that indicate the trends in an institution's QFC holdings even before the actual previous end-of-day's records are available to the FDIC.
The proposed rule also would change the requirement in Current Part 371 with respect to the point of contact at the records entity to answer questions with respect to the electronic files being maintained at the records entity. Section 371.1(c) of the proposed rule would require that records entities provide the FDIC the name and contact information for the person responsible for recordkeeping, and § 371.3(b) would require that the FDIC be notified within 3 business days of any change to such information.
The proposed rule would make no change to the requirement in Current Part 371 that a records entity may cease maintaining records one year after it ceases to be a records entity or, if it is acquired by or merges with an IDI entity that is not in troubled condition, following the time it ceases to be a separately insured IDI.
Section 371.4 of the proposed rule would set forth the requirements for the content of the QFC records that are required to be maintained by records entities. As discussed previously, Section 371.4(b) would require a full scope entity to maintain QFC records in accordance with Appendix B to Part 371, which requires significantly more comprehensive records than are required under Current Part 371. In general, full scope entities are likely to have significant QFC portfolios and the expanded recordkeeping will facilitate the decisions that must be made by the FDIC with respect to these QFC portfolios. Appendix B is substantially similar to the tables included in the Part 148 regulations and, accordingly, if a records entity is an affiliate of an entity that is required to keep records under Part 148, it is likely that it would be able to use the recordkeeping infrastructure developed to comply with Part 148. Consistency of the information as to the IDI and its reportable subsidiaries as well as the other entities in the corporate group will provide the FDIC with a more comprehensive understanding of the QFC exposure of the group.
Section 371.4 (a) of the proposed rule would require a limited scope entity to maintain less comprehensive QFC records under Appendix A, which is similar in scope to the Appendix to Current Part 371, with the changes discussed under “
The QFC records under Appendices A and B are necessary to assist the FDIC in determining, during the short one-business-day stay period applicable to QFCs, whether to transfer QFCs.
The proposed rule also would require records entities that are subject to § 371.4(b) to include information on QFCs to which their reportable subsidiaries are a party. This information would be provided by the records entity, not the reportable subsidiary. As discussed previously, a reportable subsidiary would be defined to include a subsidiary of an IDI that is not a functionally regulated subsidiary as defined in 12 U.S.C. 1844(c)(5), a security-based swap dealer as defined in 15 U.S.C. 78c(a)(71), or a major security-based swap participant as defined in 15 U.S.C. 78c(a)(67). Like IDIs, reportable subsidiaries are excluded from the recordkeeping requirements of Part 148, while information as to subsidiaries that are not reportable subsidiaries would be available to the FDIC from information provided under Part 148. Without information as to QFCs of reportable subsidiaries, the FDIC, as receiver, might not have information that would allow it to assess the effect of its transfer and retention decisions for QFCs of an IDI on the entire group comprised of the IDI and its subsidiaries. While this information would also be useful from limited scope entities maintaining information in accordance with Appendix A, the FDIC does not believe that the advantage of having this information on reportable subsidiaries would outweigh the burden for these smaller IDIs which, individually or with their subsidiaries, are not expected to normally have significant QFC positions.
Section 371.4(c) of the proposed rule would provide requirements for a records entity that changes its recordkeeping status. It would require that a limited scope entity that is maintaining QFC records in accordance with the tables in Appendix A that subsequently becomes a full scope entity maintain QFC records in accordance with the tables in Appendix B within 270 days of becoming a full scope entity or, if it is an accelerated records entity, within 60 days. The proposed rule would require such an entity to continue to maintain the records under the tables in Appendix A until it maintains the QFC records specified in the tables to Appendix B. A full scope entity that subsequently becomes a limited scope entity would be permitted to opt to maintain records under the tables in Appendix A. This entity would be required to continue to maintain the records specified in the tables to Appendix B until it maintains the records in accordance with Appendix A. The FDIC is not requiring a time period for compliance in such instance because the records under Appendix B are more comprehensive than the records under Appendix A.
If a limited scope entity that is not yet maintaining QFC records in accordance with Appendix A or B becomes a full scope entity, the proposed rule would require the records entity to maintain QFC records in accordance with Appendix B within 270 days of the date on which it became a records entity or, if it is an accelerated records entity, within 60 days. The same compliance timeframes would apply to a records entity that is a full scope entity that becomes a limited scope entity before it maintains QFC records in accordance with Appendix B. These compliance periods for records entities that change their recordkeeping status reflect the importance to the FDIC of promptly obtaining QFC records from IDIs in troubled condition.
Records entities that experience a change in status, like IDIs newly subject to Part 371, would be permitted to apply for extensions of time to comply under § 371.1(d).
The proposed rule would retain the de minimis exception included in Current Part 371. This provision allows a records entity with fewer than 20 QFC positions at the time it becomes a records entity to maintain these records in any format it chooses, including paper records, so long as the required records are capable of being updated daily, provided that the records entity does not subsequently have 20 or more QFC positions.
Section 371.5 of the proposed rule would provide rules for full scope entities that are subject to Current Part 371 immediately prior to the effective date of the amendments to Part 371 to transition to the new recordkeeping requirements included in the proposed rule. Limited scope entities that are subject to Current Part 371 immediately prior to the effective date of the amendments would not be required to transition to the new recordkeeping requirements. If, however, any such limited scope entity ceases to be subject to the recordkeeping requirements because it ceases to be in troubled condition for one year pursuant to § 371.3(d) but subsequently again becomes subject to the recordkeeping requirements, at such subsequent time the limited scope entity would be subject to the new recordkeeping requirements.
Under the proposed rule, a full scope entity that is maintaining QFC records in accordance with Current Part 371 immediately prior to the effective date of the amendments to Part 371 would be required to comply with all recordkeeping requirements of Part 371 within 270 days after the effective date of the amendments or, in the case of an accelerated records entity, 60 days. Any such records entity would also be required to continue to maintain the records required by Current Part 371 until it maintains the records required by § 371.4(b), as applicable.
Additionally, the proposed rule contains a provision that addresses the transition of a full scope entity that is required to keep records under the Current Part 371 but is not in compliance with Current Part 371's recordkeeping requirements immediately prior to the effective date of the amendments to Part 371. The proposed rule would require such a records entity to comply with the recordkeeping requirements of Part 371, as amended, within 270 days after the date that it first became a records entity or, in the case of an accelerated records entity, 60 days.
The effect of these provisions would be to provide more time for the transition to the recordkeeping requirements of Part 371, as amended, for full scope entities that are keeping the records required under Current Part 371 and less time for those that are not. The FDIC believes that it is reasonable to give IDIs that are actually maintaining the information required by Current Part 371 more time to transition to the recordkeeping requirements of the amendments to Part 371 because even in the worst case scenario where the IDI is placed into receivership prior to the transition, the FDIC will have some information on the QFCs of the IDI to use in making the transfer determination. If the transition provisions of the proposed rule were to give a full new 270 day period to an IDI already subject to Part 371, it might be the case that the IDI would be placed into receivership prior to providing any of the records required by Current Part 371 or the proposed rule.
Section 371.6 of the proposed rule is unchanged from § 371.5 of Current Part 371. It provides that violation of Part 371 would subject a records entity to enforcement action under Section 8 of the FDI Act (12 U.S.C. 1818).
Appendix A of the proposed rule would apply to a records entity that is
Specifically, Table A–1 of the proposed rule would make a limited number of additions to the rows included in Table A–1 of Current Part 371 in order to provide ready electronic access to information that FDIC staff has found to be important in determining whether to transfer or retain QFCs of a failed IDI. These additions include Row A1.1, which requires an “as of” date. This information is important because a records entity often derives data from multiple systems in multiple locations and the FDIC needs to be able to expeditiously determine whether, due to differences in time zone, legal holidays or other factors, any of the data is not current. Other additions are made to allow for systematic, electronic identification of parties. Row A1.2 would require that a records entity identifier be provided and Row A1.4 would require use of a counterparty identifier. Current Part 371 requires that a records entity provide a list of counterparty identifiers, but the new proposed format will facilitate the prompt and accurate identification of counterparties as well as the determination of whether they are affiliated entities. This is important because in an FDIA resolution, QFCs must be transferred on an all-or-none basis with respect to all QFCs entered into with counterparties of the same affiliated group. This may, but does not always, comport with straightforward netting sets, so the efficient identification of affiliated counterparties is critical to the FDIC's decisions that must be made within the short one-business-day stay period. In addition, proposed Table A–1 would require that the identifier used for records entities as well as counterparties be a Legal Entity Identifier (“LEI”), if the records entity or counterparty has one. LEIs are identifiers maintained for companies by a global organization and are increasingly used by financial institutions. Accordingly, their use in Part 371 would ensure that variations from formal names do not result in the misidentification of a records entity or counterparty and thus help ensure that the FDIC satisfies its obligation to transfer all, or none, of the QFC positions between a failed IDI and a counterparty and its affiliates.
Proposed new Rows A1.5 and A1.6, which would require that data include the internal booking location identifier and the unique booking unit or desk identifier of a QFC, are intended to improve the ability of the FDIC to identify individuals at a records entity who are familiar with a particular position. This can be of major importance to the FDIC in determining, during the one business day stay period, whether to retain or transfer a QFC. This requirement would replace the requirement in Current Part 371 that the table specify a portfolio location identifier and provide a list of booking locations.
Some of the new rows in Table A–1 are designed to provide the FDIC with information about other positions or assets of the records entity to which a QFC relates. For example, where an interest rate swap relates to a loan made by an IDI or to a different swap of the IDI, this information would be of critical importance to the FDIC in making its determination of whether to transfer or retain that QFC. The FDIA provides that a guarantee or other credit enhancement of a QFC is itself a QFC.
Rows A1.19–A1.21 would require additional information as to third party credit enhancements in favor of the records entity. This information is important to assessing credit risk and net exposure with respect to QFCs, which will facilitate decisions with respect to transfer of those QFCs. Rows A1.22–A1.24 would require information as to positions of the records entity to which the QFC relates. For example, these rows would indicate if obligations relating to a loan made by the failed IDI are being hedged by the QFC.
Other proposed changes are intended to facilitate the ability of the FDIC to electronically identify positions and governing agreements. Rows A1.10–A1.12 would require identifying information regarding the QFC master agreement or primary agreement (
Finally, Table A–1 does not include two data fields in Table A of Current Part 371 that in practice have not generally proved to elicit useful information. These are the rows that require that the purpose of the QFC position and that documentation status be identified.
While there are several non-substantive, clarifying drafting changes and additions to rows included in the existing Table A–2, the substantive additions are limited. Like Table A–1, Table A–2 includes new rows that require records entity identifiers,
Rows A2.16–A2.17 would require information as to the next margin payment date in order to help the receiver or transferee avoid inadvertent defaults and analyze the positions.
Table A–2 would continue require information as to the net current market value of all positions under a netting agreement, but would also require that the current positive market value and current negative market value of all such positions be separately stated. This break down of information would assist the FDIC in its analysis of the net overall position.
Appendix B of the proposed rule would apply to a records entity that is a full scope entity as well as to a limited scope entity that elects to use Appendix B rather than Appendix A. As discussed previously, Appendix B corresponds to the information required for records entities under Part 148. It includes all of the data discussed above that is required by Appendix A plus additional information that is important for understanding the larger and more complex QFC portfolios of the largest IDIs. The file structure for Appendix B would require four data tables: (1) Table A–1—Position-level data, (2) Table A–2—Counterparty Netting Set Data, (3) Table A–3—Legal Agreements and (4) Table A–4—Collateral Detail Data. It would also require four master data lookup tables: (1) Corporate Org Master Table, (2) Counterparty Master Table, (3) Booking Location Master Table and (4) Safekeeping Agent Master Table.
The most significant additional data required by Appendix B, as compared to Appendix A, is provided for in Tables A–3 and A–4 of Appendix B. In general, these Tables require additional information with respect to the master agreements or other contracts governing QFCs as well as additional information regarding collateral supporting QFCs.
In addition, Tables A–1 and A–2 for these entities require that the market value and notional amount of positions be expressed in local currencies, as well as in U.S. dollars, and that information as to amount of collateral subject to re-hypothecation be provided.
The information as to governing law is needed to evaluate whether there is any likelihood of different treatment of transfer of the QFC, access to collateral or other matters under non-U.S. law. The cross-default information is necessary so that the likelihood of the QFC terminating on account of the insolvency or payment defaults or other matters relating to a third party can be analyzed. The counterparty contact information may be important in connection with the FDIC's obligations under 12 U.S.C. 1821(e)(10) to take steps reasonably calculated to give notice of transfer of a QFC.
The FDIC has considered the expected effects of the proposed rule on covered institutions, the financial sector and the U.S. economy. The proposed rule will likely pose some costs for covered institutions, but by expanding the QFC recordkeeping requirements for institutions in troubled condition the proposed rule will enable the FDIC to make better informed decisions on how to manage the QFC portfolio of covered institutions if they enter into receivership. The proposed rule also would harmonize the scope and format of Part 371's QFC recordkeeping requirements for full scope entities with the recordkeeping requirements under Part 148 and thereby permit IDIs that become subject to Part 371 and are members of corporate groups subject to Part 148 to use information technology systems developed by their Part 148 affiliates in order to comply with Part 371. Finally, by enabling the FDIC to more efficiently evaluate and understand QFC portfolios the proposed rule will help the FDIC as receiver minimize unintended defaults through failures to make timely payments or collateral deliveries to QFC counterparties.
During the financial crisis of 2008 and ensuing recession many banks failed, some of which were party to significant volumes of QFCs. Through its experience of working with banks in troubled condition that were establishing systems to comply with the recordkeeping requirements of Current Part 371, the FDIC concluded that institutions with larger and more complex portfolios of QFCs would be more difficult to resolve in an efficient manner unless more QFC information was readily accessible. Readily available information on collateral, guarantees, credit enhancements, etc. would be necessary to evaluate counterparty risk and maximize value to the receivership. The proposed rule should provide benefits by reducing the likelihood that a future failure of an insured depository institution with a large and complex portfolio of QFCs could result in unnecessary losses to the receivership.
The proposed rule would likely result in large implementation costs for full scope entities. Significantly more information on QFCs is required to be maintained by the proposed rule relative to Current Part 371, including additional information as to collateral, guarantees and credit enhancements. The added information would enable the FDIC to more accurately assess and understand the QFC portfolios of institutions this size, which are more likely to be large and complex than the QFC portfolios of limited scope entities. As of September 30th, 2016, based on Consolidated Reports of Condition and Income as of that date, there were 40 FDIC-insured institutions with consolidated assets in excess of $50 billion. There are another 29 FDIC-insured institutions with consolidated assets of less than $50 billion that are members of corporate groups that are subject to Part 148, resulting in a total of 69 potential full-scope entities. In the event that one of these institutions becomes in a troubled condition, as defined in the rule, the FDIC assumes that, on average, it will take approximately 3,000 labor hours to comply with the recordkeeping requirements of the proposed revisions to Part 371 for full scope entities over and above the amount of time that would be expected to be required in order to comply with Current Part 371 for comparable entities. The implementation costs borne by covered institutions primarily include costs that would be incurred in order to accommodate the proposed new data elements. They are anticipated to be incurred when an institution becomes in a troubled condition and begins maintaining the QFC information in accordance with Part 371. Full scope entities that are subject to Current Part 371 when the final rule becomes effective could incur some transition expenses. Ongoing costs of recordkeeping for the proposed rule are assumed to be approximately similar to those under Current Part 371. The labor hours necessary to comply with the proposed rule will vary greatly for each institution depending upon the size and complexity of the QFC portfolio, the efficiency of the institution's QFC information management system(s), and the availability and accessibility of information on QFCs. Therefore, they are difficult to accurately estimate. Additionally, some costs related to complying with the rule might be ameliorated for an institution that is part of a corporate group subject to the Part 148, since its parent company may have already developed the capacity to meet the recordkeeping requirements for Part 148, which cover the same information, in the same format, as the proposed rule.
Finally, any implementation costs of the proposed rule are contingent upon an entity becoming in a troubled condition and subject to the proposed rule. Based on FDIC supervisory experience, it is estimated that two full scope entities per year, on average, will be subject to the recordkeeping requirements of the proposed rule. It is anticipated that the proposed rule would result in an additional 6,000 labor hours per year for covered institutions.
The proposed rule would likely pose some costs for limited scope entities, but those costs would be relatively small. Only slightly more QFC information is required to be maintained by limited scope entities to comply with the proposed rule relative to Current Part 371. The FDIC is proposing to remove three data elements from the Current Part 371 recordkeeping requirements while adding less than twenty additional data elements. The FDIC understands that most of the added data elements cover information
As of September 30th, 2016 there were 6,009 FDIC-insured institutions with total consolidated assets less than $50 billion. Of those institutions only 1,238 (21 percent) reported some amount of QFCs.
In the event that a limited scope entity becomes in a troubled condition, the FDIC assumes that it will take approximately 5 labor hours, on average, to comply with the added recordkeeping requirements of the proposed revisions to Part 371. The implementation costs borne by covered institutions primarily include costs that would be incurred in order to accommodate the proposed new data elements. They are anticipated to be incurred when an institution becomes in a troubled condition and begins maintaining the QFC information in accordance with Part 371. Ongoing costs of recordkeeping for the proposed rule are assumed to be approximately similar to those under Current Part 371. Therefore, the FDIC estimates that the added compliance costs associated with the proposed rule are 325 hours annually
To comply with the recordkeeping requirements of the rule it is assumed that entities in troubled condition will employ attorneys, compliance officers, credit analysts, computer programmers, computer systems analysts, database administrators, financial managers, and computer information systems managers. The FDIC has estimated that the average hourly wage rate for recordkeepers to comply with the initial recordkeeping burden is approximately $57 per hour based on average hourly wage information by occupation from the U.S. Department of Labor, Bureau of Labor Statistics.
The total estimated compliance costs for all covered entities, both full scope and limited scope, is approximately $361,000 each year. The realized compliance costs for covered entities are dependent upon future utilization rates of QFCs, and the propensity of institutions to become troubled. Therefore it is difficult to accurately estimate.
The proposed rule provides some relief from compliance costs relative to Current Part 371 by extending the time period allotted for an institution in troubled condition to start maintaining the required QFC information from 60 days to 270 days, with the exception of accelerated records entities. It has been the FDIC's experience that large institutions with complex QFC portfolios had difficulty meeting the current 60-day compliance deadline. Failure to meet the initial deadline necessitated multiple rounds of extension requests that were cumbersome and time-consuming for institutions in troubled condition and their primary regulator. By extending the compliance period to 270 days for all institutions, both “full scope” and “limited scope” entities, the proposed rule will reduce the overall compliance costs. Along with the extended compliance period the proposed rule also requires institutions to include a project plan with their extension request. However, the proposed inclusion of the project plan provision reflects current FDIC practice, and therefore, poses no additional burden.
The proposed rule would harmonize QFC recordkeeping requirements for full scope entities in troubled condition with the Part 148 requirements for other members of their corporate groups. This harmonization benefits these IDIs by enabling them to reduce costs by using information technology created for compliance with Part 148 by other members of their corporate group. Moreover, consistency of reporting across the corporate group would benefit the FDIC as receiver by enabling it to better analyze how an IDI's QFC positions relate to QFC positions of other members of the corporate group.
The proposed rule should also provide indirect benefits to QFC counterparties of institutions in troubled condition by helping the FDIC as receiver avoid unintended payment or delivery disruptions. The additional information required by the proposed rule includes detailed information about collateral, guarantees and credit enhancements which will significantly enhance the ability of the FDIC to
The FDIC considered a number of alternatives in developing the proposed rule. The major alternatives include: (i) Expanding the recordkeeping scope to include IDIs subject to any cease-and-desist order by, or written agreement with, the appropriate federal banking agency; (ii) expanding the recordkeeping scope for records entities to include all subsidiaries; (iii) recordkeeping thresholds of above and below $10 billion or $50 billion in total consolidated assets; (iv) requiring all records entities to maintain QFC records under the tables in Appendix B; (iv) requiring the same compliance period for all records entities; (v) not requiring existing full scope records entities to transition to the new recordkeeping requirements; and (vi) requiring existing limited scope entities to transition to the new recordkeeping requirements.
The FDIC considered expanding the definition of “troubled condition” to include all cease-and-desist orders or written agreements issued by the appropriate Federal banking agency in addition to those requiring action to improve the financial condition of an IDI. In reviewing the types of orders and agreements, including stipulations and consent orders, that may be issued or entered into, the FDIC determined that the requirement with respect to an action to improve the financial condition of the IDI is appropriate because it is more likely that such orders relate to an institution for which failure is less remote than is likely the case in connection with other types of orders and agreements. As a result, the FDIC decided not to expand this prong of the definition of “troubled condition.” Nonetheless, this preamble clarifies (in section III.B.2) that an “action to improve the financial condition,” for purposes of this Part, may include, but is not limited to, an action to improve capital adequacy, asset quality, management, earnings, liquidity, and sensitivity to market risk.
The FDIC also considered requiring IDIs that report on Appendix B to report QFC information for all subsidiaries rather than only “reportable subsidiaries.” However, expanding the scope of recordkeeping to all subsidiaries would be burdensome and would also be redundant for corporate groups that are subject to Part 148 because QFC information for subsidiaries that are not reportable subsidiaries (other than IDIs and insurance companies) is required under Part 148.
In determining the scope of recordkeeping for records entities, the FDIC considered total consolidated asset thresholds above and below $50 billion. As discussed under “III.A The Proposed Rule, Summary”, the FDIC determined the $50 billion threshold was appropriate because institutions at or above this threshold are more likely to have complex QFC portfolios and it is an asset level used in the several regulations cited in the above section that has been deemed appropriate for enhanced regulation and supervision. The FDIC determined that a threshold below $50 billion would impact smaller IDIs and unduly burden community banks.
The proposed rule requires certain records entities, as described previously, to maintain QFC records according to the tables in Appendix A or B depending on the size of the records entity.
The FDIC considered requiring the same compliance period for all records entities subject to this Part. Based on its experience, the FDIC has found that the longer period (270 days) is appropriate for larger entities. Larger entities that are required to report on Appendix B due to a composite CAMEL rating of 3 generally need a longer period to comply and, because an entity with a composite CAMEL rating of 3 is less likely to fail imminently, the additional time for recordkeeping should not pose significant additional risks that the FDIC as receiver will lack the information it needs with respect to the QFC portfolio. Entities with a composite CAMEL rating of 4 or 5 pose greater risk of near-term failure. For the same reason, the proposed rule would not increase the length of extensions available for 4 and 5 rated entities (30 days), regardless of their size. Although it may not be feasible for large entities with complex QFC portfolios to complete the recordkeeping requirements within 60 days, the short deadline with the requirement that extension requests be accompanied by progress reports and action plans will help assure that the recordkeeping requirements are being met in the most expeditious manner and that appropriate resources are being devoted to the effort by the IDI in troubled condition.
Finally, the FDIC considered other transition requirements. The alternative of not requiring transition to the new recordkeeping requirements by full scope entities was rejected because of the importance of having available for these entities, that are more likely to have complex QFC portfolios, all of the additional information included in the proposed rule, should such an entity become subject to receivership. The FDIC also considered requiring existing limited scope entities to transition to the new recordkeeping requirements, but determined that given the limited nature of almost all existing limited scope entity QFC portfolios the added burden would exceed the benefit of requiring this transition.
The FDIC invites comments on all aspects of the proposed rule and requests feedback on the following specific questions.
The proposed rule requires records entities, which are IDIs in troubled condition that receive notice from the FDIC that it is subject to this rule, to maintain QFC records in compliance with the provisions of this Part.
• Should the definition of “troubled condition” be modified to increase or decrease the scope of IDIs that potentially may be subject to this rule? If so, how?
Records entities would be required to maintain QFC records subject to the provisions of this Part. The FDIC requests comments on all aspects of the proposed requirement. In particular:
• Should the same compliance periods apply to all records entities, including accelerated records entities and existing records entities?
• Are the compliance periods in the proposed rule appropriate? If not, how much time should be provided?
• A full scope entity is a records entity that has total consolidated assets equal to or greater than $50 billion or that is a member of a corporate group where at least one affiliate is required to maintain QFC records pursuant to 31 CFR part 148. Is the full scope entity threshold of $50 billion in total consolidated assets appropriate? If not, what threshold would be more appropriate and why?
• Are the differences in recordkeeping requirements between full scope and limited scope entities appropriate? Are the additional requirements of Appendix B appropriate?
• Should a limited scope entity be required to report under the tables in Appendix A, Appendix B, or be given the option of either Appendix A or B?
• Should a records entity be provided a compliance timeframe when transitioning from being required to
• Should a limited scope entity have the option to maintain records under Appendix B in anticipation of meeting the criteria of a full scope entity at some point in the future?
• Are there any data fields in the proposed tables of Appendix A or Appendix B that should be modified? Which fields and why?
• Are there any additional data fields that should be included in the tables of Appendix A or Appendix B? What fields and why?
• Is the proposed 7:00 a.m. deadline for an IDI to be capable of providing records to the FDIC unduly burdensome?
• Is the new information that would be required of limited scope entities information that such entities would maintain in order to comply with Current Part 371 or information that is otherwise readily available to such entities? For example, would an IDI with a QFC that benefits from a guarantee ordinarily keep records concerning the guarantor? Would an IDI that is required to provide margin under its QFC ordinarily keep track of current margin delivery requirements either by keeping its own records or having access to data made available by its counterparty? Do the proposed changes to the recordkeeping requirements for limited scope entities impose a significant new burden on these entities as compared to the requirements currently in effect? If so, which aspects of the proposed requirements are significantly burdensome? Please be as specific as possible in your comments and quantify costs where possible.
The FDIC recognizes implementing information technology systems that will be required for compliance with this Part will take time and has proposed 270 days for records entities other than accelerated records entities and 60 days for accelerated records entities.
• Are there any aspects of the requirements that would take more time to implement? Which aspects and why? How much more time would be required?
• Should accelerated records entities be given more or less time to comply with the recordkeeping requirements than is provided in the proposed rule? How much time and why?
• Regarding § 371.5 (Transition for Existing Records Entities), should records entities that are not maintaining records under Part 371 at the time the proposed amendments to Part 371 become effective be given the same amount of time to comply with the recordkeeping requirements of this Part, as amended, as records entities that are maintaining such records on the effective date?
• Should existing full scope entities that are maintaining records in accordance with Part 371 when the proposed amendments become effective be required to transition to the new recordkeeping requirements?
• Should existing limited scope entities be required to transition to the new recordkeeping requirements?
The proposed rule would impose costs on certain records entities, but it would also provide some benefits.
• To what extent would the proposed rule impact the QFC recordkeeping operations and IT systems normally maintained by IDIs?
• What would be the costs or savings associated with these changes?
• By aligning the data requirements of Part 371 with those of Part 148, would it reduce the burden on corporate groups that are subject to the QFC recordkeeping requirements of both Part 148 and that contain an IDI subject to Part 371? Please quantify costs or burden to the extent possible.
• How burdensome would it be for a records entity that is maintaining records according to the appendix and tables in the existing Part 371 to transition to the requirements of Appendix B? What costs would be associated with that burden?
In accordance with the requirements of the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501
Certain provisions of the proposed rule contain “collection of information” requirements within the meaning of the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501–3521). In accordance with the requirements of the PRA, the FDIC 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 OMB control number is 3064–0163 and will be revised. The information collection requirements contained in this proposed rulemaking will be submitted by the FDIC to OMB for review and approval under section 3507(d) of the PRA (44 U.S.C. 3507(d)) and § 1320.11 of the OMB's implementing regulations (5 CFR 1320.11).
As discussed above, the FDIC proposes to amend its regulations regarding Part 371 which requires IDIs in a troubled condition to keep records relating to QFCs to which they are party. The FDIC estimates that the total compliance burden for covered entities, including full scope and limited scope entities, is as follows:
Comments are invited on:
(a) Whether the collections of information are necessary for the proper performance of the agencies' functions, including whether the information has practical utility;
(b) The accuracy of the estimates of the burden of the information collections, including the validity of the methodology and assumptions used;
(c) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(d) Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.
All comments will become a matter of public record. Comments on aspects of this notice that may affect reporting, recordkeeping, or disclosure requirements and burden estimates should be sent to the addresses listed in the
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601
For the same reasons as stated in the NPR of the existing Part 371 (73 FR 43635, 43640 (July 28, 2008)), the proposed rule would not have a significant economic impact on a substantial number of small entities. Most small entities do not participate in capital markets involving QFCs since QFCs are “generally sophisticated financial instruments that are usually used by larger financial institutions to hedge assets, provide funding, or increase income.”
In the event that one of these small institutions becomes in a troubled condition, the FDIC assumes that it will take approximately one labor hour, on average, to comply with the added recordkeeping requirements of the proposed revisions to Part 371. Small depository institutions generally do not have large and complex portfolios of QFCs and, therefore, the anticipated burden hours associated with the proposed rule is going to be low. Accordingly, the FDIC estimates that the added compliance costs associated with the proposed rule are 29 hours annually for all small institutions with some volume of QFCs that become in a troubled condition. The labor hours necessary to comply with the proposed rule will vary greatly for each institution depending upon the size and complexity of the QFC portfolio, the efficiency of the institution's QFC information management system(s) and the availability and accessibility of information on QFCs.
To comply with the recordkeeping requirements of the rule it is assumed that entities in troubled condition will employ attorneys, compliance officers, credit analysts, computer programmers, computer systems analysts, database administrators, financial managers, and computer information systems managers. The FDIC has estimated that the average hourly wage rate for recordkeepers to comply with the initial recordkeeping burden is approximately $57 per hour based on average hourly wage information by occupation from the U.S. Department of Labor, Bureau of Labor Statistics.
The FDIC has determined that the proposed rule will not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, enacted as part of the Omnibus Consolidated and Emergency Supplemental Appropriations Act of 1999 (Pub. L. 105–277, 112 Stat. 2681).
Section 722 of the Gramm-Leach-Bliley Act (Pub. L. 106–102, sec. 722, 113 Stat. 1338, 1471 (1999)) requires the FDIC to use plain language in all proposed and final rules published after January 1, 2000. The FDIC invites your comments on how to make this proposed rule easier to understand. For example:
• Has the FDIC organized the material to suit your needs? If not, how could this material be better organized?
• Are the requirements in the proposed regulation clearly stated? If not, how could the regulation be stated more clearly?
• Does the proposed regulation contain language or jargon that is unclear? If so, which language requires clarification?
• Would a different format (grouping and order of sections, use of headings, paragraphing) make the regulation easier to understand? If so, what changes to the format would make the regulation easier to understand?
• What else could the FDIC do to make the regulation easier to understand?
Administrative practice and procedure, Bank deposit insurance, Banking, Banks, Reporting and recordkeeping requirements, Securities, State non-member banks.
For the reasons set forth in the preamble, the Federal Insurance Deposit Corporation proposes to revise 12 CFR part 371 to read as follows:
12 U.S.C. 1819(a)(Tenth); 1820(g); 1821(e)(8)(D) and (H); 1831g; 1831i; and 1831s.
(a)
(b)
(c)
(2) Except as provided in § 371.5:
(i) A records entity, other than an accelerated records entity, shall comply with all applicable recordkeeping requirements of this part within 270 days after it becomes a records entity.
(ii) An accelerated records entity shall comply with all applicable recordkeeping requirements of this part within 60 days after it becomes a records entity.
(iii) Notwithstanding paragraphs (c)(2)(i) and (ii) of this section, a records entity that becomes an accelerated records entity after it became a records entity shall comply with all applicable recordkeeping requirements of this part within 60 days after it becomes an accelerated records entity or its original 270 day compliance period, whichever time period is shorter.
(d)
(1) Except as provided in paragraph (d)(2) of this section, no single extension for a records entity shall be for a period of more than 120 days.
(2) For a records entity that is an accelerated records entity at the time of a request for an extension, no single extension shall be for a period of more than 30 days.
(3) A records entity may request an extension of time by submitting a written request to the FDIC at least 15 days prior to the deadline for its compliance with the recordkeeping requirements of this part. The written request for an extension must contain a statement of the reasons why the records entity cannot comply by the deadline for compliance, a project plan (including timeline) for achieving compliance, and a progress report describing the steps taken to achieve compliance.
For purposes of this part:
(a)
(1) Has a composite rating, as determined by its appropriate Federal banking agency in its most recent report of examination, of 4 or 5 under the Uniform Financial Institution Rating System, or in the case of an insured branch of a foreign bank, an equivalent rating; or
(2) Is determined by the appropriate Federal banking agency or by the FDIC in consultation with the appropriate Federal banking agency to be experiencing a significant deterioration of capital or significant funding difficulties or liquidity stress, notwithstanding the composite rating of the institution by its appropriate Federal banking agency in its most recent report of examination.
(b)
(c) Amendment Effective Date means [insert effective date of amendment].
(d)
(e)
(f)
(1) The entity directly or indirectly or acting through one or more persons owns, controls, or has power to vote 25 per centum or more of any class of voting securities of the other entity;
(2) The entity controls in any manner the election of a majority of the directors or trustees of the other entity; or
(3) The Board of Governors of the Federal Reserve System has determined, after notice and opportunity for hearing in accordance with 12 CFR 225.31, that the entity directly or indirectly exercises a controlling influence over the management or policies of the other entity.
(g)
(h)
(i)
(j)
(k)
(1)
(2)
(l)
(m)
(n)
(o)
(p)
(q)
(r)
(1) A functionally regulated subsidiary as defined in 12 U.S.C. 1844(c)(5);
(2) A security-based swap dealer as defined in 15 U.S.C. 78c(a)(71); or
(3) A major security-based swap participant as defined in 15 U.S.C. 78c(a)(67).
(s)
(t)
(u)
(1) Has a composite rating, as determined by its appropriate Federal banking agency in its most recent report of examination, of 3 (only for insured depository institutions with total consolidated assets of $10 billion or greater), 4 or 5 under the Uniform Financial Institution Rating System, or in the case of an insured branch of a foreign bank, an equivalent rating;
(2) Is subject to a proceeding initiated by the FDIC for termination or suspension of deposit insurance;
(3) Is subject to a cease-and-desist order or written agreement issued by the appropriate Federal banking agency, as defined in 12 U.S.C. 1813(q), that requires action to improve the financial condition of the insured depository institution or is subject to a proceeding initiated by the appropriate Federal banking agency which contemplates the issuance of an order that requires action to improve the financial condition of the insured depository institution, unless otherwise informed in writing by the appropriate Federal banking agency;
(4) Is informed in writing by the insured depository institution's appropriate Federal banking agency that it is in troubled condition for purposes of 12 U.S.C. 1831i on the basis of the institution's most recent report of condition or report of examination, or other information available to the institution's appropriate Federal banking agency; or
(5) Is determined by the appropriate Federal banking agency or the FDIC in consultation with the appropriate Federal banking agency to be experiencing a significant deterioration of capital or significant funding difficulties or liquidity stress, notwithstanding the composite rating of the institution by its appropriate Federal banking agency in its most recent report of examination.
(a)
(1) Unless it is not required to maintain records in electronic form as provided in § 371.4(d), a records entity shall maintain the records described in § 371.4 in electronic form and shall be capable of producing such records electronically in the format set forth in the appendices of this part.
(2) All such records shall be updated on a daily basis and shall be based upon values and information no less current than previous end-of-day values and information.
(3) Except as provided in § 371.4(d), a records entity shall compile the records described in § 371.4(a) or § 371.4(b) (as applicable) in a manner that permits aggregation and disaggregation of such records by counterparty. If the records are maintained pursuant to § 371.4(b), they must be compiled by the records entity on a consolidated basis for itself and its reportable subsidiaries in a manner that also permits aggregation and disaggregation of such records by the records entity and its reportable subsidiary.
(4) Records maintained pursuant to § 371.4(b) by a records entity that is a Part 148 affiliate shall be compiled consistently, in all respects, with records compiled by its affiliate(s) pursuant to 31 CFR part 148.
(5) A records entity shall maintain each set of daily records for a period of not less than five business days.
(b)
(c)
(d)
(e)
(a)
(1) The position-level data listed in Table A–1 in Appendix A of this part with respect to each QFC to which it is a party, without duplication.
(2) The counterparty-level data listed in Table A–2 in Appendix A of this part with respect to each QFC to which it is a party, without duplication.
(3) The corporate organization master table in Appendix A of this part for the records entity and its affiliates.
(4) The counterparty master table in Appendix A of this part with respect to each QFC to which it is a party, without duplication.
(5) All documents that govern QFC transactions between the records entity and each counterparty, including, without limitation, master agreements and annexes, schedules, netting agreements, supplements, or other modifications with respect to the agreements, confirmations for each QFC position that has been confirmed and all trade acknowledgments for each QFC position that has not been confirmed, all credit support documents including, but not limited to, credit support annexes, guarantees, keep-well agreements, or net worth maintenance agreements that are relevant to one or more QFCs, and all assignment or novation documents, if applicable, including documents that confirm that all required consents, approvals, or other conditions precedent for such assignment or novation have been obtained or satisfied.
(6) A list of vendors directly supporting the QFC-related activities of the records entity and the vendors' contact information.
(b)
(1) The position-level data listed in Table A–1 in Appendix B of this part with respect to each QFC to which it or any of its reportable subsidiaries is a party, without duplication.
(2) The counterparty-level data listed in Table A–2 in Appendix B of this part with respect to each QFC to which it or any of its reportable subsidiaries is a party, without duplication.
(3) The legal agreements information listed in Table A–3 in Appendix B of this part with respect to each QFC to which it or any of its reportable subsidiaries is a party, without duplication.
(4) The collateral detail data listed in Table A–4 in Appendix B of this part with respect to each QFC to which it or any of its reportable subsidiaries is a party, without duplication.
(5) The corporate organization master table in Appendix B of this part for the records entity and its affiliates.
(6) The counterparty master table in Appendix B of this part with respect to each QFC to which it or any of its reportable subsidiaries is a party, without duplication.
(7) The booking location master table in Appendix B of this part for each booking location used with respect to each QFC to which it or any of its reportable subsidiaries is a party, without duplication.
(8) The safekeeping agent master table in Appendix B of this part for each safekeeping agent used with respect to each QFC to which it or any of its reportable subsidiaries is a party, without duplication.
(9) All documents that govern QFC transactions between the records entity (or any of its reportable subsidiaries) and each counterparty, including, without limitation, master agreements and annexes, schedules, netting agreements, supplements, or other modifications with respect to the agreements, confirmations for each QFC position that has been confirmed and all trade acknowledgments for each QFC position that has not been confirmed, all credit support documents including, but not limited to, credit support annexes, guarantees, keep-well agreements, or net worth maintenance agreements that are relevant to one or more QFCs, and all assignment or novation documents, if applicable, including documents that confirm that all required consents, approvals, or other conditions precedent for such assignment or novation have been obtained or satisfied.
(10) A list of vendors directly supporting the QFC-related activities of the records entity and its reportable subsidiaries and the vendors' contact information.
(c)
(2) A records entity that was a full scope entity maintaining the records specified in paragraph (b) of this section and that subsequently becomes a limited scope entity may continue to maintain the records specified in paragraph (b) of this section or, at its option, may maintain the records specified in paragraphs (a)(1) through (a)(6) of this section, provided however, that such records entity shall continue to maintain the records specified in paragraph (b) of this section until it maintains the records specified in paragraphs (a)(1) through (a)(6) of this section.
(3) A records entity that changes from a limited scope entity to a full scope entity and at the time it becomes a full scope entity is not yet maintaining the records specified in paragraph (a) of this section or paragraph (b) of this section must satisfy the recordkeeping requirements of paragraph (b) of this section within 270 days of first becoming a records entity (or 60 days of first becoming a records entity if it is an accelerated records entity).
(4) A records entity that changes from a full scope entity to a limited scope entity and at the time it becomes a limited scope entity is not yet maintaining the records specified in
(d)
(a)
(c)
Violating the terms or requirements set forth in this part constitutes a violation of a regulation and subjects the records entity to enforcement actions under Section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818).
By order of the Board of Directors.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for certain M7 Aerospace LLC Models SA226–T, SA226–AT, SA226–T(B), SA226–TC, SA227–AC (C–26A), SA227–AT, SA227–BC (C–26A), SA227–CC, SA227–DC (C–26B), and SA227–TT airplanes. This proposed AD was prompted by detachment of the power lever linkage to the TPE331 engine propeller pitch control. This proposed AD would require installing a secondary retention device and repetitively inspecting the propeller pitch control for proper torque, with corrections as necessary. We are proposing this AD to correct the unsafe condition on these products.
We must receive comments on this proposed AD by February 13, 2017.
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 proposed AD contact information M7 Aerospace LLC, 10823 NE Entrance Road, San Antonio, Texas 78216; phone: (210) 824–9421; fax: (210) 804–7766; Internet:
You may view this referenced service information at the FAA, Small Airplane Directorate, 901 Locust, Kansas City, Missouri 64106. For information on the availability of this material at the FAA, call 816–329–4148.
You may examine the AD docket on the Internet at
• Justin Carter, ASW–142, Aerospace Engineer, Fort Worth Airplane Certification Office (ACO), FAA, 2601 Meacham Blvd., Fort Worth, Texas 76137–4298; telephone: (817) 222–5146; fax: (817) 222–5960; email:
• Kristin Bradley, ASW–143, Aerospace Engineer, Fort Worth ACO, FAA, 2601 Meacham Blvd., Fort Worth, Texas 76137–4298; telephone: (817) 222–5485; fax: (817) 222–5960; email:
We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the
We will post all comments we receive, without change, to
We received reports of the airplane power lever linkage detaching from the TPE331 engine propeller pitch control (PPC) shaft on M7 Aircraft SA226 and SA227 airplanes. In flight operations, detachment may result in fuel flow to the engine remaining constant regardless of the power lever movement by the pilot. The orientation of the engine on certain M7 Aerospace airplanes increases the vulnerability of detachment. The PPC lever is an airplane part and its detachment from the TPE311 has been the subject of previous ADs on other airplane type designs. This condition, if not corrected, could result in uncommanded change to the engine power settings with consequent loss of control.
We reviewed M7 Aerospace LLC SA226 Series Service Bulletin 226–76–012, dated March 17, 2015; M7 Aerospace LLC SA227 Series Service Bulletin 227–76–007, dated March 17, 2015; and M7 Aerospace LLC SA227 Series Commuter Category Service Bulletin CC7–76–004, dated March 17, 2015; that in combination for the applicable models describes the actions that must be done to comply with this NPRM.
We also reviewed M7 Aerospace SA226 Series Maintenance Manual Temporary Revision 71–02, dated March 15, 2016; M7 Aerospace SA227 Series Maintenance Manual Temporary Revision 71–03, dated March 15, 2016; and M7 Aerospace SA227 Series Commuter Category Maintenance Manual Temporary Revision 71–02, dated March 15, 2016; that in combination for the applicable models describes procedures for installing the secondary retention device on the PPC assembly and doing a visual inspection of the PPC lever.
We also reviewed Honeywell International Inc. Service Bulletin TPE331–72–2190, dated December 21, 2011, that describes procedures for replacing or reworking the propeller pitch control assembly, incorporating a threaded hole in the splined end of the shouldered shaft, and reassembling the propeller pitch control assembly.
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 replacement or rework of the PPC assembly to have a threaded hole in the splined end of the shouldered shaft, installation of a secondary retention feature for the airplane control linkage interface, and a repetitive inspection of the PPC lever torque with corrective action as necessary.
We estimate that this proposed AD affects 360 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 adjustments 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 adjustments:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
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 February 13, 2017.
None.
This AD applies to M7 Aerospace LLC SA226–T, SA226–AT, SA226–T(B), SA226–TC, SA227–AC (C–26A), SA227–AT, SA227–BC (C–26A), SA227–CC, SA227–DC (C–26B), and SA227–TT airplanes; all serial numbers, certificated in any category.
Joint Aircraft System Component (JASC)/Air Transport Association (ATA) of America Code 61, Propellers/Propulsors.
This AD was prompted by detachment of the power lever linkage to the TPE331 engine propeller pitch control (PPC). We are issuing this AD to prevent detachment of the power lever linkage to the TPE331 engine propeller pitch control, which could result in uncommanded change to the engine power settings with consequent loss of control.
Comply with this AD within the compliance times specified, unless already done.
Use the applicable service bulletins as listed in paragraph (g)(1), (2), or (3) of this AD as reference to complete the actions in pargraph (h)(1) or (2) of this AD:
(1) M7 Aerospace LLC SA226 Series Service Bulletin 226–76–012, dated March 17, 2015;
(2) M7 Aerospace LLC SA227 Series Service Bulletin 227–76–007, dated March 17, 2015; or
(3) M7Aerospace LLC SA227 Series Commuter Category Service Bulletin CC7–76–004, dated March 17, 2015.
(1) Within 100 hours time-in-service (TIS) after the effective date of this AD and repetitively thereafter at intervals not to exceed 100 hours TIS, visually inspect the PPC lever to assure the attachment is properly installed following the applicable service information listed in paragraph (h)(1)(i), (ii), or (iii) of this AD, as applicable.
(i) For Models SA226 Series: Pages TR–224 through TR–228 from M7 Aerospace SA226 Series Maintenance Manual Temporary Revision 71–02, dated March 15, 2016.
(ii) For Models SA227 Series: Pages 206 and 207 from M7 Aerospace SA227 Series
(iii) For Models SA227 Series Commuter Category: Pages 206 and 206A from M7 Aerospace SA227 Series Commuter Category Maintenance Manual Temporary Revision 71–02, dated March 15, 2016.
(2) Installation of the secondary retention device required in paragraph (j) of this AD terminates the repetitive visual inspections of the PPC lever attachment required in paragraph (h)(1) of this AD.
Within the next 600 hours TIS after the effective date of this AD or within the next 12 months after the effective date of this AD, whichever occurs first, do the actions in either paragraph (i)(1) or (2) of this AD following the Accomplishment Instructions in Honeywell International Inc. Service Bulletin TPE331–72–2190, dated December 21, 2011, as referenced in the applicable service information listed in paragraph (g)(1), (2), or (3) this AD.
(1)
(2)
(1) Before further flight after the replacement or rework of the PPC assembly required in paragraph (i) of this AD, install the secondary retention feature on the PPC assembly following the applicable service information listed in paragraph (j)(1)(i), (ii), or (iii) of this AD.
(i) For Models SA226 Series: Pages TR–224 through TR–228 from M7 Aerospace SA226 Series Maintenance Manual Temporary Revision 71–02, dated March 15, 2016.
(ii) For Models SA227 Series: Pages 206 and 207 from M7 Aerospace SA227 Series Maintenance Manual Temporary Revision 71–03, dated March 15, 2016.
(iii) For Models SA227 Series Commuter Category: Pages 206 and 206A from M7 Aerospace SA227 Series Commuter Category Maintenance Manual Temporary Revision 71–02, dated March 15, 2016.
(2) Installation of the secondary retention device terminates the requirement for the repetitive inspections of the PPC lever torque required in paragraph (h) of this AD.
(1) The Manager, Fort Worth Airplane 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 (l)(1), Related Information, of this AD.
(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.
(1) For more information about this AD, contact one of the following individuals:
(i) Justin Carter, ASW–142, Aerospace Engineer, Fort Worth Airplane Certification Office (ACO), FAA, 2601 Meacham Blvd., Fort Worth, Texas 76137–4298; telephone: (817) 222–5146; fax: (817) 222–5960; email:
(ii) Kristin Bradley, ASW–143, Aerospace Engineer, Fort Worth ACO, FAA, 2601 Meacham Blvd., Fort Worth, Texas 76137–4298; telephone: (817) 222–5485; fax: (817) 222–5960; email:
(2) For service information identified in this AD, contact M7 Aerospace LLC, 10823 NE Entrance Road, San Antonio, Texas 78216; phone: (210) 824–9421; fax: (210) 804–7766; Internet:
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to supersede Airworthiness Directive (AD) 2013–19–09 and AD 2014–25–51, for all Airbus Model A318, A319, A320, and A321 series airplanes. AD 2013–19–09 currently requires replacing Angle of Attack (AOA) sensor conic plates with AOA sensor flat plates. AD 2014–25–51 currently requires revising the airplane flight manual (AFM) to advise the flightcrew of emergency procedures for abnormal Alpha Protection (Alpha Prot). Since we issued AD 2013–19–09 and AD 2014–25–51, we have received a report indicating that certain AOA sensors appear to have a greater susceptibility to adverse environmental conditions. This proposed AD would require replacing certain AOA sensors; and doing a detailed inspection and a functional heating test for discrepancies on certain AOA sensors, and replacing the affected AOA sensors. We are proposing this AD to address the unsafe condition on these products.
We must receive comments on this proposed AD by February 13, 2017.
You may send comments by any of the following methods:
•
•
•
•
For Airbus service information identified in this NPRM, contact Airbus, Airworthiness Office—EIAS, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email
You may examine the AD docket on the Internet at
Sanjay Ralhan, Aerospace Engineer, International Branch, ANM–116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057–3356; telephone 425–227–1405; 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
On March 8, 2013, we issued AD 2013–06–03, Amendment 39–17399 (78 FR 19085, March 29, 2013) (“AD 2013–06–03”) for all Airbus Model A318, A319, A320, and A321 series airplanes. AD 2013–06–03 was prompted by reports of oil residue between the stator and the rotor parts of the position resolvers of the AOA vane, which was a result of incorrect removal of the machining oil during the manufacturing process of the AOA resolvers. AD 2013–06–03 requires an inspection to determine if certain AOA probes are installed, and replacement of any affected AOA probe. We issued AD 2013–06–03 to prevent erroneous AOA information and consequent delayed or non-activation of the AOA protection systems, which during flight at a high AOA, could result in reduced control of the airplane.
On September 13, 2013, we issued AD 2013–19–09, Amendment 39–17591 (78 FR 60667, October 2, 2013) (“AD 2013–19–09”) for all Airbus Model A318, A319, A320, and A321 series airplanes. AD 2013–19–09 was prompted by a determination that replacement of AOA sensor conic plates is necessary to address the identified unsafe condition. AD 2013–19–09 requires replacing AOA sensor conic plates with AOA sensor flat plates, and subsequent removal of an AFM revision. We issued AD 2013–19–09 to prevent reduced control of the airplane.
On January 7, 2015, we issued AD 2014–25–51, Amendment 39–18067 (80 FR 3153, January 22, 2015) (“AD 2014–25–51”) for all Airbus Model A318, A319, A320, and A321 series airplanes. AD 2014–25–51 was prompted by a report of AOA probes jamming on an in-service Airbus Model A321 airplane. AD 2014–25–51 requires revising the AFM to advise the flight crew of emergency procedures for abnormal Alpha Prot. We issued AD 2014–25–51 to ensure that the flightcrew has procedures to counteract the pitch down order due to abnormal activation of the Alpha Prot. An abnormal Alpha Prot, if not corrected, could result in loss of control of the airplane.
Since we issued AD 2013–06–03, AD 2013–19–09, and AD 2014–25–51, we have received a report indicating that certain AOA sensors appear to have a greater susceptibility to adverse environmental conditions. It has been determined that replacement of certain AOA sensors is necessary to address the unsafe condition on these airplanes.
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2015–0135, dated July 8, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus Model A318, A319, A320, and A321 series airplanes. The MCAI states:
An occurrence was reported where an Airbus A321 aeroplane encountered a blockage of two Angle of Attack (AOA) probes during climb, leading to activation of the Alpha Protection (Alpha Prot) while the Mach number increased. The flight crew managed to regain full control and the flight landed uneventfully.
When Alpha Prot is activated due to blocked AOA probes, the flight control laws order a continuous nose down pitch rate that, in a worst case scenario, cannot be stopped with backward sidestick inputs, even in the full backward position. If the Mach number increases during a nose down order, the AOA value of the Alpha Prot will continue to decrease. As a result, the flight control laws will continue to order a nose down pitch rate, even if the speed is above minimum selectable speed, known as VLS.
This condition, if not corrected, could result in loss of control of the airplane.
Investigation results indicated that A320 family airplanes equipped with certain UTC Aerospace (UTAS, formerly known as Goodrich) AOA sensors, or equipped with certain SEXTANT/THOMSON AOA sensors, appear to have a greater susceptibility to adverse environmental conditions than airplanes equipped with the latest Thales AOA sensor, Part Number (P/N) C16291AB, which was designed to improve A320 airplane AOA indication behaviour in heavy rain conditions.
Having determined that replacement of these AOA sensors is necessary to achieve and maintain the required safety level of the airplane, EASA issued AD 2015–0087, retaining the requirements of EASA AD 2012–0236R1 [which corresponds to FAA AD 2013–06–03], [EASA] AD 2013–0022 (partially) [which corresponds to FAA AD 2013–19–09], and [EASA] AD 2014–0266–E [which corresponds to FAA AD 2014–25–51], which were superseded, and requiring modification of the airplanes by replacement of the affected P/N sensors, and, after modification, prohibiting (re-)installation of those P/N AOA sensors. That [EASA] AD also required repetitive detailed visual inspections (DET) and functional heating tests of certain Thales AOA sensors and provided an optional terminating action for those inspections.
Since EASA AD 2015–0087 was issued, based on further analysis results, Airbus issued Operators Information Transmission (OIT) Ref. 999.0015/15 Revision 1, instructing operators to speed up the removal from service of UTAS P/N 0861ED2 AOA sensors.
For the reasons described above, this [EASA] AD retains the requirements of EASA AD 2015–0087, which is superseded, but reduces the compliance times for airplanes with UTAS P/N 0861ED2 AOA sensors installed.
You may examine the MCAI in the AD docket on the Internet at
Airbus has issued the following service information:
• Service Bulletin A320–34–1415, Revision 03, dated July 8, 2010. This service information describes
• Service Bulletin A320–34–1444, Revision 01, dated March 17, 2011. This service information describes procedures for replacing certain SEXTANT/THOMSON AOA sensors.
• Service Bulletin A320–34–1610, dated March 31, 2015. This service information describes procedures for replacing certain UTAS AOA sensors.
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
This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of the same type design.
The requirements specified in paragraphs (1), (2), (3), and (4) of the MCAI correspond to the requirements of AD 2013–06–03. We have determined that leaving AD 2013–06–03 as a stand-alone AD provides better clarification of the actions instead of superseding AD 2013–06–03 as part of this proposed AD.
We estimate that this proposed AD affects 959 airplanes of U.S. registry.
The actions required by AD 2013–19–09, and retained in this proposed AD take about 8 work-hours per product, at an average labor rate of $85 per work-hour. Required parts cost about $0 per product. Based on these figures, the estimated cost of the actions that are required by AD 2013–19–09 is $680 per product.
The actions required by AD 2014–25–51, and retained in this proposed AD take about 1 work-hour per product, at an average labor rate of $85 per work-hour. Required parts cost about $0 per product. Based on these figures, the estimated cost of the actions that are required by AD 2014–25–51 is $85 per product.
We also estimate that it would take about 5 work-hours per product to comply with the basic requirements of this proposed AD. The average labor rate is $85 per work-hour. The parts cost is not available. Based on these figures, we estimate the cost of this proposed AD on U.S. operators to be at least $407,575, or $425 per product.
In addition, we estimate that any necessary follow-on actions would take about 5 work-hours. The parts cost is not available. We have no way of determining the number of aircraft that might need these actions.
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 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 February 13, 2017.
(1) This AD replaces AD 2013–19–09, Amendment 39–17591 (78 FR 60667, October 2, 2013) (“AD 2013–19–09”), and AD 2014–25–51, Amendment 39–18067 (80 FR 3153, January 22, 2015) (“AD 2014–25–51”).
(2) This AD affects AD 2013–06–03, Amendment 39–17399 (78 FR 19085, March 29, 2013) (“AD 2013–06–03”).
This AD applies to the Airbus airplanes listed in paragraphs (c)(1) through (c)(4) of this AD, certificated in any category, all manufacturer serial numbers.
(1) Airbus Model A318–111, –112, –121, and –122 airplanes.
(2) Airbus Model A319–111, –112, –113, –114, –115, –131, –132, and –133 airplanes.
(3) Airbus Model A320–211, –212, –214, –231, –232, and –233 airplanes.
(4) Airbus Model A321–111, –112, –131, –211, –212, –213, –231, and –232 airplanes.
Air Transport Association (ATA) of America Code 34, Navigation.
This AD was prompted by a report indicating that an Airbus Model A321 airplane encountered a blockage of two Angle of Attack (AOA) probes during climb, leading to activation of the Alpha Protection (Alpha
Comply with this AD within the compliance times specified, unless already done.
This paragraph restates the requirements of paragraph (j) of AD 2013–19–09, with removed post-installation requirement and with specific delegation approval language. Within 5 months after November 6, 2013 (the effective date of AD 2013–19–09), remove all AOA sensor conic plates having part number (P/N) F3411060200000 or P/N F3411060900000 and install AOA sensor flat plates having part numbers specified in paragraph (g)(1) or (g)(2) of this AD, except as specified in paragraph (h) of this AD. Install the AOA sensor plates in accordance with the applicable method specified in paragraph (g)(1) or (g)(2) of this AD.
(1) Install P/N D3411013520200 in accordance with the Accomplishment Instructions of Airbus Mandatory Service Bulletin A320–34–1564, including Appendix 01, dated January 25, 2013.
(2) Install P/N D3411007620000 or P/N D3411013520000, using a method approved by the Manager, International Branch, ANM–116, Transport Airplane Directorate, FAA; or the European Aviation Safety Agency (EASA); or Airbus's EASA Design Organization Approval (DOA).
This paragraph restates the exception provided by paragraph (k) of AD 2013–19–09, with no changes. An airplane on which Airbus modification 154863 (installation of AOA sensor flat plate) and modification 154864 (coating protection) have been embodied in production is not affected by the requirements of paragraph (g) of this AD, provided that, since first flight, no AOA sensor conic plate having P/N F3411060200000 or P/N F3411060900000 has been installed on that airplane.
This paragraph restates the requirements of paragraph (m) of AD 2013–19–09, with no changes.
(1) For any airplane that has AOA sensor flat plates installed: As of November 6, 2013 (the effective date of AD 2013–19–09), do not install any AOA sensor conic plate having P/N F3411060200000 or P/N F3411060900000, and do not use any AOA protection cover having P/N 98D34203003000.
(2) For any airplane that has AOA sensor conic plates installed: As of November 6, 2013 (the effective date of AD 2013–19–09), after modification of the airplane as required by paragraph (g) of this AD, do not install any AOA sensor conic plate having P/N F3411060200000 or P/N F3411060900000, and do not use any AOA protection cover having P/N 98D34203003000.
This paragraph restates the requirements of paragraph (g) of AD 2014–25–51, with no changes. Within 2 days after February 6, 2015 (the effective date of AD 2014–25–51), revise the AFM to incorporate procedures to address undue activation of Alpha Prot by inserting the text specified in figure 1 to paragraph (j) of this AD into the Emergency Procedures section of the applicable AFM, to advise the flight crew of emergency procedures for abnormal Alpha Prot. This may be accomplished by inserting a copy of this AD into the AFM. When a statement identical to the text specified in figure 1 to paragraph (j) of this AD is included in the general revisions of the AFM, the general revisions may be inserted in the AFM, and the text specified in figure 1 to paragraph (j) of this AD may be removed.
For airplanes on which any UTAS AOA sensor, P/N 0861ED or P/N 0861ED2, is installed: Within the applicable compliance times specified in paragraphs (k)(1), (k)(2), (k)(3), and (k)(4) of this AD, replace the affected Captain and First Officer AOA sensors with Thales AOA sensors, P/N C16291AB, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320–34–1610, dated March 31, 2015.
(1) For Model A318 and A321 series airplanes on which any UTAS AOA sensor, P/N 0861ED, is installed: Replace within 7 months after the effective date of this AD.
(2) For Model A319 and A320 series airplanes on which any UTAS AOA sensor, P/N 0861ED, is installed: Replace within 22 months after the effective date of this AD.
(3) For Model A318 and A321 series airplanes on which any UTAS AOA sensor, P/N 0861ED2, is installed: Replace within 4 months after the effective date of this AD.
(4) For Model A319 and A320 series airplanes on which any UTAS AOA sensor, P/N 0861ED2, is installed: Replace within 7 months after the effective date of this AD.
For airplanes on which any SEXTANT/THOMSON AOA sensor, P/N 45150320 or P/N 16990568, is installed: Within the applicable compliance time specified in paragraph (l)(1) or (l)(2) of this AD, replace each SEXTANT/THOMSON AOA sensor, P/N 45150320 and P/N 16990568, with a Thales AOA sensor, P/N C16291AB, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320–34–1444, Revision 01, dated March 17, 2011; except AOA sensors modified in accordance with the Accomplishment Instructions of Thales Avionics Service Bulletin C16291A–34–009, dated September 10, 2009, cannot be used for the replacement.
(1) For Model A318 and A321 series airplanes on which any SEXTANT/THOMSON AOA sensor, P/N 45150320 or P/N 16990568, is installed: Replace within 7 months after the effective date of this AD.
(2) For Model A319 and A320 series airplanes on which any SEXTANT/THOMSON AOA sensor, P/N 45150320 or P/N 16990568, is installed: Replace within 22 months after the effective date of this AD.
For an airplane on which any Thales AOA sensor, P/N C16291AA, is installed: Before exceeding 5,200 flight hours accumulated by each affected Thales AOA sensor since its first installation on an airplane, or within 6 months after the effective date of this AD, whichever occurs later, do a functional heating test of each AOA sensor, P/N C16291AA, to determine the maximum current (Imax) value, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320–34–1415, Revision 03, dated July 8, 2010. If, during any functional heating test, any Imax value is below the flow chart value as specified in Airbus Service Bulletin A320–34–1415, Revision 03, dated July 8, 2010, before further flight, replace each discrepant AOA sensor with a sensor identified in paragraph (m)(1) or (m)(2) of this AD, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320–34–1415, Revision 03, dated July 8, 2010. Repeat the functional heating test thereafter at intervals not to exceed 2,000 flight hours.
(1) Replace with a Thales AOA sensor, P/N C16291AA, that has passed a functional
(2) Replace with a Thales AOA sensor, P/N C16291AB, except AOA sensors modified as specified in Thales Avionics Service Bulletin C16291A–34–009, dated September 10, 2009, cannot be used for the replacement.
Modification of an airplane by replacing each Thales P/N C16291AA AOA sensor with a Thales P/N C16291AB AOA sensor, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320–34–1444, Revision 01, dated March 17, 2011, terminates the repetitive functional heating tests required in paragraph (m) of this AD for that airplane; except AOA sensors modified in accordance with the Accomplishment Instructions of Thales Avionics Service Bulletin C16291A–34–009, dated September 10, 2009, cannot be used for the replacement.
An airplane with Airbus modification 150006 (installation of Thales P/N C16291AB AOA sensors), but without modification 26934 (installation of UTAS P/N 0861ED AOA sensors) embodied in production, is not affected by the requirements of paragraphs (k), (l), and (m) of this AD, provided it is determined that no AOA sensor having SEXTANT/THOMSON P/N 45150320 or 16990568, or UTAS P/N 0861ED or 0861ED2, has been installed on that airplane since its date of manufacture.
(1) As of the effective date of this AD: For an airplane on which only Thales AOA sensors, P/N C16291AB, are installed, do not install a Thales AOA sensor, P/N C16291AA, on that airplane. This parts installation prohibition terminates the requirements of paragraph (i)(1) of AD 2013–06–03, for the airplanes identified in this paragraph.
(2) As of the effective date of this AD: For an airplane on which any combination of Thales AOA sensors, P/N C16291AA and Thales P/N C16291AB, are installed, do not install any SEXTANT/THOMSON AOA sensor, P/N 45150320 or 16990568, or UTAS AOA sensor, P/N 0861ED or 0861ED2, on that airplane.
(3) After modification of an airplane as required by paragraph (k) of this AD, do not install any AOA sensor with a part number specified in paragraphs (p)(3)(i) and (p)(3)(ii) of this AD on that airplane, with the exception that installation of a UTAS P/N 0861ED AOA sensor is allowed in the standby position of that airplane.
(i) SEXTANT/THOMSON AOA sensors, P/N 45150320 and P/N 16990568.
(ii) UTAS AOA sensors, P/N 0861ED and P/N 0861ED2.
This paragraph provides credit for the actions required by paragraph (l) of this AD, if those actions were performed before the effective date of this AD using Airbus Service Bulletin A320–34–1444, dated October 7, 2009; provided the replacement AOA sensors were not modified as specified in Thales Avionics Service Bulletin C16291A–34–009, dated September 10, 2009.
Installation of a version (part number) of an AOA sensor approved after the effective date of this AD is an approved method of compliance with the requirements of paragraph (k), (l), or (m) of this AD, as applicable, provided the requirements specified in paragraphs (r)(1) and (r)(2) of this AD are met.
(1) The version (part number) must be approved by the Manager, International Branch, ANM–116, Transport Airplane Directorate, FAA; or EASA; or Airbus's EASA DOA.
(2) The installation must be accomplished using a method approved by the Manager, International Branch, ANM–116, Transport Airplane Directorate, FAA; or EASA; or Airbus's EASA DOA.
The following provisions also apply to this AD:
(1)
(i) 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.
(ii) AMOCs approved previously for AD 2013–19–09, are approved as AMOCs for the corresponding provisions of paragraphs (g), (h), (i), and (t)(1) of this AD.
(iii) AMOCs approved previously for AD 2014–25–51, are approved as AMOCs for the corresponding provisions of paragraph (j) of this AD.
(2)
(1) For AD 2013–19–09, Amendment 39–17591 (78 FR 60667, October 2, 2013): Special flight permits may be issued in accordance with sections 21.197 and 21.199 of the Federal Aviation Regulations (14 CFR 21.197 and 21.199) to operate the airplane to a location where the airplane can be modified (if the operator elects to do so), provided Airbus A318/A319/A320/A321 TR TR286, Issue 1.0, dated December 17, 2012, has been inserted into the Emergency Procedures of the Airbus A318/A319/A320/A321 AFM.
(2) For AD 2014–25–51, Amendment 39–18067 (80 FR 3153, January 22, 2015): Special flight permits may be issued in accordance with sections 21.197 and 21.199 of the Federal Aviation Regulations (14 CFR 21.197 and 21.199) to operate the airplane to a location where the airplane can be modified (if the operator elects to do so), provided the revision required by paragraph (j) of this AD has been done.
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA Airworthiness Directive 2015–0135, dated July 8, 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 Airbus, Airworthiness Office—EIAS, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for certain The Boeing Company Model 787–8 and 787–9 airplanes. This proposed AD was
We must receive comments on this proposed AD by February 13, 2017.
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: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110–SK57, Seal Beach, CA 90740–5600; telephone 562–797–1717; Internet
You may examine the AD docket on the Internet at
Sean Schauer, Aerospace Engineer, Systems and Equipment Branch, ANM–130S, FAA, Seattle Aircraft Certification Office (ACO), 1601 Lind Avenue SW., Renton, WA 98057–3356; phone: 425–917–6479; fax: 425–917–6590; email:
We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the
We will post all comments we receive, without change, to
Boeing discovered that the wire harnesses on the EMAs for spoilers 4, 5, 10, and 11 do not have sufficient separation with the adjacent structure. Subsequent checks found that approximately 30 percent of undelivered airplanes at Boeing had the similar wire harness separation issue on the spoiler EMAs. One operator also reported that the EMA wire harness was in contact with adjacent structure, but no damage was found. Analysis indicates that the wire harness separation is reduced to its minimum with the flaps fully extended and the spoiler fully drooped; this is where the chafing most likely occurs if the wire harness does not have sufficient separation. This condition, if not corrected, could result in chafing that would cause wire damage that could result in a potential source of ignition in the flammable leakage zone and a consequent fire or explosion.
We reviewed Boeing Service Bulletin B787–81205–SB270030–00, Issue 001, dated October 22, 2015. The service information describes procedures for replacing affected EMAs with new EMAs. 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 19 airplanes of U.S. registry. We estimate the following costs to comply with 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,
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 February 13, 2017.
None.
This AD applies to The Boeing Company Model 787–8 and 787–9 airplanes, certificated in any category, as identified in Boeing Service Bulletin B787–81205–SB270030–00, Issue 001, dated October 22, 2015.
Air Transport Association (ATA) of America Code 27, Flight controls.
This AD was prompted by wire harness chafing on the electro-mechanical actuators (EMAs) for certain spoilers due to insufficient separation with adjacent structure. We are issuing this AD to prevent chafing that would cause wire damage that could result in a potential source of ignition in the flammable leakage zone and a consequent fire or explosion.
Comply with this AD within the compliance times specified, unless already done.
Within 40 months after the effective date of this AD, replace the EMAs with new EMAs, in accordance with the Accomplishment Instructions of Boeing Service Bulletin B787–81205–SB270030–00, Issue 001, dated October 22, 2015.
(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 (i)(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, 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) For service information that contains steps that are labeled as Required for Compliance (RC), the provisions of paragraphs (h)(4)(i) and (h)(4)(ii) of this AD apply.
(i) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD. If a step or sub-step is labeled “RC Exempt,” then the RC requirement is removed from that step or sub-step. An AMOC is required for any deviations to RC steps, including substeps and identified 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.
(1) For more information about this AD, contact Sean Schauer, Aerospace Engineer, Systems and Equipment Branch, ANM–130S, FAA, Seattle ACO, 1601 Lind Avenue SW., Renton, WA 98057–3356; phone: 425–917–6479; fax: 425–917–6590; email:
(2) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110–SK57, Seal Beach, CA 90740–5600; telephone 562–797–1717; Internet
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for all Airbus Model A330–200, A330–200 Freighter, A330–300, A340–500, and A340–600 series airplanes; and A340–313 airplanes. This proposed AD was prompted by the discovery of Tartaric Sulfuric Anodizing (TSA)/Chromic Acid
We must receive comments on this proposed AD by February 13, 2017.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
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For service information identified in this NPRM, contact Airbus SAS, Airworthiness Office—EAL, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 45 80; email
You may examine the AD docket on the Internet at
Vladimir Ulyanov, Aerospace Engineer, International Branch, ANM–116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057–3356; telephone 425–227–1138; fax 425–227–1149.
We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2016–0102, dated June 1, 2016; corrected June 7, 2016 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”); to correct an unsafe condition for all Airbus Model A330–200, A330–200 Freighter, A330–300, A340–500, and A340–600 series airplanes; and A340–313 airplanes. The MCAI states:
In the frame of the certification of the A330 Extended Service Goal exercise, it has been identified that Tartaric Sulfuric Anodising (TSA)/Chromic Acid Anodising (CAA) surface treatment is present in some frame holes, from aeroplane MSN 0400 and later MSN, following production process modification. On bulk cargo door frames (FR) 67 and FR 69 Right Hand Side, the door fitting attachment holes have this TSA/CAA treatment, which leads to a detrimental effect on fatigue behaviour. This condition, if not detected and corrected, could lead to critical cracks in the primary structure, possibly resulting in in-flight loss of a bulk cargo door, consequent decompression and potential damage to the aeroplane that could reduce the control of the aeroplane.
To address this potential unsafe condition, Airbus issued Alert Operators Transmission (AOT) A53L012–16 to provide instructions to inspect the fuselage bulk cargo door frames at specific locations.
For the reasons described above, this [EASA] AD requires repetitive non-destructive test (rototest and high-frequency eddy-current (HFEC)) inspection or visual detailed (DET) inspections [to detect cracking] of the affected areas, and, depending on findings, accomplishment of a repair.
This [EASA] AD is considered an interim measure, and further [EASA] AD action may follow.
You may examine the MCAI in the AD docket on the Internet at
We reviewed Airbus Alert Operators Transmission (AOT), AOT A53L012–16, Revision 00, including Appendices 1 through 6, dated May 30, 2016:
• Appendix 1. Technical disposition TD_K48_S3_01755_2016, Issue B, dated May 12, 2016.
• Appendix 2. Technical disposition TD_K48_S3_01754_2016, Issue B, dated May 12, 2016.
• Appendix 3. Technical disposition TD_K48_S3_01772_2016, Issue A, dated May 12, 2016.
• Appendix 4. Technical disposition TD_K48_S3_01773_2016, Issue A, dated May 12, 2016.
• Appendix 5. AOT A53L012–16, Revision 00, undated, titled Appendix 4: AOT reporting sheet 1; and AOT A53L012–16, Revision 00, undated, titled Appendix 4: AOT reporting sheet 2. (Appendix 5 of this document is incorrectly identified as “Appendix 4.”).
• Appendix 6. Non-destructive Testing Manual Procedure 53–40–18, “Bulk Cargo Compartment Door Cut-Out Lateral Frames at Bulk Door-Fittings FR67 at STGR 37 and at STGR 42 and FR 69 at STRG 38 and at STGR 45,” advanced copy approved for use, dated May 18, 2016.
The service information describes procedures for inspections of the fuselage bulk cargo frames at the door support and latch fittings location; repair instructions; and reporting instructions. 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
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.
We estimate that this proposed AD affects 96 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 replacements that would be required based on the results of the proposed inspection. We have no way of determining the number of airplanes that might need this replacement:
A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB control number. The control number for the collection of information required by this proposed AD is 2120–0056. The paperwork cost associated with this proposed AD has been detailed in the Costs of Compliance section of this document and includes time for reviewing instructions, as well as completing and reviewing the collection of information. Therefore, all reporting associated with this proposed AD is mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA at 800 Independence Ave. SW., Washington, DC 20591, ATTN: Information Collection Clearance Officer, AES–200.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
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 February 13, 2017.
None.
This AD applies to the following Airbus airplanes, certificated in any category, manufacturer serial numbers (MSNs) 0400 and higher.
(1) Airbus Model A330–201, –202, –203, –223, and –243 airplanes.
(2) Airbus Model A330–223F and –243F airplanes.
(3) Airbus Model A330–301, –302, –303, –321, –322, –323, –341, –342, and –343 airplanes.
(4) Airbus Model A340–313 airplanes.
(5) Airbus Model A340–541 airplanes.
(6) Airbus Model A340–642 airplanes.
Air Transport Association (ATA) of America Code 53, Fuselage.
This AD was prompted by the discovery of Tartaric Sulfuric Anodizing (TSA)/Chromic Acid Anodizing (CAA) surface treatment in certain bulk cargo door frame holes of airplanes with MSNs 0400 and higher. We are issuing this AD to detect and correct fatigue cracks in the bulk cargo door frames,
Comply with this AD within the compliance times specified, unless already done.
At the applicable compliance time specified in table 1 to paragraph (g) of this AD, do the actions specified in paragraph (g)(1) or (g)(2) of this AD, in accordance with the instructions of Airbus Alert Operators Transmission (AOT), AOT A53L012–16, Revision 00, dated May 30, 2016.
(1) Accomplish a rototest inspection to detect cracking of the holes for the bulk cargo door support fittings at fuselage frame (FR) 67 and FR 69, and a high-frequency eddy-current (HFEC) inspection of the holes for the door latch fitting at FR 69.
(2) Accomplish a detailed visual inspection to detect cracking in the bulk cargo door support fittings at FR 67 and FR 69 and the holes for the door latch fitting at FR 69.
At intervals not to exceed the values specified in table 2 to paragraph (h) of this AD, as applicable, depending on the previously selected inspection method, repeat the inspection(s) specified in either paragraph (g)(1) or (g)(2) of this AD.
If, during any inspection required by paragraph (g) or (h) of this AD, any crack is detected, 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 Airbus's EASA Design Organization Approval (DOA).
Accomplishment of a repair on an airplane, as required by paragraph (i) of this AD, does not constitute terminating action for the inspections required by this AD for that airplane, unless otherwise specified in repair instructions approved by the Manager, International Branch, ANM–116, Transport Airplane Directorate, FAA; or EASA; or Airbus's EASA DOA.
After the initial inspection specified in paragraph (g) of this AD, and after each repetitive inspection specified in paragraph (h) of this AD, at the applicable times specified in paragraph (k)(1) and (k)(2) of this AD: Report inspection findings, both positive and negative, to Airbus in accordance with the instructions of Airbus AOT A53L012–16, Revision 00, dated May 30, 2016.
(1) If the inspection was done on or after the effective date of this AD: Submit the report within 30 days after the inspection.
(2) If the inspection was done before the effective date of this AD: Submit the report within 30 days after the effective date of this AD.
The following provisions also apply to this AD:
(1)
(2)
(3)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA AD 2016–0102, dated June 1, 2016; corrected June 7, 2016, for related information. You may examine the MCAI on the Internet at
(2) For service information identified in this AD, contact Airbus SAS, Airworthiness Office—EAL, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 45 80; email
Internal Revenue Service (IRS), Treasury.
Correction to a notice of proposed rulemaking.
This document contains corrections to a notice of proposed rulemaking (REG–114734–16) that was published in the
Written or electronic comments and request for a public hearing are still being accepted and must be received by February 1, 2017.
Send submissions to: CC:PA:LPD:PR (REG–114734–16), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG–114734–16), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW., Washington, DC, or sent electronically via the Federal eRulemaking Portal at
Concerning the proposed regulations, Rose E. Jenkins, (202) 317–6934; concerning submissions of comments or request for a public hearing, Regina Johnson, (202) 317–6901 (not a toll-free number).
The notice of proposed rulemaking (REG–114734–16) that is the subject of this document is under sections 954 and 956 of the Internal Revenue Code.
As published, the notice of proposed rulemaking (REG–114734–16) contains errors that may prove to be misleading and are in need of clarification.
Accordingly, the notice of proposed rulemaking, (REG–114734–16), that was the subject of FR Doc. 2016–26424, is corrected as follows:
National Archives and Records Administration (NARA).
Proposed rule.
We are proposing to revise this regulation to reflect changes instituted by the Presidential and Federal Records Acts Amendments of 2014 (2014 Amendments). These Amendments in part added new requirements to the Presidential Records Act (PRA), which went into effect in 2014 and remain in effect, even without this proposed regulatory revision. The proposed changes make clear that, when we maintain electronic Presidential records on behalf of the President before the President's term of office expires, the President retains exclusive control over the records. In addition, the proposed changes establish procedures that we will follow to notify an incumbent President and former President when we propose to disclose Presidential records to the public, Congress, the courts, or the incumbent President under the provisions of the PRA allowing for access to Presidential records otherwise subject to restrictions. We began the regulatory revision process in response to the 2014 Amendments and issue this updated regulation to reduce confusion about access to Presidential records in light of these recent changes in the law.
Submit comments by January 27, 2017.
You may submit comments, identified by RIN 3095–AB87, by any of the following methods:
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Kimberly Keravuori, by email at
We are revising our regulations governing Presidential and Vice Presidential records to incorporate changes made by the Presidential and Federal Records Act Amendments of 2014, (“2014 Amendments,” Pub. L. 113–187, 128 Stat. 1017).
The 2014 Amendments made several changes to the Presidential Records Act (44 U.S.C. 2201–2209). The most substantial change was codifying the procedures by which we notify former and incumbent Presidents so that they may consider whether to restrict public access to Presidential records of former Presidents that are in our legal custody. This privilege review process was previously controlled by an Executive Order, subject to change by any sitting administration. Because Congress codified the privilege review process for public disclosures in the 2014 Amendments, we are revising the regulation to set out processes for giving notice in such cases, and for former or incumbent Presidents to consider whether to assert a constitutionally based privilege.
The 2014 Amendments did not codify the provisions of the Executive Order allowing for notification to the former and incumbent President when Congress, the courts, or the incumbent President (instead of the public) makes the request for records subject to access restrictions. To ensure that the former and incumbent Presidents are given notice and an opportunity to consider whether to assert a constitutionally based privilege in those circumstances as well, we are revising our regulation to set out procedures we follow prior to disclosing records under the PRA's exceptions to restricted access, which
The 2014 Amendments also authorized an incumbent President to transfer physical custody of their permanent electronic Presidential records to NARA, while leaving legal custody with the President, and some other more minor changes. We are therefore also revising the regulation to reflect these changes (the regulatory changes are identified in more detail below).
We are also making a small revision to the regulation to be consistent with 2016 amendments to the Freedom of Information Act, and are revising the wording and organization of the regulation to make it easier to follow, in compliance with provisions of the Plain Writing Act of 2010.
§ 1270.1, Scope: Removed “Nothing in these regulations is intended to govern procedures for assertion of, or response to, any constitutionally based privilege which may be available to an incumbent or former President.” The 2014 Amendments at 44 U.S.C. 2208 now include the President's authority to assert a constitutionally based privilege and those provisions have been added to this regulation.
§ 1270.2, Application: Removed “These regulations apply to all Presidential records created during a term of office of the President beginning on or after January 20, 1981.” This is already included elsewhere in the regulation and thus was redundant.
Changed from stating that all provisions in the regulation apply to the Vice President and Vice Presidential records, to stating that all provisions except §§ 1270.46 and 1270.48 apply to the Vice President as to the President, because those sections have now been revised due to the 2014 Amendments at 44 U.S.C. 2208 to cover only Presidential authorities.
§ 1270.4, Definitions: Removed “documentary material, personal records, President, Presidential archival depository, Vice Presidential records, filed” definitions because they are terms not used in the regulation any longer or the definitions were identical to the statute and not needed.
Changed the title of the subpart from “Handling Presidential records upon death or disability” to “Custody and control of Presidential records” and revised the subpart to add a provision on “Presidential records in the Archivist's physical custody” (§ 1270.20), because the President may request that the Archivist maintain physical custody of Presidential records (now, under the 2014 Amendments at 44 U.S.C. 2203(f), also including electronic records) during the President's term of office. However, the President remains responsible for control and access to these records until the end of the President's term of office.
§ 1270.32, Disposal of Presidential records in the Archivist's custody: Revised to require a preliminary notice of proposed disposal with a 45-day public comment period, in addition to the final notice published 60 days prior to the disposal, as established in the 2014 Amendments at 44 U.S.C. 2203(g)(3).
Added § 1270.38 to clarify when public access to Presidential records may occur based on requirements in 44 U.S.C. 2204, to make it easier for readers to understand the context in which the subsequent sections on restricting access occur.
§ 1270.42(b), Appealing restricted access: Expanded the time in which a person denied access due to a Presidential restriction may file an appeal, from 35 days after receiving NARA's denial letter to 90 days, to be consistent with the 2016 Amendments to the Freedom of Information Act, at 5 U.S.C. 552(a)(6)(i)(III)(aa).
§ 1270.44, Exceptions to restricted access: Under the 2014 Amendments at 44 U.S.C. 2204(f), added a provision at (a)(4) that the Archivist will not release original Presidential records to a President's designated representative who has been convicted of a crime that involves misuse or misappropriation of NARA records.
Added provisions at (d) through (g) allowing for notification of a request for records to the former and incumbent President so that they may consider whether to assert a constitutionally based privilege. These provisions are similar to new section 1270.48, which, in accord with the 2014 Amendments at 44 U.S.C. 2208, covers releasing records to the public and claiming privilege against disclosure.
§ 1270.46, Notice of intent to disclose Presidential records to the public: In accord with the 2014 Amendments at 44 U.S.C. 2208(2)(B), added detail in subsection (b) about what will be included in the notice to the public (such as the NARA case number and the end date of the 60-day working period set out in § 1270.48 for the President to assert a constitutional privilege).
§ 1270.48, Releasing records to the public and claiming privilege against disclosure: Revised to include procedures, now codified in the 2014 Amendments, by which Presidents may restrict public access to Presidential records of former Presidents that are in NARA's legal custody through a constitutionally based privilege against disclosure. This new section parallels new provisions in 44 U.S.C. 2208, including a 60-day notice period in which a President may assert a constitutionally based claim of privilege against disclosure.
The regulation has also been revised throughout with non-substantive edits and reorganization to incorporate Plain Writing Act practices and make it clearer and easier to read.
Executive Order 12866, Regulatory Planning and Review, 58 FR 51735 (September 30, 1993), and Executive Order 13563, Improving Regulation and Regulation Review, 76 FR 23821 (January 18, 2011), 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). This proposed rule is “significant” under section 3(f) of Executive Order 12866. It involves revisions to existing regulations to bring them in line with statutory changes, and affects only individuals or Government entities and access to Presidential or Vice Presidential records. The Office of Management and Budget (OMB) has reviewed this proposed regulation.
Although this proposed rule is not subject to the Regulatory Flexibility Act,
This proposed rule does not contain any information collection requirements subject to the Paperwork Reduction Act.
Review under Executive Order 13132 requires that agencies review regulations for Federalism effects on the institutional interest of states and local governments, and, if the effects are sufficiently substantial, prepare a Federal assessment to assist senior policy makers. This proposed rule will not have any direct effects on State and local governments within the meaning of the Executive Order. Therefore, the proposed regulation requires no Federalism assessment.
Archives and records, Government in the Sunshine Act, Open government, Presidential records.
For the reasons stated in the preamble, NARA proposes to revise 36 CFR part 1270 to read as follows:
44 U.S.C. 2201–2209.
This part implements the provisions of the Presidential Records Act of 1978, as amended, 44 U.S.C. 2201–2209, and establishes requirements for preserving, protecting, disposing of, and providing access to all Presidential and Vice-Presidential records created during a Presidential or Vice Presidential term of office beginning on or after January 20, 1981.
This part, except §§ 1270.46 and 1270.48, applies to Vice-Presidential records in the same manner as to Presidential records. The Vice President's duties and responsibilities, with respect to Vice-Presidential records, are the same as the President's duties and responsibilities with respect to Presidential records, except those in §§ 1270.46 and 1270.48. The Archivist's authority with respect to Vice-Presidential records is the same as the Archivist's authority with respect to Presidential records, except that the Archivist may enter into an agreement with a non-Federal archival repository to deposit Vice-Presidential records, if the Archivist determines it to be in the public interest.
For the purposes of this part—
During a President's term of office, the President may request that the Archivist maintain physical custody of Presidential records, including digital or electronic records. However, the President remains exclusively responsible for control and access to their records until their term of office concludes. During the President's terms of office, the Archivist does not disclose any of these records, except under the President's direction, until the President's term of office concludes. If a President serves consecutive terms, the Archivist does not disclose records without the President's direction until the end of the last term, or the end of another period if specified in 44 U.S.C. 2204 and subpart E of this part.
(a) Title 44 U.S.C. chapter 22 grants the President certain discretion and authority over Presidential records. An incumbent or former President may designate one or more representatives to exercise this discretion and authority, including in the event of the President's death or disability.
(b) The designation under paragraph (a) of this section is effective only if the Archivist receives written notice of it, including the names of the representatives, before the President dies or is disabled.
If a President specifies restrictions on access to Presidential records under 44 U.S.C. 2204(a), but has not made a designation under § 1270.22 at the time of their death or disability, the Archivist exercises the President's discretion or authority under 44 U.S.C. 2204, except as limited by 44 U.S.C. 2208 and § 1270.48.
An incumbent President may dispose of any Presidential records of their administration that, in the President's opinion, lack administrative, historical, informational, or evidentiary value, if the President obtains the Archivist's written views about the proposed disposal and either—
(a) Those views state that the Archivist does not intend to request Congress's advice on the matter because the Archivist either does not consider the records proposed for disposal to be of special interest to Congress or does not consider it to be in the public interest to consult with Congress about the proposed disposal; or
(b)(1) Those views state that the Archivist considers either that the records proposed for disposal may be of special interest to Congress or that consulting with Congress about the proposed disposal is in the public interest; and
(2) The President submits copies of the proposed disposal schedule to the Senate and the House of Representatives at least 60 calendar days of continuous congressional session before the proposed disposal date. For the purpose of this section, a continuous congressional session breaks only when Congress adjourns
(a) The Archivist may dispose of Presidential records in the Archivist's legal custody that the Archivist appraises and determines to have insufficient administrative, historical, informational, or evidentiary value to warrant continuing to preserve them.
(b) If the Archivist determines that Presidential records have insufficient value under paragraph (a) of this section, the Archivist publishes a proposed disposal notice in the
(c) After the public comment period in paragraph (b) of this section, the Archivist publishes a final disposal notice in the
(1) A reasonably specific description of the records scheduled for disposal;
(2) The earliest disposal date; and
(3) A concise statement of the reason for disposing of the records.
(d) Publishing the notice required by paragraph (c) of this section in the
Public access to Presidential records generally begins five years after the President leaves office, and is administered through the Freedom of Information Act (5 U.S.C. 552), as modified by the Presidential Records Act (44 U.S.C. 2204(c)).
(a) An incumbent President may, prior to the end of the President's term of office or last consecutive term of office, restrict access to certain information within Presidential records created during their administration, for a period not to exceed 12 years after the President leaves office (in accordance with 44 U.S.C. 2204).
(b) If a President specifies such restrictions, the Archivist consults with that President or the President's designated representative to identify the affected records, or any reasonably segregable portion of them.
(c) The Archivist then restricts public access to the identified records or the restricted information contained in them until the earliest of following occurs:
(1) The restricting President waives the restriction, in whole or in part;
(2) The restriction period in paragraph (a) of this section expires for the category of information; or
(3) The Archivist determines that the restricting President or an agent of that President has published the restricted record, a reasonably segregable portion of the record, or any significant element or aspect of the information contained in the record, in the public domain.
(a) If the Archivist denies a person access to a Presidential record or a reasonably segregable portion of it due to a restriction made under § 1270.40, that person may file an administrative appeal. To file an administrative appeal requesting access to Presidential records, send it to the director of the Presidential Library of the President during whose term of office the record was created, at the address listed in 36 CFR 1253.3. To file an administrative appeal requesting access to Vice Presidential records, send it to the director of the Presidential Materials Division at the address listed in 36 CFR 1253.1.
(b) An appeal must arrive to the director within 90 calendar days from the date on the access denial letter.
(c) Appeals must be in writing and must identify:
(1) The specific records the requester is seeking; and
(2) The reasons why the requester believes they should have access to the records.
(d) The director responds to the requester in writing and within 30 working days from the date they receive the appeal. The director's response states whether or not the director is granting access to the Presidential records and the basis for that decision. The director's decision to withhold release of Presidential records is final and is not subject to judicial review.
(a) Even when a President imposes restrictions on access under § 1270.40, NARA still makes Presidential records of former Presidents available in the following instances, subject to any rights, defenses, or privileges which the United States or any agency or person may invoke:
(1) To a court of competent jurisdiction in response to a properly issued subpoena or other judicial process, for the purposes of any civil or criminal investigation or proceeding;
(2) To an incumbent President if the President seeks records that contain information they need to conduct current Presidential business and the information is not otherwise available;
(3) To either House of Congress, or to a congressional committee or subcommittee, if the congressional entity seeks records that contain information it needs to conduct business within its jurisdiction and the information is not otherwise available; or
(4) To a former President or their designated representative for access to the Presidential records of that President's administration, except that the Archivist does not make any original Presidential records available to a designated representative that has been convicted of a crime that involves reviewing, retaining, removing, or destroying NARA records.
(b) The President, either House of Congress, or a congressional committee or subcommittee must request the records they seek under paragraph (a) of this section from the Archivist in writing and, where practicable, identify the records with reasonable specificity.
(c) The Archivist promptly notifies the President (or their representative) during whose term of office the record was created, and the incumbent President (or their representative) of a request for records under paragraph (a) of this section.
(d) Once the Archivist notifies the former and incumbent Presidents of the Archivist's intent to disclose records under this section, either President may assert a claim of constitutionally based privilege against disclosing the record or a reasonably segregable portion of it within 30 calendar days after the date of the Archivist's notice. The incumbent or former President must personally make any decision to assert a claim of constitutionally based privilege against disclosing a Presidential record or a reasonably segregable portion of it.
(e) The Archivist does not disclose a Presidential record or reasonably segregable part of a record if it is subject to a privilege claim asserted by the incumbent President unless:
(1) The incumbent President withdraws the privilege claim; or
(2) A court of competent jurisdiction directs the Archivist to release the record through a final court order that is not subject to appeal.
(f)(1) If a former President asserts the claim, the Archivist consults with the incumbent President, as soon as practicable and within 30 calendar days from the date that the Archivist receives notice of the claim, to determine whether the incumbent President will uphold the claim.
(2) If the incumbent President upholds the claim asserted by the former President, the Archivist does not disclose the Presidential record or a reasonably segregable portion of the record unless:
(i) The incumbent President withdraws the decision upholding the claim; or
(ii) A court of competent jurisdiction directs the Archivist to disclose the record through a final court order that is not subject to appeal.
(3) If the incumbent President does not uphold the claim asserted by the former President, fails to decide before the end of the 30-day period detailed in subparagraph (f)(1) of this section, or withdraws a decision upholding the claim, the Archivist discloses the Presidential record 60 calendar days after the Archivist received notification of the claim (or 60 days after the withdrawal) unless a court order in an action in any Federal court directs the Archivist to withhold the record, including an action initiated by the former President under 44 U.S.C. 2204(e).
(g) The Archivist may adjust any time period or deadline under this subpart, as appropriate, to accommodate records requested under this section.
When the Archivist determines it is in the public interest to make a Presidential record available to the public for the first time, the Archivist will:
(a) Promptly notify, in writing, the former President during whose term of office the record was created and the incumbent President, or their representatives, of the intended disclosure. This notice informs the Presidents of the 60-day period in which either President may make a claim of constitutionally based privilege under § 1270.48; and
(b) Notify the public. The notice includes the following information about the intended disclosure:
(1) The number of pages;
(2) A brief description of the records;
(3) The NARA case number;
(4) The date on which the 60-working-day period set out in § 1270.48(a) expires; and
(5) Any other information the Archivist may decide.
(a) Once the Archivist notifies the former and incumbent Presidents of the Archivist's intent to disclose records under § 1270.46, either President may assert a claim of constitutionally based privilege against disclosing the record or a reasonably segregable portion of it. A President must assert their claim within 60 working days after the date of the Archivist's notice, and make the claim in accordance with paragraph (d) of this section.
(b) If neither President asserts a claim within the 60-working-day period, the Archivist discloses the Presidential record covered by the notice. If either President asserts a claim on a reasonably segregable part of the record, the Archivist may disclose only the portion of the record not subject to the claim.
(c)(1) The incumbent or former President may extend the period under paragraph (a) of this section once, for not more than 30 additional working days, by sending the Archivist a written statement asserting that the President needs the extension to adequately review the record.
(2) However, if the 60-day period under subparagraph (a) of this section, or any extension of that period under subparagraph (c)(1) of this section, would end during the first six months of the incumbent President's first term of office, then the 60-day period or extension automatically extends to the end of that six-month period.
(d)(1) The incumbent or former President must personally make any decision to assert a claim of constitutionally based privilege against disclosing a Presidential record or a reasonably segregable portion of it.
(2) The President must notify the Archivist, the Committee on Oversight and Government Reform of the House of Representatives, and the Committee on Homeland Security and Governmental Affairs of the Senate, of a privilege claim under paragraph (a) of this section on the same day that the President asserts such a claim.
(e)(1) If a former President asserts the claim, the Archivist consults with the incumbent President, as soon as practicable and within 30 calendar days from the date that the Archivist receives notice of the claim, to determine whether the incumbent President will uphold the claim.
(2) The Archivist notifies the former President and the public of the incumbent President's decision on the former President's claim no later than 30 calendar days after the Archivist receives notice of the claim.
(3) If the incumbent President upholds the claim asserted by the former President, the Archivist does not disclose the Presidential record or a reasonably segregable portion of the record unless:
(i) The incumbent President withdraws the decision upholding the claim; or
(ii) A court of competent jurisdiction directs the Archivist to disclose the record through a final court order that is not subject to appeal.
(4) If the incumbent President does not uphold the claim asserted by the former President, fails to decide before the end of the 30-day period detailed in subparagraph (e)(1) of this section, or withdraws a decision upholding the claim, the Archivist discloses the Presidential record 90 calendar days after the Archivist received notification of the claim (or 90 days after the withdrawal) unless a court order in an action in any Federal court directs the Archivist to withhold the record, including an action initiated by the former President under 44 U.S.C. 2204(e).
(f) The Archivist does not disclose a Presidential record or reasonably segregable part of a record if it is subject to a privilege claim asserted by the incumbent President unless:
(1) The incumbent President withdraws the privilege claim; or
(2) A court of competent jurisdiction directs the Archivist to release the record through a final court order that is not subject to appeal.
(a) The Archivist requests specific guidance from the appropriate law enforcement agency when the Archivist is determining whether to release Presidential records compiled for law enforcement purposes that may be subject to 5 U.S.C. 552(b)(7). The Archivist requests guidance if:
(1) No general guidance applies;
(2) The record is particularly sensitive; or
(3) The type of record or information is widespread throughout the files.
(b) When the Archivist decides to release Presidential records compiled for law enforcement purposes, the Archivist notifies any agency that has provided guidance on those records under this section. The notice includes the following:
(1) A description of the records in question;
(2) A statement that the records described contain information compiled for law enforcement purposes and may be subject to the exemption provided by 5 U.S.C. 552(b)(7) for records of this type; and
(3) The name of a contact person at NARA.
(c) Any guidance an agency provides under paragraph (a) of this section is not binding on the Archivist. The Archivist decides whether Presidential records are subject to the exemption in 5 U.S.C. 552(b)(7).
Office of Government Information Services, NARA.
Proposed rule.
The Open Government Act of 2007 created the Office of Government Information Services (OGIS) within the National Archives and Records Administration (NARA). OGIS has three statutorily defined functions: OGIS offers mediation services to help resolve FOIA disputes; reviews agency FOIA policies, procedures and compliance; and identifies procedures and methods for improving compliance under the FOIA. This proposed rule sets out the implementing guidance and procedures by which OGIS carries out its statutory mission, and explains OGIS's role in the FOIA process.
Submit comments on or before February 27, 2017.
You may submit comments on this rule, identified by RIN 3095–AB88, by any of the following methods:
•
•
•
•
For information or questions about the regulation and the comments process, contact Kimberly Keravuori, External Policy Program Manager, by email at
The OPEN Government Act of 2007 (Pub. L. 110–175, 121 Stat. 2524) amended the Freedom of Information Act, or FOIA (5 U.S.C. 552, as amended), and created the Office of Government Information Services (OGIS) within the National Archives and Records Administration. OGIS began receiving FOIA cases in September 2009.
This proposed regulation explains OGIS's statutory role in the FOIA process and sets out procedures for one of OGIS's primary functions: Assisting agencies and FOIA requesters with efforts to resolve FOIA disputes. In the future, this regulation will also include provisions on OGIS's other functional areas, which are currently under development.
Title 5, United State Code § 552(h)(3), states that “The Office of Government Information Services shall offer mediation services to resolve disputes between persons making requests under this section and administrative agencies as a non-exclusive alternative to litigation. . .” As a result, we offer dispute resolution services, which is an umbrella term encompassing formal mediation (where a mediator conducts formal sessions to assist in resolving a dispute), facilitation (an informal process in which a mediator aids communication among and between the parties to resolve a dispute), and other commonly recognized resolution methods. OGIS's dispute resolution services may also include OGIS's ombuds services (which include providing information) when those services aid in resolving disputes. Our goal is to be an alternative to litigation by facilitating communication between a requester and the agency and by attempting to resolve disputes arising out of requests for information. We provide all our dispute resolution services in accordance with the Administrative Dispute Resolution Act (ADRA), 5 U.S.C. 571,
Both FOIA requesters and agencies may contact us to help resolve a dispute at any point in the FOIA process. We do not advocate on behalf of a requester or agency; the office promotes a fair FOIA process and works with parties to reach a mutually agreeable resolution. If the parties agree that the dispute has been resolved, we will close the case and may follow-up with the agency to confirm that any agreed-upon action was taken. However, if the parties cannot agree on a resolution, OGIS will issue a final response letter to the parties indicating that we are concluding the dispute resolution efforts.
Executive Order 12866, Regulatory Planning and Review, 58 FR 51735 (September 30, 1993), and Executive Order 13563, Improving Regulation and Regulation Review, 76 FR 23821 (January 18, 2011), 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). This proposed rule is “significant” under section 3(f) of Executive Order 12866 because it establishes OGIS implementing regulatory provisions for the first time. The Office of Management and Budget (OMB) has reviewed this proposed regulation.
This review requires an agency to prepare an initial regulatory flexibility analysis and publish it when the agency publishes the proposed rule. This requirement does not apply if the agency certifies that the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities (5 U.S.C. 603). NARA certifies, after review and analysis, that this proposed rule will not have a significant adverse economic
This proposed rule contains information collection activities that are subject to review and approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act. We refer to the following OMB-approved information collection in § 1291.12 of this regulation: OMB control No. 3095–0068, Request for Assistance and Consent (NA Form 10003), approved through December 31, 2016. We published the information collection notice in the
Review under Executive Order 13132 requires that agencies review regulations for Federalism effects on the institutional interest of states and local governments, and, if the effects are sufficiently substantial, prepare a Federal assessment to assist senior policy makers. This proposed rule will not have any direct effects on State and local governments within the meaning of the Executive Order. Therefore, this regulation does not require a Federalism assessment.
Alternative dispute resolution, Freedom of Information Act, Information, Mediation, Record-keeping requirements.
For the reasons stated in the preamble, NARA proposes to amend by add Subchapter I of chapter XII, title 36 of the Code of Federal Regulations, to read as follows:
5 U.S.C 552, as amended; Pub. L. 110–175, 121 Stat. 2524; 44 U.S.C. 2104(a)
This part establishes policies and procedures for Federal agencies and public requesters who wish to make use of OGIS's voluntary dispute resolution services.
The following definitions apply to this part:
Pursuant to 5 U.S.C. 552(h), OGIS:
(1) Reviews agency FOIA policies and procedures;
(2) Reviews agency compliance with the FOIA;
(3) Identifies procedures and methods for improving compliance under the FOIA; and
(4) Offers mediation services to help FOIA requesters and agencies resolve disputes, as a non-exclusive alternative to litigation.
You may contact OGIS by mail at Office of Government Information Services (OGIS); National Archives and Records Administration (NARA); 8601 Adelphi Road; College Park, MD 20740, by telephone at 202.741.5770 or toll-free at 1.877.684.6448, by fax at 202.741.5769, or by email at
(a) OGIS dispute resolution services facilitate and promote dispute resolution through non-binding, voluntary actions aided by an unbiased third party, as a non-exclusive alternative to litigation.
(b) We perform all our dispute resolution services and responsibilities in accordance with the ADRA, 5 U.S.C. 571–584.
(c) We follow the ADRA's principles for confidentiality strictly and do not disclose any information parties share as part of OGIS's dispute resolution efforts, unless an exception applies under ADRA, 5 U.S.C. 574. Therefore, we will not disclose OGIS's dispute resolution discussions, materials, correspondence, notes, any draft resolutions, and any other material related to the dispute. This allows all parties in dispute resolution discussions to be forthcoming, candid, and without concern that either OGIS or the other party may later use any statements against them.
(d) We offer dispute resolution services only at the request of one or more of the parties to the dispute, but we may decline to offer dispute resolution services when:
(1) The requester seeks OGIS assistance concerning matters other than access to records under the FOIA;
(2) The requester fails to provide the necessary information under § 1291.12(a) of this part; or
(3) The requester files a request for assistance with OGIS six or more years after the agency's decision on their FOIA request (the statute of limitations period for filing a lawsuit challenging an adverse decision under FOIA is six years (see 28 U.S.C. 2401(a) and
(e) Dispute resolution services may occur only when all parties agree to participate.
(1) The parties must agree to OGIS's assistance, agree that dispute resolution services are a supplement to, not a substitute for, the agency's administrative FOIA process, agree to keep the content of dispute resolution discussions confidential, and agree that OGIS's services are a non-exclusive alternative to Federal court litigation.
(2) Agreeing to participate in dispute resolution services and to discuss a dispute and possible resolutions does not mean that an agency is admitting to noncompliance, and resolving a dispute does not constitute a finding that the agency did not comply with FOIA.
(f) Once the parties agree to engage in dispute resolution services, they should participate fully and promptly in any meetings or telephone discussions arranged by OGIS as part of the dispute resolution process. Either party can share information with OGIS in confidence to enable OGIS's dispute resolution process to work as intended.
(a) To request OGIS dispute resolution services, either the agency or the FOIA requester must file a written request that includes:
(1) Your name (individual, or representative of an agency or other group);
(2) Contact information (mailing address, phone number, email address);
(3) Brief description of the nature of the dispute;
(4) Name of the agency; and
(5) Copies of the following documents: (i) The initial FOIA request; (ii) any agency responses to the initial request; (iii) the appeal, if any; (iv) any agency responses to the appeal; and (v) any other relevant correspondence between the FOIA requester and the agency about processing the initial FOIA request or appeal.
(b) In addition, if you are a FOIA requester, you may also need to submit a signed NA Form 10003, Consent to Make Inquiries and Release of Information and Records (available at
(c) After we receive the request for dispute resolution services, we review the request and any enclosures, enter the request into our case tracking system, and assign a case number to the request.
(d)(1) We send you an acknowledgement letter in writing within ten business days after we receive your request for dispute resolution services. The acknowledgment letter does not mean that we have committed to offering dispute resolution services in your case.
(2) If your dispute resolution services request did not include sufficient information, the acknowledgment letter may request additional information or clarification. In such cases, you have 20 business days from the date on the acknowledgment letter in which to send us the additional information, initiate contact to discuss the request, or request additional time.
(e) If you don't provide the additional information or contact OGIS within 20 business days from the date on the acknowledgment letter requesting additional information, we may close the case. If you contact OGIS with additional information after the 20 business days expire, we will open a new case.
(a) When we receive a request for dispute resolution services from one or more parties to a dispute, we review the information to determine if we may appropriately offer such services. To make this determination, we review the dispute resolution request and make sure it meets the requirements for dispute resolution services contained in 36 CFR 1291.10 and 1291.12 of this part.
(b) Once we determine that we may appropriately offer dispute resolution services, the other party or parties must also agree to engage in the process before resolution efforts can occur. If they agree, we assign one or more mediators to the dispute. If we determine that we are unable to offer dispute resolution services, we notify the party who requested the services,
(c) Mediators facilitate communication between the parties, including joint or separate discussions, to help them come to a mutually agreeable solution. The mediators may use all appropriate customary techniques associated with dispute resolution.
(d) We do not permit the parties to make any audio or video recordings of dispute resolution meetings. The mediator's notes are confidential and we do not disclose them. The parties also agree to keep the content of the dispute resolution discussions confidential.
(e) Proceedings with the mediator are informal, and the mediator has no authority to compel the parties to resolve the dispute. Either party may withdraw from the dispute resolution process at any point. If one of the parties initiates litigation during the course of the dispute resolution process, they must notify us.
(f) If the parties reach an impasse, the mediator may raise the dispute to the Deputy Director of OGIS. The Deputy Director may provide the parties with an assessment of the situation as an additional level of dispute resolution efforts to assist the parties with breaking the impasse. Any assessment the Deputy Director provides is confidential and the parties may not rely upon it in any subsequent proceedings.
(g) OGIS issues a final response letter to the parties when the dispute resolution process concludes. This letter documents the outcome of the process and any resolution the parties reach. No party may rely on the letter in subsequent proceedings and its contents are confidential unless both parties agree in writing to allow OGIS to disclose it publicly.
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve a revision to the Illinois State Implementation Plan (SIP). The revision amends the Illinois Administrative Code by updating the definition of volatile organic material or volatile organic compounds to exclude 2-amino-2-methyl-1-propanol. This revision is in response to an EPA rulemaking in 2014 which exempted this compound from the Federal definition of volatile organic compounds on the basis that the compound makes a negligible contribution to tropospheric ozone formation.
Comments must be received on or before January 27, 2017.
Submit your comments, identified by Docket ID No. EPA–R05–OAR–2016–0502 at
Michelle Becker, Life Scientist, Attainment Planning and Maintenance Section, Air Programs Branch (AR–18J), Environmental Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604, (312) 886–3901,
In the Final Rules section of this
Environmental Protection Agency (EPA).
Proposed rule.
Pursuant to the Federal Clean Air Act (CAA or Act), the Environmental Protection Agency (EPA) is approving revisions to the Louisiana State Implementation Plan (SIP) that address requirements in CAA Section 128 regarding State Board composition
Written comments should be received on or before January 27, 2017.
Submit your comments, identified by EPA–R06–OAR–2014–0513, at
Tracie Donaldson, (214) 665–6633,
In the final rules section of this
For additional information, see the direct final rule which is located in the rules section of this
Environmental Protection Agency (EPA).
Extension of public comment period.
On November 22, 2016, the U.S. Environmental Protection Agency (“EPA”) published a Notice of its proposed denial of several petitions requesting that EPA initiate a rulemaking process to reconsider or change its regulations that identify refiners and importers of gasoline and diesel fuel as the entities responsible for complying with the annual percentage standards adopted under the Renewable Fuel Standard (RFS) program. The Notice invited public comment on this proposal by January 23, 2017—60 days after publication of the Notice in the
Comments must be received on or before February 22, 2017.
Submit your comments on the EPA's proposed denial of the petitions referenced above, identified by Docket ID No. EPA–HQ–OAR–2016–0544, at
Julia MacAllister, Office of Transportation and Air Quality, Assessment and Standards Division, Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; telephone number: 734–214–4131; email address:
The EPA proposal noted above was published on November 22, 2016, at 81 FR 83776. For the reasons noted above, the public comment period will now end on February 22, 2017.
Office of Inspector General (OIG), HHS.
Notice of intent to develop regulations.
In accordance with section 205 of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), this annual notice solicits proposals and recommendations for developing new, and modifying existing, safe harbor provisions under the Federal anti-kickback statute (section 1128B(b) of the Social Security Act), as well as developing new OIG Special Fraud Alerts.
To ensure consideration, public comments must be delivered to the address provided below by no later than 5 p.m. on February 27, 2017.
In commenting, please refer to file code OIG–125–N. Because of staff and resource limitations, we cannot accept comments by facsimile (fax) transmission.
You may submit comments in one of three ways (no duplicates, please):
1.
2.
3.
For information on viewing public comments, please see the
Patrice Drew, Regulatory Affairs Liaison, Office of Inspector General, (202) 619–1368.
Section 1128B(b) of the Social Security Act (the Act) (42 U.S.C. 1320a–7b(b)) provides criminal penalties for individuals or entities that knowingly and willfully offer, pay, solicit, or receive remuneration to induce or reward business reimbursable under Federal health care programs. The offense is classified as a felony and is punishable by fines of up to $25,000 and imprisonment for up to 5 years. OIG may also impose civil money penalties, in accordance with section 1128A(a)(7) of the Act (42 U.S.C. 1320a–7a(a)(7)), or exclusion from Federal health care programs, in accordance with section 1128(b)(7) of the Act (42 U.S.C. 1320a–7(b)(7)).
Because the statute, on its face, is so broad, concern has been expressed for many years that some relatively innocuous commercial arrangements may be subject to criminal prosecution or administrative sanction. In response to the above concern, section 14 of the Medicare and Medicaid Patient and Program Protection Act of 1987, Public Law 100–93 section 14, specifically required the development and promulgation of regulations, the so-called “safe harbor” provisions, specifying various payment and business practices that, although potentially capable of inducing referrals of business reimbursable under Federal health care programs, would not be treated as criminal offenses under the anti-kickback statute and would not serve as a basis for administrative sanctions. OIG safe harbor provisions have been developed “to limit the reach of the statute somewhat by permitting certain non-abusive arrangements, while encouraging beneficial and innocuous arrangements” (56 FR 35952, July 29, 1991). Health care providers and others may voluntarily seek to comply with these provisions so that they have the assurance that their business practices will not be subject to liability under the anti-kickback statute or related administrative authorities. OIG safe harbor regulations are found at 42 CFR part 1001.
OIG has also periodically issued Special Fraud Alerts to give continuing guidance to health care providers with respect to practices OIG finds potentially fraudulent or abusive. The Special Fraud Alerts encourage industry compliance by giving providers guidance that can be applied to their own practices. OIG Special Fraud Alerts are published in the
In developing Special Fraud Alerts, OIG has relied on a number of sources and has consulted directly with experts in the subject field, including those within OIG, other agencies of the Department, other Federal and State agencies, and those in the health care industry.
Section 205 of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), Public Law 104–191 section 205, the Act, section 1128D, 42 U.S.C. 1320a–7d, requires the Department to develop and publish an annual notice in the
In developing safe harbors for a criminal statute, OIG thoroughly reviews the range of factual circumstances that may fall within the proposed safe harbor subject area so as to uncover potential opportunities for fraud and abuse. Only then can OIG determine, in consultation with the Department of Justice, whether it can effectively develop regulatory limitations and controls that will permit beneficial and innocuous arrangements within a subject area while, at the same time, protecting Federal health care programs and their beneficiaries from abusive practices.
In accordance with the requirements of section 205 of HIPAA, OIG last published a
A detailed explanation of justifications for, or empirical data supporting, a suggestion for a safe harbor or Special Fraud Alert would be helpful and should, if possible, be included in any response to this solicitation.
In accordance with section 205 of HIPAA, we will consider a number of factors in reviewing proposals for new or modified safe harbor provisions, such as the extent to which the proposals would affect an increase or decrease in:
• Access to health care services,
• the quality of health care services,
• patient freedom of choice among health care providers,
• competition among health care providers,
• the cost to Federal health care programs,
• the potential overutilization of health care services, and
• the ability of health care facilities to provide services in medically underserved areas or to medically underserved populations.
In addition, we will also consider other factors, including, for example, the existence (or nonexistence) of any potential financial benefit to health care professionals or providers that may take into account their decisions whether to (1) order a health care item or service or (2) arrange for a referral of health care items or services to a particular practitioner or provider.
In determining whether to issue additional Special Fraud Alerts, we will consider whether, and to what extent, the practices that would be identified in a new Special Fraud Alert may result in any of the consequences set forth above, as well as the volume and frequency of the conduct that would be identified in the Special Fraud Alert.
National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).
Grant of petition for rulemaking.
This notice partially grants a petition for rulemaking submitted by the Alliance of Automobile Manufacturers and the Association of Global Automakers (hereinafter collectively referred to as “Petitioners”) on June 20, 2016, to consider amending various aspects of the light vehicle Corporate Average Fuel Economy (CAFE) regulations. The Petitioners requested that NHTSA issue a direct final rule to implement the requested changes, but NHTSA believes that the issues and questions raised by the Petitioners are worthy of notice and comment. NHTSA will address the changes requested in the Petition in the course of the rulemaking proceeding, in accordance with statutory criteria.
December 21, 2016.
For technical issues, you may call Mr. James Tamm in the Fuel Economy Division of the Office of Rulemaking at (202) 493–0515. For legal issues, you may call Ms. Rebecca Yoon in the Office of Chief Counsel at (202) 366–2992. You may send mail to these officials at: National Highway Traffic Safety Administration, 1200 New Jersey Avenue SE., Washington, DC 20590.
On June 20, 2016, the Petitioners submitted a Petition to the National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency (EPA) requesting that the agencies issue a direct final rule to amend various aspects of the Corporate Average Fuel Economy (CAFE) and light-duty greenhouse gas (GHG) regulations. The Petitioners stated that these amendments are necessary to “address various inconsistencies between” NHTSA's CAFE program and EPA's GHG emissions program, and to “address additional inefficiencies” in the programs.
Specifically, Petitioners requested that NHTSA (and EPA)
(1) Include “off-cycle” credits in the calculation of manufacturers' fleet fuel economy levels for model years 2010 through 2016;
(2) Include air conditioning efficiency credits in the calculation of manufacturers' fleet fuel economy levels for model years 2010 through 2016;
(3) Apply the “fuel savings adjustment factor” for all uses of CAFE credits;
(4) Apply the same estimate of Vehicle Miles Traveled for model years 2011 through 2016 that that the EPA GHG program uses;
(5) Change the definition of “credit transfer” in 49 CFR part 536 to state that the statutory cap on credit transfers applies at time of transfer rather than at time of use;
(6) Amend regulations to clarify that manufacturers may manage and apply their credits regardless of their origin;
(7) Amend 49 CFR 531(d) so that minimum domestic passenger car standards represent 92 percent of the overall passenger car CAFE standard for the fleet as a whole calculated at the end of each model year, rather than 92 percent of the overall standard as calculated at the time that the standards are/were originally issued;
(8) Adjust the “multiplier” for full electric vehicles, plug-in hybrid electric vehicles, fuel cell vehicles, and compressed natural gas vehicles; and
(9) “Improve” the off-cycle credit approval process and reaffirm several provisions.
Some aspects of the Petition were directed to NHTSA, some to both NHTSA and EPA, and other requests were directed exclusively to EPA. The sixth item, seeking clarification that manufacturers may manage and apply their credits regardless of their origin, requests a change in an EPA regulation (40 CFR 86.1865(k)(5)) that does not appear applicable or relevant to the CAFE program. Calculation procedures for CAFE compliance are located at 40 CFR 600.510–12. Credits for CAFE over-compliance are determined based on the difference between a manufacturer's calculated “achieved” CAFE value and the manufacturer's calculated “required” CAFE value. NHTSA believes that this request was not intended to be directed at the CAFE program, but NHTSA would welcome Petitioners' clarification if this is incorrect.
Similarly, the eighth item, which addresses the “multiplier” for alternative fuel vehicles, applies exclusively to EPA's GHG program. NHTSA does not speak for EPA in this decision, and will not address this item in the upcoming rulemaking.
The remaining items will be addressed in conjunction with the Agency's upcoming proposal for setting future CAFE standards. NHTSA believes that these issues are best considered concurrently with that rulemaking for both procedural and substantive reasons. Procedurally, reducing the number of rulemaking actions increases administrative efficiency and improves the ability to evaluate cumulative program impacts comprehensively. Substantively, while Petitioners' requests nominally focus on credit and flexibility issues, NHTSA believes that the underlying questions of whether and how to expand compliance flexibilities is closely related to the question of what CAFE standards are maximum feasible in future model years, which NHTSA will determine in the upcoming rulemaking as required by statute. The Petitioners appear to agree with this, as the Petition suggests that if a lack of compliance flexibilities leads manufacturers to pay civil penalties for CAFE non-compliance, the CAFE standards may be beyond maximum feasible levels. While NHTSA does not agree that the fact that
Thus, NHTSA finds that considering these questions concurrently, as part of the same action, will best allow the Agency to maintain a well-structured program that maximizes fuel economy gains in the most cost-effective way possible. NHTSA further concludes that a direct final rule would not be an appropriate mechanism for responding to Petitioners' requests, because: (i) The opportunity for notice and public comment on the Agency's response is important and valuable, particularly given (ii) the linkage between compliance flexibilities and the maximum feasible levels of CAFE standards. Moreover, NHTSA regulations do not allow for a direct final rule to be issued as such if the rule may be controversial or is likely to result in adverse comment. NHTSA is aware that various stakeholders have strong views for and against the expansion of compliance flexibilities in the CAFE program, and the Agency would expect those stakeholders to comment to a direct final rule accordingly, which would require the Agency per its own regulations to initiate notice and comment.
NHTSA's fuel economy standards are final through 2021 and the upcoming rulemaking is required in order to set standards for 2022 and subsequent years. However, in streamlining consideration of the Petitioners' inquiry with the required NPRM, NHTSA will fully evaluate the items relevant to the CAFE program and standards, including their impacts on the program if applied prior to 2022. If in considering the Petitioner's inquiry, NHTSA finds it appropriate to initiate a separate rulemaking, NHTSA may do so. NHTSA is updating its analysis for the NPRM and welcomes input from all stakeholders, including in advance of developing its notice of proposed rulemaking. NHTSA encourages stakeholders to submit comments and to meet with the Agency to discuss their comments, concerns, and suggestions. NHTSA and EPA remain committed to working together to harmonize the CAFE and GHG program provisions to the extent possible under the agencies' statutes.
Considering all of the information before the Agency, including but not limited to the information referenced in the petition, NHTSA grants the petition in part and denies it in part. The Agency expects to initiate a rulemaking proceeding in the coming months that will address those of the Petitioners' requests that are within the Agency's jurisdiction and power to address. The granting of the petition does not mean that the Agency will issue a final rule. The determination of whether to issue a rule will be made after study of the requested actions and the various alternatives in the course of the rulemaking proceeding, in accordance with statutory criteria.
49 U.S.C. 32901, 32902, and 32903; delegation of authority at 49 CFR 1.95.
Animal and Plant Health Inspection Service, USDA.
Renewal and revision of an information collection; comment request.
In accordance with the Paperwork Reduction Act of 1995, this notice announces the Animal and Plant Health Inspection Service's intention to request a renewal and revision of an information collection associated with the regulations for the commercial transportation of equines for slaughter.
We will consider all comments that we receive on or before February 27, 2017.
You may submit comments by either of the following methods:
•
• Postal Mail/Commercial Delivery: Send your comment to Docket No. APHIS–2016–0096, Regulatory Analysis and Development, PPD, APHIS, Station 3A–03.8, 4700 River Road Unit 118, Riverdale, MD 20737–1238.
Supporting documents and any comments we receive on this docket may be viewed at
For information on the regulations for the commercial transportation of equines for slaughter, contact Dr. Rory Carolan, National Equine Programs, Surveillance, Preparedness and Response Services, VS, APHIS, 4700 River Road Unit 46, Riverdale, MD 20737; (301) 851–3558. For copies of more detailed information on the information collection, contact Ms. Kimberly Hardy, APHIS' Information Collection Coordinator, at (301) 851–2483.
The minimum standards for transportation cover, among other things, the food, water, and rest provided to such equines. The regulations also require the owner/shipper of the equines to take certain actions in loading and transporting the equines and to certify that the commercial transportation meets certain requirements. In addition, the regulations prohibit the commercial transportation for slaughter of equines considered to be unfit for travel, the use of electric prods on such animals in commercial transportation to slaughter, and the use of double-deck trailers for commercial transportation of equines for slaughter.
These regulations require several information collection activities, including a USDA–APHIS Owner/Shipper Certificate Fitness to Travel for Slaughter Form/Continuation Sheet, application of backtags, the collection of business information from any individual or other entity found to be transporting horses for slaughter, and recordkeeping.
We are asking the Office of Management and Budget (OMB) to approve our use of these information collection activities, as described, for 3 years.
The purpose of this notice is to solicit comments from the public (as well as affected agencies) concerning our information collection. These comments will help us:
(1) Evaluate 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) Evaluate the accuracy of our estimate of the burden of the collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, through use, as appropriate, of automated, electronic, mechanical, and other collection technologies;
All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.
Food Safety and Inspection Service, USDA.
Notice.
The Food Safety and Inspection Service (FSIS) is announcing the 2017 rates it will charge meat and poultry establishments, egg products plants, and importers and exporters for providing voluntary, overtime, and holiday inspection and identification, certification, and laboratory services. The 2017 basetime, overtime, holiday, and laboratory services rates will be applied on February 5, 2017.
FSIS will charge the rates announced in this notice beginning February 5, 2017.
For further information contact Michael Toner, Director, Budget Division, Office of Management, FSIS, U.S. Department of Agriculture, Room 2159, South Building, 1400 Independence Avenue SW., Washington, DC 20250–3700; Telephone: (202) 690–8398, Fax: (202) 690–4155.
On April 12, 2011, FSIS published a final rule amending its regulations to establish formulas for calculating the rates it charges meat and poultry establishments, egg products plants, and importers and exporters for providing voluntary, overtime, and holiday inspection and identification, certification, and laboratory services (76 FR 20220).
In the final rule, FSIS stated that it would use the formulas to calculate the annual rates, publish the rates in
The following table lists the 2017 Rates per hour, per employee, by type of service:
The regulations state that FSIS will calculate the rates using formulas that include the Office of Field Operations (OFO) inspection program personnel's previous fiscal year's regular direct pay and regular hours (9 CFR 391.2, 391.3, 391.4, 590.126, 590.128, 592.510, 592.520, and 592.530). In 2013, an Agency reorganization eliminated the OIA program office and transferred all of its inspection program personnel to OFO. Therefore, inspection program personnel's pay and hours are identified in the calculations as “OFO inspection program personnel's” pay and hours.
FSIS determined the 2017 rates using the following calculations:
The calculation for the 2017 basetime rate per hour per program employee is:
[FY 2016 OFO Regular Direct Pay divided by the previous fiscal year's Regular Hours ($474,751,934/16,702,093)] = $28.42 + ($28.42 * 1.60% (calendar year 2017 Cost of Living Increase)) = $28.87 + $9.81(benefits rate) + $0.97 (travel and operating rate) + $16.19 (overhead rate) + $0.02 (bad debt allowance rate) = $55.86 rounded down to 55.84 so that it is divisible by 4.
The calculation for the 2017 overtime rate per hour per program employee is:
[FY 2016 OFO Regular Direct Pay divided by previous fiscal year's Regular Hours ($474,751,934/16,702,093)]= $28.42 + ($28.42 * 1.60% (calendar year 2017 Cost of Living Increase)) =$28.87 * 1.5 = $43.31 + $9.81 (benefits rate) + $0.97 (travel and operating rate) + $16.19 (overhead rate) + $.02 (bad debt allowance rate) = $70.30, rounded down to $70.28 so that it is divisible by 4.
The calculation for the 2017 holiday rate per hour per program employee calculation is:
[FY 2016 OFO Regular Direct Pay divided by Regular Hours ($474,751,934/16,702,093)]= $28.42 + ($28.42 * 1.60% (calendar year 2017 Cost of Living Increase)) = $28.87 * 2 = $57.74 + $9.81 (benefits rate) + $0.97 (travel and operating rate) + $16.19 (overhead rate) + $.02 (bad debt allowance rate) = $84.73, rounded down to $84.72 so that it is divisible by 4.
The calculation for the 2017 laboratory services rate per hour per program employee is:
[FY 2016 OPHS Regular Direct Pay/OPHS Regular hours ($24,143,108/548,338)] = $44.03 + ($44.03 * 1.60% (calendar year 2017 Cost of Living Increase)) = $44.73 + $9.81 (benefits rate) + $0.97 (travel and operating rate) + $16.19 (overhead rate) + $.02 (bad debt allowance rate) = $71.72.
These rates are components of the basetime, overtime, holiday, and laboratory services rates formulas.
The calculation for the 2017 benefits rate per hour per program employee is:
[FY 2016 Direct Benefits/(Total Regular hours + Total Overtime hours + Total Holiday hours) ($190,215,190/19,693,587)] = $9.66 + ($9.66* 1.60% (calendar year 2017 Cost of Living Increase) = $9.81.
The calculation for the 2017 travel and operating rate per hour per program employee is:
[FY 2016 Total Direct Travel and Operating Costs/(Total Regular hours + Total Overtime hours + Total Holiday hours) ($18,819,123/19,693,587)] = $0.96 + ($0.96 * 1.0% (2017 Inflation) = $0.97.
The calculation for the 2017 overhead rate per hour per program employee is:
[FY 2016 Total Overhead/(Total Regular hours + Total Overtime hours + Total Holiday hours)($ 315,614,079/19,693,587)] = $16.03 + ($16.03 * 1.0% (2017 Inflation) = $16.19.
The 2017 calculation for bad debt rate per hour per program employee is:
[FY 2016 Total Bad Debt/(Total Regular hours + Total Overtime hours + Total Holiday hours) = ($342,710/19,693,587)] = $.02.
FSIS will announce this notice online through the FSIS Web page located at
FSIS will also make copies of this
No agency, officer, or employee of the USDA shall, on the grounds of race, color, national origin, religion, sex, gender identity, sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, or political beliefs, exclude from participation in, deny the benefits of, or subject to discrimination any person in the United States under any program or activity conducted by the USDA.
To file a complaint of discrimination, complete the USDA Program Discrimination Complaint Form, which may be accessed online at
Send your completed complaint form or letter to USDA by mail, fax, or email:
Persons with disabilities who require alternative means for communication (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at (202) 720–2600 (voice and TDD).
Rural Housing Service, USDA.
Proposed collection; Comments requested.
In accordance with the Paperwork Reduction Act of 1995, this notice announces the Agencies' intention to request an extension for a currently approved information collection in support of the program for 7 CFR part 1942, subpart A, “Community Facility Loans.”
Comments on this notice must be received by February 27, 2017 to be assured of consideration.
Aaron Morris, Community Programs Loan Specialist, Rural Housing Service, U.S. Department of Agriculture, STOP 0787, 1400 Independence Ave. SW., Washington, DC 20250–0787, telephone: (202) 720–1501.
Community Facilities programs have been in existence for many years. These programs have financed a wide range of projects varying in size and complexity from large general hospitals to small day care centers. The facilities financed are designed to promote the development of rural communities by providing the
Information will be collected by the field offices from applicants, borrowers, and consultants. This information will be used to determine applicant/borrower eligibility, project feasibility, and to ensure borrowers operate on a sound basis and use funds for authorized purposes. Failure to collect proper information could result in improper determination of eligibility, improper use of funds, and/or unsound loans.
Copies of this information collection can be obtained from Kimble Brown, Regulations and Paperwork Management Branch, at (202) 692–0043.
All responses to this notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.
Architectural and Transportation Barriers Compliance Board
Notice of meetings.
The Architectural and Transportation Barriers Compliance Board (Access Board) plans to hold its regular committee and Board meetings in Washington, DC, Monday through Wednesday, January 9–11, 2017 at the times and location listed below.
The schedule of events is as follows:
Meetings will be held at the Access Board Conference Room, 1331 F Street NW., Suite 800, Washington, DC 20004.
For further information regarding the meetings, please contact David Capozzi, Executive Director, (202) 272–0010 (voice); (202) 272–0054 (TTY).
At the Board meeting scheduled on the afternoon of Wednesday, January 11, 2017, the Access Board will consider the following agenda items:
Members of the public can provide comments either in-person or over the telephone during the final 15 minutes of the Board meeting on Wednesday, January 11, 2017. Any individual interested in providing comment is asked to pre-register by sending an email to
All meetings are accessible to persons with disabilities. An assistive listening system, Communication Access Realtime Translation (CART), and sign language interpreters will be available at the Board meeting and committee meetings.
Persons attending Board meetings are requested to refrain from using perfume, cologne, and other fragrances for the comfort of other participants (see
You may view the Wednesday, January 11, 2017 meeting through a live webcast from 1:30 p.m. to 3:00 p.m. at:
Commission on Civil Rights.
Announcement of meetings.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission), and the Federal Advisory Committee Act (FACA), that a planning meeting of the Colorado Advisory Committee to the Commission will convene at 3:00 p.m. (MST) on Friday, January 13, 2017, via teleconference. The purpose of the
Friday, January 13, 2017, at 3:00 p.m. (MST)
Malee V. Craft, DFO,
Members of the public may listen to the discussion by dialing the following Conference Call Toll-Free Number:1–888–899–5068; Conference ID: 7634583. Please be advised that before being placed into the conference call, the operator will ask callers to provide their names, their organizational affiliations (if any), and an email address (if available) prior to placing callers into the conference room. Callers can expect to incur charges for calls they initiate over wireless lines, and the Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free phone number.
Persons with hearing impairments may also follow the discussion by first calling the Federal Relay Service (FRS) at 1–800–977–8339 and provide the FRS operator with the Conference Call Toll-Free Number: 1–888–899–5068, Conference ID: 7634583. Members of the public are invited to submit written comments; the comments must be received in the regional office by Monday, February 13, 2017. Written comments may be mailed to the Rocky Mountain Regional Office, U.S. Commission on Civil Rights, 1961 Stout Street, Suite 13–201, Denver, CO 80294, faxed to (303) 866–1050, or emailed to Evelyn Bohor at
Records and documents discussed during the meeting will be available for public viewing as they become available at
Commission on Civil Rights.
Announcement of meetings.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission), and the Federal Advisory Committee Act (FACA), that a planning meeting of the New Mexico Advisory Committee to the Commission will convene at 11:00 a.m. (MST) on Wednesday, January 25, 2017, via teleconference. The purpose of the meeting is to conduct orientation for the newly appointed Committee and review progress of draft report on Elder Abuse.
Wednesday, January 25, 2017, at 11:00 a.m. (MST)
To be held via teleconference:
Malee V. Craft, DFO,
Members of the public may listen to the discussion by dialing the following Conference Call Toll-Free Number: 1–888–515–2235; Conference ID: 3622450. Please be advised that before being placed into the conference call, the operator will ask callers to provide their names, their organizational affiliations (if any), and an email address (if available) prior to placing callers into the conference room. Callers can expect to incur charges for calls they initiate over wireless lines, and the Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free phone number.
Persons with hearing impairments may also follow the discussion by first calling the Federal Relay Service (FRS) at 1–800–977–8339 and provide the FRS operator with the Conference Call Toll-Free Number: 1–888–515–2235, Conference ID: 3622450. Members of the public are invited to submit written comments; the comments must be received in the regional office by Monday, February 27, 2017. Written comments may be mailed to the Rocky Mountain Regional Office, U.S. Commission on Civil Rights, 1961 Stout Street, Suite 13–201, Denver, CO 80294, faxed to (303) 866–1050, or emailed to Evelyn Bohor at
Records and documents discussed during the meeting will be available for public viewing as they become available at
• Welcome and Roll-call
Malee V. Craft, Regional Director, Rocky Mountain Regional Office (RMRO)
• Introductions
Sandra Rodriguez, Chair, New Mexico Advisory Committee
• Orientation and brief update on Commission and Region Activities
• Discuss progress of draft report on Elder Abuse
• Next Steps
Commission on Civil Rights.
Announcement of meetings.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission), and the Federal Advisory Committee Act (FACA), that a planning meeting of the Wyoming Advisory Committee to the Commission will convene at 11:00 a.m. (MST) on Thursday, January 19, 2017, via teleconference. The purpose of the meeting is to conduct orientation for the newly appointed Committee and review previous activities as part of planning for future activities.
Thursday, January 19, 2017, at 11:00 a.m. (MST)
To be held via teleconference:
Malee V. Craft, DFO,
Members of the public may listen to the discussion by dialing the following Conference Call Toll-Free Number: 1–877–548–7901; Conference ID: 8439608. Please be advised that before being placed into the conference call, the operator will ask callers to provide their names, their organizational affiliations (if any), and an email address (if available) prior to placing callers into the conference room. Callers can expect to incur charges for calls they initiate over wireless lines, and the Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free phone number.
Persons with hearing impairments may also follow the discussion by first calling the Federal Relay Service (FRS) at 1–800–977–8339 and provide the FRS operator with the Conference Call Toll-Free Number: 1–877–548–7901, Conference ID: 8439608. Members of the public are invited to submit written comments; the comments must be received in the regional office by Monday, February 20, 2017. Written comments may be mailed to the Rocky Mountain Regional Office, U.S. Commission on Civil Rights, 1961 Stout Street, Suite 13–201, Denver, CO 80294, faxed to (303) 866–1050, or emailed to Evelyn Bohor at
Records and documents discussed during the meeting will be available for public viewing as they become available at
• Welcome and Roll-call
Malee V. Craft, Regional Director, Rocky Mountain Regional Office (RMRO)
• Introductions
Anetra D. E. Parks, Chair, Wyoming State Advisory Committee
• Orientation and brief update on Commission and Region Activities
• Review previous activities of SAC
• Next Steps
U.S. Commission on Civil Rights.
Announcement of meeting.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission) and the Federal Advisory Committee Act that the Minnesota Advisory Committee (Committee) will hold a meeting on Monday, January 9, 2017, at 2:00 p.m. CST for the purpose of preparing for a public hearing to gather testimony regarding civil rights and policing practices in Minnesota.
The meeting will be held on Monday, January 9, 2017, at 2:00 p.m. CST.
Public Call Information: Dial: 877–440–5787, Conference ID: 1262900.
Melissa Wojnaroski, DFO, at
Members of the public can listen to the discussion. This meeting is available to the public through the following toll-free call-in number: 877–440–5787, conference ID: 1262900. Any interested member of the public may call this number and listen to the meeting. An open comment period will be provided to allow members of the public to make a statement as time allows. The conference call operator will ask callers to identify themselves, the organization they are affiliated with (if any), and an email address prior to placing callers into the conference room. Callers can expect to incur regular charges for calls they initiate over wireless lines, according to their wireless plan. The Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free telephone number. Persons with hearing impairments may also follow the proceedings by first calling the Federal Relay Service at 1–800–977–8339 and providing the Service with the conference call number and conference ID number.
Members of the public are also entitled to submit written comments; the comments must be received in the regional office within 30 days following the meeting. Written comments may be mailed to the Regional Programs Unit Office, U.S. Commission on Civil Rights, 55 W. Monroe St., Suite 410, Chicago, IL 60615. They may also be faxed to the Commission at (312) 353–8324, or emailed to Carolyn Allen at
Records generated from this meeting may be inspected and reproduced at the Regional Programs Unit Office, as they become available, both before and after the meeting. Records of the meeting will be available via
U.S. Census Bureau, Commerce.
Notice.
The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995.
To ensure consideration, written comments must be submitted on or before February 27, 2017.
Direct all written comments to Jennifer Jessup, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6616, 14th and Constitution Avenue NW., Washington, DC 20230 (or via the Internet at
Requests for additional information or copies of the information collection instrument(s) and instructions should be directed to Beth Tyszka, U.S. Census Bureau, 4600 Silver Hill Road, Room 2K281J, Washington, DC 20233, 301–763–3066 (or via the Internet at
During the years preceding the 2020 Census, the Census Bureau will pursue its commitment to reducing the costs of conducting a decennial census while maintaining our commitment to quality. In the 2018 Fiscal Year, the Census Bureau will be performing a 2018 End-to-End Census Test. This last major test before the 2020 Census has the stated purpose (1) to test and validate 2020 Census operations, procedures, systems, and field infrastructure together to ensure proper integration and conformance with functional and non-functional requirements, and (2) to produce a prototype of geographic and data products.
As in previous censuses, the Post-Enumeration Survey for the 2020 Census will be conducted to provide estimates of census net coverage error and components of census coverage (such as correct enumerations, omissions, and erroneous enumerations, including duplicates) for housing units and persons living in housing units (see Definition of Terms) for the United States (U.S.) and Puerto Rico, excluding remote Alaska. These coverage estimates provide insight into the quality and coverage of census results, which can be used to improve future censuses. Given that the Post-Enumeration Survey involves several field data collection activities on a sample basis and several matching activities between the survey and the 2020 Census during the 2020 Census timeline, these Post-Enumeration Survey operations will also require testing during the 2018 End-to-End Census Test. It is also important to note that for the Post-Enumeration Survey methods, we need to ensure independence between the survey and census operations to prevent any of the programs affecting each other results.
The Independent Listing operation, beginning in January of 2018, is the first Post-Enumeration Survey operation in the 2018 End-to-End Census Test. It will be conducted to obtain a complete inventory of all the housing unit addresses within the Post-Enumeration Survey sample of Basic Collection Units (BCUs) before the 2018 End-to-End Census Test enumeration commences.
The following objectives are crucial to a successful Independent Listing operation:
• Test the automated listing and mapping capabilities required.
• Validate the creation of the Independent Listing workload.
• Conduct a listing quality control operation during the Independent Listing operation.
The Post-Enumeration Survey Independent Listing operation for the 2018 End-to-End Census Test will be conducted in selected survey sample areas in the specified sites listed below in the U.S. (excluding remote Alaska). The primary sampling unit is a BCU. The currently determined test sites are Pierce County, Washington; Providence County, Rhode Island; and the Bluefield-Beckley-Oak Hill, West Virginia area. As in the past, the Post-Enumeration Survey operations and activities will be conducted separate from and independent of the other 2018 End-to-End Census Test operations to prevent any potential contamination of census or Post-Enumeration Survey results.
During the Independent Listing operation, field staff, referred to as listers, will canvass every street, road, or other place where people might live in their assigned BCUs and construct a list of housing units using an automated data collection instrument on a mobile device. The mobile device will contain the data collection instrument with digital maps of the area that needs to be canvassed. Listers will attempt to contact a member of each housing unit they encounter in their route. If someone answers, the lister will provide a Confidentiality Notice and ask about the address in order to collect the address information, as appropriate. To ensure all units at a multi-unit are properly listed, the lister will then ask if there are any additional vacant or occupied units in the structure or on the property. If there are additional units, the lister will collect and update that information. Multi-units are defined as apartment buildings or houses, condominiums, duplexes and triplexes, in addition to separate housing units with attached apartments, such as basement or garage, or similar apartments where people could be living on Census Day. To be classified as a separate unit, these must meet the housing unit definition requirement of having direct access from outside or through a common hallway, and must either have someone living there or be intended for occupancy, even if vacant at the time of the Independent Listing operation. Mobile homes and trailers, both in a park and not in a park, will also be listed, including any empty lots or pads in the parks in the BCU. Finally, any occupied camper, recreational vehicle, van, boat, tent or other location where people are living during the listing operation will also be listed as housing units.
If the lister does not find anyone at home after several attempts, they will try to collect the information from a proxy or update the address list as best they can by observation as a last resort. Listers will also identify the location of each housing unit by collecting map spots on digital maps (
Following the completion of listing for each BCU, the addresses are computer and clerically matched, on a flow basis, against the list of addresses considered valid for the census at the time of the matching operation for the same BCU. The addresses that remain unmatched or have unresolved address status after matching will be sent to the field during the next field operation of the Post-Enumeration Survey (Initial Housing Unit Followup) to collect additional information that might allow a resolution of any differences between the Independent Listing and census address list results. Cases will also be sent to the field to resolve potential duplicates and unresolved housing unit status. The questions and procedures to be used in the Initial Housing Unit Followup phase of the Post-Enumeration Survey in the 2018 End-to-End Census Test and all subsequent Post-Enumeration Survey phases will be published in several separate
The Independent Listing operation will be conducted using in-field person-to-person interviews on an automated instrument on a mobile device. Listers will receive work assignments grouped by geography and in close proximity to the lister's residence (whenever possible). Field staff will use the Enterprise Census and Survey Enabling (ECaSE) platform's Listing and Mapping software.
The 2018 End-to-End Census Test occurs in three sites within the continental United States: Pierce County, Washington; Providence County, Rhode Island; and the Bluefield-Beckley-Oak Hill, West Virginia area. For the Post-Enumeration Survey operations, a sample of approximately 21,000 housing units will be selected and divided evenly across the three sites included in the test; allocating 7,000 units to each of the sites. Independent Listing listers are expected to knock on every door over several spaced visits in their assigned BCUs to try to find a resident or proxy to ask about the units to be listed. The quality control operation will consist of 1,050 housing units.
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they also will become a matter of public record.
U.S. Census Bureau, Commerce.
Notice.
The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on the proposed 2017 National Survey of Children's Health, as required by the Paperwork Reduction Act of 1995.
To ensure consideration, written comments must be submitted on or before February 27, 2017.
Direct all written comments to Jennifer Jessup, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6616,
Requests for additional information or copies of the information collection instrument(s) and instructions should be directed to Jason Fields, U.S. Census Bureau, ADDP, HQ–7H153, 4600 Silver Hill Road, Washington, DC 20233–0001 (301–763–2465 or via the Internet at
Sponsored by the U.S. Department of Health and Human Services' (HHS') Health Resources Services Administration's Maternal and Child Health Bureau (HRSA MCHB), the National Survey of Children's Health (NSCH) is designed to produce data on the physical and emotional health of American children under 18 years of age. The NSCH collects information on factors related to the well-being of children, including access to health care, in-home medical care, family interactions, parental health, school and after-school experiences, and neighborhood characteristics. In 2011–2012, the NSCH also collected information to assess parents' awareness of, experience with, and interest in enrolling in Medicaid and the State Children's Health Insurance Program (CHIP).
The 2017 NSCH project includes plans to test incentive efficacy (the relative benefit for reducing survey non-response by providing $0 or a $2 incentive as a token of appreciation), contact materials, and modifications to data collection strategies based on modeled information about Internet access. Preliminary results from the 2016 NSCH production cycle (administered from June 2016–February 2017) were used to inform the decisions made regarding this second year 2017 NSCH production survey project. First, based on the results from the 2016 NSCH and available funds, a $2 incentive will be administered with the initial mailing. For initial incentives, the evaluation of results from the 2016 NSCH showed that there was a statistically significant difference in the response rates when respondents were provided an incentive compared to those who were part of the control group that did not receive an incentive. The cost of incentives is balanced against the reduction in follow-up effort and cost required to collect the required data. There was a slightly larger increase in response for households mailed a $5 incentive compared to those mailed a $2 incentive with their initial survey invite, but due to budget limitations that amount is not being considered for the 2017 NSCH. A small group (10% or less) receiving no incentive will be included to monitor the effectiveness of the incentive in the initial mailing. Second, for respondents who answer a paper screener interview and are mailed their first paper topical questionnaire, incentives will be tested for their ability to reduce bias and gain cooperation for this critical second stage of paper questionnaire data collection.
In addition to testing incentives and developing materials, the 2017 NSCH will continue to serve as a platform to evaluate different non-response follow-up mailing strategies based on a household's likelihood to respond over the Internet. For the 2016 NSCH, every household within the sample was assigned an American Community Survey (ACS) tract level Internet response likelihood flag (from 2013–2014 ACS survey years) of either medium/high (approximately 70% of the sample) or low (approximately 30% of the sample). The results from the 2015 NSCH pretest showed that Internet was the mode of choice (>70% response rate); therefore, the 2016 NSCH planned solely for a web push mode of data collection. The web push mode included a combined screener and topical web instrument invite first, followed by a paper screener questionnaire in either their second or third non-response follow-up mailing. Households assigned to the low Internet likelihood group received their first paper screener questionnaire with their second non-response follow-up mailing and households assigned to the medium/high Internet likelihood group received their first paper screener invite with their third non-response follow-up mailing. For those households with children that responded to the screener questionnaire by paper, a follow-up topical paper questionnaire was mailed to that address.
In the 2016 NSCH, we observed response rates which were lower than the pretest and lower than our conservative estimates. While sample composition is still being evaluated, it is much closer to the expected nationally representative sample than the pretest was. We were able to learn considerably more about the production use of flags identifying the likelihood of responding by Internet and their usability to target mailed paper non-response follow-up. Since the 2016 NSCH sample was more representative of the general U.S. population than the prior year's pretest, we learned that response rates were actually lower across all characteristics of the sample than originally anticipated. The indicator that we developed for differentiating households likely to respond by Internet versus paper was more successful at indicating the likelihood of overall survey response than the preference for Internet over paper (medium/high Internet group were more likely to respond in general than the low Internet group). Since there continues to be a significant potential for cost savings for web data collection over paper data collection, we are working to refine and retest an Internet response indicator for the 2017 NSCH based on the results from the 2016 data collection. The first mailing strategy is a web push. This treatment is structured to reduce cost and respondent burden, focused so that all households in this group will first be invited to complete the NSCH online, and only non-respondents or those who call in to request a hard copy will be mailed a paper questionnaire. The second mailing strategy is mixed-mode, where web invitations and paper questionnaires are mailed with their initial survey invitation. The web push data collection strategy will be applied to approximately 70% of the sample using the medium/high Internet group flag that was improved based on the results of the 2016 NSCH and updated input data, while the remaining 30% low Internet group sample cases will be included in the mixed-mode data collection plan. Based on final results of the 2016 NSCH and the finalized sampling plan for the 2017 NSCH, we expect to differentiate this mix of web push and mixed-mode mailings by sampling strata and the expected presence of children.
The second new data collection strategy being tested is a pressure-sealed reminder postcard scheduled to be mailed approximately one week after the initial survey invite mailing. This strategy is being implemented because the time gap used during the 2016 NSCH proved too long, and a significant dip in response flow was observed between mailings. The ability to send reminders enclosed with pressure-seal system allow them to contain username and password login information for the Centurion web instrument as well as specific information about the survey. The postcard will also allow for a paragraph in Spanish that will direct the respondent to the Spanish web survey or the Telephone Questionnaire Assistance (TQA) line for Spanish assistance.
Third, we will test for response improvements using different envelopes to deliver the survey materials, and the impact of adding supplemental fact
Finally, for respondents who experience technical problems with the web instrument, have questions about the survey, or need other forms of assistance, the 2017 NSCH will continue to have a TQA line available similar to what was used for 2016 NSCH. TQA staff will not only be able to answer respondent questions and concerns, but also they will have the ability to collect survey responses over the phone if the respondent calls in and would like to have interviewer assistance in completing the interview.
In both Internet and paper collection modes, the survey design for the 2017 NSCH focuses on first collecting information about the children in the household and basic special health care needs, and then selecting a child from the household for follow-up to collect additional detailed topical information. If there is more than one eligible child in a household, a single child will be selected based on a sampling algorithm that considers the age and number of children as well as the presence of children with special health care needs. We estimate that of the original 190,000 selected households, our target screener return rate of 40.5 percent will yield approximately 76,950 responses to the screener. We then estimate that 60 percent of households from the first phase of the screener will be eligible to receive a topical questionnaire (households with children), and 70 percent of these households with children will return the topical questionnaire, resulting in approximately 32,319 completed topical interviews.
Census staff have developed a plan to select a production sample of approximately 190,000 households (addresses) from a Master Address File (MAF) based sampling frame, with split panels to test mode of administration (
The Topical Completion Rate is the proportion of topical-eligible households (
The goal of the 2017 NSCH is to provide HRSA MCHB with the necessary data to support the production of national estimates yearly and state-based estimates with pooled samples on the health and well-being of children, their families, and their communities as well as estimates of the prevalence and impact of children with special health care needs.
The production 2017 NSCH plan for the web push data collection design includes 70% of the 190,000 households receiving an initial invite with instructions on how to complete an English or Spanish-language screening questionnaire via the web. Those households who decide to complete the web-based survey will be taken through the screening questionnaire to determine if they screen into one of the three topical instruments. If a household lists at least one child who is 0 to 17 years old in the screener, they are directed into a topical questionnaire immediately after the last screener question. The web push production sample of 133,000 is broken out into two incentive groups the majority, 119,700 households, receiving a $2 incentive, and a small group, 13,300 households, receiving no incentive so that the effectiveness of the incentive can be monitored. No additional incentives are planned for subsequent screener follow-up reminders or screener paper questionnaire mailings. If a household in the web push treatment group decides to complete the paper screener, they may have a chance to receive an additional topical questionnaire incentive.
The production 2017 NSCH plan for the mixed-mode data collection design includes approximately 30% of the 190,000 households receiving both an initial invite with a paper screening questionnaire and instructions on how to complete an English or Spanish language screening questionnaire via the web. Those households who decide to complete the web-based survey will follow the same screening and topical selection path as the web push. For households that choose to complete the paper screener questionnaire rather than completing the survey on the Internet, upon receipt of their completed paper screener at the Census processing center, households with eligible children will be mailed a paper topical questionnaire. The mixed-mode production sample of 57,000 will also receive incentives. Approximately 51,300 households will receive a $2 incentive with the initial mailing. As in the web push group, a small sample of approximately 5,700 households will receive no incentive so that the incentive effectiveness may be monitored. No additional incentives are planned for subsequent screener follow-up reminders or screener paper questionnaire mailings. If a household in the mixed-mode group chooses to complete the paper screener instead of completing by Internet, they may receive an additional topical questionnaire incentive.
The NSCH historically was conducted in a partnership between the Health Services Resources Administration's Maternal and Child Health Bureau and the National Center for Health Statistics. As such, the survey information was sent to respondents under letterhead from the Department of Health and Human Services and the Centers for Disease Control and Prevention, with the Director of NCHS signing the letters to the respondent.
In the 2016 NSCH, we tested both standard contact branding utilized for Census Bureau surveys, which included Census Bureau letterhead and the Census Director's signature, and an alternative sent with HRSA MCHB branding. The first follow-up mailing, sent to non-responding households approximately three-weeks after their initial invitation to respond to the survey by web, was split into two groups. The first group was sent a reminder to participate with their web login and password under standard Census Bureau letterhead. The second group was sent their reminder under a HRSA MCHB letterhead. The differential success of these reminder treatments continues to be evaluated. However, initial results lean toward the majority of respondents preferring Census Bureau letterhead. These results have aided in our decision to go with Census Bureau branding on all mailed materials.
The high-Internet group will receive two additional web survey invitation letters requesting their participation in the survey prior to receiving their first paper screener questionnaire in the third follow-up mailing. The low-Internet group will receive both a web survey invitation letter along with a mailed paper screener questionnaire with each follow-up mailing. Once a household in the high-Internet group receives a paper screener questionnaire, they will then have the option to either complete the web-based survey or complete the mailed paper screener similar to the low-Internet group. If the household chooses to complete the mailed paper questionnaire, then they would then be considered part of the mailout/mailback paper-and-pencil interviewing treatment group and would receive a paper topical questionnaire if there is at least one eligible child who is 0 to 17 years old listed on the screener. Non-response follow-up for the topical questionnaire will include three more mailings, each including the paper topical questionnaire.
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they also will become a matter of public record.
On August 19, 2016, Gulf Island Shipyards, LLC submitted a notification of proposed production activity to the Foreign-Trade Zones (FTZ) Board for its facility within FTZ 279, in Houma, Louisiana.
The notification was processed in accordance with the regulations of the FTZ Board (15 CFR part 400), including notice in the
(1) Any foreign steel mill products admitted to the zone for the Gulf Island Shipyards, LLC, activity, including plate, angles, shapes, channels, rolled steel stock, bars, pipes and tubes, not incorporated into merchandise otherwise classified, and which is used in manufacturing, shall be subject to full customs duties in accordance with applicable law, unless the Executive Secretary determines that the same item is not then being produced by a domestic steel mill.
(2) Gulf Island Shipyards, LLC, shall meet its obligation under 15 CFR 400.13(b) by annually advising the FTZ
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (“the Department”) is conducting new shipper reviews (“NSR”) of the antidumping duty order on multilayered wood flooring (“MLWF”) from the People's Republic of China (“PRC”). The review covers two exporters of subject merchandise, Jiangsu Keri Wood Co., Ltd. (“Keri Wood”) and Zhejiang Simite Wooden Co., Ltd. (“Simite Wooden”). The Department preliminarily determines that Keri Wood did not make sales of subject merchandise at less than normal value. The period of review (“POR”) is December 1, 2014, through November 30, 2015. The Department also preliminarily determines that Simite Wooden's sale to the United States is not
Effective December 28, 2016.
Maisha Cryor or Robert Bolling, AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482–5831 or (202) 482–3434, respectively.
On January 27, 2016, the Department published a notice of initiation of two new shipper reviews of the antidumping duty order on MLWF from the PRC.
The merchandise covered by the order is multilayered wood flooring, which is composed of an assembly of two or more layers or plies of wood veneers
The Department is conducting these reviews in accordance with section 751(a)(2)(B) of the Act and 19 CFR 351.214. Export prices have been calculated in accordance with section 772 of the Act. Because the PRC is a non-market economy within the meaning of section 771(18) of the Act, NV has been calculated in accordance with section 773(c) of the Act. For a full description of the methodology underlying our conclusions,
The Preliminary Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's centralized electronic service system (ACCESS). ACCESS is available to registered users at
As discussed in
The Department preliminarily determines that the following weighted-average dumping margin exists for Keri Wood for the POR from December 1, 2014, through November 30, 2015:
The Department intends to disclose the analysis performed for these preliminary results to the parties within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b). Interested parties may submit case briefs by no later than 30 days after the date of publication of these preliminary results of review.
Any interested party may request a hearing within 30 days of publication of this notice.
Unless the deadline is extended pursuant to section 751(a)(2)(B)(iii), the Department intends to issue the final results of this new shipper review, which will include the results of its analysis of all issues raised in the case and rebuttal briefs, within 90 days of publication of these preliminary results, pursuant to section 751(a)(2)(B)(iv) of the Act.
If the Department proceeds to a final rescission of Simite Wooden's NSR, the assessment rate to which Simite Wooden shipments will be subject will remain unchanged. However, for Keri Wood, and if the Department continues to find that Keri Wood did not make sales of subject merchandise at less than normal value, upon issuance of the final results, pursuant to 19 CFR 351.212(b), the Department intends to determine, and the U.S. Customs and Border Protection (“CBP”) shall assess, antidumping duties on all appropriate entries.
If the respondent's weighted average dumping margin is not zero or
For entries that were not reported in the U.S. sales data submitted by Keri Wood or Simite Wooden (if applicable), the Department intends to instruct CBP to liquidate such entries at the rate for the PRC-wide entity.
Effective upon publication of the final rescission of Simite Wooden's NSR, the Department will instruct CBP to discontinue the option of posting a bond or security in lieu of a cash deposit for entries of subject merchandise by Simite Wooden. If the Department proceeds to a final rescission of Simite Wooden's new shipper review, the cash deposit rate will continue to be the PRC-wide rate because the Department will not have determined individual dumping margins of for Simite Wooden. If the Department issues final results for Simite Wooden's NSR, the Department intends to instruct CBP to collect cash deposits, effective upon the publication of the final results, at the rates established therein.
However, for Keri Wood, the following cash deposit requirements will be effective upon publication of the final results of the new shipper reviews for shipments of the subject merchandise from the PRC entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided by section 751(a)(2)(C) of the Act: (1) For subject merchandise produced and exported by Keri Wood,, the cash deposit rate will be that rate established in the final results of this new shipper review (except, if the rate is zero or
This notice also serves as a reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during the POR. Failure to comply with this requirement could result in the Department's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
This notice serves as a reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and the terms of an APO is a violation subject to sanction.
These preliminary results are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.214 and 351.221(b)(4).
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of availability of reports; public meetings, and hearings.
The Pacific Fishery Management Council (Pacific Council) has begun its annual preseason management process for the 2017 ocean salmon fisheries. This document announces the availability of Pacific Council documents as well as the dates and locations of Pacific Council meetings and public hearings comprising the Pacific Council's complete schedule of events for determining the annual proposed and final modifications to ocean salmon fishery management measures. The agendas for the March and April 2017 Pacific Council meetings will be published in subsequent
Written comments on the salmon management alternatives must be received by 5:00 p.m. Pacific Time, March 31, 2017.
Documents will be available from, and written comments should be sent to Mr. Herb Pollard, Chair, Pacific Fishery Management Council, 7700 NE Ambassador Place, Suite 101, Portland, OR 97220–1384, telephone: (503) 820–2280 (voice) or (503) 820–2299 (fax). Comments can also be submitted via email at
Ms. Robin Ehlke, telephone: (503) 820–2280.
February 17, 2017: “Review of 2016 Ocean Salmon Fisheries, Stock Assessment and Fishery Evaluation Document for the Pacific Coast Salmon Fishery Management Plan” is scheduled to be posted on the Pacific Council Web site at
March 3, 2017: “Preseason Report I—Stock Abundance Analysis and Environmental Assessment Part 1 for 2017 Ocean Salmon Fishery Regulations” is scheduled to be posted on the Pacific Council Web site at
March 22, 2017: “Preseason Report II—Proposed Alternatives and Environmental Assessment Part 2 for 2017 Ocean Salmon Fishery Regulations” and public hearing schedule is scheduled to be posted on the Pacific Council Web site at
April 21, 2017: “Preseason Report III—Council-Adopted Management Measures and Environmental Assessment Part 3 for 2017 Ocean Salmon Fishery Regulations” scheduled to be posted on the Pacific Council Web site at
May 1, 2016: Federal regulations for 2017 ocean salmon regulations will be published in the
January 17–20, 2017: The Salmon Technical Team (STT) will meet at the Pacific Council office in a public work session to draft “Review of 2016 Ocean Salmon Fisheries” and to consider any other estimation or methodology issues pertinent to the 2017 ocean salmon fisheries.
February 21–24, 2017: The STT will meet at the Pacific Council office in a public work session to draft “Preseason Report I—Stock Abundance Analysis and Environmental Assessment Part 1 for 2017 Ocean Salmon Fishery Regulations” and to consider any other estimation or methodology issues pertinent to the 2017 ocean salmon fisheries.
March 27–28, 2017: Public hearings will be held to receive comments on the proposed ocean salmon fishery management alternatives adopted by the Pacific Council. Written comments received at the public hearings and a summary of oral comments at the hearings will be provided to the Pacific Council at its April meeting.
All public hearings begin at 7 p.m. at the following locations:
March 27, 2017: Chateau Westport, Beach Room, 710 West Hancock, Westport, WA 98595, telephone: (360) 268–9101.
March 27, 2017: Red Lion Hotel, South Umpqua Room, 1313 North Bayshore Drive, Coos Bay, OR 97420, telephone: (541) 267–4141.
March 28, 2017: City of Fort Bragg. Town Hall, 363 N. Main Street, Fort Bragg, CA 95437, telephone: (707) 961–2823.
Although nonemergency issues not contained in the STT meeting agendas may come before the STT for discussion, those issues may not be the subject of formal STT action during these meetings. STT action will be restricted to those issues specifically listed in this document and to any issues arising after publication of this document requiring emergency action under Section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the STT's intent to take final action to address the emergency.
These public meetings and hearings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Mr. Kris Kleinschmidt at (503) 820–2280 (voice), or (503) 820–2299 (fax) at least 10 business days prior to the meeting date.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The New England Fishery Management Council (Council) is scheduling a public meeting of its Groundfish Advisory Panel to consider actions affecting New England fisheries in the exclusive economic zone (EEZ). Recommendations from this group will be brought to the full Council for formal consideration and action, if appropriate.
This meeting will be held on Wednesday, January 18, 2017 at 8:30 a.m. to 12:30 p.m.
The meeting will be held at the Hilton Garden Inn, 5 Park Street, Freeport, ME 04032; telephone: (207) 865–1433.
Thomas A. Nies, Executive Director, New England Fishery Management Council; telephone: (978) 465–0492.
The Advisory Panel will discuss Framework Adjustment 56 pertaining to witch flounder specifications only. They will receive an overview of the recent benchmark assessment, Plan Development Team analysis, and Scientific and Statistical Committee recommendations for witch flounder. They will make recommendations to the Groundfish Committee on witch flounder specifications for Fishing Years (FY) 2017–FY 2019. The Panel also plans to receive an overview and discuss the Council's 2017 Groundfish Priorities and make recommendations to the Groundfish Committee, as appropriate. Other business will be discussed as necessary.
Although non-emergency issues not contained in this agenda may come before this group for discussion, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Act, provided the public has been notified of the Council's intent to take final action to address the emergency.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Thomas A. Nies, Executive Director, at (978) 465–0492, at least 5 days prior to the meeting date.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The New England Fishery Management Council (Council) is scheduling a public meeting of its Groundfish Committee to consider actions affecting New England fisheries in the exclusive economic zone (EEZ). Recommendations from this group will be brought to the full Council for formal consideration and action, if appropriate.
This meeting will be held on Thursday, January 19, 2017 at 9 a.m.
The meeting will be held at the Hilton Garden Inn, 5 Park Street, Freeport, ME 04032; telephone: (207) 865–1433.
Thomas A. Nies, Executive Director, New England Fishery Management Council; telephone: (978) 465–0492.
The Groundfish Committee will discuss Framework Adjustment 56 pertaining to witch flounder specifications only. They will receive an overview of the recent benchmark assessment, Plan Development Team analysis, Scientific and Statistical Committee, and Groundfish Advisory Panel recommendations for witch flounder. The Committee will make recommendations to the Council on witch flounder specifications for FY 2017–FY 2019. The Committee also plans to discuss FY 2017 Recreational Measures for Gulf of Maine cod and haddock. They will receive an overview of recent recreational catch and effort data and results from the bioeconomic model to evaluate options for management measures in FY 2017. They will receive Recreational Advisory Panel recommendations on FY 2017 recreational measures for Gulf of Maine cod and haddock. They will make recommendations to the Council on FY 2017 recreational measures for Gulf of Maine cod and haddock. The Committee also plans to receive an overview and discuss the Council's 2017 Groundfish Priorities and make recommendations to the Groundfish Committee, as appropriate. Other business will be discussed as necessary.
Although non-emergency issues not contained in this agenda may come before this group for discussion, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Act, provided the public has been notified of the Council's intent to take final action to address the emergency.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Thomas A. Nies, Executive Director, at (978) 465–0492, at least 5 days prior to the meeting date.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of open public meeting.
This notice sets forth the proposed schedule and agenda of a forthcoming meeting of the Marine Fisheries Advisory Committee's (MAFAC) Columbia Basin Partnership Task Force. The Task Force will discuss the issues outlined under
The meeting will be held January 24, 2017, from 1:00 p.m. to 5:00 p.m., and January 25, 2017, from 8:00 a.m. to 4:00 p.m.
The meeting will be held at the Port of Portland Headquarters, Chinook Room, 8th Floor, 7200 NE Airport Way, Portland, OR 97218.
Katherine Cheney; NOAA Fisheries West Coast Region; (503) 231–6730; email:
Notice is hereby given of a meeting of MAFAC's Columbia Basin Partnership Task Force (CBP Task Force). The MAFAC was established by the Secretary of Commerce (Secretary) and since 1971, advises the Secretary on all living marine resource matters that are the responsibility of the Department of Commerce. The complete MAFAC charter and summaries of prior MAFAC meetings are located online at
This meeting time and agenda are subject to change.
The meeting is convened to provide an overview of the CBP Task Force and discuss a collective approach to the work ahead. The meeting is open to the public as observers, and a public comment period will be provided on January 25, 2017, from 1:30–2:00 p.m. to accept public input, limited to the time available.
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Katherine Cheney; 503–231–6730 by January 10, 2017.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The New England Fishery Management Council (Council) is scheduling a public meeting of its Herring
This meeting will be held on Wednesday, January 11, 2017 at 9 a.m.
The meeting will be held at the Four Points by Sheraton, 1 Audubon Road, Wakefield, MA 01880; telephone: (781) 245–9300.
Thomas A. Nies, Executive Director, New England Fishery Management Council; telephone: (978) 465–0492.
The Herring Committee will review alternatives and analyses prepared for Framework Adjustment 5 to the Atlantic Herring Fishery Management Plan (FMP), an action considering modification of accountability measures (AMs) that trigger if the sub-ACL of Georges Bank haddock is exceeded by the midwater trawl herring fishery. The committee may recommend preferred alternatives for the Council to consider for final action. The committee will review preliminary outcomes from the recent workshop held in December on Management Strategy Evaluation of Atlantic Herring Acceptable Biological Catch control rules being considered in Amendment 8 to the Atlantic Herring FMP. The committee may recommend a range of alternatives for the Committee to consider including in Amendment 8 related to harvest control rule alternatives. The committee will also review public comments on the herring related measures being considered in the Omnibus Industry Funded Monitoring (IFM) Amendment. The committee may recommend preferred alternatives for the Committee to consider as well as address other business, as necessary.
Although non-emergency issues not contained in this agenda may come before this group for discussion, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Act, provided the public has been notified of the Council's intent to take final action to address the emergency.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Thomas A. Nies, Executive Director, at (978) 465–0492, at least 5 days prior to the meeting date.
16 U.S.C. 1801
Bureau of Consumer Financial Protection.
Notice.
Pursuant to the authorities given to the Director of the Consumer Financial Protection Bureau (Bureau) under the Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) Director Richard Cordray invites the public to apply for membership for appointment to its Consumer Advisory Board (Board), Community Bank Advisory Council, and Credit Union Advisory Council (collectively, Advisory Councils). Membership of the Board and Councils includes representatives of consumers, communities, the financial services industry and academics. Appointments to the Board are typically for three years and appointments to the Councils are typically for two years. However, the Director may amend the respective Board and Council charters from time to time during the charter terms, as the Director deems necessary to accomplish the purpose of the Board and Councils. The Bureau expects to announce the selection of new members in August 2017.
The application will be available on January 16, 2017 here:
If electronic submission is not feasible, the completed application packet can be mailed to Julian Alcazar, Outreach and Engagement Specialist, Consumer Financial Protection Bureau, 1700 G Street NW., Washington, DC 20552.
All applications for membership on the Board and Councils should be sent:
•
• Julian Alcazar, Outreach and Engagement Specialist, Consumer Financial Protection Bureau, 1700 G Street NW., Washington, DC 20552. Submissions must be postmarked on or before March 1, 2017.
•
Requests for additional information should be directed to Julian Alcazar, Outreach and Engagement Specialist, Consumer Financial Protection Bureau, (202) 435–9885.
The Bureau is charged with regulating “the offering and provision of consumer financial products or services under the Federal consumer financial laws,” so as to ensure that “all consumers have access to markets for consumer financial products and services and that markets for consumer financial products and services are fair, transparent, and competitive.” Pursuant to section 1021(c) of the Wall Street Reform and Consumer Protection Act, Public Law 111–203, Dodd-Frank Act, the Bureau's primary functions are:
1. Conducting financial education programs;
2. Collecting, investigating, and responding to consumer complaints;
3. Collecting, researching, monitoring, and publishing information relevant to the function of markets for consumer financial products and services to
4. Supervising persons covered under the Dodd-Frank Act for compliance with Federal consumer financial law, and taking appropriate enforcement action to address violations of Federal consumer financial law;
5. Issuing rules, orders, and guidance implementing Federal consumer financial law; and
6. Performing such support activities as may be needed or useful to facilitate the other functions of the Bureau.
As described in more detail below, section 1014 of the Dodd-Frank Act calls for the Director of the Bureau to establish a Consumer Advisory Board to advise and consult with the Bureau regarding its functions, and to provide information on emerging trends and practices in the consumer financial markets.
Pursuant to section 1014(b) of the Dodd-Frank Act, in appointing members to the Board, “the Director shall seek to assemble experts in consumer protection, financial services, community development, fair lending and civil rights, and consumer financial products or services and representatives of depository institutions that primarily serve underserved communities, and representatives of communities that have been significantly impacted by higher-priced mortgage loans, and seek representation of the interests of covered persons and consumers, without regard to party affiliation.” The determinants of “expertise” shall depend, in part, on the constituency, interests, or industry sector the nominee seeks to represent, and where appropriate, shall include significant experience as a direct service provider to consumers.
Pursuant to section 5 of the Community Bank Advisory Council Charter, in appointing members to the Council the Director shall seek to assemble experts in consumer protection, financial services, community development, fair lending and civil rights, and consumer financial products or services and representatives of community banks that primarily serve underserved communities, and representatives of communities that have been significantly impacted by higher-priced mortgage loans, and shall strive to have diversity in terms of points of view. Only current bank or thrift employees (CEOs, compliance officers, government relations officials, etc.) will be considered for membership. Membership is limited to employees of banks and thrifts with total assets of $10 billion or less that are not affiliates of depository institutions or credit unions with total assets of more than $10 billion.
Pursuant to section 12 of the Credit Union Advisory Council Charter, in appointing members to the Council the Director shall seek to assemble experts in consumer protection, financial services, community development, fair lending and civil rights, and consumer financial products or services and representatives of credit unions that primarily serve underserved communities, and representatives of communities that have been significantly impacted by higher-priced mortgage loans, and shall strive to have diversity in terms of points of view. Only current credit union employees (CEOs, compliance officers, government relations officials, etc.) will be considered for membership. Membership is limited to employees of credit unions with total assets of $10 billion or less that are not affiliates of depository institutions or credit unions with total assets of more than $10 billion.
The Bureau has a special interest in ensuring that the perspectives of women and men, all racial and ethnic groups, and individuals with disabilities are adequately represented on the Board and Councils, and therefore, encourages applications from qualified candidates from these groups. The Bureau also has a special interest in establishing a Board that is represented by a diversity of viewpoints and constituencies, and therefore encourages applications from qualified candidates who:
1. Represent the United States' geographic diversity; and
2. Represent the interests of special populations identified in the Dodd-Frank Act, including service members, older Americans, students, and traditionally underserved consumers and communities.
Any interested person may apply for membership on the Board or Council.
A complete application packet must include:
1. A recommendation letter from a third party describing the applicant's interests and qualifications to serve on the Board or Council;
2. A complete résumé or curriculum vitae for the applicant; and
3. A one-page cover letter, which summarizes the applicant's expertise and provides reason(s) why he or she would like to join the Board or Council.
4. A complete application.
To evaluate potential sources of conflicts of interest, the Bureau will ask potential candidates to provide information related to financial holdings and/or professional affiliations, and to allow the Bureau to perform a background check. The Bureau will not review applications and will not answer questions from internal or external parties regarding applications until the application period has closed.
The Bureau will not entertain applications of federally registered lobbyists for a position on the Board and Councils.
Only complete applications will be given consideration for review of membership on the Board and Councils.
Court Services and Offender Supervision Agency for the District of Columbia.
Notice.
Notice is hereby given of the appointment of new members to the Court Services and Offender Supervision Agency (CSOSA) and the Pretrial Services Agency for the District of Columbia (PSA), Senior Executive Service Performance Review Board. PSA is an independent agency within CSOSA. The Performance Review Board assures consistency, stability, and objectivity in the appraisal process.
William Layne, Assistant Director Human Capital Planning and Executive Resources, Court Services and Offender Supervision Agency, 800 North Capitol Street NW., Suite 700, Washington, DC 20005, (202) 220–5637.
Section 4314(c)(1) through (5) of Title 5 of the United States Code, requires each agency to establish, in accordance with regulations prescribed by the Office of Personnel Management, one or more SES performance review boards. Section 4314(c)(4) of Title 5 requires that notice of appointment of board members be published in the
Section 4314(c)(1) through (5) of Title 5, United States Code.
Assistant Secretary of the Army for Financial Management & Comptroller, DoD.
Notice.
In compliance with the
Consideration will be given to all comments received by February 27, 2017.
You may submit comments, identified by docket number and title, by any of the following methods:
•
•
Any associated form(s) for this collection may be located within this same electronic docket and downloaded for review/testing. Follow the instructions at
To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to the ASA (FM&C), Attn: Mr. Roger A. Pillar, 2521 S. Clark St., Suite 7159, Arlington, VA 22202, or call Mr. Roger A. Pillar, GFEBS Functional Director at 703–545–8855.
SUS leverages a DoD portal developed by WAWF known as “OneStop” that facilitates WAWF's interaction with ERPs. Respondents are vendors that continue to utilize WAWF as the mandated single point of entry and for viewing historical records, but are routed seamlessly to the SUS module for invoice data entry referencing the ERP contract data.
White House Communications Agency (WHCA), DISA, DoD.
Notice.
In compliance with the
Consideration will be given to all comments received by February 27, 2017.
You may submit comments, identified by docket number and title, by any of the following methods:
•
•
To request more information on this proposed information collection or to obtain a copy of the proposal and associated collection instruments, please write to the White House Communications Agency (WHCA/WACC/ESB), ATTN: Kevin A. Gifford, 2743 Defense Boulevard, SW Washington, DC 20373–5815.
Respondents are DoD contractors, retired military members who have departed the agency, and agency visitors. The data collected is used for security background checks, training records, and also to encompass the historical travel records of members of the agency. This data collection is essential in maintaining the integrity of the agency's personnel, training, and travel programs.
Office of Innovation and Improvement, Department of Education.
Notice; correction.
On December 13, 2016, we published in the
Effective December 28, 2016.
In FR Doc. No. 2016–29907, in the
(a) On page 89913, in the left column under the heading
The revisions read as follows:
(b) On page 89918, in the right column under the heading
The revision reads as follows:
Points awarded under these selection criteria are in addition to any points an applicant earns under the competitive preference priorities in this notice. The maximum score that an application may receive under the competitive preference priorities and the selection criteria is 111 points.
Jennifer Todd, U.S. Department of Education, 400 Maryland Avenue SW., Room 4W201, Washington, DC 20202–5970. Telephone: (202) 453–7200 or by email:
If you use a telecommunications device for the deaf or a text telephone, call the Federal Relay Service, toll free, at 1–800–877–8339.
You may also access documents of the Department published in the
Office of Electricity Delivery and Energy Reliability, DOE.
Notice of filing.
On December 6, 2016, Moxie Freedom LLC, as owner and operator of a new baseload electric generating powerplant, submitted a coal capability self-certification to the Department of Energy (DOE) pursuant to § 201(d) of the Powerplant and Industrial Fuel Use Act of 1978 (FUA), as amended, and DOE regulations in 10 CFR 501.60, 61. The FUA and regulations thereunder require DOE to publish a notice of filing of self-certification in the
Copies of coal capability self-certification filings are available for public inspection, upon request, in the Office of Electricity Delivery and Energy Reliability, Mail Code OE–20, Room 8G–024, Forrestal Building, 1000 Independence Avenue SW., Washington, DC 20585.
Christopher Lawrence at (202) 586–5260.
Title II of FUA, as amended (42 U.S.C. 8301
The following owner of a proposed new baseload electric generating powerplant has filed a self-certification of coal-capability with DOE pursuant to FUA section 201(d) and in accordance with DOE regulations in 10 CFR 501.60, 61:
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 Idle Line 1 Abandonment Project involving the abandonment of pipeline facilities by Texas Eastern Transmission, LP (Texas Eastern) in Fayette, Pickaway, Fairfield, Perry, Muskingum, Noble, and Monroe Counties, Ohio; Marshall County, West Virginia; and Greene County, Pennsylvania. 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 January 20, 2017.
If you sent comments on this project to the Commission before the opening of this docket on October 28, 2016, you will need to file those comments in Docket No. CP17–6–000 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 proposed 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 agreement to conduct the abandonment activities. Texas Eastern provided landowners with a fact sheet prepared by the FERC entitled “An Interstate Natural Gas Facility On My Land? What Do I Need To Know?” This fact sheet addresses a number of typically asked questions, including the use of eminent domain and how to participate in the Commission's proceedings. It is also 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 (CP17–6–000) with your submission: Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 888 First Street NE., Room 1A, Washington, DC 20426.
Texas Eastern proposes to abandon in place and by removal approximately 165 miles of existing, idle Line 1 pipeline that runs from Fayette County, Ohio, to Greene County, Pennsylvania. Specifically, Texas Eastern is proposing to abandon portions of the Line 1 pipeline that were placed into idle service in 1989 including three segments of 24-inch pipeline, associated lateral lines 10–L and 10–M, metering and regulating facilities 70054 and 70005, and other related aboveground facilities.
The project would eliminate the need for future operating and maintenance expenditures on facilities that have been removed from service for many years. Texas Eastern has stated that abandonment of these idle facilities would not impact certificated parameters on Texas Eastern's system or affect service to existing customers of Texas Eastern. Texas Eastern has also stated that it has no current or reasonably foreseeable plans to use the Line 1 pipeline within the project areas following abandonment.
Texas Eastern would abandon in place the following facilities:
• 5.03 miles of Texas Eastern's 24-inch-diameter Line 1 from milepost 837.05 in Fayette County, OH to milepost 842.08 in Pickaway County, OH (Segment 1);
• 155.37 miles of Texas Eastern's 24-inch-diameter Line 1 from milepost 848.33 in Pickaway County, OH to milepost 1003.7 in Green County, PA (Segment 2);
• 5.48 miles of Texas Eastern's 24-inch-diameter Line 1 from milepost 1004.35 to 1009.83 in Greene County, PA (Segment 3);
• 0.5 miles of Texas Eastern's 8-inch Line 10–M in Marshall County, WV;
• 0.07 miles of Texas Eastern's 4.5-inch Line 10–L in Greene County, PA; and
• Metering and Regulation facilities 70054 and 70005, and related launcher/receiver barrels, mainline valves, and other appurtenances would also be removed.
The general location of the Project is shown in appendix 1.
Project construction activities would result in temporary disturbance of about 130 acres of land. This would consist of 40.4 acres associated with activities related to abandonment in place, 71.3 acres for activities associated with abandonment by removal, and 9.7 acres associated with use of a construction wareyard. Land disturbed by abandonment activities would primarily occur within Texas Eastern's existing, previously disturbed right-of-way.
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 abandonment of the proposed project under these general headings:
• Geology and soils;
• land use;
• water resources, fisheries, and wetlands;
• cultural resources;
• vegetation and wildlife;
• endangered and threatened species;
• public safety; and
• cumulative impacts.
We will also evaluate reasonable alternatives to the proposed project or portions of the project, and make recommendations on how to lessen or avoid impacts on the various resource areas.
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 making 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 of 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) (SHPO), 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.
We have already identified some issues that we think deserve attention based on a preliminary review of the
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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 proposed 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).
In addition to involvement in the EA scoping process, 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. Instructions for becoming an intervenor are in the “Document-less Intervention Guide” under the “e-filing” link on the Commission's Web site. 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 at
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, any public sessions or site visits will be posted on the Commission's calendar located at
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, interventions and protests is 30 days from the issuance date of this notice by the Commission. The Commission strongly encourages electronic filing. Please file motions to intervene, protests and comments using the Commission's eFiling system at
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m.
n. Individuals desiring to be included on the Commission's mailing list should so indicate by writing to the Secretary of the Commission.
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q. Agency Comments—Federal, state, and local agencies are invited to file comments on the described proceeding. If any agency does not file comments within the time specified for filing comments, it will be presumed to have no comments.
Take notice that on December 21, 2016, the City of Azusa, California submitted its tariff filing: City of Azusa, California 2017 Transmission Revenue Balancing Account Adjustment/Existing Transmission Contracts Update to be effective 1/1/2017.
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. Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant and all the parties in this proceeding.
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
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
On December 21, 2016, the Commission issued an order in Docket No. EL17–19–000, pursuant to section 206 of the Federal Power Act (FPA), 16 U.S.C. 824e (2012), instituting an investigation into whether the rates for Reactive Supply and Voltage Control Service (Reactive Service) of FPL Energy MH50, L.P. may be unjust and unreasonable.
The refund effective date in Docket No. EL17–19–000, established pursuant to section 206(b) of the FPA, will be the date of publication of this notice in the
Any interested person desiring to be heard in Docket No. EL17–19–000 must file a notice of intervention or motion to intervene, as appropriate, with the
Take notice that on December 13, 2016, Kinder Morgan Louisiana Pipeline, LLC (KMLP), 3250 Lacey Road, Suite 700, Downers Grove, IL 60515, filed an application under sections 7(b) and 7(c) of the Natural Gas Act (NGA), and Part 157 of the Commission's regulations, requesting authorization to (1) construct and operate the system modifications necessary to enable KMLP to offer 600,000 dekatherms per day (Dth/d) of firm transportation service utilizing a north-to-south path on KMLP's system; and (2) for permission and approval to abandon and remove facilities at an existing meter station and the replacement thereof with a larger meter station on the same site.
The proposed facilities will provide for gas flow on a north-to-south path on KMLP's system to deliver natural gas from existing pipeline interconnects to the natural gas liquefaction and LNG export facility currently being expanded and operated by Sabine Pass Liquefaction, LLC (SPL) at Sabine Pass in Cameron Parish Louisiana, all as more fully set forth in the application which is on file with the Commission and open for public inspection.
The filing may also be viewed on the Web at
Any questions regarding the proposed project should be directed to Bruce H. Newsome, Vice President, Kinder Morgan Louisiana Pipeline Company, LLC, 3250 Lacey Road, Suite 700, Downers Grove, IL 60515, or by calling (630) 725–3070 (telephone) or email at
Pursuant to Section 157.9 of the Commission's rules, 18 CFR 157.9, within 90 days of this Notice the Commission staff will either: Complete its environmental assessment (EA) and place it into the Commission's public record (eLibrary) for this proceeding; or issue a Notice of Schedule for Environmental Review. If a Notice of Schedule for Environmental Review is issued, it will indicate, among other milestones, the anticipated date for the Commission staff's issuance of the final environmental impact statement (FEIS) or EA for this proposal. The filing of the EA in the Commission's public record for this proceeding or the issuance of a Notice of Schedule for Environmental Review will serve to notify federal and state agencies of the timing for the completion of all necessary reviews, and the subsequent need to complete all federal authorizations within 90 days of the date of issuance of the Commission staff's FEIS or EA.
There are two ways to become involved in the Commission's review of this project. First, any person wishing to obtain legal status by becoming a party to the proceedings for this project should, on or before the comment date stated below, file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, a motion to intervene in accordance with the requirements of the Commission's Rules of Practice and Procedure (18 CFR 385.214 or 385.211) and the Regulations under the NGA (18 CFR 157.10). A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies of all documents filed by the applicant and by all other parties. A party must submit 7 copies of filings made with the Commission and must mail a copy to the applicant and to every other party in the proceeding. Only parties to the proceeding can ask for court review of Commission orders in the proceeding.
However, a person does not have to intervene in order to have comments considered. The second way to participate is by filing with the Secretary of the Commission, as soon as possible, an original and two copies of comments in support of or in opposition to this project. The Commission will consider these comments in determining the appropriate action to be taken, but the filing of a comment alone will not serve to make the filer a party to the proceeding. The Commission's rules require that persons filing comments in opposition to the project provide copies of their protests only to the party or parties directly involved in the protest.
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commenters will be placed on the Commission's environmental mailing list, will receive copies of the environmental documents, and will be notified of meetings associated with the Commission's environmental review process. Environmental commenters will not be required to serve copies of filed documents on all other parties. However, the non-party commenters will not receive copies of all documents filed by other parties or issued by the Commission (except for the mailing of environmental documents issued by the Commission) and will not have the right to seek court review of the Commission's final order.
The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the “eFiling” link at
Take notice that during the month of November 2016, the status of the above-
On December 20, 2016, Salt Lake City Corporation filed a notice of intent to construct a qualifying conduit hydropower facility, pursuant to section 30 of the Federal Power Act (FPA), as amended by section 4 of the Hydropower Regulatory Efficiency Act of 2013 (HREA). The proposed 10th East 500 South PRV Station Hydropower Project would have an installed capacity of 225 kilowatts (kW) and would be located on Salt Lake City Corporation's existing 36-inch-diameter water distribution pipe, in a new pressure reducing valve (PRV) station. The project would be located in Salt Lake City, in Salt Lake County, Utah.
A qualifying conduit hydropower facility is one that is determined or deemed to meet all of the criteria shown in the table below.
The deadline for filing motions to intervene is 30 days from the issuance date of this notice.
Anyone may submit comments or a motion to intervene in accordance with the requirements of Rules of Practice and Procedure, 18 CFR 385.210 and 385.214. Any motions to intervene must be received on or before the specified deadline date for the particular proceeding.
The Commission strongly encourages electronic filing. Please file motions to intervene and comments using the Commission's eFiling system at
Federal Energy Regulatory Commission, Department of Energy.
Comment request.
In compliance with the requirements of the Paperwork Reduction Act of 1995, the Federal Energy Regulatory Collection (Commission or FERC) is submitting FERC–725A(1B) (Mandatory Reliability Standards for the Bulk Power System) and FERC–725AZ (Mandatory Reliability Standards: IRO Reliability Standards), in Docket No. RD16–6 to the Office of Management and Budget (OMB) for review of the information collection requirements. Any interested person may file comments directly with OMB and should address a copy of those comments to the Commission as explained below. The Commission issued a Notice in the
Comments on the collection of information are due by January 27, 2017.
Comments filed with OMB, identified by RD16–6–000, FERC–725Z (OMB Control No. 1902–0276), and FERC–725A(1B) (OMB Control No. TBD), 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. RD16–6, by either of the following methods:
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Ellen Brown may be reached by email at
44 U.S.C. 3507(a)(1)(D).
FERC–725A(1B) address situational awareness objectives by providing for operator awareness when key alarming tools are not performing as intended. These collections will improve real-time situational awareness capabilities and enhance reliable operations by requiring reliability coordinators, transmission operators, and balancing authorities to provide operators with an improved awareness of system conditions analysis capabilities, including alarm availability, so that operators may take appropriate steps to ensure reliability. These functions include planning, operations, data sharing, monitoring, and analysis.
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Take notice that on December 20, 2016, the City of Colton, California submitted its tariff filing: City of Colton, California 2017 Transmission Revenue Balancing Account Adjustment/Existing Transmission Contracts Update to be effective 1/1/2017.
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. Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant and all the parties in this proceeding.
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
Environmental Protection Agency (EPA).
Notice of availability.
This notice announces applicability determinations, alternative monitoring decisions, and regulatory interpretations that EPA has made under the New Source Performance Standards (NSPS); the National Emission Standards for Hazardous Air Pollutants (NESHAP); and/or the Stratospheric Ozone Protection Program.
An electronic copy of each complete document posted on the Applicability Determination Index (ADI) data system is available on the Internet through the Resources and Guidance Documents for Compliance Assistance page of the Clean Air Act Compliance Monitoring Web site under “Air” at:
The General Provisions of the NSPS in 40 Code of Federal Regulations (CFR) part 60 and the General Provisions of the NESHAP in 40 CFR part 61 provide that a source owner or operator may request a determination of whether certain intended actions constitute the commencement of construction, reconstruction, or modification. The EPA's written responses to these inquiries are commonly referred to as applicability determinations. See 40 CFR 60.5 and 61.06. Although the NESHAP part 63 regulations [which include Maximum Achievable Control Technology (MACT) standards and/or Generally Available Control Technology (GACT) standards] and Section 111(d) of the Clean Air Act (CAA) contain no specific regulatory provision providing that sources may request applicability determinations, the EPA also responds to written inquiries regarding applicability for the part 63 and Section 111(d) programs. The NSPS and NESHAP also allow sources to seek permission to use monitoring or recordkeeping that is different from the promulgated requirements. See 40 CFR 60.13(i), 61.14(g), 63.8(b)(1), 63.8(f), and 63.10(f). The EPA's written responses to these inquiries are commonly referred to as alternative monitoring decisions. Furthermore, the EPA responds to written inquiries about the broad range of NSPS and NESHAP regulatory requirements as they pertain to a whole source category. These inquiries may pertain, for example, to the type of sources to which the regulation applies, or to the testing, monitoring, recordkeeping, or reporting requirements contained in the regulation. The EPA's written responses to these inquiries are commonly referred to as regulatory interpretations.
The EPA currently compiles EPA-issued NSPS and NESHAP applicability determinations, alternative monitoring decisions, and regulatory interpretations, and posts them to the ADI on a regular basis. In addition, the ADI contains EPA-issued responses to requests pursuant to the stratospheric ozone regulations, contained in 40 CFR part 82. The ADI is a data system on the Internet with over three thousand EPA letters and memoranda pertaining to the applicability, monitoring, recordkeeping, and reporting requirements of the NSPS, NESHAP, and stratospheric ozone regulations. Users can search for letters and memoranda by date, office of issuance, subpart, citation, control number, or by string word searches.
Today's notice comprises a summary of 30 such documents added to the ADI on December 6, 2016. This notice lists the subject and header of each letter and memorandum, as well as a brief abstract of the letter or memorandum. Complete copies of these documents may be obtained from the ADI on the Internet through the Resources and Guidance Documents for Compliance Assistance page of the Clean Air Act Compliance Monitoring Web site under “Air” at:
The following table identifies the control number for each document posted on the ADI data system on December 6, 2016; the applicable category; the section(s) and/or subpart(s) of 40 CFR part 60, 61, or 63 (as applicable) addressed in the document; and the title of the document, which provides a brief description of the subject matter.
We have also included an abstract of each document identified with its control number after the table. These abstracts are provided solely to alert the public to possible items of interest and are not intended as substitutes for the full text of the documents. This notice does not change the status of any document with respect to whether it is “of nationwide scope or effect” for purposes of CAA section 307(b)(1) For example, this notice does not convert an applicability determination for a particular source into a nationwide rule. Neither does it purport to make a previously non-binding document binding.
Q: Will the EPA grant a waiver to the large municipal waste combustor (MWC) at Covanta Marion, Inc. (CMI) in Brooks, Oregon, pursuant to its authority under 40 CFR 60.53b(b)(2) for the combustor unit load level limitations, under 40 CFR 60.53b(c)(1) for the particulate matter control device inlet temperature, and under 40 CFR 60.58b(m)(2)(ii) for the average mass carbon feed rate, for the two weeks preceding, and during the annual dioxin/furan and mercury performance tests for the purpose of evaluating system performance?
A: Yes. For the purpose of evaluating system performance, the EPA agrees to waive the following operational limits imposed to large municipal waste combustors under the Federal Plan at subpart FFF, part 62, pursuant to its authority under 40 CFR 60.53b(b)(2): (1) MWC load level (steam generation rate), (2) flue gas temperatures at the inlet to the particulate matter control device, and (3) activated carbon injection rate (mass carbon feed rate). These requirements are waived for the two week period preceding, and during the annual dioxin/furan and mercury performance test which is scheduled to take place during the week of June 9, 2014 at the CMI MWC. This waiver is limited to the time frame and operational limits specifically identified above, and all otherwise applicable requirements continue to be in effect during this period.
Q: May the Eielson Air Force Base (EAFB) in Alaska have an extension to the required initial performance test deadlines for a recently constructed Boiler 6A subject to 40 CFR part 60 subpart Db and 40 CFR part 63 subpart JJJJJJ under the force majeure provisions in 40 CFR 60.2, 60.8(a)(1) through (4); 63.2, and 60.7(a)(4)(i) through (iii)?
A: No. The EPA determines that the event described in the request does not meet the definition of a “force majeure event”. The EPA cannot conclude that the delay in full operation of B6A in sufficient time to conduct the required initial performance tests was beyond the control of the EAFB; therefore, the EPA is denying the EAFB's request to extend the April 26, 2015, deadline for conducting the initial performance testing of B6A.
Q: Will the EPA approve alternatives to the quality assurance testing requirements, required by 40 CFR 60.107a(e)(1), for the total reduced sulfur (TRS) flare analyzer at the CHS Inc. refinery in Laurel, Montana?
A: Yes. The EPA conditionally approves the alternative quality assurance testing requirements for the high range TRS portion of the analyzer under 40 CFR 60.l3(i). The conditions for approval of the AMP request to address safety hazards concerns are established in the EPA response letter, which include a laboratory demonstration of linearity for the analyzer.
Q1: Does the installation of the bi-fuel kit on new U.S. EPA-certified units at engines at the USR Corporation in Virginia subject to NSPS subpart IIII affect the manufacturer's certification?
A1: No. The EPA determines that the engine is no longer certified after the conversion and the owner/operator must follow the requirements listed under 40 CFR 60.4211(g) to show compliance with emission standards in NSPS subpart IIII.
Q2: Does the installation and operation of the bi-fuel kit on a certified engine constitute tampering under the Clean Air Act, or is this action prohibited by other provisions of the Clean Air Act?
A2: No. The EPA determines this action is not prohibited for certified stationary compression ignition internal combustion engines (CI ICE), but after the installation and operation of the kit, the unit is no longer certified. The owner/operator must show compliance with emission standards by following requirements listed in 40 CFR 60.4211(g).
Q3: If a manufacturer's certification is affected for an engine, what specific requirements must be performed to ensure compliance with emission standards under NSPS subpart IIII? URS requests a determination as to the testing procedures required for a facility with a fleet of identical engines which have been installed with bi-fuel units. The engines are identical in size, horsepower, model year, etc. The test would determine compliance with NSPS subpart IIII and would represent compliance for all the identical engines for the client. It is URS' contention that since the engines are identical in every way, it would be unnecessary and cost prohibitive to test all of the engines. Can a representative engine test satisfy the testing requirements for a fleet of identical engines for the same client?
A3: No. The testing requirements are listed in 40 CFR 60.4211(g). An initial performance test must be conducted for stationary CI ICE less than or equal to 500 horsepower (HP). For stationary CI ICE greater than 500 horsepower, the owner/operator must conduct an initial test, and subsequent testing every 8,760 hours of operation or every 3 years, whichever comes first. The EPA determines that a representative engine test cannot satisfy the testing requirements for a fleet of identical engines for one client, unless the owner/operator has requested and received approval of a waiver of the performance testing requirements, listed under 40 CFR 60.8(b).
Q1: Does the NSPS subpart OOOO apply to the storage facilities at the Williams Four Corners LLC Ignacio Gas Plant located near Ignacio, Colorado?
A1: Yes. Based on the information provided, the EPA understands the storage facilities referred to are the portion of the plant which stores final product (propane, butane, etc.) prior to offsite transport. As such, the storage facilities at the Ignacio Gas Plant are a process unit and an affected facility under subpart OOOO.
Q2: What value should the Ignacio Gas Plant use for “B” in the equation for determining whether a “capital expenditure” has occurred, and thus a modification under subpart OOOO at the Ignacio Gas Plant?
A2: For determining whether a modification has occurred at the Ignacio Gas Plant under subpart OOOO, in the equation for capital expenditure in 40 CFR 60.481(a), the value to be used for “B” is 4.5 and the value to be used for “X” is 2011 minus the year of construction.
Q1: Does the EPA determine that NSPS subpart Ja applies to the condensate splitter located at the Kinder Morgan Crude & Condensate LCC (KMCC) Facility, a petroleum refinery located in Galena Park, Texas?
A1: Yes. Based upon the information provided, the EPA determines that the KMCC condensate splitter facility is a refinery under subpart Ja because it receives and distills a crude oil and condensate hydrocarbon mixture into various refined petroleum products. Based on review of the company's information, the EPA concludes that the raw material feedstock, processes employed, and products generated meet the definition of a petroleum refinery provided at 40 CFR 60.101a.
Q1: Does the EPA determine that the thermal oxidizer at the 3M Company (3M) facility in Cordova, Illinois is subject to the Standards of Performance for Commercial and Industrial Solid Waste Incineration (CISWI) Units, 40 CFR part 60 subpart CCCC?
A1: No. The EPA determines that the thermal oxidizer is not subject to subpart CCCC because 3M commenced construction of the thermal oxidizer before the threshold date for a new CISWI unit.
Q2: Does the EPA determine that a fluorinated liquid organic chemical byproduct from a chemical manufacturing process unit at the facility which is atomized in the thermal oxidizer is not a “solid waste” as defined in 40 CFR 60.2265?
A2: Yes. Based on the information provided, the byproduct liquid appears to meet the Non Hazardous Secondary Material (NHSM) criteria and would be considered a non-waste ingredient under the 40 CFR part 241 regulations.
Q1: Does the EPA determine that the “like-for-like” replacement exemption in 40 CFR 60.670(d) is applicable to the replacement of affected facilities on production lines that were constructed after August 31, 1983 at the 3M Company salt recovery production line located in Elyria, Ohio?
A1: Yes. The EPA determines that the “like-for-like” replacement exemption in 40 CFR 60.670(d)(1) of subpart OOO is applicable to “affected facilities” (those constructed after August 31, 1983) with regards to the subpart OOO amendments promulgated on April 28, 2009 based on 3M's description that the Weigh Conveyors A and B are equal or smaller in size to and perform the same function as the original conveyors, and emissions at the conveyors did not increase, and as long as the remaining affected facilities in the salt recovery production line have not been replaced since April 22, 2008.
Q2: What emission standards apply to a production line constructed after August 31, 1983 that includes affected facilities constructed as a “like-for-like” replacement after April 22, 2008, assuming that all of the affected facilities on the production line have not been replaced as provided in 40 CFR 60.670(d)(3)?
A2: A production line constructed after August 31, 1983 that includes affected facilities constructed as a “like-for-like” replacement after April 22, 2008 is subject to the original subpart OOO rule standards promulgated on August 1, 1985, and not the 2009 subpart OOO rule standards, as long as all affected facilities on the production line have not been replaced.
Q: Does the EPA determine that NSPS subpart DD applies to column dryers constructed of woven wire screen at the Riceland Foods facility in Stuttgart, Arkansas (Riceland)?
A: No. The EPA determines that although the Riceland facility is a grain terminal elevator subject to subpart DD, the column dryers in question are a new subcategory of grain dryers not subject to subpart DD due to its differences in size, type and class of column dryers. The EPA has stated this position in the July 9, 2014 proposed rule for subpart DD and in a new proposed subpart DDa
Q: Does the EPA determine that NSPS subpart JJJ for Petroleum Dry Cleaners applies to closed loop, dry to dry new hydrocarbon equipment at Parrot Cleaners facility in Louisville, Kentucky?
A: No. The EPA determines that the dry to dry closed loop machines installed at Parrot Cleaners do not meet the definition of a “petroleum dry cleaner,” in that they do not use solvent in a “combination of washers, dryers, filters, stills, and settling tanks” since these are single unit machines. The EPA intent to regulate dry cleaning machines with separate units (
Q1: Does the EPA approve the use of a lock and seal configuration in lieu of flow indicators to monitor VOC containing vent streams routed from distillation facilities to plant flares at the Aux Sable Liquid Products (ASLP) facility in Morris, Illinois to demonstrate compliance with requirements of 40 CFR 63 subpart NNN?
A1: Yes. The EPA approves locking or sealing leak-proof bypass valves in the closed position in lieu of flow indicators. ASLP will conduct monthly monitoring of the lock or seal valves to ensure that they function and are kept in the closed position. ASLP will maintain a log of each lock or seal inspection and comply with the monitoring requirements of 40 CFR 60.703(b)(2), 40 CFR 60.703(b)(2)(i), and 40 CFR 60.703 (b)(2)(ii) of NSPS subpart RRR for the purpose of complying with NSPS NNN. In addition, ASLP will need to comply with the monitoring and record keeping requirements of 40 CFR 60.705(d)(2) and (s).
Q2: Does the EPA approve the use of infrared cameras to monitor the continuous presence of a pilot light in lieu of a thermocouple or ultraviolet beam sensor, in the ASLP Morris, Illinois facility?
A2: No. The EPA does not approve the use of an infrared camera pilot monitor (PM) to meet the requirements of 40 CFR 60.663(b), 40 CFR 60.703(b) and 40 CFR 60.18(e)(2) because ASLP is unable to prove that their pilot monitor can continuously monitor the presence of a pilot flame. The PM is able to detect the flare flame accurately and reliability when the vent gas is flowing, but it has not proven to have sufficient resolution for a situation where the pilot light is not present and a flare flame is present with vent gas flowing.
Q1: Does the EPA determine that the stoker boiler at Fibrominn LLC (Fibrominn) in Benson, Minnesota is subject to the Standards of Performance for Commercial and Industrial Solid Waste Incineration (CISWI) Units, 40 CFR part 60 subpart CCCC (CISWI NSPS)?
A1: No. Although the EPA concludes that the boiler is a CISWI unit, Fibrominn commenced construction of its boiler on or before June 4, 2010 and there is no evidence that it has been modified or reconstructed after August 7, 2013. Therefore, the EPA concludes that Fibrominn's boiler is not subject to the CISWI NSPS pursuant to 40 CFR 60.2010 and 60.2015.
Q2: Does the EPA determine that Fibrominn's boiler is subject to the Federal Plan Requirements for CISWI Units That Commenced Construction On or Before November 30, 1999, 40 CFR part 62 subpart III (CISWI FIP)?
A2: No. Fibrominn's boiler is not subject to the CISWI FIP because Fibrominn commenced construction between November 30, 1999, and June 4, 2010. The CISWI NSPS applies to each CISWI unit that commenced construction after June 4, 2010, or commenced reconstruction or modification after August 7, 2013.
Q3: Does the EPA determine that Fibrominn's boiler is exempt from the requirements in the CISWI FIP?
A3: No. Fibrominn's boiler is not subject to the CISWI FIP. Therefore, the question of whether Fibrominn's boiler is exempt from the CISWI FIP is moot.
Q4: Does the EPA determine that Fibrominn can avoid being subject to the NESHAP for Major Sources: Industrial, Commercial, and Institutional Boilers and Process Heaters, 40 CFR part 63 subpart DDDDD (Major Source Boiler MACT) by taking federally enforceable limits on its potential to emit prior to the compliance date, January 31, 2016?
A4: Yes. The EPA agrees that Fibrominn can take federally enforceable limits on its potential to emit to avoid being subject to the Major Source Boiler MACT. By doing so, Fibrominn would become subject to the NESHAP for Industrial, Commercial, and Institutional Boilers Area Sources, 40 CFR part 63 subpart JJJJJJ (Area Source Boiler MACT).
Q5: If Fibrominn submits a formal application to the Minnesota Pollution Control Agency (MPCA) to amend Fibrominn's existing Title V permit in order to take a synthetic minor limit, and Fibrominn submits the application to the MPCA prior to January 31, 2016, the compliance date for the Major Source Boiler MACT, does this constitute Fibrominn's “taking a synthetic minor limit” in terms of eligibility to avoid being subject to the Major Source Boiler MACT?
A5: No. Fibrominn's submittal of its application for modification of its Title V permit does not constitute taking federally enforceable limits on its potential to emit.
Q6: Does the EPA determine that Fibrominn remain subject to the case-specific MACT in its 2002 Title V permit after the compliance date for the Major Source Boiler MACT?
A6: Yes. The EPA notes that more than one MACT standard can apply to the same equipment or operation. Unless the case specific MACT is removed from the permit, Fibrominn would remain subject to the case specific MACT and either the Major Source or Area Source Boiler MACT.
Q: Does the EPA approve an extension of time to conduct a performance test required by NSPS subpart OOO based on a force majeure event at the Hi-Crush Augusta, LLC industrial sand mine and processing plant in August, Wisconsin?
A: No. The EPA determines that the event described in the request does not meet the definition of a “force majeure event” under 40 CFR 60.2.
Q1: Does the EPA approve an alternative monitoring plan (AMP) for the granular activated carbon adsorption system used to control mercury emissions from the sewage sludge incinerator subject to 40 CFR part 60 subpart LLLL at the Mattabassett District Water Pollution Control Facility in Cromwell, Connecticut?
A1: Yes. The EPA approves Mattabassett's AMP for the carbon bed under 40 CFR 60.13(i) for the granular activated carbon adsorption system (“carbon bed”) used to control mercury emissions from the sewage sludge incinerator subject to subpart LLLL. The alternative monitoring plan that Mattabassett has proposed, combined with the facilities construction permit, meets the requirement of a similar type of monitoring application for carbon
Q2: Does the EPA approve Mattabassett's site-specific ash handling monitoring plan to meet the fugitive emission limits specified in 40 CFR part 60 subpart LLLL, considering that the ash at the facility is collected using an entirely wet system?
A2: Yes. The EPA approves Mattabassett's site-specific plan for fugitive ash monitoring that consists of daily observations of the ash lagoons.
Q: Does the EPA approve an alternative monitoring plan (AMP) for the wet electrostatic precipitator (WESP) used to control air emissions from the sewage sludge incinerator subject to 40 CFR part 60 subpart LLLL located at the Mattabassett District Water Pollution Control Facility (Mattabassett) in Cromwell, Connecticut?
A: Yes. The EPA approves Mattabassett's AMP to monitor the total water flow rate of the influent to the WESP on an 8 hour block basis and to set the parameter limit at 90 percent of the 8 hour flow recorded during the initial performance test.
Q: Does the EPA approve the alternative monitoring plan to use the same high level calibration gas for both the low range and high level range for two dual range hydrogen sulfide (H2S) monitors installed on two flares subject to 40 CFR part 60 subpart Ja at the Shell Chemical LP plant in Saraland, Alabama?
A: Yes. The EPA responded to the Alabama Department of Environmental Management that based upon the expectation that the majority of H2S readings will be made on the lower range of the dual range monitors, a demonstration that the monitors have a linear response across their entire range of operation, and the toxicity of H2S, the proposal is acceptable.
Q: Does the EPA approve an alternative hydrogen sulfide (H2S) monitoring plan (AMP) for portable temporary thermal oxidizer units (TOUs) that control emissions during tank degassing and vapor control projects subject to 40 CFR part 60 subpart J and 40 CFR part 60 subpart Ja at Tristar Global Energy Solutions (Tristar) petroleum refineries located in EPA Region 4?
A: Yes. The EPA approves the AMP request since installing and operating an H2S continuous emission monitoring system would be impractical due to the short term nature of the degassing operations performed by Tristar. In addition, Tristar's proposed monitoring alternative is consistent with previously approved alternatives for other tank degassing service providers.
Q1: Does the EPA approve an alternative monitoring request (AMR) for the purpose of monitoring pressure drop under requirements of 40 CFR part 63 subpart HHHHHHH Table 5, Polyvinyl Chloride (PVC) and Copolymer Production at Major Sources NESHAP at the Oxy Vinyls, LP Pasadena PVC plant in Pasadena, Texas?
A1: Yes. The EPA approves the AMR to substitute ambient pressure for the measured outlet pressure of the scrubber. Since the scrubber is a low pressure scrubber, the outlet of the scrubber system operates at ambient pressure. Any pressure changes in the scrubber would be indicated by changes to the inlet pressure, which will be directly monitored. Therefore, the calculation of pressure drop will be determined by the difference between inlet pressure and ambient pressure. The operating limit for pressure drop has been established using engineering assessments and manufacturer's recommendations, which is allowed by 40 CFR 63.11935(d)(2). Scrubber pressure drop will be recorded in accordance with the approved AMR during a performance test, along with other operating parameters required by Table 5 of subpart HHHHHHH. The frequency and content of pressure drop monitoring, recording, and reporting will not change as a result of the approved AMR.
Q: Does the EPA approve of alternative work practice and monitoring procedures for the three enclosed hard chromium plating tanks to be installed that will be subject to 40 CFR part 63 subpart N at the Har-Conn Chrome Company (Har-Conn) facility in West Hartford, Connecticut?
A: Yes. The EPA approves the Har-Conn alternative monitoring procedures to demonstrate ongoing compliance with the operation and maintenance (“O&M”) practices and monitoring specified in Table 1 of 63.342 as they are not feasible for the application to the Palm Technology Emission Eliminating Devices (EEE) used by the enclosed hard chromium tanks. Har-Conn will use the operation and maintenance (O&M) practices and manual recommended by the manufacturer of the Palm Technology Emission Eliminating Devices (EEE), as well as daily, weekly, monthly, quarterly, and annual compliance monitoring logs for the EED.
Q: Does the EPA approve an alternative monitoring plan to the use of an alternative control device parameter other than one of the parameters required at 40 CFR 63.7525(f) and Tables 4, 7, and 8 in subpart DDDDD for wet scrubbers at the SAPPI Fine Paper North America (SAPPI) facility in Skowhegan, Maine?
A: Yes. The EPA approves SAPPI's alternative monitoring request for the wet scrubber to monitor scrubber liquid supply pressure in lieu of the pressure drop across the wet scrubber used to control emissions from the Number 2 Power Boiler. Based on the data provided showing strong correlation between spray tower liquid recirculation pressure and flow, as well as data that demonstrates a poor correlation between pressure drop of the scrubber and heat input to the boiler (an indicator of emissions), EPA agrees that this method may be used in this situation in lieu of monitoring pressure drop across the scrubber. In addition, this method is consistent with similar boiler monitoring applications.
Q1: Does the EPA approve separate sets of parameter monitoring thresholds for the scrubber liquid flow rate and pressure drop of the wet venturi scrubber subject to 40 CFR part 63 subpart DDDDD at the Verso Corporation (Verso) facility in Jay, Maine under two operating scenarios: (1) Periods when the unit burns biomass and combined biomass/fossil-fuel burning at boiler capacities up to 480 MMBtu, and (2) periods when the unit burns only fossil fuel at boiler capacities equal to or less than 240 MMBtu, on a 30-day rolling average and on a daily block average when burning only fossil fuels?
A1: Yes. The EPA approves Verso's alternative monitoring request for both operating scenarios.
Q2: Does the EPA approve for Verso when burning exclusively natural gas to operate without engaging the wet venturi scrubber after startup and exclude periods when the wet scrubber is not engaged due to burning gas from the 30-day compliance averages?
A2: Yes. The EPA approves the request to allow the unit to operate without engaging the wet scrubber and to exclude parameter monitoring data during periods when only natural gas is fired, provided that Verso can demonstrate through existing data or emissions testing that the unit complies
Q: Would an aluminum chip drying process at the Remelt Scientific facility (Remelt) in Port Charlotte, Florida, that is used to remove water meet the definition of “thermal chip dryer” in 40 CFR part 63 subpart RRR?
A: No. Remelt's chip drying process does the not meet the definition of “thermal chip dryer” and is therefore not subject to subpart RRR. Based on the description that the process operates at temperatures of 200F and 235F, and the oil that remains on the chips has an evaporation temperature of over 300F, we believe that the process would be used solely to remove water from the aluminum chips since it would not be operating at temperatures sufficient to remove the machining oil that remains on the chips.
Q1: The ArborTech Forest Products, Inc. (ArborTech) facility in Blackstone, Virginia is planning to increase its lumber production such that the potential to emit for methanol would be greater than 10 tons per year. Does the EPA determine that the facility would be reclassified as a major source for hazardous air pollutants (HAPs)?
A1: Yes. The EPA determines that if ArborTech increases the air permit limit on production and potential methanol emissions would exceed 10 tons/year that the facility would qualify as a major source and would need to be reclassified as a major source in the State permit.
Q2: Does the EPA determine that ArborTech would be subject to 40 CFR part 63 subpart DDDD, Plywood and Composite Wood Products National Emission Standards for Hazardous Air Pollutants (PCWP MACT), and would the dry kilns be considered an affected source immediately upon issuance of the revised permit/reclassification to a major source of HAPs?
A2: Yes. The EPA determines that ArborTech would be subject to the subpart DDDD rule on the date of issuance of the revised permit when the facility would be reclassified as a major source of HAPs, and therefore the dry kilns would be an affected source under the rule.
Q3: Does the EPA determine that if the wood-fired boilers' exhaust is routed to the lumber kiln(s) and used to dry lumber the boilers would be an “affected source” under the PCWP MACT and subject to the rule?
A3: The EPA determines that if Arbortech becomes a major source of HAPs, and if ArborTech sent 100 percent of the exhaust from its wood-fired boilers to its lumber drying kiln(s) to help dry lumber, then the boilers would not be subject to 40 CFR part 63 subpart DDDDD (the Major Source Boiler MACT), but would instead be subject to the PCWP MACT.
Q4: When does the EPA determine that Arbortech would become subject to the Major Source Boiler MACT?
A4: The EPA determines that if ArborTech were to become a major source of HAPs after the Major Source Boiler MACT initial compliance date for existing sources of January 31, 2016, then ArborTech would be required to bring its existing boilers into compliance with the Major Source Boiler MACT within three years after ArborTech became a major source, unless ArborTech had previously sent 100% of the exhaust from its boiler(s) to its kiln(s), thus making the boiler(s) and their exhaust streams affected sources under the PCWP MACT. If Arbortech were to become a major source prior to the Major Source Boiler MACT initial compliance date for existing sources of January 31, 2016, then its existing boilers would be required to be in compliance as of January 31, 2016, unless ArborTech had previously sent 100% of the exhaust from its boiler(s) to its kiln(s), thus making the boiler(s) and their exhaust streams affected sources under the PCWP MACT.
Q: Does the EPA approve the re-categorization of Boiler No. 9 at the Finch Paper, LLC (Finch) integrated pulp and paper manufacturing facility located in Glen Falls, New York from the wet biomass stoker subcategory to the hybrid suspension grate boiler subcategory pursuant to 40 CFR part 63 subpart DDDDD (the Major Source Boiler MACT)?
A: Yes. Based on the information submitted on the design and operation of the Boiler No. 9, the EPA determines that it meets the definition of “hybrid suspension grate boiler” found in 40 CFR 63.7575. Therefore, Boiler No. 9 will be subject to the rule as it pertains to existing hybrid suspension grate boilers.
Q: Does the EPA determine that the Truesense Imaging, Inc. (Truesense) semiconductor fabrication business (Semiconductor Business) located at its microelectronics wafer fabrication facility (FAB facility) in Rochester, NY is subject to the National Emissions Standards for Hazardous Air Pollutants for Semiconductor Manufacturing, 40 CFR part 63 subpart BBBBB (Semiconductor MACT)?
A: Yes. The EPA determines that the FAB facility, currently owned and operated by Truesense, is and continues to be an existing source with compliance required as of 2006 and must continue to comply with the Semiconductor MACT, even after a sale, as long as the source otherwise continues to meet the definition of an affected facility (
Q: Does the EPA approve Monroe Interstate Pipeline Company (MIPC) alternative monitoring request for use of top-side in-service inspections in lieu of the out-of-service inspection requirements for specific types of internal floating roof (IFR) storage tanks subject to 40 CFR part 63 subpart BBBBBB (GD GACT) and/or 40 CFR part 60 subpart Kb, NSPS for Volatile Organic Liquid Storage Vessels), at the MIPC Chelsea Tank Farm in Aston, PA?
A: Yes. In accordance with 40 CFR 60.13 and 63.8(f), EPA approves MIPC alternative monitoring request for use of top-side in-service internal inspection methodology for the IFR storage tanks subject to NSPS Kb and GD GACT specified in the AMP request (tanks that have geodesic dome roofs equipped with skylights for enhanced natural lighting and aluminum honeycomb panel decks constructed decks with mechanical shoe primary and secondary seals liquid surface) to meet the internal out-of-service inspection required at intervals no greater than 10 years by the applicable regulations. MIPC will be able to have visual access to all of the requisite components (
Q: Does the EPA determine that the stationary reciprocating internal combustion engines (RICE) participating in two Duke Energy Carolinas nonresidential demand response programs meet the definition of “emergency stationary RICE” in the National Emissions Standards for Hazardous Air Pollutants for Stationary Reciprocating Internal Combustion Engines (“RICE NESHAP”)?
A: No. The EPA determines that the terms of Duke's demand response programs do not meet all of the operational limits on emergency engines in the RICE NESHAP. The terms of the programs are consistent with the limitations on emergency demand response. However, an engine must also comply with the definition of “emergency stationary RICE” and all of the operational restrictions in 40 CFR 63.6640(f) to be considered RICE NESHAP emergency engines.
Q1: Has EPA Method 1 been removed from the reciprocating internal combustion engine (RICE) NESHAP subpart ZZZZ, or should the engines at Farabee Mechanical in Hickman, Nebraska (Farabee) be following Method 1 for test port locations.
A1: No. EPA Method 1 of 40 CFR part 60 Appendix A from the RICE NESHAP should be followed for test port locations. The EPA response letter provides guidance for numerous testing scenarios under NESHAP subpart ZZZZ sources including engines where Method 1 is required but the testing ports do not meet the minimum criteria of Method 1 and engines that are not required to use Method 1 procedures.
Q2: Is there any conflict with the RICE NESHAP subpart ZZZZ rule if utilizing test ports at engines for testing purposes?
A2: No. The Farabee Mechanical facility was approved to use single-point sampling at NSPS subpart JJJJ sources in lieu of Method 1 for their engines. Single point sampling without a stratification test for nitrogen oxide emissions using Alternative Test Method 87 is allowed under 40 CFR 60, Subparts IIII and JJJJ. However, single point sampling for carbon monoxide at NESHAP subpart ZZZZ sources have not yet been broadly approved. Therefore, when Method 1 is not met, a stratification test is to be conducted to show if the site is acceptable to perform the test.
Q: Does the EPA approve the use of the results of a particulate matter emission test conducted on December 2014 for two new wood-fired boilers at Norwich University in Northfield, Vermont that are subject to the requirements of 40 CFR part 63 subpart JJJJJJ as being representative of “initial conditions” because the first test, conducted in February 2014, was not conducted under normal operating conditions?
A: Yes. The EPA approves the use of emissions test data from the second test as meeting the requirements of 40 CFR 63.11220(b) since it is representative of normal operating conditions, and therefore Norwich University may avoid the requirement to test particulate matter every three years.
Q: Does the EPA accept the proposal by Tyson Foods Inc. to use a louvered door system, where the louvers would only open inward and would only open when negative pressure is in place, to meet the work practice requirements in 40 CFR part 63 subpart DDDDDDD, National Emissions Standards for Hazardous Air Pollutants for Area Sources: Prepared Feeds Manufacturing (Prepared Feeds Area Source Rule), to keep exterior doors in the immediate affected areas shut except during normal ingress and egress, as practicable?
A: Yes. The EPA determines that the use of the louvered door system would meet the requirements of subpart DDDDDDD. The louvered door system described would maintain the function of the closed doors by only opening the louvers to the interior of the building when the doors are under negative pressure, drawing air into the building. Under these conditions the doors would be serving the purpose of minimizing the release of prepared feed dust emissions to the outside, which is the intent of the work practice standard in Section 63.11621(a)(1)(iii).
Federal Accounting Standards Advisory Board.
Notice.
The purpose of the meetings is to discuss issues related to the following topics:
Unless otherwise noted, FASAB meetings begin at 9 a.m. and conclude before 5 p.m. and are held at the Government Accountability Office (GAO) at 441 G Street NW. in Room 7C13. Agendas and briefing materials are available at
Any interested person may attend the meetings as an observer. Board discussion and reviews are open to the public. GAO building security requires advance notice of your attendance. If you wish to attend a FASAB meeting, please pre-register on our Web site at
Ms. Wendy M. Payne, Executive Director, 441 G Street NW., Mailstop 6H19, Washington, DC 20548, or call (202) 512–7350.
Federal Advisory Committee Act, Pub. L. 92–463.
Federal Accounting Standards Advisory Board.
Notice.
The exposure draft is available on the FASAB Web site at
Respondents are encouraged to comment on any part of the exposure draft. Written comments are requested by March 14, 2017, and should be sent to
Ms. Wendy M. Payne, Executive Director, 441 G Street NW., Mailstop 6H19, Washington, DC 20548, or call (202) 512–7350.
Federal Advisory Committee Act, Pub. L. 92–463.
Federal Housing Finance Agency.
30-Day notice of submission of information collection for approval from Office of Management and Budget.
In accordance with the requirements of the Paperwork Reduction Act of 1995, the Federal Housing Finance Agency (FHFA or the Agency) is seeking public comments concerning the information collection known as “Federal Home Loan Bank Capital Stock,” which has been assigned control number 2590–0002 by the Office of Management and Budget (OMB) (the collection was previously known as “Capital Requirements for the Federal Home Loan Banks”). FHFA intends to submit the information collection to OMB for review and approval of a three-year extension of the control number, which is due to expire on December 31, 2016.
Interested persons may submit comments on or before January 27, 2017.
Submit comments to the Office of Information and Regulatory Affairs of the Office of Management and Budget, Attention: Desk Officer for the Federal Housing Finance Agency, Washington, DC 20503, Fax: (202) 395–3047, Email:
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We will post all public comments we receive without change, including any personal information you provide, such as your name and address, email address, and telephone number, on the FHFA Web site at
Jonathan F. Curtis, Financial Analyst, Division of Federal Home Loan Bank Regulation, by email at
The Federal Home Loan Bank System consists of eleven regional Federal Home Loan Banks (Banks) and the Office of Finance (a joint office that issues and services the Banks' debt securities). The Banks are wholesale financial institutions, organized under authority of the Federal Home Loan Bank Act (Bank Act) to serve the public interest by enhancing the availability of residential housing finance and community lending credit through their member institutions and, to a limited extent, through certain eligible nonmembers. Each Bank is structured as a regional cooperative that is owned and controlled by member institutions located within its district, which are also its primary customers. An institution that is eligible for membership in a particular Bank must purchase and hold a prescribed minimum amount of the Bank's capital stock in order to become and remain a member of that Bank. With limited exceptions, only an institution that is a member of a Bank may obtain access to low cost secured loans, known as
Section 6 of the Bank Act establishes capital requirements for the Banks and requires FHFA to issue regulations prescribing uniform capital standards applicable to all of the Banks.
Both the Bank Act and FHFA's regulations state that a Bank's capital plan must require its members to maintain a minimum investment in the Bank's capital stock, but both permit each Bank to determine for itself what that minimum investment is and how each member's required minimum investment is to be calculated.
A Bank must collect information from its members to determine the minimum capital stock investment each member is required to maintain at any point in time. Although the information needed to calculate a member's required minimum investment and the precise method through which it is collected differ somewhat from Bank to Bank, the Banks typically collect two types of information. First, in order to calculate and monitor compliance with its membership stock purchase requirement, a Bank typically requires each member to provide and/or confirm an annual report on the amount and types of assets held by that institution. Second, each time a Bank engages in a business transaction with a member, the Bank typically confirms with the member the amount of additional Bank capital stock, if any, the member must acquire in order to satisfy the Bank's activity-based stock purchase requirement and the method through which the member will acquire that stock.
The OMB number for the information collection is 2590–0002, which is due to expire on December 31, 2016. The likely respondents include current and former Bank members and institutions applying for Bank membership.
FHFA has analyzed the time burden imposed on respondents by the two collections under this control number and estimates that the average total annual hour burden imposed on all respondents over the next three years will be 15,230 hours. The estimate for each collection was calculated as follows:
FHFA estimates that the average annual number of current and former members and applicants for membership required to report information needed to calculate a membership stock purchase requirement will be 7,320, and that each institution will submit one report per year, resulting in an estimated total of 7,320 submissions annually. The estimate for the average time required to prepare, review, and submit each report is 0.5 hours. Accordingly, the estimate for the annual hour burden associated with membership stock purchase requirement submissions is (7,320 reports × 0.5 hours per report) = 3,660 hours.
FHFA estimates that the average number of daily transactions between Banks and members that will require the exchange of information to confirm the member's activity-based stock purchase requirement will be 341, and that there will be an average of 261 working days per year, resulting in an estimated 89,001 submissions annually. The estimate for the average preparation time per submission is 0.13 hours. Accordingly, the estimate for the annual hour burden associated with activity-based stock purchase requirement submissions is (89,001 submissions × 0.13 hours per submission) = 11,570 hours.
In accordance with the requirements of 5 CFR 1320.8(d), FHFA published an initial notice requesting comments regarding this information collection in the
In accordance with the requirements of 5 CFR 1320.10(a), FHFA is publishing this second notice to request comments regarding the following: (1) Whether the collection of information is necessary for the proper performance of FHFA functions, including whether the information has practical utility; (2) the accuracy of FHFA's estimates of the burdens of the collection of information; (3) ways to enhance the quality, utility and clarity of the information collected; and (4) ways to minimize the burden of the collection of information on members and project sponsors, including through the use of automated collection techniques or other forms of information technology. Comments should be submitted in writing to both OMB and FHFA as instructed above in the Comments section.
Federal Housing Finance Agency.
30-Day notice of submission of information collection for approval from Office of Management and Budget.
In accordance with the requirements of the Paperwork Reduction Act of 1995, the Federal Housing Finance Agency (FHFA or the Agency) is seeking public comments concerning the information collection known as “Members of the Banks,” which has been assigned control number 2590–0003 by the Office of Management and Budget (OMB). FHFA intends to submit the information collection to OMB for review and approval of a three-year extension of the control number, which is due to expire on December 31, 2016.
Interested persons may submit comments on or before January 27, 2017.
Submit comments to the Office of Information and Regulatory Affairs of the Office of Management and Budget, Attention: Desk Officer for the Federal Housing Finance Agency, Washington, DC 20503, Fax: (202) 395–3047, Email:
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•
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We will post all public comments we receive without change, including any personal information you provide, such as your name and address, email address, and telephone number, on the FHFA Web site at
Jonathan F. Curtis, Financial Analyst, Division of Federal Home Loan Bank Regulation, by email at
The Federal Home Loan Bank System consists of eleven regional Federal Home Loan Banks (Banks) and the Office of Finance (a joint office that issues and services the Banks' debt securities). The Banks are wholesale financial institutions, organized under the authority of the Federal Home Loan Bank Act (Bank Act) to serve the public interest by enhancing the availability of residential housing finance and community lending credit through their member institutions and, to a limited extent, through certain eligible nonmembers. Each Bank is structured as a regional cooperative that is owned and controlled by member institutions located within its district, which are also its primary customers. The Banks carry out their public policy functions primarily by providing low cost loans, known as advances, to their members. With limited exceptions, an institution may obtain advances and access other products and services provided by a Bank only if it is a member of that Bank.
The Bank Act limits membership in any Bank to specific types of financial institutions located within the Bank's district that meet specific eligibility requirements. Section 4 of the Bank Act specifies the types of institutions that may be eligible for membership and establishes eligibility requirements that each type of applicant must meet in order to become a Bank member.
FHFA's regulation entitled “Members of the Banks,” located at 12 CFR part 1263, implements those statutory provisions and otherwise establishes substantive and procedural requirements relating to the initiation and termination of Bank membership. Many of the provisions in the membership regulation require that an institution submit information to a Bank or to FHFA, in most cases to demonstrate compliance with statutory or regulatory requirements or to request action by the Bank or Agency.
In total, there are four types of information collections that may occur under part 1263. First, the regulation provides that (with limited exceptions) no institution may become a member of a Bank unless it has submitted to that Bank an application that documents the applicant's compliance with the statutory and regulatory membership eligibility requirements and that otherwise includes all required information and materials.
The Banks use most of the information collected under part 1263 to determine whether an applicant satisfies the statutory and regulatory requirements for Bank membership and should be approved as a Bank member. The Banks may use some of the information collected under part 1263 as a means of learning that a member wishes to withdraw or to transfer its membership to a different Bank so that the Bank can begin to process those requests. In rare cases, FHFA may use the collected information to determine whether an institution that has been denied membership by a Bank should be permitted to become a member of that Bank.
The OMB control number for this information collection is 2590–0003, which is due to expire on December 31, 2016. The likely respondents are financial institutions that are, or are applying to become, Bank members.
FHFA has analyzed the time burden imposed on respondents by the four collections under this control number and estimates that the average annual burden imposed on all respondents by those collections over the next three years will be 2,351 hours. This estimate is derived from the following calculations:
FHFA estimates that the average number of applications for Bank membership submitted annually will be 151 and that the average time to prepare and submit an application and supporting materials will be 15 hours. Accordingly, the estimate for the annual hour burden associated with preparation and submission of applications for Bank membership is (151 applications × 15 hours per application) = 2,265 hours.
FHFA estimates that the average number of applicants that have been denied membership by a Bank that will appeal such a denial to FHFA will be 1 and that the average time to prepare and submit an application for appeal will be 10 hours. Accordingly, the estimate for the annual hour burden associated with the preparation and submission of membership appeals is (1 appellants × 10 hours per application) = 10 hours.
FHFA estimates that the average number of Bank members submitting a notice of intent to withdraw from membership annually will be 4 and that the average time to prepare and submit a notice will be 1.5 hours. Accordingly, the estimate for the annual hour burden associated with preparation and submission of notices of intent to withdraw is (4 withdrawing members × 1.5 hours per application) = 6 hours.
FHFA estimates that the average number of Bank members submitting a request for transfer to another Bank will be 35 and that the average time to prepare and submit a request will be 2 hours. Accordingly, the estimate for the annual hour burden associated with preparation and submission of requests for automatic transfer is (35 transferring members × 2 hours per request) = 70 hours.
In accordance with the requirements of 5 CFR 1320.8(d), FHFA published an initial notice requesting comments regarding this information collection in the
In accordance with the requirements of 5 CFR 1320.10(a), FHFA is publishing this second notice to request comments regarding the following: (1) Whether the collection of information is necessary for the proper performance of FHFA functions, including whether the information has practical utility; (2) the accuracy of FHFA's estimates of the burdens of the collection of information; (3) ways to enhance the quality, utility and clarity of the information collected; and (4) ways to minimize the burden of the collection of information on members and project sponsors, including through the use of automated collection techniques or other forms of information technology. Comments should be submitted in writing to both OMB and FHFA as instructed above in the COMMENTS section.
Federal Housing Finance Agency.
Notice of revision to an existing system of records; request for comments.
In accordance with the requirements of the Privacy Act of 1974, as amended, 5 U.S.C. 552a (Privacy Act), the Federal Housing Finance Agency (FHFA) is making a revision to an existing system of records entitled “National Mortgage Database Project” (FHFA–21). The system of records covers the National Mortgage Database Project which is comprised of the National Mortgage Database, the National Survey of Mortgage Originations (formerly known as the National Survey of Mortgage Borrowers), and the American Survey of Mortgage Borrowers. The National Mortgage Database Project is for monitoring, researching, analyzing, and reporting information relevant to the functioning of the mortgage markets.
To be assured of consideration, comments must be received on or before January 26, 2017. The revisions to the existing system will become effective on February 6, 2017 unless comments necessitate otherwise. FHFA will publish a new notice if, in order to review comments, the effective date is delayed or if changes are made based on comments received.
Submit comments, identified by “2016–N–13,” using only one of the following methods:
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See
Forrest Pafenberg, Program Manager, National Mortgage Database Project,
FHFA seeks public comments on the revision to the system of records and will take all comments into consideration.
All comments received will be posted without change on the FHFA Web site at
This notice satisfies the Privacy Act requirement that an agency publish a system of records notice in the
As required by the Privacy Act, 5 U.S.C. 552a(r), and pursuant to paragraph 4c of Appendix I to OMB Circular No. A–130, “Federal Agency Responsibilities for Maintaining Records About Individuals,” dated November 28, 2000, FHFA has submitted a report describing the system of records covered by this notice to the Committee on Oversight and Government Reform of the House of Representatives, the Committee on Homeland Security and Governmental Affairs of the Senate, and the Office of Management and Budget.
The “National Mortgage Database Project” (FHFA–21) system of records is being revised to add data fields related to language, specifically information related to Limited English Proficiency or a Preferred Language. The information is being collected to identify obstacles for borrowers with Limited English Proficiency (LEP) or a Preferred Language (PL) in accessing mortgage credit, analyze potential solutions, and develop measures to improve access to credit. This information will assist FHFA in ensuring that its regulated entities appropriately support meaningful access to the mortgage market for mortgage ready LEP/PL borrowers, as well as support the overall goal of assuring that borrowers are able to understand and participate fully in the mortgage life cycle, including origination, servicing, and loss mitigation, regardless of the language spoken.
Information about LEP or PL will be collected as part of the National Survey of Mortgage Originations and the American Survey of Mortgage Borrowers. Responses to the survey will be maintained in anonymized form as part of the National Mortgage Database Project. A separate opt-out list from the Surveys will be maintained which will contain name, address, and Zip Code of those individuals who have opted out of receiving communications about the Surveys. FHFA employees will not have access to this list. This list is maintained in order to ensure that these individuals do not receive any future communications about the Surveys after opting out.
The revision to the system of records notice is described in detail below. All other aspects of the system of records notice, other than the changes described below, remain unchanged.
National Mortgage Database Project.
Records include information related to an individual's language preference, including, but not limited to, information about the borrower's or co-borrower's Limited English Proficiency and/or Preferred Language.
Federal Housing Finance Agency.
30-Day Notice of submission of information collection for approval from Office of Management and Budget.
In accordance with the requirements of the Paperwork Reduction Act of 1995, the Federal Housing Finance Agency (FHFA or the Agency) is seeking public comments concerning the information collection known as the “National Survey of Mortgage Originations” (NSMO), which has been assigned control number 2590–0012 by the Office of Management and Budget (OMB) (the collection was previously known as the “National Survey of Mortgage Borrowers”). FHFA
Interested persons may submit comments on or before January 27, 2017.
Submit comments to the Office of Information and Regulatory Affairs of the Office of Management and Budget, Attention: Desk Officer for the Federal Housing Finance Agency, Washington, DC 20503, Fax: (202) 395–3047, Email:
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We will post all public comments we receive without change, including any personal information you provide, such as your name and address, email address, and telephone number, on the FHFA Web site at
Forrest Pafenberg, Supervisory Economist, Office of the Chief Operating Officer, by email at
The NSMO is a recurring quarterly survey of individuals who have recently obtained a loan secured by a first mortgage on single-family residential property. The survey questionnaire is sent to a representative sample of approximately 6,000 recent mortgage borrowers each calendar quarter and typically consists of between 90 and 95 multiple choice and short answer questions designed to obtain information about borrowers' experiences in choosing and in taking out a mortgage.
Section 1324 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (Safety and Soundness Act) requires that FHFA prepare annually a detailed report on the residential mortgage market activities of two of its regulated entities—the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, “the Enterprises”)—and to submit that annual report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives.
Section 1324 further requires that FHFA conduct a monthly survey to collect data needed to adequately analyze the matters that must be addressed in the annual report.
As a means of fulfilling these and other statutory requirements, as well as to support policymaking and research regarding the residential mortgage markets, FHFA and CFPB jointly established the National Mortgage Database Project in 2012. The project is designed to provide comprehensive information about the U.S. mortgage market based on a five percent sample of residential mortgages. The project has three primary components: (1) The National Mortgage Database; (2) the quarterly NSMO; and (3) the annual
The core data in the National Mortgage Database are drawn from a random 1-in-20 sample of all closed-end first-lien mortgage loans outstanding at any time between January 1998 and the present from the files of Experian, one of the three nationwide credit reporting agencies. The National Mortgage Database currently contains data on approximately 11.6 million mortgage loans. Between 80,000 and 100,000 mortgages, drawn from a random 1-in-20 sample of loans newly reported to Experian, are added each quarter. Additional information on the mortgages in the datasets is drawn from other existing sources, including, but not limited to the Home Mortgage Disclosure Act (HMDA) data released by the Federal Financial Institutions Examination Council (FFIEC), property valuation models, transactional data maintained by local governments, and administrative data files maintained by the Enterprises and by federal agencies. Mortgages are followed in the National Mortgage Database until they terminate through prepayment (including refinancing), foreclosure, or maturity.
The NSMO was developed to complement the National Mortgage Database by providing critical and timely information—not available from existing sources—on the range of nontraditional and subprime mortgage products being offered, the methods by which these mortgages are being marketed, and the characteristics of borrowers for these types of loans. In particular, the survey questionnaire is designed to elicit directly from mortgage borrowers information on the characteristics of borrowers and on their experiences in finding and obtaining a mortgage loan, including: Their mortgage shopping behavior; their mortgage closing experiences; their expectations regarding house price appreciation; and critical financial and other life events effecting their households, such as unemployment, large medical expenses, or divorce. The survey questions do not focus on the terms of the borrowers' mortgage loans because these fields are available in the Experian data. However, the NSMO collects a limited amount of information on each respondent's mortgage to verify that the Experian records and survey responses pertain to the same mortgage.
Each wave of the NSMO is sent to the primary borrowers on about 6,000 mortgage loans, which are drawn from a simple random sample of the 80,000 to 100,000 newly originated mortgage loans that are added to the National Mortgage Database from the Experian files each quarter (at present, this represents an approximately 1-in-15 sample of loans added to the National Mortgage Database and an approximately 1-in-300 sample of all mortgage loan originations). By contract with FHFA, the conduct of the NSMO is administered through Experian, which has subcontracted the survey administration through a competitive process to Westat, a nationally-recognized survey vendor.
FHFA views the National Mortgage Database Project as a whole, including the NSMO, as the monthly “survey” that is required by section 1324 of the Safety and Soundness Act. Core inputs to the National Mortgage Database, such as a regular refresh of the Experian data, occur monthly, though NSMO itself does not. In combination with the other information in the National Mortgage Database, the information obtained through the NSMO is used to prepare the report to Congress on the mortgage market activities of Fannie Mae and Freddie Mac that FHFA is required to submit under section 1324, as well as for research and analysis by FHFA and CFPB in support of their regulatory and supervisory responsibilities related to the residential mortgage markets. The NSMO is especially critical in ensuring that the National Mortgage Database contains uniquely comprehensive information on the range of nontraditional and subprime mortgage products being offered, the methods by which these mortgages are being marketed and the characteristics—and particularly the creditworthiness—of borrowers for these types of loans. In the future, the information may be used to provide a resource for research and analysis by other federal agencies and by academics and other interested parties outside of the government.
FHFA is also seeking OMB approval to conduct cognitive pre-testing of the survey materials. The Agency will use information collected through that process to assist in drafting and modifying the survey questions and instructions, as well as the related communications, to read in the way that will be most readily understood by the survey respondents and that will be most likely to elicit usable responses. Such information will also be used help the Agency decide on how best to organize and format the survey questionnaires.
The OMB control number for this information collection is 2590–0012. The current clearance for the information collection expires on December 31, 2016.
FHFA has analyzed the hour burden on members of the public associated with conducting the survey (12,000 hours) and with pre-testing the survey materials (30 hours) and estimates the total annual hour burden imposed on the public by this information collection to be 12,030 hours. The estimate for each phase of the collection was calculated as follows:
FHFA estimates that the NSMO questionnaire will be sent to 24,000 recipients annually (6,000 recipients per quarterly survey × 4 calendar quarters). Although, based on historical experience, the Agency expects that only 30 to 35 percent of those surveys will be returned, it has assumed that all of the surveys will be returned for purposes of this burden calculation. Based on the reported experience of respondents to prior NSMO questionnaires, FHFA estimates that it will take each respondent 30 minutes (0.5 hours) to complete the survey, including the gathering of necessary materials to respond to the questions. This results in a total annual burden estimate of 12,000 hours for the survey phase of this collection (24,000
FHFA estimates that it will pre-test the survey materials with 30 cognitive testing participants annually. The estimated participation time for each participant is one hour, resulting in a total annual burden estimate of 30 hours for the pre-testing phase of the collection (30 participants × 1 hour per participant = 30 hours annually).
In accordance with the requirements of 5 CFR 1320.8(d), FHFA published an initial notice requesting comments regarding this information collection in the
The first comment letter was from an individual who has served in various capacities with a community association trade group and who is the president of a company that provides online technology in support of the sale, resale, finance, and refinance of homes in community associations.
Specifically, the letter first suggests revising Question 60 to elicit more specific information on the type of property that is associated with the respondent's mortgage and adding two questions as to whether the respondent's property is in a community association and, if so, the specific type of community association. FHFA believes that, while such questions could be suitable for a survey that focuses on housing structure, they would not be appropriate for the NSMO, which focuses on consumers' experience in seeking and obtaining a residential mortgage loan.
Finally the letter suggests revising the answer choices for Questions 7, 39, and 50 to allow respondents to indicate, respectively: Whether they used any of the proceeds from a refinance to pay community association fees; whether and to what extent community association documents or officials may have provided them with information about mortgages or mortgage lenders; and whether and to what extent they sought input about their mortgage loan closing documents from officials of a community association. FHFA notes that each of those questions permits a respondent to choose “other” and to write in a specific answer if none of the other answer choices are applicable. To date, none of the questions have elicited an “other” response in the vein of any of the answer choices that the commenter suggests adding. Accordingly, FHFA does not see a need to revise any of the questions in the manner suggested.
The second comment letter, from a law school professor, states that the NSMO is very important to understanding the health of the mortgage market and agrees that the collection is necessary for the proper performance of FHFA functions. However, it also expresses a concern that, given the length of the survey questionnaire, those recipients who ultimately decide to respond will not be representative of the typical borrower. It suggests two ways of encouraging a response from recipients who might otherwise be reluctant to take the time to complete the survey: (1) Providing a greater incentive; and (2) allowing recipients the option of completing a shorter version of the questionnaire.
FHFA agrees that non-response bias (the bias that results when respondents differ systematically from non-respondents) is an important concern and the Agency has spent, and continues to spend, significant time considering ways to increase response rates and to mitigate the effects of non-response bias. In developing the NSMO, the Agency consulted with top experts on conducting consumer surveys, who recommended an up-front payment of five dollars as the most effective way of incentivizing survey recipients to respond. FHFA adopted this recommendation. In addition, based on the results of the first seven waves of the NSMO, these experts also evaluated the expected effect on the response rate of increasing or decreasing the number of questions and the length of the questionnaire. Both experts opined that shortening the questionnaire would not significantly increase the response rate.
With respect to the mitigation of non-response bias when analyzing survey responses, FHFA has followed best practices of survey sampling analysis. The availability in the National Mortgage Database of extensive credit and administrative data on both responding and non-responding borrowers gives FHFA the ability to construct non-response weights with more accuracy than is possible for most surveys.
In accordance with the requirements of 5 CFR 1320.10(a), FHFA is publishing this second notice to request comments regarding the following: (1) Whether the collection of information is necessary for the proper performance of FHFA functions, including whether the information has practical utility; (2) the accuracy of FHFA's estimates of the burdens of the collection of information; (3) ways to enhance the quality, utility and clarity of the information collected; and (4) ways to minimize the burden of the collection of information on members and project sponsors, including through the use of automated collection techniques or other forms of information technology. Comments should be submitted in writing to both OMB and FHFA as instructed above in the Comments section.
Notice is hereby given that the Coalition for Fair Port Practices (hereinafter Petitioner), has petitioned the Commission pursuant to 46 CFR 502.51 of the Commission's Rules of Practice and Procedure, to initiate a rulemaking “to clarify what constitutes `just and reasonable rules and practices' with respect to the assessment of demurrage, detention, and per diem charges by ocean common carriers and marine terminal operators when ports are congested or otherwise inaccessible.”
Petitioner proposes and provides the text of a proposed rule and submits fifteen verified statements or supporting letters from its members which include “a broad cross-section of industry stakeholders, including shippers, receivers, motor carriers, port draymen, freight forwarders, 3PLs, and customs brokers.”
In order for the Commission to make a thorough evaluation of the Petition, interested persons are requested to submit views or arguments in reply to the Petition no later than February 28, 2017. Replies shall consist of an original and 5 copies, be directed to the Assistant Secretary, Federal Maritime Commission, 800 North Capitol Street NW., Washington, DC 20573–0001, and be served on Petitioner's counsel, Karyn A. Booth, Thompson Hine LLP, 1919 M Street NW., Suite 700, Washington, DC 20036. A PDF copy of the reply must also be sent to
Replies containing confidential information should not be submitted by email. The Commission will provide confidential treatment for identified confidential information to the extent allowed by law. A reply containing confidential information must include:
• A transmittal letter requesting confidential treatment that identifies the specific information in the reply for which protection is sought and demonstrates that the information is a trade secret or other confidential research, development, or commercial information.
• A confidential copy of the reply, clearly marked “Confidential-Restricted”, with the confidential material clearly marked on each page.
• A public version of your reply with the confidential information excluded or redacted, marked “Public Version—confidential materials excluded.”
The Petition will be posted on the Commission's Web site at
Parties participating in this proceeding may elect to receive service of the Commission's issuances in this proceeding through email in lieu of service by U.S. mail. A party opting for electronic service shall advise the Office of the Secretary in writing and provide an email address where service can be made.
The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than January 11, 2017.
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Board of Governors of the Federal Reserve System (Board).
Notice.
Under the rule of the Board regarding risk-based capital surcharges for global systemically important bank holding companies (GSIB surcharge rule), the Board is providing notice of the aggregate global indicator amounts for purposes of a calculation that is required under the GSIB surcharge rule for 2016.
Juan C. Climent, Manager, (202) 872–7526, or Holly Kirkpatrick, Supervisory Financial Analyst, (202) 452–2796, Division of Supervision and Regulation; or Mark Buresh, Senior Attorney, (202) 452–5270, or Mary Watkins, Attorney, (202) 452–3722, Legal Division. Board of Governors of the Federal Reserve System, 20th and C Streets NW., Washington, DC 20551. For the hearing impaired only, Telecommunications Device for the Deaf (TDD) users may contact (202) 263–4869.
The Board's GSIB surcharge rule establishes a methodology to identify global systemically important bank holding companies in the United States (GSIBs) based on indicators that are correlated with systemic importance.
The aggregate global indicator amounts used in the score calculation under Method 1 are based on data collected by the Basel Committee on Banking Supervision (BCBS). The BCBS amounts are determined based on the sum of the systemic indicator scores of the 75 largest U.S. and foreign banking organizations as measured by the BCBS, and any other banking organization that the BCBS includes in its sample total for that year. The BCBS publicly releases these values, denominated in euros, each year. Pursuant to the GSIB surcharge rule, the Board publishes the aggregate global indicator amounts each year as denominated in U.S. dollars using the euro-dollar exchange rate provided by the BCBS.
The aggregate global indicator amounts for purposes of the Method 1 score calculation for 2016 under § 217.404(b)(1)(i)(B) of the GSIB surcharge rule are:
12 U.S.C. 248(a), 321–338a, 481–486, 1462a, 1467a, 1818, 1828, 1831n, 1831o, 1831p–l, 1831w, 1835, 1844(b), 1851, 3904, 3906–3909, 4808, 5365, 5368, 5371.
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 January 23, 2017.
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Office of Government-wide Policy (OGP), General Services Administration (GSA).
Notice of Federal Travel Regulation (FTR) Bulletin 17–02, Calendar Year (CY) 2017 Privately Owned Vehicle (POV) Mileage Reimbursement Rates and Standard Mileage Rate for Moving Purposes (Relocation Allowances).
GSA is required by statute to set the mileage reimbursement rate for privately owned automobiles (POA) as the single standard mileage rate established by the Internal Revenue Service (IRS). In addition, the IRS' mileage rate for medical or moving purposes is used to determine the POA rate when a Government-furnished automobile is authorized. This IRS rate also establishes the standard mileage rate for moving purposes as it pertains to official relocation. Finally, GSA's annual privately owned airplane and motorcycle mileage reimbursement rate reviews have resulted in new CY 2017 rates. GSA conducts independent airplane and motorcycle studies that evaluate various factors, such as the cost of fuel, the depreciation of the original vehicles costs, maintenance and insurance, and/or by applying consumer price index data. FTR Bulletin 17–02 establishes and announces the new CY 2017 POV mileage reimbursement rates for official temporary duty and relocation travel ($0.535 per mile for POAs, $0.17 per mile for POAs when a Government furnished automobile is authorized, $1.15 per mile for privately owned airplanes, $0.505 per mile for privately owned motorcycles, and $0.17 per mile for moving purposes), pursuant to the process discussed above. This notice of subject bulletin is the only notification to agencies of revisions to the POV mileage rates for official travel, and relocation, other than the changes posted on GSA's Web site.
For clarification of content, please contact Mr. Cy Greenidge, Office of Government-wide Policy, Office of Asset and Transportation Management, at 202–219–2349, or by email at
GSA posts the POV mileage reimbursement rates, formerly published in 41 CFR Chapter 301, solely on the internet at
Centers for Medicare & Medicaid Services.
Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (the PRA), federal agencies are required to publish notice in the
Comments must be received by February 27, 2017.
When commenting, please reference the document identifier or OMB control number. To be assured consideration, comments and recommendations must be submitted in any one of the following ways:
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To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, you may make your request using one of following:
1. Access CMS' Web site address at
2. Email your request, including your address, phone number, OMB number, and CMS document identifier, to
3. Call the Reports Clearance Office at (410) 786–1326.
Reports Clearance Office at (410) 786–1326.
This notice sets out a summary of the use and burden associated with the following information collections. More detailed information can be found in each collection's supporting statement and associated materials (see
Under the PRA (44 U.S.C. 3501–3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep
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Centers for Medicare & Medicaid Services.
Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (PRA), federal agencies are required to publish notice in the
Comments on the collection(s) of information must be received by the OMB desk officer by January 27, 2017.
When commenting on the proposed information collections, please reference the document identifier or OMB control number. To be assured consideration, comments and recommendations must be received by the OMB desk officer via one of the following transmissions: OMB, Office of Information and Regulatory Affairs, Attention: CMS Desk Officer, Fax Number: (202) 395–5806
To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, you may make your request using one of following:
1. Access CMS' Web site address at
2. Email your request, including your address, phone number, OMB number, and CMS document identifier, to
3. Call the Reports Clearance Office at (410) 786–1326.
Reports Clearance Office at (410) 786–1326.
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501–3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires federal agencies to publish a 30-day notice in the
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Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA or Agency) is announcing the availability of the guidance entitled “Postmarket Management of Cybersecurity in Medical Devices.” FDA is issuing this guidance to inform industry and FDA staff of the Agency's recommendations for managing postmarket cybersecurity vulnerabilities for marketed medical devices. The guidance clarifies FDA's postmarket recommendations with regards to addressing cybersecurity vulnerabilities and emphasizes that manufacturers should monitor, identify, and address cybersecurity vulnerabilities and exploits as part of the postmarket management of their medical devices.
Submit either electronic or written comments on this guidance at any time. General comments on Agency guidance documents are welcome at any time.
You may submit comments as follows:
Submit electronic comments in the following way:
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• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Division of Dockets Management, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
An electronic copy of the guidance document is available for download from the Internet. See the
Suzanne Schwartz, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 5434, Silver Spring, MD 20993–0002, 301–796–6937 or Stephen Ripley, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 7301, Silver Spring, MD 20993–0002, 240–402–7911.
On February 19, 2013, the President issued Executive Order 13636—Improving Critical Infrastructure Cybersecurity, which recognized that resilient infrastructure is essential to preserving national security, economic stability, and public health and safety in the United States. Executive Order 13636 states that cyber threats to national security are among the most serious and that stakeholders must enhance the cybersecurity and resilience of critical infrastructure. This includes the Healthcare and Public Health Critical Infrastructure Sector.
In recognition of the shared responsibility for cybersecurity, the security industry has established resources including standards, guidelines, best practices and frameworks for stakeholders to adopt a culture of cybersecurity risk management. Best practices include collaboratively assessing cybersecurity intelligence information for risks to device functionality and clinical risk. FDA believes that, in alignment with Executive Order 13636 and PPD–21, public and private stakeholders should collaborate to leverage available resources and tools to establish a common understanding that assesses risks for identified vulnerabilities in medical devices among the information technology community, healthcare delivery organizations, the clinical user community, and the medical device community. These collaborations can lead to the consistent assessment and mitigation of cybersecurity threats, and their impact on medical device safety and effectiveness, ultimately reducing potential risk of patient harm.
Part 806 (21 CFR part 806) requires device manufacturers or importers to report promptly to FDA certain actions concerning device corrections and removals. However, the majority of actions taken by manufacturers to address cybersecurity vulnerabilities and exploits, referred to as “cybersecurity routine updates and patches,” are generally considered to be a type of device enhancement for which the FDA does not require advance notification or reporting under part 806. For a small subset of actions taken by manufacturers to correct device cybersecurity vulnerabilities and exploits that may pose a risk to health, the FDA would require medical device manufacturers to notify the Agency.
This guidance clarifies changes to devices to be considered cybersecurity routine updates and patches (
This guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The guidance represents the current thinking of FDA on “Postmarket Management of Cybersecurity in Medical Devices.” It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.
Persons interested in obtaining a copy of the guidance may do so by downloading an electronic copy from the Internet. A search capability for all Center for Devices and Radiological Health guidance documents is available at
This guidance refers to previously approved collections of information found in FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520). The collections of information in 21 CFR part 803 (medical device reporting) have been approved under OMB control number 0910–0437; the collections of information in 21 CFR part 806 (reports of corrections and removals) have been approved under OMB control number 0910–0359; the collections of information in 21 CFR part 807, subpart E (premarket notification) have been approved under OMB control number 0910–0120; the collections of information in 21 CFR part 810 (medical device recall authority) have been approved under OMB control number 0910–0432; the collections of information in 21 CFR part 814 (premarket approval) have been approved under OMB control number 0910–0231; the collections of information in 21 CFR part 820 (quality system regulations) have been approved under OMB control number 0910–0073; and the collections of information in 21 CFR part 822 (postmarket surveillance of medical devices) have been approved under OMB control number 0910–0449.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) has determined the regulatory review period for IMLYGIC and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of applications to the Director of the U.S. Patent and Trademark Office (USPTO), Department of Commerce, for the extension of a patent which claims that human biological product.
Anyone with knowledge that any of the dates as published (see the
You may submit comments as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
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• For written/paper comments submitted to the Division of Dockets Management, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Beverly Friedman, Office of Regulatory Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6250, Silver Spring, MD 20993, 301–796–3600.
The Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98–417) and the Generic Animal Drug and Patent Term Restoration Act (Pub. L. 100–670) generally provide that a patent may be extended for a period of up to 5 years so long as the patented item (human drug product, animal drug product, medical device, food additive, or color additive) was subject to regulatory review by FDA before the item was marketed. Under these acts, a product's regulatory review period forms the basis for determining the amount of extension an applicant may receive.
A regulatory review period consists of two periods of time: A testing phase and an approval phase. For human biological products, the testing phase begins when the exemption to permit the clinical investigations of the biological becomes effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the human biological product and continues until FDA grants permission to market the biological product. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of USPTO may award (for example, half the testing phase must be subtracted as well as any time that may have occurred before the patent was issued), FDA's determination of the length of a regulatory review period for a human biological product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(1)(B).
FDA has approved for marketing the human biologic product IMLYGIC (talimogene laherparepvec). IMLYGIC is indicated for the local treatment of unresectable cutaneous, subcutaneous, and nodal lesions in patients with melanoma recurrent after initial surgery. Subsequent to this approval, the USPTO received patent term restoration applications for IMLYGIC (U.S. Patent Nos. 7,063,835; 7,223,593; and 7,537,924) from BioVex Limited, and the USPTO requested FDA's assistance in determining the patents' eligibility for patent term restoration. In a letter dated July 12, 2016, FDA advised the USPTO that this human biological product had undergone a regulatory review period and that the approval of IMLYGIC represented the first permitted commercial marketing or use of the product. Thereafter, the USPTO requested that FDA determine the product's regulatory review period.
FDA has determined that the applicable regulatory review period for IMLYGIC is 3,809 days. Of this time, 3,352 days occurred during the testing
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the USPTO applies several statutory limitations in its calculations of the actual period for patent extension. In its applications for patent extension, this applicant seeks 1,826 days, 1,764 days, or 1400 days, respectively, of patent term extension.
Anyone with knowledge that any of the dates as published are incorrect may submit either electronic or written comments and ask for a redetermination (see
Submit petitions electronically to
Food and Drug Administration, HHS.
Notice; correction.
The Food and Drug Administration is correcting a notice entitled “Pharmaceutical Science and Clinical Pharmacology Advisory Committee; Notice of Meeting” that appeared in the
Jennifer Shepherd, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 31, Rm. 2417, Silver Spring, MD 20993–0002, 301–796–9001, FAX: 301–847–8533, email:
In the
On page 85978, in the third column, in the
Health Resources and Services Administration (HRSA), Department of Health and Human Services (HHS).
Notice.
In compliance with Section 3507(a)(1)(D) of the Paperwork Reduction Act of 1995, HRSA has submitted an Information Collection Request (ICR) to the Office of Management and Budget (OMB) for review and approval. Comments submitted during the first public review of this ICR will be provided to OMB. OMB will accept further comments from the public during the review and approval period.
Comments on this ICR should be received no later than January 27, 2017.
Submit your comments, including the ICR Title, to the desk officer for HRSA, either by email to
To request a copy of the clearance requests submitted to OMB for review, email the HRSA Information Collection Clearance Officer at
OMB No. 0915–0376—Extension.
Statute requires that THCGME program award recipients report annually on the types of primary care resident approved training programs provided, the number of approved training positions, the number who completed their residency at the end of the prior academic year and care for vulnerable populations living in underserved areas, and any other information as deemed appropriate by the Secretary. The described data collection activities will serve to meet this statutory requirement for the THCGME program award recipients in a uniform and consistent manner and will allow comparisons of this group to other trainees in non-THC programs. HRSA seeks renewal of these measures with no changes.
Health Resources and Services Administration (HRSA), Department of Health and Human Services.
Notice.
In compliance with the requirement for opportunity for public comment on proposed data collection projects (Section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995), HRSA announces plans to submit an Information Collection Request (ICR), described below, to the Office of Management and Budget (OMB). Prior to submitting the ICR to OMB, HRSA seeks comments from the public regarding the burden estimate, below, or any other aspect of the ICR.
Comments on this ICR must be received no later than February 27, 2017.
Submit your comments to
To request more information on the proposed project or to obtain a copy of the data collection plans and draft instruments, email
When submitting comments or requesting information, please include the information request collection title for reference.
The purpose of the Small Health Care Provider Quality Improvement Grant (Rural Quality) Program is to provide support to rural primary care providers for implementation of quality improvement activities. The goal of the program is to promote the development of an evidence-based culture and delivery of coordinated care in the primary care setting. Additional objectives of the program include improved health outcomes for patients, enhanced chronic disease management, and better engagement of patients and their caregivers. Organizations participating in the program are required to use an evidence-based quality improvement model, perform tests of change focused on improvement, and use health information technology (HIT) to collect and report data. HIT may include an electronic patient registry or an electronic health record, and is a critical component for improving quality and patient outcomes. With HIT it is possible to generate timely and meaningful data, which helps providers track and plan care.
HRSA specifically requests comments on (1) the necessity and utility of the proposed information collection for the proper performance of the agency's functions, (2) the accuracy of the estimated burden, (3) ways to enhance the quality, utility, and clarity of the information to be collected, and (4) the use of automated collection techniques or other forms of information technology to minimize the information collection burden.
Office for Civil Rights, Office of the Secretary, HHS.
Part A, Office of the Secretary, Statement of Organization, Functions, and Delegations of Authority of the Department of Health and Human Services (HHS) is being amended at Chapter AT, Office for Civil Rights (OCR), as last amended at 190 FR 60757, dated October 1, 2010, is amended to reflect the restructuring of the Office for Civil Rights (OCR) as follows:
I. Under Part A, Chapter AT, “Office for Civil Rights (OCR),” delete “Section AT.10 Organization” in its entirety and replace with the following:
Section AT.10 Organization. The Office for Civil Rights (OCR) is under the direction of the Director of the Office for Civil Rights (Director) who reports to the Secretary. OCR consists of the following components:
II. Under Chapter AT, Office for Civil Rights (OCR) delete “Section AT.20 Functions” in its entirety and replace with the following:
A. Office of the Director (AT). As the Department's chief officer and adviser to the Secretary for implementation and enforcement of HHS civil rights and Health Insurance Portability, Accountability Act (HIPAA) privacy, security, and breach notification rules, the Director provides leadership, priorities, guidance and supervision to and is responsible for overall policy, programs, and operations of OCR. The Director also is responsible for representing the Secretary and the Department, in coordination and consultation with the Assistant Secretary for Legislation, before Congress and the Executive Office of the President on matters relating to civil rights and the privacy, security, and breach rules and for liaising with other Federal departments and agencies charged with civil rights and privacy, security, and breach enforcement and compliance responsibilities.
B. Operations and Resources Division (ATA). The Operations and Resources Division (ORD) is headed by a Deputy Director who reports to the Director. Responsibilities of the Deputy Director for Operations and Resources include: Advising on all regional operations and the Centralized Case Management Operation (CCMO); resource management; and other staff functions that include management operations, budget, human resources, travel, information technology, support activities, management analysis, ethics, Continuity of Operations, property management, accountability, and performance metrics. Regional offices
C. Civil Rights Division (ATB). The Civil Rights Division is headed by the Deputy Director for Civil Rights, who reports to the Director. The Civil Rights Division oversees OCR's national civil rights program, including Section 1557 of the Affordable Care Act, as well as other federal civil rights statutes and regulations that prohibit non-discrimination on the basis of race, color, national original, sex, disability, and age; the Division also enforces provider conscience laws. The Civil Rights Division provides national leadership in OCR's enforcement and compliance activities, including advising OCR staff nationwide on case development and quality and assisting in developing negotiation, enforcement, and litigation strategies; promulgates regulations, policies, and guidance and provides technical assistance to assist covered entities with compliance; and provides subject matter expertise for public education and outreach activities to stakeholders nationwide. The Civil Rights Division also leads national civil rights compliance reviews; identifies and designs civil rights specific training programs for OCR staff; reviews challenges to OCR's regional civil rights findings; coordinates OCR's government-wide responsibilities for implementation of Age Discrimination Act requirements; and liaises with and provides civil rights technical assistance and advisory services to HHS Operating Divisions, as well as national advocacy, beneficiary, and provider groups, and to other Federal departments and agencies, including serving on intra- and interagency workgroups.
D. Health Information Privacy Division (ATC). The Health Information Privacy Division is headed by the Deputy Director for Health Information Privacy, who reports to the Director. The Health Information Privacy Division oversees OCR's enforcement of the HIPAA Privacy, Security and Breach Notification Rules, as well as the confidentiality provisions of Section 922 of the Public Health Service Act, as amended by the Patient Safety and Quality Improvement Act of 2005 (PSQIA). The Health Information Privacy Division provides national leadership in OCR's enforcement and compliance activities, including advising OCR staff nationwide on case development and quality and assisting in developing negotiation, enforcement, and litigation strategies; promulgates regulations, policies, and guidance and provides technical assistance to assist covered entities with compliance; and provides subject matter expertise for public education and outreach activities to stakeholders nationwide. The Division also identifies OCR training needs and designs HIPAA and PSQIA specific training programs for OCR staff; reviews challenges to OCR's regional offices' HIPAA investigative findings; leads national HIPAA compliance reviews, including audits; and liaises with and provides technical assistance and advisory services to HHS OPDIVS, as well as national advocacy, beneficiary, and provider groups, and to other Federal departments and agencies with respect to health information privacy, security, and breach initiatives and mandates, including serving on intra- and interagency workgroups.
III. Delegation of Authority. Pending further delegation, directives or orders by the Secretary or by the Director of the Office for Civil Rights, all delegations and re-delegations of authority made to officials and employees of affected organizational components will continue in them or their successors pending further re-delegations, provided they are consistent with this reorganization.
Centers for Disease Control and Prevention, HHS.
Notice of availability.
The National Institute for Occupational Safety and Health (NIOSH), within the Centers for Disease Control and Prevention, Department of Health and Human Services, announces publication of a guidance document which addresses the availability of closed-circuit escape respirators (CCERs) for purchase and the readiness of respirator manufacturers to comply with the provisions in Part 84, Subpart O, of Title 42 of the Code of Federal Regulations. Pursuant to a
NIOSH is soliciting public comment, but is implementing this guidance immediately because NIOSH has determined that prior public participation is not feasible or appropriate. Comments must be received by February 27, 2017.
You may submit comments, identified by “CDC–2016–0121” by any of the following methods:
Maryann D'Alessandro, NIOSH National Personal Protective Technology Laboratory, 626 Cochrans Mill Road, Pittsburgh, PA 15236; 1–888–654–2294 (this is a toll-free phone number);
Pursuant to the Federal Mine Safety and Health Act of 1977, at 30 U.S.C. 957, NIOSH is authorized to promulgate regulations to carry out its duties mandated by such Act. Under 42 CFR part 84—Approval of Respiratory Protective Devices, NIOSH approves respirators used by workers in mines and other workplaces for protection against hazardous atmospheres.
The self-contained self-rescuer (SCSR) approved under 42 CFR part 84, Subpart H, and closed-circuit escape respirator (CCER) approved under 42 CFR part 84, Subpart O reflect two generations of the same respirator used in certain industrial and other work settings during emergencies to enable users to escape from atmospheres that can be immediately dangerous to life and health. The SCSR/CCER is used by miners to escape dangerous atmospheres in mines.
Standards for the approval of CCERs were updated in a final rule published March 8, 2012, in which HHS codified a new Subpart O and removed only those technical requirements in 42 CFR part 84—Subpart H that were uniquely applicable to CCERs (77 FR 14168). All other applicable requirements of 42 CFR part 84 were unchanged. The purpose of these updated requirements is to enable NIOSH and MSHA to more effectively ensure the performance, reliability, and safety of CCERs used in underground coal mining. The March 2012 rulemaking was conducted in response to decades of reports from the field, particularly underground coal mines, documenting user concerns about the inability to inspect Subpart H-approved SCSRs for internal damage and the damage sustained to such devices in harsh underground environments. Furthermore, incidents in which wearers did not receive the expected duration of breathing air were common. The former Subpart H performance rating system classified SCSRs by the duration of breathing air, and was widely known to create confusion among users. Performance duration is not fixed and is dependent on a variety of factors which might result in less protection time than the wearer expects. As HHS said in the March 2012 final rule, “[t]he . . . duration rating is misleading and potentially dangerous to users” (77 FR 14168 at 14177). The disaster at the Sago Mine in 2006, in which 12 miners died and another was critically injured, accelerated the promulgation of the Subpart O standards with encouragement from the United Mine Workers of America;
The Subpart O CCER standards established a classification system based on the quantity (capacity) of oxygen available in an escape respirator. For the purpose of comparing the SCSR to the CCER, a device classified as a “10-minute” SCSR under Subpart H may be approximately equivalent to a “Cap 1” CCER under Subpart O, delivering between 20 and 59 liters of oxygen. A “1-hour” SCSR under Subpart H may be approximately equivalent to a “Cap 3” CCER under Subpart O, delivering at least 80 liters of oxygen. CCERs of any capacity used in mining are still required to pass the Subpart H “man test 4.” This test is used to demonstrate that CCERs used in mining will continue to meet the criteria established by MSHA in 30 CFR part 75 by providing a minimum duration of breathing air.
Because NIOSH determined that the resulting advances in escape respirator performance and reliability warranted accelerated adoption of the enhanced standards, manufacturers were authorized to continue to manufacture, label, and sell Subpart H-approved SCSRs only until April 9, 2015. The three-year period between April 9, 2012, and April 9, 2015, was provided for manufacturers to obtain certificates of approval for CCER designs developed under the Subpart O standards. Beginning on April 10, 2012, no new applications for approval of Subpart H SCSRs have been accepted. However, manufacturers were unable to develop Cap 3 CCERs in time to meet the April 9, 2015 transition deadline and, as a result, NIOSH initiated a rulemaking to extend the deadline. On August 12, 2015, NIOSH issued a final rule extending the concluding date for the transition to the Subpart O standards to 1 year after the date that the first approval was granted to certain CCER models (80 FR 48268).
In November 2016, the NIOSH National Personal Protective Technology Laboratory (NPPTL) had a series of communications with representatives from MSHA, the underground coal mine industry, and two respirator manufacturers concerning the ability of the current supply of person-wearable escape respirators to allow the mining industry to comply with MSHA regulations. Specifically, all but one of the manufacturers expressed concern that, without continued authorization to manufacture, label, and sell 1-hour, person-wearable SCSRs, manufacturers would be unable to fulfill the unmet needs of the underground coal mines that require the use of 1-hour person-wearable devices to satisfy MSHA regulatory requirements.
MSHA regulations require that two “approved self-rescue device or
According to MSHA,
In a letter to NPPTL, CSE Corporation, manufacturer of the 1-hour belt-wearable SCSR model SRLD, reported similar concerns among its mining industry customers.
On behalf of its customers, CSE expressed two primary concerns: (1) “how to implement the new Cap 3 CCER technology under the current budgetary constraints,” and (2) “the Cap 3 CCER technology is so new that many in the mining industry have not had the opportunity to evaluate it as related to their operational needs let alone even see a new Cap 3 CCER.” CSE concluded that, “[a]s a result of these concerns, many in the mining industry have not fully issued purchase orders for either technology SCSR or Cap 3 CCER to replace the expiring SCSRs.” CSE received NIOSH approval for its Cap 3 mining CCER on March 28, 2016,
Finally, a mining industry representative communicated with NPPTL to register similar concern about the availability of the SRLD.
After consideration of the concerns described above, NIOSH agrees that allowing the continued manufacturing, labeling, and sale of 1-hour Subpart H SCSRs is important for the continued respiratory protection of certain underground coal miners and necessary until such time as a person-wearable Cap 3 CCER is developed to replace it. Accordingly, NIOSH has published a guidance document, entitled “Closed-Circuit Escape Respirators; 42 CFR part 84, Subpart O Compliance; Guidance for Industry,” on the NIOSH National Personal Protective Technology Laboratory Web site, at
This policy does not extend to any other NIOSH regulatory requirement for respirator approval in 42 CFR part 84.
To ensure that underground coal miners have sufficient MSHA-required protection during escape from hazardous atmospheres, the guidance is effective immediately. The guidance represents the current thinking of NIOSH on this topic. It does not establish any rights for any person and is not binding on NIOSH or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations. To discuss an alternative approach, contact the NIOSH staff responsible for this guidance.
Coast Guard, DHS.
Sixty-day notice requesting comments.
In compliance with the Paperwork Reduction Act of 1995, the U.S. Coast Guard intends to submit an Information Collection Request (ICR) to the Office of Management and Budget (OMB), Office of Information and Regulatory Affairs (OIRA), requesting an extension of its approval for the following collection of information: 1625–0025, Carriage of Bulk Solids Requiring Special Handling—without change. Our ICR describes the information we seek to collect from the public. Before submitting this ICR to OIRA, the Coast Guard is inviting comments as described below.
Comments must reach the Coast Guard on or before February 27, 2017.
You may submit comments identified by Coast Guard docket number [USCG–2016–1000] to the Coast Guard using the Federal eRulemaking Portal at
A copy of the ICR is available through the docket on the Internet at
Mr. Anthony Smith, Office of Information Management, telephone 202–475–3532, or fax 202–372–8405, for questions on these documents.
In compliance with the Paperwork Reduction Act of 1995, the U.S. Coast Guard intends to submit an Information Collection Request (ICR) to the Office of Management and Budget (OMB), Office of Information and Regulatory Affairs (OIRA), requesting an extension of its approval for the following collection of information: 1625–0025, Carriage of Bulk Solids Requiring Special Handling—46 CFR part 148 without change.
This Notice relies on the authority of the Paperwork Reduction Act of 1995; 44 U.S.C. Chapter 35, as amended. An ICR is an application to OIRA seeking the approval, extension, or renewal of a Coast Guard collection of information (Collection). The ICR contains information describing the Collection's purpose, the Collection's likely burden on the affected public, an explanation of the necessity of the Collection, and other important information describing the Collection. There is one ICR for each Collection.
The Coast Guard invites comments on whether this ICR should be granted based on the Collection being necessary for the proper performance of Departmental functions. In particular, the Coast Guard would appreciate comments addressing: (1) The practical utility of the Collection; (2) the accuracy of the estimated burden of the Collection; (3) ways to enhance the quality, utility, and clarity of information subject to the Collection; and (4) ways to minimize the burden of the Collection on respondents, including the use of automated collection techniques or other forms of information technology. In response to your comments, we may revise this ICR or decide not to seek an extension of approval for the Collection. We will consider all comments and material received during the comment period.
We encourage you to respond to this request by submitting comments and related materials. Comments must contain the OMB Control Number of the ICR and the docket number of this request, [USCG–2016–1000], and must be received by February 27, 2017.
We encourage you to submit comments through the Federal eRulemaking Portal at
We accept anonymous comments. All comments received will be posted without change to
The Paperwork Reduction Act of 1995; 44 U.S.C. Chapter 35, as amended.
Fish and Wildlife Service, Interior.
Notice; request for comments.
We (U.S. Fish and Wildlife Service) have sent an Information Collection Request (ICR) to OMB for review and approval. We summarize the ICR below and describe the nature of the collection and the estimated burden and cost. This information collection is scheduled to expire on December 31, 2016. We may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. However, under OMB regulations, we may continue to
You must submit comments on or before January 27, 2017.
Send your comments and suggestions on this information collection to the Desk Officer for the Department of the Interior at OMB–OIRA at (202) 395–5806 (fax) or
To request additional information about this ICR, contact Tina Campbell at
The Electronic Duck Stamp Act of 2005 (Pub. L. 109–266) required the Secretary of the Interior to conduct a 3-year pilot program, under which States could issue electronic Federal Duck Stamps. This pilot program has now been made permanent with the passage of the Permanent Electronic Duck Stamp Act of 2013. The electronic stamp is valid for 45 days from the date of purchase and can be used immediately while customers wait to receive the actual stamp in the mail. After 45 days, customers must carry the actual Federal Duck Stamp while hunting or to gain free access to national wildlife refuges. Eight States participated in the pilot. At the end of the pilot, we provided a report to Congress outlining the successes of the program. The program improved public participation by increasing the ability of the public to obtain required Federal Duck Stamps.
Under our authorities in 16 U.S.C. 718
• Information verifying the current systems the State uses to sell hunting, fishing, and other associated licenses and products.
• Applicable State laws, regulations, or policies that authorize the use of electronic systems to issue licenses.
• Example and explanation of the codes the State proposes to use to create and endorse the unique identifier for the individual to whom each stamp is issued.
• Mockup copy of the printed version of the State's proposed electronic stamp, including a description of the format and identifying features of the licensee to be specified on the stamp.
• Description of any fee the State will charge for issuance of an electronic stamp.
• Description of the process the State will use to account for and transfer the amounts collected by the State that are required to be transferred under the program.
• Manner by which the State will transmit electronic stamp customer data.
Each State approved to participate in the program must provide the following information on a weekly basis:
• First name, last name, and complete mailing address of each individual that purchases an electronic stamp from the State.
• Face value amount of each electronic stamp sold by the State.
• Amount of the Federal portion of any fee required by the agreement for each stamp sold.
We again invite comments concerning this information collection on:
• Whether or not the collection of information is necessary, including whether or not the information will have practical utility;
• The accuracy of our estimate of the burden for this collection of information;
• Ways to enhance the quality, utility, and clarity of the information to be collected; and
• Ways to minimize the burden of the collection of information on respondents.
Comments that you submit in response to this notice are a matter of public record. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment, including your personal identifying information, may be made publicly available at any time. While you can ask OMB and us in your comment to withhold your personal identifying information from public review, we cannot guarantee that it will be done.
Fish and Wildlife Service, Interior.
Notice of issuance of permits.
We, the U.S. Fish and Wildlife Service (Service), have issued the following permits to conduct certain activities with endangered species, marine mammals, or both. We issue these permits under the Endangered Species Act (ESA) and Marine Mammal Protection Act (MMPA).
Brenda Tapia, U.S. Fish and Wildlife Service, Division of Management Authority, Branch of Permits, MS: IA, 5275 Leesburg Pike, Falls Church, VA 22041; fax (703) 358–2281.
Brenda Tapia, (703) 358–2104 (telephone); (703) 358–2281 (fax);
On the dates below, as authorized by the provisions of the ESA (16 U.S.C. 1531
Documents and other information submitted with these applications are available for review, subject to the requirements of the Privacy Act and Freedom of Information Act, by any party who submits a written request for a copy of such documents to: U.S. Fish and Wildlife Service, Division of Management Authority, Branch of Permits, MS: IA, 5275 Leesburg Pike, Falls Church, VA 22041; fax (703) 358–2281.
Fish and Wildlife Service, Interior.
Notice of receipt of applications for permit.
We, the U.S. Fish and Wildlife Service, invite the public to comment on the following applications
We must receive comments or requests for documents on or before January 27, 2017. We must receive requests for marine mammal permit public hearings, in writing, at the address shown in the
•
•
When submitting comments, please indicate the name of the applicant and the PRT# you are commenting on. We will post all comments on
Brenda Tapia, (703) 358–2104 (telephone); (703) 358–2281 (fax);
Send your request for copies of applications or comments and materials concerning any of the applications to the contact listed under
Please make your requests or comments as specific as possible. Please confine your comments to issues for which we seek comments in this notice, and explain the basis for your comments. Include sufficient information with your comments to allow us to authenticate any scientific or commercial data you include.
The comments and recommendations that will be most useful and likely to influence agency decisions are: (1) Those supported by quantitative information or studies; and (2) Those that include citations to, and analyses of, the applicable laws and regulations. We will not consider or include in our administrative record comments we receive after the close of the comment period (see
Comments, including names and street addresses of respondents, will be available for public review at the street address listed under
To help us carry out our conservation responsibilities for affected species, and in consideration of section 10(a)(1)(A) of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
The applicant requests reissuance of their permit to import and/or introduce from the sea biological samples collected on the high seas and on land, from wild animals opportunistically salvaged and incidentally captured, and captive-held animals of loggerhead sea turtle (
The applicant requests a permit to conduct interstate transport for one captive-bred Komodo dragon (
The applicant requests a permit to export and reimport nonliving museum specimens of endangered and threatened species previously accessioned into the applicant's collection for scientific research. This notification covers activities to be conducted by the applicant over a 5-year period.
The applicant requests a permit to conduct hair snare population surveys of wild polar bears (
Concurrent with publishing this notice in the
Bureau of Land Management, Interior.
30-Day notice and request for comments.
The Bureau of Land Management (BLM) has submitted an information collection request to the Office of Management and Budget (OMB) to continue the collection of information from those who wish to participate in the exploration, development, production, and utilization of geothermal resources on BLM-managed public lands, and on lands managed by other Federal agencies. The Office of Management and Budget (OMB) previously approved this information collection activity, and assigned it control number 1004–0132.
The OMB is required to respond to this information collection request within 60 days but may respond after 30 days. For maximum consideration, written comments should be received on or before January 27, 2017.
Please submit comments directly to the Desk Officer for the Department of the Interior (OMB #1004–0132), Office of Management and Budget, Office of Information and Regulatory Affairs, fax 202–395–5806, or by electronic mail at
Please indicate “Attn: 1004–0132” regardless of the form of your comments.
John Kalish, at 202–912–7312. Persons who use a telecommunication device for the deaf may call the Federal Relay Service at 1–800–877–8339, to leave a message for Mr. Kalish. You may also review the information collection request online at
The Paperwork Reduction Act (44 U.S.C. 3501–3521) and OMB regulations at 5 CFR part 1320 provide that an agency may not conduct or sponsor a collection of information unless it displays a currently valid OMB control number. Until OMB approves a collection of information, you are not obligated to respond. In order to obtain and renew an OMB control number, Federal agencies are required to seek public comment on information collection and recordkeeping activities (see 5 CFR 1320.8(d) and 1320.12(a)).
As required at 5 CFR 1320.8(d), the BLM published a 60-day notice in the
The BLM now requests comments on the following subjects:
1. Whether the collection of information is necessary for the proper functioning of the BLM, including whether the information will have practical utility;
2. The accuracy of the BLM's estimate of the burden of collecting the information, including the validity of the methodology and assumptions used;
3. The quality, utility and clarity of the information to be collected; and
4. How to minimize the information collection burden on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other forms of information technology.
Please send comments as directed under
The following information pertains to this request:
Forms:
• Form 3200–9, Notice of Intent to Conduct Geothermal Resource Exploration Operations;
• Form 3203–1, Nomination of Lands for Competitive Geothermal Leasing;
• Form 3260–2, Geothermal Drilling Permit;
• Form 3260–3, Geothermal Sundry Notice; and
• Form 3260–4; Geothermal Well Completion Report; and
• Form 3260–5; Monthly Report of Geothermal Operations.
The estimated burdens are itemized in the following table:
Bureau of Land Management, U.S. Department of the Interior.
Notice of public meeting.
In accordance with the Federal Land Policy and Management Act (FLPMA) and the Federal Advisory Committee Act of 1972 (FACA), the U.S. Department of the Interior, Bureau of Land Management (BLM) Boise District Resource Advisory Council (RAC), will hold a meeting as indicated below.
The meeting will be held January 25, 2017, at the Boise District Office, 3948 Development Avenue, Boise, Idaho 83705 beginning at 9:00 a.m. and adjourning by 4:00 p.m. Members of the public are invited to attend. A public comment period will be held from 11:00 a.m. to 11:10 a.m.
Michael Williamson, Public Affairs Specialist and RAC Coordinator, BLM Boise District, 3948 Development Ave., Boise, Idaho 83705, telephone (208) 384–3393.
The 15-member Council advises the Secretary of the Interior, through the BLM, on a variety of planning and management issues associated with public land management in southwestern Idaho. During the January meeting the Boise District RAC will receive updates on the Bruneau-Owyhee Sage-grouse Habitat (BOSH) Project, Tri-State Fuel Break, Gateway West Final Supplemental Environmental Impact Statement, and Planning 2.0. Agenda items and location may be modified due to changing circumstances.
The public may present written or oral comments to members of the Council. At each full RAC meeting, time is provided in the agenda for hearing public comments. Depending on the number of persons wishing to comment and time available, the time for individual oral comments may be limited. Individuals who plan to attend and need special assistance should contact the BLM Coordinator as provided above. Persons who use a telecommunications device for the deaf (TDD) may call the Federal Relay Service (FRS) at 1–800–877–8339 to contact Mr. Williamson. The FRS is available 24 hours a day, 7 days a week, to leave a message or question with Mr. Williamson. You will receive a reply during normal business hours.
Bureau of Land Management, Interior.
Notice of public meetings.
In accordance with the Federal Land Policy and Management Act of 1976 and the Federal Advisory Committee Act of 1972, the U.S. Department of the Interior, Bureau of Land Management (BLM) Dominguez-Escalante National Conservation Area
The meeting will be held February 22, 2017. Any adjustments to this meeting will be advertised on the Dominguez-Escalante NCA RMP Web site:
The meeting will be held at the Mesa County Central Services Building, 200 S. Spruce St., Room 40, Grand Junction, CO 81501.
Collin Ewing, Advisory Council Designated Federal Official, 2815 H Road, Grand Junction, CO 81506. Phone: (970) 244–3049. Email:
The 10-member Council advises the Secretary of the Interior, through the BLM, on a variety of planning and management issues associated with the Resource Management Plan (RMP) process for the Dominguez-Escalante NCA and Dominguez Canyon Wilderness. Topics of discussion during the meeting may include priorities for the RMP and travel plan.
These meetings are open to the public. The public may present written comments to the Council. Time will be allocated at the middle and end of each meeting to hear public comments. Depending on the number of persons wishing to comment and time available, the time for individual, oral comments may be limited at the discretion of the chair.
National Park Service, Interior.
Notice of proposal.
The National Park Service (NPS) is publishing for public review and comment a proposal that the Department of the Interior (Department) designate the thermal features within Valles Caldera National Preserve (Preserve), New Mexico, as “significant thermal features,” and that they be added to the list of significant thermal features within units of the National Park System, in accordance with the Geothermal Steam Act (the Act), as amended. The Act requires that those thermal features in units of the National Park System that are determined to be significant, and included in or added to the list at 30 U.S.C. 1026, must be protected from any geothermal leasing, exploration, development or utilization that might adversely affect those features.
Comments must be received on or before January 27, 2017 to be assured of receiving consideration. After considering all comments received, the NPS will issue a final notice of the Department's determination in the
Submit comments to the PEPC Web site at
Ms. Julia F. Brunner, Policy and Regulatory Specialist, Geologic Resources Division, National Park Service, P.O. Box 25287, Lakewood CO 80225–0287; telephone 303–969–2012.
The Geothermal Steam Act (the Act), as amended, authorizes the Secretary of the Interior (Secretary) to issue geothermal leases for exploration, development and utilization of geothermal resources on available public lands administered by the Department of the Interior, as well as on federal lands administered by the Department of Agriculture, and on lands that have been conveyed by the United States subject to a reservation to the United States of the geothermal resources in those lands. 30 U.S.C. 1002. The Bureau of Land Management (BLM) administers the geothermal program pursuant to its regulations at 43 CFR parts 3000, 3200, and 3280. On federal lands managed by the Agriculture Department or used for a federal water power project, the BLM must first obtain the consent of the Secretary of Agriculture or Secretary of Energy, respectively, before it may issue any leases for geothermal resources underlying those lands. See 30 U.S.C. 1014(b).
The Act does not make lands administered by the NPS subject to geothermal leasing, thereby prohibiting geothermal leasing in park units (30 U.S.C. 1002, 1014(c)). In addition, the Valles Caldera National Preserve has been expressly withdrawn from the operation of the geothermal leasing laws. 16 U.S.C. 698v–11(b)(9).
The Act requires the Secretary to maintain a list of significant thermal features within units of the National Park System (30 U.S.C. 1026(a)). For those listed significant thermal features, the Act requires:
(1) The Secretary to maintain a monitoring program, including a research program carried out by NPS in cooperation with the U.S. Geological Survey (30 U.S.C. 1026(b));
(2) the Secretary to determine, on the basis of scientific evidence, and subject to notice and public comment, whether exploration, development, or utilization of the land subject to a lease application would be reasonably likely to result in a significant adverse effect on any listed feature and, if so, not to issue the lease (30 U.S.C. 1026(c));
(3) the Secretary to determine, on the basis of scientific evidence, whether the exploration, development, or utilization of the land subject to a lease or drilling permit is reasonably likely to
(4) the Secretary of Agriculture to consider the effects on significant thermal features within units of the National Park System in determining whether to consent to leasing on national forest lands or other lands administered by the Department of Agriculture (30 U.S.C. 1026(e)).
The Act lists sixteen park units as having significant thermal features, and the Act also authorizes the Secretary to add significant thermal features within park units to the list after notice and public comment (see 30 U.S.C. 1026(a)).
In 1986, the Department of the Interior and Related Agencies Appropriations Act, Pub. L. 99–591, Section 115 paragraph 2(a) (the 1986 Act) directed the Secretary to collect and publish in the
(1) Size, extent, and uniqueness,
(2) Scientific and geologic significance,
(3) The extent to which such features remain in a natural, undisturbed condition, and
(4) Significance of thermal features to the authorized purposes for which the park unit was created.
The Department designated the NPS as the lead agency to prepare and publish the list. On February 13, 1987, as directed by the 1986 Act, the NPS published a Notice of the Proposed List of Significant Thermal Features within Units of the National Park System (52 FR 4700). After receiving 23 comments on the February 1987 notice, the NPS published the final list on August 3, 1987 (52 FR 28790), concluding that 13 park units contained significant thermal features. The 1988 Act subsequently listed these 13 park units, as well as three additional park units, as containing significant thermal features (30 U.S.C. 1001(f)).
In the process of designating the significant thermal features pursuant to the 1986 Act, the NPS defined a “thermal feature” broadly as “surface manifestations of a subsurface heat source” (see 52 FR 29890, 28792 (Aug. 3, 1987)) or “subsurface thermal activity” (see 52 FR 4700, 4702 (Feb. 13, 1987)). The NPS's 1987 definition of “thermal feature” encompassed not only the surface manifestations of underlying hydrothermal systems, but also surface manifestations of volcanic processes (see 52 FR 29890, 28792). When listing various thermal features, the NPS categorized them as “hydrothermal” or “volcanic” to indicate the surface manifestation resulting from differing types of subsurface thermal activity, systems or features, although this description did not affect the significance of any particular feature (see id.; 53 FR 4700, 4702).
More recently, the NPS has defined “thermal resources” as comprising a subsurface heat source, heat conduit rock formations, and air and/or water that circulates through the formation and may discharge at the surface; such resources create features such as geysers, hot springs, mudpots, fumaroles, unique/rare mineral precipitates and formations, and hydrophilic biotic communities (NPS Management Policies § 4.8.2.3)(2006)). To be consistent with both the 1987 and the 2006 definitions, the NPS proposes in this notice to define “thermal feature” as the surface manifestation of subsurface thermal resources, systems, or activity, and to use the words “hydrothermal” and “volcanic” as a simple description of the type of underlying thermal activity that resulted in how the feature appears on the earth's surface.
For the purpose of this notice, the NPS also proposes to remain consistent with both of its 1987 interpretations of the four significance criteria as follows:
(1) Size, extent, and uniqueness—NPS does not establish lower or upper limits on the size or extent of a feature. Each feature is identified according to its existing surface dimensions. For a feature to be considered significant under this criterion, it is identified as unique to the region, the nation, or, in some cases, the world.
(2) Scientific and geologic significance—NPS considers the feature “significant” when the feature has been identified as contributing to geologic, biological, or other scientific knowledge compared with similar features in other areas or makes a significant contribution to the understanding of similar systems.
(3) The extent to which such features remain in a natural, undisturbed condition—Under this criterion, no limits are established for amount or degree of development. The feature may be significant if it remains in a natural, relatively undisturbed condition. Modifications or improvements may be acceptable if: The alterations were necessary to preserve a developed feature; modifications intended to accommodate or improve public enjoyment of the feature are judged to be consistent or compatible with the intent of the enabling legislation; and so long as disturbances or developments, if any, have not affected the subsurface thermal regime.
(4) Significance of thermal features to the authorized purposes for which the park unit was created—NPS considers features significant if they were the basis for establishment of the unit (
Valles Caldera National Preserve was added as a unit of the National Park System on December 19, 2014. This unit includes the vast majority of the caldera itself, which is hereby proposed for addition to the list of significant thermal features as a single volcanic feature. Excepted from this proposal is the portion of the caldera (10–15%) which lies outside the Preserve's western and southern boundaries (see Figure 1). The subsurface heat that remains of this volcanic activity allows meteoric waters percolating down from the surface to become heated, which is expressed at the surface in several places within and in the vicinity of the caldera in the form of hydrologic hot springs or, in dry seasons, fumaroles or steam vents. The Preserve contains numerous thermal features (single or grouped contiguous features such as hot spring pools) in four geographic areas containing surface waters (Redondo Creek, Alamo Canyon, Sulphur Creek Canyon, and San Antonio Creek), as well as seasonal fumaroles and acid ponds or springs. These thermal features are also separately proposed for inclusion to the list as significant thermal (hydrothermal) features.
The Department proposes to list the entirety of the caldera that lies within Valles Caldera National Preserve as one significant thermal feature. The Preserve's thermal feature is part of a geothermal landscape that extends beyond the Preserve's perimeter boundary; thermal features located outside the Preserve's perimeter boundary are not included in this proposed designation (Fig. 2). The magma chamber beneath the Preserve is located under the southwest portion of the caldera (Fig. 3), with surface expressions of thermal features primarily in the vicinity of Redondo Canyon, Sulphur Creek Canyon, and Alamo Canyon. A total of 29 geothermal fumaroles have been mapped in these canyons (Fig. 4), and others may exist in other areas of the Preserve that have not yet been surveyed (Goff and Goff, 2017). Currently, approximately
The following significance criteria have been analyzed and are applicable to every component of the caldera feature and volcanic system within the Preserve.
(1)
The approximately 89,000-acre Preserve encompasses a 1.25 million year-old dormant volcanic caldera (13.7 miles in diameter) that lies in the center of the Jemez Mountains in northern New Mexico. The youngest post-caldera volcanic eruption (Banco Bonito Rhyolite lava flow) occurred about 68 thousand years ago. The Valles Caldera that formed 1.25 million years ago is the younger of two calderas within the Preserve, and lies to the southwest of the comparably sized but now nearly imperceptible Toledo Caldera (1.62 Ma; Fig. 6). Each caldera produced about 95 mi
(2)
Water, steam, and soil samples from these sites have been and continue to be collected by scientists conducting geothermal and planetary research, and by scientists searching for living organisms in extreme environments. Because of its geologic uniqueness, NPS staff will use this area for public education, as the site illustrates the exceptional geologic values of the Jemez Mountains—sulfuric acid fumaroles and mud pots, and chloride-bicarbonate hot springs and cold springs—all characteristics of geologically active volcanic formations.
(3)
The San Antonio Warm Springs and the Sulphur Springs-Alamo Canyon areas have been moderately to significantly disturbed by development (recreational structures, containment ponds, and other improvements as well as several geothermal exploration wells (drilled between 1970–1984), most of which have been permanently capped and reclaimed) that occurred prior to federal acquisition of the Preserve in 2000; however, such alterations have not changed the thermal regime. Other features, such as acid ponds and fumaroles, are undisturbed in natural habitats. Despite some past geothermal exploration and drilling, the caldera itself as a volcanic feature remains unaffected in the operation of its volcanic thermal regime, and thus remains in a natural, undisturbed condition.
(4)
Valles Caldera National Preserve was established “to protect, preserve, and restore the fish, wildlife, watershed, natural, scientific, scenic, geologic, historic, cultural, archaeological, and recreational values of the area” (Pub. L. 113–291, Sec. 3043(b)(1)). The caldera is an important natural and geologic resource, contributes to scientific understanding of the geology of the region, and also contributes to the other values for which this NPS unit was established.
Like Yellowstone National Park, which is also a caldera, Valles Caldera National Preserve contains multiple hydrothermal features that are related to the magma source. In addition, the dynamic nature of this area means that additional hydrothermal features may develop over time. The NPS therefore proposes to list these hydrothermal features as one significant thermal feature. The following significance criteria have been analyzed for each feature listed and has been found to be applicable to each feature within the system.
(1)
(b) In addition, the Preserve has numerous hot and cold sulfuric acid fumaroles, particularly in the Alamo Canyon and Redondo Canyon regions. There are at least 29 fumaroles mapped in the Redondo and Alamo canyon areas; see Fig 2 and the map at:
(c) The 40-acre private inholding of Sulphur Springs contains the highest temperature hot springs (189 °F) in the state of New Mexico; the Sulphur Springs area includes at least 7 significant named hot springs, mud pots and fumaroles, all of which are thermally anomalous; several other acid springs and gas vents are cold. The springs include such colorful descriptive names as Kidney and Stomach Trouble Spring, Footbath Spring, Ladies' Bathhouse Spring, Laxitive [sic] Spring, Turkey Spring, Lemonade Spring, and Electric Spring. Some of these were historically referred to as Main Bathhouse Spring, Sour Spring, and Alum Spring.
(d) Valle Grande spring: The easternmost named spring within the Preserve is the Valle Grande Spring (14 °C), although topographic maps indicate numerous other surrounding unnamed springs.
Uniqueness—These springs and fumaroles (some of which take the form of bubbling mudpots in wet seasons) are indicators of subsurface thermal processes, are unique to the region, and are easily accessible for study and research; there are no comparable features in the State of New Mexico. The only other places in the United States that have such systems are Yellowstone National Park in Wyoming, Montana, and Idaho; Lassen Volcano, the Long Valley Caldera, and The Geysers in California, the latter two having thermal regimes degraded by geothermal production; and a very small system at Dixie Valley, Nevada.
(2)
(3)
(4)
Once designated, the NPS will continue to work closely with the BLM and the U.S. Forest Service to ensure that monitoring data and other scientific information regarding the significant thermal features of Valles Caldera National Preserve are incorporated into leasing and permitting decisions.
On the basis of the record
The Commission, pursuant to section 751(c) of the Act (19 U.S.C. 1675(c)), instituted these reviews on October 1, 2015 (80 FR 59192) and determined on January 4, 2016 that it would conduct full reviews (81 FR 1967, January 14, 2016). Notice of the scheduling of the Commission's reviews and of a public hearing to be held in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the
The Commission made these determinations pursuant to section 751(c) of the Act (19 U.S.C. 1675(c)). It completed and filed its determinations in these reviews on December 21, 2016. The views of the Commission are contained in USITC Publication 4655 (December 2016), entitled
By order of the Commission.
Advisory Committee on the Federal Rules of Appellate Procedure, Judicial Conference of the United States.
Notice of cancellation of public hearing.
The following public hearing on proposed amendments to the Federal Rules of Appellate Procedure has been canceled: Appellate Rules Hearing on January 20, 2017, in Denver, Colorado. Announcement for this meeting was previously published in 81 FR 52713.
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 of application.
Registered bulk manufacturers of the affected basic classes, and applicants therefore, may file written comments on or objections to the issuance of the proposed registration in accordance with 21 CFR 1301.33(a) on or before February 27, 2017.
Written comments should be sent to: Drug Enforcement Administration, Attention: DEA Federal Register Representative/DRW, 8701 Morrissette Drive, Springfield, Virginia 22152.
The Attorney General has delegated her authority under the Controlled Substances Act to the Administrator of the Drug Enforcement Administration (DEA), 28 CFR 0.100(b). Authority to exercise all necessary functions with respect to the promulgation and implementation of 21 CFR part 1301, incident to the registration of manufacturers, distributors, dispensers, importers, and exporters of controlled substances (other than final orders in connection with suspension, denial, or revocation of registration) has been redelegated to the Deputy Assistant Administrator of the DEA Office of Diversion Control (“Deputy Assistant Administrator”) pursuant to section 7 of 28 CFR part 0, appendix to subpart R.
In accordance with 21 CFR 1301.33(a), this is notice that on September 26, 2016, AMRI Rensselaer, Inc., 33 Riverside Avenue, Rensselaer, New York 12144 applied to be registered as a bulk manufacturer of the following basic classes of controlled substances:
The company plans to manufacture bulk controlled substances for use in product development and for distribution to its customers.
Notice of application.
Registered bulk manufacturers of the affected basic classes, and applicants therefore, may file written comments on or objections to the issuance of the proposed registration in accordance with 21 CFR 1301.34(a) on or before January 27, 2017. Such persons may also file a written request for a hearing on the application pursuant to 21 CFR 1301.43 on or before January 27, 2017.
Written comments should be sent to: Drug Enforcement Administration, Attention: DEA Federal Register Representative/DRW, 8701 Morrissette Drive, Springfield, Virginia 22152. All requests for hearing must be sent to: Drug Enforcement Administration, Attn: Administrator, 8701 Morrissette Drive, Springfield, Virginia 22152. All requests for hearing should also be sent to: (1) Drug Enforcement Administration, Attn: Hearing Clerk/LJ, 8701 Morrissette Drive, Springfield, Virginia 22152; and (2) Drug Enforcement Administration, Attn: DEA Federal Register Representative/DRW, 8701 Morrissette Drive, Springfield, Virginia 22152. Comments and request for hearing on applications to import narcotic raw material are not appropriate. 72 FR 3417 (January 25, 2007).
The Attorney General has delegated her authority under the Controlled Substances Act to the Administrator of the Drug Enforcement Administration (DEA), 28 CFR 0.100(b). Authority to exercise all necessary functions with respect to the promulgation and implementation of 21 CFR part 1301, incident to the registration of manufacturers, distributors, dispensers importers, and exporters of, controlled substances (other than final orders in connection with suspension, denial, or revocation of registration) has been redelegated to the Assistant Administrator of the DEA Diversion Control Division (“Assistant Administrator”) pursuant to section 7 of 28 CFR part 0, appendix to subpart R.
In accordance with 21 CFR 1301.34(a), this is notice that on October 14, 2016, Noramco, Inc., 1440 Olympic Drive, Athens, Georgia 30601 applied to be registered as an importer of the following basic classes of controlled substances:
The company plans to import thebaine derivatives (9333) as reference standards. The company plans to import an intermediate form of tapentadol (9780) to bulk manufacture tapentadol for distribution to its customers. The company plans to import phenylacetone (8501) and poppy straw concentrate (9670) to manufacture other controlled substances.
Notice of application.
Registered bulk manufacturers of the affected basic classes, and applicants therefore, may file written comments on or objections to the issuance of the proposed registration in accordance with 21 CFR 1301.33(a) on or before February 27, 2017.
Written comments should be sent to: Drug Enforcement Administration, Attention: DEA Federal Register Representative/DRW, 8701 Morrissette Drive, Springfield, Virginia 22152.
The Attorney General has delegated her authority under the Controlled Substances Act to the Administrator of the Drug Enforcement Administration (DEA), 28 CFR 0.100(b). Authority to exercise all necessary functions with respect to the promulgation and implementation of 21 CFR part 1301, incident to the registration of manufacturers, distributors, dispensers, importers, and exporters of controlled substances (other than final orders in connection with suspension, denial, or revocation of registration) has been redelegated to the Deputy Assistant Administrator of the DEA Office of Diversion Control (“Deputy Assistant Administrator”) pursuant to section 7 of 28 CFR part 0, appendix to subpart R.
In accordance with 21 CFR 1301.33(a), this is notice that on September 19, 2016, Navinta LLC, 1499
The company plans to initially to manufacture API quantities of the listed controlled substances for validation purposes and FDA approval, then eventually up FDA approval to produce commercial size batches for distribution to dosage form manufacturers.
Notice of registration.
Registrants listed below have applied for and been granted registration by the Drug Enforcement Administration (DEA) as bulk manufacturers of various classes of controlled substances.
The companies listed below applied to be registered as manufacturers of various basic classes of controlled substances. Information on previously published notices is listed in the table below. No comments or objections were submitted for these notices.
The DEA has considered the factors in 21 U.S.C. 823(a) and determined that the registration of these registrants to manufacture the applicable basic classes of controlled substances is consistent with the public interest and with United States obligations under international treaties, conventions, or protocols in effect on May 1, 1971. The DEA investigated each of the company's maintenance of effective controls against diversion by inspecting and testing each company's physical security systems, verifying each company's compliance with state and local laws, and reviewing each company's background and history.
Therefore, pursuant to 21 U.S.C. 823(a), and in accordance with 21 CFR 1301.33, the DEA has granted a registration as a bulk manufacturer to the above listed persons.
Notice of application.
Registered bulk manufacturers of the affected basic classes, and applicants therefore, may file written comments on or objections to the issuance of the proposed registration in accordance with 21 CFR 1301.33(a) on or before February 27, 2017.
Written comments should be sent to: Drug Enforcement Administration, Attention: DEA Federal Register Representative/DRW, 8701 Morrissette Drive, Springfield, Virginia 22152.
The Attorney General has delegated her authority under the Controlled Substances Act to the Administrator of the Drug Enforcement Administration (DEA), 28 CFR 0.100(b). Authority to exercise all necessary functions with respect to the promulgation and implementation of 21 CFR part 1301, incident to the registration of manufacturers, distributors, dispensers, importers, and exporters of controlled substances (other than final orders in connection with suspension, denial, or revocation of registration) has been redelegated to the Assistant Administrator of the DEA Diversion Control Division (“Assistant Administrator”) pursuant to section 7 of 28 CFR part 0, appendix to subpart R.
In accordance with 21 CFR 1301.33(a), this is notice that on December 16, 2015, Synthcon, LLC, 770 Wooten Road, Unit 101, Colorado Springs, Colorado 80915 applied to be registered as a bulk manufacturer of the following basic classes of controlled substances:
The company plans to manufacture the above-listed controlled substances in bulk for distribution to its customers. In reference to drug codes 7360 marihuana and 7370 tetrahydrocannabinols the company plans to bulk manufacture both as synthetic substances. No other activity for these drug codes is authorized for this registration.
Notice of application.
Registered bulk manufacturers of the affected basic classes, and applicants therefore, may file written comments on or objections to the issuance of the proposed registration in accordance with 21 CFR 1301.33(a) on or before February 27, 2017.
Written comments should be sent to: Drug Enforcement Administration, Attention: DEA Federal Register Representative/DRW, 8701 Morrissette Drive, Springfield, Virginia 22152.
The Attorney General has delegated her authority under the Controlled Substances Act to the Administrator of the Drug Enforcement Administration (DEA), 28 CFR 0.100(b). Authority to exercise all necessary functions with respect to the promulgation and implementation of 21 CFR part 1301, incident to the registration of manufacturers, distributors, dispensers, importers, and exporters of controlled substances (other than final orders in connection with suspension, denial, or revocation of registration) has been redelegated to the Assistant Administrator of the DEA Diversion Control Division (“Assistant Administrator”) pursuant to section 7 of 28 CFR part 0, appendix to subpart R.
In accordance with 21 CFR 1301.34(a), this is notice that on September 1, 2016, Cambridge Isotope Laboratories, Inc., 50 Frontage Road, Andover, Massachusetts 01810 applied to be registered as a bulk manufacturer of morphine (9300), a basic class of controlled substance listed in schedule II:
The company plans to utilize small quantities of the listed controlled substance for use in product development of analytical reference standards, for distribution to its customers.
Notice of application.
Registered bulk manufacturers of the affected basic classes, and applicants therefore, may file written comments on or objections to the issuance of the proposed registration in accordance with 21 CFR 1301.34(a) on or before January 27, 2017. Such persons may also file a written request for a hearing on the application pursuant to 21 CFR 1301.43 on or before January 27, 2017.
Written comments should be sent to: Drug Enforcement Administration, Attention: DEA Federal Register Representative/DRW, 8701 Morrissette Drive, Springfield, Virginia 22152. All requests for hearing must be sent to: Drug Enforcement Administration, Attn: Administrator, 8701 Morrissette Drive, Springfield, Virginia 22152. All requests for hearing should also be sent to: (1) Drug Enforcement Administration, Attn: Hearing Clerk/LJ, 8701 Morrissette Drive, Springfield, Virginia 22152; and (2) Drug Enforcement Administration, Attn: DEA Federal Register Representative/DRW, 8701 Morrissette Drive, Springfield, Virginia 22152.
The Attorney General has delegated her authority under the Controlled Substances Act to the Administrator of the Drug Enforcement Administration (DEA), 28 CFR 0.100(b). Authority to exercise all necessary functions with respect to the promulgation and implementation of 21 CFR part 1301, incident to the registration of manufacturers, distributors, dispensers importers, and exporters of controlled substances (other than final orders in connection with suspension, denial, or revocation of registration) has been redelegated to the Assistant Administrator of the DEA Diversion Control Division (“Assistant Administrator”) pursuant to section 7 of 28 CFR part 0, appendix to subpart R.
In accordance with 21 CFR 1301.34(a), this is notice that on September 20, 2016, Wildlife Laboratories, Inc., 1230 W. Ash Street, Suite D, Windsor, Colorado 80550–8055 applied to be registered as an importer of the following basic class of controlled substances.
The company plans to import the listed controlled substance for sale to its customers.
Notice of application.
Registered bulk manufacturers of the affected basic classes, and applicants therefore, may file written comments on or objections to the issuance of the proposed registration in accordance with 21 CFR 1301.33(a) on or before February 27, 2017.
Written comments should be sent to: Drug Enforcement
The Attorney General has delegated her authority under the Controlled Substances Act to the Administrator of the Drug Enforcement Administration (DEA), 28 CFR 0.100(b). Authority to exercise all necessary functions with respect to the promulgation and implementation of 21 CFR part 1301, incident to the registration of manufacturers, distributors, dispensers, importers, and exporters of controlled substances (other than final orders in connection with suspension, denial, or revocation of registration) has been redelegated to the Assistant Administrator of the DEA Diversion Control Division (“Assistant Administrator”) pursuant to section 7 of 28 CFR part 0, appendix to subpart R.
In accordance with 21 CFR 1301.33(a), this is notice that on August 16, 2016, Cayman Chemical Company, 1180 East Ellsworth Road, Ann Arbor, Michigan 48108 applied to be registered as a bulk manufacturer of the following basic classes of controlled substances:
The company plans to manufacture bulk controlled substances for use in product development of analytical reference standards, for distribution to its customers.
Notice of registration.
Registrants listed below have applied for and been granted registration by the Drug Enforcement Administration (DEA) as importers of various classes of schedule I or II controlled substances.
The companies listed below applied to be registered as importers of various basic classes of controlled substances. Information on previously published notices is listed in the table below. No comments or objections were submitted and no requests for hearing were submitted for these notices.
The DEA has considered the factors in 21 U.S.C. 823, 952(a) and 958(a) and determined that the registration of the listed registrants to import the applicable basic classes of schedule I or II controlled substances is consistent with the public interest and with United States obligations under international treaties, conventions, or protocols in effect on May 1, 1971. The DEA investigated each company's maintenance of effective controls against diversion by inspecting and testing each company's physical security systems, verifying each company's compliance with state and local laws, and reviewing each company's background and history.
Therefore, pursuant to 21 U.S.C. 952(a) and 958(a), and in accordance with 21 CFR 1301.34, the DEA has granted a registration as an importer for schedule I or II controlled substances to the above listed persons.
Notice of application.
Registered bulk manufacturers of the affected basic classes, and applicants therefore, may file written comments on or objections to the issuance of the proposed registration in accordance with 21 CFR 1301.33(a) on or before February 27, 2017.
Written comments should be sent to: Drug Enforcement Administration, Attention: DEA Federal Register Representative/DRW, 8701 Morrissette Drive, Springfield, Virginia 22152.
The Attorney General has delegated her authority under the Controlled Substances Act to the Administrator of the Drug Enforcement Administration (DEA), 28 CFR 0.100(b). Authority to exercise all necessary functions with
In accordance with 21 CFR 1301.33(a), this is notice that on September 5, 2016, Johnson Matthey Inc., Pharmaceuticals Materials, 900 River Road, Conshohocken, Pennsylvania 19428, applied to be registered as a bulk manufacturer of the following basic classes of controlled substances:
The company plans to manufacture the listed controlled substances in bulk for distribution and sale to its customers. Thebaine (9333) will be used to manufacture other controlled substances for sale in bulk to its customers.
Notice.
The Department of Labor (DOL) is submitting the Office of Workers' Compensation Programs (OWCP) sponsored information collection request (ICR) revision titled, “Request for State or Federal Workers' Compensation Information,” 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
Submit comments on or before January 27, 2017.
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
Submit comments about this request to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL–OWCP, Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503, Fax: 202–395–6881 (this is not a toll-free number), email:
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 approval under the PRA for revisions to the Request for State or Federal Workers' Compensation Information (Form CM–905) information collection. Form CM–905 collects information to process a claim under the Black Lung Benefits Act (30 U.S.C. 901
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 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 Office of Workers' Compensation Programs (OWCP) sponsored information collection request (ICR) titled, “Medical Travel Refund Request,” to the Office of Management and Budget (OMB) for review and approval for continued use, without change, in accordance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501
Submit comments on or before January 27, 2017.
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
Submit comments about this request to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL–OWCP, Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503, Fax: 202–395–6881 (this is not a toll-free number), email:
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).
Respondents use Form OWCP–957 to request reimbursement for out-of-pocket expenses incurred when traveling to medical providers for covered medical testing or treatment. 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.
OMB authorization for an ICR cannot be for more than three (3) years without renewal, and the current approval for this collection is scheduled to expire on December 31, 2016; however, the DOL notes that existing information collection requirements submitted to the OMB receive a month-to-month extension while they undergo review. New requirements would only take effect upon OMB approval. For additional substantive information about this ICR, see the related notice published in the
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 Office of Workers' Compensation Programs (OWCP) sponsored information collection request (ICR) titled, “Survivor's Form for Benefits under the Black Lung Benefits Act,” to the Office of Management and Budget (OMB) for review and approval for continued use, without change, in accordance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501
Submit comments on or before January 27, 2017.
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
Submit comments about this request to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL–OWCP, Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503, Fax: 202–395–6881 (this is not a toll-free number), email:
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 to maintain PRA authorization for the Survivor's Form for Benefits under the Black Lung Benefits Act, Form CM–912, information collection. A survivor of a deceased miner files Form CM–912 to apply for BLBA benefits. The OWCP, Division of Coal Mine Workers' Compensation uses the information in determining the survivor's entitlement to BLBA benefits. BLBA sections 411(a) and 422(a) authorize 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.
OMB authorization for an ICR cannot be for more than three (3) years without renewal, and the current approval for this collection is scheduled to expire on December 31, 2016. The DOL seeks to extend PRA authorization for this information collection for three (3) more years, without any change to existing requirements. The DOL also notes that existing information collection requirements submitted to the OMB receive a month-to-month extension while they undergo review. For additional substantive information about this ICR, see the related notice published in the
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,
Occupational Safety and Health Administration (OSHA), Labor.
Request for comments.
OSHA requests comments concerning its proposed revision of the information collection requirements specified by its Program Regulation for Nationally Recognized Testing Laboratories, 29 CFR 1910.7 (the Regulation). The Regulation specifies procedures that organizations must follow to apply for, and to maintain,
Submit comments, information, and documents in response to this notice, or requests for an extension of time to make a submission, on or before February 27, 2017.
Submit comments by any of the following methods:
Theda Kenney (
The Department of Labor, as part of its continuing effort to reduce paperwork and respondent burden, conducts a preclearance consultation program to provide the public with an opportunity to comment on continuing information collection requirements in accordance with the Paperwork Reduction Act of 1995 (PRA–95) (44 U.S.C. 3506(c)(2)(A)). This program ensures that information is in the desired format, reporting burden (time and costs) is minimal, collection instruments are clearly understood, and OSHA's estimate of the information collection burden is accurate. The Occupational Safety and Health Act of 1970 (the OSH Act) (29 U.S.C. 651
A number of standards issued by OSHA contain requirements that specify employers use only equipment, products, or material tested or approved by a Nationally Recognized Testing Laboratory (NRTL). These requirements ensure that employers use safe and efficacious equipment, products, or materials in complying with the standards. Accordingly, OSHA promulgated its Program Regulation for Nationally Recognized Testing Laboratories, 29 CFR 1910.7 (the Regulation). The Regulation specifies procedures that organizations must follow to apply for, and to maintain, OSHA's recognition to test and certify equipment, products, or material for safe use in the workplace.
OSHA has a particular interest in comments on the following issues:
1. Whether the proposed information collection requirements are necessary and useful for the proper performance of the Agency's functions;
2. The accuracy of OSHA's estimate of the burden (time and costs) of the information collection requirements, including the validity of the methodology and assumptions used;
3. The quality, utility, and clarity of the information collected; and
4. Ways to minimize the burden on organizations that must comply; for example, by using automated or other technological information collection and transmission techniques.
OSHA proposes to revise the Office of Management and Budget's (OMB) approval of the collection of information requirements specified by the Regulation. In addition to extending its current approval by OMB, the Agency plans to implement a proposed fee schedule, see 80 FR 57222, Sept. 22, 2015. This proposed fee schedule would be based in part on proposed streamlined procedures for accepting and reviewing applications for NRTL recognition, expansion and renewal, and would contain revisions to the cost burden to respondents resulting from the collections of information required by the Regulation. The Agency also plans to obtain OMB approval for optional standardized forms to facilitate and simplify the information collection process as part of its information collection process. The optional forms correspond to the applications for initial, expansion of, and renewal of recognition procedures prescribed by the Regulation. Where practicable, the forms would provide for automations such as drop down lists to increase ease of use and reduce the information collection burden. The Agency expects the use of the optional standardized forms to marginally reduce the burden hours associated with these information collection requirements. The forms are included in a draft copy of the updated Directive on NRTL Program Policies, Procedures, and Guidelines, which has been attached to a Supporting Statement for the Information Collection Requirements of the Regulation. The Agency developed the Supporting Statement to outline the particulars of the collection of information proposed for approval by OMB. The Agency
You may submit comments in response to this document as follows: (1) Electronically in the Federal eRulemaking Portal at
Because of security procedures, the use of regular mail may cause a significant delay in the receipt of comments. For information about security procedures concerning the delivery of materials by hand, express delivery, messenger, or courier service, please contact the OSHA Docket Office at (202) 693–2350 (TTY (877) 889–5627).
Comments and submissions are posted without change at
David Michaels, Ph.D., MPH, Assistant Secretary of Labor for Occupational Safety and Health, 200 Constitution Avenue NW., Washington, DC 20210, authorized the preparation of this notice. The Agency is issuing this notice pursuant to Section 8(g)(2) of the Occupational Safety and Health Act of 1970 (29 U.S.C. 657(g)(2)), Secretary of Labor's Order No. 1–2012 (77 FR 3912, Jan. 25, 2012), OSHA's Program Regulation for Nationally Recognized Testing Laboratories, 29 CFR 1910.7, and the Paperwork Reduction Act of 1995 (44 U.S.C 3506
National Credit Union Administration (NCUA).
Notice.
The National Credit Union Administration (NCUA) will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, Public Law 104–13, on or after the date of publication of this notice.
Comments should be received on or before January 27, 2017 to be assured of consideration.
Send comments regarding the burden estimate, or any other aspect of the information collection, including suggestions for reducing the burden, to (1) Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for NCUA, New Executive Office Building, Room 10235, Washington, DC 20503, or email at
Copies of the submission may be obtained by emailing
Revisions are being made to NCUA Forms 5300, Call Report, and 4501A, Credit Union Profile, to capture applicable data implemented by amendments to 12 CFR part 723,
Nuclear Regulatory Commission.
Notice of submission to the Office of Management and Budget; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) has recently submitted to OMB for review the following proposal for the collection of information under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). The information collection is entitled, “Reporting of Defects and Noncompliance.”
Submit comments by January 27, 2017.
Submit comments directly to the OMB reviewer at: Vlad Dorjets, Desk Officer, Office of Information and Regulatory Affairs (3150–0035), NEOB–10202, Office of Management and Budget, Washington, DC 20503; telephone: 202–395–7315, email:
David Cullison, NRC Clearance Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555–0001; telephone: 301–415–2084; email:
Please refer to Docket ID NRC–2016–0024 when contacting the NRC about the availability of information for this action. You may obtain publicly-available information related to this action by any of the following methods:
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The NRC cautions you not to include identifying or contact information in comment submissions that you do not want to be publicly disclosed in your comment submission. All comment submissions are posted at
If you are requesting or aggregating comments from other persons for submission to the OMB, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that comment submissions are not routinely edited to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.
Under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the NRC recently submitted a request for renewal of an existing collection of information to OMB for review entitled, “Reporting of Defects and Noncompliance.” The NRC hereby informs potential respondents that an agency may not conduct or sponsor, and that a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
The NRC published a
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For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Environmental assessment and finding of no significant impact; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is considering issuance of an amendment to Facility Operating License Nos. DPR–39 and DPR–48, held by Zion
December 28, 2016.
Please refer to Docket ID NRC–2016–0271 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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John Hickman, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555–0001; telephone: 301–415–3017, email:
The NRC is considering issuance of an amendment to Facility Operating License Nos. DPR–39 and DPR–48, held by Zion
The proposed action would revise the ZNPS Defueled Station Emergency Plan (DSEP) and Permanently Defueled Emergency Action Level (EAL) Bases Document to reflect all spent fuel being transferred to an ISFSI at the site. The new emergency plan would be titled, “Zion Station ISFSI Emergency Plan” (ZS ISFSI EP).
The proposed action is requested by the licensee's application dated January 7, 2016, (ADAMS Accession No. ML16008B080), as supplemented by letter dated June 22, 2016, (ADAMS Accession No. ML16176A208).
The ZNPS is a permanently defueled nuclear power facility that has permanently ceased operations and is storing generated spent fuel onsite in an ISFSI. The licensee requested that the NRC review and approve the changes from the current ZNPS DSEP to the proposed Revision 0 to the ZS ISFSI EP. The major changes from the current ZNPS DSEP to the proposed Revision 0 to the ZS ISFSI EP include: Removal of non-ISFSI related emergency event types; transfer responsibility for implementing the emergency plan to ISFSI Management, a revision to the Emergency Response Organization to reflect a potential event impacting spent fuel stored in ISFSI at the site, and removal of EALs for the permanently defueled nuclear power plant.
The NRC has completed its EA of the proposed amendment. The NRC has concluded that the proposed changes from the current ZNPS DSEP to the proposed Revision 0 to the ZS ISFSI EP to reflect the transfer of all the spent nuclear fuel to a dry cask ISFSI would not significantly affect plant safety and would not have a significant adverse effect on the probability of an accident occurring.
The proposed action would not result in an increased radiological hazard beyond those previously analyzed in the Defueled Safety Analysis Report. There will be no change to radioactive effluents that effect radiation exposures to plant workers and members of the public. No changes will be made to plant buildings or the site property. Therefore, no changes or different types of radiological impacts are expected as a result of the proposed amendment.
The proposed action does not result in changes to land use or water use, or result in changes to the quality or quantity of non-radiological effluents. No changes to the National Pollution Discharge Elimination System permit are needed. No effects on the aquatic or terrestrial habitat in the vicinity or the plant, or to threatened, endangered, or protected species under the Endangered Species Act, or impacts to essential fish habitat covered by the Magnuson-Stevens Act are expected. There are no impacts to the air or ambient air quality. There are no impacts to historical and cultural resources. There would be no noticeable effect on socioeconomic conditions in the region. Therefore, no changes or different types of non-
Accordingly, the NRC concludes that there are no significant environmental impacts associated with the proposed action.
As an alternative to the proposed action, the staff considered denial of the proposed action (
The action does not involve the use of any different resources than those previously considered in the “Final Environmental Impact Statement related to the proposed Zion Nuclear Power Station, Units 1 and 2,” dated December 8, 1972 (ADAMS Accession No. ML15344A360).
On October 6, 2016, the staff consulted with the Illinois State official, Ms. Kay Foster, regarding the proposed action. The state official had no comments on the conclusions in the EA and the FONSI.
The NRC has determined not to prepare an EIS for the proposed action. Amending the licenses to revise the current ZNPS DSEP to the proposed Revision 0 to the ZS ISFSI EP to reflect the transfer of all the spent nuclear fuel to a dry cask ISFSI will not result in any significant radiological or non-radiological environmental impacts. Therefore the proposed action will not have a significant effect on the quality of the human environment. Accordingly, on the basis of the EA in Section II above, which is incorporated by reference herein, the NRC has determined that a FONSI is appropriate.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Regulatory guide; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is issuing Regulatory Guide (RG) 4.24, “Aquatic Environmental Studies for Nuclear Power Stations.” This RG provides technical guidance to applicants for the development of aquatic studies involving environmental reviews that are part of NRC licensing actions related to new nuclear power stations.
Please refer to Docket ID NRC–2014–0256 when contacting the NRC about the availability of information regarding this document. You may obtain publically-available information related to this document, using the following methods:
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Regulatory guides are not copyrighted, and NRC approval is not required to reproduce them.
Peyton Doub, Office of New Reactors, telephone: 301–415–6703, email:
The NRC is issuing a new guide in the NRC's “Regulatory Guide” series. This series was developed to describe and make available to the public information regarding methods that are acceptable to the NRC staff for implementing specific parts of the agency's regulations, techniques that the staff uses in evaluating specific issues or postulated events, and data that the staff needs in its review of applications for permits and licenses.
Revision 0 of RG 4.24 was issued with a temporary identification as Draft Regulatory Guide, DG–4023. This is the initial issuance of RG 4.24. The purpose of this RG is to offer technical guidance to applicants for aquatic environmental studies and analyses supporting decisions related to new nuclear power stations by the NRC. The results of aquatic studies provided by applicants are analyzed by the staff as a basis for the staff's decisions related to nuclear power station siting, conducting baseline investigations, identifying important species and habitats, analyzing impacts and monitoring.
Draft regulatory guide, DG–4023 was published in the
This regulatory guide is a rule as defined in the Congressional Review Act (5 U.S.C. 801–808). However, the Office of Management and Budget has not found it to be a major rule as defined in the Congressional Review Act.
Issuance of this regulatory guide not constitute backfitting as defined in section 50.109 of title 10 of the
The guidance in this regulatory guide may be applied to applications for early site permits, combined licenses, and limited work authorizations issued under 10 CFR 50.10 (including information under 10 CFR 51.49(b) or (f)), any of which are docketed and under review by the NRC. The guidance in this regulatory guide may also be applied to applications for construction permits, early site permits, combined licenses, and limited work authorizations (including information under 10 CFR 51.49(b) or (f). Such action does not constitute backfitting as defined in 10 CFR 50.109(a)(1) and is not otherwise inconsistent with the applicable issue finality provisions in 10 CFR part 52. Applicants and potential applicants are not, with certain exceptions, protected by either the Backfit Rule or any issue finality provisions under part 52. Neither the Backfit Rule nor the issue finality provisions under Part 52—with certain exclusions discussed below—were intended to every NRC action which substantially changes the expectations of current and future applicants.
The exceptions to the general principle are applicable whenever an applicant references a Part 52 license (
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Notice of submission to the Office of Management and Budget; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) has recently submitted a request for renewal of an existing collection of information to the Office of Management and Budget (OMB) for review. The information collection is entitled, “NRC Form 850A, “Request for NRC Contractor Building Access Authorization” NRC Form 850B, “Request for NRC Contractor Information Technology Access Authorization” NRC Form 850C, “Request for NRC Contractor Security Clearance.”
Submit comments by January 27, 2017.
Submit comments directly to the OMB reviewer at: Vlad Dorjets, Desk Officer, Office of Information and Regulatory Affairs (3150–0218), NEOB–10202, Office of Management and Budget, Washington, DC 20503; telephone: 202–395–7315, email:
David Cullison, NRC Clearance Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555–0001; telephone: 301–415–2084; email:
Please refer to Docket ID: NRC–2016–0064 when contacting the NRC about the availability of information for this action. You may obtain publicly-available information related to this action by any of the following methods:
• Federal rulemaking Web site: Go to
• NRC's Agencywide Documents Access and Management System (ADAMS): You may obtain publicly-available documents online in the ADAMS Public Documents collection at
• NRC's PDR: You may examine and purchase copies of public documents at the NRC's PDR, Room O1–F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852.
• NRC's Clearance Officer: A copy of the collection of information and related instructions may be obtained without charge by contacting the NRC's Clearance Officer, David Cullison, Office of the Chief Information Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555–0001; telephone: 301–415–2084; email:
The NRC cautions you not to include identifying or contact information in comment submissions that you do not want to be publicly disclosed in your comment submission. All comment submissions are posted at
If you are requesting or aggregating comments from other persons for submission to the OMB, then you should inform those persons not to include identifying or contact information that they do not want to be
Under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the NRC recently submitted a request for renewal of an existing collection of information to OMB for review entitled, “NRC Form 850A, “Request for NRC Contractor Building Access Authorization” NRC Form 850B, “Request for NRC Contractor Information Technology Access Authorization” NRC Form 850C, “Request for NRC Contractor Security Clearance.” The NRC hereby informs potential respondents that an agency may not conduct or sponsor, and that a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
The NRC published a
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For the Nuclear Regulatory Commission.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to delay the implementation of the Limit Order Protection or “LOP” for members accessing PSX.
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 purpose of the proposal is to delay the implementation of the Exchange's mechanism to protect against erroneous Limit Orders, which are entered into PSX, at Rule 3307(f).
At this time the Exchange proposes to delay the implementation from January 21, 2017 until a date no later than March 31, 2017 in order to allow additional time to complete testing. The Exchange will announce the specific date in advance through an Equities Trader Alert. For more information regarding LOP see the previous LOP rule changes.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The Exchange's proposal does not impose any significant burden on competition because LOP will apply to all PSX market participants in a uniform manner once implemented.
No written comments were either solicited or received.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of 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 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.
Pursuant to Section 19(b)(1)
The Exchange proposes to (1) change how orders would be processed when the protected best bid (“PBB”) is higher than the protected best offer (“PBO”) (the “PBBO”) in certain circumstances, and (2) adopt a limit order price protection mechanism. The proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the self-regulatory organization included
The Exchange proposes to (1) change how orders would be processed when the PBB is higher than the PBO in certain circumstances, and (2) adopt a limit order price protection mechanism.
Currently, when the PBB is priced higher than the PBO in a security (
Rule 13(a)(1) provides that a Market Order that is eligible for automatic executions is an unpriced order to buy or sell a stated amount of a security that is to be traded at the best price obtainable without trading through the NBBO. Rule 13(a)(1)(B)(i) provides that when the Exchange is open for continuous trading, a Market Order will be rejected on arrival, or cancelled if resting, if there is no contra-side NBBO or if the best protected quotations are or become crossed.
The Exchange proposes to no longer reject or cancel Market Orders when the PBBO is crossed. To effectuate this change, the Exchange proposes to delete the phrase “or if the best protected quotations are or become crossed” in Rule 13(a)(1)(B)(i). As a result of this proposed change, if a Market Order arrives when the PBBO is crossed, the Exchange would process the Market Order in the same way as when the NBBO is crossed under the current rule.
The Exchange proposes to amend the Rule 13 to specify circumstances when the Exchange would make order handling decisions based on a protected quotation. The Exchange proposes to make these changes because, in the circumstances described below, the Exchange would no longer avail itself of the exception to the Order Protection Rule specified in Rule 611(b)(4), and therefore the Exchange would include protected quotations for order handling purposes even when the PBBO is crossed.
First, the Exchange proposes to amend the definition of NYSE IOC Order to reflect that, when the PBBO is crossed, the Exchange would route such orders to other markets if an execution on the Exchange would trade through a protected quotation in compliance with Regulation NMS. Rule 13(b)(2)(B) defines an NYSE IOC Order as a Limit Order designated Immediate or Cancel (“IOC”) that will be automatically executed against the displayed quotation up to its full size and sweep the Exchange book, as provided in Rule 1000 to the extent possible, with portions of the order routed to other markets if necessary in compliance with Regulation NMS and the portion not so executed will be immediately and automatically cancelled. As such, currently an NYSE IOC Order is only routed to a protected quotation unless the exception in Rule 611(b)(4) applies. Because the Exchange proposes to route an NYSE IOC Order to other markets if an execution on the Exchange would trade through a protected quotation,
Second, the Exchange proposes to amend the definition of “best-priced sell interest” and “best-priced buy interest,” which are terms used for purposes of determining where to display and rank a Limit Order designated with an Add Liquidity Only (“ALO”) Modifier. Supplementary Material .10 of Rule 13 provides that, for purposes of the Rule, the term “best-priced sell interest” refers to the lowest priced sell interest against which incoming buy interest would be required to execute with and/or route to, including Exchange displayed offers, Non-Display Reserve Orders, Non-Display Reserve e-Quotes, odd-lot sized sell interest, unexecuted Market Orders, and protected offers on away markets and that the term “best-priced buy interest” refers to the highest
Because the Exchange currently avails itself of the exception in Rule 611(b)(4) when the PBBO is crossed, the Exchange does not include protected bids or offers in the determination of “best-priced sell interest” or “best-priced buy interest.” With the proposed change, in the circumstances when the Exchange no longer avails itself of this exception, the Exchange would consider all protected quotations, including when the PBBO is crossed. To reflect this change, the Exchange proposes the following amendments to Supplementary Material .10 to Rule 13.
• In the first clause defining “best-priced sell interest,” the Exchange proposes to delete “with and/or route to” after “execute,” add the word “and” before “unexecuted Market Orders” and add the phrase “the lowest-priced” before “protected offers on away markets.” The proposed change would clarify that best-priced sell interest can mean either the lowest-priced sell interest against which incoming buy interest would execute with on the Exchange or the lowest-priced protected
• In the second clause defining “best-priced buy interest,” the Exchange would delete “with and/or route” after “execute,” add the word “and” before “unexecuted Market Orders,” and add “the highest-priced” before “protected bids on away markets.”
Rule 13(f)(1) defines pegging interest and provides that pegging interest pegs to prices based on (i) a PBBO, which may be available on the Exchange or an away market, or (ii) interest that establishes a price on the Exchange. If the PBBO is not within the specified price range of the pegging interest, the pegging interest will instead peg to the next available best-priced displayable interest that is within the specified price range, which may be on the Exchange or the protected bid or offer of another market.
To avoid routing pegging interest when the PBBO is locked or crossed, the Exchange proposes to specify that the Exchange would not peg to a locking or crossing PBBO and would instead peg to the next-available best-priced displayable interest that would not lock or cross either the Exchange's BBO or the PBBO. To effect this change, the Exchange proposes to amend Rule 13(f)(1)(B)(i) to provide that pegging interest to buy (sell) will not peg to the PBB (PBO) if the PBBO is locked or crossed or to a price that is locking or crossing the Exchange best offer (bid), but instead would peg to the next available best-priced displayable interest that would not lock or cross the Exchange best offer (bid) or the PBO (PBB).
Rule 70 governs the execution of Floor broker interest, including g-Quotes. G-Quotes are an electronic method for Floor brokers to represent orders that yield priority, parity and precedence based on size to displayed and non-displayed orders on the Exchange's book, in compliance with Section 11(a)(1)(G) of the Act (the “G Rule”).
Because the proposed change to how the Exchange would operate when the PBBO is crossed would result in routable orders being routed to a crossed PBBO, the Exchange proposes to revise the behavior of g-Quotes to limit the circumstances when such orders would route. While the G Rule only requires G orders to yield to orders on the Exchange, the Exchange does not believe that a G order should trade on another market before resting displayed interest on the Exchange trades and to which, absent routing of the G order, would be yielded priority by the G order under the G Rule. Accordingly, the Exchange proposes to restrict a g-Quote from routing to a protected quotation ahead of displayed orders on the Exchange at the same price. To effect this change, the Exchange proposes to add a new subsection (iii) to Rule 70(a) that would provide that a g-Quote to buy (sell) that would be required to route on arrival would be cancelled when there is resting displayable interest that is not a g-Quote or DMM interest to buy (sell) at the same or higher (lower) price as the g-Quote.
Further, the Exchange proposes to amend subsection (a)(ii) of Supplementary Material .25 to Rule 70 to specify that discretionary instructions for Floor broker d-Quotes
Finally, the Exchange proposes a technical amendment to correct a number sequence error in current subsections (iv) through (viii) of Rule 70.25(a). Subsection (iv) currently follows subsection (ii), which the Exchange proposes to re-number (iii). The remaining subsections (v) through (viii) would be re-numbered (iv) through (vii).
Rule 76 governs the execution of manual “cross” or “crossing” orders by Floor brokers on the Exchange trading Floor. Supplementary Material .10 of Rule 76 permits Floor Brokers to enter a cross transaction into their hand held device (“HHD”) and describes the operation by the Exchange of a quote minder function that monitors protected bids and offers to determine when the limit price assigned to the proposed crossed transaction is such that the orders may be executed consistent with Regulation NMS Rule 611.
The Exchange proposes to amend Supplementary Material .10 of Rule 76 to specify that quote minder would be unavailable to Floor brokers when the PBBO is crossed by adding the sentence “Quote minder will not monitor protected bids and offers when the PBBO is crossed” to the end of the Rule. The proposed change to Rule 76.10 is consistent with the proposed change, described above, that the Exchange would route orders even if the PBBO is crossed. Because Rule 76 governs crossing orders at a single price on the Exchange, the Exchange believes this proposed change makes clear that the Exchange would not permit a crossing order to be executed when the PBBO is crossed.
Rule 1000 provides for automatic executions by Exchange systems. Supplementary Material .10 is currently marked “Reserved.” The Exchange proposes to delete the word “Reserved” and add new text to specify how DMM interest would be processed when the PBBO is crossed and there is same side resting displayable interest that is locking or crossing the contra-side PBBO. Similar to the proposed amendment described above relating to g-Quotes, the Exchange does not believe that DMM interest should have an opportunity to trade on another market ahead of displayed orders on the Exchange.
To effect this change, the proposed amendment would provide that DMM interest that would be required to route on arrival would be cancelled when there is same side resting displayable
The Exchange proposes to amend Rule 13 to introduce limit order price protection, which would result in Limit Orders with prices too far away from the prevailing quote to be rejected on arrival. The proposed rule is based on NYSE Arca Equities, Inc, (“NYSE Arca Equities”) Rule 7.31(a)(2)(B).
As proposed, the Exchange would reject limit orders that are priced a specified percentage away from the contra side national best bid (“NBB”) or national best offer (“NBO”), as defined in Rule 600(b)(42) of Regulation NMS. As the Exchange receives limit orders, Exchange systems will check the price of the limit order against the contra-side NBB or NBO at the time of the order entry to determine whether the limit order is within the specified percentage. As proposed, the specified percentage would be equal to the corresponding “numerical guideline” percentages set forth in paragraph (c)(1) of Rule 1000 (Automatic Executions) that are used to calculate Trading Collars.
Proposed Rule 13(a)(2)(A) would provide that a Limit Order to buy (sell) would be rejected if it is priced at or above (below) a specified percentage away from the NBO (NBB). Proposed Rule 13(a)(2)(A)(i) would further provide if the NBB or the NBO is greater than $0.00 up to and including $25.00, the specified percentage would be 10%; if the NBB or NBO is greater than $25.00 up to and including $50.00, the specified percentage would be 5%; and if the NBB or NBO is greater than $50.00, the specified percentage would be 3%. For example, if the NBB is $26.00, a sell order priced at or below $24.70, which is 5% below the NBB, would be rejected. Likewise, if the NBO is $55.00, a buy order priced at or above $56.65, which is 3% above the NBO, would be rejected.
Proposed Rule 13(a)(2)(A)(i) would further provide that if the NBBO is crossed, the Exchange would use the Exchange Best Offer (“BO”) instead of the NBO for buy orders and the Exchange Best Bid (“BB”) instead of the NBB for sell orders. The proposed Rule would further provide that if the NBBO is crossed and there is no BO (BB), Limit Order Price Protection will not be applied to an incoming Limit Order to buy (sell). Further, proposed Rule 13(a)(2)(A)(i) would provide, like current NYSE Arca Rule 7.31(a)(2)(B), that Limit Order Price Protection will not be applied to an incoming Limit Order to buy (sell) if there is no NBO (NBB). Further, if the specified percentage for both buy and sell orders are not in the minimum price variation (“MPV”) for the security, as defined in Supplemental Material .10 to Rule 62, they would be rounded down to the nearest price at the applicable MPV. This proposed rule text is based on current Rule 1000(c)(1), governing Trading Collars.
Proposed Rule 13(a)(2)(A)(ii) would provide that Limit Order Price Protection would be applicable only when automatic executions are in effect. This rule would further provide that Limit Order Price Protection would not be applicable (a) before a security opens for trading or during a halt or pause; (b) during a trading suspension; (c) to incoming Auction-Only Orders; and (d) to high-priced securities, as defined in Rule 1000(a)(iii).
Finally, in connection with the introduction of the proposed Limit Order Price Protection mechanism, the Exchange proposes to amend Rule 1000(c) and (c)(ii) to delete references to marketable limit orders. Accordingly, Trading Collars specified in Rule 1000(c) would be applicable to Market Orders only, and pricing protections in proposed Rule 13(a)(2)(A) would be applicable to Limit Orders.
The Exchange believes that the Limit Order Protection mechanism would prevent the entry of supermarketable limit orders,
Because of the technology changes associated with this rule proposal, the Exchange will announce the implementation date in a Trader Update. The Exchange currently anticipates implementing the proposed changes no later than March 31, 2017.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that the proposed changes to modify current order behavior that is based on Rule 611(b)(4) would remove impediments to and perfect the mechanism of a free and open market and a national market system because they are designed to reflect changes to how such orders would be processed when the PBBO is crossed in a manner consistent with the original intent of such orders.
• The Exchange believes the proposed amendment to Rule 13 governing Market Orders would remove impediments to and perfect the mechanism of a free and open market and a national market system because it would promote transparency that a Market Order would be accepted when the PBBO is crossed, and thus may route when the PBBO is crossed.
• The Exchange believes the proposed amendments to the Rule 13 definition of an NYSE IOC Order
• The proposed amendments to Rules 70 and 1000 to cancel g-Quotes that would otherwise be required to route to away markets ahead of resting displayable interest and reject DMM interest that would increase the displayed quantity of similarly-entered resting DMM interest when that resting interest is locked or crossed by a protected away quote would remove impediments to and perfect the mechanism of a free and open market and a national market system and protect investors and the public because it would provide priority to previously-displayed orders not only for execution opportunities on the Exchange, but also on other markets.
• The proposed amendment to Rule 76 relating to crossing orders would remove impediments to and perfect the mechanism of a free and open market and a national market system because it would provide transparency that crossing orders, which are designed to trade on the Exchange as a single-priced transaction, would not be eligible to trade if the PBBO is crossed.
The Exchange believes that the proposed Limit Order Protection mechanism would remove impediments to and perfect the mechanism of a free and open market and a national market system by rejecting orders that are priced too far away from the prevailing market. The Exchange believes that the proposed rule would ensure that limit orders would not cause the price of a security to move beyond prices that could otherwise be determined to be a clearly erroneous execution, thereby protecting investors from receiving executions away from the prevailing prices at any given time.
Finally, the Exchange's proposal to make non-substantive changes to the text of Supplementary Material .10 of Rule 13 and to Rule 70.25(a) adds clarity and transparency to Exchange rules and reduces potential investor confusion, which would remove impediments to and perfect the mechanism of a free and open market and a national market system.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed change would not impose any burden on competition because it would align how the Exchange operates when the PBBO is crossed with how other equity exchanges function when the PBBO is crossed. Moreover, the proposed rule changes would specify how orders would be processed when the PBBO is crossed, thereby promoting transparency and efficiency to the benefit of all market participants, and the adoption of a limit order protection mechanism that is based on the rules of another exchange. The Exchange believes that the proposed rule change will serve to promote regulatory clarity and consistency, thereby reducing burdens on competition in the marketplace and facilitating investor protection.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
A proposed rule change filed under Rule 19b–4(f)(6)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
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 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.
Securities and Exchange Commission (“Commission”).
Notice of an application for an order pursuant to: (a) Section 6(c) of the Investment Company Act of 1940 (“Act”) granting an exemption from sections 18(f) and 21(b) of the Act; (b) section 12(d)(1)(J) of the Act granting an exemption from section 12(d)(1) of the Act; (c) sections 6(c) and 17(b) of the Act granting an exemption from sections 17(a)(1), 17(a)(2) and 17(a)(3) of the Act; and (d) section 17(d) of the Act and rule 17d–1 under the Act to permit certain joint arrangements and transactions. Applicants request an order that would permit certain registered open-end management investment companies to participate in a joint lending and borrowing facility.
Secretary, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington, DC, 20549–1090; Applicants: 1801 California Street, Suite 5200, Denver, Colorado 80202.
Jill Ehrlich, Senior Counsel, at (202) 551–6819 or David J. Marcinkus, Branch Chief, at (202) 551–6821 (Division of Investment Management, Chief Counsel's Office).
The following is a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or an applicant using the Company name box, at
1. Applicants request an order that would permit the applicants to participate in an interfund lending facility where each Fund could lend money directly to and borrow money directly from other Funds to cover unanticipated cash shortfalls, such as unanticipated redemptions or trade fails.
2. Applicants anticipate that the proposed facility would provide a borrowing Fund with significant savings at times when the cash position of the Fund is insufficient to meet temporary cash requirements. In addition, Funds making short-term cash loans directly to other Funds would earn interest at a rate higher than they otherwise could obtain from investing their cash in repurchase agreements or certain other short term money market instruments. Thus, applicants assert that the facility would benefit both borrowing and lending Funds.
3. Applicants agree that any order granting the requested relief will be subject to the terms and conditions stated in the Application. Among others, the Adviser, through a designated committee, would administer the facility as a disinterested fiduciary as part of its duties under the investment management agreements with the Funds and would receive no additional fee as compensation for its services in connection with the administration of the facility. The facility would be subject to oversight and certain approvals by the Funds' Board, including, among others, approval of the interest rate formula and of the method for allocating loans across Funds, as well as review of the process in place to evaluate the liquidity implications for the Funds. A Fund's aggregate outstanding interfund loans will not exceed 15% of its net assets, and the Fund's loans to any one Fund will not exceed 5% of the lending Fund's net assets.
4. Applicants assert that the facility does not raise the concerns underlying section 12(d)(1) of the Act given that the Funds are part of the same group of investment companies and there will be no duplicative costs or fees to the Funds.
5. Applicants also believe that the limited relief from section 18(f)(1) of the Act that is necessary to implement the facility (because the lending Funds are not banks) is appropriate in light of the conditions and safeguards described in the application and because the Funds would remain subject to the requirement of section 18(f)(1) that all borrowings of a Fund, including combined interfund loans and bank borrowings, have at least 300% asset coverage.
6. Section 6(c) of the Act permits the Commission to exempt any persons or transactions from any provision of the Act if such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Section 12(d)(1)(J) of the Act provides that the Commission may exempt any person, security, or transaction, or any class or classes of persons, securities, or transactions, from any provision of section 12(d)(1) if the exemption is consistent with the public interest and the protection of investors. Section 17(b) of the Act authorizes the Commission to grant an order permitting a transaction otherwise prohibited by section 17(a) if it finds that (a) the terms of the proposed transaction are fair and reasonable and do not involve overreaching on the part of any person concerned; (b) the proposed transaction is consistent with the policies of each registered investment company involved; and (c) the proposed transaction is consistent with the general purposes of the Act. Rule 17d–1(b) under the Act provides that in passing upon an application filed under the rule, the Commission will consider whether the participation of the registered investment company in a joint enterprise, joint arrangement or profit sharing plan on the basis proposed is consistent with the provisions, policies and purposes of the Act and the extent to which such participation is on a basis different from or less advantageous than that of the other participants.
For the Commission, by the Division of Investment Management, under delegated authority.
Pursuant to Section 19(b)(1)
Pursuant to the provisions of Section 19(b)(1) under the Securities Exchange Act of 1934 (“Act”),
The text of the proposed rule change is available at the Exchange's Web site at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statement [sic] may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
IEX listing rules require issuers to notify IEX about substitution listing events. Specifically, Rule 14.002(a)(32) defines a “Substitution Listing Event”
IEX proposes to expand the definition of a Substitution Listing Event to include cases where an issuer of securities listed under Chapter 16 replaces, or significantly modifies, the index, portfolio, or reference asset underlying its security (including, but not limited to, a significant modification to the index methodology, a change in the index provider, or a change in control of the index provider). This type of change would require IEX to review the changes to the index, portfolio, or
IEX believes it is appropriate to require notification of these changes in the same manner as other Substitution Listing Events,
IEX also proposes to modify Rule 16.101 to highlight that certain changes to the index, portfolio, or reference asset underlying a security is a Substitution Listing Event that requires 15 calendar days' notice. The new language also emphasizes that such a change may affect the company's compliance with the listing requirements and may require IEX to file a new rule filing pursuant to Section 19(b)(1) of the Act
The Exchange does not currently list any ETPs. The proposed rule changes would be applicable in the event IEX lists ETPs.
IEX believes that the proposed rule change is consistent with Section 6(b)
IEX believes that the proposed requirement that an issuer of securities that would be listed under Chapter 16 notify IEX 15 calendar days in advance of certain changes to the index, portfolio, or reference asset underlying the security is consistent with the investor protection objectives of Section 6(b)(5) of the Act. Specifically, the proposed change will help to ensure that IEX has sufficient time to review the revised index, portfolio, or reference asset and determine whether the product complies with IEX's listing requirements and whether a rule filing must be filed by IEX pursuant to Section 19(b)(1) of the Act and approved by the Commission or otherwise take effect (as applicable), which will help protect investors. Similarly, the provisions that provide that IEX will (i) halt trading if a company effectuates a change that requires such a filing before it is approved by the SEC or otherwise takes effect (as applicable); and (ii) commence delisting proceedings if a company effectuates a change in the case where IEX determines not to submit a rule filing or withdraws a rule filing, or where the SEC disapproves a rule filing are consistent with the public interest and the protection of investors because they is [sic] designed to enable the Exchange to ensure that the necessary rule filings regarding IEX listed ETPs are approved or otherwise take effect (as applicable).
IEX 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 proposed rule change is not based on competitive factors, but rather is designed to ensure that IEX staff would have adequate time to review a change to an index, portfolio, or reference asset for compliance with the listing requirements and to file and obtain approval or effectiveness of a rule change, if necessary. As such, the Exchange believes that the proposed change will have no impact on competition.
Written comments were neither solicited nor received.
Because the proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, it has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b–4(f)(6) thereunder.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule change should be approved or disapproved.
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 Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend the Exchange's data fees at Rule 7035 to change the billing cycle for administrative fees paid by distributors of Nasdaq market data from annual to monthly, and to: (1) Replace the current $500 annual administrative fee assessed to distributors of delayed market data with a $50 monthly administrative fee, and (2) replace the current $1,000 annual administrative fee assessed to distributors of real-time market data with a $100 monthly administrative fee. The proposal is described further below.
While these amendments are effective upon filing, the Exchange has designated the proposed amendments to be operative on January 1, 2017.
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 purpose of the proposed rule change is to change the billing cycle for administrative fees paid by distributors of Nasdaq market data from annual to monthly, and to: (1) Replace the current $500 annual administrative fee assessed to distributors of delayed market data with a $50 monthly administrative fee, and (2) replace the current $1,000 annual administrative fee assessed to distributors of real-time market data with a $100 monthly administrative fee.
Nasdaq assesses an annual administrative fee to any market data distributor that receives a proprietary market data product. The amount of that fee is $500 for delayed market data and $1,000 for real-time market data. Distributors of both delayed and real-time market data are not required to pay both fees; they are charged only the higher fee. The time difference between “delayed” and “real-time” data varies by product. Nasdaq Basic data, for example, is considered delayed after 15 minutes, while data from the Nasdaq Market Pathfinders Service is considered delayed after 24 hours. The specific delay interval applicable to each product is published on the Nasdaq Trader Web site. The fee is not prorated if the distributor receives the data feed for less than a year.
The Exchange proposes to change the billing cycle for administrative fees paid by distributors of Nasdaq market data from annual to monthly, and to: (1) replace the current $500 annual administrative fee assessed to distributors of delayed market data with
The purposes of the proposal are to: (1) facilitate billing by aligning the current annual administrative fee billing cycle with Nasdaq's standard monthly billing cycle; (2) allocate the fee more equitably by charging distributors that receive less than a year of market data an administrative fee only for those months that they receive market data; (3) bring the Exchange's administrative fee into alignment with the PSX and BX market data administrative fees, which, after current proposals take effect, will be charged the same administrative fees on the same billing cycle; and (4) offset cost increases caused by general price inflation.
The complexity of administering Nasdaq's market data program has increased significantly since the current fee was set in July of 2006. New, more complex products and services require Nasdaq to expend more resources in administration and monitoring. For example, the introduction of Enhanced Display Solutions—which allow subscribers to view Nasdaq market data on computer monitors and export it to applications—required Nasdaq to create new reporting systems and review mechanisms for the use of market data. New reporting and review mechanisms also had to be created to implement Managed Data Solutions, which allow electronic systems access to Nasdaq market data without human intervention. The Nasdaq Basic Net Reporting Program—a service that allows distributors to lower the cost of Nasdaq Basic by reporting the number of natural persons using the data rather than the number of electronic devices able to display that data—also required Nasdaq to develop new reporting systems. All of these programs were created in response to customer demand, and all require administrative expenditures that had not been necessary when the amount of the administrative fee was set in 2006.
The administrative fee is entirely optional in that it applies only to firms that elect to distribute Nasdaq proprietary data.
The proposed changes do not raise the cost of any other Nasdaq product, except to the extent that they increase the total cost of purchasing market data.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
The Commission and the courts have repeatedly expressed their preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. In Regulation NMS, while adopting a series of steps to improve the national market system, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
Likewise, in
Further, “[n]o one disputes that competition for order flow is `fierce.' . . . As the SEC explained, `[i]n the U.S. national market system, buyers and sellers of securities, and the broker-dealers that act as their order-routing agents, have a wide range of choices of where to route orders for execution'; [and] `no exchange can afford to take its market share percentages for granted' because `no exchange possesses a monopoly, regulatory or otherwise, in the execution of order flow from broker dealers' . . . .”
The Exchange believes that the proposal to replace the current $500 annual administrative fee assessed to distributors of delayed market data with a $50 monthly administrative fee, and the current $1,000 annual administrative fee assessed to distributors of real-time data with a $100 monthly administrative fee, is fair and equitable in accordance with Section 6(b)(4) of the Act, and not unreasonably discriminatory in accordance with Section 6(b)(5) of the Act. As described above, the proposed fee change is reasonable and necessary to facilitate billing, allocate fees more equitably, align administrative fees with those of the PSX and BX exchanges, and to offset general price inflation. Moreover, administrative fees are constrained by the Exchange's need to compete for order flow.
The Exchange believes that the proposed change is an equitable allocation and is not unfairly discriminatory because the Exchange will apply the same fee to all similarly-situated distributors.
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. In terms of inter-market competition, 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 to remain competitive with other exchanges and with alternative trading systems that have been exempted from compliance with the statutory standards applicable to exchanges. Because competitors are free to modify their own fees in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited.
The proposal is to replace the current $500 annual administrative fee assessed to distributors of delayed market data with a $50 monthly administrative fee, and the current $1,000 annual administrative fee assessed to distributors of real-time market data with a $100 monthly administrative fee. If the changes proposed herein are unattractive to market participants, it is likely that the Exchange will lose market share as a result.
Specifically, market forces constrain administrative fees in three respects. First, all fees associated with
Administrative fees are constrained by competition among exchanges and other entities seeking to attract order flow. Order flow is the “life blood” of the exchanges. Broker-dealers currently have numerous alternative venues for their order flow, including self-regulatory organization (“SRO”) markets, as well as internalizing broker-dealers (“BDs”) and various forms of alternative trading systems (“ATSs”), including dark pools and electronic communication networks (“ECNs”). Each SRO market competes to produce transaction reports via trade executions, and two FINRA-regulated Trade Reporting Facilities (“TRFs”) compete to attract internalized transaction reports. The existence of fierce competition for order flow implies a high degree of price sensitivity on the part of BDs, which may readily reduce costs by directing orders toward the lowest-cost trading venues.
The level of competition and contestability in the market for order flow is demonstrated by the numerous examples of entrants that swiftly grew into some of the largest electronic trading platforms and proprietary data producers: Archipelago, Bloomberg Tradebook, Island, RediBook, Attain, TracECN, BATS Trading and BATS/Direct Edge. A proliferation of dark pools and other ATSs operate profitably with fragmentary shares of consolidated market volume. For a variety of reasons, competition from new entrants, especially for order execution, has increased dramatically over the last decade.
Each SRO, TRF, ATS, and BD that competes for order flow is permitted to produce proprietary data products. Many currently do or have announced plans to do so, including NYSE, NYSE Amex, NYSE Arca, BATS, and IEX. This is because Regulation NMS deregulated the market for proprietary data. While BDs had previously published their proprietary data individually, Regulation NMS encourages market data vendors and BDs to produce market data products cooperatively in a manner never before possible. Order routers and market data vendors can facilitate production of proprietary data products for single or multiple BDs. The potential sources of proprietary products are virtually limitless.
The markets for order flow and market data are inextricably linked: a trading platform cannot generate market information unless it receives trade orders. As a result, the competition for order flow constrains the prices that platforms can charge for proprietary data products. Firms make decisions on how much and what types of data to consume based on the total cost of interacting with Nasdaq and other exchanges. Administrative fees are part of the total cost of proprietary data. A supracompetitive increase in the fees charged for either transactions or market data has the potential to impair revenues from both products.
Administrative fees are constrained by competition from other exchanges that sell market data, such as NYSE and BATS. If administrative fees were to become excessive, distributors may elect to discontinue one or two products or services purchased from Nasdaq, or reduce the level of their purchases, to signal that the overall cost of market data had become excessive. Such a reduction in purchases would act as a discipline to Nasdaq's administrative fees, and would constrain the Exchange in its pricing decisions.
Distributors provide another form of price discipline for market data products. Distributors are in competition for users, and can curtail their purchases of market data if the total price of market data, including administrative fees, were set above competitive levels.
In summary, market forces constrain the level of administrative fees through competition for order flow, competition from other sources of proprietary data, and in the competition among distributors for customers. For these reasons, the Exchange has provided a substantial basis demonstrating that the fee is equitable, fair, reasonable, and not unreasonably discriminatory, and therefore consistent with and in furtherance of the purposes of the Exchange Act.
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 Act.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of 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.
Pursuant to Section 806(e)(1) of Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act entitled the Payment, Clearing, and Settlement Supervision Act of 2010 (“Clearing Supervision Act” or “Payment, Clearing and Settlement Supervision Act”)
The proposed change would change the methodology that FICC uses in the Mortgage-Backed Securities Division's (“MBSD”) value-at-risk (“VaR”) model from one that employs a full revaluation approach to one that would employ a sensitivity approach, as described in greater detail below.
The proposed change would also amend the MBSD Rules to (1) revise the definition of VaR Charge to reference an alternative volatility calculation (referred to herein as the Margin Proxy (as defined in Item II(B) below)), which would be employed in the event that the requisite data used to employ the sensitivity approach is unavailable for an extended period of time, (2) revise the definition of VaR Charge to include a minimum amount (the “VaR Floor”) that FICC would employ as an alternative to the amount calculated by the proposed VaR model for portfolios where the VaR Floor would be greater than the model-based charge amount, (3) eliminate two components from the Required Fund Deposit calculation that would no longer be necessary following implementation of the proposed VaR model, and (4) change the margining approach that FICC may employ for certain securities with inadequate historical pricing data from one that calculates charges using a historic index volatility model to one that would employ a simple haircut method, as described in greater detail below.
The proposed sensitivity approach and Margin Proxy methodologies would be reflected in the Methodology and Model Operations Document—MBSD Quantitative Risk Model (the “QRM Methodology”). FICC is requesting confidential treatment of this document and has filed it separately with the Secretary of the Commission.
In its filing with the Commission, the clearing agency included statements concerning the purpose of and basis for the Advance Notice and discussed any comments it received on the Advance Notice. The text of these statements may be examined at the places specified in Item IV below. The clearing agency has prepared summaries, set forth in sections A and B below, of the most significant aspects of such statements.
Written comments relating to the proposed change have not been solicited or received. FICC will notify the Commission of any written comments received by FICC
FICC is proposing to change the methodology that is currently used in MBSD's VaR model from one that employs a full revaluation approach to one that would employ a sensitivity approach. In connection with this change, FICC is also proposing to (1) amend the definition of VaR Charge to reference that an alternative volatility calculation (referred to herein as the Margin Proxy (as defined in section B below)) would be employed in the event that the requisite data used to employ the sensitivity approach is unavailable for an extended period of time, (2) revise the definition of VaR Charge to include a VaR Floor that FICC would employ as an alternative to the amount calculated by the proposed VaR model for portfolios where the VaR Floor would be greater than the model-based charge amount, (3) eliminate two components from the Required Fund Deposit calculation that would no longer be necessary following implementation of the proposed VaR model, and (4) change the margining approach that FICC may employ for certain securities with inadequate historical pricing data from one that calculates charges using a historic index volatility model to one that would employ a simple haircut method. These changes are described in more detail below.
A key tool that FICC uses to manage market risk is the daily calculation and collection of Required Fund Deposits from Clearing Members. The Required Fund Deposit serves as each Clearing Member's margin. The aggregate of all Clearing Members' Required Fund Deposits constitutes the Clearing Fund of MBSD, which FICC would access should a defaulting Clearing Member's own Required Fund Deposit be insufficient to satisfy losses to FICC
The objective of a Clearing Member's Required Fund Deposit is to mitigate potential losses to FICC associated with liquidation of such Member's portfolio in the event that FICC ceases to act for such Member (hereinafter referred to as a “default”). Pursuant to the MBSD Rules, each Clearing Member's Required Fund Deposit amount currently consists of the following components: the VaR Charge, the Coverage Charge, the Deterministic Risk Component, the margin requirement differential (“MRD”) and, to the extent appropriate, a special charge.
The VaR Charge is calculated using a risk-based margin methodology that is intended to capture the market price risk associated with the securities in a Clearing Member's portfolio. The methodology uses historical market moves to project the potential gains or losses that could occur in connection with the liquidation of a defaulting Clearing Member's portfolio. The methodology assumes that a portfolio would take three days to hedge or liquidate in normal market conditions. The projected liquidation gains or losses are used to determine the amount of the VaR Charge, which is calculated to cover projected liquidation losses at a 99 percent confidence level.
FICC employs daily backtesting to determine the adequacy of each Clearing Member's Required Fund Deposit. The backtesting compares the Required Fund Deposit for each Clearing Member with actual price changes in the Clearing Member's portfolio. The portfolio values are calculated by using the actual positions in such Member's portfolio on a given day and the observed security price changes over the following three days. These backtesting results are reviewed as part of FICC's VaR model performance monitoring and assessment of the adequacy of each Clearing Member's Required Fund Deposit.
FICC currently calculates the VaR Charge using a methodology referred to as the “full revaluation” approach. The full revaluation approach employs a historical simulation method to fully reprice each security in a Clearing Member's portfolio using valuation algorithms with prevailing and historical market data. VaR provides an estimate of the possible losses for a given portfolio based on a given confidence level over a particular time horizon. The VaR Charge is calibrated at a 99 percent confidence level based on a 1-year look-back period assuming a three-day liquidation/hedge period. If FICC determines that a security's price history is incomplete and the market price risk cannot be calculated by the VaR model, then FICC applies an index volatility model until such security's trading history and pricing reflects market risk factors that can be appropriately calibrated from the security's historical data.
During the volatile market period that occurred during the second and third quarters of 2013, FICC's full revaluation approach did not respond effectively to the levels of market volatility at that time, and the VaR Charge amounts that were calculated using the profit and loss scenarios generated by FICC's full revaluation model did not achieve a 99 percent confidence level. Thus, the VaR Charge and the Required Fund Deposit yielded backtesting deficiencies beyond FICC's risk tolerance, which prompted FICC to employ a supplemental risk charge to ensure that each Clearing Member's VaR Charge would achieve a minimum 99 percent confidence level. This supplemental charge, referred to as the margin proxy (the “Margin Proxy”), ensured that each Clearing Member's VaR Charge was adequate and, at the minimum, mirrored historical price moves.
In connection with the above, FICC performed a review of the existing model deficiencies, examined the root causes of such deficiencies and considered options that would remediate the observed model weaknesses. As a result of this review, FICC is proposing to change MBSD's methodology for calculating the VaR Charge by: (1) Replacing the full revaluation approach with the sensitivity approach,
The current full revaluation method uses valuation algorithms, one component of which is FICC's prepayment model, to fully reprice each security in a Clearing Member's portfolio over a range of historically simulated scenarios. While there are benefits to this method, some of its deficiencies are that it requires significant historical market data inputs, calibration of various model parameters and extensive quantitative support for price simulations. FICC believes that the proposed sensitivity approach would address these deficiencies because it would leverage external vendor expertise in supplying the market risk attributes, which would then be incorporated by FICC into its model to calculate the VaR Charge. FICC would source security-level risk sensitivity data and relevant historical risk factor time series data from an external vendor for all Eligible Securities.
• Key rate measures the sensitivity of a price change to changes in interest rates;
• convexity measures the degree of curvature in the price/yield relationship of key interest rates;
• spread is the yield spread that is added to a benchmark yield curve to discount a TBA's cash flows to match its market price, which takes into account a credit premium and the option-like feature of mortgage-backed-securities due to prepayment;
• volatility reflects the implied volatility observed from the swaption market to estimate fluctuations in interest rates, which impact the prepayment assumptions;
• mortgage basis captures the basis risk between the prevailing mortgage rate and a blended Treasury rate, which impacts borrowers' refinance incentives and the model prepayment assumptions; and
• time risk factor accounts for the time value change (or carry adjustment) over the assumed liquidation period.
FICC's proposal to use third-party risk factor data requires that FICC take steps to mitigate potential model risk. FICC has reviewed a description of the vendor's calculation methodology and the manner in which the market data is used to calibrate the vendor's models. FICC understands and is comfortable with the vendor's controls, governance process and data quality standards. Additionally, FICC would conduct an independent review of the vendor's release of a new version of the model. As described in the QRM Methodology, to the extent that the vendor changes its model and methodologies that produce the risk factors and risk sensitivities, the effect of these changes to FICC's proposed sensitivity approach would be reviewed by FICC. Future changes to the QRM Methodology would be subject to a proposed rule change pursuant to the Act Rule 19b–4 (“Rule 19b–4”).
Under the proposed approach, a Clearing Member's portfolio risk sensitivities would be calculated by FICC as the aggregate of the security level risk sensitivities weighted by the corresponding position market values. The portfolio risk sensitivities and the vendor supplied historical risk factor time series data would then be used by FICC's risk model to calculate the VaR Charge for each Clearing Member. More specifically, FICC would look at the historical changes of the chosen risk factors during the look-back period in order to generate risk scenarios to arrive at the market value changes for a given portfolio. A statistical probability distribution would be formed from the portfolio's market value changes.
The proposed sensitivity approach differs from the current full revaluation method mainly in how the market value changes are calculated. The full revaluation method accounts for changes in properties of mortgage-backed securities that change over time by incorporating certain historical data
The sensitivity approach would provide three key benefits. First, the sensitivity approach incorporates both historical data and current risk factor sensitivities while the full revaluation approach is calibrated with only historical data. The proposed sensitivity approach integrates both observed risk factor changes and current market conditions to more effectively respond to current market price moves that may not be reflected in the historical price moves. This is evidenced in FICC's independent validation of the proposed model and the backtesting results. The risk factor data is sourced from an industry-leading vendor risk model with trading quality accuracy. As part of the assessment of the proposed VaR model, the independent validation of the proposed model indicated that the proposed sensitivity approach would address deficiencies observed in the existing model by leveraging external vendor expertise, which FICC does not need to develop in-house, in supplying the market risk attributes that would then be incorporated by FICC into its model to calculate the VaR Charge. FICC has also performed backtesting to validate the performance of the proposed model and determine the impact on the VaR Charge. Based on FICC's review of the backtesting results and the impact study, the sensitivity approach provides better coverage on volatile days and a material improvement in margin coverage, while not significantly increasing the overall Clearing Fund. Results of the analysis indicate that the proposed sensitivity approach would be more responsive to changing market dynamics and that it would not negatively impact FICC or its Clearing Members.
The second benefit of the proposed sensitivity approach is that it would provide more transparency to Clearing Members. Since Clearing Members typically use risk factor analysis for their own risk and financial reporting such Members would have comparable data and analysis to assess the variation in their VaR Charge based on changes in the market value of their portfolios. Thus, Clearing Members would be able to simulate the VaR Charge to a closer degree than under the existing VaR model.
The third benefit of the proposed sensitivity approach is that it provides FICC with the ability to increase the look-back period used to generate the risk scenarios from 1 year to 10 years plus, to the extent applicable, an additional stressed period.
FICC would have the ability to include an additional period of historically observed stressed market conditions to a 10-year look-back period if FICC observes that (1) the results of the model performance monitoring are not within FICC's 99th percentile confidence level or (2) the 10-year look-back period does not contain sufficient
On an annual basis, FICC would assess whether an additional stressed period should be included. This assessment would include a review of (1) the largest moves in the dominating market risk factor of the proposed VaR model, (2) the impact analyses resulting from the removal and/or addition of a stressed period and (3) the backtesting results of the proposed look-back period. As described in the QRM Methodology, approval by FICC's Model Risk Governance Committee (“MRGC”) and, to the extent necessary, the Management Risk Committee (“MRC”) would be required to determine when to apply an additional period of stressed market conditions to the look-back period and the appropriate historical stressed period to utilize if it is not within the current 10-year period.
Finally, FICC does not believe that its engagement of the vendor would present a conflict of interest to FICC because the vendor is not an existing Clearing Member nor are any of the vendor's affiliates existing Clearing Members. To the extent that the vendor or any of its affiliates submit an application to become a Clearing Member, FICC will negotiate an appropriate information barrier with the applicant in an effort to prevent a conflict of interest from arising. An affiliate of the vendor currently provides an existing service to FICC, however, this arrangement does not present a conflict of interest because the existing agreement between FICC and the vendor, and the existing agreement between FICC and the vendor's affiliate each contain provisions which limit the sharing of confidential information.
FICC is proposing to amend the definition of VaR Charge to include a VaR Floor. The VaR Floor would be employed as an alternative to the amount calculated by the proposed model for portfolios where the VaR Floor would be greater than the model-based charge amount. FICC's proposal to establish a VaR Floor seeks to address the risk that the proposed VaR model may calculate too low a VaR Charge for certain portfolios where the VaR model applies substantial risk offsets among long and short positions in different classes of mortgage-backed securities that have a high degree of historical price correlation. Because this high degree of historical price correlation may not apply in future changing market conditions,
As noted above, FICC intends to source certain sensitivity data and risk factor data from a vendor. FICC's Quantitative Risk Management, Vendor Risk Management, and Information Technology teams have conducted due diligence of the vendor in order to evaluate its control framework for managing key risks. FICC's due diligence included an assessment of the vendor's technology risk, business continuity, regulatory compliance, and privacy controls. FICC has existing policy and procedures for data management that includes market data and analytical data provided by vendors. These policies and procedures do not have to be amended in connection with this proposed rules change. FICC also has tools in place to assess the quality of the data that it receives from vendors.
Rule 1001(c)(1) of Regulation Systems Compliance and Integrity (“SCI”) requires FICC to establish, maintain, and enforce reasonably designed written policies and procedures that include the criteria for identifying responsible SCI personnel, the designation and documentation of responsible SCI personnel, and escalation procedures to quickly inform responsible SCI personnel of potential SCI events.
In connection with FICC's proposal to source data for the proposed sensitivity approach, FICC is also proposing procedures that would govern in the event that the vendor fails to provide sensitivity data and risk factor data. If the vendor fails to provide any data or a significant portion of the data timely, FICC would use the most recently available data on the first day that such data disruption occurs. If it is determined that the vendor will resume providing data within five (5) business days, management would determine whether the VaR Charge should continue to be calculated by using the most recently available data along with an extended look-back period or whether the Margin Proxy should be invoked, subject to the approval of DTCC's Group Chief Risk Officer or his/her designee. If it is determined that the data disruption will extend beyond five (5) business days, the Margin Proxy would be applied, subject to the approval of the MRC followed by notification to FICC's Board Risk Committee.
The Margin Proxy would be calculated as follows: (i) Risk factors would be calculated using historical market prices of benchmark TBA securities and (ii) each Clearing Member's portfolio exposure would be calculated on a net position across all products and for each securitization program (
FICC would calculate the Margin Proxy on a daily basis and the Margin Proxy method would be subject to monthly performance review by the MRGC. FICC would monitor the performance of the calculation on a monthly basis to ensure that it could be used in the circumstance described above. Specifically, FICC would monitor each Clearing Member's Required Fund Deposit and the aggregate Clearing Fund requirements versus the requirements calculated by Margin Proxy. FICC would also backtest the Margin Proxy results versus the three-day profit and loss based on actual market price moves. If FICC observes material differences between the Margin Proxy calculations and the aggregate Clearing Fund requirement calculated using the proposed VaR model, or if the Margin Proxy's backtesting results do not meet FICC's 99 percent confidence level, management may recommend remedial actions to the MRGC, and to the extent necessary the MRC, such as increasing the look-back period and/or applying an appropriate historical stressed period to the Margin Proxy calibration.
Occasionally, portfolios contain classes of securities that reflect market price changes not consistently related to historical risk factors. The value of these securities is often uncertain because the securities' market volume varies widely, thus the price histories are limited. Since the volume and price information for such securities is not robust, a historical simulation approach would not generate VaR Charge amounts that adequately reflect the risk profile of such securities. Currently, MBSD Rule 4 provides that FICC may use a historic index volatility model to calculate the VaR component of the Required Fund Deposit for these classes of securities. FICC is proposing to amend Rule 4 to replace the historic index volatility model with a haircut method.
FICC believes that the haircut method would better capture the risk profile of these securities because the lack of adequate historical data makes it difficult to map such securities to a historic index volatility model. FICC is proposing to calculate the component of the Required Fund Deposit applicable to these securities by applying a fixed haircut level to the gross market value of the positions. FICC has selected an initial haircut of 1 percent based on its analysis of a five-year historical study of three-day returns during a period that such securities were traded. This percentage would be reviewed annually or more frequently if market conditions warrant and updated, if necessary, to ensure sufficient coverage.
Currently, the classes of securities that lack adequate historical data include balloon Fannie Mae 7-year securities, balloon Freddie Mac 5-year securities and balloon Freddie Mac 7-year securities. FICC has no exposure to these security classes as of the filing date of this proposed change and has had negligible exposure over the last several years. However, prudent risk management dictates that FICC maintain appropriate rules to cover potential future exposures.
FICC is also proposing to eliminate the Coverage Charge and MRD components from MBSD's Required Fund Deposit calculation. Both components are based on historical portfolio activity, which may not be indicative of a Clearing Member's current risk profile, but were determined by FICC to be appropriate to address potential shortfalls in margin charges under the existing VaR model.
As part of the development and assessment of the sensitivity approach for MBSD's proposed VaR model, FICC obtained an independent validation of the proposed model by an external party, backtested the model's performance and analyzed the impact of the margin changes. Results of the analysis indicated that the proposed sensitivity approach would be more responsive to changing market dynamics and a Clearing Member's portfolio composition coverage than the existing model. The model validation and backtesting analysis also demonstrated that the proposed sensitivity model would provide sufficient margin coverage on a standalone basis. Because testing and validation of MBSD's proposed VaR model show a material improvement in margin coverage, FICC believes that the Coverage Charge and MRD components are no longer necessary.
The proposed changes to the MBSD Rules are as follows:
• Delete the term “Coverage Charge” from Rule 1 because FICC is proposing to eliminate this component from the Clearing Fund calculation.
• Delete the references to the Coverage Charge and the MRD in Rule 4 Section 2(c) because FICC is proposing to eliminate these components from the Clearing Fund calculation.
• Amend the term “VaR Charge” to reflect that (x) an alternative volatility calculation would be employed in the event that the requisite data used to employ the sensitivity approach is unavailable for an extended period of time and (y) the VaR Floor would be utilized as the VaR Charge if the proposed VaR methodology yields an amount that is lower than 5 basis points of the market value of a Clearing Member's gross unsettled positions.
• Replace the reference to the “historic index volatility model” with “haircut method” in Rule 4 Section 2 to reflect the method that would be used for classes of securities where the volatility is less amendable to statistical analysis.
The QRM Methodology document provides the methodology by which
FICC believes that the proposed change, which consists of proposals to (1) implement the sensitivity approach in order to correct the existing deficiencies in the existing VaR methodology, (2) establish the Margin Proxy as a back-up to the sensitivity approach, (3) establish a VaR Floor as the minimum VaR Charge, (4) apply a haircut to securities that have market price changes that are not consistently related to historical risk factors and (5) remove the Coverage Charge component and the MRD component from the Required Fund Deposit calculation, would enable FICC to better limit its exposure to Clearing Members arising out of the activity in their portfolios.
FICC's proposal to change the existing VaR methodology from one that employs a full revaluation approach to one that employs a sensitivity approach would affect FICC's management of risk because it would help to address the deficiencies observed in the current model by leveraging external vendor expertise in supplying the market risk attributes that would then be incorporated by FICC into its model to calculate the VaR Charge. The proposed methodology would enhance FICC's risk management capabilities because it would enable sensitivity analysis of key model parameters and assumptions. The sensitivity approach would allow FICC to attribute market price moves to various risk factors (such as key rates, option adjusted spread, and mortgage basis) that would enable FICC to view and respond more effectively to market volatility.
As noted above, the proposed sensitivity approach would leverage external vendor expertise in supplying the market risk attributes. FICC would manage the risks associated with a potential data disruption by using the most recently available data on the first day that a data disruption occurs. If it is determined that the vendor will resume providing data within five (5) business days, management would determine whether the VaR Charge should continue to be calculated by using the most recently available data along with an extended look-back period or whether the Margin Proxy should be invoked subject to the approval of DTCC's Group Chief Risk Officer or his/her designee. If it is determined that the data disruption will extend beyond five (5) business days, the Margin Proxy would be applied, subject to the approval of the MRC followed by notification to FICC's Board Risk Committee.
FICC's proposal to implement the Margin Proxy as a back-up methodology to the sensitivity approach would affect FICC's management of risk because the Margin Proxy would help ensure that FICC could continue to calculate each Clearing Member's VaR Charge in the event that FICC experiences a data disruption that is expected to last beyond five (5) business days.
FICC's proposal to implement the VaR Floor would affect FICC's management of risk because it addresses the risk that the proposed VaR model may calculate too low a VaR Charge for certain portfolios where the VaR model applies substantial risk offsets among long and short positions in different classes of mortgage-backed securities that have a high degree of historical price correlation. Because this high degree of historical price correlation may not apply in future changing market conditions, FICC would manage this risk by applying a VaR Floor that would be based upon the market value of the gross unsettled positions in the Clearing Member's portfolio. This would protect FICC in the event that it is required to liquidate a large mortgage-backed securities portfolio in stressed market conditions.
FICC's proposal to implement a simple haircut method for securities with inadequate historical pricing data would affect FICC's management of risk because the proposed change would better capture the risk profile of these securities thus helping to ensure that sufficient margin would be calculated for portfolios that contain these securities. FICC would continue to manage the market risk of clearing these securities by conducting analysis on the type of securities that cannot be processed by the proposed VaR model and engaging in periodic reviews of the haircut used for calculating margin for these types of securities.
FICC's proposal to remove the Coverage Charge and MRD components would affect FICC's management of risk because the proposed changes would remove unnecessary components from the Clearing Fund calculation. As described above, both components are based on historical portfolio activity, which may not be indicative of a Clearing Member's current risk profile. As part of FICC's development of the sensitivity VaR model, FICC pursued a validation of the proposed model by an external party, performed back testing to validate model performance, and conducted analysis to determine the impact of the changes to the Clearing Members. Results of the analysis indicate that the proposed sensitivity approach would be more responsive to changing market dynamics and provide better coverage than the existing model. Given the improvement in model coverage, FICC believes that the Coverage Charge and MRD components would no longer be necessary.
FICC has also managed the effect of the overall proposal by conducting extensive outreach with Clearing Members regarding the proposed changes, educating such Members on reasons for these proposed changes, and explaining the related risk management improvements. FICC has invited all Clearing Members to customer forums in an effort to provide transparency regarding the changes and the expected macro impact across the membership, and has provided each Clearing Member with an individual impact study. In addition, FICC's Enterprise Risk Management team and Relationship Management team have been available to answer all questions. Such communication gives Clearing Members the opportunity to manage any impact to their own risk profile.
The proposed changes, which have been described in detail above, consist of proposals to (1) implement the sensitivity approach in order to correct the existing deficiencies in the existing VaR methodology, (2) establish the Margin Proxy as a back-up to the sensitivity approach, (3) establish a VaR Floor as the minimum VaR Charge, (4) apply a haircut to securities that have market price changes that are not consistently related to historical risk factors and (5) remove the Coverage Charge component and the MRD component from the Required Fund Deposit calculation, would be consistent
FICC believes that the proposed changes are also consistent with Rules 17Ad–22(b)(1) and (b)(2) under the Act.
Rule 17Ad–22(b)(2) under the Act requires a registered clearing agency that performs central counterparty services to establish, implement, maintain and enforce written policies and procedures reasonably designed to use margin requirements to limit its credit exposures to participants under normal market conditions and use risk-based models and parameters to set margin requirements and review such margin requirements and the related risk-based models and parameters at least monthly.
FICC believes that the proposed changes are consistent with Rules 17Ad–22(e)(4) and (e)(6) of the Act, which were recently adopted by the Commission.
Rule 17Ad–22(e)(6) will require FICC to establish, implement, maintain and enforce written policies and procedures reasonably designed to cover its credit exposures to its participants by establishing a risk-based margin system that is monitored by management on an ongoing basis and regularly reviewed, tested, and verified.
The proposed change may be implemented if the Commission does not object to the proposed change within 60 days of the later of (i) the date that the proposed change was filed with the Commission or (ii) the date that any additional information requested by the Commission is received. The clearing agency shall not implement the proposed change if the Commission has any objection to the proposed change.
The Commission may extend the period for review by an additional 60 days if the proposed change raises novel or complex issues, subject to the Commission providing the clearing agency with prompt written notice of the extension. A proposed change may be implemented in less than 60 days from the date the Advance Notice is filed, or the date further information requested by the Commission is received, if the Commission notifies the clearing agency in writing that it does not object to the proposed change and authorizes the clearing agency to implement the proposed change on an earlier date, subject to any conditions imposed by the Commission.
The clearing agency shall post notice on its Web site of proposed changes that are implemented.
The proposal shall not take effect until all regulatory actions required with respect to the proposal are completed.
Interested persons are invited to submit written data, views and arguments concerning the foregoing.
• 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.
All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–FICC–2016–801 and should be submitted on or before January 12, 2017.
By the Commission.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to adopt a trading license fee for calendar year 2017. The Exchange proposes to make the rule change operative on January 3, 2017. 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 Price List to adopt a trading license fee for calendar year 2017. The Exchange proposes to make the rule change operative on January 3, 2017.
NYSE Rule 300(b) provides that, in each annual offering, up to 1366 trading licenses for the following calendar year will be sold annually at a price per trading license to be established each year by the Exchange pursuant to a rule filing submitted to the Securities and Exchange Commission (“Commission”) and that the price per trading license will be published each year in the Exchange's price list.
The Exchange proposes to leave the current trading license fee in place for 2017: $50,000 for the first license held by a member organization and no charge for additional licenses held by a member organization. Such trading license fees have been in place since July 1, 2016.
The proposed changes are not otherwise intended to address any other problem, and the Exchange is not aware of any significant problem that the affected market participants would have in complying with the proposed changes.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that it is subject to significant competitive forces, as described below in the Exchange's statement regarding the burden on competition.
For the foregoing reasons, the Exchange believes that the proposal is consistent with the Exchange Act.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change will keep trading license fees the same as they have been since July 1, 2016. As a result, the Exchange does not believe that the proposed rule change will place an unreasonable burden on current members because their trading license fees will remain the same. In addition, the Exchange does not believe that the proposed rule change will place an unreasonable burden on potential members because a potential member's fees will be the same as for a current member and pro-rated for licenses held for less than a year.
Finally, 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 or rebate opportunities available at other venues to be more favorable. In such an environment, the Exchange must continually adjust its fees and rebates to remain competitive with other exchanges and with alternative trading systems that have been exempted from compliance with the statutory standards applicable to exchanges. Because competitors are free to modify their own fees and credits in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited. As a result of all of these considerations, the Exchange does not believe that the proposed changes will impair the ability of member organizations or competing order execution venues to maintain their competitive standing in the financial markets.
No written comments were solicited or received with respect to the proposed rule change.
The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A)
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of 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.
Pursuant to Section 19(b)(1)
The Exchange proposes to amend Rule 123D and the Listed Company Manual to eliminate the requirement for Floor Official approval for halts in trading. The proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend Rule 123D and the Listed Company Manual to eliminate the requirement for Floor Official
Current Rule 123D(d) provides that once trading has commenced, trading may only be halted with the approval of a Floor Governor or two Floor Officials and that an Executive Floor Governor, or in their absence a Senior Floor Governor, should be consulted if it is felt that trading should be halted in a bank or brokerage stock due to a potential misperception regarding the company's financial viability.
Commensurate with the evolution of the equities markets and trading on the Exchange towards more automated processes, the procedures and situations requiring approvals by Floor Officials have also evolved. For example, the Exchange previously eliminated the ability of a Floor broker to seek an exception to Rule 122 requirements if Floor Official permission is obtained.
The Exchange also proposes to make a related change to Section 202.06(B) of the Listed Company Manual to delete two references to Rule 123D that would be rendered obsolete by the proposed deletion of Rule 123D(d). In addition, the Exchange proposes to re-letter the remaining subsections of Rule 123D to account for the deletion of Rule 123D(d).
The Exchange proposes to make a related change to eliminate the requirement in Rule 123D(e) that an “Equipment Changeover” halt in trading requires the approval of a Floor Governor or two Floor Officials as such approval is no longer necessary. An Equipment Changeover halt is a non-regulatory halt condition that only halts trading on the Exchange. The Exchange believes that if circumstances arise warranting an Equipment Changeover halt, obtaining Floor Official approval before halting trading adds an unnecessary step that is no longer needed in today's automated markets.
Because of the procedural changes associated with the proposed rule changes, the Exchange proposes to announce the eliminations via Trader Update and anticipates implementing the changes in the first quarter of 2017.
The proposed rule changes are consistent with Section 6(b)
The Exchange believes that the proposed rule changes support the objectives of the Act by amending duties and responsibilities once assigned to Floor Officials to better comport with the Exchange's current regulatory structure and to reflect the changing technology and development of its automated systems. Specifically, eliminating the unnecessary step of obtaining Floor Official approval in connection with trading halts would remove impediments to and perfect a national market system by streamlining and simplifying functionality and complexity in connection with trading halts. The Exchange believes that streamlining the procedures and eliminating unnecessary Floor Official approval requirements would be consistent with the public interest and the protection of investors because investors will not be harmed and in fact would benefit from the removal of unnecessary functionality. The Exchange also believes that eliminating Floor Official approval would benefit investors by adding transparency and clarity to the Exchange's rules.
The Exchange believes that the proposed deletion of two references to Rule 123D in Section 202.06B of the Listed Company Manual is reasonable, equitable and not unfairly discriminatory because the references are obsolete. The proposed changes would result in the removal of obsolete text from the Listed Company Manual and therefore add greater clarity to the Listed Company Manual regarding halts in trading.
The Exchange believes that the proposed re-lettering of the remaining subsections of Rule 123D is reasonable, equitable and not unfairly discriminatory because the proposed change would add greater clarity to the Exchange's rule book.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed change is not designed to address any competitive issue but rather would streamline functionality, eliminate an unnecessary step, and streamline forms, thereby reducing confusion and making the Exchange's rules easier to understand and navigate.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
A proposed rule change filed under Rule 19b–4(f)(6)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
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 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.
On June 16, 2016, NYSE MKT LLC (“NYSE MKT”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1)
Section 19(b)(2) of the Act
The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule changes so that it has sufficient time to consider the proposed rule changes and the comments received.
Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Securities and Exchange Commission (“Commission”).
Notice of application for an order under sections 17(d) and 57(i) of the Investment Company Act of 1940 (the “Act”) and rule 17d–1 under the Act to permit certain joint transactions otherwise prohibited by sections 17(d) and 57(a)(4) of the Act and rule 17d–1 under the Act.
Secretary, U.S. Securities and Exchange Commission, 100 F St. NE., Washington, DC 20549–1090. Applicants: ARCC, 245 Park Avenue, 44th Floor, New York, NY 10167; Ares Management, L.P., 2000 Avenue of the
Courtney S. Thornton, Senior Counsel, or David J. Marcinkus, Branch Chief, at (202) 551–6821 (Chief Counsel's Office, Division of Investment Management).
The following is a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or for an applicant using the Company name box, at
1. The Applicants request an order of the Commission under Sections 17(d) and 57(i) and Rule 17d-1 thereunder (the “Order”) to permit, subject to the terms and conditions set forth in the application (the “Conditions”), a Regulated Fund
2. ARCC is a closed-end management investment company incorporated in Maryland that has elected to be regulated as a business development company (“BDC”) under the Act.
3. ACM, a Delaware limited liability company registered under the Investment Advisers Act of 1940 (the “Advisers Act”), serves as the investment adviser to ARCC.
4. Ivy Hill is a Delaware limited partnership that is registered under the Advisers Act. Ivy Hill is ARCC's indirect wholly owned portfolio company that manages the investment and reinvestment of the assets of the Existing Downstream Ivy Hill Funds identified in Appendix B to the application . Each of the Existing Downstream Ivy Hill Funds would be an investment company but for Section 3(c)(1) or 3(c)(7) of the Act.
5. Applicants state that in March 2012, ARCC received an exemptive order under Sections 6(c) and 12(d)(3) of the Act which permits ARCC to own and make additional investments in Ivy Hill (the “12(d)(3) Order”).
6. The Existing Affiliated Funds are the investment funds identified in Appendix A to the application. Applicants represent that each Existing Affiliated Fund is a separate and distinct legal entity and each would be an investment company but for Section 3(c)(1) or 3(c)(7) of the Act.
7. The Existing Advisers to Affiliated Funds are the investment advisers to the Existing Affiliated Funds. Each of the
8. Each of the Applicants may be deemed to be directly or indirectly controlled by Ares Management L.P. (“Ares Management”), a publicly traded partnership and the parent company of the Advisers. Ares Management thus may be deemed to control the Regulated Funds and the Affiliated Funds. Applicants state that Ares Management is a holding company and does not currently offer investment advisory services to any person and is not expected to do so in the future. Applicants state that, as a result, Ares Management has not been included as an Applicant.
9. Applicants state that a Regulated Fund may, from time to time, form one or more Wholly-Owned Investment Subs.
10. Applicants state that the Advisers are presented with thousands of investment opportunities each year on behalf of their clients and must determine how to allocate those opportunities in a manner that, over time, is fair and equitable to all of their clients. Such investment opportunities may be Potential Co-Investment Transactions.
11. Applicants represent that they have established processes for allocating initial investment opportunities, opportunities for subsequent investments in an issuer and dispositions of securities holdings reasonably designed to treat all clients fairly and equitably. Further, Applicants represent that these processes will be extended and modified in a manner reasonably designed to ensure that the additional transactions permitted under the Order will both (i) be fair and equitable to the Regulated Funds and the Affiliated Funds and (ii) comply with the Conditions.
12. Specifically, applicants state that the Advisers are organized and managed such that the individual portfolio managers and investment teams responsible for identifying and evaluating investment opportunities and making investment decisions on behalf of clients are promptly notified of the opportunities. If the requested Order is granted, the Advisers will establish, maintain and implement policies and procedures reasonably designed to ensure that, when such opportunities arise, the Advisers to the relevant Regulated Funds are promptly notified and receive the same information about the opportunity as any other Advisers considering the opportunity for their clients. In particular, consistent with Condition 1, if a Potential Co-Investment Transaction falls within the then-current Objectives and Strategies
13. The Adviser to each applicable Regulated Fund will then make an independent determination of the appropriateness of the investment for the Regulated Fund in light of the Regulated Fund's then-current circumstances. If the Adviser to a Regulated Fund deems the Regulated Fund's participation in such Potential Co-Investment Transaction to be appropriate, then it will formulate a recommendation regarding the proposed order amount for the Regulated Fund.
14. Applicants state that, for each Regulated Fund and Affiliated Fund whose Adviser recommends participating in a Potential Co-Investment Transaction, the Adviser will submit a proposed order amount to an allocation committee for the area in question (
15. If the aggregate Internal Orders for a Potential Co-Investment Transaction do not exceed the size of the investment opportunity immediately prior to the submission of the orders to the underwriter, broker, dealer or issuer, as applicable (the “External Submission”), then each Internal Order will be fulfilled as placed. If, on the other hand, the aggregate Internal Orders for a Potential Co-Investment Transaction exceed the size of the investment opportunity immediately prior to the External Submission, then the allocation of the opportunity will be made pro rata on the basis of the size of the Internal Orders.
16. Applicants state that from time to time the Regulated Funds and Affiliated Funds may have opportunities to make Follow-On Investments
17. Applicants propose that Follow-On Investments would be divided into two categories depending on whether the prior investment was a Co-Investment Transaction or a Pre-Boarding Investment.
18. A Regulated Fund would be permitted to invest in Standard Review Follow-Ons either with the approval of the Required Majority under Condition 8(c) or without Board approval under Condition 8(b) if it is (i) a Pro Rata Follow-On Investment
19. Applicants propose that Dispositions
20. A Regulated Fund may participate in a Standard Review Disposition either with the approval of the Required Majority under Condition 6(d) or without Board approval under Condition 6(c) if (i) the Disposition is a Pro Rata Disposition
21. Applicants represent that under the terms and Conditions of the Application, all Regulated Funds and Affiliated Funds participating in a Co-Investment Transaction will invest at the same time, for the same price and with the same terms, conditions, class, registration rights and any other rights, so that none of them receives terms more favorable than any other. However, the settlement date for an Affiliated Fund in a Co-Investment Transaction may occur up to ten business days after the settlement date for the Regulated Fund, and vice versa.
22. Under Condition 15, if an Adviser, its principals, or any person controlling, controlled by, or under common control with the Adviser or its principals, and the Affiliated Funds (collectively, the “Holders”) own in the aggregate more than 25 percent of the outstanding voting shares of a Regulated Fund (the “Shares”), then the Holders will vote such Shares as directed by an independent third party when voting on matters specified in the Condition. Applicants believe that this Condition will ensure that the Independent Directors will act independently in evaluating Co-Investment Transactions, because the ability of the Adviser or its principals to influence the Independent Directors by a suggestion, explicit or implied, that the Independent Directors can be removed will be limited significantly. The Independent Directors shall evaluate and approve any independent party, taking into account its qualifications, reputation for independence, cost to the shareholders, and other factors that they deem relevant.
1. Section 17(d) of the Act and rule 17d–1 under the Act prohibit participation by a registered investment company and an affiliated person in any “joint enterprise or other joint arrangement or profit-sharing plan,” as defined in the rule, without prior approval by the Commission by order upon application. Section 17(d) of the Act and rule 17d–1 under the Act are applicable to Regulated Funds that are registered closed-end investment companies.
2. Similarly, with regard to BDCs, section 57(a)(4) of the Act generally prohibits certain persons specified in section 57(b) from participating in joint transactions with the BDC or a company controlled by the BDC in contravention of rules as prescribed by the Commission. Section 57(i) of the Act provides that, until the Commission prescribes rules under section 57(a)(4), the Commission's rules under section 17(d) of the Act applicable to registered closed-end investment companies will be deemed to apply to transactions subject to section 57(a)(4). Because the Commission has not adopted any rules under section 57(a)(4), rule 17d–1 also applies to joint transactions with Regulated Funds that are BDCs.
3. Co-Investment Transactions are prohibited by either or both of Rule 17d–1 and Section 57(a)(4) without a prior exemptive order of the Commission to the extent that the Affiliated Funds and the Regulated Funds participating in such transactions fall within the category of persons described by Rule 17d–1 and/or Section 57(b), as applicable, vis-à-vis each participating Regulated Fund. Each of the participating Regulated Funds and Affiliated Funds may be deemed to be affiliated persons vis-à-vis a Regulated Fund within the meaning of section 2(a)(3) by reason of common control because (i) controlled affiliates of Ares Management manage each of the Affiliated Funds, (ii) Ares Management controls ACM, which manages ARCC, and (iii) to the extent that ARCC
4. In passing upon applications under rule 17d–1, the Commission considers whether the company's participation in the joint transaction is consistent with the provisions, policies, and purposes of the Act and the extent to which such participation is on a basis different from or less advantageous than that of other participants.
5. Applicants state that in the absence of the requested relief, in many circumstances the Regulated Funds would be limited in their ability to participate in attractive and appropriate investment opportunities. Applicants state that, as required by Rule 17d–1(b), the Conditions ensure that the terms on which Co-Investment Transactions may be made will be consistent with the participation of the Regulated Funds being on a basis that it is neither different from nor less advantageous than other participants, thus protecting the equity holders of any participant from being disadvantaged. Applicants further state that the Conditions ensure that all Co-Investment Transactions are reasonable and fair to the Regulated Funds and their shareholders and do not involve overreaching by any person concerned, including the Advisers. Applicants state that the Regulated Funds' participation in the Co-Investment Transactions in accordance with the Conditions will be consistent with the provisions, policies, and purposes of the Act and would be done in a manner that is not different from, or less advantageous than, that of other participants.
Applicants agree that the Order will be subject to the following Conditions:
(a) Each Adviser (other than Ivy Hill) will establish, maintain and implement policies and procedures reasonably designed to ensure that each Adviser is promptly notified of all Potential Co-Investment Transactions that fall within the then-current Objectives and Strategies and Board-Established Criteria of any Regulated Fund the Adviser manages.
(b) When an Adviser to a Regulated Fund is notified of a Potential Co-Investment Transaction under Condition 1(a), the Adviser will make an independent determination of the appropriateness of the investment for the Regulated Fund in light of the Regulated Fund's then-current circumstances.
(a) If the Adviser deems a Regulated Fund's participation in any Potential Co-Investment Transaction to be appropriate for the Regulated Fund, it will then determine an appropriate level of investment for the Regulated Fund.
(b) If the aggregate amount recommended by the Advisers to be invested in the Potential Co-Investment Transaction by the participating Regulated Funds and any participating Affiliated Funds, collectively, exceeds the amount of the investment opportunity, the investment opportunity will be allocated among them pro rata based on the size of the Internal Orders, as described in section III.A.1.b. of the application. Each Adviser to a participating Regulated Fund will promptly notify and provide the Eligible Directors with information concerning the Affiliated Funds' and Regulated Funds' order sizes to assist the Eligible Directors with their review of the applicable Regulated Fund's investments for compliance with these Conditions.
(c) After making the determinations required in Condition 1(b) above, each Adviser to a participating Regulated Fund will distribute written information concerning the Potential Co-Investment Transaction (including the amount proposed to be invested by each participating Regulated Fund and each participating Affiliated Fund) to the Eligible Directors of its participating Regulated Fund(s) for their consideration. A Regulated Fund will enter into a Co-Investment Transaction with one or more other Regulated Funds or Affiliated Funds only if, prior to the Regulated Fund's participation in the Potential Co-Investment Transaction, a Required Majority concludes that:
(i) the terms of the transaction, including the consideration to be paid, are reasonable and fair to the Regulated Fund and its equity holders and do not involve overreaching in respect of the Regulated Fund or its equity holders on the part of any person concerned;
(ii) the transaction is consistent with:
(A) the interests of the Regulated Fund's equity holders; and
(B) the Regulated Fund's then-current Objectives and Strategies;
(iii) the investment by any other Regulated Fund(s) or Affiliated Fund(s) would not disadvantage the Regulated Fund, and participation by the Regulated Fund would not be on a basis different from, or less advantageous than, that of any other Regulated Fund(s) or Affiliated Fund(s) participating in the transaction; provided that the Required Majority shall not be prohibited from reaching the conclusions required by this Condition 2(c)(iii) if:
(A) the settlement date for another Regulated Fund or an Affiliated Fund in a Co-Investment Transaction is later than the settlement date for the Regulated Fund by no more than ten business days or earlier than the settlement date for the Regulated Fund by no more than ten business days, in either case, so long as: (x) the date on which the commitment of the Affiliated Funds and Regulated Funds is made is the same; and (y) the earliest settlement date and the latest settlement date of any Affiliated Fund or Regulated Fund participating in the transaction will occur within ten business days of each other; or
(B) any other Regulated Fund or Affiliated Fund, but not the Regulated Fund itself, gains the right to nominate a director for election to a portfolio company's board of directors, the right to have a board observer or any similar right to participate in the governance or management of the portfolio company so long as: (x) the Eligible Directors will have the right to ratify the selection of such director or board observer, if any; (y) the Adviser agrees to, and does, provide periodic reports to the Regulated Fund's Board with respect to the actions of such director or the information received by such board observer or obtained through the exercise of any similar right to participate in the governance or management of the portfolio company; and (z) any fees or other compensation that any other Regulated Fund or Affiliated Fund or any affiliated person of any other Regulated Fund or Affiliated Fund receives in connection with the right of one or more Regulated Funds or Affiliated Funds to nominate a director or appoint a board observer or otherwise to participate in the governance or management of the portfolio company will be shared proportionately among any participating Affiliated Funds (who may, in turn, share their portion with their affiliated persons) and any participating
(iv) the proposed investment by the Regulated Fund will not involve compensation, remuneration or a direct or indirect
3.
4.
5.
6.
(a)
(i) The Adviser to such Regulated Fund or Affiliated Fund will notify each Regulated Fund that holds an investment in the issuer of the proposed Disposition at the earliest practical time; and
(ii) the Adviser to each Regulated Fund that holds an investment in the issuer will formulate a recommendation as to participation by such Regulated Fund in the Disposition.
(b)
(c)
(i) (A) the participation of each Regulated Fund and Affiliated Fund in such Disposition is proportionate to its then-current holding of the security (or securities) of the issuer that is (or are) the subject of the Disposition
(ii) each security is a Tradable Security and (A) the Disposition is not to the issuer or any affiliated person of the issuer; and (B) the security is sold for cash in a transaction in which the only term negotiated by or on behalf of the participating Regulated Funds and Affiliated Funds is price.
(d)
7.
(a)
(i) the Adviser to such Regulated Fund or Affiliated Fund will notify each Regulated Fund that holds an investment in the issuer of the proposed Disposition at the earliest practical time;
(ii) the Adviser to each Regulated Fund that holds an investment in the issuer will formulate a recommendation as to participation by such Regulated Fund in the Disposition; and
(iii) the Advisers will provide to the Board of each Regulated Fund that holds an investment in the issuer all information relating to the existing investments in the issuer of the Regulated Funds and Affiliated Funds, including the terms of such investments and how they were made, that is necessary for the Required Majority to make the findings required by this Condition.
(b)
(i) the Disposition complies with Conditions 2(c)(i), (ii), (iii)(A), and (iv); and
(ii) the making and holding of the Pre-Boarding Investments were not prohibited by Section 57 or Rule 17d–1, as applicable, and records the basis for the finding in the Board minutes.
(c)
(i)
(ii)
(iii)
(iv)
(v)
8.
(a)
(i) the Adviser to each such Regulated Fund or Affiliated Fund will notify each Regulated Fund that holds securities of the portfolio company of the proposed transaction at the earliest practical time; and
(ii) the Adviser to each Regulated Fund that holds an investment in the issuer will formulate a recommendation as to the proposed participation, including the amount of the proposed investment, by such Regulated Fund.
(b)
(i) (A) the proposed participation of each Regulated Fund and each Affiliated Fund in such investment is proportionate to its outstanding investments in the issuer or the security at issue, as appropriate,
(ii) it is a Non-Negotiated Follow-On Investment.
(c)
(d)
(i) the amount of the opportunity proposed to be made available to any Regulated Fund is not based on the Regulated Funds' and the Affiliated Funds' outstanding investments in the issuer or the security at issue, as appropriate, immediately preceding the Follow-On Investment; and
(ii) the aggregate amount recommended by the Advisers to be invested in the Follow-On Investment by the participating Regulated Funds and any participating Affiliated Funds, collectively, exceeds the amount of the investment opportunity,
(e)
9.
(a)
(i) the Adviser to each such Regulated Fund or Affiliated Fund will notify each Regulated Fund that holds securities of the portfolio company of the proposed transaction at the earliest practical time;
(ii) the Adviser to each Regulated Fund that holds an investment in the issuer will formulate a recommendation as to the proposed participation, including the amount of the proposed investment, by such Regulated Fund; and
(iii) the Advisers will provide to the Board of each Regulated Fund that holds an investment in the issuer all information relating to the existing investments in the issuer of the Regulated Funds and Affiliated Funds, including the terms of such investments and how they were made, that is necessary for the Required Majority to make the findings required by this Condition.
(b)
(c)
(i)
(ii)
(iii)
(iv)
(d)
(i) the amount of the opportunity proposed to be made available to any Regulated Fund is not based on the Regulated Funds' and the Affiliated Funds' outstanding investments in the issuer or the security at issue, as appropriate, immediately preceding the Follow-On Investment; and
(ii) the aggregate amount recommended by the Advisers to be invested in the Follow-On Investment by the participating Regulated Funds and any participating Affiliated Funds, collectively, exceeds the amount of the investment opportunity,
(e)
10.
(a) Each Adviser to a Regulated Fund will present to the Board of each Regulated Fund, on a quarterly basis, and at such other times as the Board may request, (i) a record of all investments in Potential Co-Investment Transactions made by any of the other Regulated Funds or any of the Affiliated Funds during the preceding quarter that fell within the Regulated Fund's then-current Objectives and Strategies and Board-Established Criteria that were not made available to the Regulated Fund, and an explanation of why such investment opportunities were not made available to the Regulated Fund; (ii) a record of all Follow-On Investments in and Dispositions of investments in any issuer in which the Regulated Fund holds any investments by any Affiliated Fund or other Regulated Fund during the prior quarter; and (iii) all information concerning Potential Co-Investment Transactions and Co-Investment Transactions, including investments made by other Regulated Funds or Affiliated Funds that the Regulated Fund considered but declined to participate in, so that the Independent Directors, may determine whether all Potential Co-Investment Transactions and Co-Investment Transactions during the preceding quarter, including those investments that the Regulated Fund considered but declined to participate in, comply with the Conditions.
(b) All information presented to the Regulated Fund's Board pursuant to this Condition will be kept for the life of the Regulated Fund and at least two years thereafter, and will be subject to examination by the Commission and its staff.
(c) Each Regulated Fund's chief compliance officer, as defined in rule 38a-1(a)(4), will prepare an annual report for its Board each year that evaluates (and documents the basis of that evaluation) the Regulated Fund's compliance with the terms and Conditions of the application and the procedures established to achieve such compliance. In the case of a BDC Downstream Fund that does not have a chief compliance officer, the chief compliance officer of the BDC that controls the BDC Downstream Fund will prepare the report for the relevant Independent Party.
(d) The Independent Directors (including the non-interested members of each Independent Party) will consider at least annually whether continued participation in new and existing Co-Investment Transactions is in the Regulated Fund's best interests.
11.
12.
13.
14.
15. If the Holders own in the aggregate more than 25 percent of the Shares of a Regulated Fund, then the Holders will vote such Shares as directed by an independent third party when voting on (1) the election of directors; (2) the removal of one or more directors; or (3) any other matter under either the Act or applicable State law affecting the Board's composition, size or manner of election.
For the Commission, by the Division of Investment Management, under delegated authority.
Securities and Exchange Commission (“Commission”).
Notice of an application for an order pursuant to: (a) section 6(c) of the Investment Company Act of 1940 (“Act”) granting an exemption from sections 18(f) and 21(b) of the Act; (b) section 12(d)(1)(J) of the Act granting an exemption from section 12(d)(1) of the Act; (c) sections 6(c) and 17(b) of the Act granting an exemption from sections 17(a)(1), 17(a)(2) and 17(a)(3) of the Act; and (d) section 17(d) of the Act and rule 17d–1 under the Act to permit certain joint arrangements and transactions. Applicants request an order that would permit certain registered open-end management investment companies to participate in a joint lending and borrowing facility.
Hearing requests should be received by the Commission by 5:30 p.m. on January 17, 2017 and should be accompanied by proof of service on the applicants, in the form of an affidavit, or, for lawyers, a certificate of service. Pursuant to Rule 0–5 under the Act, hearing requests should state the nature of the writer's interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary.
Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC, 20549–1090; Applicants: 100 Pearl Street, Hartford, CT 06103.
Hae-Sung Lee, Attorney-Adviser, at (202) 551–7345 or Mary Kay Frech, Branch Chief, at (202) 551–6821 (Division of Investment Management, Chief Counsel's Office).
The following is a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or an applicant using the Company name box, at
1. Applicants request an order that would permit the applicants to participate in an interfund lending facility where each Fund could lend money directly to and borrow money directly from other Funds to cover unanticipated cash shortfalls, such as unanticipated redemptions or trade fails.
2. Applicants anticipate that the proposed facility would provide a borrowing Fund with a source of liquidity at a rate lower than the bank borrowing rate at times when the cash position of the Fund is insufficient to meet temporary cash requirements. In addition, Funds making short-term cash loans directly to other Funds would earn interest at a rate higher than they otherwise could obtain from investing their cash in repurchase agreements or certain other short term money market instruments. Thus, applicants assert that the facility would benefit both borrowing and lending Funds.
3. Applicants agree that any order granting the requested relief will be subject to the terms and conditions stated in the application. Among others, the Advisers, through a designated committee, would administer the facility as a disinterested fiduciary as part of its duties under the investment management and administrative agreements with the Funds and would receive no additional fee as compensation for its services in connection with the administration of the facility. The facility would be
4. Applicants assert that the facility does not raise the concerns underlying section 12(d)(1) of the Act given that the Funds are part of the same group of investment companies and there will be no duplicative costs or fees to the Funds.
5. Applicants also believe that the limited relief from section 18(f)(1) of the Act that is necessary to implement the facility (because the lending Funds are not banks) is appropriate in light of the conditions and safeguards described in the application and because the Funds would remain subject to the requirement of section 18(f)(1) that all borrowings of a Fund, including combined interfund loans and bank borrowings, have at least 300% asset coverage.
6. Section 6(c) of the Act permits the Commission to exempt any persons or transactions from any provision of the Act if such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Section 12(d)(1)(J) of the Act provides that the Commission may exempt any person, security, or transaction, or any class or classes of persons, securities, or transactions, from any provision of section 12(d)(1) if the exemption is consistent with the public interest and the protection of investors. Section 17(b) of the Act authorizes the Commission to grant an order permitting a transaction otherwise prohibited by section 17(a) if it finds that (a) the terms of the proposed transaction are fair and reasonable and do not involve overreaching on the part of any person concerned; (b) the proposed transaction is consistent with the policies of each registered investment company involved; and (c) the proposed transaction is consistent with the general purposes of the Act. Rule 17d–1(b) under the Act provides that in passing upon an application filed under the rule, the Commission will consider whether the participation of the registered investment company in a joint enterprise, joint arrangement or profit sharing plan on the basis proposed is consistent with the provisions, policies and purposes of the Act and the extent to which such participation is on a basis different from or less advantageous than that of the other participants.
For the Commission, by the Division of Investment Management, under delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to modify the NYSE Amex Options Fee Schedule (“Fee Schedule”). The Exchange proposes to implement the fee change effective December 15, 2016. The proposed change is available on the Exchange's Web site at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The purpose of this filing is to amend Section III.C. of the Fee Schedule to exempt Binary Return Derivatives contracts (“ByRDs”) from the monthly Rights Fees assessed on Specialists, e-Specialists, Directed Order Market Markers (each a “DOMM”). The Exchange proposes to implement these changes effective December 15, 2016.
The Exchange added rules related to ByRDs in 2007 and re-launched trading in ByRDs in March 2016.
The Exchange believes the proposed treatment of ByRDs for purposes of the Fee Schedule would further the Exchange's goal of introducing new products to the marketplace by encouraging trading in these products.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes the proposed change is reasonable, equitable and not unfairly discriminatory because the Exchange's treatment of ByRDs would apply equally to all market participants that opted to trade ByRDs. Further, the proposed change is reasonable and does not unfairly discriminate because exempting ByRDs from monthly Rights Fees would further the Exchange's goal of introducing new products to the marketplace by encouraging trading in these products. To the extent that the proposed change incentivizes any market participants to direct their order flow to the Exchange, all market participants would benefit from increased liquidity and trading opportunities on the Exchange.
The Exchange believes the proposed change to remove obsolete language from the Fee Schedule adds clarity and transparency to the Fee Schedule, which makes it easier for market participants to comprehend.
For these reasons, the Exchange believes that the proposal is consistent with the Act.
In accordance with Section 6(b)(8) of the Act,
The Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues. 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 solicited or received with respect to the proposed rule change.
The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
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 Market Data section of its fee schedule to: (i) Adopt fees for a new market data product called BZX Summary Depth; and (ii) amend the fees for BZX Depth.
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 proposes to amend the Market Data section of its fee schedule to: (i) Adopt fees for a new market data product called BZX Summary Depth; and (ii) amend the fees for BZX Depth.
BZX Summary Depth is a data feed that will provide aggregated two-sided quotations for all displayed orders entered into the System
The Exchange now proposes to amend its fee schedule to incorporate fees for distribution of BZX Summary Depth to subscribers.
External Distributors that receive BZX Summary Depth will be required to count every Professional User and Non-Professional User to which they provide BZX Summary Depth, the requirements for which are identical to that currently in place for other market data products offered by the Exchange.
• In connection with an External Distributor's distribution of BZX Summary Depth, the Distributor should count as one User each unique User that the Distributor has entitled to have access to BZX Summary Depth. However, where a device is dedicated specifically to a single individual, the Distributor should count only the individual and need not count the device.
• The External Distributor should identify and report each unique User. If a User uses the same unique method to gain access to BZX Summary Depth, the Distributor should count that as one User. However, if a unique User uses multiple methods to gain access to BZX Summary Depth (
• External Distributors should report each unique individual person who receives access through multiple devices as one User so long as each device is dedicated specifically to that individual.
• If an External Distributor entitles one or more individuals to use the same device, the External Distributor should include only the individuals, and not the device, in the count.
Each External Distributor will receive a credit against its monthly Distribution Fee for BZX Summary Depth equal to the amount of its monthly Usage Fees up to a maximum of the Distribution Fee for BZX Summary Depth. For example, an External Distributor will be subject to a $5,000 monthly Distribution Fee where they receive BZX Summary Depth. If that External Distributor reports User quantities totaling $5,000 or more of monthly usage of BZX Summary Depth, it will pay no net Distribution Fee, whereas if that same External Distributor were to report User quantities totaling $4,000 of monthly usage, it will pay a net of $1,000 for the Distribution Fee. External Distributors will remain subject to the per User fees discussed above.
BZX Depth is an uncompressed market data feed that provides depth-of-book quotations and execution information based on equity orders entered into the System.
The Exchange intends to implement the proposed fee change on January 3, 2017.
The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,
The Exchange also believes that the proposed rule change is consistent with Section 11(A) of the Act
In addition, the proposed fees would not permit unfair discrimination because all of the Exchange's customers and market data vendors will be subject to the proposed fees on an equivalent basis. BZX Summary Depth and BZX Depth are distributed and purchased on a voluntary basis, in that neither the Exchange nor market data distributors are required by any rule or regulation to make this data available. Accordingly, Distributors and Users can discontinue use at any time and for any reason, including due to an assessment of the reasonableness of fees charged. Firms have a wide variety of alternative market data products from which to choose, such as similar proprietary data products offered by other exchanges and consolidated data. Moreover, the Exchange is not required to make any proprietary data products available or to offer any specific pricing alternatives to any customers.
In addition, the fees that are the subject of this rule filing are constrained by competition. As explained below in the Exchange's Statement on Burden on Competition, the existence of alternatives to BZX Summary Depth and BZX Depth further ensures that the Exchange cannot set unreasonable fees, or fees that are unreasonably discriminatory, when vendors and subscribers can elect such alternatives. That is, the Exchange competes with other exchanges (and their affiliates) that provide similar market data products. If another exchange (or its affiliate) were to charge less to distribute its similar product than the Exchange charges to consolidate and distribute BZX Summary Depth and BZX Depth, prospective Users likely would not subscribe to, or would cease subscribing to, BZX Summary Depth and BZX Depth.
The Exchange notes that the Commission is not required to undertake a cost-of-service or rate-making approach. The Exchange believes that, even if it were possible as a matter of economic theory, cost-based pricing for non-core market data would be so complicated that it could not be done practically.
In addition, the proposed fees are reasonable when compared to similar fees for comparable products offered by the NYSE and Nasdaq. Specifically, NYSE offers NYSE OpenBook for a monthly fee of $60.00 per professional subscriber and $15 per non-professional subscriber.
The Exchange further believes that the proposed Enterprise Fee is reasonable because it will simplify reporting for certain recipients that have large numbers of Professional and Non-Professional Users. Firms that pay the proposed Enterprise Fee will not have to report the number of Users on a monthly basis as they currently do, but rather will only have to count natural person users every six months, which is a significant reduction in administrative burden. Finally, the Exchange believes that it is equitable and not unfairly discriminatory to establish an Enterprise Fee because it reduces the Exchange's costs and the Distributor's administrative burdens in tracking and auditing large numbers of Users.
The proposed Digital Media Enterprise Fee is equitable and reasonable because it will also enable recipient firms to more widely distribute data from BZX Summary Depth to investors for informational purposes at a lower cost than is available today. For example, a recipient firm may purchase an Enterprise license in the amount of $30,000 per month for to receive BZX Summary Depth from an External Distributor for an unlimited number of Professional and Non-Professional Users, which is greater than the proposed Digital Media Enterprise Fee. The Exchange also believes the amount of the Digital Media Enterprise Fee is reasonable as compared to the existing enterprise fees discussed above because the distribution of BZX Summary Depth data is limited to television, Web sites, and mobile devices for informational purposes only, while distribution of BZX Summary Depth data pursuant to an Enterprise license contains no such limitation. The Exchange also believes that the proposed Digital Media Enterprise Fee is equitable and reasonable because it is less than similar fees charged by other exchanges.
In addition, the proposed fees are reasonable when compared to similar fees for comparable products offered by the NYSE and Nasdaq. Specifically, NYSE offers NYSE OpenBook Ultra for a monthly fee of $60.00 per professional subscriber and $15 per non-professional subscriber.
The Exchange further believes that the proposed Enterprise Fee is reasonable because it will simplify reporting for certain recipients that have large numbers of Professional and Non-Professional Users. Firms that pay the proposed Enterprise Fee will not have to report the number of Users on a monthly basis as they currently do, but rather will only have to count natural person users every six months, which is a significant reduction in administrative burden. Finally, the Exchange believes that it is equitable and not unfairly discriminatory to establish an Enterprise Fee because it reduces the Exchange's costs and the Distributor's administrative burdens in tracking and auditing large numbers of Users.
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, as amended. The Exchange's ability to price BZX Depth and BZX Summary Depth is constrained by: (i) competition among exchanges, other trading platforms, and Trade Reporting Facilities (“TRF”) that compete with each other in a variety of dimensions; (ii) the existence of inexpensive real-time consolidated data and market-specific data and free delayed data; and (iii) the inherent contestability of the market for proprietary data.
The Exchange and its market data products are subject to significant competitive forces and the proposed fees represent responses to that competition. To start, the Exchange competes intensely for order flow. It competes with the other national securities exchanges that currently trade equities, with electronic communication networks, with quotes posted in FINRA's Alternative Display Facility, with alternative trading systems, and with securities firms that primarily trade as principal with their customer order flow.
In addition, BZX Summary Depth and BZX Depth compete with a number of alternative products. For instance, BZX Summary Depth and BZX Depth do provide a complete picture of all trading activity in a security. Rather, the other national securities exchanges, the several TRFs of FINRA, and Electronic Communication Networks (“ECN”) that produce proprietary data all produce trades and trade reports. Each is currently permitted to produce last sale information products, and many currently do, including Nasdaq and NYSE. In addition, market participants can gain access to BZX last sale and depth-of-book quotations, though integrated with the prices of other markets, on feeds made available through the SIPs.
In sum, the availability of a variety of alternative sources of information imposes significant competitive pressures on Exchange data products and the Exchange's compelling need to attract order flow imposes significant competitive pressure on the Exchange to act equitably, fairly, and reasonably in setting the proposed data product fees. The proposed data product fees are, in part, responses to that pressure. The Exchange believes that the proposed fees would reflect an equitable allocation of its overall costs to users of its facilities.
In addition, when establishing the proposed fees, the Exchange considered the competitiveness of the market for proprietary data and all of the implications of that competition. The Exchange believes that it has considered all relevant factors and has not considered irrelevant factors in order to establish fair, reasonable, and not unreasonably discriminatory fees and an equitable allocation of fees among all Users. The existence of alternatives to BZX Depth and BZX Summary Depth, including existing similar feeds by other exchanges, consolidated data, and proprietary data from other sources, ensures that the Exchange cannot set unreasonable fees, or fees that are unreasonably discriminatory, when vendors and subscribers can elect these alternatives or choose not to purchase a specific proprietary data product if its cost to purchase is not justified by the returns any particular vendor or subscriber would achieve through the purchase.
Lastly, the Exchange represents that the increase in pricing of BZX Depth and the proposed pricing of the BZX Summary Feed would continue to enable a competing vendor to create a competing product to the Exchange's Bats One Feed on the same price and latency basis as the Exchange. The Bats One Feed is a data feed that disseminates, on a real-time basis, the aggregate BBO of all displayed orders for securities traded on each of the Bats Exchanges and for the Bats Exchanges report quotes under the CTA Plan or the Nasdaq/UTP Plan. The Bats One Feed also contains the individual last sale information for the Bats Exchanges (collectively with the aggregate BBO, the “Bats One Summary Feed”). In addition, the Bats One Feed contains optional functionality which enables recipients to receive aggregated two-sided quotations from the Bats Exchanges for up to five (5) price levels (“Bats One Premium Feed”).
When adopting the Bats One Feed, the Exchange represented that a vendor could create a competing product based in the data feed used to construct the Bats One Feed on the same cost and latency basis as the Exchange.
The Exchange has neither solicited nor received written comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to 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.
Pursuant to Section 19(b)(1)
The Exchange proposes to (1) change how orders would be processed when the protected best bid (“PBB”) is higher than the protected best offer (“PBO”) (the “PBBO”) in certain circumstances, and (2) adopt a limit order price protection mechanism. The proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to (1) change how orders would be processed when the PBB is higher than the PBO in certain circumstances, and (2) adopt a limit order price protection mechanism.
Currently, when the PBB is priced higher than the PBO in a security (
Rule 13(a)(1)—Equities provides that a Market Order that is eligible for automatic executions is an unpriced order to buy or sell a stated amount of a security that is to be traded at the best price obtainable without trading through the NBBO. Rule 13(a)(1)(B)(i)—Equities provides that when the Exchange is open for continuous trading, a Market Order will be rejected on arrival, or cancelled if resting, if there is no contra-side NBBO or if the best protected quotations are or become crossed.
The Exchange proposes to no longer reject or cancel Market Orders when the PBBO is crossed. To effectuate this change, the Exchange proposes to delete the phrase “or if the best protected quotations are or become crossed” in Rule 13(a)(1)(B)(i)—Equities. As a result of this proposed change, if a Market Order arrives when the PBBO is crossed, the Exchange would process the Market Order in the same way as when the NBBO is crossed under the current rule.
The Exchange proposes to amend the Rule 13—Equities to specify circumstances when the Exchange would make order handling decisions based on a protected quotation. The Exchange proposes to make these changes because, in the circumstances described below, the Exchange would no longer avail itself of the exception to the Order Protection Rule specified in Rule 611(b)(4), and therefore the Exchange would include protected
First, the Exchange proposes to amend the definition of Exchange IOC Order to reflect that, when the PBBO is crossed, the Exchange would route such orders to other markets if an execution on the Exchange would trade through a protected quotation in compliance with Regulation NMS. Rule 13(b)(2)(B)—Equities defines an Exchange IOC Order as a Limit Order designated Immediate or Cancel (“IOC”) that will be automatically executed against the displayed quotation up to its full size and sweep the Exchange book, as provided in Rule 1000 to the extent possible, with portions of the order routed to other markets if necessary in compliance with Regulation NMS and the portion not so executed will be immediately and automatically cancelled. As such, currently an Exchange IOC Order is only routed to a protected quotation unless the exception in Rule 611(b)(4) applies. Because the Exchange proposes to route an Exchange IOC Order to other markets if an execution on the Exchange would trade through a protected quotation,
Second, the Exchange proposes to amend the definition of “best-priced sell interest” and “best-priced buy interest,” which are terms used for purposes of determining where to display and rank a Limit Order designated with an Add Liquidity Only (“ALO”) Modifier. Supplementary Material .10 of Rule 13—Equities provides that, for purposes of the Rule, the term “best-priced sell interest” refers to the lowest priced sell interest against which incoming buy interest would be required to execute with and/or route to, including Exchange displayed offers, Non-Display Reserve Orders, Non- Display Reserve e-Quotes, odd-lot sized sell interest, unexecuted Market Orders, and protected offers on away markets and that the term “best-priced buy interest” refers to the highest
Because the Exchange currently avails itself of the exception in Rule 611(b)(4) when the PBBO is crossed, the Exchange does not include protected bids or offers in the determination of “best-priced sell interest” or “best-priced buy interest.” With the proposed change, in the circumstances when the Exchange no longer avails itself of this exception, the Exchange would consider all protected quotations, including when the PBBO is crossed. To reflect this change, the Exchange proposes the following amendments to Supplementary Material .10 to Rule 13—Equities.
• In the first clause defining “best-priced sell interest,” the Exchange proposes to delete “with and/or route to” after “execute,” add the word “and” before “unexecuted Market Orders” and add the phrase “the lowest-priced” before “protected offers on away markets.” The proposed change would clarify that best-priced sell interest can mean either the lowest-priced sell interest against which incoming buy interest would execute with on the Exchange or the lowest-priced protected offer, which can be a protected offer on an away market.
• In the second clause defining “best-priced buy interest,” the Exchange would delete “with and/or route” after “execute,” add the word “and” before “unexecuted Market Orders,” and add “the highest-priced” before “protected bids on away markets.” The proposed change would clarify that best-priced buy interest can mean either the lowest-priced buy interest against which incoming sell interest would execute with on the Exchange or the lowest-priced protected bid, which can be a protected bid on an away market.
Rule 13(f)(1)—Equities defines pegging interest and provides that pegging interest pegs to prices based on (i) a PBBO, which may be available on the Exchange or an away market, or (ii) interest that establishes a price on the Exchange. If the PBBO is not within the specified price range of the pegging interest, the pegging interest will instead peg to the next available best-priced displayable interest that is within the specified price range, which may be on the Exchange or the protected bid or offer of another market.
To avoid routing pegging interest when the PBBO is locked or crossed, the Exchange proposes to specify that the Exchange would not peg to a locking or crossing PBBO and would instead peg to the next-available best-priced displayable interest that would not lock or cross either the Exchange's BBO or the PBBO. To effect this change, the Exchange proposes to amend Rule 13(f)(1)(B)(i)—Equities to provide that pegging interest to buy (sell) will not peg to the PBB (PBO) if the PBBO is locked or crossed or to a price that is locking or crossing the Exchange best offer (bid), but instead would peg to the next available best-priced displayable interest that would not lock or cross the Exchange best offer (bid) or the PBO (PBB).
Rule 70—Equities governs the execution of Floor broker interest, including g-Quotes. G-Quotes are an electronic method for Floor brokers to represent orders that yield priority, parity and precedence based on size to displayed and non-displayed orders on the Exchange's book, in compliance with Section 11(a)(1)(G) of the Act (the “G Rule”).
Because the proposed change to how the Exchange would operate when the PBBO is crossed would result in routable orders being routed to a crossed PBBO, the Exchange proposes to revise the behavior of g-Quotes to limit the circumstances when such orders would route. While the G Rule only requires G orders to yield to orders on the Exchange, the Exchange does not believe that a G order should trade on
Further, the Exchange proposes to amend subsection (a)(ii) of Supplementary Material .25 to Rule 70—Equities to specify that discretionary instructions for Floor broker d-Quotes
Rule 76—Equities governs the execution of manual “cross” or “crossing” orders by Floor brokers on the Exchange trading Floor. Supplementary Material .10 of Rule 76—Equities permits Floor Brokers to enter a cross transaction into their hand held device (“HHD”) and describes the operation by the Exchange of a quote minder function that monitors protected bids and offers to determine when the limit price assigned to the proposed crossed transaction is such that the orders may be executed consistent with Regulation NMS Rule 611.
The Exchange proposes to amend Supplementary Material .10 of Rule 76—Equities to specify that quote minder would be unavailable to Floor brokers when the PBBO is crossed by adding the sentence “Quote minder will not monitor protected bids and offers when the PBBO is crossed” to the end of the Rule. The proposed change to Rule 76.10—Equities is consistent with the proposed change, described above, that the Exchange would route orders even if the PBBO is crossed. Because Rule 76—Equities governs crossing orders at a single price on the Exchange, the Exchange believes this proposed change makes clear that the Exchange would not permit a crossing order to be executed when the PBBO is crossed.
Rule 1000—Equities provides for automatic executions by Exchange systems. The Exchange proposes to add new Supplementary Material .10 to specify how DMM interest would be processed when the PBBO is crossed and there is same side resting displayable interest that is locking or crossing the contra-side PBBO. Similar to the proposed amendment described above relating to g-Quotes, the Exchange does not believe that DMM interest should have an opportunity to trade on another market ahead of displayed orders on the Exchange.
To effect this change, the proposed amendment would provide that DMM interest that would be required to route on arrival would be cancelled when there is same side resting displayable buy (sell) interest (that is not a g-Quote or DMM interest to buy (sell)) that is locking or crossing the PBO (PBB). Similarly, the Exchange proposes to specify that certain DMM interest that would increase the displayed quantity of the similarly-entered resting DMM interest would be rejected when the resting DMM interest is locked or crossed by a protected away quote.
The Exchange proposes to amend Rule 13—Equities to introduce limit order price protection, which would result in Limit Orders with prices too far away from the prevailing quote to be rejected on arrival. The proposed rule is based on NYSE Arca Equities, Inc, (“NYSE Arca Equities”) Rule 7.31(a)(2)(B).
As proposed, the Exchange would reject limit orders that are priced a specified percentage away from the contra side national best bid (“NBB”) or national best offer (“NBO”), as defined in Rule 600(b)(42) of Regulation NMS. As the Exchange receives limit orders, Exchange systems will check the price of the limit order against the contra-side NBB or NBO at the time of the order entry to determine whether the limit order is within the specified percentage. As proposed, the specified percentage would be equal to the corresponding “numerical guideline” percentages set forth in paragraph (c)(1) of Rule 1000—Equities (Automatic Executions) that are used to calculate Trading Collars.
Proposed Rule 13(a)(2)(A)—Equities would provide that a Limit Order to buy (sell) would be rejected if it is priced at or above (below) a specified percentage away from the NBO (NBB). Proposed Rule 13(a)(2)(A)(i)—Equities would further provide if the NBB or the NBO is greater than $0.00 up to and including $25.00, the specified percentage would be 10%; if the NBB or NBO is greater than $25.00 up to and including $50.00, the specified percentage would be 5%; and if the NBB or NBO is greater than $50.00, the specified percentage would be 3%. For example, if the NBB is $26.00, a sell order priced at or below $24.70, which is 5% below the NBB, would be rejected. Likewise, if the NBO is $55.00, a buy order priced at or above $56.65, which is 3% above the NBO, would be rejected.
Proposed Rule 13(a)(2)(A)(i)—Equities would further provide that if the NBBO is crossed, the Exchange would use the Exchange Best Offer (“BO”) instead of the NBO for buy orders and the Exchange Best Bid (“BB”) instead of the NBB for sell orders. The proposed Rule would further provide that if the NBBO is crossed and there is no BO (BB), Limit Order Price Protection will not be applied to an incoming Limit Order to buy (sell). Further, proposed Rule 13(a)(2)(A)(i)—Equities would provide, like current NYSE Arca Rule 7.31(a)(2)(B), that Limit Order Price Protection will not be applied to an incoming Limit Order to buy (sell) if there is no NBO (NBB). Further, if the specified percentage for both buy and sell orders are not in the minimum price variation (“MPV”) for the security, as defined in Supplemental Material .10 to Rule 62—Equities, they would be rounded down to the nearest price at the applicable MPV. This proposed rule text is based on current Rule 1000(c)(1)—Equities, governing Trading Collars.
Proposed Rule 13(a)(2)(A)(ii)—Equities would provide that Limit Order Price Protection would be applicable only when automatic executions are in effect. This rule would further provide that Limit Order Price Protection would not be applicable (a) before a security opens for trading or during a halt or pause; (b) during a trading suspension; (c) to incoming Auction-Only Orders;
Finally, in connection with the introduction of the proposed Limit Order Price Protection mechanism, the Exchange proposes to amend Rule 1000(c)—Equities and (c)(ii)—Equities to delete references to marketable limit orders. Accordingly, Trading Collars specified in Rule 1000(c)—Equities would be applicable to Market Orders only, and pricing protections in proposed Rule 13(a)(2)(A)—Equities would be applicable to Limit Orders.
The Exchange believes that the Limit Order Protection mechanism would prevent the entry of supermarketable limit orders,
Because of the technology changes associated with this rule proposal, the Exchange will announce the implementation date in a Trader Update. The Exchange currently anticipates implementing the proposed changes no later than March 31, 2017.
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that the proposed changes to modify current order behavior that is based on Rule 611(b)(4) would remove impediments to and perfect the mechanism of a free and open market and a national market system because they are designed to reflect changes to how such orders would be processed when the PBBO is crossed in a manner consistent with the original intent of such orders.
• The Exchange believes the proposed amendment to Rule 13—Equities governing Market Orders would remove impediments to and perfect the mechanism of a free and open market and a national market system because it would promote transparency that a Market Order would be accepted when the PBBO is crossed, and thus may route when the PBBO is crossed.
• The Exchange believes the proposed amendments to Rule 13—Equities definition of an Exchange IOC Order clarifying that the Exchange would route to a protected quotation when the PBBO is crossed would remove impediments to and perfect the mechanism of a free and open market and a national market system because it would provide specificity regarding the reason why an order may be routed, thereby promoting transparency in Exchange rules. The Exchange further believes that specifying that Supplementary Material .10 relates to the displaying and ranking of Limit Orders designated ALO would remove impediments to and perfect the mechanism of a free and open market and a national market system by adding clarity and transparency to the Exchange's rules.
• The proposed amendments to Rules 70—Equities and 1000—Equities to cancel g-Quotes that would otherwise be required to route to away markets ahead of resting displayable interest and reject DMM interest that would increase the displayed quantity of similarly-entered resting DMM interest when that resting interest is locked or crossed by a protected away quote would remove impediments to and perfect the mechanism of a free and open market and a national market system and protect investors and the public because it would provide priority to previously-displayed orders not only for execution opportunities on the Exchange, but also on other markets.
• The proposed amendment to Rule 76—Equities relating to crossing orders would remove impediments to and perfect the mechanism of a free and open market and a national market system because it would provide transparency that crossing orders, which are designed to trade on the Exchange as a single-priced transaction, would not be eligible to trade if the PBBO is crossed.
The Exchange believes that the proposed Limit Order Protection mechanism would remove impediments to and perfect the mechanism of a free and open market and a national market system by rejecting orders that are priced too far away from the prevailing market. The Exchange believes that the proposed rule would ensure that limit orders would not cause the price of a security to move beyond prices that could otherwise be determined to be a clearly erroneous execution, thereby protecting investors from receiving executions away from the prevailing prices at any given time.
Finally, the Exchange's proposal to make non-substantive changes to the text of Supplementary Material .10 of Rule 13—Equities and to Rule 70.25(a)—Equities adds clarity and transparency to Exchange rules and reduces potential investor confusion, which would remove impediments to and perfect the mechanism of a free and open market and a national market system.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed change would not impose any burden on competition because it would align how the Exchange operates when the PBBO is crossed with how other equity exchanges function when the PBBO is crossed. Moreover, the proposed rule changes would specify how orders would be processed when the PBBO is crossed, thereby promoting transparency and efficiency to the benefit of all market participants, and the adoption of a limit order protection mechanism that is based on the rules of another exchange. The Exchange believes that the proposed rule change will serve to promote regulatory clarity and consistency, thereby reducing burdens on competition in the marketplace and facilitating investor protection.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
A proposed rule change filed under Rule 19b–4(f)(6)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
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 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.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to delay the implementation of the Limit Order Protection or “LOP” for members accessing the Nasdaq Market Center.
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 purpose of the proposal is to delay the implementation of the Exchange's mechanism to protect against erroneous Limit Orders, which are entered into the Nasdaq Market
At this time the Exchange proposes to delay the implementation from January 21, 2017 until a date no later than March 31, 2017 in order to allow additional time to complete testing. The Exchange will announce the specific date in advance through an Equities Trader Alert. For more information regarding LOP see the previous LOP rule changes.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The Exchange's proposal does not impose any significant burden on competition because LOP will apply to all Nasdaq market participants in a uniform manner once implemented.
No written comments were either solicited or received.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of 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 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.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
FINRA is proposing to amend FINRA Rules 2341 (Investment Company Securities), 11140 (Transactions in Securities “Ex-Dividend,” “Ex-Rights” or “Ex-Warrants”), 11150 (Transactions “Ex-Interest” in Bonds Which Are Dealt in “Flat”), 11210 (Sent by Each Party), 11320 (Dates of Delivery), 11620 (Computation of Interest), 11810 (Buy-In Procedures and Requirements), and 11860 (COD Orders) to conform to the Commission's proposed amendment to SEA Rule 15c6–1(a) to shorten the standard settlement cycle for most broker-dealer transactions from three business days after the trade date (“T+3”) to two business days after the trade date (“T+2”) and the industry-led initiative to shorten the settlement cycle from T+3 to T+2.
The text of the proposed rule change is available on FINRA's Web site at
In its filing with the Commission, FINRA 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. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
On September 28, 2016, the Commission proposed amending SEA Rule 15c6–1(a) to shorten the standard settlement cycle for most broker-dealer transactions from T+3 to T+2 on the basis that the shorter settlement cycle would reduce the risks that arise from the value and number of unsettled securities transactions prior to the completion of settlement, including credit, market, and liquidity risk directly faced by U.S. market participants. The proposed rule amendment was published for comment in the
In 1995, the standard U.S. trade settlement cycle for equities, municipal and corporate bonds, and unit investment trusts, and financial instruments composed of these products was shortened from five business days after the trade date (“T+5”) to T+3.
In April 2014, the Depository Trust & Clearing Corporation (“DTCC”) published its formal recommendation to shorten the standard U.S. trade settlement cycle to T+2 and announced that it would partner with market participants and industry organizations to devise the necessary approach and timelines to achieve T+2.
In an effort to improve the overall efficiency of the U.S. settlement system by reducing the attendant risks in T+3 settlement of securities transactions, and to align U.S. markets with other major global markets that have already moved to T+2, DTCC, in collaboration with the financial services industry, formed an Industry Steering Committee (“ISC”) and an industry working group and sub-working groups to facilitate the move to T+2.
In light of the SEC Proposing Release that would amend SEA Rule 15c6–1(a) to require standard settlement no later than T+2 and similar proposals from other SROs,
The details of the proposed rule change are described below.
Rule 2341(m) requires members, including underwriters, that engage in direct retail transactions for investment company shares to transmit payments received from customers for the purchase of investment company shares to the payee by the end of the third business day after receipt of a customer's order to purchase the shares, or by the end of one business day after receipt of a customer's payment for the shares, whichever is later. FINRA is proposing to amend Rule 2341(m) to change the three-business day transmittal requirement to two business days, while retaining the one-business day alternative.
Rule 11140(b)(1) provides that for dividends or distributions, and the issuance or distribution of warrants, that are less than 25 percent of the value of the subject security, if definitive information is received sufficiently in advance of the record date, the date designated as the “ex-dividend date” shall be the second business day preceding the record date if the record date falls on a business day, or the third business day preceding the record date if the record date falls on a day designated by FINRA's UPC Committee as a non-delivery date. FINRA is proposing to shorten the time frames in Rule 11140(b)(1) by one business day.
Rule 11150(a) prescribes the manner for establishing “ex-interest dates” for transactions in bonds or other similar evidences of indebtedness which are traded “flat.” Such transactions are “ex-interest” on the second business day preceding the record date if the record date falls on a business day, on the third business day preceding the record date if the record date falls on a day other than a business day, or on the third business day preceding the date on which an interest payment is to be made if no record date has been fixed. FINRA is proposing to shorten the time frames in Rule 11150(a) by one business day.
Paragraphs (c) and (d) of Rule 11210 set forth the “Don't Know” (“DK”) voluntary procedures for using “DK Notices” (FINRA Form No. 101) or other forms of notices, respectively. Depending upon the notice used, a confirming member may follow the “DK” procedures when it sends a comparison or confirmation of a trade (other than one that clears through the National Securities Clearing Corporation (“NSCC”) or other registered clearing agency), but does not receive a comparison or confirmation or a signed “DK” from the contra-member by the close of four business days following the trade date of the transaction (“T+4”). The procedures generally provide that after T+4, the confirming member shall send a “DK Notice” (or similar notice) to the contra-member. The contra-member then has four business days after receipt of the confirming member's notice to either confirm or “DK” the transaction.
FINRA is proposing to amend paragraphs (c) and (d) of Rule 11210 to provide that the “DK” procedures may be used by the confirming member if it does not receive a comparison or confirmation or signed “DK” from the contra-member by the close of one business day following the trade date of the transaction, rather than the current T+4.
Rule 11320 prescribes delivery dates for various transactions. Paragraph (b) states that for a “regular way” transaction, delivery must be made on, but not before, the third business day after the date of the transaction. FINRA is proposing to amend Rule 11320(b) to change the reference to third business day to second business day. Paragraph (c) provides that in a “seller's option” transaction, delivery may be made by the seller on any business day after the third business day following the date of the transaction. FINRA is proposing to amend Rule 11320(c) to change the reference to third business day to second business day.
In the settlement of contracts in interest-paying securities other than for cash, Rule 11620(a) requires the calculation of interest at the rate specified in the security up to, but not including, the third business day after the date of the transaction. The proposed amendment would shorten the time frame to the second business day. In addition, the proposed amendment would make non-substantive technical changes to the title of paragraph (a).
Rule 11810(j)(1)(A) sets forth the fail-to-deliver and liability notice procedures where a securities contract is for warrants, rights, convertible securities or other securities which have been called for redemption; are due to expire by their terms; are the subject of a tender or exchange offer; or are subject to other expiring events such as a record date for the underlying security and the last day on which the securities must be delivered or surrendered is the settlement date of the contract or later.
Under Rule 11810(j)(1)(A), the receiving member delivers a liability notice to the owing counterparty. The liability notice sets a cutoff date for the delivery of the securities by the counterparty and provides notice to the counterparty of the liability attendant to its failure to deliver the securities in time. If the owing counterparty, or delivering member, delivers the securities in response to the liability notice, it has met its delivery obligation. If the delivering member fails to deliver the securities on the expiration date, it will be liable for any damages that may accrue thereby.
Rule 11810(j)(1)(A) further provides that when both parties to a contract are participants in a registered clearing agency that has an automated liability notification service, transmission of the liability notice must be accomplished through such system.
Given the proposed shortened settlement cycle, FINRA is proposing to amend Rule 11810(j)(1)(A) in situations where both parties to a contract are not participants of a registered clearing agency with an automated notification service, by extending the time frame for delivery of the liability notice. Rule 11810(j)(1)(A) would be amended to provide that in such cases, the receiving member must send the liability notice to the delivering member as soon as practicable but not later than two hours prior to the cutoff time set forth in the instructions on a specific offer or other event to obtain the protection provided by the Rule. FINRA believes that extending the time given to the receiving member to transmit liability notifications will maintain the efficiency of the notification process while mitigating the possible overuse of such notifications.
Currently, FINRA understands that the identity of the counterparty, or delivering member, becomes known to the receiving member by mid-day on the business day after trade date (“T+1”), and by that time, the receiving member will generally also know which transactions are subject to an event identified in Rule 11810(j)(1)(A) that would prompt the receiving member to issue a liability notice to the delivering member. FINRA believes that the receiving member regularly issues liability notices to the seller or other parties from which the securities involved are due when the security is subject to an event identified in Rule 11810(j)(1)(A) during the settlement cycle as a way to mitigate the risk of a potential fail-to-deliver. In the current T+3 settlement environment, the one business day time frame gives the receiving member the requisite time needed to identify the parties involved and undertake the liability notification process.
However, FINRA believes that the move to a T+2 settlement environment will create inefficiencies in the liability notification process under Rule 11810(j)(1)(A) when both parties to a contract are not participants in a registered clearing agency with an automated notification service. The shorter settlement cycle, with the loss of one-business day, would not afford the receiving member sufficient time to: (1) Ascertain that the securities are subject to an event listed in Rule 11810(j)(1)(A) during the settlement cycle; (2) identify the delivering member and other parties from which the securities involved are due; and (3) determine the likelihood that such parties may fail to deliver. Where the receiving member has sufficient time (
Rule 11860(a) directs members to follow various procedures before accepting collect on delivery (“COD”) or payment on delivery (“POD”) orders. Rule 11860(a)(4)(A) states that the member must obtain an agreement from the customer that the customer will furnish instructions to the agent no later than the close of business on the second business day after the date of execution of the trade to which the confirmation relates in the case of a purchase by the customer where the agent is to receive the securities against payment, or COD. In light of the proposed shortened settlement cycle, FINRA is proposing to amend Rule 11860(a)(4)(A) to provide that the time period for a customer buying COD to furnish instructions to the agent will be no later than the close of business on the first business day after the date of execution of the trade, rather than the close of business on the second business day.
If the Commission approves the proposed rule change, FINRA will announce the effective date of the proposed rule change in a
FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,
FINRA 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 proposed rule change makes changes to rules pertaining to securities settlement and is intended to facilitate the implementation of the industry-led transition to a T+2 settlement cycle. Moreover, the proposed rule changes are consistent with the SEC's proposed amendment to SEA Rule 15c6–1(a) to require standard settlement no later than T+2. Accordingly, FINRA believes that the proposed changes do not impose any burdens on the industry in addition to those necessary to implement amendments to SEA Rule 15c6–1(a) as described and enumerated in the SEC Proposing Release.
These conforming changes include changes to rules that specifically establish the settlement cycle as well as rules that establish time frames based on settlement dates, including for certain post-settlement rights and obligations. FINRA believes that the proposed changes set forth in the filing are necessary to support a standard settlement cycle across the U.S. for secondary market transactions in equities, corporate and municipal bonds, unit investment trusts, and financial instruments composed of these products, among others.
The proposed rule change was published for comment in
Of the eight comment letters received, seven expressed support for the industry-led move to T+2 stating, among other benefits, that the move will align U.S. markets with international markets that already work in the T+2 environment, improve the overall efficiency and liquidity of the securities markets, and the stability of the financial system by reducing counterparty risk and pro-cyclical and liquidity demands, and decreasing clearing capital requirements.
In its comment letter, SIFMA raised a concern with the one-day time frame in Rule 11810(j)(1)(A), asserting that the requirement for the delivering member to deliver a liability notice to the receiving member no later than one business day prior to the latest time and the date of the offer or other event in order to obtain the protection provided by the Rule may no longer be appropriate in a T+2 environment in some situations such as where the delivery obligation is transferred to another party as a result of continuous net settlement, settlements outside of the NSCC, and settlements involving a third party that is not a FINRA member firm. SIFMA noted that NYSE Rule 180 (Failure to Deliver) includes a similar requirement for NYSE member firms that are participants in a registered clearing agency to transmit liability notification through an automated notification service and proposed amending Rule 11810(j)(1)(A) to omit the reference to a notification time frame, which would align with NYSE Rule 180.
While FINRA did not initially propose amendments to Rule 11810 for the T+2 initiative,
Rule 11860(a)(3) requires a member that accepts a COD or POD order from a customer to deliver to the customer a confirmation not later than the close of business on T+1. In
FINRA has considered the comment and agrees that the proposed change to T+0 may present significant difficulties for member firms, particularly small firms. Moreover, FINRA believes that the existing requirement to deliver customer confirmations on T+1 would still assure the efficient clearance and settlement of transactions in a T+2 settlement environment. Therefore, in order to remain aligned with the provisions of other SROs and current industry practices, FINRA has determined to retain the current T+1 confirmation delivery requirement under Rule 11860(a)(3).
Several commenters conveyed the importance of testing systems and educating market participants and retail investors on the impacts of a shorter settlement cycle.
FINRA recognizes that market participants will have to undergo systemic and procedural changes to implement the shorter payment period for a securities purchase as part of the ongoing transition to the T+2 framework. As BDA acknowledged, the 2017 timeline should allow firms to make all the necessary changes to systems that the proposed rule will require. FINRA further recognizes the importance of educating retail investors regarding the impact of a shortened settlement cycle and is committed to
Within 45 days of the date of publication of this notice in the
(A) by order approve or disapprove such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to adjust qualifying tier thresholds and fees and rebates under the Schedule of Fees.
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 purpose of the proposed rule change is to adjust qualifying tier thresholds and fees and rebates under the Exchange's Schedule of Fees. Each of the proposed changes is described in more detail below.
ISE Gemini currently provides volume-based maker rebates to Market Maker
The highest tier threshold attained by any method above applies retroactively in a given month to all eligible traded contracts and applies to all eligible market participants.
Any day that the market is not open for the entire trading day or the Exchange instructs members in writing to route their orders to other markets may be excluded from the ADV calculation; provided that the Exchange will only remove the day for members that would have a lower ADV with the day included.
As outlined in the following table, the Exchange now proposes to decrease the number of tiers available to four, modify the ADV thresholds required for members to achieve for each of those tiers, and eliminate the qualifying thresholds based on Total Affiliated Member ADV with a Minimum Priority Customer Maker ADV. With the elimination of the fifth tier, the Exchange hereby proposes to eliminate all fees and rebates applicable to members that achieve that tier.
Currently, the Exchange provides a maker rebate to Market Maker orders in Penny Symbols and SPY that is $0.30 per contract in Tier 1, $0.32 per contract in Tier 2 (or $0.33 per contract for members that execute a Market Maker ADV of 100,000 to 124,999 contracts in a given month), $0.34 per contract in Tier 3, $0.37 per contract in Tier 4, and $0.38 per contract in Tier 5. The Exchange proposes to increase the maker rebate provided to Market Maker orders in Penny Symbols and SPY to $0.45 per contract in Tier 4.
Currently, the Exchange provides a maker rebate to Priority Customer orders in Penny Symbols and SPY that is $0.25 per contract in Tier 1 (or $0.32 per contract for members that execute a Priority Customer Maker ADV of 5,000 to 19,999 contracts in a given month), $0.40 per contract in Tier 2, $0.48 per contract in Tier 3, $0.50 per contract in Tier 4, and $0.52 per contract in Tier 5. The Exchange proposes to increase the maker rebate provided to Priority Customer orders in Penny Symbols and SPY to $0.53 per contract in Tier 4.
Currently, the Exchange provides a maker rebate to Market Maker orders in Non-Penny Symbols that is $0.40 per contract in Tier 1, $0.42 per contract in Tier 2 (or $0.43 per contract for members that execute a Market Maker ADV of 100,000 to 124,999 contracts in a given month), $0.44 per contract in Tier 3, $0.47 per contract in Tier 4, and $0.49 per contract in Tier 5. The Exchange proposes to increase the maker rebate provided to Market Maker orders in Non-Penny Symbols to $0.50 per contract in Tier 3, and $0.75 per contract in Tier 4. In addition, the Exchange proposes to eliminate the higher rebate provided in Tier 2 for members that execute a Market Maker ADV of 100,000 to 124,999 contracts in a given month.
Currently, the Exchange provides a maker rebate to Priority Customer orders in Non-Penny Symbols that is $0.75 per contract in Tier 1 (or $0.76 per contract for members that execute a Priority Customer Maker ADV of 5,000 to 19,999 contracts in a given month), $0.80 per contract in Tier 2, and $0.85 per contract in Tiers 3 through 5. The Exchange proposes to increase the maker rebate provided to Priority Customer orders in Non-Penny Symbols to $1.05 per contract in Tier 4.
Currently, the Exchange charges a taker fee for Market Maker and Non-ISE Gemini Market Maker
The Exchange proposes to decrease the taker fee charged to Market Maker and Non-ISE Gemini Market Maker orders in Penny Symbols and SPY to $0.48 per contract in Tier 4 for trades executed against a Non-Priority Customer. The Exchange also proposes to increase the taker fee for Priority Customer orders in Penny Symbols and SPY to $0.48 per contract in Tier 1, $0.47 per contract in Tiers 2 and 3, and $0.45 per contract in Tier 4. Finally, the Exchange proposes to charge a taker fee of $0.49 per contract for Priority Customer orders in Penny Symbols and SPY for trades executed against a Priority Customer.
Currently, the Exchange charges a taker fee for Non-Priority Customer orders in Non-Penny Symbols that is $0.89 per contract, regardless of the tier achieved.
The Exchange proposes to increase the taker fee for Non-Priority Customer orders to $1.10 for trades executed against a Priority Customer in Non-Penny Symbols. In addition, the Exchange proposes to increase the taker fee for Priority Customer orders in Non-Penny Symbols to $0.85 per contract for trades executed against a Priority Customer. With these changes, different taker fees will be charged for trades executed against a Priority Customer similar to taker fees charged in Penny Symbols. Orders that do not trade against a Priority Customer will continue to be charged at their current rates.
The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,
The Exchange believes that the proposed fee change is reasonable and equitable. The Exchange is reducing the number of tiers offered to four, and is eliminating one of the methods of achieving those tiers—
Today, the Exchange provides enhanced maker rebates for Market Maker Priority Customer orders. Further increasing the rebates will incentivize these members to send additional order flow to ISE Gemini, thereby creating additional liquidity to the benefit of members and investors that trade on the Exchange. Although the proposed fee changes are designed to attract liquidity from Market Makers and Priority Customers by increasing maker rebates, certain taker fees will also be increased. The Exchange believes that the taker fee increases are appropriate as the fees will remain attractive to market participants who will now also benefit from additional liquidity posted on the Exchange.
With respect to increased taker fees for trades executed against a Priority Customer, the Exchange believes that the proposed fees are appropriate as they are designed to offset the enhanced rebates. With the proposed changes, Priority Customers will be offered even more favorable maker rebates. The Exchange believes that members will benefit from the additional liquidity created by the higher Priority Customer rebates, and it is therefore appropriate to charge an increased taker fee for trades executed against a Priority Customer. Furthermore, these taker fees are within the range of taker fees charged on other markets, including for example the Nasdaq Options Market (“NOM”), which charges a taker fee of up to $1.10 in Non-Penny Pilot Options and $0.50 per contract in Penny Pilot Options.
The Exchange also does not believe that the proposed fee change is unfairly discriminatory. While the proposed fee change generally increases maker rebates for Market Maker and Priority Customer orders, and increases taker fees for trades executed against a Priority Customer, the Exchange believe that the proposed fee structure will remain attractive to all members. As has historically been the case, Market Maker and Priority Customer orders will earn more favorable maker rebates in order to encourage that order flow. Market Makers have different requirements and obligations to the Exchange that other market participants do not (such as quoting requirements). In addition, a Priority Customer is by definition not a broker or dealer in securities, and does not place more than 390 orders in listed options per day on average during a calendar month for its own beneficial account(s). This limitation does not apply to participants whose behavior is substantially similar to that of market professionals, including Professional Customers, who will generally submit a higher number of orders than Priority Customers.
In accordance with Section 6(b)(8) of the Act,
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 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.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to adopt (i) BOX Rule 3220 (Disruptive Quoting and Trading Activity Prohibited) to clearly prohibit disruptive quoting and trading activity on the Exchange and (ii) BOX Rule 12160 (Expedited Suspension Proceeding) to permit the Exchange to take prompt action to suspend Option Participants or their clients that violate Rule 3220. 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 self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to adopt BOX Rule 3220 (Disruptive Quoting and Trading Activity Prohibited) to clearly prohibit disruptive quoting and trading activity on the Exchange and to adopt a new Exchange Rule 12160 (Expedited Suspension Proceeding), to permit the Exchange to take prompt action to suspend Options Participants
As a national securities exchange registered pursuant to Section 6 of the Act, the Exchange is required to be organized and to have the capacity to enforce compliance by its members and persons associated with its members, with the Act, the rules and regulations
The process described above, from the identification of disruptive and potentially manipulative or improper quoting and trading activity to a final resolution of the matter, can often take several years. The Exchange believes that this time period is generally necessary and appropriate to afford the subject Options Participant adequate due process, particularly in complex cases. However, as described below, the Exchange believes that there are certain obvious and uncomplicated cases of disruptive and manipulative behavior or cases where the potential harm to investors is so large that the Exchange should have the authority to initiate an expedited suspension proceeding in order to stop the behavior from continuing on the Exchange.
In recent years, several cases have been brought and resolved by the Exchange and other SROs that involved allegations of wide-spread market manipulation, much of which was ultimately being conducted by foreign persons and entities using relatively rudimentary technology to access the markets and over which the Exchange and other SROs had no direct jurisdiction. In each case, the conduct involved a pattern of disruptive quoting and trading activity indicative of manipulative layering
The following two examples are instructive on the Exchange's rationale for the proposed rule change.
In July 2012, Biremis Corp. (formerly Swift Trade Securities USA, Inc.) (the “Firm”) and its CEO were barred from the industry for, among other things, supervisory violations related to a failure by the Firm to detect and prevent disruptive and allegedly manipulative trading activities, including layering, short sale violations, and anti-money laundering violations.
In September of 2012, Hold Brothers On-Line Investment Services, Inc. (the “Firm”) settled a regulatory action in connection with the Firm's provision of a trading platform, trade software and trade execution, support and clearing services for day traders.
The Exchange also notes the criminal proceedings against Navinder Singh Sarao. Mr. Sarao's for [sic] manipulative trading activity, which included forms of layering and spoofing in the futures markets, which has been linked as a contributing factor to the “Flash Crash” of 2010, and yet continued through 2015.
The Exchange believes that the activities described in the cases above provide justification for the proposed rule change, which is described below. In addition, while the examples provided are related to the equities market, the Exchange believes that this type of conduct should be prohibited for options as well. The Exchange believes that these patterns of disruptive and allegedly manipulative quoting and trading activity need to be addressed and the product should not limit the action taken by the Exchange.
The Exchange proposes to adopt new Rule 12160, titled “Expedited Suspension Proceeding,” to set forth procedures for issuing suspension orders, immediately prohibiting an Options Participant from conducting continued disruptive quoting and trading activity on the Exchange. Importantly, these procedures would also provide the Exchange the authority to order an Options Participant to cease and desist from providing access to the Exchange to a client of the Options Participant that is conducting disruptive quoting and trading activity in violation of proposed Rule 3220. Proposed Rule 3220 would be titled, “Disruptive Quoting and Trading Activity Prohibited.” Under proposed paragraph (a) of Rule 12160, with the prior written authorization of the Chief Regulatory Officer (“CRO”) or such other senior officers as the CRO may designate, the Office of General Counsel or Regulatory Department of the Exchange (such departments generally referred to as the “Exchange” for purposes of proposed Rule 12160) may initiate an expedited suspension proceeding with respect to alleged violations of Rule 3220, which is proposed as part of this filing and described in detail below. Proposed paragraph (a) would also set forth the requirements for notice and service of such notice pursuant to the Rule, including the required method of service and the content of notice.
Proposed paragraph (b) of Rule 12160 would govern the appointment of a Hearing Panel as well as potential disqualification or recusal of Panel Members. The proposed provision is consistent with existing Exchange Rule 12060(a). The proposed rule provides for a Panel Member to be recused in the event he or she has a conflict of interest or bias or other circumstances exist where his or her fairness might reasonably be questioned in accordance with Rules [sic]12160(b)(2). In addition to recusal initiated by such a Panel Member, a party to the proceeding will be permitted to file a motion to disqualify a Panel Member. However, due to the compressed schedule pursuant to which the process would operate under Rule 12160, the proposed rule would require such motion to be filed no later than 5 days after the announcement of the Hearing Panel and the Exchange's brief in opposition to such motion would be required to be filed no later than 5 days after service thereof. Pursuant to existing Rule 12060(a)(3), any time a person serving on a Panel has a conflict of interest or bias or circumstances otherwise exist where his fairness might be reasonably questioned, the person must withdraw from the Panel. The applicable Panel Member shall remove himself or herself and the Panel Chairman may request the Chairman of the Hearing Committee to select a replacement such that the Hearing Panel still meets the compositional requirements described in Rule 12060(a).
Under paragraph (c) of the proposed Rule, the hearing would be held not later than 15 days after service of the notice initiating the suspension proceeding, unless otherwise extended by the Chairman of the Hearing Panel with the consent of the Parties for good cause shown. In the event of a recusal or disqualification of a Panel Member, the hearing shall be held not later than five days after a replacement Panel Member is appointed. Proposed paragraph (c) would also govern how the hearing is conducted, including the authority of Panel Members, witnesses, additional information that may be required by the Hearing Panel, the requirement that a transcript of the proceeding be created and details related to such transcript, and details regarding the creation and maintenance of the record of the proceeding. Proposed paragraph (c) would also state that if a Respondent fails to appear at a hearing for which it has notice, the allegations in the notice and accompanying declaration may be deemed admitted, and the Hearing Panel may issue a suspension order without further proceedings. Finally, as proposed, if the Exchange fails to appear at a hearing for which it has notice, the Hearing Panel may order that the suspension proceeding be dismissed.
Under paragraph (d) of the proposed Rule, the Hearing Panel would be required to issue a written decision stating whether a suspension order would be imposed. The Hearing Panel would be required to issue the decision not later than 10 days after receipt of the hearing transcript, unless otherwise extended by the Chairman of the Hearing Panel with the consent of the Parties for good cause shown. The Rule would state that a suspension order shall be imposed if the Hearing Panel finds by a preponderance of the evidence that the alleged violation specified in the notice has occurred and that the violative conduct or continuation thereof is likely to result in significant market disruption or other significant harm to investors.
Proposed paragraph (d) would also describe the content, scope and form of a suspension order. As proposed, a suspension order shall be limited to ordering a Respondent to cease and desist from violating proposed Rule 3220 and/or to ordering a Respondent to cease and desist from providing access to the Exchange to a client of Respondent that is causing violations of Rule 3220. Under the proposed rule, a suspension order shall also set forth the alleged violation and the significant market disruption or other significant harm to investors that is likely to result without the issuance of an order. The order shall describe in reasonable detail the act or acts the Respondent is to take or refrain from taking, and suspend such Respondent unless and until such action is taken or refrained from. Finally, the order shall include the date and hour of its issuance. As proposed, a suspension order would remain effective and enforceable unless modified, set aside, limited, or revoked pursuant to proposed paragraph (e), as described below. Finally, paragraph (d) would require service of the Hearing Panel's decision and any suspension order consistent with other portions of the proposed rule related to service.
Proposed paragraph (e) of Rule 12160 would state that at any time after the Hearing Panel served the Respondent with a suspension order, a Party could apply to the Hearing Panel to have the order modified, set aside, limited, or revoked. If any part of a suspension order is modified, set aside, limited, or revoked, proposed paragraph (e) of Rule 12160 provides the Hearing Panel discretion to leave the cease and desist part of the order in place. For example, if a suspension order suspends Respondent unless and until Respondent ceases and desists
Finally, proposed paragraph (f) would provide that sanctions issued under the proposed Rule 12160 would constitute final and immediately effective disciplinary sanctions imposed by the Exchange, and that the right to have any action under the Rule reviewed by the Commission would be governed by Section 19 of the Act. The filing of an application for review would not stay the effectiveness of a suspension order unless the Commission otherwise ordered.
The Exchange currently has authority to prohibit and take action against manipulative trading activity, including disruptive quoting and trading activity, pursuant to its general market manipulation rules, including Rules 3000, Just and Equitable Principles of Trade, and 3050, Manipulation. The Exchange proposes to adopt new Rule 3220, which would more specifically define and prohibit disruptive quoting and trading activity on the Exchange. As noted above, the Exchange proposes to apply the proposed suspension rules to proposed Rule 3220.
Proposed Rule 3220 would prohibit Option Participants from engaging in or facilitating disruptive quoting and trading activity on the Exchange, as described in proposed Rule 3220(a)(1) and (2), including acting in concert with other persons to effect such activity. The Exchange believes that it is necessary to extend the prohibition to situations when persons are acting in concert to avoid a potential loophole where disruptive quoting and trading activity is simply split between several brokers or customers. The Exchange believes, that with respect to persons acting in concert perpetrating an abusive scheme, it is important that the Exchange have authority to act against the parties perpetrating the abusive scheme, whether it is one person or multiple persons.
To provide proper context for the situations in which the Exchange proposes to utilize its proposed authority, the Exchange believes it is necessary to describe the types of disruptive quoting and trading activity that would cause the Exchange to use its authority. Accordingly, the Exchange proposes to adopt Rule 3220(a)(1) and (2) providing additional details regarding disruptive quoting and trading activity. Proposed Rule 3220(a)(1)(i) describes disruptive quoting and trading activity containing many of the elements indicative of layering. It would describe disruptive quoting and trading activity as a frequent pattern in which the following facts are present: (i) A party enters multiple limit orders on one side of the market at various price levels (the “Displayed Orders”); and (ii) following the entry of the Displayed Orders, the level of supply and demand for the security changes; and (iii) the party enters one or more orders on the opposite side of the market of the Displayed Orders (the “Contra-Side Orders”) that are subsequently executed; and (iv) following the execution of the Contra-Side Orders, the party cancels the Displayed Orders.
Proposed Rule 3220(a)(1)(ii) describes disruptive quoting and trading activity containing many of the elements indicative of spoofing and would describe disruptive quoting and trading activity as a frequent pattern in which the following facts are present: (i) a party narrows the spread for a security by placing an order inside the national best bid or offer; and (ii) the party then submits an order on the opposite side of the market that executes against another market participant that joined the new inside market established by the order described in proposed 3220(a)(1)(ii)(A) that narrowed the spread. The Exchange believes that the proposed descriptions of disruptive quoting and trading activity articulated in the rule are consistent with the activities that have been identified and described in the client access cases described above. The Exchange further believes that the proposed descriptions will provide Option Participants with clear descriptions of disruptive quoting and trading activity that will help them to avoid engaging in such activities or allowing their clients to engage in such activities.
The Exchange proposes to make clear in proposed Rule 3220(a)(2), unless otherwise indicated, the descriptions of disruptive quoting and trading activity do not require the facts to occur in a specific order in order for the rule to apply. For instance, with respect to the pattern defined in proposed Rule 3220(a)(1)(i) it is of no consequence whether a party first enters Displayed Orders and then Contra-side Orders or vice-versa. However, as proposed, it is required for supply and demand to change following the entry of the Displayed Orders. The Exchange also proposes to make clear that disruptive quoting and trading activity includes a pattern or practice in which some portion of the disruptive quoting and trading activity is conducted on the Exchange and the other portions of the disruptive quoting and trading activity are conducted on one or more other exchanges. The Exchange believes that this authority is necessary to address market participants who would otherwise seek to avoid the prohibitions of the proposed Rule by spreading their activity amongst various execution venues. In sum, proposed Rule 3220 coupled with proposed Rule 12160 would provide the Exchange with authority to promptly act to prevent disruptive quoting and trading activity from continuing on the Exchange.
Below is an example of how the proposed rule would operate.
Assume that through its surveillance program, Exchange staff identifies a pattern of potentially disruptive quoting and trading activity. After an initial investigation the Exchange would then contact the Option Participant responsible for the orders that caused the activity to request an explanation of the activity as well as any additional relevant information, including the source of the activity. If the Exchange were to continue to see the same pattern from the same Option Participant and the source of the activity is the same or has been previously identified as a frequent source of disruptive quoting and trading activity then the Exchange could initiate an expedited suspension proceeding by serving notice on the Option Participant that would include details regarding the alleged violations as well as the proposed sanction. In such a case the proposed sanction would likely be to order the Option Participant to cease and desist providing access to the Exchange to the client that is responsible for the disruptive quoting and trading activity and to suspend such Options Participant unless and until such action is taken.
The Options Participant would have the opportunity to be heard in front of a Hearing Panel at a hearing to be conducted within 15 days of the notice. If the Hearing Panel determined that the violation alleged in the notice did not occur or that the conduct or its continuation would not have the potential to result in significant market disruption or other significant harm to investors, then the Hearing Panel would dismiss the suspension order proceeding.
If the Hearing Panel determined that the violation alleged in the notice did occur and that the conduct or its continuation is likely to result in significant market disruption or other significant harm to investors, then the Hearing Panel would issue the order including the proposed sanction, ordering the Options Participant to cease providing access to the client at issue and suspending such Options Participant unless and until such action is taken. If such Option Participant wished for the suspension to be lifted because the client ultimately responsible for the activity no longer would be provided access to the Exchange, then such Option Participant could apply to the Hearing Panel to have the order modified, set aside, limited or revoked. The Exchange notes that the issuance of a suspension order would not alter the Exchange's ability to further investigate the matter and/or later sanction the Options Participant pursuant to the Exchange's standard disciplinary process for supervisory violations or other violations of Exchange rules or the Act.
The Exchange reiterates that it already has broad authority to take action against an Options Participant in the event that such Options Participant is engaging in or facilitating disruptive or manipulative trading activity on the Exchange. For the reasons described above, and in light of recent cases like the client access cases described above, as well as other cases currently under investigation, the Exchange believes that it is equally important for the Exchange to have the authority to promptly initiate expedited suspension proceedings against any Options Participant who has demonstrated a clear pattern or practice of disruptive quoting and trading activity, as described above, and to take action including ordering such Options Participant to terminate access to the Exchange to one or more of such Options Participant's clients if such clients are responsible for the activity.
The Exchange recognizes that its proposed authority to issue a suspension order is a powerful measure that should be used very cautiously. Consequently, the proposed rules have been designed to ensure that the proceedings are used to address only the most clear and serious types of disruptive quoting and trading activity and that the interests of Respondents are protected. For example, to ensure that proceedings are used appropriately and that the decision to initiate a proceeding is made only at the highest staff levels, the proposed rules require the CRO or another senior officer of the Exchange to issue written authorization before the Exchange can institute an expedited suspension proceeding. In addition, the rule by its terms is limited to violations of Rules [sic] 3220, when necessary to protect investors, other Options Participants and the Exchange. The Exchange will initiate disciplinary action for violations of Rule 3220, pursuant to Rule 12160. Further, the Exchange believes that the proposed expedited suspension provisions described above that provide the opportunity to respond as well as a Hearing Panel determination prior to taking action will ensure that the Exchange would not utilize its authority in the absence of a clear pattern or practice of disruptive quoting and trading activity.
The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Securities Exchange Act of 1934 (the “Act”),
Further, the Exchange believes that the proposal is consistent with Sections 6(b)(1) and 6(b)(6) of the Act,
As explained above, the Exchange notes that it has defined the prohibited disruptive quoting and trading activity by modifying the traditional definitions of layering and spoofing
Through this proposal, the Exchange does not intend to modify the definitions of spoofing and layering that have generally been used by the Exchange and other regulators in connection with actions like those cited above. The Exchange believes that the pattern of disruptive and allegedly manipulative quoting and trading activity was widespread across multiple exchanges, and the Exchange, FINRA, and other SROs identified clear patterns of the behavior in 2007 and 2008 in the equities markets.
Further, the Exchange believes that adopting a rule applicable to Options Participants is consistent with the Act because the Exchange believes that this type of behavior should be prohibited for all Options Participants. The type of product should not be the determining factor, rather the behavior which challenges the market structure is the primary concern for the Exchange. While this behavior may not be as prevalent on the options market today, the Exchange does not believe that the possibility of such behavior in the future would not have the same market impact and thereby warrant an expedited process.
The Exchange further believes that the proposal is consistent with Section 6(b)(7) of the Act,
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. To the contrary, the Exchange believes that each self-regulatory organization should be empowered to regulate trading occurring on its market consistent with the Act and without regard to competitive issues. The Exchange is requesting authority to take appropriate action if necessary for the protection of investors, other Options Participants and the Exchange. The Exchange also believes that it is important for all exchanges to be able to take similar action to enforce their rules against manipulative conduct thereby leaving no exchange prey to such conduct. The Exchange does not believe that the proposed rule change imposes an undue burden on competition, rather this process will provide the Exchange with the necessary means to enforce against violations of manipulative quoting and trading activity in an expedited manner, while providing Options Participants with the necessary due process. The Exchange's proposal would treat all Options Participants in a uniform manner with respect to the type of disciplinary action that would be taken for violations of manipulative quoting and trading activity.
The Exchange has neither solicited nor received comments on the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
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 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.
Pursuant to Section 19(b)(1)
The Exchange proposes to amend Rule 123D—Equities and the Listed Company Manual to eliminate the requirement for Floor Official approval for halts in trading. The proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to amend Rule 123D—Equities and the Company Guide to eliminate the requirement for Floor Official
Current Rule 123D(d)—Equities provides that once trading has commenced, trading may only be halted with the approval of a Floor Governor or two Floor Officials and that an Executive Floor Governor, or in their absence a Senior Floor Governor, should be consulted if it is felt that trading should be halted in a bank or brokerage stock due to a potential misperception regarding the company's financial viability.
Commensurate with the evolution of the equities markets and trading on the Exchange towards more automated processes, the procedures and situations requiring approvals by Floor Officials have also evolved. For example, the Exchange previously eliminated the ability of a Floor broker to seek an exception to Rule 122—Equities requirements if Floor Official permission is obtained.
The Exchange also proposes to make a related change to Section 402 of the Company Guide to delete a reference to Rule 123D—Equities that would be rendered obsolete by the proposed deletion of Rule 123D(d)—Equities. In addition, the Exchange also proposes to make a related change to Section 404 of the Company Guide to delete a reference to a consultation with trading floor officials that would be rendered obsolete by the proposed deletion of Rule 123D(d)—Equities. In addition, the Exchange proposes to re-letter the remaining subsections of Rule 123D—Equities to account for the deletion of Rule 123D(d)—Equities.
The Exchange proposes to make a related change to eliminate the requirement in Rule 123D(e)—Equities that an “Equipment Changeover” halt in trading requires the approval of a Floor Governor or two Floor Officials as such approval is no longer necessary. An Equipment Changeover halt is a non-regulatory halt condition that only halts trading on the Exchange. The Exchange believes that if circumstances arise warranting an Equipment Changeover halt, obtaining Floor Official approval before halting trading adds an unnecessary step that is no longer needed in today's automated markets.
Because of the procedural changes associated with the proposed rule
The proposed rule changes are consistent with Section 6(b)
The Exchange believes that the proposed rule changes support the objectives of the Act by amending duties and responsibilities once assigned to Floor Officials to better comport with the Exchange's current regulatory structure and to reflect the changing technology and development of its automated systems. Specifically, eliminating the unnecessary step of obtaining Floor Official approval in connection with trading halts would remove impediments to and perfect a national market system by streamlining and simplifying functionality and complexity in connection with trading halts. The Exchange believes that streamlining the procedures and eliminating unnecessary Floor Official approval requirements would be consistent with the public interest and the protection of investors because investors will not be harmed and in fact would benefit from the removal of unnecessary functionality. The Exchange also believes that eliminating Floor Official approval would benefit investors by adding transparency and clarity to the Exchange's rules.
The Exchange believes that the proposed deletion of the reference to Rule 123D—Equities in Section 402 of the Company Guide is reasonable, equitable and not unfairly discriminatory because the reference is obsolete. The Exchange believes that the proposed deletion of the reference to a consultation with trading floor officials in Section 404 of the Company Guide is reasonable, equitable and not unfairly discriminatory because the reference is obsolete. The proposed changes would result in the removal of obsolete text from the Company Guide and therefore add greater clarity to the Company Guide regarding halts in trading.
The Exchange believes that the proposed re-lettering of the remaining subsections of Rule 123D—Equities is reasonable, equitable and not unfairly discriminatory because the proposed change would add greater clarity to the Exchange's rule book.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed change is not designed to address any competitive issue but rather would streamline functionality, eliminate an unnecessary step, and streamline forms, thereby reducing confusion and making the Exchange's rules easier to understand and navigate.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
A proposed rule change filed under Rule 19b–4(f)(6)
At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
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 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.
Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), E.O. 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
For further information, including a list of the imported objects, contact the Office of Public Diplomacy and Public Affairs in the Office of the Legal Adviser, U.S. Department of State (telephone: 202–632–6471; email:
Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), E.O. 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
For further information, including a list of the imported objects, contact the Office of Public Diplomacy and Public Affairs in the Office of the Legal Adviser, U.S. Department of State (telephone: 202–632–6471; email:
Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), E.O. 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
For further information, including a list of the imported objects, contact the Office of Public Diplomacy and Public Affairs in the Office of the Legal Adviser, U.S. Department of State (telephone: 202–632–6471; email:
Susquehanna River Basin Commission.
Notice.
This notice lists the projects approved by rule by the Susquehanna River Basin Commission during the period set forth in “DATES.”
November 1–30, 2016.
Susquehanna River Basin Commission, 4423 North Front Street, Harrisburg, PA 17110–1788.
Jason E. Oyler, General Counsel, telephone: (717) 238–0423, ext. 1312; fax: (717) 238–2436; email:
This notice lists the projects, described below, receiving approval for the consumptive use of water pursuant to the Commission's approval by rule process set forth in 18 CFR 806.22(f) for the time period specified above:
1. Inflection Energy (PA), LLC, Pad ID: Stunner, ABR–201111037.R1, Gamble and Eldred Townships, Lycoming County, Pa.; Consumptive Use of Up to 4.0000 mgd; Approval Date: November 7, 2016.
2. Inflection Energy (PA), LLC, Pad ID: Nature Boy East, ABR–201203010.R1, Upper Fairfield Township, Lycoming County, Pa.; Consumptive Use of Up to 4.0000 mgd; Approval Date: November 7, 2016.
3. EXCO Resources (PA), LLC, Pad ID: Farnsworth Unit 1H Pad, ABR–201111038.R1, Franklin Township, Lycoming County, Pa.; Consumptive Use of Up to 8.0000 mgd; Approval Date: November 9, 2016.
4. SWEPI LP, Pad ID: Chappell 855, ABR–201110009.R1, Middlebury Township, Tioga County, Pa.; Consumptive Use of Up to 4.0000 mgd; Approval Date: November 9, 2016.
5. Chief Oil & Gas LLC, Pad ID: King Drilling Pad #1, ABR–201205007.R1, Towanda Township, Bradford County, Pa.; Consumptive Use of Up to 2.0000 mgd; Approval Date: November 10, 2016.
6. Chief Oil & Gas LLC, Pad ID: Ambrosius Drilling Pad #1, ABR–201205004.R1, Wilmot Township, Bradford County, Pa.; Consumptive Use of Up to 2.0000 mgd; Approval Date: November 14, 2016.
7. Chief Oil & Gas LLC, Pad ID: D & J Farms Drilling Pad #1, ABR–201204004.R1, Sheshequin Township, Bradford County, Pa.; Consumptive Use of Up to 2.0000 mgd; Approval Date: November 17, 2016.
8. SWN Production Company, LLC, Pad ID: LOCH, ABR–201112031.R1, Cogan House Township, Lycoming County, Pa.; Consumptive Use of Up to 4.9990 mgd; Approval Date: November 17, 2016.
9. SWN Production Company, LLC, Pad ID: FLICKS RUN, ABR–201201011.R1, Cogan House Township, Lycoming County, Pa.; Consumptive Use of Up to 4.9990 mgd; Approval Date: November 17, 2016.
10. Chief Oil & Gas LLC, Pad ID: Yanavitch Drilling Pad #1, ABR–201204003.R1, Stevens Township, Bradford County, Pa.; Consumptive Use of Up to 2.0000 mgd; Approval Date: November 22, 2016.
11. Chief Oil & Gas LLC, Pad ID: Polowy Drilling Pad #1, ABR–201205008.R1, Ulster Township, Bradford County, Pa.; Consumptive Use of Up to 2.0000 mgd; Approval Date: November 28, 2016.
12. Talisman Energy USA, Inc., Pad ID: Bucks Hill, ABR–201112019.R1, LeRaysville Borough, Bradford County, Pa.; Consumptive Use of Up to 7.5000 mgd; Approval Date: November 28, 2016.
13. Chesapeake Appalachia, LLC, Pad ID: Hart, ABR–201205009.R1, Wyalusing Township, Bradford County, Pa.; Consumptive Use of Up to 7.5000 mgd; Approval Date: November 29, 2016.
Pub. L. 91–575, 84 Stat. 1509
Office of the United States Trade Representative.
Request for comments and notice of public hearing.
Section 182 of the Trade Act of 1974 (Trade Act) requires the United States Trade Representative (Trade Representative) to identify countries that deny adequate and effective protection of intellectual property rights (IPR) or deny fair and equitable market access to U.S. persons who rely on intellectual property protection. The provisions of Section 182 are commonly referred to as the “Special 301” provisions of the Trade Act. The Trade Act requires the Trade Representative to determine which, if any, of these countries to identify as Priority Foreign Countries. The Office of the United States Trade Representative (USTR) requests written comments that identify acts, policies, or practices that may form the basis of a country's identification as a Priority Foreign Country or placement on the Priority Watch List or Watch List. USTR also requests notices of intent to appear at the public hearing.
The schedule and deadlines for the 2017 Special 301 review are as follows:
On or about April 30, 2017: USTR will publish the 2017 Special 301 Report within 30 days of the publication of the National Trade Estimate (NTE) Report.
You should submit written comments, notice of intent to testify, hearing statements, and post hearing comments, which must be in English, through the Federal eRulemaking Portal:
Christine Peterson, Director for Innovation and Intellectual Property, Office of the United States Trade Representative, at
Section 182 of the Trade Act, commonly known as the “Special 301” provisions, requires the Trade Representative to identify countries that deny adequate and effective IPR protections or fair and equitable market access to U.S. persons who rely on intellectual property protection. The Trade Act requires the Trade Representative to determine which, if any, of these countries to identify as Priority Foreign Countries. Acts, policies or practices that are the basis of a country's identification as a Priority Foreign Country can be subject to the procedures set out in sections 301–305 of the Trade Act.
In addition, USTR has created a “Priority Watch List” and “Watch List” to assist the Administration in pursuing the goals of the Special 301 provisions. Placement of a trading partner on the Priority Watch List or Watch List indicates that particular problems exist in that country with respect to IPR protection, enforcement or market access for persons that rely on intellectual property protection. Trading partners placed on the Priority Watch List are the focus of increased bilateral attention concerning the problem areas.
USTR chairs the Special 301 Subcommittee (Subcommittee) of the Trade Policy Staff Committee. The Subcommittee reviews information from many sources, and consults with and makes recommendations to the Trade Representative on issues arising under Special 301. Written submissions from the public are a key source of information for the Special 301 review process. In 2017, USTR again will conduct a public hearing as part of the review process as well as offer the opportunity, as described below, for hearing participants to provide additional information relevant to the review. At the conclusion of the process, USTR will publish the results of the review in a “Special 301” Report.
USTR requests that interested persons identify through the process outlined in this notice those countries whose acts, policies, or practices deny adequate and effective protection for intellectual property rights or deny fair and equitable market access to U.S. persons who rely on intellectual property protection.
Section 182 also requires the Trade Representative to identify any act, policy or practice of Canada that affects cultural industries, was adopted or expanded after December 17, 1992, and is actionable under Article 2106 of the North American Free Trade Agreement (NAFTA). The public is invited to submit views relevant to this aspect of the review.
Section 182 requires the Trade Representative to identify all such acts, policies, or practices within 30 days of the publication of the NTE Report. In accordance with this statutory requirement, USTR will publish the annual Special 301 Report on or about April 30, 2017.
To facilitate the review, written comments should be as detailed as possible and provide all necessary information for identifying and assessing the effect of the acts, policies, and practices. USTR invites written comments that provide specific references to laws, regulations, policy statements, including innovation policies, executive, presidential or other orders, and administrative, court or other determinations that should factor in the review. USTR also requests that, where relevant, submissions mention particular regions, provinces, states, or other subdivisions of a country in which an act, policy, or practice is believed to warrant special attention. Finally, submissions proposing countries for review should include data, loss estimates, and other information regarding the economic impact on the United States, U.S. industry and the U.S. workforce caused by the denial of adequate and effective intellectual property protection. Comments that include quantitative loss claims should be accompanied by the methodology used in calculating such estimated losses.
The Special 301 Subcommittee will hold a public hearing on February 28, 2017, at the Office of the United State Trade Representative, 1724 F Street NW., Rooms 1&2, Washington DC 20508, at which interested persons, including representatives of foreign governments, may appear to provide oral testimony. If necessary, the hearing may continue on the next business day. The hearing will be open to the public. Because the hearing will take place in Federal facilities, security screening will be required. Attendees will need to show photo identification and be screened for security purposes. Please consult
Prepared oral testimony before the Special 301 Subcommittee must be delivered in person, in English, and will be limited to five minutes. Subcommittee member agencies may ask questions following the prepared statement. Persons, except representatives of foreign governments, wishing to testify at the hearing must submit a “Notice of Intent to Testify” and “Hearing Statement” by the February 9, 2017, deadline to
All representatives of foreign governments that wish to testify at the hearing must submit a “Notice of Intent to Testify” by the February 23, 2017, deadline to
All submissions must be in English and sent electronically via
Filers of comments containing business confidential information also must submit a public version of their comments. The file name of the public version should begin with the character “P”. The “BC” and “P” should be followed by the name of the person or entity submitting the comments. Filers submitting comments containing no business confidential information should name their file using the name of the person or entity submitting the comments. The non-business confidential version will be placed in the docket at
As noted, USTR strongly urges commenters to submit comments through
Comments will be placed in the docket and open to public inspection, except business confidential information. Comments may be viewed on the
Office of the United States Trade Representative.
Notice of public hearing and request for comments.
The interagency Section 301 Committee is holding a public hearing and seeking public comments to assist the United States Trade Representative (Trade Representative) in connection with the request of representatives of the U.S. beef industry to reinstate action against the European Union (EU) pursuant to Section 306(c) of the 1974 Trade Act, as amended (19 U.S.C. 2416(c)). Prior to reinstating trade action, the Office of the United States Trade Representative (USTR) will conduct a review of the effectiveness of such an action, and of other actions that could be taken (including actions against other products), in achieving the objectives of Section 301 of this title (19 U.S.C. 2411); and the effects of such actions on the United States economy, including consumers.
The schedule and deadlines are as follows:
Monday, January 30, 2017 at 11:59 p.m.: Deadline for interested persons to submit written comments and requests to appear at the hearing, which must include a summary of testimony.
Wednesday, February 15, 2017: The Section 301 Committee will convene a public hearing in Rooms 1 and 2, 1724 F Street NW., Washington, DC 20508, beginning at 9:30 a.m. If necessary, the hearing may continue on the next business day.
Wednesday, February 22, 2017 at 11:59 p.m.: Deadline for submission of post-hearing rebuttal comments.
All written comments, requests to appear at the hearing, hearing summaries, and rebuttal comments must be in English and submitted electronically via the Federal eRulemaking Portal:
For procedural questions concerning written comments or participating in the public hearing, contact Gwendolyn Diggs at (202) 395–3150. For questions on the
The EU bans the import of beef and beef products produced from animals to which any of six hormones have been administered for growth-promotion purposes. The six hormones at issue are estradiol 17–b, testosterone, progesterone, zeranol, trenbolone acetate (TBA) and melengestrol acetate (MGA). The effect of the EU ban is to prohibit the import of all but specially-produced U.S. beef and beef products. In February 1998, the WTO Dispute Settlement Body (DSB) in the
On November 6, 2008, the inter-agency Section 301 committee requested public comments on a list of alternative products under consideration for the imposition of increased duties. On January 23, 2009, USTR announced a determination to modify the list of products subject to additional duties by removing some products from the list and adding replacement products, consistent with the WTO's authorization.
The MOU provided for the EU to make phased increases in market access by adopting a tariff-rate quota (TRQ) for beef produced without growth-promoting hormones (termed HQB products), in return for the United States making phased reductions in additional duties the United States had imposed consistent with WTO authorization.
Under the second phase of the MOU, starting in August 2012, the EU increased the TRQ to 45,000 metric tons (MT). Although the EU has maintained this 45,000 MT TRQ for HQB products, it has not in practice provided benefits to the U.S. beef industry sufficient to compensate for the economic harm resulting from the EU ban on all but specially-produced U.S. beef. In particular, non-U.S. exporters of HQB products have been able to fill a substantial part of the 45,000 MT TRQ.
In February 2016, Congress passed and the President signed the Trade Facilitation and Trade Enforcement Act of 2015. Among other things, the Act amended relevant provisions of the 1974 Trade Act to confirm that the Trade Representative may reinstate a previously terminated Section 301 action in order to exercise a WTO authorization to suspend trade concessions. In particular, the new Section 306(c) of the 1974 Trade Act permits the Trade Representative to reinstate a Section 301 action following (1) a request from the petitioner or any representative of the domestic industry that would benefit from reinstatement of action, (2) consultations under Section 306(d) of the Trade Act, and (3) a review under section 307(c) of the Trade Act.
Section 306(d) of the 1974 Trade Act requires the Trade Representative to consult with the petitioner, if any, involved in the initial investigation and with representatives of the domestic industry concerned, and provide an opportunity for the presentation of views by interested parties. Section 307(c) requires the Trade Representative to conduct a review of the effectiveness of such an action, and of other actions that could be taken (including actions against other products), in achieving the objectives of Section 301 of this title (19 U.S.C. 2411); and the effects of such actions on the United States economy, including consumers.
On December 9, 2016, representatives of the U.S. beef industry invoked the new Section 306(c) of the 1974 Trade Act by filing a written request for reinstatement of action.
In order to assist in a possible reinstatement of the action in accordance with Section 306(c) of the 1974 Trade Act, and to provide information in connection with a review under Section 307(c) of the Act, the Section 301 Committee seeks public comments with respect to the specific EU products on the lists in the annexes to this notice. Annex I contains the full list of EU products covered by the ongoing WTO authorization for the United States to suspend tariff concessions and related obligations with respect to the EU. In addition, for convenience, Annex II contains the list of EU products initially subject to increased duties starting in 1999, and in effect in whole or in part until 2011. Annex II is a subset of the full product list in Annex I. In considering a possible reinstatement of the action, the Trade Representative will consider including any product listed in Annex I, regardless of whether that product was covered by the 1999 action.
The Section 301 Committee invites comments with respect to whether particular products should be included on a new list that would be subject to increased duties, as well as the rate of duty that would be best suited to the objective of encouraging a satisfactory resolution of the dispute. The comments should address: (i) Whether imposing increased duties on a particular product would be practicable or effective in terms of encouraging a favorable resolution of the dispute, and (ii) whether imposing increased duties on a particular product would cause disproportionate economic harm to U.S. interests, including small- or medium-size businesses and consumers.
In addition, the Section 301 Committee requests comments on whether actions on particular products should be taken with respect to products of all members of the EU, or whether action should be taken with respect to products of one or more particular EU members. The EU currently has 28 member States: Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.
To be assured of consideration, you must submit written comments by 11:59 p.m. on January 30, 2017 in accordance with the instructions in section E below.
The Section 301 Committee will convene a public hearing in Rooms 1 and 2, 1724 F Street NW., Washington, DC 20508, beginning at 9:30 a.m. on February 15, 2017. Persons wishing to appear at the hearing must provide written notification of their intention and a summary of the proposed testimony by 11:59 p.m. on January 30, 2017 in accordance with the instructions in section E below. Remarks at the hearing may be no more than five minutes to allow for possible questions from the Section 301 Committee. The deadline for submission of post-hearing rebuttal comments is 11:59 p.m. February 22, 2017.
Indicate in the “Type Comment” field if you are submitting a request to appear at the hearing, and include the name, address and telephone number of the person presenting the testimony. A summary of the testimony should be attached by using the “Upload File” field. The file name should include who will be presenting the testimony. Remarks at the hearing should be limited to no more than five minutes to allow for possible questions from the section 301 Committee.
Persons submitting a notification of intent to testify and/or written
All submissions must be in English and must be submitted electronically via
To make a submission via
The
Indicate in the “Type Comment” field if you are submitting a request to appear at the hearing, and include the name, address and telephone number of the person presenting the testimony. The file name should include who will be presenting the testimony.
Please do not attach separate cover letters to electronic submissions; rather, include any information that might appear in a cover letter in the comments themselves. Similarly, to the extent possible, please include any exhibits, annexes, or other attachments in the same file as the comment itself, rather than submitting them as separate files.
For any comments submitted electronically containing business confidential information, the file name of the business confidential version should begin with the characters “BC”. Any page containing business confidential information must be clearly marked “BUSINESS CONFIDENTIAL” on the top of that page and the submission should clearly indicate, via brackets, highlighting, or other means, the specific information that is business confidential. A filer requesting business confidential treatment must certify that the information is business confidential and would not customarily be released to the public by the submitter. Filers of submissions containing business confidential information also must submit a public version of their comments. The file name of the public version should begin with the character “P”. The “BC” and “P” should be followed by the name of the person or entity submitting the comments or reply comments.
As noted, USTR strongly urges submitters to file comments through
Comments will be placed in the docket and open to public inspection, except information granted business confidential status. Comments may be viewed on the
The products listed below are under consideration for the imposition of increased duties in accordance with the WTO DSB authorization in the
Annex II contains the list of EU products initially subject to increased duties starting in 1999, and in effect in whole or in part until 2011. Annex II is a subset of the full product list in Annex I.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of Unified Carrier Registration Plan Board of Directors meeting.
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.
The meeting will be held on February 7, 2017, from 9:00 a.m. to 12:00 noon Pacific Standard Time.
The meetings will be open to the public at the Courtyard by Marriott Downtown, 530 Broadway, San Diego, CA 92101, 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.
Mr. Avelino Gutierrez, Chair, Unified Carrier Registration Board of Directors at (505) 827–4565.
Maritime Administration, Department of Transportation.
Notice and request for comments
The Department of Transportation (DOT) invites public comments about our intention to request the Office of Management and Budget (OMB) approval to renew an information collection. We are required to publish this notice in the
Written comments should be submitted by February 27, 2017.
You may submit comments identified by Docket No. MARAD–2016–0131 through one of the following methods:
•
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Michael Pucci, 202–366–5167, Office of Maritime Program, Maritime Administration, 1200 New Jersey Avenue SE., Washington, DC 20590, Email:
The Paperwork Reduction Act of 1995; 44 U.S.C. Chapter 35, as amended; and 49 CFR 1.93.
By order of the Maritime Administrator.
National Highway Traffic Safety Administration (NHTSA), DOT.
Notice of proposed extension, without change, of a currently approved collection of information.
Before a Federal agency can collect certain information from the public, the agency must receive approval from the Office of Management and Budget (OMB). Under procedures established by the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Comments must be submitted on or before February 27, 2017.
You may submit comments to the docket number identified in the heading of this document by any of the following methods:
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Regardless of how you submit your comments, please be sure to mention the docket number of this document and cite OMB Clearance No. 2127–0025, “49 CFR part 512, Confidential Business Information.”
You may call the Docket at 202–366–9322.
Note that all comments received will be posted without change to
For questions contact Thomas Healy in the Office of the Chief Counsel at the National Highway Traffic Safety Administration, telephone (202) 366–7161.
Under the Paperwork Reduction Act of 1995, before an agency submits a proposed collection of information to OMB for approval, it must publish a document in the
(i) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(ii) the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(iii) how to enhance the quality, utility, and clarity of the information to be collected; and
(iv) how to minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
In compliance with these requirements, NHTSA asks for public comment on the following extension of clearance for a currently approved collection of information:
Part 512 ensures that information submitted under a claim of confidentiality is properly evaluated in an efficient manner under prevailing legal standards and, where appropriate, accorded confidential treatment. To facilitate the evaluation process, in their requests for confidential treatment, submitters of information may make reference to certain limited classes of information that are presumptively treated as confidential, such as blueprints and engineering drawings, future specific model plans (under limited conditions), and future vehicle production or sales figures for specific models (under limited conditions). Further, most early warning reporting (EWR) data are confidential under class determinations provided in 49 CFR part 512, with the exception of information on death, injury, and property damage claims and notices, which would be handled on an individual basis according to the procedures of part 512 and are, therefore, covered by this notice. 72 FR 59434 (Oct. 19, 2007).
The agency receives requests for confidential treatment that vary in size from requests that ask the agency to withhold as little as a portion of one page to multiple boxes of documents. NHTSA estimates that it will take on average approximately eight (8) hours for an entity to prepare a submission requesting confidential treatment. This estimate will vary based on the size of the submission, with smaller and voluntary submissions taking considerably less time to prepare. The agency based this estimate on the volume of requests received over the past three years.
NHTSA estimates that it will receive approximately 500 requests for confidential treatment annually. This figure is based on the average number of requests received over the past three years. We selected this period because it provides an estimate based on incoming requests for the most recent three years. The agency estimates that the total burden for this information collection will be approximately 4000 hours, which is based on the number of requests (500) multiplied by the estimated number of hours to prepare each submission (8 hours).
Since nothing in the rule requires those persons who request confidential treatment pursuant to part 512 to keep copies of any records or requests submitted to us, recordkeeping costs imposed would be zero hours and zero costs.
44 U.S.C. 3506; delegation of authority at 49 CFR 1.95.
National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).
Receipt of petition.
Ford Motor Company (Ford), has determined that certain model year (MY) 2015–2017 Ford F–150 and Ford F-Super Duty pickup trucks do not fully comply with Federal Motor Vehicle Safety Standard (FMVSS) No. 202a,
The closing date for comments on the petition is January 27, 2017.
Interested persons are invited to submit written data, views, and arguments on this petition. Comments must refer to the docket and notice number cited in the title of this notice and submitted by any of the following methods:
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• Comments may also be faxed to (202) 493–2251.
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 comments you have submitted by mail were received, please enclose a stamped, self-addressed postcard with the comments. Note that all comments received will be posted without change to
All comments and supporting materials received before the close of business on the closing date indicated above will be filed in the docket and will be considered. All comments and supporting materials received after the closing date will also be filed and will be considered to the fullest extent possible.
When the petition is granted or denied, notice of the decision will also be published in the
All comments, background documentation, and supporting materials submitted to the docket may be viewed by anyone at the address and times given above. The documents may also be viewed on the Internet at
DOT's complete Privacy Act Statement is available for review in a
Ford Motor Company (Ford), has determined that certain model year (MY) 2015–2017 Ford F–150 and Ford F-Super Duty pickup trucks do not fully comply with paragraph S4.2.2 of Federal Motor Vehicle Safety Standard (FMVSS) No. 202a,
This notice of receipt of Ford's petition is published under 49 U.S.C. 30118 and 30120 and does not represent any agency decision or other exercise of judgment concerning the merits of the petition.
Approximately 274,321 MY 2015–2017 Ford F–150 and MY 2017 Ford
Ford explains that the noncompliance is that the driver and front passenger seat head restraints in the subject vehicles do not meet the minimum width requirements of paragraph S4.2.2 of FMVSS No. 202a. The head restraints have, on average, a width of 239 mm, which is below the 254 mm minimum width required by the standard.
Paragraph S4.2.2 of FMVSS No. 202a states:
S4.2.2
Ford described the subject noncompliance and stated its belief that the noncompliance is inconsequential as it relates to motor vehicle safety.
In support of its petition, Ford submitted the following reasoning:
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a. Review of preamble discussions (FMVSS No. 202a rulemaking) finds that the main reason for retaining the 254 mm width requirement was concern that “occupants seated on bench seats are freer than occupants of single seats to position themselves so that they are not directly in front of the head restraint, and a bench head restraint needs to be wider to assure that the head restraint will be behind the occupant in event of a crash.” (72 FR 25514)
b. Review of preamble discussions finds that the main reason for retaining the 170 mm width requirement, and not increasing to 254 mm, for “bucket seats” is “. . . front outboard non-bench seats have a defined contour that, in addition to belt use, better prescribe occupant seating position relative to the head restraint. Therefore, the front non-bench head restraints can be narrower than the front bench seat head restraints.” (69 FR 74848)
c. Conclusion: The seat utilized in the subject vehicles are not “bench seats” in the traditional sense of providing a single seating surface that spans the width of the vehicle. All of the characteristics citied by the Agency in supporting the basis for narrower head restraints for bucket seat vehicles are present in the outboard seats of the subject trucks because the outboard bucket seats are identical regardless of how the center area between the seats is configured. The ability for an occupant to position or mis-position themselves in the outboard seat is the same for trucks with or without the center dsp because the seat contours and seat belt anchorage locations are the same. The seats are identical and interchangeable but the head restraint width requirement is different. Ford is not advocating that a narrower head restraint width requirement should apply. Rather, Ford believes that the safety risk the agency sought to address by retaining a wider width requirement for seats with a front center dsp is simply not present in the subject bucket seats because of its contoured design. Regardless how the front center area between the seats is configured, Ford believes that the subject head restraints in the outboard front bucket seats provide the intended level of protection.
a. Ford evaluated head restraint width protection using seating reference point measurements (SgRP). In promulgating FMVSS No. 202a, the Agency proposed to “maintain the existing width requirements.” In responding to comments to harmonize the requirements with ECE 17, the agency stated that, “The 254 mm width requirement for these head restraints on bench seats has been in effect since January 1, 1969.” (69 FR 74848). Ford believes that this clearly shows that the agency intended to retain the width requirement as-is in the upgraded standard.
b. In retaining the width requirements, the measurement procedure was revised from “when measured either 64 mm below the top of the head restraint or 635 mm above the seating reference point” to “when measured 65 ± 3 mm below the top of the head restraint.”
c. Ford believes that the position of the occupant's head is determined by their seating position, not by the head restraint. In this case, Ford believes that measuring the head restraint width from the SgRP demonstrates that the subject head restraints provide the intended level of safety. Measuring from the top of the head restraint actually varies the location of the width requirement based on the head restraint design, and is not necessarily based on the position of the occupant's head. Below is a table providing data illustrating how the height of a head restraint affects the location at which the width requirement applies, further it shows how this is different under the original FMVSS No. 202 standard.
d. The height of the adjustable head restraint in the subject trucks ranges from a minimum of 802 mm up to 851 mm, exceeding the height requirements of FMVSS No. 202a by 50 mm.
e. While the agency argued that the existing requirements should not be changed because they meet the need for motor vehicle safety, in the preambles for the FMVSS No. 202a upgrade, no rationale was provided for excluding the option of measuring up from the SgRP or how this option did not meet the need for motor vehicle safety.
f. Conclusion: In the subject trucks, the outboard dsp head restraint width exceeds the requirement when the width is measured 635 mm above the SgRP. This method is based on the occupant seated height and is consistent for all seats and head restraints, and demonstrates that the subject head restraints provide occupants with the intended level of safety.
a. Ford evaluated head restraint width protection for occupants using a SAEJ826 package manikin. The measured width of the head restraint at the initial point of contact between the head restraint and the head of the manikin is 257 mm. The height at this location is 636 mm above the seating reference point (SgRP).
b. Based on a survey of 15 trucks the highest point on the head restraint that meets the 254 mm width requirement ranged from 674 mm to 721 mm above the SgRP with the head restraint in the full down position. Ford provides the required width across a wide section of the head restraint. Adjusting the head restraint up (up to 50 mm of vertical adjustment is available) further increases the range at which Ford provides the required width. This range of coverage includes occupants as tall and taller than the 95th percentile American male.
c. Conclusion: The subject trucks provide the required width and intended level of safety for all occupants including, and taller than, the 95th percentile American male.
a. Another alternative method for evaluating seat performance is testing. The Ford F–150 meets or exceeds all other FMVSS No. 202a requirements and was rated “Good” by the Insurance Institute for Highway Safety based on dynamic whiplash testing. Based on testing, Ford believes that its head restraints are indeed providing the intended level of safety to occupants.
Ford stated that it has made changes in production to increase the width of the head restraints.
Ford concluded by expressing the belief that the subject noncompliance is inconsequential as it relates to motor vehicle safety, and that its petition to be exempted from providing notification of the noncompliance, as required by 49 U.S.C. 30118, and a remedy for the noncompliance, as required by 49 U.S.C. 30120, should be granted.
NHTSA notes that the statutory provisions (49 U.S.C. 30118(d) and 30120(h)) that permit manufacturers to file petitions for a determination of inconsequentiality allow NHTSA to exempt manufacturers only from the duties found in sections 30118 and 30120, respectively, to notify owners, purchasers, and dealers of a defect or noncompliance and to remedy the defect or noncompliance. Therefore, any decision on this petition only applies to the subject vehicles that Ford no longer controlled at the time it determined that the noncompliance existed. However, any decision on this petition does not relieve vehicle distributors and dealers of the prohibitions on the sale, offer for sale, or introduction or delivery for introduction into interstate commerce of the noncompliant vehicles under their control after Ford notified them that the subject noncompliance existed.
49 U.S.C. 30118, 30120: delegations of authority at 49 CFR 1.95 and 501.8.
Financial Crimes Enforcement Network (“FinCEN”), Treasury.
Notice and request for nominations.
FinCEN is inviting nominations from the public for membership on the Bank Secrecy Act Advisory Group. New members will be selected for three-year membership terms.
Nominations must be received by January 27, 2017.
Nominations must be emailed to
FinCEN Resource Center at 800–767–2825.
The Annunzio-Wylie Anti-Money Laundering Act of 1992 required the Secretary of the Treasury to establish a Bank Secrecy Act Advisory Group (BSAAG) consisting of representatives from federal regulatory and law enforcement agencies, financial institutions, and trade groups with members subject to the requirements of the Bank Secrecy Act, 31 CFR 1000—1099
FinCEN invites BSAAG membership nominations for financial institutions, trade groups, and non-federal regulatory and law enforcement agencies. New members will be selected to serve a three-year term and must designate one individual to represent that member at plenary meetings. The designated representative should be knowledgeable about Bank Secrecy Act requirements and must be able and willing to make the necessary time commitment to participate on committees throughout the year by phone and attend biannual plenary meetings held in Washington, DC, in May and October.
It is important to provide complete answers to the following items, as nominations will be evaluated on the information provided through this process. There is no formal application; interested organizations may submit their nominations via email or email attachment. Nominations should consist of:
• Name of the organization requesting membership
• Point of contact, title, address, email address and phone number
• Description of the financial institution or trade group and its involvement with the Bank Secrecy Act, 31 CFR 1000–1099
• Reasons why the organization's participation on the BSAAG will bring value to the group
Organizations may nominate themselves, but nominations for individuals who are not representing an organization will not be considered. Members will not be remunerated for their time, services, or travel. In making the selections, FinCEN will seek to complement current BSAAG members
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
The Veterans Benefits Administration (VBA), Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
VA Forms 21–0960M–9 is used to gather necessary information from a claimant's treating physician regarding the results of medical examinations.
Written comments and recommendations on the proposed collection of information should be received on or before February 27, 2017.
Submit written comments on the collection of information through Federal Docket Management System (FDMS) at
Nancy J. Kessinger at (202) 632–8924 or FAX (202) 632–8925.
Under the PRA of 1995 (Pub. L. 104–13; 44 U.S.C. 3501–21), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VBA invites comments on: (1) Whether the proposed collection of information is necessary for the proper performance of VBA's functions, including whether the information will have practical utility; (2) the accuracy of VBA's estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology.
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
The Veterans Benefits Administration (VBA), Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
VA Forms 21–0960M–4 is used to gather necessary information from a claimant's treating physician regarding the results of medical examinations.
Written comments and recommendations on the proposed collection of information should be received on or before February 27, 2017.
Submit written comments on the collection of information through Federal Docket Management System (FDMS) at
Nancy J. Kessinger at (202) 632–8924 or FAX (202) 632–8925.
Under the PRA of 1995 (Pub. L. 104–13; 44 U.S.C. 3501–21), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VBA invites comments on: (1) Whether the proposed collection of information is necessary for the proper performance of VBA's functions, including whether the information will have practical utility; (2) the accuracy of VBA's estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology.
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
The Veterans Benefits Administration (VBA), Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
VA Forms 21–0960M–8 is used to gather necessary information from a claimant's treating physician regarding the results of medical examinations.
Written comments and recommendations on the proposed collection of information should be received on or before February 27, 2017.
Submit written comments on the collection of information through Federal Docket Management System (FDMS) at
Nancy J. Kessinger at (202) 632–8924 or FAX (202) 632–8925.
Under the PRA of 1995 (Pub. L. 104–13; 44 U.S.C. 3501–21), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VBA invites comments on: (1) Whether the proposed collection of information is necessary for the proper performance of VBA's functions, including whether the information will have practical utility; (2) the accuracy of VBA's estimate of the burden of the proposed collection of information; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology.
By direction of the Secretary.
Bureau of Land Management, Interior.
Notice.
This notice announces that the Assistant Secretary of the Interior for Land and Minerals Management proposes to withdraw 1,337,904 acres of public lands located within designated California Desert National Conservation Lands from mining to protect nationally significant landscapes with outstanding cultural, biological, and scientific values. This notice temporarily segregates the lands from location and entry under the United States mining laws for up to two years and provides the public with an opportunity to comment on the proposed withdrawal. In addition, this notice initiates the public scoping process for an Environmental Impact Statement (EIS), which will analyze and disclose impacts of the proposed withdrawal.
Comments on the proposed withdrawal application and scoping comments on issues to be analyzed in the EIS must be received by March 28, 2017. Please clearly indicate whether comments are in regard to the withdrawal application or scoping comments on the EIS. The date(s) and location(s) of meetings related to the proposed withdrawal and scoping meetings for the EIS will be announced at least 30 days in advance of the meeting through local media, newspapers, the
Written comments should be sent to the BLM-California State Director, 2800 Cottage Way, Rm W–1623, Sacramento, CA 95825 or electronically to
Vicki Campbell, DRECP Program Manager, 916–978–4320; Bureau of Land Management, 2800 Cottage Way, Rm W–1623, Sacramento, CA 95825; email
The Bureau of Land Management (BLM) petitioned the Assistant Secretary of the Interior for Land and Minerals Management to withdraw 1,337,904 million acres of California Desert National Conservation Lands from location and entry under the United States mining laws for a period of 20 years, subject to valid existing rights. All of the lands (unless otherwise subject to an existing withdrawal) will remain open to the public land laws, leasing under the mineral and geothermal leasing laws, and disposal under the mineral material sales laws. The lands are located in the California Desert Conservation Area. Copies of the maps entitled “DRECP-California Desert National Conservation Lands Proposed Withdrawal” depicting the lands proposed for withdrawal are posted on the BLM Web site at
• BLM California State Office, 2800 Cottage Way, Suite W–1623, Sacramento, CA 95825;
• BLM California Desert District Office, 22835 Calle San Juan De Los Lagos, Moreno Valley, CA 92553;
• BLM Barstow Field Office, 2601 Barstow Road, Barstow, CA 92311;
• BLM El Centro Field Office, 1661 S. 4th Street, El Centro, CA 92243;
• BLM Needles Field Office, 1303 S. Highway 95, Needles, CA 92363;
• BLM Palm Springs South Coast Field Office, 1201 Bird Center Drive, Palm Springs, CA 92262; and
• BLM Ridgecrest Field Office, 300 S. Richmond Road, Ridgecrest, CA 93555.
The proposed withdrawal is divided into four areas and includes all of the public lands identified below:
Secs. 6 thru 8;
Secs. 16 thru 22;
Secs. 27 thru 30;
The Amargosa area of the California Desert National Conservation Lands described aggregate 417,894 acres in Inyo and San Bernardino Counties.
The Big Morongo area of the California Desert National Conservation Lands described aggregates 94,744 acres in San Bernardino County.
The Chuckwalla Bench and Dos Palmas area of the California Desert National Conservation Lands described aggregates 589,662 acres in Imperial and Riverside Counties.
The Eastern Slopes-West Desert area of the California Desert National Conservation Lands described aggregates 235,604 acres in Kern and Inyo Counties.
The total areas described aggregate 1,337,904 acres in the State of California and the counties listed above, and consist of a subset of the designated California Desert National Conservation Lands.
The Assistant Secretary of the Interior for Land and Minerals Management has approved the BLM's petition. This action therefore, constitutes a withdrawal proposal of the Secretary of the Interior (43 CFR 2310.1–3(e)).
The purpose of the proposed withdrawal is to protect nationally significant landscapes with outstanding cultural, biological, and scientific values from adverse effects of locatable mineral exploration and mining.
The use of a right-of-way, interagency or cooperative agreement, or surface management by the BLM under 43 CFR 3715 or 43 CFR 3809 regulations do not adequately constrain nondiscretionary uses, which could result in the loss of nationally significant values for which the California Desert National Conservation Lands were designated.
Alternative sites for withdrawal from location and entry under the United States mining laws exist on approximately 1.6 million acres of California Desert National Conservation Lands. These California Desert National Conservation Lands are not being proposed for withdrawal at this time because their values are not as sensitive and therefore would not benefit from a withdrawal to the same degree as the proposed 1,337,904 acres. A future phase 2 withdrawal proposal may include all or a portion of the approximately 1.6 million remaining acres of California Desert National Conservation Lands.
No water rights would be needed to fulfill the purpose of the proposed withdrawal.
Records relating to the application may be examined by contacting the BLM offices listed above.
For a period until March 28, 2017, all persons who wish to submit comments, suggestions, or objections in connection with the proposed withdrawal may present their views in writing to the BLM-California State Director, 2800 Cottage Way, Rm 1623, Sacramento, CA 95825, or electronically to
Notice is hereby given that one or more public meetings will be held in connection with the proposed withdrawal. A notice of the time and place of these public meetings will be published in the
All comments received, within the prescribed timeframe, will be considered before any final action is taken on the withdrawal application.
This notice also opens a 90-day public scoping period for the EIS. The purpose of the public scoping process is to determine relevant issues that will influence the scope of the environmental analysis, including alternatives in the EIS. At present, the BLM has identified the following preliminary issues for analysis: Air quality, climate, Native American resources, cultural resources, mineral resources, recreation, socio-economic conditions, soil resources, special status species, vegetation resources, visual resources, water resources, and fish and wildlife resources.
Because of the nature of a withdrawal of public lands from location and entry under the United States mining laws,
The BLM will use the NEPA scoping process to help fulfill the public involvement requirements under the National Historic Preservation Act (54 U.S.C. 306108) as provided in 36 CFR 800.2(d)(3). The information about historic and cultural resources within the area potentially affected by the proposed action will assist the BLM in identifying and evaluating impacts to such resources.
The BLM will consult with tribes on a government-to-government basis in accordance with Executive Order 13175 and other policies. Tribal concerns, including impacts to Indian trust assets and potential impacts to cultural resources, will be given due consideration. Federal, State, and local agencies, along with tribes and other stakeholders that may be interested in or affected by the proposed withdrawal, are invited to participate in the scoping process and, if eligible, may request or be requested by the BLM to participate in the development of the EIS as a cooperating agency.
Comments, including names and street addresses of respondents, will be available for public review at the BLM California State Office at the address noted above, during regular business hours Monday through Friday, except Federal holidays. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
For a period until December 28, 2018, the lands described in this notice will be segregated from location and entry under the United States mining laws, subject to valid existing rights, unless the application/proposal is denied or canceled or the proposed withdrawal is approved prior to that date. Licenses, permits, cooperative agreements, or other discretionary land use authorizations may be allowed during the temporary segregative period, but only with approval of the authorized officer of the BLM.
The application will be processed in accordance with the regulations set forth in 43 CFR part 2300.
Office of Energy Efficiency and Renewable Energy, Department of Energy.
Final rule.
This final rule amends the test procedure for certain walk-in cooler and freezer components by improving the procedure's clarity, updating related certification and enforcement provisions to address the performance-based energy conservation standards for walk-in cooler and freezer equipment, and establishing labeling requirements to aid manufacturers in determining compliance with the relevant standards for walk-in cooler and freezer applications. The amendments consist of provisions specific to certain walk-in cooler and freezer refrigeration systems, including product-specific definitions, removal of a performance credit for hot gas defrost, and a method to accommodate refrigeration equipment that use adaptive defrost and on-cycle variable-speed evaporator fan control.
The effective date of this rule is January 27, 2017. The final rule changes will be mandatory for representations starting June 26, 2017. The incorporation by reference of certain publications listed in the rule is approved by the Director of the Federal Register on January 27, 2017.
The docket, which includes
A link to the docket Web page can be found at
Ms. Ashley Armstrong, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE–2J, 1000 Independence Avenue SW., Washington, DC 20585–0121. Telephone: (202) 586–6590. Email:
DOE incorporates by reference the following industry standards into 10 CFR part 431:
(1) AHRI Standard 420–2008 (“AHRI 420–2008”), “Performance Rating of Forced-Circulation Free-Delivery Unit Coolers for Refrigeration,” copyright 2008.
(2) AHRI Standard 1250–2009 (“AHRI 1250–2009”), “Standard for Performance Rating of Walk-in Coolers and Freezers,” approved 2009.
(3) ASHRAE Standard 23.1–2010 (“ASHRAE 23.1–2010”), “Methods of Testing for Rating the Performance of Positive Displacement Refrigerant Compressors and Condensing Units that Operate at Subcritical Temperatures of the Refrigerant,” ANSI approved January 28, 2010.
(4) ASTM C518–04 (“ASTM C518”), Standard Test Method for Steady-State Thermal Transmission Properties by Means of the Heat Flow Meter Apparatus, approved May 1, 2004.
Copies of AHRI Standard 420–2008 and AHRI Standard 1250–2009 may be purchased from AHRI at 2111 Wilson Boulevard, Suite 500, Arlington, VA 22201, or by going to
Copies of ASHRAE 23.1–2010 may be purchased from ASHRAE at 1971 Tullie Circle NE., Atlanta, GA 30329, or by going to
Copies of ASTM C518 may be obtained from the American Society for Testing and Materials, 100 Barr Harbor Drive, West Conshohocken, PA 19428–2959, (610) 832–9500.
For a further discussion of these standards, see section IV.N.
Walk-in coolers and walk-in freezers (collectively, “walk-ins” or “WICFs”) are included in the list of “covered equipment” for which the U.S. Department of Energy (“DOE”) is authorized to establish and amend energy conservation standards and test procedures. (42 U.S.C. 6311(1)(G)) By definition, a walk-in is an enclosed storage space of less than 3,000 square feet that can be walked into and is refrigerated to prescribed temperatures based on whether the given unit is a cooler or a freezer. See generally 42 U.S.C. 6311(20). In simple terms, a walk-in is an insulated box (or envelope) serviced by a refrigerated system that feeds cold air to the box's
Title III, Part C
In general, this program addresses the energy efficiency of certain types of commercial and industrial equipment. Relevant provisions of the Act specifically include definitions (42 U.S.C. 6311), energy conservation standards (42 U.S.C. 6313), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C. 6315), and the authority to require information and reports from manufacturers (42 U.S.C. 6316 and 6296(d)). Manufacturers of covered equipment must use the prescribed DOE test procedure as the basis for making representations to the public regarding the energy use or efficiency of such equipment. (42 U.S.C. 6314(d))
Under 42 U.S.C. 6314, EPCA sets forth the criteria and procedures DOE must follow when prescribing or amending test procedures for covered products. EPCA provides in relevant part that any test procedures prescribed or amended under this section shall be reasonably designed to produce test results that measure the energy efficiency, energy use or estimated annual operating cost of a covered product during a representative average use cycle or period of use and shall not be unduly burdensome to conduct. See 42 U.S.C. 6314(a)(2) (detailing criteria for setting test procedures for industrial equipment).
DOE also generally periodically reviews its test procedures and if it determines that an amendment is warranted, DOE publishes a proposal to amend them and offers the public an opportunity to present oral and written comments on that proposal. (See generally 42 U.S.C. 6314(b)) DOE also generally determines the extent, if any, to which the test procedure amendment(s) would alter the measured energy efficiency of any covered product as determined under the existing test procedure. (42 U.S.C. 6293(e)(1)) For purposes of this rulemaking, DOE has made this determination through its conducting of a parallel rulemaking setting standards for certain classes of walk-in refrigeration systems.
Section 312 of the Energy Independence and Security Act of 2007, Public Law 110–140 (December 19, 2007), required DOE to establish test procedures to measure walk-in energy use. On April 15, 2011, DOE published test procedures for the principal components that make up a walk-in: panels, doors, and refrigeration systems. DOE took this component-based testing approach after carefully considering a significant body of feedback from interested parties that requiring a single test procedure for an entire walk-in would be impractical because most walk-ins are assembled on-site with components from different manufacturers. 76 FR 21580, 21582 (April 15, 2011).
On February 20, 2014, DOE initiated another test procedure rulemaking for walk-ins to clarify and modify the test procedures published in April 2011. DOE also proposed to revise the existing regulations for walk-ins to allow manufacturers, once certain qualifications are met, to use an alternative efficiency determination method (“AEDM”) to certify compliance and report ratings. That effort, which came in the form of a supplemental notice of proposed rulemaking (“SNOPR”), solicited public comments, data, and information on the proposed test procedure modifications. 79 FR 9818 (February 20, 2014). DOE published a final rule codifying the AEDM provisions and amendments to the test procedure for walk-ins on May 13. 2014. 79 FR 27388.
DOE also published a notice of proposed rulemaking (“NOPR”) to establish new performance-based energy conservation standards for walk-ins on September 11, 2013. (“September 2013 NOPR”) 78 FR 55782. That NOPR addressed the comments received during earlier stages of the rulemaking and proposed new energy conservation standards for this equipment. In conjunction with the September 2013 NOPR, DOE published a technical support document (“TSD”) to accompany the proposed rule along with spreadsheets addressing aspects of DOE's engineering analysis, Government Regulatory Impact Model (“GRIM”), life cycle cost (“LCC”), and national impact analysis (“NIA”). See Docket No. EERE–2008–BT–STD–0015. DOE proposed standards for eight dedicated condensing classes of refrigeration systems, two multiplex condensing classes of refrigeration systems, three classes of panels, four classes of non-display doors, and two classes of display doors. (The proposed refrigeration system standards used the metric “annual walk-in energy factor” (“AWEF”), and the door standards used the metric maximum energy consumption that incorporates thermal insulating ability and electrical energy used by the door. The proposed panel standards were equivalent to those previously established by Congress and use a measurement of thermal insulation—or “R-value”—to represent the energy efficiency of these components.) DOE published a final rule adopting these new standards on June 3, 2014 (“June 2014 final rule”). 79 FR 32050. Except for the equipment class standards that were vacated, as described below, compliance with the standards adopted in the June 2014 final rule is required starting on June 5, 2017.
After publication of the June 2014 final rule, the Air-Conditioning, Heating and Refrigeration Institute (“AHRI”) and Lennox International, Inc. (a manufacturer of walk-in refrigeration systems) filed petitions for review of DOE's final rule and DOE's subsequent denial of a petition for reconsideration of the rule (79 FR 59090 (October 1, 2014)) with the United States Court of Appeals for the Fifth Circuit.
A controlling Order from the United States Court of Appeals for the Fifth
To address the vacated standards, DOE established a Working Group to negotiate proposed energy conservation standards to replace them. Specifically, on August 5, 2015, DOE published a notice of intent to establish a Working Group for Certain Equipment Classes of Refrigeration Systems of Walk-in Coolers and Freezers to Negotiate a Notice of Proposed Rulemaking for Energy Conservation Standards (“Working Group”). 80 FR 46521. The Working Group was established under the Appliance Standards and Rulemaking Federal Advisory Committee (“ASRAC”) in accordance with the Federal Advisory Committee Act (“FACA”) and the Negotiated Rulemaking Act (“NRA”). (5 U.S.C. App. 2; 5 U.S.C. 561–570, Pub. L. 104–320.) The purpose of the Working Group was to discuss and, if possible, reach consensus on proposed standard levels for the energy efficiency of the affected classes of walk-in refrigeration systems. The Working Group consisted of 12 representatives of parties having a defined stake in the outcome of the proposed standards and one DOE representative (see Table 1). All of the meetings were open to the public and broadcast via webinar. Several people who were not members of the Working Group attended the meetings and were given the opportunity to comment on the proceedings. Non-Working Group meeting attendees are listed in Table 2. The Working Group consulted as appropriate with a range of experts on technical issues. The Working Group met in-person on 13 days of meetings held between August 27 and December 15, 2015.
On December 15, 2015, the Working Group reached consensus on, among other things, a series of energy conservation standards to replace those that were vacated as a result of the litigation. The Working Group assembled their recommendations into a single Term Sheet (See Docket EERE–2015–BT–STD–0016, No. 56) that was presented to, and approved by, the ASRAC on December 18, 2015. DOE anticipates adopting in a separate rulemaking document energy conservation standards consistent with the Working Group's Term Sheet for those classes of walk-in refrigeration systems whose standards were vacated. See Docket No. EERE–2015–BT–STD–0016 for all background documents on the negotiated rulemaking.
While the Working Group's focus centered primarily on addressing the six energy conservation standards for low-temperature dedicated condensing equipment classes and both medium- and low-temperature multiplex condensing equipment classes, (see Docket No. EERE–2015–BT–STD–0016, No. 1 and 2), the Term Sheet also included recommendations that DOE consider making certain amendments to the walk-in test procedure. These recommendations included technical corrections to the test procedure itself, definitions for certain terms to provide clarity regarding the applicability of the standards (and, relatedly, the test procedure), and other changes that the Working Group deemed necessary in order to implement the agreed-upon refrigeration system standards.
DOE is requiring manufacturers to use the prescribed test procedure described in this document when making representations regarding the energy use or efficiency of covered equipment. Manufacturers will have 180 days after the final rule's publication date to ensure that these representations are based on this test procedure. (42 U.S.C. 6314(d))
The amendments adopted in this final rule will not change the measured energy use of the classes of refrigeration systems whose standards were not vacated.
In addition to implementing the recommendations detailed in the Term Sheet developed as part of the ASRAC negotiated rulemaking meetings, this final rule fulfills DOE's obligation to periodically review its test procedures under 42 U.S.C. 6314(a). DOE also reviewed other aspects of the WICF test procedure and ultimately concluded that, with the exception of the amendments being made in this final rule, no other changes are needed at this point in time. DOE anticipates that its next evaluation of this test procedure (and the addressing of any remaining issues detailed in the Term Sheet that relate to the WICF test procedure) will occur in a manner consistent with this provision. (Term Sheet at EERE–2015–BT–STD–0016, No. 56, Recommendation #6)
In this final rule, DOE amends 10 CFR 431.304, “Uniform test method for the measurement of energy consumption of walk-in coolers and walk-in freezers,” and related certification, compliance, and enforcement provisions of 10 CFR part 429. The amendments fall into two groups.
The first group consists of test procedure modifications and other additions to the regulatory text recommended by the Working Group and listed in the Term Sheet, including the following:
(1) Adding definitions for the terms “dedicated condensing unit,” “outdoor dedicated condensing refrigeration system,” “indoor dedicated condensing refrigeration system,” “adaptive defrost,” “process cooling,” and “refrigerated storage space.” DOE also is adding definitions for “dedicated condensing refrigeration system,” “single-package dedicated system,” “matched condensing unit,” “matched refrigeration system,” and modifying the definition of “refrigeration system” to complete a comprehensive structure for defining all relevant terms discussed in the test procedure.
(2) Removing the method for calculating defrost energy and defrost heat load of a system with hot gas defrost and establish a method to test hot gas defrost refrigeration systems to obtain AWEF ratings equivalent to those of electric defrost refrigeration systems.
(3) Establishing a regulatory approach for refrigeration systems with adaptive defrost and/or on-cycle variable-speed evaporator fan control that requires that these features be deactivated when such units are tested to demonstrate compliance with the standard, while allowing for representations of their improved performance when using these features.
The second group of amendments consists of test procedure modifications and certification, compliance, and enforcement provisions that, while not part of the Term Sheet, are necessary for implementing the energy conservation standards. This group of changes includes the following:
(1) Re-organizing the test procedure provisions in 10 CFR 431.304 to improve clarity, and correct typographical errors in the rule language.
(2) Clarifying section 3.0 “Additional Definitions” in appendix A to subpart R of part 431.
(3) Modifying the current walk-in certification and reporting requirements in 10 CFR 429.53 to clarify applicability of walk-in test procedures to certain equipment classes and add provisions for reporting additional rating metrics.
(4) Adding walk-in refrigeration systems, panels, and doors to the list of products and equipment included as part of the enforcement testing requirements prescribed in 10 CFR 429.110(e)(2).
(5) Adding product specific enforcement provisions for walk-ins.
(6) Adding labeling requirements for walk-in refrigeration systems, panels, and doors.
This final rule stems from the detailed discussions and suggestions offered by Working Group participants during the walk-in negotiated rulemaking. These participants, in addition to providing detailed technical feedback on replacing the vacated standards, also offered detailed recommendations regarding the walk-in test procedures. These recommendations were offered as a means to address questions related to the treatment of certain types of features or components that may be present in a given walk-in refrigeration system. DOE developed specific proposals to incorporate the Working Group recommendations into its test procedures, resulting in the August 2016 NOPR. 81 FR 54926. DOE received comments from a number of interested parties. A list of these parties is included in Table 3—Interested Parties Who Commented on the WICF NOPR. The comments received and DOE's decisions regarding finalization of the test procedure amendments are discussed in the sections that follow.
The Working Group recommended that DOE define the terms “dedicated condensing unit,” “matched condensing unit,” and “outdoor condensing unit” (Term Sheet at EERE–2015–BT–STD–0016, No. 56, Recommendation #1); “adaptive defrost” (Term Sheet at EERE–2015–BT–STD–0016, No. 56, Recommendation #2); and “process cooling,” “preparation room refrigeration,” and “storage space.” (Term Sheet at EERE–2015–BT–STD–0016, No. 56, Recommendation #7) DOE sought to define these terms to more clearly identify the categories of equipment that are covered and to clarify the application of the test procedures and standards to these equipment. To this end, DOE proposed definitions for these terms along with several others, notably, the terms “dedicated condensing refrigeration system,” “outdoor dedicated condensing refrigeration system,” “indoor dedicated condensing refrigeration system,” “matched refrigeration system,” “unit cooler,” and “packaged dedicated system.” These supplemental definitions were developed to help enhance the clarity of the walk-in regulatory framework and to assist manufacturers in readily ascertaining how to classify (and certify for compliance purposes) the myriad of refrigeration systems they produce. Finally, DOE proposed to modify the current definition of “refrigeration system” to align it more closely with the terminology being defined. See 81 FR at 54929–54932. The following sections discuss the proposed definitions and comments received from stakeholders regarding the proposals. The precise text for the final definitions, which will all appear in 10 CFR 431.302, is contained in the regulatory text appearing at the end of this document.
DOE proposed to define the dedicated condensing equipment class to address three refrigeration system configurations—(1) a dedicated condensing unit; (2) a packaged dedicated system; and (3) a matched refrigeration system. DOE proposed defining what a dedicated condensing refrigeration system is to clarify the scope of this equipment class. Consistent with Lennox's assertion that single-package refrigeration systems are a type of dedicated condensing system (Docket No. EERE–2015–BT–STD–0016, DOE and Lennox, Public Meeting Transcript (October 16, 2015), No. 63 at pp. 249–251), DOE proposed to include this configuration in the proposed definition. DOE also proposed that a matched condensing system—consisting of a dedicated condensing unit that is distributed in commerce with one or more specific unit coolers—would also be treated as a dedicated condensing system. Finally, DOE also proposed to treat as a dedicated condensing system a dedicated condensing unit sold separately from any unit cooler. This proposed clarification underpins DOE's certification approach of allowing manufacturers to test and rate condensing units separately when certifying compliance with the dedicated condensing standard, without having to distribute their condensing
DOE's proposed definition for “dedicated condensing unit” reflected each of these elements. Under the proposed definition, such a unit would be a positive displacement condensing unit that is part of a refrigeration system (as defined in 10 CFR 431.302) and is an assembly that (1) includes 1 or more compressors, a condenser, and one refrigeration circuit and (2) is designed to serve one refrigerated load. The term “factory-made” was omitted from the proposed definition to avoid suggesting that such an assembly is not a condensing unit (and thus not covered by DOE regulations) if it happens to be assembled from its subcomponents after shipment from the factory.
Lennox, KeepRite, Rheem, ASAP and NEEA agreed with the proposed definition of “dedicated condensing unit.” (Lennox, No. 13 at p. 6; KeepRite, No. 17 at p. 1; Rheem, No. 18 at p. 2; ASAP and NEEA, No. 19 at p. 1)
DOE did not receive any opposing comments regarding its proposed definition for “dedicated condensing unit.” Accordingly, DOE is adopting this definition as proposed.
Additionally, DOE proposed to define “dedicated condensing refrigeration system” as referring to a (a) dedicated condensing unit, (b) packaged dedicated system, or (c) matched refrigeration system. 81 FR at 54930.
ASAP and NEEA supported this proposed definition. (ASAP and NEEA, No. 19 at p. 1) Others, however, challenged the inclusion of packaged dedicated systems within the proposed definition (
DOE proposed to treat a packaged dedicated system as a type of dedicated condensing refrigeration system. These systems are factory-assembled equipment where the components serving the compressor, condenser, and evaporator functions are “packaged” into a single piece of equipment. The system is then installed as part of a walk-in application, with the compressor and condenser located on the outside of the walk-in envelope (
Rheem and American Panel commented that a “packaged dedicated system” leaves the factory as a complete system, with only power hookup and air inlet and outlet to be configured on-site. Consequently, they suggested adding the clause “factory-assembled” to the definition for a packaged dedicated system. (Rheem, Public Meeting Transcript, No. 23 at pp. 19–21; American Panel, Public Meeting Transcript, No. 23 at p. 22)
Public meeting and written comments submitted to DOE from several manufacturers and AHRI indicated that there is no viable test procedure for packaged systems. Commenters requested that DOE clarify how to test and rate this equipment. The commenters pointed out the necessity of disassembling the unit to install mass flow meters and to install the evaporator and condenser sections in separate environmental chambers when testing packaged systems under the current test procedure. The commenters suggested that packaged systems should be exempt from the scope of the WICF standards because there is no test procedure for them. Further, Rheem, Manitowoc, and AHRI stated that it was their understanding from the ASRAC Working Group meeting that packaged systems do not fall within the definition of dedicated condensing unit, and are not subject to the dedicating condensing class standards. (Rheem, Public Meeting Transcript, No. 23 at pp. 16–17; Lennox, Public Meeting Transcript, No. 23 at p. 18; Manitowoc, No. 10 at pp. 3–4; Rheem, No. 18 at pp. 1–2; Hussmann, No. 20 at p. 1; AHRI, No. 11 at p. 6) The CA IOUs disagreed with manufacturers' claims that AHRI 1250–2009 is not an appropriate test procedure for packaged dedicated system WICF systems, noting that AHRI 1250–2009 specifically cites “integrated single package refrigeration units” as part of its scope. In addition, the CA IOUs recommended that DOE change the term, “packaged dedicated system,” to “single-package dedicated system,” or “self-contained units”. (CA IOUs, No. 21 at pp. 2–3)
DOE notes that the definition for “refrigeration system” was established in the context of walk-ins to include “(1) [a] packaged dedicated system where the unit cooler and condensing unit are integrated into a single piece of equipment” in the April 15, 2011 final rule establishing test procedures for WICFs. 76 FR at 21605. In DOE's view, packaged systems are walk-in refrigeration systems and are subject to the applicable prescriptive standards established by Congress through EISA 2007 along with the performance standards that DOE prescribes for these systems.
DOE notes that section 2.1 of AHRI 1250–2009 describes the scope of this testing standard as applying “to mechanical refrigeration equipment consisting of an integrated single package refrigeration unit, or separate
Further, the possibility that the equipment has one or more design characteristics that prevent testing according to the prescribed test procedures does not exempt manufacturers from coverage under the standards. DOE has established the waiver process to address such circumstances. See 10 CFR 431.401. While DOE acknowledges stakeholders' comments that the configurations of certain models of refrigeration systems may prevent testing according to the prescribed test procedures, manufacturers may avail themselves of the procedures under 10 CFR 431.401 to obtain a waiver that would enable them to test this equipment using an alternative test procedure. This process requires, among other things, that manufacturers include in a petition for waiver any alternate test procedures known to evaluate the performance of the equipment in a manner representative of the energy consumption characteristics of the basic model (10 CFR 431.401(b)(1)(iii)). The filing of the waiver does not exempt a manufacturer from compliance with standards or certification requirements. (10 CFR 431.401(a)(2))
In response to comments that “factory-assembled” should be part of the definition for single-package dedicated system, DOE notes that DOE omitted this clause from several of the definitions to avoid implying that a piece of equipment that otherwise meets the definition does not meet it if part of the assembly occurs outside a factory. An example of this is a refrigeration system that is shipped from the factory in multiple boxes and then assembled in the field. DOE agrees that it is likely that nearly all such single-package systems are fully assembled in a factory. However, DOE believes that any such refrigeration system that is not fully assembled in a factory, for example, by having the condenser fan assembly mounted to the unit in the field, should still be considered a single-package refrigeration system and regulated under the relevant requirements under the dedicated condensing refrigeration system equipment class. Hence, DOE is not adopting the suggested change.
Regarding the CA IOUs' suggestion that the term “packaged dedicated system” be changed to “single-package dedicated system” for purposes of DOE's regulatory definitions, DOE surveyed manufacturer literature, and found that packaged dedicated systems are marketed as “Packaged Systems” or “Packaged Refrigeration Systems”. (Master-Bilt product specification sheet, No. 32 at p. 7; Lennox product catalog, No. 31 at p. 190; and Rheem product specification, No. 30) However, DOE believes that the suggested use of the term “single-package dedicated refrigeration system” would provide further clarity, indicating more precisely what this equipment is, and would be consistent with the approach already used for air-conditioning units. This consistency is significant since walk-in refrigeration systems are generally very similar in classification and operation to air conditioning systems. Accordingly, the use of the term “single-package” in the walk-in context would help clarify the categorization of this equipment and reduce the potential for industry and market confusion. To reduce the risk of confusion, DOE is adopting the suggested change from the CA–IOUs and is renaming the “packaged dedicated systems” category as “single-package dedicated refrigeration systems.”
DOE proposed to define a “matched condensing unit” as “a dedicated condensing unit that is distributed in commerce with one or more unit cooler(s) specified by the condensing unit manufacturer.” DOE also proposed to define “matched refrigeration system” (also called “matched-pair”) as “a refrigeration system including the matched condensing unit and the one or more unit coolers with which it is distributed in commerce.” 81 FR at 54931.
KeepRite supported the proposed definitions for matched condensing unit and matched refrigeration system. (KeepRite, No. 17 at p. 1) DOE did not receive any other comments regarding this definition and therefore is adopting it as proposed.
DOE has established separate equipment classes for indoor and outdoor dedicated condensing refrigeration systems. See,
Rheem and Lennox commented that 65 percent of net capacity at 95 °F would not be an effective metric for differentiating models. (Rheem, No. 18 at p. 2; Lennox, No. 13 at p. 6) Rheem further indicated that box load and condensing unit capacity are not the same and that as ambient temperature is lowered, the condensing unit capacity increases, which means overall capacity will be higher at a 65 °F ambient temperature than at a 95 °F ambient temperature. (Rheem, Public Meeting Transcript, No. 23 at pp. 24–25) Manitowoc, Rheem, Lennox, KeepRite and AHRI also suggested that the definition should reference existing test conditions from the test procedure rather than the proposed conditions—the use of which, some manufacturers suggested, has not been supported with substantiating data in the record. (Manitowoc, No. 10 at p. 4; Rheem, No. 18 at p. 2; Lennox, No. 13 at p. 6; KeepRite, No. 17 at p. 1; AHRI, No. 11 at p. 7)
AHRI, Manitowoc, Lennox, and Rheem supported the inclusion of “no less than one hour” in the proposed “outdoor dedicated condensing refrigeration system” definition. (AHRI, No. 11 at p. 7; Manitowoc, No. 10 at p. 4; Lennox, No. 13 at p. 6; Rheem, No. 18 at p. 2)
Finally, Manitowoc, Rheem, and AHRI also requested that the term “packaged dedicated systems” be removed from both the proposed definition and the test procedure. (Manitowoc, No. 10 at p. 4; Rheem, No. 18 at p. 2; AHRI, No. 11 at p. 7)
As addressed in section III.A.1.b, DOE considers the renamed “single-package dedicated systems” to be part of the dedicated condensing refrigeration system class, and does not agree with these commenters' suggestion to remove this category of equipment from the “outdoor” definition, since such units can be designed for outdoor use. Other than the name change for this equipment, which was discussed earlier in section III.A.1.b, the “outdoor dedicated condensing refrigeration system” definition adopted in this final rule retains this term.
NCC commented that some condensing units could be used with both outdoor and indoor applications. (NCC, Public Meeting Transcript, No. 23 at p. 26) Rheem commented that, because the outdoor requirements are more demanding, units that have passed outdoor certification testing should be able to apply for indoor certification without retesting. (Rheem, Public Meeting Transcript, No. 23 at p. 27) Heat Controller noted that often in the field a unit that is marketed and sold as an indoor unit will be fitted with an aftermarket weather covering and installed in an outdoor environment by a contractor. Heat Controller also commented that the manufacturer typically provides performance characteristics for its units at a range of ambient temperatures and installers will use these data to verify the unit's performance in an outdoor environment. (Heat Controller, Public Meeting Transcript, No. 23 at pp. 28–30) Rheem expressed concern about how DOE would enforce the regulation in this scenario, where a unit labeled and certified for indoor use is installed in an outdoor environment. (Rheem, Public Meeting Transcript, No. 23 at pp. 30–31)
ASAP and NEEA noted that outdoor units have certain design options (
Hussmann noted that, given that some condensing units already in the market are sold for outdoor applications without an enclosure, the term “encased” should be removed from the proposed “outdoor dedicated condensing refrigeration system” definition. (Hussmann, No. 20 at p. 2) However, in light of the comments discussed above indicating that indoor units are often installed in outdoor applications, it is not clear whether this comment suggests that units designed for outdoor use do not have enclosures or whether it is confirming that indoor units are installed outdoors.
The CA IOUs commented that indoor units should be labeled for “indoor use only” to help contractors, building inspectors, and building owners verify that the equipment complies with standards. The CA IOUs also explained that since indoor units have less stringent AWEF requirements and are not designed to adjust to the wide fluctuations in outdoor temperature, they are generally less costly to purchase. They speculated that this price difference could lead to increased energy consumption, incentivizing customers to buy less efficient, more affordable indoor units for outdoor applications. (CA IOUs, No. 21 at p. 4) ASAP and NEEA also encouraged DOE to consider whether labeling requirements and/or marketing restrictions could help prevent equipment certified for indoor use from being used in outdoor applications. (ASAP and NEEA, No. 19 at p. 2)
DOE notes that the industry comments recommended changing the definition to more closely adhere to the wording provided in the Term Sheet, particularly, “maintaining box conditions” with respect to the interior of the walk-in enclosure. (KeepRite, No. 17 at p. 1; Manitowoc, No. 10 at p. 4; AHRI, No. 11 at pp. 6–7; Lennox, No. 13 at p. 6; Rheem, No. 18 at p. 2) However, the commenters were unable to offer any clarity in applying the phrase “maintaining box temperature”—a central concern raised in DOE's request for comments. DOE's proposed definition attempted to provide a measurable criterion to clarify what maintaining box conditions entails. Specifically, DOE recognized that during a WICF refrigeration system test, the test room conditioning system would maintain the box conditions if the unit under test did not. 81 FR at 54931. DOE considered what it would mean for a refrigeration system to be maintaining box conditions if it is refrigerating a walk-in under the specified ambient temperature (35 °F), and concluded that the ability to maintain box conditions would depend on the load on the refrigeration system. If the thermal load exceeds the capacity of the unit, the unit will not maintain box conditions. DOE considered that the test procedure temperatures and specified loads in AHRI 1250–2009 might be a reasonable reference regarding the typical box thermal load. DOE notes that AHRI developed the industry test procedure, AHRI 1250, in 2009, with input from a working group consisting of industry and other stakeholders. Among other elements of the test procedure, the box load equations were developed through working group consensus and based on a comprehensive load analysis incorporating all key elements of the expected heat load. In developing the equations, that working group assumed a load of 70% of the capacity at 95 °F for coolers, and 80% of the capacity at 95 °F for freezers based on industry input. DOE used the box load equations in AHRI 1250–2009 (Equation 3 for medium-temperature and Equation 7 for low-temperature) in developing the proposed outdoor unit definition. DOE notes that commenters asserted that DOE provided no data, but the commenters did not dispute the suggestion that AHRI 1250–2009 might provide a reasonable indication of box loads, nor did they provide any alternative suggestion regarding what the box load might be at 35 °F. Hence, DOE believes that its proposed approach is appropriate to clarify the meaning of maintaining the box temperature and does not require additional data to substantiate it.
In response to Rheem's observation that the box load and the condensing unit capacities are not the same, DOE agrees. DOE considered that the box load equations specified in the industry standard AHRI 1250–2009 test procedure, which are the basis of the AWEF efficiency metric, would be a good representation of the relationship between the box load and the net capacity (in 95 °F test conditions) of a properly-sized condensing unit. DOE calculated the box load for a walk-in located in 35 °F ambient outdoor temperature conditions by using these equations specified in AHRI 1250–2009. For both medium-temperature and low-temperature units, the calculated box load is approximately 65% of the net capacity measured in 95 ;°F conditions. As mentioned above, in order to “maintain box conditions”, the capacity must be equal to the box load—hence, DOE proposed that maintaining the box load in 35 °F ambient conditions is equivalent to having a capacity in this ambient temperature that is 65% of the capacity in 95 °F conditions. Hence, DOE believes that the proposed definition is equivalent to both the Term Sheet recommendation and addressed comments that the definition for indoor/outdoor dedicated condensing unit
However, given the comments provided on the proposed definition, DOE is concerned that the definition (as proposed) would not be sufficient to clearly distinguish outdoor units from indoor units. DOE agrees that unit capacity at 35 °F may exceed the capacity at 95 °F. However, if this is true for an indoor unit, the indoor unit would be able to maintain box conditions in a 35 °F ambient temperature, and in this case, the ability to “maintain box conditions” would not distinguish outdoor units from indoor units—which would undercut its value as a means of distinguishing outdoor condensing unit from an indoor unit. Regarding Hussmann's comment regarding enclosures, DOE is not certain whether it meant that true outdoor units are sometimes sold without enclosures. DOE's research has not identified any condensing units marketed for outdoor use that do not have enclosures, but agrees that it is possible for a system without an enclosure to be marketed for outdoor use. In recognition of this possibility, DOE's finalized definition does not include this requirement.
Given all of these considerations, DOE is unconvinced that the proposed definition, or the alternatives recommended by commenters, would be sufficient to clearly distinguish outdoor units from indoor units. Thus, DOE is taking a third approach in this final rule, allowing the designation of indoor or outdoor to be provided by the manufacturer. However, in order to help ensure that dedicated condensing systems are installed and used appropriately, DOE is adopting the CA IOUs recommendation and will require that dedicated condensing units not designated for outdoor use will be labeled “indoor use only”. While DOE does not believe, as suggested by the CA IOUs, that the indoor system standard is less stringent than the outdoor system standard (see further discussion regarding this issue below), DOE does have concerns that refrigeration systems that are not designed for outdoor use may not operate properly when installed outdoors, and thus use more energy.
The “indoor use only” label will help prevent the use of indoor units in outdoor applications, for which they are not suited. Further, DOE will allow a manufacturer to designate a unit for both outdoor and indoor use, thus acknowledging that condensing units suitable for outdoor units may be acceptable for use in indoor applications, as indicated by Rheem. (Rheem, Public Meeting Transcript, No. 23 at p. 27)
Accordingly, DOE is finalizing the definition of an outdoor dedicated condensing refrigeration system as a dedicated condensing refrigeration system designated by the manufacturer for outdoor use and is also finalizing the definition of an indoor dedicated condensing refrigeration system as a dedicated condensing refrigeration system designated by the manufacturer for indoor use or for which there is no designation regarding the use location.
DOE notes that “designated” in these definitions means any form of representation that the system may be used in the given location—this includes representations made in brochures, online product information, technical bulletins, installation instructions, labels, and other related materials. DOE notes that a dedicated condensing refrigeration system may be both an outdoor system and an indoor system according to the DOE definitions—but system cannot avoid classification by having no designation.
Regarding Rheem's comment that any outdoor dedicated condensing unit should also be allowed to be certified as an indoor dedicated condensing unit without additional testing, DOE believes that outdoor systems should be allowed to be sold as indoor systems if they comply with both the indoor and outdoor standards. A manufacturer choosing this approach would need to certify the system both as an indoor and as an outdoor system. It would also need to test that system at different requisite conditions related to outdoor and indoor use in accordance with the applicable test procedure provisions—specifically, tests for an outdoor unit are conducted at 95 °F, 59 °F, and 35 °F outdoor temperatures, while the active mode (
In addition to dedicated condensing systems, the definition of “refrigeration system” in 10 CFR 431.302 also includes unit coolers connected to a multiplex condensing system. DOE previously referred to this class of equipment as “multiplex condensing,” abbreviated as “MC.” DOE proposed to drop the term “multiplex condensing” and rename this class of equipment as “unit coolers” (
Lennox, KeepRite, Rheem, ASAP and NEEA supported the proposed definition. (Lennox, No. 13 at p. 7; KeepRite, No. 17 at p. 1; Rheem, Public Meeting Transcript, No. 23 at p. 33; Rheem, No. 18 at p. 2; ASAP and NEEA, No. 19 at p. 1) Hussmann commented that the proposed definition could be applied to a condenser, if, the phrase “transferred from air to refrigerant” is interpreted as potentially referring to either heating or cooling the air. (Hussmann, Public Meeting Transcript, No. 23 at pp. 32–33)
In response to Hussmann's concern, DOE is modifying its proposal by adding “thus cooling the air” to the definition of unit cooler to clarify the direction of heat transfer. DOE believes this clarification will exclude condenser applications from the definition, since they heat rather than cool the air that passes through them. Accordingly, the definition for unit cooler refers to “an assembly, including means for forced air circulation and elements by which heat is transferred from air to refrigerant, thus cooling the air, without any element external to the cooler imposing air resistance.”
DOE proposed defining a “refrigeration system” as “the mechanism (including all controls and other components integral to the system's operation) used to create the refrigerated environment in the interior of a walk-in cooler or freezer, consisting of: (1) A dedicated condensing refrigeration system (as defined in 10 CFR 431.302); or (2) A unit cooler.” 81 FR at 54932.
Rheem, Manitowoc, and KeepRite commented that the use of “or” between proposed clauses (1) and (2) in the definition would imply that a unit cooler would be considered a full refrigeration system, while, in reality, a unit cooler must be matched with a condensing unit to function as a full refrigeration system. Manitowoc and KeepRite recommended replacing “or” with “and” in the proposed definition. (Rheem, Public Meeting Transcript, No. 23 at pp. 34–35; Manitowoc, No. 10 at p. 4; KeepRite, No. 17 at p. 2)
DOE initially defined “refrigeration system” to set out the scope of coverage of this equipment in the April 2011 test procedure final rule for walk-ins. 76 FR at 21596–21597. However, DOE's test procedure for walk-in refrigeration systems has since been adjusted to permit manufacturers to certify compliance on a component basis,
DOE notes that if the “or” is replaced by “and” as suggested in the written comments, the scope of coverage would be reduced to only pairs including a dedicated condensing system combined with a unit cooler. However, as mentioned earlier in this discussion, by defining this term, DOE seeks to clearly set out the scope of regulatory coverage for this equipment, which could extend to an individual unit cooler or an individual condensing unit. Therefore, consistent with this approach, DOE is adopting the proposed definition in this rule.
Consistent with the Term Sheet, DOE proposed to define “adaptive defrost” as a defrost control system that reduces defrost frequency by initiating defrosts or adjusting the number of defrosts per day in response to operating conditions (
KeepRite and Rheem supported the proposed definition. (KeepRite, No. 17 at p. 7; Rheem, No. 18 at p. 3) Lennox agreed with DOE's proposed definition but noted that the proposed definition does not specifically indicate the unit construction (
As DOE noted in the August 2016 NOPR, this proposed definition is consistent with the Working Group's agreement that manufacturers should rate their systems for compliance purposes without the adaptive defrost credit, but that the test procedure would continue to retain its current method for calculating the benefit of adaptive defrost to permit manufacturers to make representations of system efficiency with this feature included. As indicated in the NOPR, the Working Group discussed this topic extensively. (See,
EPCA defines a walk-in as “an enclosed storage space,” that can be walked into, which has a total area of less than 3,000 square feet, but does not include products designed and marketed exclusively for medical, scientific, or research purposes. (42 U.S.C. 6311(20)) The use of the term “storage space” in the definition raises questions about which refrigerated spaces would qualify as a “storage space” and thereby comprise equipment subject to the walk-in standards. DOE has discussed the scope of this definition throughout its rulemakings to develop test procedures and energy conservation standards for walk-ins—most recently, the August 2016 NOPR addressed whether the scope extends to process cooling equipment such as blast chillers and blast freezers that can be walked into. 81 FR at 54934–54936.
In the August 2016 NOPR, DOE described the background leading to the proposal of a definition for walk-in process cooling refrigeration equipment. 81 FR at 54934. As described in that document, interested parties requested that DOE clarify the applicability of standards to this equipment as part of the initial standards rulemaking that DOE conducted for developing walk-in performance-based standards. The discussions in that prior rulemaking led DOE to conclude in the June 2014 final rule that equipment used solely for process cooling would not be required to meet the walk-in standards, but that products used for “both process and storage” applications could not categorically be excluded from coverage. 79 FR at 32068. The August 2016 NOPR noted also the October 2014 meeting to clarify aspects of the test procedure, during which DOE again stated that blast chillers and blast freezers did not fall within the scope of the energy conservation standards established for walk-ins in the June 2014 final rule. However, DOE acknowledged at the time that it did not have a definition for “process” cooling in the context of walk-ins. (Docket No. EERE–2011–BT–TP–0024, Heatcraft and DOE, Public Meeting Transcript (October 22, 2014), No. 0117 at pp. 23, 61– 63) The question of process cooling arose again during the Walk-in Working Group meetings, during which meeting participants asked DOE to add definitions to clarify the meaning of process cooling (See Docket No. EERE–2015–BT–STD–0016: Manufacturer-submitted material, No. 6 at p. 2; Lennox, Public Meeting Transcript (August 27, 2015), No. 15 at pp. 96–97; AHRI, Public Meeting Transcript (December 15, 2015), No. 60 at pp. 141–142; and Term Sheet, No. 56, Recommendation #7)
The August 2016 NOPR explained that DOE considered process cooling more carefully in light of the Working Group's request to develop clarifying definitions and concluded that its initial statements in the 2014 final rule that blast chillers and blast freezers are not walk-ins were in error. DOE observed that, although the EPCA definition refers to a walk-in as an “enclosed storage space”, there is no clarity regarding the meaning of “storage” or the minimum duration for an item to remain in an enclosure to be considered in “storage”. Hence, DOE now believes that these categories of equipment, referred to as “process cooling equipment” do fall under the EPCA definition for walk-ins and are, subject to standards. 81 FR at 54934.
The August 2016 NOPR went on to discuss DOE's proposal for defining a walk-in process cooling refrigeration system. DOE specifically developed this proposal, acknowledging the different energy use characteristics of process cooling refrigeration systems as well as their different equipment attributes (as compared to other walk-in refrigeration systems), to exclude such equipment from being subject to walk-in refrigeration system performance standards. (Because DOE now regards process cooling systems as “walk-in coolers or freezers,” they will be subject to the statutory design requirements.) DOE proposed defining a “walk-in process cooling refrigeration system” as “a refrigeration system that is used exclusively for cooling food or other substances from one temperature to another.” 81 FR at 54936. The proposed definition specified that a process cooling refrigeration system must either be (1) distributed in commerce with an enclosure consisting of panels and door(s) such that the assembled product has a refrigerating capacity of at least 100 Btu/h per cubic foot of enclosed internal volume or (2) a unit cooler having an evaporator coil that is at least four-and-one-half (4.5) feet in height and whose height is at least one-and-one-half (1.5) times the width. This proposed definition would cover process cooling systems that are distributed in commerce as part of a complete assembly, process cooling unit coolers that are distributed separately from the enclosure, and refrigeration systems—including unit coolers meeting the process cooling definition. 81 FR at 54954.
DOE noted in the NOPR that it proposed to consider process cooling refrigerated insulated enclosures to be walk-ins that are subject to the prescriptive statutory requirements for walk-ins. DOE also notes that its discussion and proposals focused on process cooling refrigeration systems rather than the panels and doors that make up the insulated enclosure. Hence, DOE intended the exclusions associated with the proposals to apply only to refrigeration systems that meet the process cooling definition, and that the exclusions would be associated with walk-in refrigeration system performance standards. Id. at 54934–54936. DOE also provided a table in the public meeting presentation to clarify its interpretation of the applicability of walk-in standards to different components of process cooling equipment. (Public Meeting Presentation, No. 3 at p. 30) This table indicated that the proposed exclusion for process cooling refrigeration systems would apply to, among other things, dedicated condensing units that are exclusively distributed in commerce with unit coolers meeting the unit cooler portion of the process cooling definition. DOE notes that this exclusion was not explicit in the proposed definition and is clarifying it to explicitly include such dedicated condensing units in the definition.
DOE explained in the August 2016 NOPR the reasons it believed that walk-in process cooling equipment should be considered to be covered under the walk-in definition. See 81 FR 54934–54936. DOE discusses comments responding to this position, and DOE's responses to them. DOE ultimately concludes that this equipment should be covered as walk-in equipment. In DOE's view, covering this equipment as a class of walk-in is important in furthering DOE's goals for reducing and limiting energy use because this equipment represents a growing sector of the refrigeration industry. Process cooling equipment emerged on the market relatively recently in 1990 to serve a range of food sales and service applications. (Master-Bilt Blast Chillers, No. 25 at pp. 2, 3, 10) The global blast chiller market is expected to grow by an estimated 4.62% per year from 2016–2020 and North America is expected to remain a dominant portion of this market.
Many commenters argued that process cooling equipment does not fall under the walk-in definition. Several of these comments argued that food is not “stored” in this equipment and/or the temperature within it is not “held” at a given temperature for storage purposes.
EPCA defines “walk-in cooler” and “walk-in freezer” as an enclosed storage space refrigerated to temperatures, respectively, above, and at or below 32 degrees Fahrenheit that can be walked into, and has a total chilled storage area of less than 3,000 square feet. (42 U.S.C. 6311(20)(A)) While EPCA does not define the component terms “storage” or “can be walked into” used in the walk-in definition, it does expressly exclude certain equipment from the definition (
Commenters appear to be arguing that a unit must hold contents for some minimum time-period to meet the “storage” element of the definition but offered no suggested time period for DOE to consider in applying this definition. The statutory definition of “walk-in cooler and walk-in freezer” does not indicate a specific timing requirement or provide further information about when the use of a space constitutes storage. Further, although dictionary definitions of “storage” indicate that the contents be kept for some period of time, no specific period is provided.
DOE notes that Recommendation #7 from WICF Term Sheet (which contains the only mention of process cooling in the Term Sheet) recommended that DOE add “WICF specific definitions for process cooling, preparation room refrigeration, and storage space.” (Docket EERE–2015–BT–STD–0016, Term Sheet, No. 56 at p. 3) This recommendation does not state that these categories of equipment are excluded from the scope of WICFs. In fact, a comment received in response to the initial 2013 notice of proposed rulemaking for energy conservation standards stated that process cooling equipment would appear to fall within the walk-in definition. (Docket No. EERE–2008–BT–STD–0015, Hussmann, No. 93 at pp. 2, 8–9) In re-examining that comment, along with other information and materials since the publication of the June 2014 rule, DOE has reconsidered its prior views on process cooling equipment.
As noted in the NOPR, contents are placed in process cooling equipment for at least a brief period of time to reduce their temperature. 81 FR at 54934. When asked during the public meeting how long the products remain in a process cooling system when they are being cooled, American Panel noted that, although the Food and Drug Administration and NSF International issue recommended maximum processing times, there is no industry-specified minimum or maximum processing duration for blast chillers or blast freezers. (American Panel, Public Meeting Transcript, No. 23 at p. 48) DOE notes that the 2013 FDA Food Code requires that food starting at 135 °F be cooled to 70 °F within 2 hours and to 41 °F within 6 hours (FDA 2013 Food Code, Chapter 3, Section 501.14(A)), while NSF requires that rapid pulldown refrigerators and freezers be able to reduce food temperature from 135 °F to 40 °F in 4-hours. (NSF/ANSI 7–2009, section 10.5.1) These time periods differ significantly and are substantially longer than the 90-minute pulldown times discussed in the June 2014 final rule. (79 FR at 32068). This observation underscores American Panel's statement that there is no standard maximum processing time. Also, while DOE recognizes that product may remain in process cooling equipment for a short period of time, this fact alone does not necessarily clarify that the equipment cannot be considered to have a storage function. The period of time a product can be held in a cooler or freezer without sustaining some damage can be expected to vary product by product, depending on a variety of factors including, whether the product is chilled or frozen, its packaging when inserted into the equipment (
Absent a definitive time-period to delineate the use of space as storage space, DOE considered the design and operation of process cooling equipment with other equipment falling within the WICF definition. DOE considers that design and operation are reflective of the function of equipment (
Manitowoc and AHRI argued that the panels and doors used by process cooling systems are not the same as those used in other WICF systems and therefore the WICF prescriptive requirements should not apply. (Manitowoc, No. 10 at p. 3; AHRI, No.
In the context of blast chillers, American Panel noted that while the panels and doors for this equipment were similar to those used in other walk-ins, the refrigeration systems used in blast chillers are designed and used very differently from walk-ins—a fact that, in its view, necessitated that these (and similar process cooling equipment) be treated separately from walk-ins. (American Panel, No. 7 at p. 1) American Panel did not clarify how the refrigeration systems are designed differently, in spite of DOE's request for data or information on the qualities, characteristics, or features specific to the refrigeration system that would cause a process refrigeration system to be unable to meet a walk-in refrigeration system standard. See 81 FR at 54950.
American Panel, however, asserted that blast chillers and shock freezers differ from walk-ins in that they have an on/off switch, they do not reach a stable condition until the pulldown cycle ends, either automatically or manually, and they rely on the user to stop and restart the cycle. (American Panel, No. 7 at p. 1) In its view, all of these features differed from the operation of walk-ins, which typically operate continuously and independent of user action, being connected to power at all times. DOE notes that this description of refrigeration equipment operation also applies to other walk-in systems. The walk-in refrigeration system is sized so that its capacity is greater than the walk-in box load. Equation 1, for example, in AHRI 1250–2009, indicates that the box load for a walk-in is 70 percent of the net refrigeration system capacity at the design temperature for conditions outside the box. Hence, a walk-in refrigeration system does not achieve steady state operation—it relies on a thermostat to shut the system off at the desired internal temperature (
American Panel also contended that, because a blast chiller's operation changes continuously and the equipment exhibits no stable operating condition, it cannot be tested to a rated AWEF and a test procedure cannot be applied. (American Panel, Public Meeting Transcript, No. 23 at pp. 46–47, 56, 78) American Panel added that, if the test procedure were to be updated to include blast chiller performance testing, the food industry would support using NSF's testing methods for rapid pulldown refrigeration as a starting point. (American Panel, No. 07 at p. 2) DOE notes first that a performance-based test procedure requiring steady state operation is not necessary for process cooling refrigeration systems, because equipment meeting the definition is excluded from the walk-in refrigeration system performance standards,
Process cooling equipment such as blast chillers and blast freezers, despite any asserted differences, have several characteristics in common with more conventional walk-ins that make them capable of serving the function of refrigerated product storage. These characteristics include having an insulated enclosure made of insulated panels and a door (or doors) sufficiently large that the enclosure can be walked into, and being cooled with a refrigeration system consisting of a dedicated condensing unit and a refrigerant evaporator that operates using forced convection heat transfer (
AHRI, Manitowoc, and Rheem also asserted that process cooling equipment is inconsistent with the term “walk-in” because a person cannot walk into a process cooling enclosure during operation. (AHRI, No. 11 at p. 5; Manitowoc, No. 10 at p. 3; Rheem, No. 18 at p. 3) However, DOE notes that the walk-in definition does not specify when the equipment can be walked into—it simply states that the equipment must be one “that can be walked into.” (42 U.S.C. 6311(20)(A))
In interpreting the “walk-in cooler and freezer” definition, DOE also
In consideration of these factors, DOE has determined that process cooling equipment falls within the EPCA definition of “walk-in cooler” and “walk-in freezer.” While products may not be able to be stored in process cooling equipment on a long-term basis, products are still stored in process cooling equipment at least for the duration they are cooled. If Congress had intended to limit the application of the walk-in definition to include only long-term storage, it could have done so when crafting the final language of the statute. Congress, in fact, did not limit what comprises storage space. Moreover, when comparing the design and function of process cooling equipment with other WICFs, DOE was unable to determine a distinction with regard to storage.
AHRI, Manitowoc, KeepRite, Rheem, and Hussmann argued that including process cooling equipment in the definitions of walk-in cooler and walk-in freezer would be inconsistent with DOE's proposed definition for refrigerated storage space, “as space held at refrigerated temperatures” since process cooling equipment does not hold a specific temperature but changes the temperature of the contents. (AHRI, No. 11 at p. 5; Manitowoc, No. 10 at p. 3; KeepRite, No. 17 at p. 2; Rheem, No. 18 at p. 3; Hussmann, No. 20 at p. 4) DOE notes that comments submitted by Bally describe process cooling equipment as operating at “cold temperatures (min. of 5 °F)” and having “doors [that] must stay condensate free while the air temperature is at 5 °F.” (Bally, No. 22 at p. 1) These descriptions suggest control of temperature within the blast chiller is held at the minimum 5 °F—in other words, the interior is held at a temperature near 5 °F. This fact suggests that process cooling equipment can (and do) hold temperatures, contrary to the comments. Nevertheless, DOE notes that the proposed definition for refrigerated storage space as “space held at refrigerated temperatures” does not require that the temperature be held at a discrete constant value—instead, it only requires that the space is held at a temperature consistent with “refrigerated,”
NAFEM also weighed in on this issue generally, arguing that blast chillers should not be considered within the scope of the walk-in definition because there is no appropriate test procedure for blast chillers. (NAFEM, No. 14 at p. 1) However, EPCA's walk-in definition does not stipulate that its scope extends only to equipment for which there is a test procedure. In fact, EPCA mandated prescriptive standards for walk-ins that took effect (on January 1, 2009, see 42 U.S.C. 6313(f)(1)) before DOE finalized a test procedure on April 15, 2011 for measuring a given unit's energy efficiency. 76 FR 21580. Similarly, in response to American Panel's comment that a process cooling refrigeration system is not a walk-in because it cannot be rated with an AWEF, satisfaction of the separate statutory prescriptive requirements specified in the statute (
Manitowoc, Rheem, and AHRI also noted that an ASHRAE Special Project Committee (“SPC”) has been formed to draft a relevant testing standard titled, “Method of Testing for (Rating) Small Commercial Blast Chillers, Chiller/Freezers, and Freezers.” They argued that in light of this work, it is premature to define process cooling systems while this new industry standard is still under development. (Manitowoc, No. 10 at p. 3; Rheem, No. 18 at p. 3; AHRI, No. 11 at p. 5) DOE notes that the WICF Working Group, which included Manitowoc and Rheem, requested that DOE develop a definition for process cooling. Before the finalization of the WICF Term Sheet on December 15, 2015, DOE was not aware of any announcement from ASHRAE SPC regarding the start of its work. Nevertheless, the SPC has not finished its work, and the commenters did not provide any indication of what equipment definitions the SPC is considering. Accordingly, DOE has finalized its definition in the manner proposed, based on the industry input provided. DOE may consider revising its “process cooling” definition if necessary once the ASHRAE rating method for blast chillers, chiller/freezers, and freezers is complete.
Finally, DOE notes that the CA IOUs supported treating process cooling as a subset category of WICF equipment. Further, they supported requiring process cooling panels, doors, and dedicated condensing units not sold as part of a “matched-pair with a unit cooler” to meet the 2014 final rule WICF standards and the proposed standards under consideration. (CA IOUs, No. 21 at p. 2)
As described in the NOPR, DOE concluded that while process cooling enclosures that resemble walk-ins are within the scope of walk-ins, it proposed to exclude some of the refrigeration systems of these process cooler walk-ins from the performance-based standards established and in development for WICF refrigeration systems. 81 FR at 54934–54937. For the reasons described earlier, DOE has not revised its proposed approach after review of the comments, and believes that its definition, as adopted in this rule, satisfies the recommendations of the Working Group Term Sheet.
DOE received few comments regarding the distinguishing characteristics proposed for process cooling refrigeration systems. In fact, only one of the commenters mentioned any characteristic of the refrigeration system condensing unit of a process cooling system that might distinguish it from the equipment serving other walk-ins—Bally commented that the condensing units are not unique to blast chillers, except with respect to extra receiver capacity. (Bally, No. 22 at p. 1) However, DOE would not consider a larger receiver to be a sufficient difference to distinguish these condensing units since using a larger receiver would not affect steady state energy use as measured by the test procedure, since the receiver itself does not consume energy and does not contribute significantly to the heat transfer function of the condenser. Furthermore, there is a range of refrigerant receiver capacities used in walk-in refrigeration systems and it is not clear that there is an appropriate
Lennox recommended that the evaporator coil height, width, and depth be defined on a diagram accompanying the proposed definition to prevent a misinterpretation of the dimensions. (Lennox, Public Meeting Transcript, No. 23 at p. 40) Lennox provided a diagram to illustrate this in its written comments (Lennox, No. 13 at p. 8) In reviewing this diagram, DOE agrees that the dimensions shown in the provided diagram are consistent with the proposed definition's intent and agrees that a diagram would be useful to clarify the applicable dimensions. Accordingly, the final rule incorporates a diagram based on the one submitted by Lennox to clarify the process cooling definition.
With respect to blast freezers, Bally noted that some of these equipment use horizontally-oriented evaporator units and some non-process cooling refrigeration systems chill their contents using a circular pattern. In its view, because of the absence of any standard orientation or chilling pattern for process cooling and non-process cooling refrigeration systems, these design characteristics are not useful for differentiating process refrigeration systems. (Bally, Public Meeting Transcript, No. 23 at pp. 41–42) DOE notes that a horizontally-oriented evaporator that is not part of a unit cooler as defined would not be subject to the unit cooler standards, nor would it, as a matched pair with a dedicated condensing unit, be subject to the dedicated condensing unit standards. In order to clarify the extension of this exclusion to matched pairs including such evaporators, DOE has modified the process cooling refrigeration system definition to explicitly list dedicated condensing units that are distributed in commerce exclusively with evaporators that are not unit coolers.
Alternatively, Bally suggested that airflow rate may be a good characteristic for differentiating process refrigeration systems from other walk-in refrigeration systems. (Bally, Public Meeting Transcript, No. 23 at p. 44) American Panel expressed concern with the use of a cooling capacity per enclosed volume rating to differentiate process cooling equipment because the equipment may be used to process different quantities or densities of product at different times—a condition which may prevent a given blast chiller from satisfying a definition based on cooling capacity per enclosed volume. (American Panel, Public Meeting Transcript, No. 23 at pp. 38–39) DOE had considered airflow rate or air velocity to distinguish process cooling evaporators, noting that evaporator fan power, velocity, or air flow of a unit cooler could be atypically high for a number of reasons, including the use of inefficient fans or motors, long air “throw” distance, and other factors. (See 81 FR at 54936) For example, DOE's investigation of evaporator fan horsepower showed that the horsepower for process cooling evaporator fans, although generally higher than for other walk-in evaporators, is not always higher than all such other walk-in evaporators—a potential overlapping fact that lessens the value of using horsepower as a clear distinguishing characteristic. Hence, DOE concluded that there would be too much overlap with other WICF unit coolers on the basis of these parameters. DOE notes that Bally's submission did not provide sufficient information or data that would support the use of a specific air flow rate on which DOE could rely that would serve as the basis for distinguishing process coolers from other walk-in refrigeration systems. With respect to American Panel's concerns, DOE notes that its comments provided no alternative value of cooling load per volume for DOE to consider that would enable one to readily distinguish process cooling refrigeration systems from non-process cooling refrigeration systems. While American Panel seems to suggest that the capacity of the refrigeration system would depend on the load inserted into a process cooler, DOE disagrees, because the capacity cited in the proposed definition is the refrigeration system's net capacity when determined in a manner consistent with the prescribed walk-in test conditions—this capacity depends on the refrigeration system characteristics, not on how much product is being cooled. Specifically, when testing a condensing unit alone, the test calls for maintaining certain operating conditions (see,
However, to address the comments regarding the inconsistency of the “storage” aspect of walk-ins with the pulldown of product temperature in process cooling equipment, DOE will modify the definition to identify refrigeration systems that are “capable of rapidly cooling food or other substances” rather than systems that are “used exclusively” for this purpose. Also, in order to clarify that the enclosure that uses these refrigeration systems is insulated, DOE will insert “insulated” before the word “enclosure” in the definition.
KPS raised concern regarding the precision of the process cooling definition, indicating that “blast chillers” and “blast freezers” are used by customers and manufacturers to describe a range of product types. (KPS, No. 8 at p. 1) KPS did not, however, elaborate on what other types of equipment should be addressed (or excluded) by DOE's proposed definition. DOE is aware, for example, of blast chillers and freezers that are smaller than walk-ins and that might be considered “reach-in process cooling equipment,”
Bally noted that blast chillers are built in small quantities with uniquely designed electronically commutated motors (“ECMs”) and expressed concern with how the proposed regulations would affect the ECM supply chain. (Bally, Public Meeting Transcript, No. 23 at pp. 42–43) Bally elaborated in written comments that ECM orders can have up to 15 weeks of lead-time and have to be ordered in small batches. (Bally, No. 22 at pp. 1–2) Accordingly, Bally suggested that the proposed 60-
With respect to the proposed definition for process cooling refrigeration systems, Bally suggested that the definition specify that the doors used with this equipment be freezer doors. (Bally, Public Meeting Transcript, No. 23 at p. 53) Bally reiterated this comment in its written submission, indicating that the 5 °F temperature inside a blast chiller makes it challenging to prevent the formation of condensation. (Bally, No. 22 at p. 1) In response, DOE notes that a walk-in with a 5 °F internal temperature is technically a freezer (see
Bally also requested that there be no requirement for floor insulation for process equipment. It noted that tray carts must roll in and out of the enclosure, which means that they cannot use ramps, and that building a pit to accommodate the necessary insulation would be expensive and could pose structural issues. (Bally, No. 22 at p. 1) Consistent with DOE's view, as discussed elsewhere in this discussion, that the process cooling enclosures discussed by Bally would be considered to be walk-in freezers, DOE notes that the statutory prescriptive requirements already require floor insulation of R–28. (42 U.S.C. 6311(f)(1)(D)) Given this requirement, DOE has no discretion regarding the applicability of the floor insulation requirement, which is imposed by statute.
DOE proposed defining “preparation room refrigeration” as comprising applications that use “a unit cooler that is designed for use in a room occupied by personnel who are preparing food and that is characterized by low outlet air velocity, evaporator temperature between 30 and 55 degrees Fahrenheit, and electric or hot gas defrost.” 81 FR at 54937. While DOE proposed to define this type of refrigeration system for the purpose of enhancing clarity, this equipment would not be exempt from the applicable standards that were already prescribed by Congress with respect to walk-ins. DOE requested comment on any other characteristics of preparation room refrigeration that would (1) clearly distinguish it from other walk-in refrigeration systems
Commenters addressed whether preparation room equipment falls under the scope of walk-ins. As mentioned in section III.A.1.h, AHRI noted that preparation room refrigeration was included in the WICF Term Sheet in order to exclude this equipment from the scope of walk-ins. (AHRI, No. 11 at p. 5) However, as noted in the discussion of that section, the Term Sheet did not provide any guidance regarding whether preparation room refrigeration falls within the scope of walk-ins. (Docket EERE–2015–BT–STD–0016, Term Sheet, No. 56 at p. 3)
AHRI, Lennox, Manitowoc, Hussmann, Rheem, and KeepRite asserted that preparation rooms fall outside the scope of walk-ins and urged DOE to exclude them. (AHRI, No. 11 at pp. 4–5; Lennox, No. 13 at pp. 8–9; Manitowoc, No. 10 at p. 3; Hussmann, No. 20 at p. 4; Rheem, No. 18 at p. 4; KeepRite, No. 17 at p. 2) Commenters provided several reasons why preparation room equipment should not be considered within the scope of walk-ins. AHRI stated that “these systems are not commonly enclosed” and that they are not for storage. (AHRI, No. 11 at p. 4) Other stakeholders provided variations on the “not enclosed” theme, including, for example, Rheem (“not always an enclosed space”), Hussmann (“often not enclosed,” but also discusses the possibility that they are enclosed,
Regarding the issue of equipment use for food storage, Lennox commented that preparation rooms are areas where humans occupy the space to prepare and package food. (Lennox, No. 13 at p. 8) Hussmann commented that preparation rooms are places where work is being performed on the product, not places where finalized goods are stored. (Hussmann, No. 20 at p. 4) Other commenters, including Manitowoc, AHRI, KeepRite, and Rheem also stated that preparation rooms are not used for storage. (Manitowoc, No. 10 at p. 2; AHRI, No. 11 at p. 4; KeepRite, No. 17 at p. 2; Rheem, No. 18 at p. 3)
Several commenters suggested that DOE consider an alternative definition: “An open space or space without a sealed door (as defined in 10 CFR part 431.302) that separates the interior volume of a unit of commercial refrigeration equipment from the ambient environment, designed for use in a room occupied by personnel who are preparing and packaging food. A preparation room is not designed for storage.” (AHRI, No. 11 at p. 4) Similar definitions of preparation room or preparation space were suggested by Lennox, Rheem, and Manitowoc. (Lennox, No. 13 at p. 8; Rheem, No. 18 at p. 3; Manitowoc, No. 10 at pp. 2–3)
DOE notes that the WICF Term Sheet recommended that DOE develop a definition for “preparation room refrigeration” to focus on the refrigeration system, rather than preparation spaces in general. (Docket EERE–2015–BT–STD–0016, Term Sheet, No. 56 at p. 3) This approach is reinforced by the agenda for the WICF Working Group meetings, which included as key issues, (a) proposed energy conservation standards for six classes of refrigeration systems, and (b) potential impacts on installers, neither of which addresses preparation spaces generally. 80 FR at 46523. Hence, DOE's intent in requesting comment on its definition of preparation room refrigeration was to solicit information regarding the characteristics of this equipment that would distinguish it from walk-in refrigeration systems. Discussion of the proposed characteristics appears below, but DOE notes that none of the comments received provided information regarding features that distinguish preparation room refrigeration systems from walk-in refrigeration systems. The emphasis of the commenters on the lack of an enclosure or the use of preparation room space for purposes other than storage does not represent any feature that distinguishes the refrigeration systems used in these two groups of equipment. As indicated in the NOPR, DOE had not identified any characteristics of preparation room refrigeration systems that would distinguish them from other walk-in refrigeration systems. The definition was primarily proposed in order to explore the recommendation of
Regarding the suggested alternative definitions based on non-refrigeration system-based characteristics, in DOE's view, these characteristics play no role in distinguishing those refrigeration systems used in preparation room applications from non-preparation room applications, since they describe preparation room space but do not address the refrigeration systems used for these spaces. Accordingly, DOE is declining to adopt these suggested changes to the proposed definition. Comments regarding the proposed distinguishing characteristics and DOE's responses are discussed in more detail below.
DOE received several comments regarding the characteristics it proposed including as part of the proposed definition of preparation room refrigeration to distinguish this equipment from non-preparation room refrigeration systems. AHRI stated that DOE's proposed definition is unclear and incorrect because the evaporator temperature specification does not indicate whether it is ambient or suction temperature, there is no quantified specification for “low outlet air velocity,” and because these systems do not exclusively use electric or hot gas defrost. (AHRI, No. 11 at p. 4) Others made these same points. Manitowoc indicated that specifying the evaporator temperature does not clarify whether the temperature is ambient or suction temperature. (Manitowoc, No. 10 at p. 3) Rheem and Lennox suggested that the evaporator temperature in the definition be clarified as the “saturated suction temperature”. (Rheem, Public Meeting Transcript, No. 23 at p. 57; Lennox, Public Meeting Transcript, No. 23 at p. 58) Rheem, Manitowoc, Lennox, and KeepRite also commented that preparation room refrigeration systems may use air defrost, which argues in favor of not limiting the definition to gas or electric defrost units. Finally, Rheem, Manitowoc, Lennox, and KeepRite suggested that the “low air velocity” cited in the proposed definition should be more specifically defined. (Rheem, Public Meeting Transcript, No. 23 at p. 58; Rheem, No. 18 at p. 4; Manitowoc, No. 10 at p. 3; Lennox, No. 13 at p. 9; KeepRite, No. 17 at p. 2)
AHRI also requested that information related to preparation room refrigeration systems (beyond its suggested alternative definition) be removed in the final rule. (AHRI, No. 11 at pp. 4–5) Manitowoc also requested that DOE exclude all information related to preparation room refrigeration from the scope of this rulemaking. (Manitowoc, No. 10 at p. 3) Regarding the characteristics of preparation room refrigeration systems, in light of some of the limitations with the proposed definition and the absence of any specifications from commenters that would help with its clarification (
Consistent with the Term Sheet, DOE proposed to define “refrigerated storage space” in the context of the current definition for a walk-in as “a space held at refrigerated (as defined in 10 CFR 431.302) temperatures.” 81 FR at 54937.
Hussmann suggested modifying the proposed “refrigerated storage space” definition to reflect WICF room intent, which is to “maintain product at a specific temperature for storage purposes.” 81 FR at 54937. Hussmann argued that making this change would help clarify the difference between WICF rooms and process rooms, because, in its view, the term “maintain” would specify the presence of a holding area with the equipment—rather than equipment that imparts any changes on the products placed inside of it.
While the proposed definition does not delineate a difference between equipment that is subject to standards and equipment that is not subject to standards, as discussed earlier in section III.A.1.h of this final rule, DOE does not interpret the phrase “held at temperatures” to mean that the equipment is held at a constant temperature. Instead, DOE views this term as referring to a temperature at or below the 55 °F specified for “refrigerated” as defined in 10 CFR 431.302. Accordingly, DOE is finalizing the definition as proposed.
Reflecting Recommendation #3 of the WICF Term Sheet (Docket EERE–2015–BT–STD–0016, Term Sheet, No. 56 at p. 2), DOE proposed to amend the test procedure by removing the method for calculating the defrost energy and heat load of a system with hot gas defrost. 81 FR at 54937–54938. With this change, manufacturers of refrigeration systems with hot gas defrost would be unable to take account of that feature in testing or rating their systems when using the DOE test procedure. Id.
All commenters agreed with the proposed removal of the hot gas defrost credit in the test procedure. Rheem and Heat Controller agreed that the credit should be removed from the efficiency calculation because it unfairly favored systems using hot gas defrost over comparable electric defrost systems. (Rheem, Public Meeting Transcript, No. 23 at p. 64; Heat Controller, Public Meeting Transcript, No. 23 at p. 66) Lennox and KeepRite also agreed with removing the hot gas defrost credit. (Lennox, No. 13 at p. 9; KeepRite, No. 17 at p. 2)
However, Rheem and the CA IOUs also argued that, because the proposed approach would fail to quantify the energy used by hot gas systems during the defrost cycle, thereby eliminating any accounting of the energy use contribution for defrost in the test procedure calculations, the proposed change would still unfairly favor hot gas defrost systems. (Rheem, Public Meeting Transcript, No. 23 at pp. 60–61; CA IOUs, No. 21 at p. 3) The CA IOUs encouraged DOE to ensure that WICF equipment with hot gas defrost and electric defrost are treated fairly within the test procedure. (CA IOUs, No. 21 at
Rheem and Manitowoc asserted their belief that the removal of the hot gas defrost credit would correspondingly remove the need for manufacturers to certify the performance of this equipment. (Rheem, Public Meeting Transcript, No. 23 at p. 63; Manitowoc, No. 10 at p. 3) KeepRite also supported the removal of the certification requirements for these systems. (KeepRite, No. 17 at p. 2) In response, DOE notes that the requirement to test and certify hot gas defrost walk-in refrigeration systems was adopted by the May 2014 test procedure final rule and the June 2014 energy conservation standard final rule—this is not a new requirement. The Fifth Circuit Order did not strike the requirement for certification of performance for any refrigeration systems on or after their standards compliance date. The discussions during the Working Group meetings did not address relief of testing and certification requirements for this equipment—hence, these requirements still stand, regardless of the removal of the hot gas defrost credit.
DOE notes that the NOPR public meeting attendees briefly discussed ways to assign an AWEF level to a hot gas defrost refrigeration system during the public meeting and in a separate meeting between DOE and industry representatives (Ex Parte Communication of September 29, 2016 Meeting, No. 6). When asked whether there would generally be an equivalent electric defrost model whose AWEF rating could be used for any given hot gas defrost model, Rheem noted that most hot gas defrost models have a comparable electric defrost model. (Rheem, Public Meeting Transcript, No. 23 at p. 62) However, Bally commented that the individual models sometimes are part of different basic models. Rheem and Bally added that significant clarification would be needed to specify how a proxy rating system would work to avoid misinterpreting the regulation. (Rheem, Public Meeting Transcript, No. 23 at p. 62; Bally, Public Meeting Transcript, No. 23 at p. 64)
Commenters suggested ways to assign an AWEF value for hot gas defrost units. AHRI and Hussmann suggested permitting manufacturers to assign the minimum allowable AWEF to a hot gas refrigeration system. (AHRI, No. 11 at p. 5; Hussmann, No. 20 at p. 4) However, commenters also offered an alternative to this approach, which would allow manufacturers to assign the AWEF value of an equivalent electric defrost unit to the hot gas defrost unit. AHRI and multiple manufacturers suggested, without offering any supporting details or reasoning, that equivalence in this context be defined as an electric defrost system within 10 percent of the rated net capacity of the hot gas defrost unit. (AHRI, No. 11 at p. 6; Manitowoc, No. 10 at p. 3; NCC, No. 16 at p. 2; Lennox, No. 13 at p. 4; Rheem, No. 18 at p. 4; Hussmann, No. 20 at p. 4) ASAP and NEEA agreed that using equivalent electric defrost units as surrogates for rating hot gas defrost units would address the concerns with the proposed test procedure. (ASAP and NEEA, No. 19 at p. 3) The CA IOUs also agreed with this approach, but presented another alternative: Apply a default defrost energy consumption value for hot defrost units based on their refrigeration capacity. (CA IOUs, No. 21 at p. 3) The CA IOUs offered no further detail on how to determine this value.
Commenters also offered a few methods for dealing with cases where there is no equivalent unit. Manitowoc suggested that, in these cases, the AWEF value be determined based on interpolation between electric defrost units with higher and lower capacities—which would create a weighted average of the AWEFs of the two electric defrost units). (Manitowoc, No. 10 at p. 3) Lennox suggested using an AEDM, which would use a calculated energy contribution for defrost and apply it to the hot gas defrost unit's calculated performance as if it were an electric defrost unit. (Lennox, No. 13 at p. 4) AHRI and Rheem argued that the model should be rated with the minimum AWEF value (as defined in 10 CFR 431.306) in these cases. (Rheem, No. 18 at p. 2; AHRI, No. 11 at p. 6)
Some commenters recommended separate approaches for condensing units and unit coolers. NCC suggested that a hot gas defrost condensing unit should be tested as an electric defrost model by first removing all mechanical components associated with hot gas defrost functions. (NCC, No. 16 at p. 1) For this approach, the proposed test procedure would specify standardized values for the electric defrost energy use and heat addition. See,
Regarding the suggestions that AWEF ratings for hot gas defrost units not be required, in DOE's view, such an approach would likely remove any incentive for manufacturers to design and build hot gas defrost equipment that would maintain steady state efficiency in a manner consistent with the standards that apply to electric defrost systems since, under this approach, the unit's design has no influence on whether it complies with the applicable electric defrost system standard. Similarly, simply assigning a baseline AWEF value to the unit fails to impose any requirements on the units' efficiencies, since a default value would be applied to this equipment, which again would make compliance unrelated to the unit's design.
Further, while using the AWEF of an equivalent electric defrost unit to rate hot gas defrost units may have merit, DOE does not have, and the commenters did not provide, any information demonstrating how the use of the suggested 10-percent range would impact manufacturer incentives to use efficient designs. This suggested equivalence criterion, if adopted, would play little to no role with respect to the energy use of the unit's components, such as the energy use of a unit cooler's evaporator fan. A smaller evaporator coil with greater fan power and more air flow could provide the same net capacity as a larger coil with less fan power and air flow, but use more fan power to do it.
In addition, comparing the net capacity of the hot gas defrost unit with those of electric defrost units to test equivalency implies that it is understood how to determine that value. As discussed in the comments, net capacity as measured in the test procedure is not the same as capacity reported for application ratings. See,
Regarding the suggested use of an AEDM along with a prescribed value for the energy consumption from defrost usage, DOE notes that an AEDM simulates a unit's performance during testing, which requires that there first be a test procedure that the AEDM would simulate. Because there is no hot gas defrost test procedure, this approach would also be unworkable unless a test procedure were first developed and defined. In short, DOE agrees with Rheem and Bally that significant clarification would be needed to specify how a proxy rating system would work to avoid misinterpreting the regulation. For the reasons described earlier, however, DOE is not convinced that the suggested “within 10 percent of net capacity” provides sufficient clarification.
NCC's comment addressed possible approaches for testing hot gas defrost condensing units and unit coolers. But because coverage also extends to matched-pair or single-package systems, a hot gas defrost test approach must also be developed for these system categories.
After considering various possibilities for developing procedures to test hot gas defrost features, as discussed above, DOE continues to believe a test that measures the energy benefits of hot-gas defrost is not warranted at this time. Accordingly, DOE is adopting, in this respect, an approach consistent with the intent of the one set forth in the NOPR. Namely, a manufacturer will test a hot gas defrost condensing unit without measuring the impacts of the hot gas defrost feature, and that feature will not affect the rated efficiency either positively or negatively. In that sense, the test procedure for units with hot gas defrost will be the same as the test procedure for units with electric defrost.
DOE is clarifying one aspect of the test procedure with respect to hot gas defrost. DOE recognizes that the hot gas defrost components can impose pressure drop on the refrigerant lines during the test, which can reduce performance. This issue was discussed in the WICF Working Group meetings, where the addition of a pressure drop equivalent to 3 °F dew point reduction in the suction line was included in the initial engineering analysis developed for hot gas defrost units to reflect this issue. (Docket EERE–2015–BT–STD–0016, Working Group Meeting Presentation, Fifth and Sixth Meetings: Engineering Analysis, No. 26 at p. 34) (The hot gas defrost calculations were subsequently removed from the engineering analysis because hot gas defrost was not considered as a design option.) Thus, the presence of hot gas defrost components would cause the hot gas defrost feature to detract from a model's rated efficiency. That outcome would be inconsistent with the approach DOE set forth in the NOPR, the purpose of which was to make rated efficiencies neutral with respect to the presence of hot gas defrost. While DOE does not have information to support a general presumption that hot gas defrost increases efficiency by a particular amount, it does not believe that hot gas defrost ordinarily decreases efficiency in operation. Accordingly, DOE will permit a manufacturer to remove the hot gas defrost components. Thus, incorporating hot gas defrost in a condensing unit will not cause a decrease in the unit's rated efficiency under the test procedure.
However, DOE recognizes that simply removing the hot gas defrost components may not be sufficient to set up a condensing unit for a test, since removal of a component may leave pipe ends open to the surroundings. Some of these pipe ends may have to be capped or connected with each other, and at least two ends represent the suction inlet and liquid outlet of the condensing unit. Also, some of the hot gas defrost components may make little impact to the operation of the system and accompanying measurement—which would encourage a manufacturer not to remove those components. To ensure that any third party testing is conducted consistently with manufacturer testing or its recommendations for testing, information to clarify which components are removed and the subsequent piping connections may have to be provided. DOE will consider proposing in a future rulemaking that certification reporting for hot gas defrost units include as non-public information a list of the hot-gas-defrost components that must be removed for the test and instructions for piping connections to allow proper testing. DOE may also consider allowing any such instructions to be provided in pdf form as supplementary test information. The regulations being adopted are generic in nature such that manufacturers (and other stakeholders that utilize the test procedure) should have sufficient instruction on how to test all basic models that have hot-gas defrost components.
Further, DOE is also adopting this approach for testing hot gas defrost unit coolers, matched-pairs, or single-package refrigeration systems. For these systems, the hot gas defrost components would also be removed from the system, and pipes reconnected as required. The units would be tested measuring steady state performance, but frosting or defrost tests would not be feasible under this approach and they would not be run. Using this procedure, the test chambers would have to be operated with low moisture levels to prevent frost formation during testing. Performing this test will generally require using test facilities with conditioning systems that can cool down the indoor room and remove its moisture before operation of the unit under test can start to ensure that the test unit does not collect any moisture from the room. It also requires that infiltration into the indoor room be minimized. The defrost heat and energy use for the test would be calculated in the same manner as for an electric defrost condensing unit tested alone, thus allowing determination of equivalent AWEF. DOE has adopted this approach for hot gas defrost refrigeration systems in 10 CFR part 431, subpart R, appendix C.
Although some test facilities may not be equipped with conditioning systems that would allow cooling of the indoor room and removal of moisture prior to start of the test unit, DOE expects that some manufacturers will develop performance representations for their hot gas defrost units using AEDMs, as suggested by some of the comments, and that there may be limited need for the actual testing of hot gas defrost unit coolers and matched-pairs under this approach. The AEDMs would only need to be able to estimate the steady state performance of the systems in refrigerating mode, since they would, like the test, use the standardized contributions for hot gas defrost energy input and heat addition.
Heat Controller emphasized the need to develop a test method to quantify the differences between various defrost technologies. (Heat Controller, Public Meeting Transcript, No. 23 at p. 66) Lennox also supported the development of a method to determine the AWEF for hot gas defrost models. (Lennox, No. 13 at p. 4) DOE notes that WICF Term Sheet Recommendation #6 would involve DOE initiating a future test procedure rulemaking to adopt test procedure provisions for several items, including hot gas defrost. Developing and adopting such a test procedure would enable one to differentiate between technologies. DOE plans to address this issue in the future.
Consistent with the Recommendation #4 of the WICF Term Sheet (Docket EERE–2015–BT–STD–0016, Term Sheet, No. 56 at p. 2), DOE proposed to amend the test procedure so that the provisions for assigning a benefit to adaptive defrost cannot be used to certify compliance with the energy conservation standard. 81 FR at 54938–54939.
DOE did not receive any comments regarding this proposal and is adopting the proposed amendment.
Consistent with Recommendation #4 of the WICF Term Sheet (Docket EERE–2015–BT–STD–0016, Term Sheet, No. 56 at p. 2), DOE proposed to amend the test procedure so that unit cooler compliance with the applicable walk-in refrigeration system standard would be assessed without using on-cycle variable-speed evaporator fans. As part of this approach, manufacturers would be permitted to make representations of the energy efficiency or consumption for a unit cooler basic model using on-cycle variable-speed fans as measured in accordance with the DOE test procedure, provided that the additional represented value has been certified to DOE per 10 CFR 429.12.
DOE did not receive any comments regarding this proposal and is adopting it in this final rule.
DOE proposed to re-organize the walk-in test procedure found at 10 CFR 431.304 into three separate appendices, one for each metric corresponding to the regulated component. DOE proposed to revise Appendix A to Subpart R of Part 431 by designating it as, and retaining only the procedure for, measuring the energy consumption (in kWh/day) for walk-in doors. DOE also proposed to create a new Appendix B to Subpart R of Part 431, which would contain the method of measuring the R-value, which would apply to walk-in doors and panels. Lastly, DOE proposed creating a new Appendix C to Subpart R of Part 431, which would contain the test method for refrigeration systems. In addition, DOE proposed to clarify some of the definitions and terminology used in the test procedure.
Specifically, DOE proposed to revise Appendix A to Subpart R of Part 431, which contains the procedure for measuring energy consumption (in kWh/day) for display and non-display doors, by removing the definitions and references related to walk-in panels. DOE proposed to (1) remove the definition of “core region,” (2) move the definition of “edge region” to the proposed Appendix B, and (3) remove the prescribed subfloor temperature listed in Table A.1 of Appendix A. Further, DOE proposed to amend the definition of “surface area” by removing the currently inserted example referencing walk-in panels and modifying the definition of “rating condition” by removing the discussion of internal walk-in components. 81 FR at 54939. These amendments were intended to clarify Appendix A and did not substantively change the DOE test procedure for measuring the energy consumption of walk-in doors.
To clarify how to calculate door power usage, DOE proposed defining “rated power” as the electricity-consuming device's power as specified on the device's nameplate. If the device does not have a nameplate or such nameplate does not list the device's power, then the rated power must be read from the device's product data sheet. See 81 FR at 54939. In addition, DOE proposed that, for each basic model of walk-in door that has an electricity consuming device(s) for which rated power is taken from a product data sheet, the walk-in door manufacturer must retain the product data sheet as part of the test data underlying the walk-in door's certification report. 81 FR at 54939.
Hussmann expressed concern about how to calculate the rated power for certain variable-power door components, like variable-resistance heaters and door-opening devices. In its view, the proposed definition for rated power, which would require manufacturers to use 100% of a device's rated power, does not make sense when applied to variable power devices that have a lower average power. (Hussmann, Public Meeting Transcript, No. 23 at pp. 73–74) In sections 4.4.2 and 4.5.2 of Appendix A to Subpart R to Part 431, DOE's current test procedure details how to calculate the power usage for each type of electricity consuming device used in a walk-in door. The procedure includes percent time off values to account for energy saving features like timers, control system, or other auto-shut-off system. These values also reduce the calculated power usage for features that are not constantly operational,
Additionally, DOE proposed adding a new Appendix B to Subpart R of Part 431 to improve the clarity of the walk-in test procedure. This appendix would include the currently prescribed method of measuring the R-value found in 10 CFR 431.304. Specifically, DOE proposed to move the provisions found at 10 CFR 431.304(b) and (c) into Appendix B. DOE also proposed to add the definition of “edge region” that was previously located in Appendix A to Subpart R of Part 431 to Appendix B, as this definition is relevant to the R-value test method.
Dow supported the creation of Appendix B to Subpart R of Part 431, commenting that this change would help highlight the fundamental differences between doors and panels and clarify how each are treated in the proposed and future test procedures. (Dow, No. 9 at p. 2) In addition, Dow commented that it understood that the R-value for insulation used in WICF-related panels and doors must be determined in accordance with the WICF test procedures in Appendix B to Subpart R of Section 431 and sought confirmation of the accuracy of this understanding from DOE. (Dow, No. 9 at p. 3)
DOE did not receive any negative comments regarding the re-organization of Appendix A and proposed addition
Appendix B to Subpart R of Section 431 as adopted in this final rule contains the test method for measuring the R-value of insulation. This test method must be used when determining the R-value for walk-in panels and doors.
With respect to the proposed amendments regarding Appendices A and B, Dow supported the inclusion of ASTM C518–04 in the test procedure but recommend updating the procedure to reference the new version of this standard, ASTM C518–10. (Dow, No. 9 at p. 2) In this rulemaking, DOE proposed to make only editorial changes to the test procedure for measuring R-value but may consider Dow's suggestion to reference the most recent version of ASTM C518 in a future rulemaking.
DOE also proposed to add a new Appendix C to Subpart R of Part 431 and include the test method for refrigeration systems in this appendix. Within Appendix C, DOE further organized its discussion of test procedures in terms of the refrigeration system configuration types—
DOE also proposed to correct typographical errors in the regulatory text contained in the proposed Appendix C. DOE proposed to correct the saturated suction A and saturated suction B temperatures to be −20 °F and −26 °F, respectively, in the table currently in 10 CFR 431.304(c)(10)(xv). 81 FR at 54939. DOE also proposed correcting an equation for defrost heat load contribution currently at 10 CFR 431.304(c)(12)(ii). The equation for defrost heat load contribution currently specifies that this contribution should be divided by 3.412 Btu/W-h, but it should instead be multiplied by 3.412 Btu/W-h. 81 FR at 54939–54940.
DOE did not receive any comments regarding its proposal to add a new Appendix C to Subpart R of Part 431 or its proposal to include the test method for refrigeration systems in this same appendix. DOE did not receive any comments in response to its proposal to correct typographical errors within the test procedure language or equation that would become part of the proposed Appendix C. Therefore, DOE is adopting its proposed changes in this final rule.
DOE proposed to amend the representation requirements for refrigeration systems to clarify how to apply the test procedure to the range of possible kinds of refrigeration systems. Specifically, DOE proposed to direct manufacturers of unit coolers, dedicated condensing units, single-package dedicated systems, and matched refrigeration systems to the appropriate subsections of Appendix C to Subpart R of Part 431—the DOE test procedure for refrigeration systems. DOE also proposed not to require the rating of a matched refrigeration system if the constituent unit cooler(s) and dedicated condensing unit have been tested and rated separately. However, if a manufacturer wished to represent the efficiency of the matched refrigeration system separately from the efficiency of either constituent component, or if the manufacturer cannot rate one or both of the constituent components using the specified method (
DOE explained in its proposal that a manufacturer of a walk-in cooler or walk-in freezer is any person who: (1) Manufactures a component of a walk-in cooler or walk-in freezer that affects energy consumption, including, but not limited to, refrigeration, doors, lights, windows, or walls; or (2) manufactures or assembles the complete walk-in cooler or walk-in freezer. 10 CFR 431.302.
Several of the statutory standards, as well as DOE's 2014 standards and any energy conservation standards that DOE may adopt in its separate ongoing rulemaking (see Docket No. EERE–2015–BT–STD–0016), apply to specific components of a walk-in. A manufacturer of a walk-in component (
A manufacturer of a complete walk-in (
Dow stated that the certification and compliance requirement language regarding doors, walls, ceiling, and floor panels/components is not clear. It noted that some WICF floors, which are considered “panels” under DOE's regulations are not, in fact, separate pre-assembled panels but are built into the floor of the building in which the WICF is located. In this case, Dow noted that the floor would be a component of the WICF but not a “panel.” (Dow, No. 9 at p. 1) Dow also noted that, although WICF panels consist of an assembly of materials (metal skins, insulation, fasteners, etc.), the text refers to insulation material alone as a panel, which, in its view, adds confusion on how to apply the test procedure. (Dow, No. 9 at p. 2)
DOE agrees with Dow's comments that a WICF floor may comprise pre-assembled panels or layer(s) of insulation and/or some other floor covering material (
A manufacturer of a walk-in component must ensure that the component meets the applicable standard. In the August 2016 NOPR, DOE proposed to modify this current approach (detailed at 10 CFR 429.12(b)(6)) by requiring that for each brand name, a walk-in manufacturer must submit both the basic model number and the manufacturer's individual model number(s). When it first established reporting requirements for walk-ins, DOE explained that it was adopting a limited approach since it did not have sufficient information at the time to determine whether reporting individual model numbers for walk-in components was feasible. See 76 FR 12422, 12466 (March 7, 2011) (“March 2011 CCE Rule”). DOE noted that it would revisit this issue in the future.
AHRI, Manitowoc, Rheem, Zero Zone, NCC, and KeepRite opposed DOE's proposal to expand the model number reporting requirements. (AHRI, No. 11 at p. 3; Manitowoc, No. 10 at p. 2; Rheem, No. 18 at p. 6; Zero Zone, No. 15 at p. 2; NCC, No. 16 at p. 6; KeepRite, No. 17 at p. 2) AHRI, Manitowoc, and Rheem disagreed with DOE's observation that manufacturers routinely submit both basic and individual model numbers for WICF systems, noting that this is not the case for all manufacturers or types of equipment. (AHRI, No. 11 at p. 3; Manitowoc, No. 10 at p. 2; Rheem, No. 18 at p. 5) AHRI, Manitowoc, Rheem, NCC, and KeepRite also noted that the proposed reporting change will greatly increase the number of models listed in DOE's Certification Compliance Management System (“CCMS”) because there may be hundreds of combinations for a given basic model, and make the database more difficult for customers to navigate. (AHRI, No. 11 at p. 3; Manitowoc, No. 10 at p. 2; Rheem, No. 18 at pp. 5–6; NCC, No. 16 at p. 6; KeepRite, No. 17 at p. 2) Bally commented that DOE also needs to consider the effect of an increase in door basic models as a result of the new energy conservation standard going into effect on June 3, 2017. Once the maximum energy consumption metric becomes effective many variables such as door area, U-value, and power consumption will impact door basic models. Separating its models by door area alone, Bally states that it has 63 different combinations. (Bally, No. 22 at p. 1) NCC asserted that it may have to recertify daily because it manufactures so many custom products. (NCC, No. 16 at p. 6) Hussmann and KeepRite commented that the proposed requirement would significantly increase the complexity of reporting, which would result in the reporting of hundreds of model numbers. (Hussmann, No. 20 at p. 3; KeepRite, No. 17 at p. 2) Zero Zone commented that the additional model number reporting requirements would increase paper work for the manufacturers without providing any value to customers. (Zero Zone, No. 15 at p. 2)
Lennox argued that the proposed individual model number reporting requirement would be burdensome unless it was allowed to group its individual model numbers using the “wildcard” digit placeholders it currently uses when reporting. (Lennox, Public Meeting Transcript, No. 23 at pp. 70–71) Hussmann added that allowing placeholder digits (“wildcards”) for both AWEF-altering and AWEF-agnostic model changes would simplify the reporting process, allow for a clean transition to marketing materials, and clarify the rating system for consumers. (Hussmann, No. 20 at p. 3) Rheem and NCC similarly advocated for the use of placeholder characters (
DOE acknowledges that its proposal requiring manufacturers to report the basic model number and individual model number(s) for each brand distributed in commerce may result in an increase in reporting burden. However, as explained in the August 2016 NOPR, DOE believes the additional burden to be minimal. 81 FR at 54940. DOE disagrees with the comments from AHRI, Manitowoc, and Rheem that manufacturers are not currently reporting individual model numbers. As of October 2016, each basic model listed in DOE's Compliance Certification Database
However, as requested by Lennox, Hussmann, and NCC, manufacturers may use wildcards to represent non-energy consuming features when certifying individual model numbers. Wildcards may not be used to represent energy consuming components that would result in a different representative value, but manufacturers may elect to group those individual models into one basic model at their discretion. Based on the comments received from Lennox and Hussmann, DOE understands that allowing wildcards will simplify the requirement to report individual models and will alleviate the concerns noted by AHRI, Manitowoc Foodservice, Rheem, Zero Zone, NCC, KeepRite, Bally, and Hussmann. Therefore, with the clarifications noted in this paragraph, this rule will require walk-in component manufacturers to submit both the basic model number and the manufacturer's individual model number(s).
With respect to the issue of energy-consuming components, Hussmann questioned whether individual models with design differences that are small but affect the units' energy consumption (
DOE also proposed adding reporting requirements for both the standards promulgated in the June 2014 final rule (with a June 2017 compliance date) and for the standards for certain equipment classes of walk-in refrigeration systems that will be defined in a separate energy conservation standards rulemaking (see Docket No. EERE–2015–BT–STD–0016).
In addition to the reporting requirements defined in 10 CFR 429.53(b), DOE proposed requiring certification reports to include the following product-specific information to show compliance with the amended energy conservation standards:
—Doors: Rated energy consumption, rated surface area in square feet, the rated power of each light, heater wire, and/or other electricity consuming device associated with each basic model of display and non-display door, and whether such device(s) has a timer, control system, or other demand-based control reducing the device's power consumption.
—Refrigeration systems: Rated annual walk-in energy factor (AWEF), rated net capacity, and the configuration tested for certification (
ASAP and NEEA supported the proposed expansion of reporting requirements for doors and other WICF components, and agreed with DOE that this information is necessary to allow DOE to verify the door's rated energy consumption. (ASAP and NEEA, No. 19 at p. 3)
KPS commented that the new reporting requirements are burdensome to WICF OEMs that do not manufacture all door options and other power-rated accessories or any nonstandard option. In its view, this information is dynamic and may change with each order. KPS asked if the WICF OEM can rely on each of the relevant vendors to meet the component testing requirements and be in compliance with DOE. (KPS, No. 8 at p. 1) A manufacturer of a walk-in component (
Bally suggested that manufacturers of door components (
Walk-in cooler and walk-in freezer manufacturers may rely on test data developed by other entities that supply sub-assemblies of a walk-in component (
DOE's new certification requirements will provide comprehensive, up-to-date efficiency information about walk-in equipment sold in the United States at any given time—a necessary predicate to an effective enforcement program. This rule adopts these new certification regulations for walk-in doors and refrigeration systems to ensure that DOE has the information it needs to ensure that regulated products sold in the United States comply with the law. As discussed in section III.A.1.d of this final rule, DOE is also requiring indoor dedicated condensing units to specify if the basic model is also certified as an outdoor dedicated condensing unit and, if so, the basic model number for the outdoor dedicated condensing unit.
Hussmann expressed concern regarding how doors from a walk-in system manufactured before the current standard would be replaced, suggesting that there may be challenges retrofitting compliant doors to these older systems. (Hussmann, Public Meeting Transcript, No. 23 at p. 111–112) DOE clarifies that all walk-in doors manufactured on or after June 5, 2017 must comply with applicable energy conservation standards. 10 CFR 431.306(c)–(d) DOE does not provide an exclusion for retrofit or replacement doors.
In the August 2016 NOPR, DOE explained that while it does not require manufacturers of complete walk-ins to submit certification reports for the complete walk-in itself, a manufacturer of a complete walk-in must ensure that each walk-in it manufactures meets the various statutory and regulatory standards. That is, a manufacturer of a complete walk-in is required to use components that comply with the applicable standards and to ensure the final product fulfills the statutory design requirements.
For example, consider an installer deciding which panels to use. The installer could assemble a compliant walk-in in several ways. The installer could build a panel, test it, and certify it as the component manufacturer. The installer could use an uncertified panel with a claimed compliant R-value and accept responsibility for its compliance. The installer could use a certified panel with a label that meets DOE requirements and bear no responsibility for the testing and certification of the panel. In any of these situations, the installer must use compliant panels. The only difference between the three scenarios is that in the third scenario the installer is permitted to rely upon the representations of the manufacturer of a WICF component to ensure compliance of the component; if those representations turn out to be false, the component manufacturer is responsible.
As discussed in more detail in III.B.5 of this final rule, DOE proposed several labeling provisions to help manufacturers of complete walk-ins, who are not manufacturers of walk-in components, ensure compliance with the standards. In addition to the component-based regulations requiring certification (doors, panels, and refrigeration systems), walk-ins generally must: have automatic door closers; have strip doors, spring hinged doors, or some other method of minimizing infiltration when doors are open; and for all interior lights, use light sources with an efficacy of 40 lumens per watt or more. It is the responsibility of the manufacturer of the complete walk-in to ensure that the walk-in incorporates these design features.
At the public meeting discussing the proposed test procedure, Bally remarked that it seems unlikely that an installer could use an uncertified panel with a claimed compliant R-value because component manufacturers cannot distribute panels that are uncertified. (Bally, Public Meeting Transcript, No. 23 at p. 110) DOE clarified that its proposal covers a scenario where a walk-in is built out of insulated building materials designed for applications other than walk-in coolers and freezers. In this scenario, the manufacturer of a complete walk-in is responsible for the compliance of the walk-in that it assembled and ensuring that the insulated building materials used to construct the walk-in meet the applicable R-value standards.
Commenters raised questions regarding the compliance dates for walk-in refrigeration energy conservation standards and related refrigeration system reporting requirements.
Hussmann requested that the enforcement date for medium temperature condensing units be pushed back to align with that of the other WICF refrigeration systems. Hussmann argued that these systems often share components and this change would allow manufacturers the flexibility to work with all equipment classes at one time. (Hussmann, No. 20 at p. 3)
DOE issued an enforcement policy on February 1, 2016, explaining that DOE will not seek civil penalties or injunctive relief concerning violations of the four energy conservation standards applicable to dedicated condensing refrigeration systems operating at medium temperatures detailed at 10 CFR 431.306(e). DOE will not seek civil penalties or injunctive relief in these cases provided that the violations relate to the distribution in commerce of WICF refrigeration system components manufactured prior to January 1, 2020.
Lennox asked that DOE explicitly align the reporting requirements for medium temperature condensing units with the January 1, 2020 enforcement date (
DOE proposed to include walk-ins to the list of equipment subject to the enforcement testing sampling plan for covered equipment found in Appendix B of Subpart C of Part 429. DOE received no comments on this proposal and is adopting it in this final rule.
DOE proposed to add specific enforcement provisions for walk-in refrigeration systems and doors to 10 CFR 429.134. Specifically, DOE proposed to clarify which entity or entities are liable for the distribution of noncompliant units in commerce and how to verify the refrigeration capacity for walk-in refrigeration systems and surface area of walk-in doors.
If DOE determines that a basic model of a panel, door, or refrigeration system for walk-ins fails to meet an applicable energy conservation standard, then the manufacturer of that basic model is responsible for that noncompliance. If DOE determines that a complete walk-in cooler or walk-in freezer or any component thereof fails to meet an applicable energy conservation standard, then the manufacturer of that complete walk-in cooler or walk-in freezer is responsible for the noncompliance with the applicable standard. However, a manufacturer of a complete walk-in would not be held responsible for the use of components that were certified and labeled (in accordance with DOE labeling requirements) as compliant but later found to be noncompliant with the applicable standards. DOE did not receive any comments on this aspect of its proposal and is adopting it in this final rule.
DOE also proposed adding an explanation of how DOE verifies the refrigeration capacity for walk-in refrigeration systems to 10 CFR 429.134. Specifically, DOE proposed that the refrigeration capacity of the basic model would be measured pursuant to the test requirements of 10 CFR part 431 for each unit tested. The results of the measurement(s) would be averaged and compared to the value of refrigeration capacity certified by the manufacturer. Under this approach, the certified refrigeration capacity would be considered valid only if the average measured refrigeration capacity is within 5 percent of the certified refrigeration capacity. If the certified refrigeration capacity is found to be
Manitowoc commented in support of the 5 percent tolerance during enforcement testing. (Manitowoc, No. 10 at p. 2) AHRI and Lennox supported DOE's proposal to verify the net capacity, but suggested that “within” be replaced by “plus or minus” to provide a slightly wider range around the net capacity value. (AHRI, No. 11 at p. 4; Lennox, No. 13 at p. 10)
DOE agrees with Lennox and AHRI that specifying “plus or minus 5 percent” clarifies the regulatory text at 10 CFR 429.134(l)(2). In this rule, DOE will finalize its proposal related to the certified refrigeration capacity, but will amend it to specify that the certified net capacity will be considered valid “only if the average measured net capacity is within plus or minus five percent of the certified net capacity.”
Further, DOE proposed to specify how DOE would verify the surface area for walk-in display doors and non-display doors in 10 CFR 429.134. The certified surface area would be considered valid only if the average measured surface area of the door is within 1 percent of the certified surface area. If the certified surface area is found to be valid, that surface area value would be used as the basis for calculating the maximum energy consumption for the basic model. If the certified surface area is found to be invalid, the average measured surface area would serve as the basis for calculating maximum energy consumption for the basic model. See 81 FR at 54941.
Bally commented that in some walk-in applications the door cap height is reduced by 2-inches to accommodate grout and tile used for walk-in floors, resulting in a shorter walk-in door. The 1% certified surface area will mean that for a 78″ door, each
DOE also proposed to specify in 10 CFR 429.134 how it will account for the rated power (as defined in the proposal) of each electricity consuming device(s) in calculating the walk-in door energy consumption. For each basic model of walk-in cooler and walk-in freezer door, DOE would calculate the door's energy consumption using the power listed on the nameplate of each electricity-consuming device shipped with the door. If an electricity-consuming device shipped with a walk-in door does not have a nameplate or such nameplate does not list the device's power, then DOE would use the device's “rated power” included in the door's certification report. 81 FR at 54941. DOE did not receive any comments regarding this proposal and is adopting it in this final rule.
If the Secretary has prescribed test procedures for any class of covered equipment, a labeling rule applicable to such class of covered equipment must be prescribed. See 42 U.S.C. 6315(a). EPCA, however, also sets out certain criteria that must be met prior to prescribing a given labeling rule. Specifically, to establish these requirements, DOE must determine that: (1) Labeling in accordance with Section 6315 is technologically and economically feasible with respect to any particular equipment class; (2) significant energy savings will likely result from such labeling; and (3) labeling in accordance with Section 6315 is likely to assist consumers in making purchasing decisions. (42 U.S.C. 6315(h))
If these criteria are met, EPCA specifies certain aspects of equipment labeling that DOE must consider in any rulemaking establishing labeling requirements for covered equipment. At a minimum, such labels must include the energy efficiency of the affected equipment, as tested under the prescribed DOE test procedure. The labeling provisions may also consider the addition of other requirements, including: Directions for the display of the label; a requirement to display on the label additional information related to energy efficiency or energy consumption, which may include instructions for maintenance and repair of the covered equipment, as necessary, to provide adequate information to purchasers; and requirements that printed matter displayed or distributed with the equipment at the point of sale also include the information required to be placed on the label. (42 U.S.C. 6315(b) and 42 U.S.C. 6315(c))
DOE proposed labeling requirements for walk-ins—specifically, that certain information be shown on the permanent nameplates of doors, panels, and refrigeration systems. DOE also proposed to clarify requirements with respect to the disclosure of efficiency information in marketing materials and the labeling requirements for process cooling refrigeration systems. In the following sections, DOE's specific proposal and comments received regarding its proposed nameplate requirements are discussed in detail.
DOE reviewed the labeling requirements proposed in the August 2016 NOPR with respect to the three statutory prerequisites addressing the Secretary's authority to promulgate labeling rules. (42 U.S.C. 6315(h)) The following paragraphs addresses these elements and accounts for the comments responding to this aspect of DOE's proposal.
DOE found the proposed labeling recommendations would be technologically and economically feasible with respect to walk-in cooler and freezer equipment class. In general, DOE also found that walk-in refrigeration system manufacturers and display door manufacturers already include nameplates on their equipment. Typically, these nameplates include the equipment's model number.
DOE explained in the August 2016 NOPR that it was less common for non-display doors and panels for walk-ins to have nameplates, but that it was more likely that an entire assembled walk-in may have a single nameplate. Nonetheless, DOE found that adding a permanent nameplate or permanent sticker to both walk-in non-display doors and panels would be technologically feasible, as both types of equipment have adequate useable surface to apply such labels. DOE estimated that the total cost of applying labels to non-display doors and panels would be negligible—less than a tenth of one percent of the average manufacturer's annual revenue. Accordingly, based on these facts, DOE found that the proposed labeling requirements would be economically feasible. 81 FR at 54942.
Several commenters responded to these aspects of DOE's proposal.
Bally commented that the proposed requirements for panel labeling is not technologically feasible because putting the date of manufacture on each panel is difficult. Since the labels are usually printed days or weeks before the actual manufacturing date, the proposed requirement would force manufacturers to put a second label on the panel printed on the day or day after manufacture. Further, in its view, labeling is not technologically feasible because labeling each panel requires the creation of many unique nameplates for even a small walk-in. (Bally, No. 22 at p. 2) Regarding these comments, as discussed in section III.B.5.b of this final rule, DOE is no longer requiring walk-in panel labels to include the R-value, model number, or date of manufacture. Therefore, under the approach adopted in this rule, walk-in panels will not require two labels as Bally suggested. Additionally, DOE is adopting a requirement to have a generic statement for walk-in panel labels, which eliminates the need for each panel to have a unique label.
KPS claimed the amount of information being requested for labels will increase the size of the label, and that their presence will disrupt the aesthetics of the panel because the OEM will be required to place them on each panel or door. (KPS, No. 8 at p. 1) Heat Controller also commented that, for some small equipment, the increased size of the label due to the proposed regulation may make it difficult to place the label according to UL's requirements. (Heat Controller, Public Meeting Transcript, No. 23 at p. 96)
KPS also stated that the label must be dynamic for each unique job, and the burdens faced by manufacturers come in the form of the cost of implementing the proposed changes—namely, the cost of the change, the time to implement the labeling requirement, and the materials used to make the labels. Marketing collateral changes, required system changes, and the burden to customers will, in KPS's view, result in a cost impact much greater than $10,000. (KPS, No. 8 at p. 1) Hussmann noted that the proposed labeling requirements would require it to develop a new label format, rewrite labeling software, and purchase new labeling machines that can handle the increased size of the label. (Hussmann, No. 20 at p. 2) Bally also expressed concern regarding the economic implications of the proposed requirements. It noted that describing the label as a “nameplate” implies higher costs than “label”. (Bally, Public Meeting Transcript, No. 23 at p. 87) American Panel commented that it is not economically feasible to label each panel because label(s) would have to be high-grade Mylar/polyester in order to withstand being power washed and cleaned with harsh chemicals. The added cost to track and uniquely label each panel would bring no more benefit than having a single label for an entire walk-in. (American Panel, No. 7 at p. 1)
With respect to the labeling requirements generally, DOE notes that the requirements adopted in this rule will align with some of the labeling information already required by UL (
Regarding the remaining potential feasibility issues raised by commenters, DOE notes that the final rule reduces the amount of information required on component nameplates and the amount of information required to be disclosed in catalogs and marketing materials for walk-in panels, doors, and refrigeration systems. In light of KPS's concerns, the final rule does not require each walk-in component to have a unique label showing the applicable representative energy efficiency or energy consumption. Regarding Hussmann's comment that the proposed labeling requirements will cause manufacturers to undergo significant retooling, in DOE's view, the reduced requirements adopted in this rule for all walk-in components will likely reduce the amount of retooling—if any—that may be required by the rule. See section III.B.4.b, supra. As to Bally's and American Panel's concerns on the expenses associated with using permanent nameplate materials, DOE clarifies that it is using the term “permanent” to mean that the label is not easily removable and will not become detached from the equipment under everyday wear and tear. As long as walk-in labels meet the aforementioned specifications, manufacturers may select appropriate labeling materials at their discretion.
DOE also notes that it considered the cost to manufacturers of updating their marketing materials to include efficiency information, brand, model number, and the disclosure statement on each page of the document that listed the walk-in component. See 81 FR at 54944 and 54945–54946 (discussing potential burden impacts on walk-in manufacturers, including small manufacturers). Marketing materials include literature, data sheets, selection software, sales training, and compliance documentation. In this final rule, DOE reduced the burden by removing the term “each page” from its requirement to disclosure of efficiency information in catalogs and marketing materials. Instead, DOE is requiring that all catalogs that list a regulated walk-in component and all materials used to market the component prominently display the same information that appears on the component's permanent nameplate and the applicable efficiency information. However, this information is not required to be on
All of the changes that DOE is adopting in this final rule create less burdensome labeling requirements than those proposed in the NOPR. The labeling requirements for panels and doors are designed such that the labels can be applied across a range of basic models. Also, DOE is adopting less burdensome information display requirements for product catalogues. Reflecting the nature of these changes, DOE is estimating labeling and compliance costs on a per manufacturer basis rather than on a per model basis. Activities associated with software selection, sales training and compliance documentation are typically a one-time expense for each manufacturer and do not scale with the number of models. Further, product literature templates are generally standardized templates shared between groups of walk-in components. Therefore, updates to these materials are
DOE stated in the August 2016 NOPR that the proposed labeling requirements would likely result in significant energy savings. The related energy conservation standards are expected to save approximately 3 quadrillion British thermal units (quads). DOE explained that requiring labels that include the rated value subject to the standards will increase consumer awareness of the standards. 81 FR at 54943. As a result, requiring the labels may increase consumer demand for more efficient walk-in components, thus leading to additional savings beyond that calculated for the standards. In addition, labeling requirements would both help installers, assemblers, and contractors ensure that they are selecting equipment that the component manufacturer intended to be used as part of a completed walk-in, and limit the potential compliance burden faced by these entities. For example, DOE understands from manufacturer interviews and market research that insulated metal panels may be used in other types of applications, such as communications equipment sheds.
In the August 2016 NOPR, DOE also explained that the proposed labeling requirements are likely to assist consumers in making purchasing decisions. By including the rated metric on the nameplate and marketing materials, manufacturers are able to demonstrate to purchasers that the equipment they are purchasing meets the DOE standard and is acceptable for use in a walk-in. Additionally, consumers have the information needed to compare the energy efficiency performance between different component models, with the assurance that the ratings were calculated according to a DOE-specified test procedure. 81 FR at 54943.
AHRI claimed that consumers will not see a label on the equipment before it is purchased, and that a label will not save energy, increase demand for more efficient walk-ins, or be used to make purchasing decisions. In addition, AHRI argued that most walk-ins are built to order and the labels will not assist customer decision making. Furthermore, it noted that customers do not want labels visible on their equipment, which is frequently displayed in a client-facing business setting. However, AHRI remarked that the ratings in CCMS and marketing materials may assist customers in purchasing decisions, but the tangible labels placed on equipment require additional cost without any consumer benefit. (AHRI, No. 11 at pp. 1–2) Manitowoc and Rheem agreed that ratings displayed in DOE's CCMS and in marketing materials may assist customers in purchasing decisions, but argued that labels would incur cost to manufacturers without any customer benefit. (Manitowoc, No. 10 at p. 1; Rheem, No. 18 at p. 5) Manitowoc, Rheem, Zero Zone, and KeepRite also commented that WICF units are usually built to order, not to sell in a retail setting, and therefore labels will not assist customers in their buying decisions. (Manitowoc, No. 10 at p. 1; Rheem, No. 18 at p. 4; Zero Zone, No. 15 at p. 2; KeepRite, No. 17 at p. 3)
Bally argued that because the customer purchases the panels before seeing them, the panel labels have less of an effect on purchasing decisions than marketing literature. (Bally, Public Meeting Transcript, No. 23 at p. 86; Bally, No. 22 at p. 3) Bally added that energy savings will not likely result from the proposed labeling regulation. Bally commented that while the test procedures for panels and doors include “short cuts” that assist manufacturers with testing, they can distort equipment comparisons. Specifically, regarding door labels, Bally noted that the rating does not reflect the range of actual uses seen in the field and the customers' actual energy use will not be accurately reflected by the energy consumption on the nameplate. Bally contended that this situation may confuse customers and cause them to misjudge the requirements of their equipment. Regarding panel labels, Bally noted that the R-value is not easily converted into cost savings. Bally also noted that manufacturers (especially of freezers) only certify that their equipment meet the minimum requirements; therefore, customers would not be able to make significant judgments from the data displayed on the label. (Bally, No. 22 at p. 3)
In this rule, DOE is adopting labeling requirements that will likely result in significant energy savings by increasing consumers' awareness of the standards and helping installers, assemblers, and contractors ensure that the equipment they select is intended for walk-in applications. In addition, DOE's labeling requirements are likely to assist consumers in making purchasing decisions. As explained in section III.B.5.a and section III.B.5.c of this final rule, DOE modified its labeling requirements to specify that catalogs and marketing materials for each walk-in component must include each basic model's representative energy consumption or energy efficiency, as applicable. As AHRI, Manitowoc, Rheem, and Bally commented, including this information in marketing materials is beneficial to customers making purchasing decisions.
Regarding built-to-order equipment, DOE notes that energy conservation standards for walk-in components were established, in part, to address regulatory complications associated with the customization of walk-ins. Even if a complete walk-in is designed from a variety of components from different manufacturers, applying labels on walk-in equipment allows the installer verify that each component is appropriate for walk-in applications. In addition, including representative efficiency information in equipment catalogs and marketing materials allows entities designing walk-ins to compare the efficiency of walk-in components.
In response to Bally's comment that the test procedure for walk-in doors distorts energy consumption and is not indicative of energy use in the field, DOE notes that the specific rating conditions in the test procedure were established so that measured energy consumption is more equitable across the market. If a manufacturer believes that the test procedure is unrepresentative of a basic model's energy use, it may seek a test procedure waiver in accordance with the requirements in 10 CFR 431.401.
AHRI requested that DOE rescind the labeling proposal because the requirements of 42 U.S.C. 6315 have not been met. Specifically, AHRI commented that labeling will not assist customers in making purchasing decisions nor will labels save energy by increasing demand for more efficient walk-ins. (AHRI, No. 11 at p. 1–2) As explained in the preceding paragraphs, however, DOE concludes that this final rule meets the requirements of 42 U.S.C. 6315.
DOE proposed that the permanent nameplates of doors, panels, and refrigeration systems display certain information.
For walk-in doors, DOE proposed that the permanent nameplates of these components must be clearly marked with the rated energy consumption, brand name, model number, date of manufacture, and an application statement that states, “This door is designed and certified for use in walk-in cooler and freezer applications.” Specifically, the energy consumption would need to be identified with an “EC_” immediately preceding the relevant value and the model number would need to be displayed in one of the following forms: “Model_”, “Model number_”, or “Model No. _”. 81 FR at 54942.
With respect to panels, DOE proposed that the permanent nameplates of panels for walk-in cooler and walk-in freezers clearly display the rated R-value, brand name, model number, date of manufacture, and an application statement that states, “This panel is designed and certified for use in walk-in cooler and freezer applications.” The R-value would be identified with an “R-value_” immediately preceding the relevant value. The model number would also need to be displayed in one of the following forms: “Model_”, “Model number_”, or “Model No. _”. 81 FR at 54954.
For walk-in refrigeration systems that are not manufactured solely for process cooling applications, DOE proposed that the permanent nameplates of these components be clearly marked with the AWEF, brand name, refrigeration system model number, date of manufacture, and an application statement that states, “This refrigeration system is designed and certified for use in walk-in cooler and freezer applications.” The AWEF must be identified with “AWEF_” immediately preceding the relevant value and the model number must be displayed in one of the following forms: “Model_”, “Model number_”, or “Model No. _”. 81 FR at 54942. In addition, DOE proposed that the permanent nameplate of a refrigeration system component that can only be used as part of a process cooling refrigeration system must be marked clearly with the brand name, model number, the date of manufacture, and the statement, “This refrigeration system is designed only for use in walk-in cooler and freezer process cooling refrigeration applications.” The model number would be displayed in one of the following forms: “Model_”, “Model number_”, or “Model No. _”. If a refrigeration system can be used for both process cooling refrigeration and non-process cooling refrigeration applications, then the refrigeration system must be clearly marked with its applicable AWEF, brand name, model number, date of manufacture, and an application statement that says, “This refrigeration system is designed and certified for use in walk-in cooler and freezer applications.” 81 FR at 54942.
Finally, for each of these proposed requirements, DOE proposed that all orientation, spacing, type sizes, typefaces, and line widths used to display this required information must be the same as or similar to the display of the other performance data contained on the component's permanent nameplate. 81 FR at 54942.
DOE received general comments as well as specific concerns on its labeling proposal. ASAP and NEEA supported the proposed labeling requirements. (ASAP and NEEA, No. 19 at pp. 3–4) The CA IOUs supported the adoption of WICF component labeling requirements that would apply to each WICF component, including labels on each individual panel and door. (CA IOUs, No. 21 at p. 3) AHRI, Manitowoc, Rheem, and Zero Zone recommended that DOE drop the proposed labeling requirements for WICF refrigeration systems because labels will not help customers make purchasing decisions. (AHRI, No. 11 at p. 2; Manitowoc, No. 10 at p. 1; Rheem, No. 18 at p. 4; Zero Zone, No. 15 at p. 2; Hussmann, No. 20 at p. 2) Similarly, KeepRite requested that the labeling requirements be removed for refrigeration equipment and panels. (KeepRite, No. 17 at p. 3) Hussmann requested that there be no additional labeling requirement and added that it already labels their equipment as required by UL. (Hussmann, No. 20 at p. 2) Rheem added that potential labeling requirements should have been brought up during the ASRAC negotiation. (Rheem, No. 18 at p. 5)
With respect to the labeling of efficiency information, AHRI suggested that DOE require efficiency information to be included only in published materials. AHRI explained that customers will use marketing materials to compare energy efficiency and ensure ratings were calculated according to the DOE-specific test procedure. (AHRI, No. 11 at p. 2) Rheem argued that online resources, including the CCMS database and manufacturer's literature, are preferable to labels since these sources of information offer consumers context, meaning and the opportunity to compare ratings—none of which are possible with the proposed physical labels. Rheem explained that because WICFs are not built to be purchased in a retail setting or for head-to-head comparison—as most WICF equipment is built to order—labels will not assist customers in making purchasing decisions. Moreover, consumers would prefer not to have labels on equipment that is for display purposes. (Rheem, No. 18 at p. 4–5)
CrownTonka, Bally, and KeepRite expressed concern about labeling each panel individually. CrownTonka commented that most of their food customers and local health officials do not want labels on each panel. (CrownTonka, Public Meeting Transcript, No. 23 at pp. 84–85) Bally commented that requiring labels for each panel model would require manufacturers to invest in in-house labeling capabilities and may impact manufacturing process times. (Bally, Public Meeting Transcript, No. 23 at pp. 102–103) Bally also noted that panels qualifying for both freezer and cooler applications would require two separate R-value labels for each operating condition. (Bally, No. 22 at p. 3) KeepRite commented that labeling every panel is not necessary, redundant and wasteful. KeepRite added that the labeling of every panel would not be aesthetically pleasing and could lead to sanitation issues. (KeepRite, No. 17 at p. 3) American Panel agreed that walk-in components should be labeled to demonstrate DOE compliance, but saw no value to the customer having labels on every walk-in insulated panel. American Panel added that labels are not seen until installation, and some panels are hidden by floor covering. (American Panel, No. 7 at p. 1) However, the CA IOUs supported requiring labels on each individual panel and door, noting that this is common practice for many construction materials (wall insulation, windows). (CA IOUs, No. 21 at p. 3)
Stakeholders also recommended alternative approaches to reduce the labeling burden. Manitowoc and KeepRite suggested that, if DOE retains the labeling requirements, then DOE should allow manufacturers to have a single label on each walk-in. (Manitowoc, No. 10 at p. 1; KeepRite, No. 17 at p. 3) KeepRite explained that a majority of panels arrive to the jobsite on the same truckload. (KeepRite, No. 17 at p. 3) CrownTonka noted that it usually provides all floor, wall, and ceiling panels for a given walk-in; IB noted that, in addition to all panels, it also usually provides passage doors. Therefore, both manufacturers suggested
Other stakeholders commented on the proposed language for inclusion on all walk-in equipment permanent nameplates—
DOE agrees with the suggestion from Bally, CrownTonka, Rheem, and NCC. Walk-in components may be designed for walk-in cooler applications, walk-in freezer applications, or both walk-in cooler and freezer applications. Therefore, DOE finds that the approach suggested by these manufacturers improves the application statement because it not only identifies that the component is designed for use in a walk-in, but also identifies the type of walk-in (cooler, freezer, or both) for which the component is designed. This additional information would help installers verify that they are using the appropriate component for a particular application. Therefore, DOE is modifying its proposed permanent nameplate requirement by requiring that the permanent nameplate indicate whether the basic model is designed and certified for use in (1) walk-in cooler applications, (2) walk-in freezer applications, or (3) both walk-in cooler and walk-in freezer applications. For example, a walk-in panel designed and certified for use only in a walk-in cooler must contain on its label the following statement, “This panel is designed and certified for use in walk-in cooler applications.” Similarly, if a walk-in panel is designed and certified for both walk-in cooler and walk-in freezer applications, then it must contain on its label the following statement, “This panel is designed and certified for use in walk-in cooler and freezer applications.” Although the “certified” language on the label pertains specifically to the certification of compliance to DOE, to minimize the labeling burden, DOE is adopting Lennox's suggestion of dropping the proposed inclusion of the language “to DOE requirements” to the label.
Regarding the proposed labeling requirements, DOE's intention is to adopt a limited set of labeling requirements for walk-in components that would reduce the overall burden on manufacturers, including for installers who will be relying on these labels when assembling a given walk-in. For walk-in doors, DOE is requiring that they include a permanent nameplate marked with the door brand name and, as applicable, the statement, “This door is designed and certified for use in [walk-in cooler, walk-in freezer, or walk-in cooler and freezer] applications.”
Similarly, to reduce the burden on walk-in panel manufacturers while preserving information useful for walk-in installers, DOE is requiring these components to have a permanent nameplate that includes the brand name and, as applicable, the statement, “This panel is designed and certified for use in [walk-in cooler, walk-in freezer, or walk-in cooler and freezer] applications.”
In DOE's view, the more limited labeling requirements being adopted in this rule will enable manufacturers to demonstrate that a given walk-in component complies with the applicable DOE energy conservation standards, while eliminating the burden of creating a different label for each basic model. These limited labeling requirements are generalized and can be applied to a range of basic models in the manner suggested by Bally and CrownTonka. Further, these limited labeling requirements reduce manufacturer burden because components designed for both walk-in cooler and freezer applications would not require two separate labels, a concern expressed by Bally.
With respect to the concept of using a single label for a completed walk-in, DOE notes that its regulatory framework for this equipment relies on the component-based statutory scheme established by Congress. As a result, applying the single, completed walk-in labeling approach suggested by Manitowoc, KeepRite, CrownTonka, IB, and Hussmann would be inconsistent with that Congressionally-enacted scheme and potentially less effective at ensuring that installers and consumers have reliable information regarding whether the walk-in components they are using comply with the applicable standards. The requirements in this final rule are intended to help manufacturers of a complete walk-in identify components that comply with the applicable standards and have been certified as such. In DOE's view, a single label for a complete walk-in would reduce the utility of the label with respect to complete walk-in manufacturers (
DOE considers energy efficiency information an important aspect of walk-in design, advertising and purchasing and is therefore maintaining the requirement to report such information in catalogs and marketing materials. This change is consistent with the approach suggested by AHRI and Rheem. Specifically, DOE is requiring walk-in door manufacturers to include each basic model's representative energy consumption in catalogs and marketing materials while walk-in panel manufacturers would
Regarding door labels, Bally requested that required door labels should include units of measure that follow the maximum energy consumption metric, “kWh/day”. (Bally, No. 22 at p. 3) DOE agrees with Bally that energy consumption information should be listed with the appropriate units of measure. As explained in the previous paragraphs, DOE is not requiring walk-in doors to have energy consumption marked on their nameplates. However, manufacturers must include the representative energy consumption for each basic model of walk-in door in equipment catalogs and marketing materials. Per Bally's suggestion, DOE is adding a requirement that door energy consumption must be listed with the units of measure, “kWh/day”.
Lennox, NCC, Heat Controller, CrownTonka, and Bally also commented that some of the information that the proposal would require on a label is already included in current markings or is otherwise tracked and recorded by manufacturers. AHRI, Rheem, and Hussmann commented that current safety standards require WICF manufacturers to provide the brand name, date of manufacture, and model number via a label, and that this information will allow consumers to look up efficiency information online—which Hussmann asserts is the preferred method to review information because it provides context, meaning and the opportunity to compare ratings. (AHRI, No. 11 at p. 2; Rheem, No. 18 at p. 5; Hussmann, No. 20 at p. 2) Bally stated that UL labels already placed on each door include power consumption and the energy consumption labeling proposed would be redundant and confusing. (Bally, No. 22 at p. 3)
Similar to walk-in doors and panels, DOE's intention is to adopt labeling requirements for walk-in refrigeration systems that are not overly burdensome to manufacturers and that provide installers with enough information to assemble walk-ins with compliant components. In addition, based on the comments from AHRI, Rheem, and Hussmann, DOE understands that walk-in customers benefit from having brand name, date of manufacture and model number information included on refrigeration system labels because this information allows walk-in customers to look up efficiency information in CCMS or in manufacturer literature. In light of the comments received from Lennox, NCC, Heat Controller, CrownTonka, AHRI, Rheem, and Hussmann, DOE finds that refrigeration systems are already labeled with the brand, date of manufacture, and model number information, all of which supports the view that it is technologically feasible for refrigeration systems to be labeled with this information. Further, manufacturers will have minimal financial impacts because they do not need to modify equipment nameplates in order to meet a requirement to label walk-in refrigeration systems with brand name, date of manufacturer, and model number. This rule requires walk-in cooler and freezer refrigeration systems (that are not manufactured solely for process cooling applications) to have a permanent nameplate marked with the refrigeration system's brand name, model number, date of manufacture, and the statement, “This refrigeration system is designed and certified for use in [walk-in cooler, walk-in freezer, or walk-in cooler and freezer] applications.” In addition, DOE is requiring a refrigeration system that is not designated for outdoor use be labeled with the statement, “Indoor use only.” See section III.A.1.d for more details. The permanent nameplate of a refrigeration system component that can only be used as part of a process cooling refrigeration system must be marked clearly with the statement, “This refrigeration system is designed for use exclusively in walk-in cooler and/or freezer process cooling refrigeration applications.” DOE is requiring manufacturers of walk-in refrigeration systems to include each basic model's representative AWEF in catalogs and marketing materials.
DOE also notes that EPCA generally requires that labels prescribed by the Secretary must indicate the energy efficiency of the affected equipment, as tested under the prescribed DOE test procedure. (42 U.S.C. 6315(b)) For walk-in equipment, the labeling requirements prescribed by the Secretary shall indicate the energy efficiency of the equipment. See 42 U.S.C. 6315(e). DOE's rule requires that manufacturers disclose whether a given regulated walk-in component meets the applicable energy efficiency requirement that applies. In DOE's view, this approach satisfies the requirements of 42 U.S.C. 6315 since it discloses whether a given component meets the prescribed level of efficiency, while minimizing the associated burden requirements. DOE notes that the specific requirements of 42 U.S.C. 6315(e) do not require that a specific value be provided on the label—only that the label “indicate the energy efficiency of the equipment.” In DOE's view, this final rule's labeling requirement, which would also be coupled with a requirement that equipment catalogs prominently display the energy efficiency of regulated components, satisfies this provision since the label will readily indicate whether a given component satisfies the prescribed energy efficiency level for that component. Accordingly, DOE's adopted approach satisfies its legal obligations while balancing the interests in providing sufficient information to the public against the potential costs of requiring a label for walk-in components. DOE notes that manufacturers are free to provide additional information regarding the performance of their components should they choose to do so, see section III.B.5.b for additional details.
Given that the disclosure statement represents that the labeled component is certified as compliant with the applicable energy conservation standard, if a manufacturer has not certified to DOE that a component meets applicable standards, the components may not contain any labels indicating compliance or certification.
DOE also received comments specific to the proposed requirement that the date of manufacture be included on the label. Lennox commented that the month and year of manufacture are already included in its UL markings, while NCC noted that its UL markings indicate the manufacturing date by quarter and year. (Lennox, Public Meeting Transcript, No. 23 at p. 83; NCC, Public Meeting Transcript, No. 23 at p. 91) NCC further explained that the exact date of manufacture cannot be determined when the nameplates are printed; instead they indicate the date of manufacture by quarter within their serial numbers, as controlled by the UL safety procedure file. NCC recommended that DOE allow manufacturers to continue using the formats defined in their safety procedure files. (NCC, No. 16 at p. 2) CrownTonka commented that they print serial numbers on each component and use these numbers to keep records of the manufactured date, intended use and other details. (CrownTonka, Public Meeting Transcript, No. 23 at pp. 92–93) Bally commented that it currently prints the manufactured date, job number, and other information on each panel. (Bally, Public Meeting Transcript, No. 23 at pp. 103–104) Lennox added that it found the proposed manufacturing date labeling requirement unclear regarding the required format for the date code, and recommended that the manufacturing date labeling requirement to be represented by the date code, which is incorporated into the unit serial number. (Lennox, No. 13
DOE clarifies that if manufacturers typically include model number information on the label of a walk-in panel, door, or refrigeration system, then that specific requirement is already satisfied for purposes of the labeling requirements being adopted in this rule, and no further action by a manufacturer would be needed. Regarding the issues raised by Lennox and Heat Controller, DOE agrees that if the date of manufacture is embedded in the serial number of a given regulated component, DOE will consider this approach to satisfy the manufacture date requirement. However, DOE emphasizes that a walk-in refrigeration system manufacturer is responsible for maintaining records to discern the date of manufacture from the serial number for each walk-in refrigeration system. DOE is specifying in its labeling requirements that if the date of manufacture is embedded in the unit's serial number, then the manufacturer of the refrigeration system must retain any relevant records to discern the date from the serial number.
DOE believes that the date of manufacture must reflect the month and year the unit was manufactured since the compliance date for the energy conservation standards for walk-in equipment is based on the date of manufacture. Labeling equipment with the date of manufacture enables DOE to readily determine whether a given unit is subject to the walk-in energy conservation standards. Quarterly dates of manufacture alone contain insufficient information to enable either DOE or the manufacturer to readily make this determination.
Heat Controller asked if a dedicated condensing unit had to be labeled with information specific to the dedicated condensing unit or information related complete refrigeration system installed in a walk-in under DOE's proposal. Heat Controller explained that they would not know where a dedicated condensing unit would end up and would not know the brand or model number under which the complete refrigeration system was sold. (Heat Controller, Public Meeting Transcript, No. 23 at p. 94) DOE clarifies that a dedicated condensing unit distributed in commerce without a matched unit cooler would only need to be labeled with information specific to the dedicated condensing unit—
In commenting on the proposed inclusion of the requirement to identify the “refrigeration system brand,” Lennox viewed this proposal as referring to the original equipment manufacturer (“OEM”) name and not the brands under which they market their products. It requested that “refrigeration system brand” be changed to “refrigeration manufacturer name” instead. Lennox stated that manufacturer name information is currently represented on all Lennox WICF equipment nameplates and DOE's proposal would pose no additional burden if implemented in this manner. (Lennox, No. 13 at p. 9) DOE agrees that either the manufacturer name or the brand name must be displayed on the label for walk-in components. In this rule, DOE is adopting labeling requirements for walk-in panels, doors, and refrigeration systems that require either the manufacturer name or brand name to be displayed on each unit.
CrownTonka requested that DOE clarify the term “permanent.” It added that making labels permanent can require different materials, different ink, different combinations of systems, with significant costs. (CrownTonka, Public Meeting Transcript, No. 23 at pp. 97–98) DOE clarifies that it is using the term “permanent” to mean that the label is not easily removable and will not become detached from the equipment or unreadable through everyday wear and tear.
In the NOPR, DOE also considered a requirement specifying the location of the permanent nameplates on doors, panels, and refrigeration systems. The NOPR proposed to require that the permanent nameplate must be visible at all times, including when the component is assembled into a complete walk-in.
ASAP and NEEA agreed that labels should be visible because it will effectively enable utilities and code inspectors to verify the installation of qualified equipment. (ASAP and NEEA, No. 19 at pp. 3–4) The CA IOUs suggested that the labels should be placed such that they would be fully visible if the walk-in were assembled in an “open air” environment, with none hidden or covered by any joints. (CA IOUs, No. 21 at p. 3)
Other commenters, however, opposed this proposed requirement. Manitowoc and Rheem noted that WICF customers do not want visible labels on their equipment, which are often client-facing. (Manitowoc, No. 10 at p. 1; Rheem, No. 18 at p. 4) Hussmann also commented that the label should not be fully visible to the customer. Hussmann expressed concern about requiring a door label that would block view of any product, but supported using a hinge label that is visible only when the door is opened. (Hussmann, Public Meeting Transcript, No. 23 at pp. 89–90) It added that it places labels in discreet but accessible locations because customers do not want to have visible labels on their equipment. (Hussmann, No. 20 at p. 2) American Panel suggested as an alternative that walk-in door labels be placed on the door frame with other product labeling and safety information. (American Panel, No. 7 at p. 1) Bally noted that if labels are affixed in a visible location they will allow dirt to collect around their periphery and will interfere with cleaning. (Bally, No. 22 at p. 3)
Heat Controller was concerned that the label visibility requirements could necessitate the placement of multiple labels on a single component. Specifically, it asked whether rooftop refrigeration systems would need a second label in the walk-in envelope that was visible from ground level. (Heat Controller, Public Meeting Transcript, No. 23 at p. 95) CrownTonka also asked that the visibility and permanence requirements of the label be clarified. (CrownTonka, Public Meeting Transcript, No. 23 at pp. 97–98)
American Panel commented that floor panels are often installed beneath a permanent floor covering (
In light of these comments, DOE is electing not to require the permanent nameplate to be visible at all times, including when the component is assembled into a complete walk-in. However, the label must be visible to the entity that purchases the walk-in component. For example, a panel may have a label on an edge that is not visible when the panel is assembled into a complete walk-in. However, the contractor that purchased the panel would be able to see the label prior to assembly. Additionally, as explained by American Panel, even if a floor panel is covered by a permanent floor covering like concrete, the floor panel must have a label that is visible prior to their integration into a fully assembled walk-in. In response to Heat Controller's comment, DOE clarifies that refrigeration systems installed on a walk-in roof would not need a second label that is visible from ground level.
Lastly, Dow commented that it understood that the NOPR did not propose to require insulation suppliers to label walk-in panels and requested that DOE clarify the role, if any, of insulation suppliers in regards to labeling. (Dow, No. 9 at pp. 2–3) DOE notes that only walk-in component manufacturers are responsible for labeling their equipment.
DOE proposed to clarify the requirements for the disclosure of efficiency information in marketing materials and to require that such marketing materials prominently display the same information required to appear on a walk-in component's permanent nameplate.
Lennox supported the reporting requirements to communicate the rated efficiency and net capacity in their literature for each model, but stated that reporting the information on each page of product literature is duplicative, adds no value to individuals reading the literature and creates an additional burden to manufacturers. Lennox requested the language be revised to remove the term “each page” and indicate that reporting of this information is required in product literature. (Lennox, No. 13 at p. 10) NCC noted that while many marketing materials provide performance information at a range of operating conditions, some marketing materials, such as leaflets, may not have space available for detailed technical data. (NCC, No. 16 at p. 3)
In response to these concerns, DOE is modifying its proposal. Marketing materials must prominently display the same information that must appear on a walk-in component's permanent nameplate. In addition, DOE is requiring manufacturers to disclose the R-value of walk-in panels, the energy consumption for walk-in doors, and the AWEF for walk-in refrigeration systems in each catalog that lists the component and all materials used to market the component. However, as suggested by Lennox, DOE is removing the term “each page” from this requirement. DOE believes that reporting efficiency information on each page of catalogs and marketing materials may be overly burdensome. DOE also notes that while this rule does not require that detailed technical data, like a range of operating conditions, be reported in all marketing materials, the rule requires that all marketing materials that list the walk-in component, including leaflets, must disclose the efficiency of that component.
AHRI, Manitowoc, Rheem, NCC, and KeepRite requested that DOE clarify that net capacity need not be included in marketing materials. These stakeholders argued that net capacity is not familiar or useful to consumers and may cause them confusion. (AHRI, No. 11 at p. 3; Manitowoc, No. 10 at p. 2; Rheem, No. 18 at pp. 6–7; NCC, No. 16 at p. 3; KeepRite, No. 17 at p. 2) AHRI, Rheem, and KeepRite also asked that DOE clarify in the final rule that only information on the proposed label is required in marketing literature. (AHRI, No. 11 at p. 3; Rheem, No. 18 at pp. 6–7; KeepRite, No. 17 at p. 2) NCC commented that manufacturers should be allowed to publish total capacity data at both rated and application conditions. (NCC, No. 16 at p. 3) AHRI and Manitowoc commented that the performance tables used in existing marketing materials are valuable to customers. (AHRI, No. 11 at p. 3; Manitowoc, No. 10 at p. 2) KeepRite asked that DOE clarify whether the current marketing methods for ratings (
This rule contains no requirement to include net capacity in marketing materials. As discussed earlier in section III.B.5.b of this final rule, DOE elected to limit its labeling requirements for panels, doors, and refrigeration systems. In addition to the limited information displayed on walk-in component labels, DOE is requiring catalogs and marketing materials for doors, panels, and refrigeration systems to include the representative energy efficiency or energy consumption for each walk-in component model listed in the literature. With respect to publishing certain application ratings, manufacturers may continue to do so. Specifically, manufacturers may publish total capacity, net capacity, system total power consumption and component power consumptions. In response to AHRI's, Manitowoc's, and KeepRite's request to retain the existing performance tables in marketing literature, DOE agrees that these tables may be retained so long as that information is consistent with this rule.
NCC also requested that DOE permit manufacturers to publish all necessary application capacities, even if some of the associated AWEF values may be below the minimum requirement. In addition, NCC asked whether accessories that are required for certain applications but may reduce the measured AWEF values can be listed on a manufacturer's marketing material with a note stating that it “may not meet DOE minimum AWEF requirements,” or similar language. (NCC, No. 16 at p. 3) Manufacturers must determine the represented AWEF for each basic model of walk-in refrigeration system in accordance with DOE's test procedure (10 CFR 431.306) and sampling requirements (10 CFR 429. 53). All walk-in refrigeration system basic models, including those basic models sold with accessories, are required to meet the applicable AWEF standards. Distribution in commerce of any covered equipment that does not comply with an applicable energy conservation standard is prohibited.
In addition to the issues discussed above, DOE examined its other obligations under EPCA in developing this final rule. These requirements are addressed in greater detail below.
EPCA requires that the test procedures DOE prescribes or amends be reasonably designed to produce test results that measure the energy efficiency, energy use, or estimated annual operating cost of a covered product during a representative average use cycle or period of use. These procedures must also not be unduly burdensome to conduct. See 42 U.S.C. 6314(a). DOE has concluded that the adopted amendments satisfy this requirement. The adopted test procedure amendments generally represent minor changes to the test procedure that do not affect the equipment required for testing and either reduce or have no effect on the time required to conduct the testing.
Section III.A.2.a of this final rule discusses the reasons for removing the method for addressing the treatment of hot gas defrost—a credit—from the test procedure. That credit represented the efficiency improvement of hot gas defrost and applied to any low-temperature refrigeration system that uses hot gas defrost. The procedure adopted in this rule will require refrigeration systems with hot gas defrost to be tested by measuring their steady-state performance with their hot gas defrost components removed and pipes reconnected according to the manufacturer's specifications, as discussed in section III.A.2.a of this document. This step represents a potential increase in test burden when testing unit coolers, matched pairs, and single-package dedicated systems with hot gas defrost. The reason for this step, as discussed in section III.A.2.a of this document, is that the evaporators of such systems cannot defrost themselves and cannot remove moisture from the
DOE does not have detailed information regarding the test facilities that manufacturers use to test refrigeration systems, or whether all manufacturers have their own test facilities. DOE expects, however, that most of these test facilities have indoor room conditioning systems to ensure that low-capacity systems, whose capacity may not exceed the indoor room thermal load and would therefore not be able to pull the indoor room temperature down to specified test conditions, could be tested. In support of this expectation, DOE notes that Figure C1 of appendix C of AHRI 1250–2009 shows a conditioning system in the indoor room of the illustrated test facility. DOE also expects that some manufacturers will develop performance representations for their hot gas defrost units using AEDMs, an approach that limits the need for actual testing of hot gas defrost unit coolers and matched-pairs. Therefore, DOE does not expect these increased requirements to add unduly to test burden.
Section III.A.2.b of this final rule discusses DOE's revisions to the test procedure for refrigeration systems with adaptive defrost. This final rule does not require manufacturers of refrigeration systems with adaptive defrost to measure and certify their performance using this feature. Manufacturers that make representations showing the benefit of adaptive defrost may continue using the testing and certification requirements for performance incorporating this feature since these provisions are not affected by this final rule. Hence, in DOE's view, there is no added test burden involved with the test procedure as finalized in this notice.
Section III.A.2.c of this final rule discusses DOE's revisions to the test procedure for unit coolers with on-cycle variable-speed fan control. Prior to this final rule, DOE allowed manufacturers to test the benefit of this feature using the DOE test procedure for unit coolers. DOE is modifying the test procedure to specify that certified ratings of systems with this feature shall exclude the credit. This approach lowers the testing burden for unit coolers with this feature because manufacturers no longer need to perform this test to obtain ratings for certification. (Manufacturers may still make representations of unit cooler efficiency with this feature; in this case, the testing burden will not change.)
In general, when modifying a given test procedure, DOE determines to what extent, if any, the new test procedure would alter the measured energy use of covered products. (42 U.S.C 6293(e)(1)). DOE has made this determination in light of the corresponding standards rulemaking that it is conducting in parallel with this test procedure rulemaking. See 81 FR 62980. (That rulemaking addresses potential energy conservation standards for certain classes of walk-in refrigeration systems.) DOE has determined that the adopted test procedure amendments could affect the measured energy use of certain covered products, but the amendments would only affect aspects related to testing after the compliance date of the amended energy conservation standards that DOE is proposing in a separate notice. The test procedure amendments would not, however, affect the current standards for any walk-in components, nor would they affect the refrigeration system standards promulgated in the June 2014 final rule with a compliance date of June 5, 2017 (
This section discusses additional comments made by interested parties during this rulemaking that were unrelated to any of DOE's specific proposals.
Lennox commented that in the current market, high temperature freezer applications (10 °F to 32 °F room temperature) are served by medium temperature condensing units. (Lennox, No. 13 at p. 2) Lennox, Rheem and AHRI pointed out the challenges that using lower GWP refrigerants pose for reaching freezer testing conditions with medium temperature condensing units. Lennox, Rheem and AHRI recommended that DOE allow manufacturers to publish application ratings below 32 °F room temperature for medium temperature WICF products without having to certify this equipment as low temperature refrigeration systems using the low-temperature test conditions. (Lennox, No. 13 at pp. 2–4; Rheem, No. 18 at p. 6; AHRI, No. 11 at p. 7) Lennox suggested that this “high temperature freezer” application may justifiably represent a third class of walk-in refrigeration systems (in addition to low-temperature and medium-temperature), which could require establishing a third set of test procedure operating conditions and standards. However, Lennox also highlighted the cost and reporting burden associated with establishing a new equipment class for the high temperature freezer application. (Lennox, No. 13 at pp. 2–4) Hussmann requested that manufacturers be allowed to market and sell medium temperature unit coolers for applications with interior temperatures less than 32 °F. Although not explicitly stated in the comment, DOE assumes Hussmann intended this as a request that DOE not require the testing and certifying of such equipment as low-temperature unit coolers. Hussmann explained that unit coolers cannot have optimized performance at both −10 °F and close-to-32 °F test conditions. (Hussmann, No. 20 at p. 3)
As noted earlier, DOE published a notice of proposed rulemaking to address potential energy conservation standards for certain classes of walk-in refrigeration equipment. In response to that rulemaking proposal, Lennox submitted additional information on the high temperature freezer issue. (See docket No. EERE–2015–BT–STD–0016, Lennox, No. 89 at pp. 2–5) In particular, Lennox provided AWEF values for operation at 10 °F room temperature showing that medium-temperature condensing units are more efficient than low-temperature condensing units at 10 °F room temperature. These values also indicated that medium-temperature condensing units were more efficient under these conditions than the low-temperature AWEF standard levels proposed by DOE (which apply for −10 °F rather than 10 °F room conditions). See 81 FR at 62982 (detailing proposed standard levels for various walk-in refrigeration equipment classes). Lennox used these data to argue that DOE's
DOE discussed the issues regarding publishing application ratings in section III.B.2. DOE acknowledges the market need for equipment to serve the high-temperature freezer market and that medium-temperature units may have better efficiency than low-temperature units in this temperature range. However, models that span multiple equipment classes are to be tested and certified as compliant with the applicable standard for each equipment class. If these equipment cannot be tested in a way that properly represents their performance characteristics, manufacturers have the option of petitioning DOE for test procedure waivers as described in 10 CFR 431.401. DOE notes the test method of commercial refrigerators, freezers, and refrigerator-freezers includes provisions for testing equipment at the lowest application product temperature. (10 CFR part 431, appendix A to subpart C) While DOE is not formalizing such an approach in this rule, the manufacturer may consider such an approach or other applicable test methods when petitioning for a waiver. DOE may also consider establishing new equipment classes and developing applicable test methods in future rulemakings.
Lennox recommended that DOE update the test procedure in section 3.3.1 of 10 CFR part 431, subpart R, appendix C to indicate that any mounted or ancillary components installed in the refrigerant flow path upstream of the distributor and downstream of the heat exchanger exit are to be removed during the test. Lennox noted the 10 °F temperature differential (“TD”) at the heat exchanger was specified as the basis for the test procedure
Regarding this issue, DOE notes that the current test conditions for testing unit coolers includes a 25 °F saturated suction temperature for medium temperature unit coolers and −20 °F for low-temperature unit coolers (see 10 CFR 431.304(12)(ii)). These conditions represent a 10 °F TD relative to the unit cooler air entering dry-bulb temperatures (see Tables 15 and 16 in 10 CFR 431.304), which is consistent with AHRI 1250–2009. DOE maintained the same test conditions in this final rule in section 3.3.1 of 10 CFR part 431, subpart R, Appendix C. There is no indication in AHRI 1250–2009, nor in the test procedure in 10 CFR 431.304, that these conditions apply to the heat exchanger rather than the suction outlet. For example, Table C2 of Appendix C of AHRI 1250–2009 lists “pressure of superheated refrigerant vapor leaving the Unit Cooler” as a measured quantity. DOE asserts that “leaving the unit cooler” is not the same as “within the heat exchanger.” The “leaving the heat exchanger” location is underscored by Figure C1 of Appendix C of the test standard, which shows the pressure measurement in the pipe after it has exited the unit cooler. AHRI 1250–2009 does not point to locations within the heat exchanger when referencing the unit cooler exit, focusing instead on the exit piping. Hence, it is not clear that the test procedure calls for 10 °F TD within the heat exchanger if there is any appreciable pressure drop between the heat exchanger and the pipe leaving the unit cooler.
Regarding Lennox's comment that the proposed UC AWEF standards used an assumed 10 °F TD at the heat exchanger, DOE's unit cooler energy modeling in support of its standards proposal did not involve any assumption regarding the removal of any mounted/ancillary components in the refrigerant line. The analysis also did not assume that there would be any significant pressure drop between the heat exchanger's suction header and the unit cooler outlet. As DOE noted in its standards proposal, DOE's unit cooler testing indicated that the unit coolers' measured capacities are lower than the nominal capacities reported in manufacturer literature. These results suggest that using a unit cooler's nominal capacity would overestimate both capacity and efficiency when measured during testing. (September 11, 2015 Public Meeting Presentation, Docket No. EERE–2015–BT–STD–0016, No. 3 at p. 40) Rheem suggested that this discrepancy may be due, in part, to the difference between the test conditions used during testing and those used when determining the nominal capacity of a unit cooler. (Docket No. EERE–2015–BT–STD–0016, Rheem, Public Meeting Transcript (September 11, 2015), No. 61 at pp. 116–117) DOE's standards analysis used performance modeling of WICF evaporator coils, calibrated with testing data, to develop an equation that related manufacturer-reported nominal capacity to the net capacity measured during unit cooler testing. (September 30, 2015 Public Meeting Presentation, Docket No. EERE–2015–BT–STD–0016, No. 7 at pp. 55 and 57) The tests conducted were consistent with AHRI 1250–2009, with the pressures measured in the exit piping leaving the unit coolers. DOE used this approach, which was vetted by the WICF Working Group, for determining unit cooler measured capacity in the subsequent analysis. (Docket No. EERE–2015–BT–STD–0016, various parties, Public Meeting Transcript (October 15, 2015), No. 62 at pp. 205–209)
Moreover, Lennox did not indicate in its submission which ancillary components should be removed. DOE believes any components that are necessary for the proper operation of a given unit cooler should remain part of that equipment when tested. DOE is aware that unit coolers equipped with hot gas defrost are likely to require additional valves in the refrigerant line. DOE discusses specific requirements regarding components installed as part of hot gas defrost units in section III.A.2.a of this final rule. DOE notes that evaporator pressure regulators (“EPRs”) are commonly installed with unit coolers in supermarket refrigeration systems, but not in dedicated condensing applications. For this reason, DOE believes that it may be acceptable to remove the EPR during unit cooler testing, but is not formalizing this approach in the test procedure at this time. DOE is not aware of any other ancillary components that are likely to be installed as indicated by the comment. If a manufacturer believes the inclusion of any ancillary components would make testing non-representative of average use cycles, it can petition DOE for a waiver in accordance with the requirements in 10 CFR 431.401.
Lennox recommended that DOE specify that during the unit cooler off-cycle fan power test, the controls shall be adjusted to 50% fan speed/duty cycle only if the controls are adjustable, and that otherwise the control default parameters shall be used. (Lennox, No. 13 at p. 5)
Lennox's suggestion, if adopted, would potentially allow fans with fixed two-speed control to use speed below 50% in unit cooler testing. During one of the Working Group meetings, Rheem stated concern with air flow distribution at low fan speed. Lennox and Rheem agreed with selecting 50% as the minimum evaporator fan turn-down for both on-cycle and off-cycle evaporator fan speed in DOE's engineering analysis supporting the standard rulemaking. (Docket No. EERE–2015–BT–STD–0016, Rheem, Lennox, Public Meeting Transcript (September 11, 2015), No. 61 at pp. 135–136) In a subsequent meeting, DOE presented analyses that used as the lowest speed for variable-speed fan operation 50% of the fan's maximum speed for both on-cycle and off-cycle in the analysis. The Working Group raised no objections to this approach. (See public meeting presentation, Docket No. EERE–2015–BT–STD–0016, No. 7 at p. 20; see also Public Meeting Transcript (September 30, 2015), Docket No. EERE–2015–BT–STD–0016, No. 67 at p. 106). Consistent with this approach, DOE used a 50% lower limit as part of its energy conservation standard rulemaking analysis. See Docket EERE–2015–BT–STD–0016, NOPR Technical Support Document, No. 70, Section 5.5.6.7 pp. 5–34 to 5–35. The energy conservation standards developed during the related negotiated rulemaking are based on the use of this 50% limit for testing. Hence, it would be inconsistent to now allow the use of a lower fan speed in tests for demonstration of compliance with the standards. Consequently, consistent with the approach laid out during the negotiated rulemaking for walk-in standards, DOE is continuing to use 50% as the lower limit of evaporator fan duty cycle and fan speed. The procedure allows two- or multi-speed fan controls to use a low (or intermediate) speed that is no less than 50% of the maximum fan speed. DOE notes that the test procedure does not prohibit a manufacturer from offering evaporator fan speed/duty cycle settings that are lower than 50% in the market, but recognizes that such fans would likely require multi-speed motors. These designs would likely use low-speed settings for the off-cycle in some installations and intermediate speed settings for the off-cycle in other installations that require these higher (intermediate) speeds to ensure more complete air mixing—but off-cycle for testing would be 50% of full-speed or higher using an intermediate speed setting.
Lennox and Rheem suggested that the WICF test procedure lacks clarification on the capacity calculation when testing a condensing unit only. Both commenters suggested using the condensing unit capacity in the AWEF calculation. Rheem proposed the condensing unit capacity should be calculated using the enthalpy of the refrigerant leaving the condensing unit (liquid line), the enthalpy of the refrigerant entering the condensing unit (suction line), and the measured refrigerant mass flow rate. (Lennox, No. 13 at p.11; Rheem, No. 18 at p.7)
DOE notes the saturated refrigerant temperatures at the unit cooler coil exit for the purposes of calculating the enthalpy leaving the unit cooler are provided in section 3.4.2.1 of the proposed 10 CFR 431 Subpart R, Appendix C (and also 10 CFR 431.304(12)(ii) of the current test procedure), and are 25 °F for medium temperature and −20 °F for low temperature. Section 3.4.1 indicates that the suction dew point conditions at the condensing unit are the “suction A” conditions provided in AHRI 1250–2009, Tables 11 through 14—these are 23 °F for medium temperature and −22 °F for low temperature. Hence, the pressure drop in the suction line is assumed to be equivalent to a 2 °F reduction in dew point temperature.
However, the unit cooler refrigerant exit temperature or superheat, neither of which were provided in the test procedure, is also required to calculate the unit cooler leaving enthalpy. The test procedure requires testing with a suction temperature entering the unit cooler (
Instead, DOE considered the approach recommended by the WICF Working Group, which DOE applied in its walk-in standards engineering analysis. During the Working Group meetings, DOE presented the use of a 6.5 °F unit cooler exit superheat assumption for calculating unit cooler capacity of low temperature dedicated condensing unit tested alone. See Docket No. EERE–2015–BT–STD–0016, DOE and Hussmann, Public Meeting Transcript (September 30, 2015), No. 67 at pp. 135. DOE developed a spreadsheet-based engineering model that calculates the performance of different WICF equipment designs and summarizes cost versus efficiency relationships for the classes covered in the energy conservation standard rulemaking. DOE made a draft version of the spreadsheet available to the Working Group members and the general public. See Docket EERE–2015–BT–STD–0016, No. 32. DOE implemented integer superheat values in the engineering spreadsheet to avoid refrigerant property calculation errors. A caucus of manufacturers later submitted their notes after reviewing the DOE-provided draft engineering spreadsheet. There was no disagreement on the selection of unit cooler superheat values as part of condensing unit calculations. See Docket EERE–2015–BT–STD–0016, No. 45) Consistent with the superheat values given in the engineering spreadsheet presented to the Working Group, DOE is adopting the same values (6 °F for low temperature, 10 °F to medium temperature) in this final rule for low temperature and medium temperature condensing units tested alone. DOE adds the prescribed superheat values to section 3.4.2.1 for purposes of calculating enthalpy leaving the unit cooler as part of the calculating gross capacity. DOE notes that the recommendations made by Lennox and Rheem for the conditions representing enthalpy at the unit cooler inlet are consistent with the engineering analysis as discussed by the WICF Working Group, for which unit cooler inlet enthalpy equals to condensing unit outlet enthalpy (
EPCA defines the R-value as the 1/K factor multiplied by the thickness of the panel, and that the K factor shall be tested based on ASTM test procedure C518–2004. (42 U.S.C. 6314(a)(9)(A)). (The K factor represents the thermal conductivity.) EPCA, however, does not specify when the R-value should be determined. As was first discussed in the 2010 NOPR and later in the 2010 SNOPR, the R-value of polyurethane and extruded polystyrene (“XPS”) insulation products can significantly decrease with time. 75 FR 185, 192–195 (January 4, 2010) and 75 FR 55067, 55075–55081 (September 9, 2010). To address this concern, two European testing standards DIN EN 13164:2009 and DIN EN 13165:2009 were included in the 2011 Test Procedure final rule in order to take foam aging into consideration when determining an R-value for these insulation types. 76 FR at 21585 (April 15, 2011). However, as discussed in its 2014 final rule addressing the use of AEDMs and certain test procedure issues with respect to walk-ins, DOE received a number of negative comments regarding this aspect of the WICF panel test procedure. See 79 FR 27388. The comments largely presented two concerns: Test burden and the availability of laboratories to conduct these tests. In these comments, multiple manufacturers suggested that no independent laboratories were capable of conducting DIN EN 13164/13165 tests. Several industry comments suggested that the cost of these tests could be excessive, particularly given the limited availability of independent test laboratories to perform these specific tests. See section III.D. of the 2014 AEDM and Test Procedure SNOPR for a full comment summary, 79 FR at 9835–9837. In response to the concerns highlighted in these comments, DOE ultimately removed the portions of the test procedure referencing DIN EN 13164/13165. 79 FR at 27405.
This issue resurfaced in the comments of EPS–IA in response to the August 2016 NOPR. EPS–IA reiterated that the R-value of XPS products reduces significantly from the time of production (“fresh”) to when it's assembled in panels (weeks or months later). Further, EPS–IA noted that panel manufacturers often accelerate the aging process by shaping or milling the XPS product during panel assembly. (EPS–IA, No. 12 at p. 2) EPS–IA argued that existing regulations allow manufacturers to report, and assemblers to rely upon, the “fresh” R-value, which is significantly higher than the actual R-value of the XPS in an assembled panel. (EPS–IA, No. 12 at p. 1) EPS–IA suggested that DOE modify the regulation to require the reporting of a stable, long-term R-value, or alternatively to define “fresh” and implement controls to ensure manufacturers are incorporating “fresh” insulation into the panels. EPS–IA also suggested that DOE adopt existing FTC R-value regulations, rather than craft its own test methodology, and noted that requiring panel manufacturers to label each unit will not address the issue. (EPS–IA, No. 12 at p. 2)
DOE agrees with EPS–IA's observation that insulation, including those types used in walk-in applications, may exhibit aging. However, in this test procedure, DOE proposed editorial changes to the test procedure for measuring R-value for walk-in cooler and freezer panels. While the test procedure does not account for insulation aging at this time, the Department may consider alternate test methods—such as those suggested by EPS–IA—for addressing insulation aging in a future energy conservation standard and test procedure rulemakings.
DOE received written comments on the capability of test laboratories performing enforcement testing. AHRI and Manitowoc recommended that DOE ensure that laboratories demonstrate repeatability on a regular basis in order to justify the results from an enforcement test. (AHRI, No. 11 at p. 4; Manitowoc, No. 10 at p. 2) NCC noted that DOE should pre-qualify laboratories on testing of WICF refrigeration systems where enforcement tests for this equipment would be performed. (NCC, No. 16 at p. 6)
DOE requires enforcement testing to be conducted at laboratories accredited to the International Organization for Standardization (“ISO”)/International Electrotechnical Commission (“IEC”), “General requirements for the competence of testing and calibration laboratories.” In addition, when conducting enforcement testing, DOE requires the specific DOE test procedure to be on the test laboratory's scope of accreditation. 10 CFR 429.110(a)(3) DOE may consider additional criteria for test laboratories conducting walk-in cooler or walk-in freezer testing in a separate rulemaking that could apply equally to both test laboratories used by manufacturers and those used by DOE for enforcement.
The CA IOUs recommended that DOE begin to address the issues with testing variable-capacity condensing units. (CA IOUs, No. 21 at pp. 4–5)
DOE is aware that ASHRAE Standard Project Committee 210 (SPC 210) has established a Working Group to address test methods issues regarding variable- and multiple-capacity condensing units. The SPC 210 Working Group includes members representing walk-in refrigeration system and compressor manufacturers who are familiar with the design, operation and testing of variable- and multiple-capacity compressors and condensing units. DOE believes it is appropriate to permit ASHRAE SPC 210 to continue with its developmental work in defining an appropriate test method for this equipment. Allowing these industry experts to analyze and develop the parameters of an approach to address this equipment will help ensure that the fundamental issues associated with testing this equipment are sufficiently vetted and addressed. Once that development work has completed and a test method has been developed, DOE will examine that method and may then consider its incorporation into the applicable regulations in a future rulemaking.
AHRI and Manitowoc recommended that DOE publish a supplemental notice of proposed rulemaking (“SNOPR”) as the next stage of this rulemaking. The written comments argued that many of the NOPR proposals did not originate from the ASRAC negotiation, and that many of the proposals do not provide a clear way forward for implementation. The comments also indicated DOE has the necessary time available to issue an SNOPR. (AHRI, No 11 at p.7; Manitowoc, No 10 at p.3)
DOE has the authority to propose amendments to its regulations that are necessary in order to properly administer standards and test procedure requirements. DOE notes the ASRAC negotiations had a limited scope that did not address many topics proposed in the NOPR. The proposals not originating from the negotiations are clearly identified in the NOPR and this final rule, and DOE believes that stakeholders had ample time to voice concerns and suggest alternative approaches. DOE has received numerous comments to its NOPR and
KPS commented that the ASRAC Working Group had little representation from WICF OEMs. KPS also suggested adding more WICF OEMs to the Working Group. (KPS, No. 8 at p.1)
Prior to the Working Group meetings, on August 5, 2015, DOE published a notice of intent to establish a Working Group for Certain Equipment Classes of Refrigeration Systems of Walk-in Coolers and Freezers to Negotiate a Notice of Proposed Rulemaking for Energy Conservation Standards. 80 FR 46521. DOE notes that the agenda for the WICF Working Group meetings included as key issues (a) proposed energy conservation standards for six classes of refrigeration systems and (b) potential impacts on installers. See id. at 46523. These issues focused on refrigeration systems and installers. As discussed in section I.B, the Working Group consisted of 12 representatives of parties having a defined stake in the outcome of the proposed standards and one DOE representative. These members included six representatives of WICF refrigeration system manufacturers (Traulsen, Lennox, Hussmann, Manitowoc, Rheem, and Emerson). In addition, a representative of the Air Conditioning Contractors of America represented walk-in installers. Other members other than DOE represented efficiency advocacy groups and utilities. (Docket EERE–2015–BT–STD–0016, No. 56 at p. 4) Hence, DOE believes that the representation was appropriate for the scope of the Working Group.
During the public meeting, AHRI asked for clarification as to whether the EPCA prescriptive requirements are still needed with the minimum energy efficiency standard DOE established. (AHRI, Public Meeting Transcript, No. 23, at p. 14)
DOE notes it is not within DOE's authority to waive the statutorily-prescribed prescriptive design requirements set forth in EPCA. (42 U.S.C. 6313(f)) EPCA does not specify an expiration date for these requirements and there is no indication in the statute that the performance-based standards would supplant the already-enacted prescriptive requirements. Hence, these prescriptive requirements continue to remain in effect.
The Office of Management and Budget (“OMB”) has determined that test procedure rulemakings do not constitute “significant regulatory actions” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, 58 FR 51735 (October 4, 1993). Accordingly, this action was not subject to review under the Executive Order by the Office of Information and Regulatory Affairs (“OIRA”) in the OMB.
The Regulatory Flexibility Act (5 U.S.C. 601
For manufacturers of walk-in equipment, the Small Business Administration (“SBA”) has set a size threshold, which defines those entities classified as “small businesses” for the purposes of the statute. DOE used the SBA's small business size standards to determine whether any small entities would be subject to the requirements of the rule. 65 FR 30848 (May 15, 2000), as amended at 65 FR 53533, 53544 (September 5, 2000) and codified at 13 CFR part 121. The size standards are listed by North American Industry Classification System (“NAICS”) code and industry description and are available at
Title III, Part C of the Energy Policy and Conservation Act of 1975 (“EPCA” or, in context, “the Act”), Public Law 94–163, as amended (codified at 42 U.S.C. 6311–6317) established the Energy Conservation Program for Certain Industrial Equipment, a program covering certain industrial equipment, including walk-ins, the subject of this document. (42 U.S.C. 6311(1)(G))
In general, this program addresses the energy efficiency of certain types of commercial and industrial equipment. Relevant provisions of the Act specifically include definitions (42 U.S.C. 6311), energy conservation standards (42 U.S.C. 6313), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C. 6315), and the authority to require information and reports from manufacturers (42 U.S.C. 6316 and 6296). Manufacturers of covered equipment must use the prescribed DOE test procedure as the basis for making representations to the public regarding the energy use or efficiency of such equipment. (42 U.S.C. 6314(d))
DOE did not receive written comments that specifically addressed impacts on small businesses or that were provided in response to the IRFA.
DOE used available public information to identify potential small manufacturers. DOE's research involved industry trade association membership directories (including those from AHRI
DOE identified forty-seven panel manufacturers, of which forty-two are the small businesses.
DOE identified forty-nine walk-in door manufacturers. Forty-five of those produce solid doors and four produce display doors. Of the forty-five solid door manufacturers, forty-two produce panels as their primary business and are considered in the category of panel manufacturers in this preamble. The remaining three solid door manufacturers are all considered small businesses. Of the four display door manufacturers, two are considered small businesses. Therefore, of the seven manufacturers that exclusively produce walk-in doors (three producing solid doors and four producing display doors), DOE determined that five are small businesses.
DOE identified ten walk-in refrigeration system manufacturers that produce equipment for one or more of the equipment classes analyzed in this proposal. All ten are domestic companies and three of the ten manufacturers are small businesses.
Lastly, DOE looked at manufacturers that assemble the complete walk-in cooler or walk-in freezer (
DOE estimates that 3,400 to 14,100 companies offer walk-in contractor services. This is a subset of the roughly 87,000 plumbing, heating, and air-conditioning contractor establishments in the United Stated.
Panel manufacturers have had to comply with standards for their panels' R-value (a measure of the insulating value) since 2009. In a previous test procedure rule, published in May 2014, DOE established a sampling plan and certification reporting requirements for walk-in panels. 79 FR 27388 (May 13, 2014). DOE is not establishing any new testing, certification, compliance, or reporting requirements for panels in this final rule. However, DOE is adopting labeling requirements for walk-in panels, and DOE is establishing that manufacturers include rating information on marketing materials for panels. For further discussion of the labeling requirements, see section III.B.5. As discussed in that section, the cost of updating marketing materials could be up to $50,000 per manufacturer. DOE calculated that the cost of updating marketing materials for a small manufacturer would be less than one percent of annual revenues; thus, this requirement would not have a significant impact on small manufacturers.
This final rule establishes new certification requirements for door manufacturers and refrigeration system manufacturers to use when certifying their basic models to DOE. Door manufacturers must certify that they meet the June 2014 standards, which have a compliance date of June 5, 2017. Manufacturers of refrigeration systems for which standards were promulgated in the June 2014 final rule, and which were not subsequently remanded by the United States Court of Appeals for the Fifth Circuit's court order, must also certify that those refrigeration systems meet the June 2014 standards, which have a compliance date of June 5, 2017. DOE is conducting a separate energy conservation standards rulemaking for those refrigeration system classes whose standards were remanded. On the compliance date for those standards, manufacturers will have to certify that those refrigeration systems meet the relevant standards using the certification requirements in this rule.
In general, DOE modified the data elements walk-in door manufacturers and walk-in refrigeration system manufacturers will be required to submit as part of a certification report indicating that all basic models distributed in commerce in the U.S. comply with the applicable standards using DOE's test procedures. These data elements include product-specific certification data describing the efficiency and characteristics of the basic model. The certification reports are submitted for each basic model, either when the requirements go into effect (for models already in distribution), or prior to when the manufacturer begins distribution of a particular basic model, and annually thereafter. Reports must be updated when a new model is introduced or a change affecting energy efficiency or use is made to an existing model resulting in a change in the certified rating. (10 CFR 429.12(a))
DOE currently requires manufacturers or their party representatives to prepare and submit certification reports using DOE's electronic Web-based tool, the Compliance Certification Management System (“CCMS”), which is the only mechanism for submitting certification reports to DOE. CCMS currently has product-specific templates that manufacturers must use when submitting certification data to DOE. See
DOE is also requiring manufacturers to label their doors with the door brand name and an application statement. DOE is requiring manufacturers to label their refrigeration systems with the brand, model number, date of manufacture, an application statement and if applicable specify if the systems is for indoor use only. For further discussion of the labeling requirements, see section III.B.5. As discussed in that section, the cost of updating marketing materials could be up to $50,000 per manufacturer.
DOE added clarifications that the entity responsible for testing, rating, and certifying is the WICF component manufacturer. Thus, WICF manufacturers that exclusively assemble the complete WICF and who use components that are certified and labelled as compliant with applicable standards, do not bear any testing and certification burdens. DOE is also establishing labeling requirements and revising the certification requirements
This section considers alternatives to the final rule. DOE has tried to minimize the reporting burden as much as possible by: (1) Accepting electronic submissions; (2) providing preformatted templates that lay out the certification and compliance requirements for each product; and (3) allowing manufacturers to group individual models into basic models for the purposes of certification to reduce the number of discrete models reported to the Department. DOE has also made efforts to address the concerns of small businesses by expanding the ability of manufacturers to use alternative efficiency determination methods (“AEDMs”) in lieu of conducting tests requiring testing equipment.
In this rule, DOE is expanding the information that manufacturers and importers of covered walk-in equipment would need to submit to the Department to certify that the equipment they are distributing in commerce in the U.S. complies with the applicable energy conservation standards. Further, this rule requires manufacturers to disclose performance information as part of the proposed labeling requirements for walk-in panels, doors, and refrigeration systems.
Certification Reports, Compliance Statements, Application for a Test Procedure Waiver, Recordkeeping for Consumer Products and Commercial/Industrial Equipment Subject to Energy or Water Conservation Standards, and Label and Marketing Material Information Disclosure.
Revision and Expansion of an Existing Collection.
Manufacturers of the covered equipment addressed in this rule are already required to certify to DOE that their equipment complies with applicable energy conservation standards. In certifying compliance, manufacturers must test their equipment according to the applicable DOE test procedures for the given equipment type, including any amendments adopted for those test procedures, or use AEDMs (as applicable) to develop the certified ratings of the basic models. The collection-of-information requirement for the certification proposals is subject to review and approval by OMB under the PRA.
Manufacturers are required to certify: (1) New basic models before distribution in commerce; (2) existing basic models, whose certified ratings remain valid, annually; (3) existing basic models, whose designs have been altered resulting in a change in rating that is more consumptive or less efficient, at the time the design change is made; and (4) previously certified basic models that have been discontinued, annually. Respondents may submit reports to the Department at any time during the year using DOE's online system.
Amendments to the existing walk-in standards are expected to result in slight changes to the information that DOE is collecting for walk-ins. Specifically, DOE is requiring that, in addition to information currently required for certification reports, door manufacturers report the door energy use as determined by the DOE test procedure, the rated power of each light, heater wire and/or other electricity consuming device and whether such device(s) has a control system. Refrigeration system manufacturers will need to report the Annual Walk-in Efficiency Factor (“AWEF”), net capacity as determined by the DOE test procedure, the configuration test for certification, and whether indoor dedicated condensing units are also certified as outdoor dedicated condensing units. Manufacturers will have to re-submit certification reports for basic models that they distribute in commerce starting on the compliance date of the amended standards.
In addition, DOE is requiring manufacturers of walk-in components to disclose their rated energy use or efficiency, in all component catalogs and marketing materials. For further discussion of the information disclosure requirements, see section III.B.5. As discussed in that section, the cost of initially updating marketing materials could be up to $50,000 per manufacturer.
Regarding the additional certification requirements, DOE estimates that the slight change in certification requirements would not result in additional burden because walk-in component manufacturers are already required to annually certify compliance with the existing standards.
DOE estimates the burden for this rule as follows:
(1) Annual Estimated Number of Respondents: 63 (47 panel manufacturers, 7 door manufacturers, and 10 refrigeration system manufacturers).
(2) Annual Estimated Number of Total Responses: 1,216 (188 for panels, 28 door, 1000 for refrigeration systems).
(3) Annual Estimated Number of Burden Hours: 1,216 (1 hour for applying and creating label and updating marketing materials).
(4) Annual Estimated Reporting and Recordkeeping Cost Burden: $91,200.
In this final rule, DOE amends its test procedure for walk-in coolers and walk-in freezers. DOE has determined that this rule falls into a class of actions that are categorically excluded from review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321
Executive Order 13132, “Federalism,” 64 FR 43255 (August 4, 1999), imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have Federalism implications. The Executive Order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and to carefully assess the necessity for such actions. The Executive Order also requires agencies to have an accountable process to
Regarding the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” 61 FR 4729 (February 7, 1996), imposes on Federal agencies the general duty to adhere to the following requirements: (1) Eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; (3) provide a clear legal standard for affected conduct rather than a general standard; and (4) promote simplification and burden reduction. Section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation (1) clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in sections 3(a) and 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, this final rule meets the relevant standards of Executive Order 12988.
Title II of the Unfunded Mandates Reform Act of 1995 (“UMRA”) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. Public Law 104–4, sec. 201 (codified at 2 U.S.C. 1531). For a regulatory action resulting in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a proposed “significant intergovernmental mandate,” and requires an agency plan for giving notice and an opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect small governments. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA. 62 FR 12820; also available at
Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105–277) requires Federal agencies to issue a Family Policymaking Assessment for any rule that may affect family well-being. This final rule will not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment.
DOE has determined, under Executive Order 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights” 53 FR 8859 (March 18, 1988), that this regulation will not result in any takings that might require compensation under the Fifth Amendment to the U.S. Constitution.
Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for agencies to review most disseminations of information to the public under guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (February 22, 2002), and DOE's guidelines were published at 67 FR 62446 (October 7, 2002). DOE has reviewed this final rule under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines.
Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to OMB, a Statement of Energy Effects for any significant energy action. A “significant energy action” is defined as any action by an agency that promulgated or is expected to lead to promulgation of a final rule, and that (1) is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (3) is designated by the Administrator of OIRA as a significant energy action. For any significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use if the regulation is implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use.
This regulatory action is not a significant regulatory action under Executive Order 12866. Moreover, it would not have a significant adverse effect on the supply, distribution, or use of energy, nor has it been designated as a significant energy action by the Administrator of OIRA. Therefore, it is not a significant energy action, and, accordingly, DOE has not prepared a Statement of Energy Effects.
Under section 301 of the Department of Energy Organization Act (Pub. L. 95–91; 42 U.S.C. 7101), DOE must comply with section 32 of the Federal Energy
The modifications to the test procedure for walk-in coolers and walk-in freezers adopted in this final rule incorporates testing methods contained in certain sections of the following commercial standards: ASTM C518–14, “Standard Test Method for Thermal Steady-State Thermal Transmission Properties by Means of the Heat Flow Meter Apparatus”; AHRI Standard 1250–2009 “Standard for Performance Rating of Walk-ins”; AHRI 420–2008, “Performance Rating of Forced-Circulation Free Delivery Unit Coolers for Refrigeration”; and ASHRAE 23.1–2010, “Methods of Testing for Performance Rating Positive Displacement Refrigerant Compressors and Condensing Units that Operate at Subcritical Temperatures of the Refrigerant”. DOE has evaluated these standards and was unable to conclude whether they fully comply with the requirements of section 32(b) of the FEAA (
As required by 5 U.S.C. 801, DOE will report to Congress on the promulgation of this rule before its effective date. The report will state that it has been determined that the rule is not a “major rule” as defined by 5 U.S.C. 804(2).
In this final rule, DOE incorporates by reference the ASTM C518–04 test method titled “Standard Test Method for Thermal Steady-State Thermal Transmission Properties by Means of the Heat Flow Meter Apparatus.” This reference standard is the method by which thermal conductivity (the “K factor”) of a walk-in panel is measured and its use is mandated by EPCA. (42 U.S.C. 6314(a)(9)(A))
Copies of ASTM C518–04 may be obtained from the American Society for Testing and Materials, 100 Barr Harbor Drive, West Conshohocken, PA 19428–2959, by phone at (610) 832–9500, or by going to
Also, DOE incorporates by reference the test standard published by AHRI, titled “Standard for Performance Rating of Walk-ins,” AHRI Standard 1250–2009. AHRI Standard 1250–2009 establishes definitions, test requirements, rating requirements, minimum data requirements for published ratings, operating requirements, marking and nameplate data, and conformance conditions for walk-in coolers and walk-in freezers. This testing standard applies to mechanical refrigeration equipment that consists of an integrated, single-package refrigeration unit, or as separate unit cooler and condensing unit components, where the condensing unit can be located either indoors or outdoors. Controls can be integral or can be added by a separate party, as long as their performance is tested and certified with the listed mechanical equipment.
Copies of AHRI Standard 1250–2009 may be purchased from AHRI at 2111 Wilson Boulevard, Suite 500, Arlington, VA 22201, or by going to
DOE also incorporates by reference AHRI 420–2008, titled “Performance Rating of Forced-Circulation Free Delivery Unit Coolers for Refrigeration.” AHRI 420–2008 establishes the following elements for forced-circulation free-delivery unit coolers for refrigeration: Definitions, test requirements, rating requirements, minimum data requirements for published ratings, marketing and nameplate data, and conformance conditions. The standard applies to factory-made, forced-circulation, free-delivery unit coolers, as defined in Section 3 of this standard, operating with a volatile refrigerant fed by either direct expansion or liquid overfeed at wet conditions, dry conditions, or both.
Copies of AHRI 420–2008 may be purchased from AHRI at 2111 Wilson Boulevard, Suite 500, Arlington, VA 22201, or by going to
Finally, DOE also incorporates by reference ASHRAE Standard 23.1–2010, entitled “Methods of Testing for Performance Rating Positive Displacement Refrigerant Compressors and Condensing Units that Operate at Subcritical Temperatures of the Refrigerant.” ASHRAE 23.1–2010 provides testing methods for rating the thermodynamic performance of positive displacement refrigerant compressors and condensing units that operate at subcritical temperatures of the refrigerant. This standard applies to all of the refrigerants listed in ASHRAE Standard 34, “Designation and Safety Classification of Refrigerants,” that fall within the scope of positive displacement refrigerant compressors and condensing units that operate at subcritical temperatures of the refrigerant, which either (a) do not have liquid injection or (b) incorporate liquid injection that is achieved by compressor motor power.
Copies of ASHRAE 23.1–2010 may be purchased from ASHRAE at 1971 Tullie Circle NE., Atlanta, GA 30329, or by going to
The Secretary of Energy has approved publication of this final rule.
Administrative practice and procedure, Confidential business information, Energy conservation, Household appliances, Reporting and recordkeeping requirements.
Administrative practice and procedure, Confidential business information, Energy conservation test procedures, Incorporation by reference, and Reporting and recordkeeping requirements.
For the reasons stated in the preamble, DOE amends parts 429 and 431 of Chapter II of Title 10, Code of Federal Regulations as set forth below:
42 U.S.C. 6291–6317; 28 U.S.C. 2461 note.
(b) * * *
(6) For each brand, the basic model number and the manufacturer's individual model number(s) in that basic model with the following exceptions: For external power supplies that are certified based on design families, the design family model number and the individual manufacturer's model numbers covered by that design family must be submitted for each brand. For distribution transformers, the basic model number or kVA grouping model number (depending on the certification method) for each brand must be submitted. For commercial HVAC, WH, and refrigeration equipment, an individual manufacturer model number may be identified as a “private model number” if it meets the requirements of § 429.7(b).
(a)
(2) For each basic model of walk-in cooler and walk-in freezer refrigeration system, the annual walk-in energy factor (AWEF) must be determined either by testing, in accordance with § 431.304 of this chapter and the provisions of this section, or by application of an AEDM that meets the requirements of § 429.70 and the provisions of this section.
(i)
(A)
(B)
(C)
(D)
(ii)
(B) For each basic model, a sample of sufficient size shall be randomly selected and tested to ensure that any represented value of AWEF or other measure of energy efficiency of a basic model for which consumers would favor higher values shall be less than or equal to the lower of:
(
And
(
And
(C) The represented value of net capacity shall be the average of the capacities measured for the sample selected.
(iii)
(A) Any represented value of AWEF or other measure of energy efficiency of a basic model for which consumers would favor higher values shall be less than or equal to the output of the AEDM and greater than or equal to the Federal standard for that basic model.
(B) The represented value of net capacity must be the net capacity simulated by the AEDM.
(3) For each basic model of walk-in cooler and walk-in freezer panel, display door, and non-display door, the R-value and/or energy consumption must be determined by testing, in accordance with § 431.304 of this chapter and the provisions of this section.
(i)
(A)
(B)
(C)
(ii)
(B) For each basic model, a sample of sufficient size shall be randomly selected and tested to ensure that—
(
(
And
(
And
(
(
And x~ is the sample mean; n is the number of samples; and x
(
And x~ is the sample mean; s is the sample standard deviation; n is the number of samples; and t
(b)
(2) Pursuant to § 429.12(b)(13), a certification report must include the following public product-specific information:
(i) For doors: The door type, R-value of the door insulation, and a declaration that the manufacturer has incorporated the applicable design requirements. In addition, for those walk-in coolers and walk-in freezers with transparent reach-in doors and windows, the glass type of the doors and windows (
(ii) For walk-in cooler and walk-in freezer panels: The R-value of the insulation.
(iii) For walk-in cooler and walk-in freezer refrigeration systems: The installed motor's functional purpose (
(3) Pursuant to § 429.12(b)(13), starting on June 5, 2017, a certification report must include the following public product-specific information in addition to the information listed in paragraph (b)(2) of this section:
(i) For walk-in cooler and walk-in freezer doors: The door energy consumption and rated surface area in square feet.
(ii) For refrigeration systems that are medium-temperature dedicated condensing units, medium-temperature single-package dedicated systems, or medium-temperature matched systems: The refrigeration system AWEF, net capacity, the configuration tested for certification (
(4) Pursuant to § 429.12(b)(13), starting on June 5, 2017, a certification report must include the following product-specific information in addition to the information listed in paragraphs (b)(2) and (3) of this section:
(i) For walk-in cooler and walk-in freezer doors: the rated power of each light, heater wire, and/or other electricity consuming device associated with each basic model of display and non-display door; and whether such device(s) has a timer, control system, or other demand-based control reducing the device's power consumption.
(5) When certifying compliance to the AWEF refrigeration standards for WICF refrigeration systems except those specified in (b)(3)(ii) of this section, a certification report must include the following public product-specific information in addition to the information listed in paragraph (b)(2) of this section: For refrigeration systems that are low-temperature dedicated condensing units, low-temperature matched systems, low-temperature single-package dedicated systems, or medium and low-temperature unit coolers: The refrigeration system AWEF, net capacity, the configuration tested for certification (
(e) * * *
(2) For automatic commercial ice makers; commercial refrigerators, freezers, and refrigerator-freezers; refrigerated bottled or canned vending machines; commercial air conditioners and heat pumps; commercial packaged boilers; commercial warm air furnaces; commercial water heating equipment; and walk-in cooler and walk-in freezer refrigeration systems, DOE will use an initial sample size of not more than four units and follow the sampling plans in appendix B of this subpart (Sampling Plan for Enforcement Testing of Covered Equipment and Certain Low-Volume Covered Products).
(q)
(2)
(i) If the certified net capacity is found to be valid, the certified net capacity will be used as the basis for calculating the AWEF of the basic model.
(ii) If the certified net capacity is found to be invalid, the average measured net capacity will serve as the basis for calculating the annual energy consumption for the basic model.
(3)
(i) If the certified surface area is found to be valid, the certified surface area will be used as the basis for calculating the maximum energy consumption (kWh/day) of the basic model.
(ii) If the certified surface area is found to be invalid, the average measured surface area will serve as the basis for calculating the maximum energy consumption (kWh/day) of the basic model.
(4) For each basic model of walk-in cooler and walk-in freezer door, DOE will calculate the door's energy consumption using the power listed on the nameplate of each electricity consuming device shipped with the door. If an electricity consuming device shipped with a walk-in door does not have a nameplate or such nameplate does not list the device's power, then DOE will use the device's “rated power” included in the door's certification report.
42 U.S.C. 6291–6317; 28 U.S.C. 2461 note.
The revision and additions read as follows:
(1) Includes 1 or more compressors, a condenser, and one refrigeration circuit; and
(2) Is designed to serve one refrigerated load.
(1) A dedicated condensing unit;
(2) A single-package dedicated system; or
(3) A matched refrigeration system.
(1) A dedicated condensing refrigeration system (as defined in this section); or
(2) A unit cooler.
(1) Be distributed in commerce with an insulated enclosure consisting of panels and door(s) such that the assembled product has a refrigerating capacity of at least 100 Btu/h per cubic foot of enclosed internal volume;
(2) Be a unit cooler having an evaporator coil that is at least four-and-one-half (4.5) feet in height and whose height is at least one-and-one-half (1.5) times the width. The height of the evaporator coil is measured perpendicular to the tubes and is also the fin height, while its width is the finned length parallel to the tubes, as illustrated in Figure 1; or
(3) Be a dedicated condensing unit that is distributed in commerce exclusively with a unit cooler meeting description (2) or with an evaporator that is not a unit cooler,
The additions and revisions read as follows:
(a)
(b) * * *
(1) ANSI/AHRI Standard 420–2008 (“AHRI 420–2008”), “Performance Rating of Forced-Circulation Free-Delivery Unit Coolers for Refrigeration,” Copyright 2008, IBR approved for appendix C to subpart R of part 431.
(2) AHRI Standard 1250P (I–P)–2009 (“AHRI 1250–2009”), “Standard for Performance Rating of Walk-in Coolers and Freezers, (including Errata sheet dated December 2015), copyright 2009, except Table 15 and Table 16. IBR approved for appendix C to subpart R of part 431.
(c)
(1) ANSI/ASHRAE Standard 23.1–2010, (“ASHRAE 23.1–2010”), “Methods of Testing for Rating the Performance of Positive Displacement Refrigerant Compressors and Condensing Units that Operate at Subcritical Temperatures of the Refrigerant,” ANSI approved January 28, 2010, IBR approved for appendix C to subpart R of part 431.
(2) [Reserved]
(d) * * *
(1) * * * IBR approved for appendix B to subpart R of part 431.
(b) Determine the energy efficiency and/or energy consumption of the specified walk-in cooler and walk-in freezer components by conducting the appropriate test procedure as follows:
(1) Determine the U-factor, conduction load, and energy use of walk-in cooler and walk-in freezer display panels by conducting the test procedure set forth in appendix A to this subpart.
(2) Determine the energy use of walk-in cooler and walk-in freezer display doors and non-display doors by conducting the test procedure set forth in appendix A to this subpart.
(3) Determine the R-value of walk-in cooler and walk-in freezer non-display panels and non-display doors by conducting the test procedure set forth in appendix B to this subpart.
(4) Determine the AWEF and net capacity of walk-in cooler and walk-in freezer refrigeration systems by conducting the test procedure set forth in appendix C to this subpart.
(a) Panel nameplate—(1) Required information. The permanent nameplate of a walk-in cooler or walk-in freezer panel for which standards are prescribed in § 431.306 must be marked clearly with the following information:
(i) The panel brand or manufacturer; and
(ii) One of the following statements, as appropriate:
(A) “This panel is designed and certified for use in walk-in cooler applications.”
(B) “This panel is designed and certified for use in walk-in freezer applications.”
(C) “This panel is designed and certified for use in walk-in cooler and walk-in freezer applications.”
(2) Display of required information. All orientation, spacing, type sizes, typefaces, and line widths to display this required information must be the same as or similar to the display of the other performance data included on the panel's permanent nameplate. The permanent nameplate must be visible unless the panel is assembled into a completed walk-in.
(b) Door nameplate—(1) Required information. The permanent nameplate of a walk-in cooler or walk-in freezer door for which standards are prescribed in § 431.306 must be marked clearly with the following information:
(i) The door brand or manufacturer; and
(ii) One of the following statements, as appropriate:
(A) “This door is designed and certified for use in walk-in cooler applications.”
(B) “This door is designed and certified for use in walk-in freezer applications.”
(C) “This door is designed and certified for use in walk-in cooler and walk-in freezer applications.”
(2) Display of required information. All orientation, spacing, type sizes, typefaces, and line widths to display this required information must be the same as or similar to the display of the other performance data included on the door's permanent nameplate. The permanent nameplate must be visible unless the door is assembled into a completed walk-in.
(c) Refrigeration system nameplate—(1) Required information. The permanent nameplate of a walk-in cooler or walk-in freezer refrigeration system for which standards are prescribed in § 431.306 must be marked clearly with the following information:
(i) The refrigeration system brand or manufacturer;
(ii) The refrigeration system model number;
(iii) The date of manufacture of the refrigeration system (if the date of manufacture is embedded in the unit's serial number, then the manufacturer of the refrigeration system must retain any relevant records to discern the date from the serial number);
(iv) If the refrigeration system is a dedicated condensing refrigeration system, and is not designated for outdoor use, the statement, “Indoor use only” (for a matched pair this must appear on the condensing unit); and
(v) One of the following statements, as appropriate:
(A) “This refrigeration system is designed and certified for use in walk-in cooler applications.”
(B) “This refrigeration system is designed and certified for use in walk-in freezer applications.”
(C) “This refrigeration system is designed and certified for use in walk-in cooler and walk-in freezer applications.”
(2) Process cooling refrigeration systems. The permanent nameplate of a process cooling refrigeration system (as defined in § 431.302) must be marked clearly with the statement, “This refrigeration system is designed for use exclusively in walk-in cooler and walk-in freezer process cooling refrigeration applications.”
(3) Display of required information. All orientation, spacing, type sizes, typefaces, and line widths to display this required information must be the same as or similar to the display of the other performance data included on the refrigeration system's permanent nameplate. The model number must be in one of the following forms: “Model ___” or “Model number ___” or “Model No. ___.” The permanent nameplate must be visible unless the refrigeration system is assembled into a completed walk-in.
(d) A manufacturer may not mark the nameplate of a component with the required information if the manufacturer has not submitted a certification of compliance for the relevant model.
(e) Disclosure of efficiency information in marketing materials. Each catalog that lists the component and all materials used to market the component must include:
(1) For panels—The R-value in the form “R-value__.”
(2) For doors—The energy consumption in the form “EC__kWh/day.”
(3) For those refrigeration system for which standards are prescribed—The AWEF in the form “AWEF __.”
(4) The information that must appear on a walk-in cooler or walk-in freezer component's permanent nameplate pursuant to paragraphs (a)–(c) of this section must also be prominently displayed in each catalog that lists the component and all materials used to market the component.
The revisions and additions read as follows:
3.2 [Reserved]
3.3 [Reserved]
3.4
3.5
3.6
This appendix covers the test requirements used to measure the R-value of non-display panels and non-display doors of a walk-in cooler or walk-in freezer.
The definitions contained in § 431.302 apply to this appendix.
3.1
4.1 The R value shall be the 1/K factor multiplied by the thickness of the panel.
4.2 The K factor shall be based on ASTM C518 (incorporated by reference; see § 431.303).
4.3 For calculating the R value for freezers, the K factor of the foam at 20 ± 1 degrees Fahrenheit (average foam temperature) shall be used. Test results from a test sample 1 ±0.1-inches in thickness may be used to determine the R value of panels with various foam thickness as long as the foam is of the same final chemical form.
4.4 For calculating the R value for coolers, the K factor of the foam at 55 ± 1 degrees Fahrenheit (average foam temperature) shall be used. Test results from a test sample 1 ± 0.1-inches in thickness may be used to determine the R value of panels with various foam thickness as long as the foam is of the same final chemical form.
4.5 Foam shall be tested after it is produced in its final chemical form. For foam produced inside of a panel (“foam-in-place”), “final chemical form” means the foam is cured as intended and ready for use as a finished panel. For foam produced as board stock (typically polystyrene), “final chemical form” means after extrusion and ready for assembly into a panel or after assembly into a panel. Foam from foam-in-place panels must not include any structural members or non-foam materials. Foam produced as board stock may be tested prior to its incorporation into a final panel. A test sample 1 ± 0.1-inches in thickness must be taken from the center of a panel and any protective skins or facers must be removed. A high-speed band-saw and a meat slicer are two types of recommended cutting tools. Hot wire cutters or other heated tools must not be used for cutting foam test samples. The two surfaces of the test sample that will contact the hot plate assemblies (as defined in ASTM C518 (incorporated by reference, see § 431.303)) must both maintain ±0.03 inches flatness tolerance and also maintain parallelism with respect to one another within ±0.03 inches. Testing must be completed within 24 hours of samples being cut for testing.
4.6 Internal non-foam member and/or edge regions shall not be considered when testing in accordance with ASTM C518 (incorporated by reference, see § 431.303).
4.7 For panels consisting of two or more layers of dissimilar insulating materials (excluding facers or protective skins), test each material as described in sections 4.1 through 4.6 of this appendix. For a panel with N layers of insulating material, the overall R-Value shall be calculated as follows:
This appendix covers the test requirements used to determine the net capacity and the AWEF of the refrigeration system of a walk-in cooler or walk-in freezer.
The definitions contained in § 431.302 and AHRI 1250–2009 (incorporated by reference; see § 431.303) apply to this appendix. When definitions in standards incorporated by reference are in conflict or when they conflict with this section, the hierarchy of precedence shall be in the following order: § 431.302, AHRI 1250–2009, and then either AHRI 420–2008 (incorporated by reference; see § 431.303) for unit coolers or ASHRAE 23.1–2010 (incorporated by reference; see § 431.303) for dedicated condensing units.
Determine the Annual Walk-in Energy Factor (AWEF) and net capacity of walk-in cooler and walk-in freezer refrigeration systems by conducting the test procedure set forth in AHRI 1250–2009 (incorporated by reference; see § 431.303), with the modifications to that test procedure provided in this section. When standards that are incorporated by reference are in conflict or when they conflict with this section, the hierarchy of precedence shall be in the following order: § 431.302, AHRI 1250–2009, and then either AHRI 420–2008 (incorporated by reference; see § 431.303) or ASHRAE 23.1–2010 (incorporated by reference; see § 431.303).
3.1.
When conducting testing in accordance with AHRI 1250–2009 (incorporated by reference; see § 431.303), the following modifications must be made.
3.1.1. In Table 1, Instrumentation Accuracy, refrigerant temperature measurements shall have a tolerance of ±0.5 F for unit cooler in/out, ±1.0 F for all other temperature measurements.
3.1.2. In Table 2, Test Operating and Test Condition Tolerances for Steady-State Test, electrical power frequency shall have a Test Condition Tolerance of 1 percent.
3.1.3. In Table 2, the Test Operating Tolerances and Test Condition Tolerances for Air Leaving Temperatures shall be deleted.
3.1.4. In Tables 2 through 14, the Test Condition Outdoor Wet Bulb Temperature requirement and its associated tolerance apply only to units with evaporative cooling.
3.1.5. Tables 15 and 16 shall be modified to read as follows:
When conducting testing in accordance with appendix C of AHRI 1250–2009 (incorporated by reference; see § 431.303), the following modifications must be made.
3.2.1. In appendix C, section C3.1.6, any refrigerant temperature measurements upstream and downstream of the unit cooler may use sheathed sensors immersed in the flowing refrigerant instead of thermometer wells.
3.2.2. It is not necessary to perform composition analysis of refrigerant (appendix C, section C3.3.6) or refrigerant oil concentration testing (appendix C, section C3.4.6).
3.2.3. In appendix C, section C3.4.5, for verification of sub-cooling downstream of mass flow meters, only the sight glass and a temperature sensor located on the tube surface under the insulation are required.
3.2.4. In appendix C, section C3.5, regarding unit cooler fan power measurements, for a given motor winding configuration, the total power input shall be measured at the highest nameplate voltage. For three-phase power, voltage imbalances shall be no more than 2 percent from phase to phase.
3.2.5. In the test setup (appendix C, section C8.3), the liquid line and suction line shall be constructed of pipes of the manufacturer-specified size. The pipe lines shall be insulated with a minimum total thermal resistance equivalent to
3.3.
3.3.1. For unit coolers tested alone, use test procedures described in AHRI 1250–2009 (incorporated by reference; see § 431.303) for testing unit coolers for use in mix-match system ratings, except that for the test conditions in Tables 15 and 16, use the Suction A saturation condition test points only. Also for unit coolers tested alone, use the calculations in section 7.9 to determine AWEF and net capacity described in AHRI 1250–2009 for unit coolers matched to parallel rack systems.
3.3.2. In appendix C, section C.13, the version of AHRI Standard 420 used for test methods, requirements, and procedures shall be AHRI 420–2008 (incorporated by reference; see § 431.303).
3.3.3. Use appendix C, section C10 of AHRI 1250–2009 for off-cycle evaporator fan testing, with the exception that evaporator fan controls using periodic stir cycles shall be adjusted so that the greater of a 50% duty cycle (rather than a 25% duty cycle) or the manufacturer default is used for measuring off-cycle fan energy. For adjustable-speed controls, the greater of 50% fan speed (rather than 25% fan speed) or the manufacturer's default fan speed shall be used for measuring off-cycle fan energy. Also, a two-speed or multi-speed fan control may be used as the qualifying evaporator fan control. For such a control, a fan speed no less than 50% of the speed used in the maximum capacity tests shall be used for measuring off-cycle fan energy.
3.3.4. Use appendix C, section C11 of AHRI 1250–2009 (incorporated by reference, see § 431.303) for defrost testing. The Frost Load Condition Defrost Test (C11.1.1) is optional.
3.3.4.1. If the frost load condition defrost test is performed:
3.3.4.1.1 Operate the unit cooler at the dry coil conditions as specified in appendix
3.3.4.1.2 Operate the unit cooler at the frost load conditions as specified in appendix C, sections C11.1 and C11.1.1 to obtain frosted coil defrost energy, DF
3.3.4.1.3 The number of defrosts per day, N
3.3.4.1.4 Use appendix C, equations C13 and C14 in section C11.3 to calculate, respectively, the daily average defrost energy, DF, in W-h and the daily contribution of the load attributed to defrost Q
3.3.4.1.5 The defrost adequacy requirements in appendix C, section C11.3 shall apply.
3.3.4.2 If the frost load test is not performed:
3.3.4.2.1 Operate the unit cooler at the dry coil conditions as specified in appendix C, section C11.1 to obtain dry coil defrost energy, DF
3.3.4.2.2 The frost load defrost energy, DF
3.3.4.2.3 The number of defrosts per day N
3.3.4.2.4 Use appendix C, equation C13 in section C11.3 to calculate the daily average defrost energy, DF, in W-h.
3.3.4.2.5 The daily contribution of the load attributed to defrost Q
3.3.5. If a unit has adaptive defrost, use appendix C, section C11.2 of AHRI 1250–2009 as follows:
3.3.5.1. When testing to certify to the energy conservation standards in § 431.306, do not perform the optional test for adaptive or demand defrost in appendix C, section C11.2.
3.3.5.2. When determining the represented value of the calculated benefit for the inclusion of adaptive defrost, conduct the optional test for adaptive or demand defrost in appendix C, section C11.2 to establish the maximum time interval allowed between dry coil defrosts. If this time is greater than 24 hours, set its value to 24 hours. Then, calculate N
3.3.6. For matched refrigeration systems and single-package dedicated systems, calculate the AWEF using the calculations in AHRI 1250–2009 (incorporated by reference; see § 431.303), section 7.4, 7.5, 7.6, or 7.7, as applicable.
3.3.7. For unit coolers tested alone, calculate the AWEF and net capacity using the calculations in AHRI 1250–2009, (incorporated by reference; see § 431.303), section 7.9. If the unit cooler has variable-speed evaporator fans that vary fan speed in response to load, then:
3.3.7.1. When testing to certify compliance with the energy conservation standards in § 431.306, fans shall operate at full speed during on-cycle operation. Do not conduct the calculations in AHRI 1250–2009, section 7.9.3. Instead, use AHRI 1250–2009, section 7.9.2 to determine the system's AWEF.
3.3.7.2. When calculating the benefit for the inclusion of variable-speed evaporator fans that modulate fan speed in response to load for the purposes of making representations of efficiency, use AHRI 1250–2009, section 7.9.3 to determine the system AWEF.
3.4.1. Refer to appendix C, section C.12 of AHRI 1250–2009 (incorporated by reference; see § 431.303), for the method of test for dedicated condensing units. The version of ASHRAE Standard 23 used for test methods, requirements, and procedures shall be ANSI/ASHRAE Standard 23.1–2010 (incorporated by reference; see § 431.303). When applying this test method, use the applicable test method modifications listed in sections 3.1 and 3.2 of this appendix. For the test conditions in AHRI 1250–2009, Tables 11, 12, 13, and 14, use the Suction A condition test points only.
3.4.2. Calculate the AWEF and net capacity for dedicated condensing units using the calculations in AHRI 1250–2009 (incorporated by reference; see § 431.303) section 7.8. Use the following modifications to the calculations in lieu of unit cooler test data:
3.4.2.1. For calculating enthalpy leaving the unit cooler to calculate gross capacity, (a) The saturated refrigerant temperature (dew point) at the unit cooler coil exit, T
3.4.2.2. The on-cycle evaporator fan power in watts, EF
For medium-temperature systems (coolers), EF
For low-temperature systems (freezers), EF
3.4.2.3. The off-cycle evaporator fan power in watts, EF
EF
3.4.2.4. The daily defrost energy use in watt-hours, DF, shall be calculated as follows:
For medium-temperature systems (coolers), DF = 0
For low-temperature systems (freezers), DF = 8.5 × 10
3.4.2.5. The daily defrost heat load contribution in Btu, Q
For medium-temperature systems (coolers), Q
For low-temperature systems (freezers), Q
3.5.1 Hot Gas Defrost Dedicated Condensing Units Tested Alone: Test these units as described in section 3.4 of this appendix for electric defrost dedicated condensing units that are not matched for
3.5.2 Hot Gas Defrost Matched Systems, Single-package Dedicated Systems, and Unit Coolers Tested Alone: Test these units as described in section 3.3 of this appendix for electric defrost matched systems, single-package dedicated systems, and unit coolers tested alone, but do not conduct defrost tests as described in sections 3.3.4 and 3.3.5 of this appendix. Calculate daily defrost energy use as described in section 3.4.2.4 of this appendix. Calculate daily defrost heat contribution as described in section 3.4.2.5 of this appendix.
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing amendments to the National Emission Standards for Hazardous Air Pollutants (NESHAP) for the Manufacturing of Nutritional Yeast source category. The proposed amendments address the results of the residual risk and technology reviews (RTRs) conducted as required under the Clean Air Act (CAA) as well as other actions deemed appropriate during the review of these standards. The proposed amendments include revising the form of the fermenter volatile organic compounds (VOC) emission limits, changing the testing and monitoring requirements, and updating the reporting and recordkeeping requirements.
For questions about this proposed action, contact Allison Costa, Sector Policies and Programs Division (Mail Code E140), Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, Research Triangle Park, North Carolina 27711; telephone number: (919) 541–1322; fax number: (919) 541–3470; and email address:
Please note that any updates made to any aspect of the hearing, including whether or not a hearing will be held, will be posted online at
Table 1 of this preamble lists the NESHAP and the associated regulated industrial source category that is the subject of this proposal. Table 1 is not intended to be exhaustive, but rather provides a guide for readers regarding the entities that this proposed action is likely to affect. The proposed standards, once promulgated, will be directly applicable to the affected sources. Federal, state, local, and tribal government entities would not be affected by this proposed action. As defined in the
In addition to being available in the docket, an electronic copy of this action is available on the Internet. Following signature by the EPA Administrator, the EPA will post a copy of this proposed action at
Section 112 of the CAA establishes a two-stage regulatory process to address emissions of hazardous air pollutants (HAP) from stationary sources. In the first stage, after the EPA has identified categories of sources emitting one or more of the HAP listed in CAA section 112(b), CAA section 112(d) requires us to promulgate technology-based NESHAP for those sources. “Major sources” are those that emit or have the potential to emit 10 tons per year (tpy) or more of a single HAP or 25 tpy or more of any combination of HAP. For major sources, the technology-based NESHAP must reflect the maximum degree of emission reductions of HAP achievable (after considering cost, energy requirements and non-air quality health and environmental impacts) and are commonly referred to as maximum achievable control technology (MACT) standards.
MACT standards must reflect the maximum degree of emissions reduction achievable through the application of measures, processes, methods, systems or techniques, including, but not limited to, measures that: (1) Reduce the volume of or eliminate pollutants through process changes, substitution of materials, or other modifications; (2) enclose systems or processes to eliminate emissions; (3) capture or treat pollutants when released from a process, stack, storage, or fugitive emissions point; (4) are design, equipment, work practice, or operational standards (including requirements for operator training or certification); or (5) are a combination of the above. CAA section 112(d)(2)(A)–(E). The MACT standards may take the form of design, equipment, work practice, or operational standards where the EPA first determines either that: (1) A pollutant cannot be emitted through a conveyance designed and constructed to emit or capture the pollutant, or that any requirement for, or use of, such a conveyance would be inconsistent with law; or (2) the application of measurement methodology to a particular class of sources is not practicable due to technological and economic limitations. CAA section 112(h)(1)–(2).
The MACT “floor” is the minimum control level allowed for MACT standards promulgated under CAA section 112(d)(3) and may not be based on cost considerations. For new sources, the MACT floor cannot be less stringent than the emissions control that is achieved in practice by the best-controlled similar source. The MACT floor for existing sources can be less stringent than floors for new sources, but not less stringent than the average emissions limitation achieved by the best-performing 12 percent of existing sources in the category or subcategory (or the best-performing five sources for categories or subcategories with fewer than 30 sources). In developing MACT standards, the EPA must also consider control options that are more stringent than the floor. We may establish standards more stringent than the floor based on considerations of the cost of achieving the emission reductions, any non-air quality health and environmental impacts, and energy requirements.
The EPA is then required to review these technology-based standards and revise them “as necessary (taking into account developments in practices, processes, and control technologies)” no less frequently than every 8 years. CAA section 112(d)(6). In conducting this review, the EPA is not required to recalculate the MACT floor.
The second stage in standard-setting focuses on reducing any remaining (
Section 112(f)(2) of the CAA requires the EPA to determine for source categories subject to MACT standards whether the emission standards provide an ample margin of safety to protect public health. Section 112(f)(2)(B) of the CAA expressly preserves the EPA's use of the two-step process for developing standards to address any residual risk and the Agency's interpretation of “ample margin of safety” developed in the
The first step in the process of evaluating residual risk is the determination of acceptable risk. If risks are unacceptable, the EPA cannot consider cost in identifying the emissions standards necessary to bring risks to an acceptable level. The second step is the determination of whether standards must be further revised in order to provide an ample margin of safety to protect public health. The ample margin of safety is the level at which the standards must be set, unless an even more stringent standard is necessary to prevent, taking into consideration costs, energy, safety, and other relevant factors, an adverse environmental effect.
The Agency in the Benzene NESHAP concluded that “the acceptability of risk under section 112 is best judged on the basis of a broad set of health risk measures and information” and that the “judgment on acceptability cannot be reduced to any single factor.” Benzene NESHAP at 38046. The determination of what represents an “acceptable” risk is based on a judgment of “what risks are acceptable in the world in which we live” (Risk Report at 178, quoting
In the Benzene NESHAP, we stated that “EPA will generally presume that if the risk to [the maximum exposed] individual is no higher than approximately one in 10 thousand, that risk level is considered acceptable.” 54 FR at 38045, September 14, 1989. We discussed the maximum individual lifetime cancer risk (or maximum individual risk (MIR)) as being “the estimated risk that a person living near a plant would have if he or she were exposed to the maximum pollutant concentrations for 70 years.”
Understanding that there are both benefits and limitations to using the MIR as a metric for determining acceptability, we acknowledged in the Benzene NESHAP that “consideration of maximum individual risk * * * must take into account the strengths and weaknesses of this measure of risk.”
“[p]articular attention will also be accorded to the weight of evidence presented in the risk assessment of potential carcinogenicity or other health effects of a pollutant. While the same numerical risk may be estimated for an exposure to a pollutant judged to be a known human carcinogen, and to a pollutant considered a possible human carcinogen based on limited animal test data, the same weight cannot be accorded to both estimates. In considering the potential public health effects of the two pollutants, the Agency's judgment on acceptability, including the MIR, will be influenced by the greater weight of evidence for the known human carcinogen.”
“[i]n establishing a presumption for MIR, rather than a rigid line for acceptability, the Agency intends to weigh it with a series of other health measures and factors. These include the overall incidence of cancer or other serious health effects within the exposed population, the numbers of persons exposed within each individual lifetime risk range and associated incidence within, typically, a 50 kilometers (km) exposure radius around facilities, the science policy assumptions and estimation uncertainties associated with the risk measures, weight of the scientific evidence for human health effects, other quantified or unquantified health effects, effects due to co-location of facilities, and co-emission of pollutants.”
As noted earlier, in
CAA section 112(f)(2) requires the EPA to determine, for source categories
According to CAA section 112(f)(2)(A), if the MACT standards for HAP “classified as a known, probable, or possible human carcinogen do not reduce lifetime excess cancer risks to the individual most exposed to emissions from a source in the category or subcategory to less than one in one million,” the EPA must promulgate residual risk standards for the source category (or subcategory), as necessary to provide an ample margin of safety to protect public health. In doing so, the EPA may adopt standards equal to existing MACT standards if the EPA determines that the existing standards (
The CAA does not specifically define the terms “individual most exposed,” “acceptable level,” and “ample margin of safety.” In the Benzene NESHAP, 54 FR 38044, September 14, 1989, we stated as an overall objective:
In protecting public health with an ample margin of safety under section 112, EPA strives to provide maximum feasible protection against risks to health from hazardous air pollutants by (1) protecting the greatest number of persons possible to an individual lifetime risk level no higher than approximately 1-in-1 million and (2) limiting to no higher than approximately 1-in-10 thousand [
The Agency further stated that “[t]he EPA also considers incidence (the number of persons estimated to suffer cancer or other serious health effects as a result of exposure to a pollutant) to be an important measure of the health risk to the exposed population. Incidence measures the extent of health risks to the exposed population as a whole, by providing an estimate of the occurrence of cancer or other serious health effects in the exposed population.”
In the ample margin of safety decision process, the Agency again considers all of the health risks and other health information considered in the first step, including the incremental risk reduction associated with standards more stringent than the MACT standard or a more stringent standard that the EPA has determined is necessary to ensure risk is acceptable. In the ample margin of safety analysis, the Agency considers additional factors, including costs and economic impacts of controls, technological feasibility, uncertainties, and any other relevant factors. Considering all of these factors, the Agency will establish the standard at a level that provides an ample margin of safety to protect the public health, as required by CAA section 112(f). 54 FR 38046, September 14, 1989.
In the original 1992 list of sources under CAA section 112(c)(1), the EPA defined the Baker's Yeast Manufacturing source category as including any facility engaged in the manufacture of baker's yeast by fermentation (both active dry yeast and compressed yeast) (57 FR 31576). The EPA explained that the category included, but was not limited to, the following manufacturing process units: Fermentation vessels and the drying and packaging system. The original source category was renamed to Manufacturing of Nutritional Yeast in 1998 to clarify that the source category covered the manufacturing of yeast, not its use in facilities such as breweries or bakeries. Both “baker's yeast” and “nutritional yeast” are common names for
Only facilities that are located at or are part of a major source of HAP emissions are subject to the Manufacturing of Nutritional Yeast NESHAP; area sources of HAP are not subject to the rule. The HAP emitted by nutritional yeast manufacturing facilities is acetaldehyde, a probable carcinogen. In 2016, there are four nutritional yeast manufacturing facilities that are subject to the NESHAP.
The affected sources at nutritional yeast manufacturing facilities are the collection of equipment used to manufacture
Currently, the fermenters are subject to batch average VOC emission limits that differ for each fermentation stage, and which must be met for 98 percent of all batches in each fermentation stage on a rolling 12-month basis. VOC is used as a surrogate for the HAP of interest, acetaldehyde. The batch
In the current NESHAP, facilities can continuously monitor either the VOC concentration in the fermenter exhaust or the brew ethanol concentration in the fermenter liquid to determine compliance with the emission limits. If a facility monitors brew ethanol concentration, it must conduct an annual performance test to determine the correlation between the brew ethanol concentration in the fermenter liquid and the VOC concentration in the fermenter exhaust gas.
The EPA visited three nutritional yeast manufacturing facilities during the development of the NESHAP. Those facilities were the American Yeast and AB Mauri Fleischmann's Yeast facilities in Memphis, Tennessee, which we visited in December 2015, and the Red Star Yeast facility in Cedar Rapids, Iowa, which we visited in June 2016. We also held a conference call with the Minn-Dak Wahpeton facility, located in Wahpeton, North Dakota, in May 2016. The EPA discussed the specific yeast fermentation processes employed by each facility, including a discussion of the number and design of their fermenters and associated emission points, the process controls and monitors used, unregulated emission sources, and other aspects of facility operations. The site visits and conference call are documented in separate memoranda: “Site Visit Report—American Yeast Corporation, Memphis Plant,” “Site Visit Report—AB Mauri Fleischmann's Yeast, Memphis Plant,” “Site Visit Report—Red Star Yeast, Cedar Rapids, IA,” and “Notes from May 6, 2016 Conference Call Between the EPA and Minn-Dak Wahpeton,” which are available in the docket for this action.
The EPA used information from the National Emissions Inventory (NEI) and the RACT/BACT/LAER Clearinghouse (RBLC) to support this proposed rulemaking. We used the NEI emissions and supporting data to develop the modeling file for the risk review. The EPA utilized the RBLC to identify additional control technologies for the technology review. See sections III.A, III.C, and IV.C of this preamble for further details on the use of these sources of information.
In this section, we describe the analyses performed to support the proposed decisions for the RTR and other issues addressed in this proposal.
The EPA conducted a risk assessment that provides estimates of the MIR posed by the HAP emissions from each source in the source category, the hazard index (HI) for chronic exposures to HAP with the potential to cause non-cancer health effects, and the hazard quotient (HQ) for acute exposures to HAP with the potential to cause non-cancer health effects. The assessment also provides estimates of the distribution of cancer risks within the exposed populations, cancer incidence, and an evaluation of the potential for adverse environmental effects. The eight sections that follow this paragraph describe how we estimated emissions and conducted the risk assessment. The docket for this rulemaking contains the following document which provides more information on the risk assessment inputs and models: “Residual Risk Assessment for the Manufacturing of Nutritional Yeast Source Category in Support of the December 2016 Risk and Technology Review Proposed Rule.” The methods used to assess risks (as described in the eight primary steps below) are consistent with those peer-reviewed by a panel of the EPA's Science Advisory Board (SAB) in 2009 and described in their peer review report issued in 2010;
Fermenters are the primary emission source at nutritional yeast facilities. Each fermenter emission source has a stack through which the emissions are vented. The HAP emitted is acetaldehyde, which is a by-product of the fermentation process. We used acetaldehyde emissions data from the 2011 NEI and state emission reports (
The available emissions data in the RTR emissions dataset include estimates of the mass of HAP emitted during the specified annual time period. In some cases, these “actual” emission levels are lower than the emission levels required to comply with the current MACT standards. The emissions level allowed to be emitted by the MACT standards is referred to as the “MACT-allowable” emissions level. We discussed the use of both MACT-allowable and actual emissions in the final Coke Oven Batteries RTR (70 FR 19998–19999, April 15, 2005) and in the proposed and final Hazardous Organic NESHAP RTRs (71 FR 34428, June 14, 2006, and 71 FR 76609, December 21, 2006, respectively). In those actions, we noted that assessing the risks at the MACT-allowable level is inherently reasonable since these risks reflect the maximum level facilities could emit and still comply with national emission standards. We also explained that it is reasonable to consider actual emissions, where such data are available, in both steps of the risk analysis, in accordance with the Benzene NESHAP approach. (54 FR 38044, September 14, 1989.)
For nutritional yeast manufacturing facilities, we used the actual emissions as the basis for the MACT-allowable emissions in the risk assessment. We set allowable emissions equal to actual emissions based on information gathered during the site visits that the facilities are operating near maximum capacity and close to the level of emissions allowed under the NESHAP. It is difficult to calculate a precise allowable emissions level for this industry because the emission limits are based on the average emissions concentration during each batch and the absolute number of batches produced at a facility fluctuates each year based on market demand for yeast.
Furthermore, facilities are also unlikely to emit significantly higher levels of HAP due to a business incentive to minimize acetaldehyde
As stated above, MACT-allowable emissions are used to develop estimates of risk when actual emissions are lower than those required to meet current emission standards. Due to the difficulties that limit the calculation of allowable emissions (
Both long-term and short-term inhalation exposure concentrations and health risks from the source category addressed in this proposal were estimated using the Human Exposure Model (Community and Sector HEM–3 version 1.1.0). The HEM–3 performs three primary risk assessment activities: (1) Conducting dispersion modeling to estimate the concentrations of HAP in ambient air, (2) estimating long-term and short-term inhalation exposures to individuals residing within 50 km of the modeled sources,
The air dispersion model used by the HEM–3 model (AERMOD) is one of the EPA's preferred models for assessing pollutant concentrations from industrial facilities.
In developing the risk assessment for chronic exposures, we used the estimated annual average ambient air concentrations of each HAP emitted by each source for which we have emissions data in the source category. The air concentrations at each nearby census block centroid were used as a surrogate for the chronic inhalation exposure concentration for all the people who reside in that census block. We calculated the MIR for each facility as the cancer risk associated with a continuous lifetime (24 hours per day, 7 days per week, and 52 weeks per year for a 70-year period) exposure to the maximum concentration at the centroid of inhabited census blocks. Individual cancer risks were calculated by multiplying the estimated lifetime exposure to the ambient concentration of each of the HAP (in micrograms per cubic meter (μg/m
The EPA estimated incremental individual lifetime cancer risks associated with emissions from the facilities in the source category as the sum of the risks for each of the carcinogenic HAP (including those classified as carcinogenic to humans, likely to be carcinogenic to humans, and suggestive evidence of carcinogenic potential)
To assess the risk of non-cancer health effects from chronic exposures, we summed the HQ for each of the HAP that affects a common target organ system to obtain the HI for that target organ system (or target organ-specific HI, TOSHI). The HQ is the estimated exposure divided by the chronic reference value, which is a value selected from one of several sources. First, the chronic reference level can be the EPA reference concentration (RfC) (
As mentioned above, in order to characterize non-cancer chronic effects, and in response to key recommendations from the SAB, the EPA selects dose-response values that reflect the best available science for all HAP included in RTR risk assessments.
The EPA also evaluated screening estimates of acute exposures and risks for each of the HAP (for which appropriate acute dose-response values are available) at the point of highest potential off-site exposure for each facility. To do this, the EPA estimated the risks when both the peak hourly emissions rate and worst-case dispersion conditions occur. We also assume that a person is located at the point of highest impact during that same time. In accordance with our mandate in section 112 of the CAA, we use the point of highest off-site exposure to assess the potential risk to the maximally exposed individual. The acute HQ is the estimated acute exposure divided by the acute dose-response value. In each case, the EPA calculated acute HQ values using best available, short-term dose-response values. These acute dose-response values, which are described below, include the acute REL, acute exposure guideline levels (AEGL) and emergency response planning guidelines (ERPG) for 1-hour exposure durations. As discussed below, we used conservative assumptions for emissions rates, meteorology, and exposure location.
As described in the CalEPA's “Air Toxics Hot Spots Program Risk Assessment Guidelines, Part I, The Determination of Acute Reference Exposure Levels for Airborne Toxicants,” an acute REL value (
AEGL values were derived in response to recommendations from the National Research Council (NRC). As described in “Standing Operating Procedures (SOP) of the National Advisory Committee on Acute Exposure Guideline Levels for Hazardous Substances” (
The document lays out the purpose and objectives of AEGL by stating that “the primary purpose of the AEGL program and the National Advisory Committee for Acute Exposure Guideline Levels for Hazardous Substances is to develop guideline levels for once-in-a-lifetime, short-term exposures to airborne concentrations of acutely toxic, high-priority chemicals.”
The AEGL–1 value is then specifically defined as “the airborne concentration (expressed as ppm (parts per million) or mg/m
ERPG values are derived for use in emergency response, as described in the American Industrial Hygiene Association's ERP Committee document titled, “ERPGS Procedures and Responsibilities” (
As can be seen from the definitions above, the AEGL and ERPG values include the similarly-defined severity levels 1 and 2. For many chemicals, a severity level 1 value AEGL or ERPG has not been developed because the types of effects for these chemicals are not consistent with the AEGL–1/ERPG–1 definitions; in these instances, we compare higher severity level AEGL–2 or ERPG–2 values to our modeled exposure levels to screen for potential acute concerns. When AEGL–1/ERPG–1 values are available, they are used in our acute risk assessments.
Acute REL values for 1-hour exposure durations are typically lower than their corresponding AEGL–1 and ERPG–1 values. Even though their definitions are slightly different, AEGL–1 values are often the same as the corresponding ERPG–1 values, and AEGL–2 values are often equal to ERPG–2 values. Maximum HQ values from our acute screening risk assessments typically result when basing them on the acute REL value for a particular pollutant. In cases where our maximum acute HQ value exceeds 1, we also report the HQ value based on the next highest acute dose-response value (usually the AEGL–1 and/or the ERPG–1 value).
To develop screening estimates of acute exposures in the absence of hourly emissions data, generally we first develop estimates of maximum hourly emissions rates by multiplying the average actual annual hourly emissions rates by a default factor to cover routinely variable emissions. We choose the factor to use partially based on process knowledge and engineering judgment. The factor chosen also reflects a Texas study of short-term emissions variability, which showed that most peak emission events in a heavily-industrialized four-county area (Harris, Galveston, Chambers, and Brazoria Counties, Texas) were less than twice the annual average hourly emissions rate. The highest peak emissions event was 74 times the annual average hourly emissions rate, and the 99th percentile ratio of peak hourly emissions rate to the annual average hourly emissions rate was 9.
For this source category, we used an acute multiplication factor of 1.2 for all emission sources from nutritional yeast manufacturing facilities. The factor equals the average peak-to-mean ratio developed using 5 years of batch-averaged fermenter VOC concentration data from the facility with the highest emissions in the 2011 NEI. While the current rule requires continuous monitoring of emissions, facilities are required to report whether the percentage of batches that meet emission limits based on the average concentration of VOC emitted from each batch meets the current compliance requirements; not the continuous levels of emissions at the facility. Using the data above, we developed a multiplier to estimate potential acute emissions from each facility in this source category. A further discussion of why this factor was chosen can be found in the memorandum, “Emissions Data and Acute Risk Factor Used in Residual Risk Modeling: Manufacturing of Nutritional Yeast Source Category,” available in the docket for this rulemaking.
As part of our acute risk assessment process, for cases where acute HQ values from the screening step were less than or equal to 1 (even under the conservative assumptions of the screening analysis), acute impacts were deemed negligible and no further analysis was performed for these HAP. In cases where an acute HQ from the screening step was greater than 1, additional site-specific data were considered to develop a more refined estimate of the potential for acute impacts of concern. For this source category, all acute HQ screening values were less than 1. Therefore, we did not employ additional data refinements.
Ideally, we would prefer to have continuous measurements over time to see how the emissions vary by each hour over an entire year. Having a frequency distribution of hourly emissions rates over a year would allow us to perform a probabilistic analysis to estimate potential threshold exceedances and their frequency of occurrence. Such an evaluation could include a more complete statistical treatment of the key parameters and elements adopted in this screening analysis. Recognizing that this level of data is rarely available, we instead rely on the multiplier approach.
To better characterize the potential health risks associated with estimated acute exposures to HAP, and in response to a key recommendation from the SAB's peer review of the EPA's RTR risk assessment methodologies,
The EPA conducted a screening analysis examining the potential for significant human health risks due to exposures via routes other than inhalation (
For the Manufacturing of Nutritional Yeast source category, we did not identify emissions of any PB–HAP. Because we did not identify PB–HAP emissions, no further evaluation of multi-pathway risk was conducted for this source category.
The proposed rule amendments include changes to the form of the current emission limits, additional testing requirements, changes to the current monitoring requirements, and updates to the reporting and recordkeeping requirements. The proposed amendments to the emission limits may lead to a slight decrease in the overall emissions from the facilities, but we are unable to quantify this reduction. Facilities will continue to employ current process controls to comply with the emission limits (
The proposed amendments to testing and monitoring requirements will increase the reliability of the emissions data that is monitored by each facility to ensure that the current emission limits are being met consistently. Therefore, risks considering the proposed amendments are estimated to be the same as actual risks under the current MACT standard.
The EPA conducts a screening assessment to examine the potential for adverse environmental effects as required under section 112(f)(2)(A) of the CAA. Section 112(a)(7) of the CAA defines “adverse environmental effect” as “any significant and widespread adverse effect, which may reasonably be anticipated, to wildlife, aquatic life, or other natural resources, including adverse impacts on populations of endangered or threatened species or significant degradation of environmental quality over broad areas.”
The EPA focuses on seven HAP, which we refer to as “environmental HAP,” in its screening analysis: Five PB–HAP and two acid gases. The five PB–HAP are cadmium, dioxins/furans, polycyclic organic matter (POM), mercury (both inorganic mercury and methyl mercury), and lead compounds. The two acid gases are hydrogen chloride (HCl) and hydrogen fluoride (HF). The rationale for including these seven HAP in the environmental risk screening analysis is presented below.
HAP that persist and bioaccumulate are of particular environmental concern because they accumulate in the soil, sediment, and water. The PB–HAP are taken up, through sediment, soil, water, and/or ingestion of other organisms, by plants or animals (
In addition to accounting for almost all of the mass of PB–HAP emitted, we note that the TRIM.FaTE model that we use to evaluate multi-pathway risk allows us to estimate concentrations of cadmium compounds, dioxins/furans, POM, and mercury in soil, sediment and water. For lead compounds, we currently do not have the ability to calculate these concentrations using the TRIM.FaTE model. Therefore, to evaluate the potential for adverse environmental effects from lead compounds, we compare the estimated HEM-modeled exposures from the source category emissions of lead with the level of the secondary National Ambient Air Quality Standards (NAAQS) for lead.
Due to their well-documented potential to cause direct damage to terrestrial plants, we include two acid gases, HCl, and HF in the environmental screening analysis. According to the 2005 NEI, HCl, and HF account for about 99 percent (on a mass basis) of the total acid gas HAP emitted by stationary sources in the U.S. In addition to the potential to cause direct damage to plants, high concentrations of HF in the air have been linked to fluorosis in livestock. Air concentrations of these HAP are already calculated as part of the human multi-pathway exposure and risk screening analysis using the HEM3–AERMOD air dispersion model, and we are able to use the air dispersion modeling results to estimate the potential for an adverse environmental effect.
The EPA acknowledges that other HAP beyond the seven HAP discussed above may have the potential to cause adverse environmental effects. Therefore, the EPA may include other relevant HAP in its environmental risk screening in the future, as modeling science and resources allow. The EPA invites comment on the extent to which other HAP emitted by the source category may cause adverse environmental effects. Such information should include references to peer-reviewed ecological effects benchmarks that are of sufficient quality for making regulatory decisions, as well as information on the presence of organisms located near facilities within the source category that such benchmarks indicate could be adversely affected.
For the environmental risk screening analysis, the EPA first determined whether any facilities in the Manufacturing of Nutritional Yeast source category emitted any of the seven environmental HAP. For this source category, we did not identify emissions
To put the source category risks in context, we typically examine the risks from the entire “facility,” where the facility includes all HAP-emitting operations within a contiguous area and under common control. In other words, we examine the HAP emissions not only from the source category emission points of interest, but also emissions of HAP from all other emission sources at the facility for which we have data. The current NESHAP does not set emission limits for equipment other than fermenters at the affected sources. There is a potential for temporary wastewater storage tanks (
We did not perform a separate facility-wide risk assessment for facilities that manufacture nutritional yeast. One facility (American Yeast) reported 43 pounds of additional HAP emissions, composed largely of hexane and formaldehyde, from equipment sources not covered by 40 CFR part 63, subpart CCCC (
In the Benzene NESHAP, we concluded that risk estimation uncertainty should be considered in our decision-making under the ample margin of safety framework. Uncertainty and the potential for bias are inherent in all risk assessments, including those performed for this proposal. Although uncertainty exists, we believe that our approach, which used conservative tools and assumptions, ensures that our decisions are health protective and environmentally protective. A brief discussion of the uncertainties in the RTR emissions dataset, dispersion modeling, inhalation exposure estimates, and dose-response relationships follows below. A more thorough discussion of these uncertainties is included in the “Residual Risk Assessment for the Manufacturing of Nutritional Yeast Source Category in Support of the December 2016 Risk and Technology Review Proposed Rule,” which is available in the docket for this action.
Although the development of the RTR emissions dataset involved quality assurance/quality control processes, the accuracy of emissions values will vary depending on the source of the data, the degree to which data are incomplete or missing, the degree to which assumptions made to complete the datasets are accurate, errors in emission estimates, and other factors. The emission estimates considered in this analysis generally are annual totals for certain years, and they do not reflect short-term fluctuations during the course of a year or variations from year to year. The estimates of peak hourly emission rates for the acute effects screening assessment were based on an emission adjustment factor applied to the average annual hourly emission rates, which are intended to account for emission fluctuations due to normal facility operations.
We recognize there is uncertainty in ambient concentration estimates associated with any model, including the EPA's recommended regulatory dispersion model, AERMOD. In using a model to estimate ambient pollutant concentrations, the user chooses certain options to apply. For RTR assessments, we select some model options that have the potential to overestimate ambient air concentrations (
The EPA did not include the effects of human mobility on exposures in the assessment. Specifically, short-term mobility and long-term mobility between census blocks in the modeling domain were not considered.
In addition, the assessment predicted the chronic exposures at the centroid of each populated census block as surrogates for the exposure concentrations for all people living in that block. Using the census block centroid to predict chronic exposures tends to over-predict exposures for people in the census block who live farther from the facility and under-predict exposures for people in the census block who live closer to the facility. Thus, using the census block centroid to predict chronic exposures may lead to a potential understatement or overstatement of the true maximum impact, but is an unbiased estimate of average risk and incidence. We reduce this uncertainty by analyzing large census blocks near facilities using aerial imagery and adjusting the location of the block centroid to better represent the population in the block, as well as adding additional receptor locations where the block population is not well represented by a single location.
The assessment evaluates the cancer inhalation risks associated with pollutant exposures over a 70-year period, which is the assumed lifetime of an individual. In reality, both the length of time that modeled emission sources at facilities actually operate (
The exposure estimates used in these analyses assume chronic exposures to ambient (outdoor) levels of pollutants. Because most people spend the majority of their time indoors, actual exposures may not be as high, depending on the characteristics of the pollutants modeled. For many of the HAP, indoor levels are roughly equivalent to ambient levels, but for very reactive pollutants or larger particles, indoor levels are typically lower. This factor has the potential to result in an overestimate of 25 to 30 percent of exposures.
In addition to the uncertainties highlighted above, there are several factors specific to the acute exposure assessment that the EPA conducts as part of the risk review under section 112 of the CAA that should be highlighted. The accuracy of an acute inhalation exposure assessment depends on the simultaneous occurrence of independent factors that may vary greatly, such as hourly emissions rates, meteorology, and the presence of humans at the location of the maximum concentration. In the acute screening assessment that we conduct under the RTR program, we assume that peak emissions from the source category and worst-case meteorological conditions co-occur, thus, resulting in maximum ambient concentrations. These two events are unlikely to occur at the same time, making these assumptions conservative. We then include the additional assumption that a person is located at this point during this same time period. For this source category, these assumptions would tend to be worst-case actual exposures as it is unlikely that a person would be located at the point of maximum exposure during the time when peak emissions and worst-case meteorological conditions occur simultaneously.
There are uncertainties inherent in the development of the dose-response values used in our risk assessments for cancer effects from chronic exposures and non-cancer effects from both chronic and acute exposures. Some uncertainties may be considered quantitatively, and others generally are expressed in qualitative terms. We note as a preface to this discussion a point on dose-response uncertainty that is brought out in the EPA's
Cancer URE values used in our risk assessments are those that have been developed to generally provide an upper bound estimate of risk. That is, they represent a “plausible upper limit to the true value of a quantity” (although this is usually not a true statistical confidence limit).
Chronic non-cancer RfC and reference dose (RfD) values represent chronic exposure levels that are intended to be health-protective levels. Specifically, these values provide an estimate (with uncertainty spanning perhaps an order of magnitude) of a continuous inhalation exposure (RfC) or a daily oral exposure (RfD) to the human population (including sensitive subgroups) that is likely to be without an appreciable risk of deleterious effects during a lifetime. To derive values that are intended to be “without appreciable risk,” the methodology relies upon an uncertainty factor (UF) approach (U.S. EPA, 1993 and 1994), which considers uncertainty, variability, and gaps in the available data. The UF are applied to derive reference values that are intended to protect against appreciable risk of deleterious effects. The UF are commonly default values,
While collectively termed “UF,” these factors account for a number of different quantitative considerations when using observed animal (usually rodent) or human toxicity data in the development of the RfC. The UF are intended to
Many of the UF used to account for variability and uncertainty in the development of acute reference values are quite similar to those developed for chronic durations, but they more often use individual UF values that may be less than 10. The UF are applied based on chemical-specific or health effect-specific information (
Not all acute reference values are developed for the same purpose, and care must be taken when interpreting the results of an acute assessment of human health effects relative to the reference value or values being exceeded. Where relevant to the estimated exposures, the lack of short-term dose-response values at different levels of severity should be factored into the risk characterization as potential uncertainties.
For a group of compounds that are unspeciated (
As discussed in section II.A of this preamble, in evaluating and developing standards under CAA section 112(f)(2), we apply a two-step process to address residual risk. In the first step, the EPA determines whether risks are acceptable. This determination “considers all health information, including risk estimation uncertainty, and includes a presumptive limit on maximum individual lifetime [cancer] risk (MIR)
In past residual risk actions, the EPA considered a number of human health risk metrics associated with emissions from the categories under review, including the MIR, the number of persons in various risk ranges, cancer incidence, the maximum non-cancer HI and the maximum acute non-cancer hazard.
The Agency is considering these various measures of health information to inform our determinations of risk acceptability and ample margin of safety under CAA section 112(f). As explained in the Benzene NESHAP, “the first step judgment on acceptability cannot be reduced to any single factor” and, thus, “[t]he Administrator believes that the acceptability of risk under [previous] section 112 is best judged on the basis of a broad set of health risk measures and information.” 54 FR 38046, September 14, 1989. Similarly, with regard to the ample margin of safety determination, “the Agency again considers all of the health risk and other health information considered in the first step. Beyond that information, additional factors relating to the appropriate level of control will also be considered, including cost and economic impacts of controls, technological feasibility, uncertainties, and any other relevant factors.”
The Benzene NESHAP approach provides flexibility regarding factors the EPA may consider in making determinations and how the EPA may weigh those factors for each source category. In responding to comment on our policy under the Benzene NESHAP, the EPA explained that:
“[t]he policy chosen by the Administrator permits consideration of multiple measures of health risk. Not only can the MIR figure be considered, but also incidence, the presence of non-cancer health effects, and the uncertainties of the risk estimates. In this way, the effect on the most exposed individuals can be reviewed as well as the impact on the general public. These factors can then be weighed in each individual case. This approach complies with the
The EPA notes that it has not considered certain health information to date in making residual risk determinations. At this time, we do not attempt to quantify those HAP risks that may be associated with emissions from other facilities that do not include the source categories in question, mobile source emissions, natural source emissions, persistent environmental pollution, or atmospheric transformation in the vicinity of the sources in these categories.
The Agency understands the potential importance of considering an individual's total exposure to HAP in addition to considering exposure to HAP emissions from the source category and facility. We recognize that such consideration may be particularly important when assessing non-cancer risks, where pollutant-specific exposure health reference levels (
In response to the SAB recommendations, the EPA is incorporating cumulative risk analyses into its RTR risk assessments, including those reflected in this proposal. The Agency is: (1) Conducting facility-wide assessments, which include source category emission points, as well as other emission points within the facilities; (2) considering sources in the same category whose emissions result in exposures to the same individuals; and (3) for some persistent and bioaccumlative pollutants, analyzing the ingestion route of exposure. In addition, the RTR risk assessments have always considered aggregate cancer risk from all carcinogens and aggregate non-cancer HI from all non-carcinogens affecting the same target organ system.
Although we are interested in placing source category and facility-wide HAP risks in the context of
Our technology review focused on the identification and evaluation of developments in practices, processes, and control technologies that have occurred since the MACT standards were promulgated. Where we identified such developments, in order to inform our decision of whether it is “necessary” to revise the emissions standards, we analyzed the technical feasibility of applying these developments and the estimated costs, energy implications, non-air environmental impacts, as well as considering the emission reductions. We also considered the appropriateness of applying controls to new sources versus retrofitting existing sources.
Based on our analyses of the available data and information, we identified potential developments in practices, processes, and control technologies. For this exercise, we considered any of the following to be a “development”:
• Any add-on control technology or other equipment that was not identified and considered during development of the original MACT standards;
• Any improvements in add-on control technology or other equipment (that were identified and considered during development of the original MACT standards) that could result in additional emissions reduction;
• Any work practice or operational procedure that was not identified or considered during development of the original MACT standards;
• Any process change or pollution prevention alternative that could be broadly applied to the industry and that was not identified or considered during development of the original MACT standards; and
• Any significant changes in the cost (including cost effectiveness) of applying controls (including controls the EPA considered during the development of the original MACT standards).
In addition to reviewing the practices, processes, and control technologies that were considered at the time we originally developed (or last updated) the NESHAP, we reviewed a variety of data sources in our investigation of potential practices, processes, or controls to consider. Among the sources we reviewed were the NESHAP for various industries that were promulgated since the MACT standards being reviewed in this action. We reviewed the regulatory requirements and/or technical analyses associated with these regulatory actions to identify any practices, processes, and control technologies considered in these efforts that could be applied to emission sources in the Manufacturing of Nutritional Yeast source category, as well as the costs, non-air impacts, and energy implications associated with the use of these technologies. Additionally, we requested information from facilities regarding developments in practices, processes, or control technology. Finally, we reviewed information from other sources, such as state and/or local permitting agency databases and industry-supported databases.
As described above, for the Manufacturing of Nutritional Yeast source category, we conducted an inhalation risk assessment for all HAP emitted. We present results of the risk assessment briefly below and in more detail in the document: “Residual Risk Assessment for the Manufacturing of Nutritional Yeast Source Category in Support of the December 2016 Risk and Technology Review Proposed Rule,” which is available in the docket for this action.
Table 2 of this preamble provides a summary of the results of the inhalation risk assessment for the source category. As discussed in section III.A.2 of this preamble, we set MACT-allowable HAP emission levels at nutritional yeast manufacturing facilities equal to actual emissions. For more detail about the MACT-allowable emission levels, see the memorandum, ``Emissions Data and Acute Risk Factor Used in Residual Risk Modeling: Manufacturing of Nutritional Yeast Source Category,” which is available in the docket for this action.
The results of the inhalation risk modeling using actual emissions data, as shown in Table 2 of this preamble, indicate that the maximum lifetime individual cancer risk could be up to 2-in-1 million, the maximum chronic non-cancer TOSHI value could be up to 0.08, and the maximum off-facility site acute HQ value could be up to 0.2. The total estimated national cancer incidence from these facilities based on actual emission levels is 0.0009 excess cancer cases per year or 1 case in every 1,100 years.
Table 2 of this preamble shows the acute risk results for the Manufacturing of Nutritional Yeast source category. The screening analysis for acute impacts was based on an industry specific multiplier of 1.2, to estimate the peak emission rates from the average rates. For more detailed acute risk results, refer to the draft document: “Residual Risk Assessment for the Manufacturing of Nutritional Yeast Source Category in Support of the December 2016 Risk and Technology Review Proposed Rule,” which is available in the docket for this action.
There are no PB–HAP emitted by facilities in this source category. Therefore, we do not expect any human health multi-pathway risks as a result of emissions from this source category.
The emissions data for the Manufacturing of Nutritional Yeast source category indicate that sources within this source category do not emit any of the seven pollutants that we identified as “environmental HAP,” as discussed earlier in this preamble. Additionally, the processes and materials used in the source category typically do not emit any of the seven environmental HAP. Also, we are unaware of any adverse environmental effect caused by emissions of HAP that are emitted by this source category (acetaldehyde). Therefore, we do not expect an adverse environmental effect as a result of HAP emissions from this source category.
As explained in section III.A.7 of this preamble, we did not perform a separate facility-wide risk assessment because we expect facility-wide risks to be equal to the risks we assessed for this source category.
To examine the potential for any environmental justice issues that might be associated with the source category, we performed a demographic analysis, which is an assessment of risks to individual demographic groups within the population near the four nutritional yeast manufacturing facilities that are subject to the NESHAP. In this analysis, we evaluated the distribution of HAP-related cancer risks and non-cancer hazards from the nutritional yeast manufacturing facilities across different social, demographic, and economic groups within the populations living near facilities identified as having the highest risks. The methodology and the results of the demographic analyses are included in a technical report, “Risk and Technology Review—Analysis of Socio-Economic Factors for Populations Living Near Nutritional Yeast Manufacturing Facilities,” available in the docket for this action.
The analysis indicates that the minority population living within 50 km (1,700,000 people, of whom 41 percent are minority) and within 5 km (131,567 people, of whom 68 percent are minority) of the four nutritional yeast manufacturing facilities is greater than the minority population found nationwide (28 percent). The specific
When examining the risk levels of those exposed to emissions from the four nutritional yeast manufacturing facilities, we find approximately 750 persons are exposed to a cancer risk greater than or equal to 1-in-1 million, and the highest cancer risk for these individuals is less than 2-in-1 million. Of these 750 persons, 100 percent of them are defined as minority. When examining the noncancer risks surrounding these facilities, no one is predicted to have a chronic non-cancer TOSHI greater than 1.
As noted in section III.B of this preamble, we weigh all health risk factors in our risk acceptability determination, including the cancer MIR, the number of persons in various cancer and non-cancer risk ranges, cancer incidence, the maximum non-cancer TOSHI, the maximum acute non-cancer HQ, the extent of non-cancer risks, the potential for adverse environmental effects, the distribution of cancer and non-cancer risks in the exposed population, and risk estimation uncertainties (54 FR 38044, September 14, 1989).
For the Manufacturing of Nutritional Yeast source category, the risk analysis indicates that the cancer risks to the individual most exposed could be up to 2-in-1 million due to actual emissions and up to 2-in-1 million based on allowable emissions. As explained in section III.A.2 of this preamble, we determined that actual emissions provide an accurate representation of maximum emissions from the source category and used the actual emissions in both steps of the risk assessment (
Considering all of the health risk information and factors discussed above, including the uncertainties discussed in section III.A.8 of this preamble, we propose to find that the risks from the Manufacturing of Nutritional Yeast source category are acceptable.
Although we are proposing that the risks from the Manufacturing of Nutritional Yeast source category are acceptable, risk estimates for approximately 750 individuals in the exposed population are above 1-in-1 million at the actual and MACT-allowable emissions levels. Consequently, we further considered whether the MACT standards for the Manufacturing of Nutritional Yeast source category provide an ample margin of safety to protect public health. In this ample margin of safety analysis, we investigated available emissions control options that might reduce the risk from the source category. We considered this information along with all of the health risks and other health information considered in our determination of risk acceptability.
As discussed in section IV.C of this preamble, during the technology review for this source category, we evaluated two control technologies for reducing acetaldehyde emissions from fermenters at nutritional yeast facilities: Thermal oxidizers and wet (packed bed) scrubbers. Thermal oxidizers have the potential to reduce total acetaldehyde emissions from this source category by 11 tpy to 36 tpy, for a total of 90 tpy for the industry, but would also lead to increases in energy use and emissions of approximately 89 tpy of nitrogen oxides (NO
We did not identify emissions of any of the seven environmental HAP included in our environmental risk screening, and are unaware of any adverse environmental effects caused by HAP emitted by this source category (acetaldehyde). Therefore, we do not expect there to be an adverse environmental effect as a result of HAP emissions from this source category and we are proposing that it is not necessary to set a more stringent standard to prevent, taking into consideration costs, energy, safety, and other relevant factors, an adverse environmental effect.
In order to fulfill our obligations under CAA section 112(d)(6), we conducted a technology review to identify developments in practices, processes, and control technologies that may advise revisions to the current NESHAP standards applicable to the Manufacturing of Nutritional Yeast source category (
After reviewing information from the sources above, we identified two control technologies for further evaluation that are technically feasible for use at nutritional yeast facilities: thermal oxidizers and wet scrubbers.
After identifying control technologies that are technically feasible for reducing acetaldehyde emissions from nutritional yeast fermenters, we then evaluated the costs and emissions reductions associated with installing regenerative thermal oxidizers (RTOs) and packed bed scrubbers at each of the four nutritional yeast facilities. The total capital investment to install RTOs ranged from $2 million to $6.9 million per facility for a total of approximately $14.9 million for the industry. Annual costs for each facility were approximately $0.8 million to $2.2 million, for a total of $5.2 million per year for the industry. Applying a control efficiency of 98 percent, acetaldehyde emissions for each facility would be reduced by approximately 11 tpy to 36 tpy, for a total of 90 tpy for the industry. To install RTOs at each facility, the resulting cost effectiveness ranged from $32,000 to $90,000 per ton of acetaldehyde reduced. Furthermore, use of RTOs would result in increased energy use and NO
The total capital investment to install packed bed scrubbers on fermenters ranged from $3 million to $11.6 million per facility for a total of about $24.5 million for the industry. Annual costs for each facility were approximately $0.8 million to $2.5 million, for a total of $5.8 million per year for the industry. Applying a control efficiency of 85 percent, acetaldehyde emissions for each facility would be reduced by approximately 9.4 tpy to 31 tpy, for a total of 78 tpy for the industry. To install packed bed scrubbers at each facility, the resulting cost effectiveness ranged from $43,000 to $110,000 per ton of acetaldehyde reduced. Furthermore, the use of packed bed scrubbers would lead to increased energy usage and other environmental impacts, such as the usage and disposal of water and caustic solutions (
Considering the high costs per ton of acetaldehyde reduced and potential adverse environmental impacts associated with the installation of RTOs or packed bed scrubbers, we did not consider these technologies to be cost effective for further reducing acetaldehyde emissions from fermenters at nutritional yeast manufacturing facilities. In light of the results of the technology review, we conclude that changes to the fermenter emission limits are not warranted pursuant to CAA section 112(d)(6). We solicit comment on our proposed decision.
We are proposing revisions to the malfunction provisions of the MACT rule in order to ensure that they are consistent with the Court decision in
The Manufacturing of Nutritional Yeast NESHAP currently requires that 98 percent of all batches meet the fermenter batch average VOC emission limits, on a 12-month rolling basis. However, this requirement allows 2 percent of the batches to exceed the standard. This formulation of the standard is in direct conflict with the statutory requirement that emission standards apply at all times, as discussed in
In recognition that the yeast manufacturing process is biological and does not produce the exact same level of emissions from every batch, the proposed amendments also include an alternative compliance method in Table 1 to 40 CFR part 63, subpart CCCC that allows facilities to average the VOC concentration data from all batches within each fermentation stage over a rolling 12-month period. When manufacturing yeast, increased acetaldehyde levels indicate inefficiencies in the manufacturing process; consequently, facilities have a financial incentive to reduce emissions as much as possible through process controls. However, to ensure that the averaging method will be at least as stringent as the emission standards without averaging, we are proposing a 5-percent discount factor in the VOC emission limit for each stage,
We are also proposing changes to 40 CFR 63.2171 and Table 4 to 40 CFR part 63, subpart CCCC that specify the procedures facilities must use to demonstrate continuous compliance with either of the two proposed forms of the emission limits in Table 1 to 40 CFR part 63, subpart CCCC. The proposed changes require facilities to immediately begin demonstrating continuous compliance with one of the two proposed forms of the emission limits (
For the proposed Average Option, the changes to 40 CFR 63.2171 and Table 4 to 40 CFR part 63, subpart CCCC require facilities to calculate compliance on a monthly basis using data from every batch produced during the previous 12 months. The proposed amendments to 40 CFR 63.2150 remove the exemption that allows facilities to exceed emissions during periods of malfunction. The proposed amendments to 40 CFR 63.2170 retain the provision that data recorded during monitoring malfunctions, associated repairs, and required quality assurance or quality control activities must not be used to report emissions. Therefore, data from batches that were produced during periods of malfunctions over the past 12 months, other than those related to the monitoring system, must now be included in the calculations used to determine compliance. Additionally, instead of calculating a single determination of compliance based on the emissions from all batches regardless of fermentation stage, facilities must now determine compliance for batches within each of the three fermentation stages that have specific emission limits in Table 1 to 40 CFR part 63, subpart CCCC. Based on information collected during the site visits, the EPA expects that facilities have the necessary data available to make these changes to the methods used to determine compliance upon promulgation of the final rule.
For the proposed Batch Option, the changes to 40 CFR 63.2171 and Table 4 to 40 CFR part 63, subpart CCCC require facilities to demonstrate that the average VOC concentration for each individual batch produced during a semiannual compliance period did not exceed the applicable emission limits. As noted above, this now includes data from batches that were produced during periods of malfunctions, other than malfunctions related to the monitoring system. Based on information collected during the site visits, the EPA expects that facilities have the necessary data available to make these changes to the methods used to determine compliance upon promulgation of the final rule.
The EPA requests comment on the proposed timeframe to demonstrate compliance using the revised form of the emission limits upon promulgation of the final rule and the availability of data necessary to comply within this timeframe.
We propose to revise the rule's testing, monitoring, recordkeeping, and reporting requirements in five ways: (1) Owners or operators must demonstrate compliance by using a VOC continuous emission monitoring system (CEMS) to determine the VOC concentration in the fermenter exhaust (
Subpart CCCC of 40 CFR part 63 currently allows owners or operators to monitor brew ethanol in the fermenter liquid and determine an annual correlation to VOC concentration in the fermenter exhaust in order to demonstrate compliance with fermenter VOC emission limits. We are proposing to revise the requirements of 40 CFR 63.2166 and 63.2171 and Table 3 and Table 4 to 40 CFR part 63, subpart CCCC to remove the option to monitor brew ethanol.
Currently, one facility demonstrates compliance by monitoring brew ethanol and submits annual reports showing the results of performance testing and development of the correlation equation for each fermentation stage.
As mentioned above, individual equations typically exhibited strong statistical correlations for the data used to develop them, which indicates that there is a relationship between VOC emissions and brew ethanol concentration for a given batch. However, the observed variability between equations indicates the correlation between VOC emissions and brew ethanol concentration is different for each batch. This means that the correlation developed for one batch may not be representative of the correlation between VOC emissions and brew ethanol concentration for any other batch. Given that estimates of VOC concentrations from a given fermentation stage can almost double for a single brew ethanol concentration, depending on the correlation equation used, a batch that appears to be in compliance could, in fact, be out of compliance.
The manufacturing of yeast is a biological process and some degree of variation is expected. However, emissions are also determined by a few key process parameters, including the amount of available oxygen and the composition and amount of the sugar and nutrient mixture fed to the yeast in each batch. As noted on the site visits, the amount of oxygen does not vary significantly between batches. Fermenters are equipped with aeration systems, which operate at full capacity for every batch. In contrast, the composition of the sugar source can vary greatly from one batch to the next. Market factors (
In order to establish a reliable correlation between VOC emissions and brew ethanol for each batch, a new performance test would need to be conducted every time the sugar source changes. At facilities where the sugar source changes frequently, this requirement would pose a significant financial and logistic burden with results that were of limited applicability. In addition, it would create significant challenges for the regulatory authority responsible for enforcing the frequency and validity of the performance tests.
Reliable emissions data are critical to ensuring compliance with the established emission limits, which is necessary to reduce the emissions of HAP and protect public health and the environment. Therefore, the EPA is proposing to remove the option to demonstrate compliance with the emission limits by monitoring brew ethanol, and to require all facilities to monitor fermenter exhaust using CEMS.
We are proposing to allow facilities to continue to monitor brew ethanol for up to 1 year after the promulgation of any such proposed rule revisions. This transition period would help ensure continuous compliance with the emission limits while allowing time to install CEMS (see proposed 40 CFR 63.2171). Additionally, because no new facilities are currently under construction, we are proposing to remove requirements in 40 CFR 63.2160, 63.2166, 63.2180, and Table 3 to 40 CFR part 63, subpart CCCC related to the demonstration of initial compliance by monitoring brew ethanol. New affected sources would not be able to demonstrate initial compliance by monitoring brew ethanol.
We are proposing to revise language in 40 CFR 63.2164 to reference a “brew ethanol monitor” and not a “CEMS” to monitor brew ethanol. CEMS is not the correct term to describe the monitoring device for brew ethanol. The term “brew ethanol monitor” is already defined in the current rule, and the proposed revisions correctly incorporate its use into the rule language.
The EPA specifically requests comments on whether the option to demonstrate compliance by monitoring brew ethanol and developing a correlation to VOC concentration in the fermenter exhaust should be retained if performance tests to determine the correlation are conducted more frequently. Commenters should address the frequency of the correlation recalculation (using performance testing) needed to provide reliable emissions data that will consistently reflect accurate emissions for each batch and explain the basis for their conclusions.
The current rule allows the use of CEMS that generate a single combined response value for VOC (VOC CEMS) or that rely upon GC CEMS, if they are constructed and operated according to the applicable Performance Specification (PS) of 40 CFR part 60, appendix B, to monitor VOC emissions (40 CFR 63.2163). However, nutritional yeast manufacturing facilities emit a mixture of VOCs and the emission limits for these facilities are stated for total VOC (as opposed to specific VOC species). While VOC CEMS constructed and operated according to PS 8 can measure total VOCs, GC CEMS constructed and operated according to PS 9 are suitable for measuring a few specific VOC species. Based on information collected during the site visits, we are not aware of any facilities currently using GC CEMS. Therefore, we propose to revise 40 CFR 63.2163 to remove the option to use GC CEMS to monitor VOC concentration. The EPA requests comment on this proposed revision.
The current rule requires owners or operators who monitor fermenter exhaust to have valid CEMS data from at least 75 percent of the full hours over
We propose to revise 40 CFR 63.2163, 63.2170, 63.2181(c)(7), and 63.2182(b)(9) to require owners or operators of nutritional yeast sources to follow this model. Owners or operators would be required to collect VOC concentration data at all times of batch operation. Failure to collect VOC concentration data would be a deviation of monitoring requirements and would trigger generation of a report identifying the periods during which data were not collected, a description of the deviation event, and an explanation as to why the deviation occurred. The owner or operator would also be required to maintain records of each deviation. In addition, owners or operators would report the hours of deviation, along with the hours of batch operation. Relying on reported information, regulatory authorities would determine what, if any, follow-up correction or enforcement action should occur. The EPA requests comment on this proposed revision and its incorporation into the rule.
The current rule requires owners or operators of nutritional yeast manufacturing facilities to monitor compliance using either VOC or GC CEMS. Additionally, the rule exempts owners or operators that use a VOC CEMS with a flame ionization analyzer from conducting the RATAs required by PS 8. As discussed in section IV.D.2.b of this preamble, we are proposing to remove the option to monitor compliance using a GC CEMS and the related installation requirements. The current rule requires owners or operators to install and certify VOC CEMS according to PS 8. Use of PS 8 ensures that the VOC CEMS has been installed properly, but it lacks ongoing quality assurance and quality control (QA/QC) procedures to ensure that a properly installed VOC CEMS continues to operate appropriately. Such procedures are included in Procedure 1 of appendix F to part 60. In order to clarify the minimum requirements for owners or operators to ensure their VOC CEMS continue to produce valid data, we propose to revise 40 CFR 63.2163 to include the requirements of Procedure 1 of appendix F to part 60, where propane would be used for the calibration gas and Method 25A would be used as the Reference Method (RM). In doing so, we are also removing the exemption for owners and operators of nutritional yeast manufacturing facilities that monitor VOC emissions using a flame ionization analyzer from conducting the relative-accuracy test PS 8 requires. Incorporation of a consistent set of ongoing QA/QC requirements will not only provide assurance that the ongoing collected data are valid, but also ensure a consistent basis for collecting those data.
Moreover, we propose to replace the outdated reference 2 of PS 8, “A Procedure for Establishing Traceability of Gas Mixtures to Certain National Bureau of Standards Standard Reference Materials,” with the current version of our traceability protocol. In the revised regulatory text of 40 CFR part 63, subpart CCCC, the EPA is proposing to incorporate by reference EPA/600/R–12/531, EPA Traceability Protocol for Assay and Certification of Gaseous Calibration Standards, May 2012, at 40 CFR 63.2163(b)(2), in accordance with requirements of 1 CFR 51.5. The protocol is used to certify calibration gases for continuous emission monitors and specifies methods for assaying gases and establishing traceability to National Institute of Standards and Technology reference standards.
Through this action, the EPA is proposing to amend 40 CFR 63.2181(a) to require that owners or operators of nutritional yeast manufacturing facilities submit electronic copies of compliance reports, which include performance test and performance evaluation results, through the EPA's Central Data Exchange (CDX) using the Compliance and Emissions Data Reporting Interface (CEDRI). The EPA believes that the electronic submittal of the reports addressed in this proposed rulemaking will increase the usefulness of the data contained in those reports, is in keeping with current trends in data availability, will further assist in the protection of public health and the environment, and will ultimately result in less burden on the regulated community. Under current requirements, paper reports are often stored in filing cabinets or boxes, which make the reports more difficult to obtain and use for data analysis and sharing. Electronic storage of such reports would make data more accessible for review, analyses, and sharing. Electronic reporting can also eliminate paper-based, manual processes, thereby saving time and resources, simplifying data entry, eliminating redundancies, minimizing data reporting errors, and providing data quickly and accurately to the affected facilities, air agencies, the EPA, and the public.
In 2011, in response to Executive Order 13563, the EPA developed a plan
The EPA Web site that stores the submitted electronic data, WebFIRE, will be easily accessible to everyone and will provide a user-friendly interface that any stakeholder could access. By making data readily available, electronic reporting increases the amount of data that can be used for many purposes. One example is the development of emissions factors. An emissions factor is a representative value that attempts to relate the quantity of a pollutant released to the atmosphere with an activity associated with the release of that pollutant (
The EPA has received feedback from stakeholders asserting that many of the EPA's emissions factors are outdated or not representative of a particular industry emission source. While the EPA believes that the emissions factors are suitable for their intended purpose, we recognize that the quality of emissions factors varies based on the extent and quality of underlying data. We also recognize that emissions profiles on different pieces of equipment can change over time due to a number of factors (fuel changes, equipment improvements, industry work practices), and it is important for emissions factors to be updated to keep up with these changes. The EPA is currently pursuing emissions factor development improvements that include procedures to incorporate the source test data that we are proposing be submitted electronically. By requiring the electronic submission of the reports identified in this proposed action, the EPA would be able to access and use the submitted data to update emissions factors more quickly and efficiently, creating factors that are characteristic of what is currently representative of the relevant industry sector. Likewise, an increase in the number of test reports used to develop the emissions factors will provide more confidence that the factor is of higher quality and representative of the whole industry sector.
Additionally, by making the records, data, and reports addressed in this proposed rulemaking readily available, the EPA, the regulated community, and the public will benefit when the EPA conducts its CAA-required technology and risk-based reviews. As a result of having performance test reports and air emission reports readily accessible, our ability to carry out comprehensive reviews will be increased and achieved within a shorter period of time. These data will provide useful information on control efficiencies being achieved and maintained in practice within a source category and across source categories for regulated sources and pollutants. These reports can also be used to inform the technology-review process by providing information on improvements to add-on control technology and new control technology.
Under an electronic reporting system, the EPA's Office of Air Quality Planning and Standards (OAQPS) would have air emissions and performance test data in hand; OAQPS would not have to collect these data from the EPA Regional offices or from delegated air agencies or industry sources in cases where these reports are not submitted to the EPA Regional offices. Thus, we anticipate fewer or less substantial information collection requests (ICRs) in conjunction with prospective CAA-required technology and risk-based reviews may be needed. We expect this to result in a decrease in time spent by industry to respond to data collection requests. We also expect the ICRs to contain less extensive stack testing provisions, as we will already have stack test data electronically. Reduced testing requirements would be a cost savings to industry. The EPA should also be able to conduct these required reviews more quickly, as OAQPS will not have to include the ICR collection time in the process or spend time collecting reports from the EPA Regional Offices. While the regulated community may benefit from a reduced burden of ICRs, the general public benefits from the Agency's ability to provide these required reviews more quickly, resulting in increased public health and environmental protection.
Electronic reporting could minimize submission of unnecessary or duplicative reports in cases where facilities report to multiple government agencies and the agencies opt to rely on the EPA's electronic reporting system to view report submissions. Where air agencies continue to require a paper copy of these reports and will accept a hard copy of the electronic report, facilities will have the option to print paper copies of the electronic reporting forms to submit to the air agencies, and, thus, minimize the time spent reporting to multiple agencies. Additionally, maintenance and storage costs associated with retaining paper records could likewise be minimized by replacing those records with electronic records of electronically submitted data and reports.
Air agencies could benefit from more streamlined and automated review of the electronically submitted data. For example, because the performance test data would be readily-available in a standard electronic format, air agencies would be able to review reports and data electronically rather than having to conduct a review of the reports and data manually. Having reports and associated data in electronic format will facilitate review through the use of software “search” options, as well as the downloading and analyzing of data in spreadsheet format. Additionally, air agencies would benefit from the reported data being accessible to them through the EPA's electronic reporting system wherever and whenever they want or need access (as long as they have access to the Internet). The ability to access and review air emission report information electronically will assist air agencies to more quickly and accurately determine compliance with the applicable regulations, potentially allowing a faster response to violations which could minimize harmful air emissions. This benefits both air agencies and the general public.
The proposed electronic reporting of data is consistent with electronic data trends (
In 2008, the United States Court of Appeals for the District of Columbia Circuit vacated portions of two provisions in the EPA's CAA section 112 regulations governing the emissions of HAP during periods of SSM.
While the current rule does not exempt periods of startup and shutdown from emissions standards, we are proposing several changes to eliminate the malfunction exemption that is contained in this rule. While, for simplicity, we refer throughout this section to the SSM exemption and the associated SSM plan requirements, only the malfunction exemption and its removal are relevant to this action because periods of startup and shutdown were never exempt from emissions standards in this subpart. As discussed earlier in this preamble (section IV.D.1), we are proposing standards in this rule that apply at all times (
The EPA has attempted to ensure that the provisions we are proposing to eliminate are inappropriate, unnecessary, or redundant in the absence of the SSM exemption. We are specifically seeking comment on whether we have successfully identified all such provisions and whether any of the identified provisions retain utility even in the absence of the SSM exemption.
In proposing the standards in this rule, the EPA has taken into account startup and shutdown periods and, for the reasons explained below, has not proposed alternate standards for those periods.
Periods of startup, normal operations, and shutdown are all predictable and routine aspects of a source's operations. In this NESHAP, owners and operators of nutritional yeast manufacturing facilities employ process controls to limit emissions. These process controls are employed from the time a fermenter starts production of a batch of yeast and continue until the fermenter is emptied of yeast. Additionally, emissions are averaged over the entire duration of each batch in order to meet emission limits, so there was no need to set separate limits for periods of startup and shutdown in this rule.
Malfunctions, in contrast, are neither predictable nor routine. Instead they are, by definition, sudden, infrequent, and not reasonably preventable failures of emissions control, process, or monitoring equipment. 40 CFR 63.2 (definition of malfunction). The EPA interprets CAA section 112 as not requiring emissions that occur during periods of malfunction to be factored into development of CAA section 112 standards. Under CAA section 112, emissions standards for new sources must be no less stringent than the level “achieved” by the best controlled similar source and for existing sources generally must be no less stringent than the average emission limitation “achieved” by the best performing 12 percent of sources in the category. There is nothing in CAA section 112 that directs the Agency to consider malfunctions in determining the level “achieved” by the best performing sources when setting emission standards. As the D.C. Circuit has recognized, the phrase “average emissions limitation achieved by the best performing 12 percent of” sources “says nothing about how the performance of the best units is to be calculated.”
Further, accounting for malfunctions in setting emission standards would be difficult, if not impossible, given the myriad different types of malfunctions that can occur across all sources in the category and given the difficulties associated with predicting or accounting for the frequency, degree, and duration of various malfunctions that might occur. As such, the performance of units that are malfunctioning is not “reasonably” foreseeable.
In this instance, it is unlikely that a malfunction would result in a violation of the standards for fermenters. For fermenters, the rule provides an option for owners and operators to determine the average VOC concentration for all batches within each fermentation stage using data from 12-month periods. This option minimizes the effect of malfunctions on the ability of a facility to meet the emission limits because the averaging effectively minimizes “spikes” in emissions. Additionally, many of the common malfunctions described by owners and operators of nutritional yeast manufacturing facilities during the site visits were malfunctions of the emissions
In the unlikely event that a source fails to comply with the applicable CAA section 112(d) standards as a result of a malfunction event, the EPA would determine an appropriate response based on, among other things, the good faith efforts of the source to minimize emissions during malfunction periods, including preventative and corrective actions, as well as root cause analyses to ascertain and rectify excess emissions. The EPA would also consider whether the source's failure to comply with the CAA section 112(d) standard was, in fact, sudden, infrequent, not reasonably preventable and was not instead caused in part by poor maintenance or careless operation. 40 CFR 63.2 (definition of malfunction).
If the EPA determines in a particular case that an enforcement action against a source for violation of an emission standard is warranted, the source can raise any and all defenses in that enforcement action and the Federal District Court will determine what, if any, relief is appropriate. The same is true for citizen enforcement actions. Similarly, the presiding officer in an administrative proceeding can consider any defense raised and determine whether administrative penalties are appropriate.
In summary, the EPA interpretation of the CAA and, in particular, CAA section 112 is reasonable and encourages practices that will avoid malfunctions. Administrative and judicial procedures for addressing exceedances of the standards fully recognize that violations may occur despite good faith efforts to comply and can accommodate those situations.
We are proposing to revise the General Provisions table (Table 6 to 40 CFR part 63, subpart CCCC) to specify that 40 CFR 63.6(e)(1)(i) does not apply to 40 CFR part 63, subpart CCCC. Section 63.6(e)(1)(i) describes the general duty to minimize emissions. Some of the language in that section is no longer necessary or appropriate in light of the elimination of the SSM exemption. We are proposing instead to add general duty regulatory text at 40 CFR 63.2150(c) that reflects the general duty to minimize emissions while eliminating the reference to periods covered by an SSM exemption. The current language in 40 CFR 63.6(e)(1)(i) characterizes what the general duty entails during periods of SSM. With the elimination of the SSM exemption, there is no need to differentiate between normal operations, startup and shutdown, and malfunction events in describing the general duty. Therefore, the language the EPA is proposing at 40 CFR 63.2150(c) does not include that language from 40 CFR 63.6(e)(1).
We are also proposing to revise the General Provisions table (Table 6 to 40 CFR part 63, subpart CCCC) to specify that 40 CFR 63.6(e)(1)(ii) does not apply to 40 CFR part 63, subpart CCCC. Section 63.6(e)(1)(ii) imposes requirements that are not necessary with the elimination of the SSM exemption or are redundant with the general duty requirement being added at 40 CFR 63.2150.
We are proposing to revise the General Provisions table (Table 6 to 40 CFR part 63, subpart CCCC) to specify that 40 CFR 63.6(e)(3) does not apply to 40 CFR part 63, subpart CCCC. Generally, these paragraphs require development of an SSM plan and specify SSM recordkeeping and reporting requirements related to the SSM plan. As noted, the EPA is proposing to remove the SSM exemptions. Therefore, affected units will be subject to an emission standard during such events. The applicability of a standard during such events will ensure that sources have ample incentive to plan for and achieve compliance and thus the SSM plan requirements are no longer necessary.
We are proposing to revise the General Provisions table (Table 6 to 40 CFR part 63, subpart CCCC) to specify that 40 CFR 63.6(f)(1) does not apply to 40 CFR part 63, subpart CCCC. The current language of 40 CFR 63.6(f)(1) exempts sources from non-opacity standards during periods of SSM. As discussed above, the Court in
We are proposing to revise the General Provisions table (Table 6 to 40 CFR part 63, subpart CCCC) to specify that 40 CFR 63.7(e)(1) does not apply to 40 CFR part 63, subpart CCCC. Section 63.7(e)(1) describes performance testing requirements. The EPA is instead proposing to add a performance testing requirement at 40 CFR 63.2161(b). The performance testing requirements we are proposing to add differ from the General Provisions performance testing provisions in several respects. The proposed regulatory text does not include the language in 40 CFR 63.7(e)(1) that restated the SSM exemption and language that precluded startup and shutdown periods from being considered “representative” for purposes of performance testing. The proposed performance testing provisions exclude periods of startup and shutdown. As in 40 CFR 63.7(e)(1), performance tests conducted under this subpart should not be conducted during malfunctions because conditions during malfunctions are often not representative of normal operating conditions. The EPA is proposing to add language that requires the owner or operator to record the process information that is necessary to document operating conditions during the test and include in such record an explanation to support that such conditions represent normal operation. Section 63.7(e) requires that the owner or operator make available to the Administrator such records “as may be necessary to determine the condition of the performance test” upon request, but does not specifically require the information to be recorded. The regulatory text the EPA is proposing to add to this provision builds on that requirement and makes explicit the requirement to record the information.
We are proposing to revise the General Provisions table (Table 6 to 40 CFR part 63, subpart CCCC) to specify that 40 CFR 63.8 (c)(1)(i) and (iii) do not apply to 40 CFR part 63, subpart CCCC. The cross-references to the general duty and SSM plan requirements in those subparagraphs are not necessary in light of other requirements of 40 CFR 63.8 that require good air pollution control practices (40 CFR 63.8(c)(1)) and that set out the requirements of a quality control program for monitoring equipment (40 CFR 63.8(d)).
We are proposing to revise the General Provisions table (Table 6 to 40 CFR part 63, subpart CCCC) to specify that 40 CFR 63.8(d)(3) does not apply to 40 CFR part 63, subpart CCCC. The final sentence in 40 CFR 63.8(d)(3) refers to the General Provisions' SSM plan requirement, which is no longer
We are proposing to revise the General Provisions table (Table 6 to 40 CFR part 63, subpart CCCC) to specify that 40 CFR 63.10(b)(2)(i) does not apply to 40 CFR part 63, subpart CCCC. Section 63.10(b)(2)(i) describes the recordkeeping requirements during startup and shutdown. These recording provisions are no longer necessary because the EPA is proposing that recordkeeping and reporting applicable to normal operations will apply to startup and shutdown. In the absence of special provisions applicable to startup and shutdown, such as a startup and shutdown plan, there is no reason to retain additional recordkeeping for startup and shutdown periods.
We are proposing to revise the General Provisions table (Table 6 to 40 CFR part 63, subpart CCCC) to specify that 40 CFR 63.10(b)(2)(ii) does not apply to 40 CFR part 63, subpart CCCC. Section 63.10(b)(2)(ii) describes the recordkeeping requirements during a malfunction. The EPA is proposing to add such requirements to 40 CFR 63.2182(a)(2). The regulatory text we are proposing to add differs from the General Provisions it is replacing in that the General Provisions requires the creation and retention of a record of the occurrence and duration of each malfunction of process, air pollution control, and monitoring equipment. The EPA is proposing that this requirement apply to any failure to meet an applicable standard and is requiring that the source record the date, time, and duration of the failure rather than the “occurrence.”
The EPA is also proposing to add to 40 CFR 63.2182(a)(2) a requirement that sources keep records that include a list of the affected source or equipment and actions taken to minimize emissions, an estimate of the quantity of each regulated pollutant emitted over the standard for which the source failed to meet the standard, and a description of the method used to estimate the emissions. Examples of such methods would include product-loss calculations, mass balance calculations, measurements when available, or engineering judgment based on known process parameters. The EPA is proposing to require that sources keep records of this information to ensure that there is adequate information to allow the EPA to determine the severity of any failure to meet a standard, and to provide data that may document how the source met the general duty to minimize emissions when the source has failed to meet an applicable standard.
We are proposing to revise the General Provisions table (Table 6 to 40 CFR part 63, subpart CCCC) to specify that 40 CFR 63.10(b)(2)(iv) does not apply to 40 CFR part 63, subpart CCCC. When applicable, the provision requires sources to record actions taken during SSM events when actions were inconsistent with their SSM plan. The requirement is no longer appropriate because SSM plans will no longer be required. The requirement previously applicable under 40 CFR 63.10(b)(2)(iv)(B) to record actions to minimize emissions and record corrective actions is now applicable by reference to 40 CFR 63.2182(a)(2).
We are proposing to revise the General Provisions table (Table 6 to 40 CFR part 63, subpart CCCC) to specify that 40 CFR 63.10(b)(2)(v) does not apply to 40 CFR part 63, subpart CCCC. When applicable, the provision requires sources to record actions taken during SSM events to show that actions taken were consistent with their SSM plan. The requirement is no longer appropriate because SSM plans will no longer be required.
We are proposing to revise the General Provisions table (Table 6 to 40 CFR part 63, subpart CCCC) to specify that 40 CFR 63.10(c)(15) does not apply to 40 CFR part 63, subpart CCCC. When applicable, the provision allows an owner or operator to use the affected source's SSM plan or records kept to satisfy the recordkeeping requirements of the SSM plan, specified in 40 CFR 63.6(e), to also satisfy the requirements of 40 CFR 63.10(c)(10) through (12). The EPA is proposing to eliminate this requirement because SSM plans would no longer be required, and, therefore, 40 CFR 63.10(c)(15) no longer serves any useful purpose for affected units.
We are proposing to revise the General Provisions table (Table 6 to 40 CFR part 63, subpart CCCC) to specify that 40 CFR 63.10(d)(5) does not apply to 40 CFR part 63, subpart CCCC. Section 63.10(d)(5) describes the reporting requirements for startups, shutdowns, and malfunctions. To replace the General Provisions reporting requirement, the EPA is proposing to add reporting requirements to 40 CFR 63.2181(c)(5) and (6). The replacement language differs from the General Provisions requirement in that it eliminates periodic SSM reports as a stand-alone report. We are proposing language that requires sources that fail to meet an applicable standard at any time to report the information concerning such events in the semi-annual compliance report already required under this rule. We are proposing that the report must contain the number, date, time, duration, and the cause of such events (including unknown cause, if applicable), a list of the affected source or equipment, an estimate of the quantity of each regulated pollutant emitted over any emission limit, and a description of the method used to estimate the emissions.
Examples of such methods would include product-loss calculations, mass balance calculations, measurements when available, or engineering judgment based on known process parameters. The EPA is proposing this requirement to ensure that there is adequate information to determine compliance, to allow the EPA to determine the severity of the failure to meet an applicable standard, and to provide data that may document how the source met the general duty to minimize emissions during a failure to meet an applicable standard.
We will no longer require owners or operators to determine whether actions taken to correct a malfunction are consistent with an SSM plan, because malfunction plans would no longer be required. The proposed amendments, therefore, eliminate the cross reference to 40 CFR 63.10(d)(5)(i) that contains the description of the previously required SSM report format and submittal schedule from this section. These specifications are no longer necessary because the events will be reported in otherwise required reports with similar format and submittal requirements.
We are proposing to revise the General Provisions table (Table 6 to 40 CFR part 63, subpart CCCC) to specify that 40 CFR 63.10(d)(5)(ii) does not apply to 40 CFR part 63, subpart CCCC. Section 63.10(d)(5)(ii) describes an immediate report for startups, shutdowns, and malfunctions when a source failed to meet an applicable standard but did not follow the SSM plan. We will no longer require owners and operators to report when actions taken during a startup, shutdown, or malfunction were not consistent with an SSM plan, because plans would no longer be required.
We are proposing other miscellaneous revisions that add clarity to rule language. For example, we are using active, second-person voice throughout the rule by incorporating “you must . . .” into the language. This is consistent with the EPA's current rule-writing practices and creates uniformity within 40 CFR part 63, subpart CCCC. We are also proposing the removal of “but is not limited to” in 40 CFR 63.2132, because this language is not necessary. The 40 CFR part 63, subpart CCCC requirements are limited to fermenters at this time, and the removal of this language clarifies this distinction. The EPA requests comment on each of these proposed revisions.
The EPA is proposing that currently operating facilities must immediately comply with the revised form of the fermenter VOC emission limits and general compliance requirements upon the effective date of the final rule. As discussed in section IV.D.2.a of this preamble, facilities that currently demonstrate compliance by monitoring brew ethanol in the fermenter have up to 1 year to install CEMS. During this time, emissions data must be collected for each batch using the existing compliance method (monitoring brew ethanol) for use in the semiannual compliance reports with the revised emission limits. Sources that are constructed or reconstructed after promulgation of the rule revisions must comply with the emission limits and compliance requirements upon startup of the affected source. We request comment on each of these timeframes.
We are proposing to revise 40 CFR 63.2133 to specify that an area source that becomes a major source of HAP, and that is an existing affected source, must be in compliance with the subpart by not later than 1 year after it becomes a major source, instead of by not later than 3 years. This revision is consistent with the proposed requirement that facilities have 1 year to install CEMS if they currently monitor brew ethanol in the fermenter to determine compliance. The EPA requests comment on this timeframe.
We anticipate that four nutritional yeast facilities currently operating in the United States will be affected by these proposed amendments.
The proposed amendments to this subpart will have a positive impact on air quality. While facilities will not need to install additional controls to comply with the proposed fermenter emission limits, the revisions will remove the exemption that allowed up to 2 percent of the total number of batches to exceed emission limits, as well as the exemption that allowed emissions from batches produced during periods of malfunction to not be used in determining compliance with emission limits. While these changes cannot easily be quantified due to a lack of data on the current number of exempted batches, the practical effect is that production of all batches of nutritional yeast at affected sources will be required to meet emission limits. The other proposed revisions, which affect testing, monitoring, recordkeeping, and reporting requirements, will ensure that emissions monitoring equipment continues to perform as expected and provides reliable data from each facility to be reported for compliance. For reference, the baseline emissions for each facility are documented in the memorandum, “Emissions Data and Acute Risk Factor Used in Residual Risk Modeling: Manufacturing of Nutritional Yeast Source Category,” which is available in the docket for this action.
We have estimated compliance costs for all existing sources to install the necessary monitoring equipment (
Total annualized costs for this proposal are estimated to be $172,000. Estimated annualized compliance costs range from $16,000 to $109,000 per facility. The EPA conducted economic impact screening analyses for this proposal, as detailed in the memorandum, “Economic Impact Analysis for the Manufacturing of Nutritional Yeast Risk and Technology Review (RTR),” which is available in the docket for this action. Screening analyses suggest that the impacts of this action will be minimal, with all entities subject to this action estimated to have cost-to-sales ratios of less than 0.1 percent. We do not expect any adverse economic impacts to result from this action.
As discussed above, the proposed amendments to this subpart will have positive impacts on air quality by removing the exemption for a portion of batches to meet emission limits. The proposed changes to monitoring methods will increase the reliability of emissions data collected by facilities by requiring continued maintenance of emission monitoring systems and monitoring of actual emission measurements at all times instead of allowing emission estimates based on brew ethanol correlations, which will allow regulators to clearly assess whether the standards for the protection of public health and the environment are being met. In particular, the demographics analysis shows that increased risk levels are concentrated around the facility that is not currently using CEMS. The proposed amendment will directly benefit this population by increasing the accuracy of the emissions data that is monitored and reported. Utilization of CEMS is also expected to facilitate more effective use of current process controls for acetaldehyde emissions versus use of the brew ethanol correlation approach. Other proposed amendments will result in additional benefits, such as streamlined reporting through electronic methods for owners/operators of nutritional yeast manufacturing facilities and increased access to emissions data by stakeholders, as described in previous sections.
We solicit comments on all aspects of this proposed action, including those aspects specifically called out elsewhere in this preamble. As noted previously, we are not seeking comment on the source category definition in this action. In addition to general comments on this proposed action, we are also interested in additional data that may improve the risk assessments and other analyses. We are specifically interested in receiving any improvements to the data used in the site-specific emissions profiles used for risk modeling. Such data should include supporting documentation in sufficient detail to allow characterization of the quality and representativeness of the data or information. Section VII of this preamble provides more information on submitting data.
The site-specific emissions profiles used in the source category risk and demographic analyses and instructions are available for download on the RTR Web site at
If you believe that the data are not representative or are inaccurate, please identify the data in question, provide your reason for concern, and provide any “improved” data that you have, if available. When you submit data, we request that you provide documentation of the basis for the revised values to support your suggested changes. To submit comments on the data downloaded from the RTR Web site, complete the following steps:
1. Within this downloaded file, enter suggested revisions to the data fields appropriate for that information.
2. Fill in the commenter information fields for each suggested revision (
3. Gather documentation for any suggested emissions revisions (
4. Send the entire downloaded file with suggested revisions in Microsoft® Access format and all accompanying documentation to Docket ID No. EPA–HQ–OAR–2015–0730 (through the method described in the
5. If you are providing comments on a single facility or multiple facilities, you need only submit one file for all facilities. The file should contain all suggested changes for all sources at that facility. We request that all data revision comments be submitted in the form of updated Microsoft® Excel files that are generated by the Microsoft® Access file. These files are provided on the RTR Web site at
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 OMB for review.
The information collection activities in this proposed rule have been submitted for approval to OMB under the PRA. The Information Collection Request (ICR) that the EPA prepared has been assigned EPA ICR number 1886.03. A copy of the ICR can be found in the docket for this rule, and it is summarized here.
We are proposing new reporting and recordkeeping requirements to the Manufacturing of Nutritional Yeast source category as a result of additional requirements related to the use of CEMS.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for the EPA's regulations in 40 CFR are listed in 40 CFR part 9.
Submit your comments on the Agency's need for this information, the accuracy of the provided burden estimates and any suggested methods for minimizing respondent burden to the EPA using the docket identified at the beginning of this rule. You may also send your ICR-related comments to OMB's Office of Information and Regulatory Affairs via email to
I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. One entity subject to the requirements of this action is assumed to be a small business for the purposes of this analysis, as the complex ownership structure makes it difficult to clearly determine the entity's size. The Agency has determined that this entity may experience an impact of less than 0.01 percent of revenues. Details of this analysis are presented in the memorandum, “Economic Impact Analysis for the Manufacturing of Nutritional Yeast Risk and Technology Review (RTR),” which is available in the docket for this action.
This action does not contain an unfunded mandate that may result in expenditures of $100 million or more as described in UMRA, 2 U.S.C. 1531–1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local, or tribal governments. The nationwide annualized cost of this action for affected industrial sources is estimated to be $172,000 per year.
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. No tribal facilities are known to be engaged in the nutritional yeast manufacturing industry that would be affected by this action. Thus, Executive Order 13175 does not apply to this action.
This action is not subject to Executive Order 13045 because it is not economically significant as defined in Executive Order 12866. This action's
This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.
This action involves technical standards. Therefore, the EPA conducted a search to identify potentially applicable voluntary consensus standards. However, the Agency identified no such standards. Therefore, the EPA has decided to use EPA Method 25A of 40 CFR part 60, appendix A. A thorough summary of the search conducted and results are included in the memorandum titled, “Voluntary Consensus Standard Results for the Risk and Technology Review of the Manufacturing of Nutritional Yeast NESHAP,” which is available in the docket for this action.
The EPA believes that this action does not have disproportionately high and adverse human health or environmental effects on minority populations, low-income populations, and/or indigenous peoples, as specified in Executive Order 12898 (58 FR 7629, February 16, 1994).
The documentation for this decision is contained in section IV.A of this preamble and the technical report, “Risk and Technology Review—Analysis of Socio-Economic Factors for Populations Living Near Nutritional Yeast Manufacturing Facilities,” which is available in the docket for this action.
As discussed in section IV.A of this preamble, we performed a demographic analysis, which is an assessment of risks to individual demographic groups, of the population close to the facilities (within 50 km and within 5 km). In this analysis, we evaluated the distribution of HAP-related cancer risks and non-cancer hazards from the nutritional yeast manufacturing facilities across different social, demographic, and economic groups within the populations living near facilities identified as having the highest risks.
The analysis indicates that the minority population living within 50 km (1,700,000 people, of which 41 percent are minority) and within 5 km (131,567 people, of which 68 percent are minority) of the four nutritional yeast manufacturing facilities is greater than the minority population found nationwide (28 percent). The specific demographics of the population within 5 and 50 km of the facilities indicate potential disparities in certain demographic groups, including the “African American,” “Below the Poverty Level,” and “Over 25 and without high school diploma” groups.
When examining the risk levels of those exposed to emissions from the four nutritional yeast manufacturing facilities we find approximately 750 persons around one facility (AB Mauri—Fleischmann's Yeast in Memphis, Tennessee) are exposed to a cancer risk greater than or equal to 1-in-1 million with the highest exposure to these individuals of less than 2-in-1 million. Of these 750 persons, 100 percent of them are defined as minority. When examining the noncancer risks surrounding these facilities, no one is predicted to have a chronic non-cancer TOSHI greater than 1. This facility is also the only one that is not currently using CEMS. The proposed amendments will directly benefit this population by increasing the accuracy of the emissions data that is monitored and reported. Utilization of CEMS is also expected to facilitate more effective use of process controls for acetaldehyde emissions versus use of the brew ethanol correlation approach.
The EPA has determined that this proposed rule does not have disproportionately high and adverse human health or environmental effects on minority populations, low-income populations, and/or indigenous peoples because the health risks based on actual emissions are low (below 2-in-1 million), the population exposed to risks greater than 1-in-1 million is relatively small (750 persons), and the rule maintains or increases the level of environmental protection for all affected populations without having any disproportionately high and adverse human health or environmental effects on any population, including any minority, low-income, or indigenous populations. Further, the EPA believes that implementation of this rule will provide an ample margin of safety to protect public health of all demographic groups.
Environmental protection, Air pollution control, Hazardous substances, Incorporation by reference, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, the Environmental Protection Agency proposes to amend part 63 of title 40, chapter I, of the Code of Federal Regulations as follows:
42 U.S.C. 7401,
(m) * * *
(24) EPA/600/R–12/531, EPA Traceability Protocol for Assay and Certification of Gaseous Calibration Standards, May 2012, IBR approved for § 63.2163(b)(2).
This subpart establishes national emission limitations for hazardous air pollutants emitted from manufacturers of nutritional yeast. This subpart also establishes requirements to demonstrate initial and continuous compliance with the emission limitations.
(a) You are subject to this subpart if you own or operate a nutritional yeast manufacturing facility that is, is located at, or is part of a major source of hazardous air pollutants (HAP) emissions.
(1) A manufacturer of nutritional yeast is a facility that makes yeast for the purpose of becoming an ingredient in dough for bread or any other yeast-raised baked product, or for becoming a nutritional food additive intended for consumption by humans. A manufacturer of nutritional yeast does not include production of yeast intended for consumption by animals, such as an additive for livestock feed.
(2) A major source of HAP emissions is any stationary source or group of stationary sources located within a contiguous area and under common control that emits or has the potential to emit, considering controls, any single HAP at a rate of 9.07 megagrams (10 tons) or more per year or any combination of HAP at a rate of 22.68 megagrams (25 tons) or more per year.
(b) [Reserved]
(a) This subpart applies to each new, reconstructed, or existing “affected source” that produces
(b) The affected source is the collection of equipment used in the manufacture of the nutritional yeast species
(c) The emission limitations in this subpart apply to fermenters in the affected source that meet all of the criteria listed in paragraphs (c)(1) and (2) of this section.
(1) The fermenters are “fed-batch” as defined in § 63.2192.
(2) The fermenters are used to support one of the last three fermentation stages in a production run (
(d) The emission limitations in this subpart do not apply to flask, pure-culture, yeasting-tank, or any other set-batch (defined in § 63.2192) fermentation, and they do not apply to any operations after the last dewatering operation, such as filtration.
(e) The emission limitations in Table 1 to this subpart do not apply to fermenters during the production of specialty yeast (defined in § 63.2192).
(f) An affected source is a “new affected source” if you commenced construction of the affected source after October 19, 1998, and you met the applicability criteria in § 63.2131 at the time you commenced construction.
(g) An affected source is “reconstructed” if it meets the criteria for reconstruction as defined in § 63.2.
(h) An affected source is “existing” if it is not new or reconstructed.
(a) If you have a new or reconstructed affected source, then you must comply with paragraph (a)(1) or (2) of this section.
(1) If you start up your affected source before May 21, 2001, then you must comply with the applicable emission limitations in Table 1 to this subpart no later than May 21, 2001.
(2) If you start up your affected source on or after May 21, 2001, then you must comply with the applicable emission limitations in Table 1 to this subpart upon startup of your affected source.
(b) If you have an existing affected source, then you must comply with the applicable emission limitations in Table 1 to this subpart no later than May 21, 2004.
(c) If you have an area source that increases its emissions, or its potential to emit, so that it becomes a major source of HAP, then paragraphs (c)(1) through (2) of this section apply.
(1) Any portion of the existing facility that is a new affected source or a new reconstructed source must be in compliance with this subpart upon startup.
(2) All other parts of the affected source must be in compliance with this subpart by not later than 1 year after it becomes a major source.
(d) You must meet the notification requirements in § 63.2180 according to the schedule in § 63.2180 and in subpart A of this part.
You must meet the applicable emission limitations in Table 1 to this subpart.
(a) You must be in compliance with the emission limitations in Table 1 to this subpart at all times.
(b) If the date upon which you must demonstrate initial compliance as specified in § 63.2160 falls after the compliance date specified for your affected source in § 63.2133, then you must maintain a log detailing the operation and maintenance of the continuous emission monitoring systems and the process and emissions control equipment during the period between those dates.
(c) At all times, you must operate and maintain any affected source, including associated air pollution control
(d) To determine compliance before [date of publication of the final rule in the
(e) To determine compliance on or after [date of publication of the final rule in the
(a) For each emission limitation in Table 1 to this subpart for which you demonstrate compliance using the Average Option, you must demonstrate initial compliance for the period ending on the last day of the month that is 12 calendar months (or 11 calendar months, if the compliance date for your affected source is the first day of the month) after the compliance date that is specified for your affected source in § 63.2133. (For example, if the compliance date is October 15, 2017, then the first 12-month period for which you must demonstrate compliance would be October 15, 2017 through October 31, 2018.)
(b) For each emission limitation in Table 1 to this subpart for which you demonstrate compliance using the Batch Option, you must demonstrate initial compliance for the period ending June 30 or December 31 (use whichever date is the first date following the compliance date that is specified for your affected source in § 63.2133).
(a) You must conduct each performance test in Table 2 to this subpart that applies to you, as specified in paragraphs (b) through (f) of this section.
(b) You must conduct performance tests under such conditions as the Administrator specifies, based on representative performance of the affected source for the period being tested, and under the specific conditions that this subpart specifies in Table 2 to this subpart and in paragraphs (b)(1) through (4) of this section. You must record the process information that is necessary to document operating conditions during the test and include in such record an explanation to support that such conditions represent normal operation. Upon request, you must make available to the Administrator such records as may be necessary to determine the conditions of performance tests.
(1) You must conduct each performance test simultaneously with brew ethanol monitoring to establish a brew-to-exhaust correlation as specified in paragraph (f) of this section.
(2) For each fermentation stage, you must conduct one run of the EPA Test Method 25A of 40 CFR part 60, appendix A–7, over the entire length of a batch. The three fermentation stages do not have to be from the same production run.
(3) You must obtain your test sample at a point in the exhaust-gas stream before you inject any dilution air. For fermenters, dilution air is any air not needed to control fermentation.
(4) You must record the results of the test for each fermentation stage.
(c) You may not conduct performance tests during periods of malfunction.
(d) You must collect data to correlate the brew ethanol concentration to the VOC concentration in the fermenter exhaust according to paragraphs (d)(1) through (3) of this section.
(1) You must collect a separate set of brew ethanol concentration data for each fed-batch fermentation stage while manufacturing the product that constitutes the largest percentage (by mass) of average annual production.
(2) You must measure brew ethanol as specified in § 63.2164 concurrently with conducting a performance test for VOC in fermenter exhaust as specified in paragraph (b) of this section. You must measure brew ethanol at least once during each successive 30-minute period over the entire period of the performance test for VOC in fermenter exhaust.
(3) You must keep a record of the brew ethanol concentration data for each fermentation stage over the period of EPA Test Method 25A of 40 CFR part 60, appendix A–7, performance test.
(e) For each set of data that you collected under paragraphs (b) and (d) of this section, you must perform a linear regression of brew ethanol concentration (percent) on VOC fermenter exhaust concentration (parts per million by volume (ppmv) measured as propane). You must ensure the correlation between the brew ethanol concentration, as measured by the brew ethanol monitor, and the VOC fermenter exhaust concentration, as measured by EPA Test Method 25A of 40 CFR part 60, appendix A–7, is linear with a correlation coefficient of at least 0.90.
(f) You must calculate the VOC concentration in the fermenter exhaust using the brew ethanol concentration data according to Equation 1 of this section.
(a) For each emission limitation in Table 1 to this subpart for which compliance is demonstrated by monitoring brew ethanol concentration and calculating VOC concentration in the fermenter exhaust according to the
(b) The first subsequent performance test must be conducted no later than 365 calendar days after the initial performance test conducted according to § 63.2160. Each subsequent performance test must be conducted no later than 365 calendar days after the previous performance test. You must conduct a performance test for each 365 calendar day period during which you demonstrate compliance using the brew ethanol correlation developed according to § 63.2161.
(a) You must install and certify a CEMS that generates a single combined response value for VOC concentration (VOC CEMS) according to the procedures and requirements in Performance Specification 8—Performance Specifications for Volatile Organic Compound Continuous Emission Monitoring Systems in Stationary Sources in appendix B to part 60 of this chapter.
(b) You must operate and maintain your VOC CEMS according to the procedures and requirements in Procedure 1—Quality Assurance Requirements for Gas Continuous Emission Monitoring Systems Used for Compliance Determination in appendix F to part 60 of this chapter.
(1) You must conduct a relative accuracy test audit (RATA) at least annually, in accordance with sections 8 and 11, as applicable, of Performance Specification 8.
(2) As necessary, rather than relying on reference 2 of Performance Specification 8 of appendix B to 40 CFR part 60, you must rely on EPA/600/R–12/531, EPA Traceability Protocol for Assay and Certification of Gaseous Calibration Standards, May 2012 (incorporated by reference, see § 63.14).
(3) Your affected source must meet the criteria of Performance Specification 8, section 13.2.
(c) You must use Method 25A in appendix A–7 to part 60 of this chapter as the Reference Method (RM).
(d) You must calibrate your VOC CEMS with propane.
(e) You must set your VOC CEMS span at less than 5 times the relevant VOC emission limitation given in Table 1 or 2 of this subpart. Note that the EPA considers 1.5 to 2.5 times the relevant VOC emission limitation to be the optimum range, in general.
(f) You must complete the performance evaluation and submit the performance evaluation report before the compliance date that is specified for your affected source in § 63.2133.
(g) You must monitor VOC concentration in fermenter exhaust at any point prior to dilution of the exhaust stream.
(h) You must collect data using the VOC CEMS at all times during each batch monitoring period, except for periods of monitoring system malfunctions, required monitoring system quality assurance or quality control activities (including, as applicable, calibration checks and required zero and span adjustments), and any scheduled maintenance.
(i) For each CEMS, you must record the results of each inspection, calibration, and validation check.
(j) You must check the zero (low-level) and high-level calibration drifts for each CEMS in accordance with the applicable Performance Specification of 40 CFR part 60, appendix B. You must adjust the zero (low-level) and high-level calibration drifts, at a minimum, whenever the zero (low-level) drift exceeds 2 times the limits of the applicable Performance Specification. You must perform the calibration drift checks at least once daily except under the conditions of paragraphs (j)(1) through (3) of this section.
(1) If a 24-hour calibration drift check for your CEMS is performed immediately prior to, or at the start of, a batch monitoring period of a duration exceeding 24 hours, you are not required to perform 24-hour-interval calibration drift checks during that batch monitoring period.
(2) If the 24-hour calibration drift exceeds 2.5 percent of the span value in fewer than 5 percent of the checks over a 1-month period, and the 24-hour calibration drift never exceeds 7.5 percent of the span value, you may reduce the frequency of calibration drift checks to at least weekly (once every 7 days).
(3) If, during two consecutive weekly checks, the weekly calibration drift exceeds 5 percent of the span value, then you must resume a frequency of at least 24-hour interval calibration checks until the 24-hour calibration checks meet the test of paragraph (j)(2) of this section.
(k) If your CEMS is out of control, you must take corrective action according to paragraphs (k)(1) through (3) of this section.
(1) Your CEMS is out of control if the zero (low-level) or high-level calibration drift exceeds 2 times the limits of the applicable Performance Specification.
(2) When the CEMS is out of control, you must take the necessary corrective action and repeat all necessary tests that indicate that the system is out of control. You must take corrective action and conduct retesting until the performance requirements are below the applicable limits.
(3) You must not use data recorded during batch monitoring periods in which the CEMS is out of control in averages and calculations used to demonstrate compliance, or to meet any data availability requirement established under this subpart. The beginning of the out-of-control period is the beginning of the first batch monitoring period that follows the most recent calibration drift check during which the system was within allowable performance limits. The end of the out-of-control period is the end of the last batch monitoring period before you have completed corrective action and successfully demonstrated that the system is within the allowable limits. If your successful demonstration that the system is within the allowable limits occurs during a batch monitoring period, then the out-of-control period ends at the end of that batch monitoring period. If the CEMS is out of control for any part of a particular batch monitoring period, it is out of control for the whole batch monitoring period.
(a) You must install, operate, and maintain each brew ethanol monitor according to the manufacturer's specifications and in accordance with § 63.2150(c).
(b) Each of your brew ethanol monitors must complete a minimum of one cycle of operation (sampling, analyzing, and data recording) for each successive 30-minute period within each batch monitoring period. Except as specified in paragraph (c) of this section, you must have a minimum of two cycles of operation in a 1-hour period to have a valid hour of data.
(c) You must reduce the brew ethanol monitor data to arithmetic batch averages computed from two or more data points over each 1-hour period, except during periods when calibration, quality assurance, or maintenance activities pursuant to provisions of this part are being performed. During these periods, a valid hour of data must consist of at least one data point representing a 30-minute period.
(d) You must have valid brew ethanol monitor data from all operating hours over the entire batch monitoring period.
(e) You must set the brew ethanol monitor span to correspond to not greater than 5 times the relevant emission limit; note that we consider 1.5 to 2.5 times the relevant emission limit to be the optimum range, in general. You must use the brew-to-exhaust correlation equation established under § 63.2161(f) to determine the span value for your brew ethanol monitor that corresponds to the relevant emission limit.
(f) For each brew ethanol monitor, you must record the results of each inspection, calibration, and validation check.
(g) The gas chromatographic (GC) that you use to calibrate your brew ethanol monitor must meet the requirements of paragraphs (g)(1) through (3) of this section.
(1) You must calibrate the GC at least daily, by analyzing standard solutions of ethanol in water (0.05 percent, 0.15 percent, and 0.3 percent).
(2) For use in calibrating the GC, you must prepare the standard solutions of ethanol using the procedures listed in paragraphs (g)(2)(i) through (vi) of this section.
(i) Starting with 100-percent ethanol, you must dry the ethanol by adding a small amount of anhydrous magnesium sulfate (granular) to 15–20 milliliters (ml) of ethanol.
(ii) You must place approximately 50 ml of water into a 100-ml volumetric flask and place the flask on a balance. You must tare the balance. You must weigh 2.3670 grams of the dry (anhydrous) ethanol into the volumetric flask.
(iii) Add the 100-ml volumetric flask contents to a 1000-ml volumetric flask. You must rinse the 100-ml volumetric flask with water into the 1000-ml flask. You must bring the volume to 1000 ml with water.
(iv) You must place an aliquot into a sample bottle labeled “0.3% Ethanol.”
(v) You must fill a 50-ml volumetric flask from the contents of the 1000-ml flask. You must add the contents of the 50-ml volumetric flask to a 100-ml volumetric flask and rinse the 50-ml flask into the 100-ml flask with water. You must bring the volume to 100 ml with water. You must place the contents into a sample bottle labeled “0.15% Ethanol.”
(vi) With a 10-ml volumetric pipette, you must add two 10.0-ml volumes of water to a sample bottle labeled “0.05% Ethanol.” With a 10.0-ml volumetric pipette, you must pipette 10.0 ml of the 0.15 percent ethanol solution into the sample bottle labeled “0.05% Ethanol.”
(3) For use in calibrating the GC, you must dispense samples of the standard solutions of ethanol in water in aliquots to appropriately labeled and dated glass sample bottles fitted with caps having a Teflon® seal. You may keep refrigerated samples unopened for 1 month. You must prepare new calibration standards of ethanol in water at least monthly.
(h) You must calibrate the CEMS according to paragraphs (h)(1) through (3) of this section.
(1) To calibrate the brew ethanol monitor, you must inject a brew sample into a calibrated GC and compare the simultaneous ethanol value given by the brew ethanol monitor to that given by the GC. You must use either the Porapak® Q, 80–100 mesh, 6′ ×
(2) If a brew ethanol monitor value for ethanol differs by 20 percent or more from the corresponding GC ethanol value, you must determine the brew ethanol values throughout the rest of the batch monitoring period by injecting brew samples into the GC not less frequently than once every 30 minutes. From the time at which you detect a difference of 20 percent or more until the batch monitoring period ends, the GC data will serve as the brew ethanol monitor data.
(3) You must perform a calibration of the brew ethanol monitor at least four times per batch.
(a) You must demonstrate initial compliance with each emission limitation that applies to you according to Table 3 to this subpart.
(b) You must submit the Notification of Compliance Status containing the results of the initial compliance demonstration according to the requirements in § 63.2180(e).
(a) You must monitor and collect data according to this section.
(b) Except for periods of monitoring system malfunctions, required monitoring system quality assurance or control activities (including, as applicable, calibration checks and required zero and span adjustments), and any scheduled maintenance, you must collect data using the CEMS at all times during each batch monitoring period.
(c) You may not use data recorded during monitoring malfunctions, associated repairs, and required quality assurance or quality control activities in data averages and calculations used to report emission or operating levels, or to fulfill a data collection requirement. You must use all the data collected during all other periods in assessing the operation of the control system.
(d) Any hour during the batch monitoring period for which quality-assured VOC data are not obtained is a deviation from monitoring requirements and is counted as an hour of monitoring system downtime.
(a) You must demonstrate continuous compliance with each emission limitation in Table 1 to this subpart that applies to you according to methods specified in Table 4 to this subpart and the applicable procedures of this section.
(1) To demonstrate compliance prior to [date one year after the date of publication of the final rule in the
(2) To demonstrate compliance on and after [date 1 year after the date of publication of the final rule in the
(b) To demonstrate compliance with emission limitations prior to [date of publication of the final rule in the
(1) You must determine the percentage of batches over a 12-month calculation period that were in compliance with the applicable maximum concentration. The total number of batches in the calculation period is the sum of the numbers of batches of each fermentation stage for which emission limits apply. To determine which batches are in the 12-month calculation period, you must
(2) You must determine the percentage of batches in compliance with the applicable emission limitations for each 12-month calculation period at the end of each calendar month.
(3) The first 12-month calculation period begins on the compliance date that is specified for your affected source in § 63.2133 and ends on the last day of the month that includes the date 1 year after your compliance date, unless the compliance date for your affected source is the first day of the month, in which case the first 12-month calculation period ends on the last day of the month that is 11 calendar months after the compliance date. (For example, if the compliance date for your affected source is October 15, 2017, the first 12-month calculation period would begin on October 15, 2017, and end on October 31, 2018. If the compliance date for your affected source is October 1, 2017, the first 12-month calculation period would begin on October 1, 2017, and end on September 30, 2018.)
(4) The second 12-month calculation period and each subsequent 12-month calculation period begins on the first day of the month following the first full month of the previous 12-month averaging period and ends on the last day of the month 11 calendar months later. (For example, if the compliance date for your affected source is October 15, 2017, the second calculation period would begin on December 1, 2017, and end on November 30, 2018.)
(c) To demonstrate compliance with emission limitations on and after [date of publication of the final rule in the
(1) At the end of each calendar month, you must determine the average VOC concentration from all batches in each fermentation stage in a 12-month calculation period. To determine which batches are in a 12-month calculation period, you must include those batches for which the batch monitoring period ended on or after midnight on the first day of the period and exclude those batches for which the batch monitoring period did not end before midnight on the last day of the period.
(2) The first 12-month calculation period begins on the compliance date that is specified for your affected source in § 63.2133 and ends on the last day of the month that includes the date 1 year after your compliance date, unless the compliance date for your affected source is the first day of the month, in which case the first 12-month calculation period ends on the last day of the month that is 11 calendar months after the compliance date. (For example, if the compliance date for your affected source is October 15, 2017, the first 12-month calculation period would begin on October 15, 2017, and end on October 31, 2018. If the compliance date for your affected source is October 1, 2017, the first 12-month calculation period would begin on October 1, 2017, and end on September 30, 2018.)
(3) The second 12-month calculation period and each subsequent 12-month calculation period begins on the first day of the month following the first full month of the previous 12-month averaging period and ends on the last day of the month 11 calendar months later. (For example, if the compliance date for your affected source is October 15, 2017, the second calculation period would begin on December 1, 2017, and end on November 30, 2018.)
(d) To demonstrate compliance with emission limitations on and after [date of publication of the final rule in the
(a) You must submit all of the notifications in §§ 63.7(b) and (c), 63.8(e), (f)(4) and (6), and 63.9(b) through (h) that apply to you by the dates specified.
(b) If you start up your affected source before May 21, 2001, you are not subject to the initial notification requirements of § 63.9(b)(2).
(c) If you are required to conduct a performance test as specified in Table 2 to this subpart, you must submit a notification of intent to conduct a performance test at least 60 calendar days before the performance test is scheduled to begin as required in § 63.7(b)(1).
(d) If you are required to conduct a performance evaluation as specified in § 63.2163, you must submit a notification of the date of the performance evaluation at least 60 days prior to the date the performance evaluation is scheduled to begin as required in § 63.8(e)(2).
(e) If you are required to conduct a performance test as specified in Table 2 to this subpart, you must submit a Notification of Compliance Status according to § 63.9(h)(2)(ii).
(f) For each initial compliance demonstration required in Table 3 to this subpart, you must submit the Notification of Compliance Status no later than July 31 or January 31, whichever date follows the date that is specified for your affected source in § 63.2160(a) or (b). The first compliance report, described in § 63.2181(b)(1), serves as the Notification of Compliance Status.
(a) You must submit each report in Table 5 to this subpart that applies to you.
(1) On and after [date of publication of the final rule in the
(i) Within 60 days after the date of completing each performance test as required by this subpart, you must submit the results of the performance test following the procedure specified in either paragraph (a)(1)(i)(A) or (B) of this section.
(A) For data collected using test methods supported by the EPA's Electronic Reporting Tool (ERT) as listed on the EPA's ERT Web site (
(B) For data collected using test methods that are not supported by the EPA's ERT as listed on the EPA's ERT Web site at the time of the test, you must submit the results of the performance test to the Administrator at the appropriate address listed in § 63.13.
(ii) Within 60 days after the date of completing each CEMS performance evaluation (as defined in § 63.2), you must submit the results of the performance evaluation following the procedure specified in either paragraph (ii)(A) or (B) of this section.
(A) For performance evaluations of CEMS measuring RATA pollutants that are supported by the EPA's ERT as listed on the EPA's ERT Web site at the time of the evaluation, you must submit the results of the performance evaluation to the EPA via the CEDRI. Performance evaluation data must be submitted in a file format generated through the use of the EPA's ERT or an alternate file format consistent with the XML schema listed on the EPA's ERT Web site. If you claim that some of the performance evaluation information being submitted is CBI, then you must submit a complete file generated through the use of the EPA's ERT or an alternate electronic file consistent with the XML schema listed on the EPA's ERT Web site, including information claimed to be CBI, on a compact disc, flash drive or other commonly used electronic storage media to the EPA. The electronic storage media must be clearly marked as CBI and mailed to U.S. EPA/OAQPS/CORE CBI Office, Attention: Group Leader, Measurement Policy Group, MD C404–02, 4930 Old Page Rd., Durham, NC 27703. The same ERT or alternate file with the CBI omitted must be submitted to the EPA via the EPA's CDX as described earlier in this paragraph.
(B) For any performance evaluations of continuous emission monitoring systems measuring RATA pollutants that are not supported by the EPA's ERT as listed on the EPA's ERT Web site at the time of the evaluation, you must submit the results of the performance evaluation to the Administrator at the appropriate address listed in § 63.13.
(b) Unless the Administrator has approved a different schedule for submission of reports under § 63.10(a), you must submit each report by the date in Table 5 to this subpart and according to paragraphs (b)(1) through (5) of this section.
(1) The first compliance report must include the information specified in paragraph (c) of this section. If you are demonstrating compliance with an emission limitation using a 12-month calculation period (
(2) The first compliance report must be postmarked or delivered no later than July 31 or January 31, whichever date follows the end of the first compliance reporting period specified in paragraph (b)(1) of this section.
(3) Each subsequent compliance report must cover the semiannual reporting period from January 1 through June 30 or the semiannual reporting period from July 1 through December 31. Each subsequent compliance report must include the information specified in paragraph (c) of this section.
(4) Each subsequent compliance report must be postmarked or delivered no later than July 31 or January 31, whichever date is the first date following the end of the semiannual reporting period.
(5) For each affected source that is subject to permitting regulations pursuant to 40 CFR part 70 or part 71, and if the permitting authority has established dates for submitting semiannual reports pursuant to 40 CFR 70.6(a)(3)(a)(iii)(A) or 40 CFR 71.6(a)(3)(a)(iii)(A), you may submit the first and subsequent compliance reports according to the dates the permitting authority has established instead of according to the dates in paragraphs (b)(1) through (4) of this section.
(c) The compliance report must contain the information listed in paragraphs (c)(1) through (7) of this section.
(1) Company name and address.
(2) Statement by a responsible official with that official's name, title, and signature, certifying the accuracy of the content of the report.
(3) Date of report and beginning and ending dates of the reporting period.
(4) For reporting periods ending before [date of publication of the final rule in the
(5) For reporting periods ending before [date of publication of the final rule in the
(6) For reporting periods ending on or after [date of publication of the final rule in the
(i) If using the Average Option in Table 1 to this subpart, the average VOC concentration in the fermenter exhaust from all batches in each fermentation stage for each 12-month period ending on a calendar month that falls within the reporting period that did not exceed the applicable emission limitation.
(ii) If using the Batch Option in Table 1 to this subpart, a certification that the average VOC concentration in the fermenter exhaust for each batch did not exceed applicable emission limitations.
(7) For reporting periods ending on and after [date of publication of the final rule in the
(i) If using the Average Option in Table 1 to this subpart, the average VOC concentration in the fermenter exhaust from all batches in each fermentation
(ii) If using the Batch Option in Table 1 to this subpart, the fermenters and batches that failed to meet the applicable standard; the date, time, and duration of each failure; an estimate of the quantity of VOC emitted over the emission limitation; a description of the method used to estimate the emissions; and the actions taken to minimize emissions and correct the failure.
(8) The total operating hours and hours of monitoring system downtime for each fermenter.
(a) You must keep the records listed in paragraphs (a)(1) through (4) of this section.
(1) A copy of each notification and report that you submitted to comply with this subpart, including all documentation supporting any Notification of Compliance Status and compliance report that you submitted, according to the requirements in § 63.10(b)(2)(xiv).
(2) Records of failures to meet a standard, specified in § 63.2181(c)(5) and (7).
(3) Records of performance tests and performance evaluations as required in § 63.10(b)(2)(viii).
(4) Records of results of brew-to-exhaust correlation tests specified in § 63.2161.
(b) For each CEMS, you must keep the records listed in paragraphs (b)(1) through (9) of this section.
(1) Records described in § 63.10(b)(2)(vi).
(2) All required measurements needed to demonstrate compliance with a relevant standard (including, but not limited to, CEMS data, raw performance testing measurements, and raw performance evaluation measurements that support data that you are required to report).
(3) Records described in § 63.10(b)(2)(viii) through (xi). The CEMS system must allow the amount of excess zero (low-level) and high-level calibration drift measured at the interval checks to be quantified and recorded.
(4) All required CEMS measurements (including monitoring data recorded during CEMS breakdowns and out-of-control periods).
(5) Identification of each time period during which the CEMS was inoperative, except for zero (low-level) and high-level checks.
(6) Identification of each time period during which the CEMS was out of control, as defined in § 63.2163(k).
(7) Current version of the performance evaluation test plan, as specified in § 63.8(d)(2), including the program of corrective action for a malfunctioning CEMS, and previous (
(8) Request for alternatives to relative accuracy test audits for CEMS as required in § 63.8(f)(6)(i).
(9) Records of each deviation from monitoring system requirements, including a description and explanation of each deviation.
(c) You must keep the records required in Table 4 to this subpart to show continuous compliance with each emission limitation that applies to you.
(d) You must also keep the records listed in paragraphs (d)(1) through (3) of this section for each batch in your affected source.
(1) Unique batch identification number.
(2) Fermentation stage for which you are using the fermenter.
(3) Unique CEMS equipment identification number.
(a) Your records must be in a form suitable and readily available for expeditious review, according to § 63.10(b)(1).
(b) As specified in § 63.10(b)(1), you must keep each record for 5 years following the date of each occurrence, measurement, maintenance, corrective action, report, or record.
(c) You must keep each record on site for at least 2 years after the date of each occurrence, measurement, maintenance, corrective action, report, or record, according to § 63.10(b)(1). You may keep the records off site for the remaining 3 years.
(d) You must keep written procedures documenting the CEMS quality control program on record for the life of the affected source or until the affected source is no longer subject to the provisions of this part, to be made available for inspection, upon request, by the Administrator.
Table 6 to this subpart shows which parts of the General Provisions in §§ 63.1 through 63.13 apply to you.
(a) We, the U.S. EPA, or a delegated authority such as your state, local, or tribal agency, can implement and enforce this subpart. If our Administrator has delegated authority to your state, local, or tribal agency, then that agency has the authority to implement and enforce this subpart. You should contact the U.S. EPA Regional Office that serves you to find out if this subpart is delegated to your state, local, or tribal agency.
(b) In delegating implementation and enforcement authority of this subpart to a state, local, or tribal agency under 40 CFR part 63, subpart E, the authorities contained in paragraph (c) of this section are retained by our Administrator and are not transferred to the state, local, or tribal agency.
(c) The authorities that will not be delegated to state, local, or tribal agencies are listed in paragraphs (c)(1) through (4) of this section.
(1) Approval of alternatives to the non-opacity emission limitations in § 63.2140 under § 63.6(g).
(2) Approval of major alternatives to test methods under § 63.7(e)(2)(ii) and (f) and as defined in § 63.90.
(3) Approval of major alternatives to monitoring under § 63.8(f) and as defined in § 63.90.
(4) Approval of major alternatives to recordkeeping and reporting under § 63.10(f) and as defined in § 63.90.
Terms used in this subpart are defined in the Clean Air Act, in 40 CFR 63.2, the General Provisions of this part, and in this section as follows:
(a) The Working Group shall consist of representatives from:
(b) The Working Group shall consult with additional agencies or offices, as appropriate.
(b) Within 30 days of the date of this memorandum, the Working Group shall develop an initial 3-year strategic action plan that details broad approaches to be taken to enhance access to services and benefits. This initial plan shall be supplemented by a more detailed plan, to be published within 120 days of the date of this memorandum that discusses the steps to be taken in greater detail. The Working Group shall also report periodically on its accomplishments and ongoing initiatives.
(b) Nothing in this memorandum shall be construed to impair or otherwise affect the authority granted by law to an executive department or an agency, or the head thereof, or the status of that department or agency within the Federal Government.
(c) This memorandum shall be implemented consistent with applicable law and subject to the availability of appropriations.
(d) This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
(e) The Secretary of Homeland Security is hereby authorized and directed to publish this memorandum in the