Industry and Security Bureau
International Trade Administration
National Oceanic and Atmospheric Administration
Centers for Disease Control and Prevention
Centers for Medicare & Medicaid Services
Community Living Administration
Food and Drug Administration
National Institutes of Health
Coast Guard
U.S. Customs and Border Protection
Indian Affairs Bureau
National Park Service
Justice Programs Office
Federal Aviation Administration
Internal Revenue Service
United States Mint
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
To subscribe to the Federal Register Table of Contents electronic mailing list, go to https://public.govdelivery.com/accounts/USGPOOFR/subscriber/new, enter your e-mail address, then follow the instructions to join, leave, or manage your subscription.
Federal Aviation Administration (FAA), DOT.
Final special conditions; request for comments.
These special conditions are issued for the Embraer S.A. (Embraer) Model ERJ 190–300 airplane. This airplane will have a novel or unusual design feature when compared to the state of technology envisioned in the airworthiness standards for transport-category airplanes. This design feature is a digital-systems network architecture requiring isolation or protection from unauthorized internal access. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
This action is effective on Embraer on June 14, 2017. We must receive your comments by July 31, 2017.
Send comments identified by docket number FAA–2017–0239 using any of the following methods:
•
•
•
•
Varun Khanna, FAA, Airplane and Flight Crew Interface, ANM–111, Transport Airplane Directorate, Aircraft Certification Service, 1601 Lind Avenue SW., Renton, Washington 98057–3356; telephone 425–227–1298; facsimile 425–227–1320.
The FAA has determined that notice of, and opportunity for prior public comment on, these special conditions is impracticable because these procedures would significantly delay issuance of the design approval and thus delivery of the affected airplane.
In addition, the substance of these special conditions has been subject to the public-comment process in several prior instances with no substantive comments received. The FAA therefore finds that good cause exists for making these special conditions effective upon publication in the
We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data.
We will consider all comments we receive by the closing date for comments. We may change these special conditions based on the comments we receive.
On September 13, 2013, Embraer applied for an amendment to Type Certificate No. A57NM to include the new Model ERJ 190–300 airplane. The Model ERJ 190–300 airplane, which is a derivative of the Embraer Model ERJ 190–100 STD airplane currently approved under Type Certificate No. A57NM, is a 97- to 114-passenger transport-category airplane, designed with a new wing with a high aspect ratio and raked wingtip, and a new electrical-distribution system. The maximum take-off weight is 124,340 lbs (56,400 kg).
Under the provisions of title 14, Code of Federal Regulations (14 CFR) 21.101, Embraer must show that the Model ERJ 190–300 airplane meets the applicable provisions of the regulations listed in Type Certificate No. A57NM, or the applicable regulations in effect on the date of application for the change, except for earlier amendments as agreed upon by the FAA.
If the Administrator finds that the applicable airworthiness regulations (
Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, or should any other model already included on the same type certificate be modified to incorporate the same novel or unusual
In addition to the applicable airworthiness regulations and special conditions, the Embraer Model ERJ 190–300 airplane must comply with the fuel-vent and exhaust-emission requirements of 14 CFR part 34 and the noise-certification requirements of 14 CFR part 36.
The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type certification basis under § 21.101.
The Embraer Model ERJ 190–300 airplane will incorporate the following novel or unusual design feature: A digital-systems network architecture requiring isolation or protection from unauthorized internal access.
Networks, both in safety-related and non-safety-related applications, have been implemented in existing commercial-production airplanes. However, network security considerations and functions have played a relatively minor role in the certification of such systems because of the isolation, protection mechanisms, and limited connectivity between these networks.
To provide an understanding of the airplane electronic equipment, systems, and assets, these special conditions use the concept of domains. However, this does not prescribe any particular architecture.
The aircraft-control domain consists of the airplane electronic systems, equipment, instruments, networks, servers, software and hardware components, databases, etc., which are part of the type design of the airplane and are installed in the airplane to enable the safe operation of the airplane. These can also be referred to as flight-safety-related systems, and include flight controls, communication, display, monitoring, navigation, and related systems.
The operator-information domain generally consists of functions that the airplane operator manages or controls, such as administrative functions and cabin-support functions.
The passenger-entertainment domain consists of all functions required to provide the passengers with information and entertainment systems.
The Embraer Model ERJ 190–300 airplane design introduces the potential for access to the aircraft-control domain and airline-information-services domain by unauthorized persons through the passenger-information-services domain; and the security vulnerabilities related to the introduction of viruses, worms, user mistakes, and intentional sabotage of airplane networks, systems, and databases.
For electronic systems-and-assets security in these domains, the level of protection provided against security threats should be based on a security-risk assessment, noting that the level of protection could differ between domains and within domains, depending on the security threat. For each security vulnerability and airplane electronic asset, Embraer should identify in which domain the asset will be addressed.
In addition, the operating systems for current airplane systems are usually and historically proprietary. Therefore, they are not as susceptible to corruption from worms, viruses, and other malicious actions as are more-widely used commercial operating systems, such as Microsoft Windows, because access to the design details of these proprietary operating systems is limited to the system developer and airplane integrator. Some systems installed on the Embraer Model ERJ 190–300 airplane will use operating systems that are widely used and commercially available from third-party software suppliers. The security vulnerabilities of these operating systems may be more widely known than are the vulnerabilities of proprietary operating systems that the avionics manufacturers currently use.
These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
As discussed above, these special conditions are applicable to the Embraer Model ERJ 190–300 airplane. Should Embraer apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, these special conditions would apply to that model as well.
This action affects only a certain novel or unusual design feature on one model of airplane. It is not a rule of general applicability.
The substance of these special conditions has been subject to the notice and comment period in several prior instances and has been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. Therefore, the FAA has determined that prior public notice and comment are unnecessary and impracticable, and good cause exists for adopting these special conditions upon publication in the
Aircraft, Aviation safety, Reporting and recordkeeping requirements.
The authority citation for these special conditions is as follows:
49 U.S.C. 106(g), 40113, 44701, 44702, 44704.
Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for Embraer Model ERJ 190–300 airplanes.
1. The applicant must ensure that the airplane design provides isolation from, or airplane electronic-system security protection against, access by unauthorized sources internal to the airplane. The design must prevent inadvertent and malicious changes to, and all adverse impacts upon, airplane equipment, systems, networks, or other assets required for safe flight and operations.
2. The applicant must establish appropriate procedures to allow the operator to ensure that continued airworthiness of the airplane is maintained, including all post-type-certification modifications that may have an impact on the approved electronic-system security safeguards.
Federal Aviation Administration (FAA), DOT.
Final special conditions; request for comments.
These special conditions are issued for the Embraer S.A. (Embraer) ERJ 190–300 airplane. This airplane will have a novel or unusual design feature when compared to the state of technology envisioned in the airworthiness standards for transport-category airplanes. These airplanes will have a digital-systems network architecture composed of several connected networks that may allow access to or by external computer systems and networks, and may result in airplane electronic system-security vulnerabilities. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
This action is effective on Embraer on June 14, 2017. We must receive your comments by July 31, 2017.
Send comments identified by docket number FAA–2017–0238 using any of the following methods:
•
•
•
•
Varun Khanna, FAA, Airplane and Flight Crew Interface, ANM–111, Transport Airplane Directorate, Aircraft Certification Service, 1601 Lind Avenue SW., Renton, Washington 98057–3356; telephone 425–227–1298; facsimile 425–227–1320.
The FAA has determined that notice of, and opportunity for prior public comment on, these special conditions is impracticable because these procedures would significantly delay issuance of the design approval and thus delivery of the affected airplane.
In addition, the substance of these special conditions has been subject to the public comment process in several prior instances with no substantive comments received. The FAA therefore finds that good cause exists for making these special conditions effective upon publication in the
We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data.
We will consider all comments we receive by the closing date for comments. We may change these special conditions based on the comments we receive.
On September 13, 2013, Embraer applied for an amendment to Type Certificate No. A57NM to include the new Model ERJ 190–300 airplane. The Model ERJ 190–300 airplane, which is a derivative of the Embraer Model ERJ 190–100 STD airplane currently approved under Type Certificate No. A57NM, is a 97- to 114-passenger transport-category airplane, designed with a new wing with a high aspect ratio and raked wingtip, and a new electrical-distribution system. The maximum take-off weight is 124,340 lbs (56,400 kg).
Under the provisions of title 14, Code of Federal Regulations (14 CFR) 21.101, Embraer must show that the Model ERJ 190–300 airplane meets the applicable provisions of the regulations listed in Type Certificate No. A57NM, or the applicable regulations in effect on the date of application for the change, except for earlier amendments as agreed upon by the FAA.
If the Administrator finds that the applicable airworthiness regulations (
Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, or should any other model already included on the same type certificate be modified to incorporate the same novel or unusual design feature, these special conditions would also apply to the other model under § 21.101.
In addition to the applicable airworthiness regulations and special conditions, the Embraer Model ERJ 190–300 airplane must comply with the fuel-vent and exhaust-emission requirements of 14 CFR part 34 and the noise-certification requirements of 14 CFR part 36.
The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type certification basis under § 21.101.
The Embraer Model ERJ 190–300 airplane will incorporate the following novel or unusual design feature:
A digital-systems network architecture composed of several connected networks. This network architecture and network configuration will have the capability to allow access
• Flight-safety-related control, communication, and navigation systems (airplane-control domain);
• Operator business and administrative support (operator-information domain); and
• Passenger information and entertainment systems (passenger-entertainment domain)
The Embraer Model ERJ 190–300 airplane's digital-systems network architecture is novel or unusual for commercial transport airplanes as it allows connection to airplane electronic systems and networks, and access from sources external to the airplane (
The existing regulations and guidance material did not anticipate these types of digital-system architectures, nor access to airplane systems. Furthermore, 14 CFR part 25, and current system-safety assessment policy and techniques, do not address potential security vulnerabilities by unauthorized access to airplane data busses and servers. Therefore, these special conditions are issued to ensure that the security, integrity, and availability of airplane systems are not compromised by certain wired or wireless electronic connections between airplane data busses and networks.
These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
As discussed above, these special conditions are applicable to the Embraer Model ERJ 190–300 airplane. Should Embraer apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, these special conditions would apply to that model as well.
This action affects only a certain novel or unusual design feature on one model of airplane. It is not a rule of general applicability.
The substance of these special conditions has been subject to the notice and comment period in several prior instances and has been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. Therefore, the FAA has determined that prior public notice and comment are unnecessary and impracticable, and good cause exists for adopting these special conditions upon publication in the
Aircraft, Aviation safety, Reporting and recordkeeping requirements.
The authority citation for these special conditions is as follows:
49 U.S.C. 106(g), 40113, 44701, 44702, 44704.
Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for electronic system-security protection from unauthorized external access on Embraer S.A. Model ERJ 190–300 airplanes.
1. The applicant must ensure that the airplane electronic systems are protected from access by unauthorized sources external to the airplane, including those possibly caused by maintenance activity.
2. The applicant must ensure that electronic system-security threats are identified and assessed, and that effective electronic system-security protection strategies are implemented to protect the airplane from all adverse impacts on safety, functionality, and continued airworthiness.
3. The applicant must establish appropriate procedures to allow the operator to ensure that continued airworthiness of the airplane is maintained, including all post-type-certification modifications that may have an impact on the approved electronic system-security safeguards.
Bureau of Industry and Security, Commerce.
Correcting amendments.
The Bureau of Industry and Security (BIS) maintains, as part of its Export Administration Regulations (EAR), the Commerce Control List (CCL), which identifies certain items subject to Department of Commerce jurisdiction. This rule corrects citations, replaces text that was inadvertently removed, and corrects other errors associated with the “Wassenaar Arrangement 2015 Plenary Agreements Implementation, Removal of Foreign National Review Requirements, and Information Security Updates” final rule published on September 20, 2016 (WA15 rule).
This rule is effective: June 14, 2017.
For general questions contact Sharron Cook, Office of Exporter Services, Bureau of Industry and Security, U.S. Department of Commerce at 202–482 2440 or by email:
On September 20, 2016, BIS published a final rule entitled, “Wassenaar Arrangement 2015 Plenary Agreements Implementation, Removal of Foreign National Review Requirements, and Information Security Updates” (81 FR 64656–64692), (WA15
The introductory paragraph of § 740.13 (License Exception TSU) of the EAR is corrected by removing the reference to “encryption source code (and corresponding object code) that would be considered publicly available under § 734.3(b)(3) of the EAR,” because the publicly available provisions for encryption were moved to § 742.15(b) in the WA15 rule. This action also adds to the introductory paragraph a reference to “release of technology and source code in the United States by U.S. universities to their bona fide and full time regular employees” as that authorization was added in § 740.13(f) of the EAR by the initial implementation rule (78 FR 22718), April 16, 2013.
This correcting action makes three changes to § 740.17 of the EAR, as described below.
In § 740.17, a Note that was inadvertently removed by the WA15 rule is added to introductory paragraph (b). The Note was omitted by error when the mass market provisions were moved from § 742.15(b) to § 740.17(b) in order to consolidate these provisions in one place.
Also in § 740.17, paragraph (b)(2)(i) is amended by replacing the incorrect reference to non-existing paragraph (a)(i)(A) and adding in its place the correct reference to paragraph (b)(2)(i)(A).
This correction rule amends the Notes to paragraph (a) by revising paragraph (6) to replace the reference to Note 1 to Category 5, Part II with a reference to Supplement No. 2 to part 774 of the EAR because Note 1 to Category 5, Part II was removed by the WA15 rule and replaced with the Supp. No. 2 reference.
Although the Export Administration Act of 1979, as amended, expired on August 21, 2001, the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 2001 Comp., p. 783 (2002), as amended by Executive Order 13637 of March 8, 2013, 78 FR 16129 (March 13, 2013), and as extended by the Notice of August 4, 2016, 81 FR 52587 (August 8, 2016), has continued the Export Administration Regulations (EAR) in effect under the International Emergency Economic Powers Act (50 U.S.C. 1701
1. Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been designated a “significant regulatory action,” as defined under Executive Order 12866.
2. This rule does not contain policies with Federalism implications as that term is defined under Executive Order 13132.
3. The provisions of the Administrative Procedure Act requiring notice of proposed rulemaking, the opportunity for public participation, and a 30-day delay in effective date (5 U.S.C. 553) are inapplicable, because this regulation involves a military and foreign affairs function of the United States (5 U.S.C. 553(a)(1)). Immediate implementation of these amendments fulfills the United States' international obligation to the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (Wassenaar Arrangement). The Wassenaar Arrangement contributes to international security and regional stability by promoting greater responsibility in transfers of conventional arms and dual use goods and technologies, thus preventing destabilizing accumulations of such items. The Wassenaar Arrangement consists of 41 member countries that act on a consensus basis, and the changes set forth in this action make technical corrections to regulations implementing agreements reached at the December 2015 plenary session of the Wassenaar Arrangement. Because the United States is a significant exporter of the items covered by this rule, implementation of this rule is necessary for the Wassenaar Arrangement to achieve its purpose. Any delay in implementation will create a disruption in the movement of affected items globally, because of disharmony between export control measures implemented by Wassenaar Arrangement members, resulting in tension between member countries. Export controls work best when all countries implement the same export controls in a timely manner. Delaying this rulemaking to allow for notice and comment and a 30-day delay in effectiveness would prevent the United States from fulfilling its commitment to the Wassenaar Arrangement in a timely manner, and would injure the credibility of the United States in this and other multilateral regimes.
In addition, issuing a notice of proposed rulemaking would be inappropriate and contrary to the public interest in this instance, as this rule is merely making corrections to a previously published final rule.
Although there is no formal comment period, public comments on this final rule are welcome on a continuing basis. Comments should be submitted to Sharron Cook, Office of Exporter Services, Bureau of Industry and Security, Department of Commerce, 14th and Pennsylvania Ave. NW., Room 2099, Washington, DC 20230.
4. Because this action merely makes technical correcting amendments to the previously published WA15 final rule, the analysis required by the the Regulatory Flexibility Act (5 U.S.C. 601
Administrative practice and procedure, Exports, Reporting and recordkeeping requirements.
Exports, Reporting and recordkeeping requirements.
Accordingly, parts 740 and 774 of the Export Administration Regulations (15 CFR parts 730 through 774) are amended as follows:
50 U.S.C. 4601
This license exception authorizes exports and reexports of operation technology and software; sales technology and software; software updates (bug fixes); “mass market” software subject to the General Software Note; and release of technology and source code in the United States by U.S. universities to their bona fide and full time regular employees. Note that encryption software subject to the EAR is not subject to the General Software Note (see paragraph (d)(2) of this section).
The addition reads as follows:
(b) * * *
50 U.S.C. 4601
(a) * * *
Coast Guard, DHS.
Final rule.
The Coast Guard is establishing a permanent special local regulation on Lake Superior within the Keweenaw Waterway for the annual Breakers to Bridge Paddle Festival. This annual event historically occurs within the first 2 weeks of September and lasts for 1 day. This action is necessary to safeguard the participants and spectators on the water in a portion of the Keweenaw Waterway between the North Entry and the Portage Lake Lift Bridge located in Houghton, MI. This regulation will functionally restrict all vessel speeds while within a designated no-wake zone, unless otherwise specifically authorized by the Captain of the Port Duluth (COTP) or a designated representative. The area forming the subject of this permanent special local regulation is described below.
This rule is effective July 14, 2017.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions about this rulemaking, call or email Lieutenant John Mack, Waterways management, MSU Duluth, Coast Guard; telephone 218–725–3818, email
On March 30, 2017 the Coast Guard published an NPRM in the
As noted above, we received no comments on our NPRM published on
This rule creates a permanent special local regulation in the Keweenaw Waterway for the annual Breakers to Bridge Paddle Festival that historically takes place in the within the first two weeks of September. The no-wake zone will be enforced on all vessels entering a portion of the Keweenaw Waterway beginning at the North Entry at position 47°14′03″ N., 088°37′53″ W.; and ending at the Portage Lake Lift Bridge at position 47°07′25″ N., 088°34′26″ W. All vessels transiting through the no-wake zone will be required to travel at an appropriate rate of speed that does not create a wake except as may be permitted by the Captain of the Port Duluth (COTP) or a designated representative. The precise times and date of enforcement for this special local regulation will be determined annually.
The COTP will use all appropriate means to notify the public when the special local regulation in this rule will be enforced. Such means may include publication in the
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders and we discuss First Amendment rights of protestors.
E.O.s 12866 (“Regulatory Planning and Review”) and 13563 (“Improving Regulation and Regulatory Review”) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits including potential economic, environmental, public health and safety effects, distributive impacts, and equity. E.O.13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. Executive Order 13771 (“Reducing Regulation and Controlling Regulatory Costs”), directs agencies to reduce regulation and control regulatory costs and provides that “for every one new regulation issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled through a budgeting process.”
The Office of Management and Budget (OMB) has not designated this rule a significant regulatory action under section 3(f) of Executive Order 12866. Accordingly, the Office of Management and Budget (OMB) has not reviewed it.
As this rule is not a significant regulatory action, this rule is exempt from the requirements of Executive Order 13771. See OMB's Memorandum titled “Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017 titled `Reducing Regulation and Controlling Regulatory Costs' ” (February 2, 2017).
This regulatory action determination is based on the size, location, duration, and time-of-year of the Special Local Regulation. Vessel traffic will be able to safely transit through the no-wake zone which will impact only a portion of the Keweenaw Waterway between the North Entry and the Portage Lake Lift Bridge located in Houghton, MI during a time of year when commercial vessel traffic is normally low. Moreover, the Coast Guard will issue Broadcast Notice to Mariners via VHF–FM marine channel 16.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601–612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit through the no-wake zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104–121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531–1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Management Directive 023–01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
Marine safety, Navigation (water), Reporting and recordkeeping requirements, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 100 as follows:
33 U.S.C. 1233.
(a)
(b)
(c)
Coast Guard, DHS.
Interim rule; request for comments.
The Coast Guard is amending anchorage regulations for the Lower Mississippi River below Baton Rouge. This amendment will modify Cedar Grove Anchorage and White Castle Anchorage, and will establish two new anchorages, Point Michel Anchorage and Plaquemines Point Anchorage, on the Lower Mississippi River, Above Head of Passes. This interim rule increases the available anchorage areas necessary to accommodate vessel traffic; improves navigation safety, providing for the overall safe and efficient flow of vessel traffic and commerce; and aids and assists the economy through increased anchorage capacity, streamlining vessel throughput and increasing ship to port interactions. We invite your comments on this rule.
This rule is effective on June 14, 2017. Comments and related material must be received by the Coast Guard on or before October 12, 2017.
You may submit comments identified by docket number USCG–2014–0991 using the Federal eRulemaking Portal at
If you have questions about this interim rule, call or email Lieutenant Commander (LCDR) Howard Vacco, Waterways Management Division, Sector New Orleans, U.S. Coast Guard; telephone (504) 365–2281, email
The Coast Guard establishes anchorage grounds under authority in 33 U.S.C. 471. As stated in title 33 Code of Federal Regulation (CFR) 109.05 (33 CFR 109.05), this authority has been delegated to U.S. Coast Guard District Commanders. On April 3, 2015, the Coast Guard published an Advance Notice of Proposed Rulemaking (ANPRM) in the
The Coast Guard is issuing this interim rule without the prior notice and opportunity to comment through the NPRM process, pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment through the NPRM process when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a NPRM with respect to this rule because it is impracticable. This rule will reduce vessel traffic congestion, and decrease the distance between anchorages during the most congested and demanding navigation period. This rule will also assist in maintaining safe navigation and movement of commerce during the high water and increased current
For the same reasons, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The Coast Guard received requests from the Crescent River Port Pilots' Association and the New Orleans Baton Rouge River Pilots Association to amend an existing anchorage and establish two new anchorages. These requests were presented and discussed at a Maritime Navigation Safety Association (MNSA) meeting on August 12, 2014 and at a Port Safety Council Meeting on September 10, 2014. Attendees at those meetings did not comment on or object to the requests presented. The Coast Guard received a subsequent request, via a comment to the April 3, 2015 ANPRM, requesting expansion of an additional anchorage. The Coast Guard also observed that during grain season, typically occurring annually from December through May, the anchorages were at maximum capacity. This creates a hazardous condition as vessels experiencing a casualty had no safe anchorage to stop in and the closest safe anchorage for the vessel was further away than was prudent to transit with the casualty. Finally, due to high water conditions on the Lower Mississippi River, the Coast Guard received emergency requests from industry for additional anchorage area as these conditions are causing increased reliance on safe anchorage to manage transits during both high traffic season and high water. This rule will improve the overall safety of anchored vessels in the White Castle and Cedar Grove Anchorages and provide for two additional anchorage areas to address the increased waterway congestion and improve the overall safe and efficient flow of vessel traffic and commerce.
The distance between the two upper anchorages in the Lower Mississippi River, White Castle Anchorage MM 190.4 and Baton Rouge General Anchorage MM 228.5 is so great that a vessel suffering a casualty between them would become a hazard to the waterway. Plaquemines Point Anchorage was created to help mitigate the risk by reducing the distance between safe anchorage for deep draft vessels in the reach between White Castle Anchorage and Baton Rouge General Anchorage. The addition of the Plaquemines Point Anchorage reduces the greatest distance between anchorages at this stretch from 38.1 miles to 24.1miles.
The legal basis and authorities for this rule are found in 33 U.S.C. 471, 1221 through 1236, 2071; 33 CFR 1.05–1, Department of Homeland Security Delegation No. 0170.1, which collectively authorize the Coast Guard to propose, establish, and define regulatory anchorages. Through this rulemaking, the Coast Guard is amending two existing anchorage grounds; Cedar Grove Anchorage, 33 CFR 110.195(a)(12) and White Castle Anchorage, § 110.195(a)(29), and is establishing two new permanent anchorage grounds; Point Michel Anchorage, § 110.195(a)(35), and Plaquemines Point Anchorage, § 110.195(a)(36).
The Coast Guard has consulted with the Chief of Engineers the Army Corps of Engineers, New Orleans District about the specific provisions of this interim rule, and the Chief of Engineers has recommended that we proceed with our amendment of two existing anchorage grounds and establishment of two addition anchorage grounds as specified in this rule.
This interim rule establishes two new anchorages and amends two established anchorages to provide necessary additional anchorage area while also requesting comments. While vessels are occupying the new and amended anchorage areas, the impact of this rule will be more apparent to mariners operating in these areas. We believe the mariner will therefore be more inclined to provide input and feedback on how the increased anchorage area is used and if such changes address the needs of the waterway. This feedback will aid the Coast Guard in finalizing these changes and designing better anchorage systems as needed in the future. Additionally, this rule is being timed to take effect during the most demanding maritime environment. During this time the river historically experiences high water levels with faster currents, low river levels with increased shoaling, fog season, and the increased outflow of goods due to grain harvest.
During the ANPRM comment period, the Coast Guard received support for establishing new anchorages and expanding existing anchorages. Four comments were submitted in support of Point Michel Anchorage and Cedar Grove Anchorage. Additionally, one comment requested that the Coast Guard also expand the White Castle Anchorage at Mile Marker 191 Above Head of Passes on the Lower Mississippi River. Therefore, this rule also expands White Castle Anchorage, as requested. It also adjusted the three anchorages discussed in the ANPRM and establishes Plaquemines Point Anchorage. One comment requested that the Coast Guard include latitude and longitude coordinates for the anchorage limits in addition to the textual description. The Coast Guard considered transitioning the anchorage geographic boundaries from Low Water Reference Plane (LWRP) and River Mile Markers (MM) to latitude and longitude coordinates while developing the ANPRM and found it would not add to the mariners' experience or clarity of the anchorage locations. Due to the ever-changing nature of the Lower Mississippi River, using LWRP as a reference for the anchorage boundaries will allow an anchorage to move with the river in the event that it shifts in vicinity of the anchorage. Using latitude and longitude could require the Coast Guard to amend the anchorage definition every time the U.S. Army Corps of Engineers adjusts the LWRP based on hydrographic survey data.
Therefore, through this interim rule with request for comments, the Coast Guard is establishing two new anchorages and increasing the size of two established anchorages. The two new anchorages are known as the Point Michel Anchorage, § 110.195(a)(35), and the Plaquemines Point Anchorage, § 110.195(a)(36). The two anchorages increased in size are the Cedar Grove Anchorage, § 110.195(a)(12), and the
By increasing existing anchorages and establishing new anchorages, this interim rule increases the available anchorage areas in this section of the river necessary to accommodate vessel traffic; improves navigation safety, providing for the overall safe and efficient flow of vessel traffic and commerce; and aids and assists the economy through increased anchorage capacity, streamlining vessel throughput and increasing ship to port interactions. The additional anchorage area established by this interim rule and request for comments increases the safety of life and property on navigable waters, while ensuring that the needs and concerns of all stakeholders are addressed through the rulemaking comment process before making the new and increased anchorages permanent through a final rulemaking.
The Coast Guard is establishing Point Michel Anchorage as an area, 1.4-miles long and 500-feet wide along the right descending bank of the river extending from mile 40.8 to mile 42.2 Above Head of Passes. Its inner boundary is a line parallel to the nearest bank 325 feet from the water's edge into the river as measured from the LWRP. Its outer boundary of the anchorage is a line parallel to the nearest bank 825 feet from the water's edge into the river as measured from the LWRP.
Currently the Cedar Grove Anchorage, under § 110.195(a)(12), is an area extending 1.2 miles in length along the right descending bank of the river from mile 69.9 to mile 71.1 Above Head of Passes. The current width of the anchorage is 500 feet, and the inner boundary is a line parallel to the nearest bank 200 feet from the water's edge into the river as measured from the LWRP, with the outer boundary at a line parallel to the nearest bank 700 feet from the water's edge into the river as measured from the LWRP.
The Coast Guard is amending the Cedar Grove Anchorage to increase the anchorage's overall length by fourteen hundredths of a mile, shifting the lower limit down river from mile 69.9 to mile 69.56 and shifting the upper limit down river from mile 71.1 to mile 70.9.
Currently, the White Castle Anchorage, under § 110.195(a)(29), is an area extending 0.7 miles in length along the right descending bank of the river from mile 190.4 to mile 191.1 Above Head of Passes. The current width of the anchorage is 300 feet and its inner boundary is a line parallel to the nearest bank 400 feet from the water's edge into the river as measured from the LWRP, with an outer boundary at a line parallel to the nearest bank 700 feet from the water's edge into the river as measured from the LWRP.
The Coast Guard is amending the White Castle Anchorage to increase the anchorage's overall length by fourteen hundredths of a mile, shifting the lower limit down river from mile 190.4 to mile 190.3 and shifting the upper limit up river from mile 190.1 to mile 191.14.
The Coast Guard is establishing Plaquemines Point Anchorage as an area, 0.5 miles in length along the right descending bank of the river extending from mile 203.9 to mile 204.4 Above Head of Passes. The anchorage is 500 feet wide and its inner boundary is a line parallel to the nearest bank 400 feet from the water's edge into the river as measured from the LWRP. Its outer boundary is a line parallel to the nearest bank 900 feet from the water's edge into the river as measured from the LWRP.
We have placed illustrations of each of the four anchorages as amended or established by this rule in the docket, accessible as indicated under
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has not been designated a “significant regulatory action,” under Executive Order12866. Accordingly, the rule has not been reviewed by the Office of Management and Budget.
The impacts on routine navigation are expected to be minimal because the anchorage areas are established outside of the navigation channel and will not unnecessarily restrict vessel traffic. When the anchorages are not occupied, vessels will be able to maneuver in and through the anchorage areas, and when occupied there is still room for two-way deep draft traffic to pass.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601–612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
This rule will not have a significant economic impact on a substantial number of small entities for the following reasons. This rule is amending two existing anchorage grounds and establishing two new anchorage grounds on a portion of the Lower Mississippi River. The new anchorages are being established and managed like all existing anchorages on the Lower Mississippi River. These anchorages are in the Federal Channel, a safe distance from shore, off revetment, in safe water, do not conflict with any other permit and do not impede safe navigation.
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule will have a significant economic impact on it, please submit a comment (see
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104–121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531–1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Management Directive 023–01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969(42 U.S.C. 4321–4370f), and have made a determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves amending two existing anchorage grounds and establishing two new anchorage grounds on a portion of the Lower Mississippi River. It is categorically excluded from further review under paragraph 34(f) of Figure 2–1 of Commandant Instruction M16475.lD. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under
We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.
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
Anchorage grounds.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 110 as follows:
33 U.S.C. 471, 1221 through 1236, 2071; 33 CFR 1.05–1; Department of Homeland Security Delegation No. 0170.1.
(a) * * *
(12)
(29)
(35)
(36)
Coast Guard, DHS.
Notice of enforcement of regulation.
The Coast Guard will enforce the safety zone for the Avi Resort and Casino Labor Day Fireworks on the Colorado River in Laughlin, Nevada on Sunday, September 3, 2017. This safety zone is necessary to provide for the safety of the participants, spectators, official vessels of the event, and general users of the waterway. Our regulation for annual fireworks events on the Colorado River within the San Diego Captain of the Port Zone identifies the regulated area for this event. During the enforcement period, no spectators shall anchor, block, loiter in, or impede the transit of official patrol vessels in the regulated area without the approval of the Captain of the Port, or his designated representative.
The regulations in 33 CFR 165.1124 will be enforced from 8 p.m. through 10 p.m. on September 3, 2017, for Item 4 in Table 1 ot § 165.1124.
If you have questions on this publication, call or email Lieutenant Robert Cole, Waterways Management, U.S. Coast Guard Sector San Diego, CA; telephone 619–278–7656, email
The Coast Guard will enforce the regulations in 33 CFR 165.1124 for a safety zone on the Colorado River in Laughlin, Nevada for the Avi Resort and Casino Labor Day Fireworks in 33 CFR 165.1124, Table 1, Item 4 of that section from 8 p.m. through 10 p.m. on September 3, 2017. This enforcement action is being taken to provide for the safety of life on navigable waterways during the fireworks event. Our regulation for annual fireworks events on the Colorado River within the San Diego Captain of the Port Zone identifies the regulated area for this event. Under the provisions of 33 CFR 165.1124, a vessel may not enter the regulated area, unless it receives permission from the Captain of the Port, or his designated representative. Spectator vessels may safely transit outside the regulated area but may not anchor, block, loiter, or impede the transit of participants or official patrol vessels. The Coast Guard may be assisted by other Federal, State, or Local law enforcement agencies in enforcing this regulation.
This document is issued under authority of 33 CFR 165.1124 and 5 U.S.C. 552 (a). In addition to this document in the
If the Captain of the Port or his designated representative determines that the regulated area need not be enforced for the full duration stated on this document, he or she may use a Broadcast Notice to Mariners or other communications coordinated with the event sponsor to grant general permission to enter the regulated area.
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone for certain waters of the Potomac River. This action is necessary to provide for the safety of life on the navigable waters during a fireworks display in Charles County near Newburg, MD on June 17, 2017. This action will prohibit persons and vessels from entering the safety zone unless authorized by the Captain of the Port Maryland-National Capital Region or a designated representative.
This rule is effective from 8:30 p.m. on June 17, 2017, until 10 p.m. on June 24, 2017.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions about this rulemaking, call or email Mr. Ronald Houck, Sector Maryland-National Capital Region Waterways Management Division, U.S. Coast Guard; telephone 410–576–2674, email
On April 11, 2017, Gilligan's Pier of Newburg, MD, notified the Coast Guard that it will conduct a fireworks display starting at 9 p.m. on June 17, 2017. The fireworks display will be launched from a barge located on the Potomac River, in Charles County near Newburg, MD. In the event of inclement weather, the fireworks display will be rescheduled for June 24, 2017. On May 5, 2017 the Coast Guard published a notice of proposed rulemaking (NPRM) titled “Safety Zone; Potomac River, Newburg, MD” (82 FR 21153). There we stated why we issued the NPRM, and invited comments on our proposed regulatory action related to this fireworks display. During the comment period that ended June 5, 2017, we received no comments.
We are issuing this rule, and under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making it effective less than 30 days after publication in the
The Coast Guard is issuing this rule under authority in 33 U.S.C. 1231. The COTP has determined that potential
As noted above, the Coast Guard received no comments on its NPRM published May 5, 2017. There are no changes in the regulatory text of this rule from the proposed rule published in the
This rule establishes a safety zone from 8:30 p.m. through 10 p.m. on June 17, 2017, and if necessary due to inclement weather, from 8:30 p.m. through 10 p.m. on June 24, 2017. The safety zone will cover the navigable waters of the Potomac River, within 200 yards radius of a fireworks barge in approximate position latitude 38°23′45.2″ N., longitude 076°59′31.8″ W., located near Newburg, MD. The duration of the safety zone is intended to ensure the safety of vessels and the navigable waters before, during, and after the scheduled twenty minute fireworks display. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, the rule has not been reviewed by the Office of Management and Budget.
This regulatory action determination is based on the size, location, duration, and time-of-day of the safety zone. Vessel traffic will be able to safely transit around this safety zone which will impact a small designated area of the Potomac River for 1
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601–612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above this rule will not have a significant economic impact on any vessel owner or operator.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104–121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1–888–REG–FAIR (1–888–734–3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531–1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Management Directive 023–01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321–4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone lasting 1–1/2 hours that will prohibit entry within 200 yards of a fireworks discharge barge. It is categorically excluded from further review under paragraph 34(g) of Figure 2–1 of Commandant Instruction M16475.lD. A Record of Environmental Consideration (REC) supporting this
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05–1, 6.04–1, 6.04–6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(c)
(1) All persons are required to comply with the general regulations governing safety zones found in § 165.23.
(2) Entry into or remaining in this zone is prohibited unless authorized by the Coast Guard Captain of the Port Maryland-National Capital Region. All vessels underway within this safety zone at the time it is implemented are to depart the zone.
(3) Persons desiring to enter or transit through the safety zone must first obtain authorization from the Captain of the Port Maryland-National Capital Region or designated representative. To request permission to enter or transit the area, the Captain of the Port Maryland-National Capital Region or designated representatives can be contacted at telephone number 410–576–2693 or on Marine Band Radio VHF–FM channel 16 (156.8 MHz). The Coast Guard vessels enforcing this section can be contacted on Marine Band Radio VHF–FM channel 16 (156.8 MHz). Upon being hailed by a U.S. Coast Guard vessel, or other Federal, State, or local agency vessel, by siren, radio, flashing light, or other means, the operator of a vessel shall proceed as directed. If permission is granted, all persons and vessels must comply with the instructions of the Captain of the Port Maryland-National Capital Region or designated representative and proceed as directed while within the zone.
(4)
(d)
Environmental Protection Agency (EPA).
Final rule; administrative change.
The Environmental Protection Agency (EPA) is updating the materials that are incorporated by reference (IBR) into the West Virginia state implementation plan (SIP). The regulations affected by this update have been previously submitted by the West Virginia Department of Environmental Protection (WV DEP) and approved by EPA. This update affects the SIP materials that are available for public inspection at the National Archives and Records Administration (NARA) and the EPA Regional Office.
This action is effective June 14, 2017.
SIP materials which are incorporated by reference into 40 CFR part 52 are available for inspection at the following locations: Air Protection Division, U.S. Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania 19103; or the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202–741–6030, or go to:
Sheila K. Martinez, (215) 814–2035 or by email at
The SIP is a living document which a state revises as necessary to address its unique air pollution problems. Therefore, EPA, from time to time, must take action on SIP revisions containing new and/or revised regulations as being part of the SIP. On May 22, 1997 (62 FR 27968), EPA revised the procedures for incorporating by reference federally-approved SIPs, as a result of consultations between EPA and the Office of the Federal Register (OFR). The description of the revised SIP document, IBR procedures and “Identification of plan” format are discussed in further detail in the May 22, 1997
Since the publication of the last IBR update, EPA has approved into the SIP the following regulatory changes to the following West Virginia regulations:
1. EPA-Approved Regulations and Statutes 6B–1–3 (West Virginia Code 6B-Ethics Standards and Financial Disclosure), sections 6B–1–3, 6B–2–6 and 6B–2–7.
1. 45 CSR 8 (Ambient Air Quality Standards), sections 45–8–1 through 45–8–4.
2. 45 CSR 13 (Permits for Construction, Modification, Relocation and Operation of Stationary Sources of Air Pollutants, Notification Requirements, Temporary Permits, General Permits, and Procedures for Evaluation), section 45–13–1 through 45–13B.
3. 45 CSR 14 (Permits for Construction and Major Modification of Major Stationary Sources of Air Pollution for the Prevention of Significant Deterioration), section 45–14–1 through 45–14–26.
4. 45 CSR 19 (Permits for Construction and Major Modification of Major Stationary Sources of Air Pollution which Cause or Contribute to Nonattainment), section 45–19–1 through 45–19B.
1. 45 CSR 8, sections 45–8–5 through 45–8–7.
In this action, EPA is announcing the update to the IBR material as of July 1, 2016 and revising the text within 40 CFR 52.2520(b).
EPA is revising our 40 CFR part 52 “Identification of Plan” for the State of West Virginia regarding incorporation by reference, § 52.2520(b). EPA is revising § 52.2520(b)(1) to clarify that all SIP revisions listed in paragraphs (c) and (d), regardless of inclusion in the most recent “update to the SIP compilation,” are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking in which EPA approved the SIP revision, consistent with following our “Approval and Promulgations of Air Quality Implementation Plans; Revised Format of 40 CFR part 52 for Materials Being Incorporated by Reference,” effective May 22, 1997 (62 FR 27968). EPA is revising § 52.2520(b)(2) to clarify references to other portions of paragraph (b) with paragraph (b)(2). EPA is revising paragraph (b)(3) to update address and contact information.
EPA is also revising entries at 40 CFR 52.2520(c) in the “State Citation” column for Regulation 45 CSR 8 (Ambient Air Quality Standards) to read “Section 45–8–1,” “Section 45–8–2,” “Section 45–8–3,” and “Section 45–8–4.”
EPA has determined that this rule falls under the “good cause” exemption in section 553(b)(3)(B) of the Administrative Procedures Act (APA) which, upon finding “good cause,” authorizes agencies to dispense with public participation and section 553(d)(3) which allows an agency to make a rule effective immediately (thereby avoiding the 30-day delayed effective date otherwise provided for in the APA). This rule simply codifies provisions which are already in effect as a matter of law in federal and approved state programs. Under section 553 of the APA, an agency may find good cause where procedures are “impractical, unnecessary, or contrary to the public interest.” Public comment is “unnecessary” and “contrary to the public interest” since the codification only reflects existing law. Immediate notice in the CFR benefits the public by removing outdated citations and incorrect table entries.
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 previously EPA approved regulations promulgated by the State of West Virginia and federally effective prior to July 1, 2016. Therefore, these materials have been approved by EPA for inclusion in the SIP, have been incorporated by reference by EPA into that plan, are fully federally enforceable under sections 110 and 113 of the CAA as of the effective date of the final rulemaking of EPA's approval, and will be incorporated by reference by the Director of the Federal Register in the next update to the SIP compilation.
Under the Clean Air Act (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 Order 12866 (58 FR 51735, October 4, 1993);
• does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4);
• does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.
The Congressional Review Act, 5 U.S.C. 801
EPA has also determined that the provisions of section 307(b)(1) of the CAA pertaining to petitions for judicial review are not applicable to this action. Prior EPA rulemaking actions for each individual component of the West Virginia SIP compilations had previously afforded interested parties the opportunity to file a petition for judicial review in the United States Court of Appeals for the appropriate circuit within 60 days of such rulemaking action. Thus, EPA sees no need in this action to reopen the 60-day period for filing such petitions for judicial review for this “Identification of plan” update action for West Virginia.
Environmental protection, Air pollution control, Carbon monoxide, Incorporation by reference, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.
40 CFR part 52 is amended as follows:
42 U.S.C. 7401
The revisions reads as follows:
(b)
(2) EPA Region III certifies that the materials provided by EPA at the addresses in paragraph (b)(3) of this section are an exact duplicate of the officially promulgated state rules/regulations which have been approved as part of the state implementation plan as of the dates referenced in paragraph (b)(1) of this section. No additional revisions were made to paragraph (d) of this section between April 1, 2013 and July 1, 2016.
(3) Copies of the materials incorporated by reference into the state implementation plan may be inspected at the Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania 19103. To obtain the material, please call the Regional Office at (215) 814–3376. You may also inspect the material with an EPA approval date prior to July 1, 2016 for the State of West Virginia at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, go to:
(c) * * *
Environmental Protection Agency (EPA).
Final rule.
Pursuant to the Federal Clean Air Act (CAA or the Act), the Environmental Protection Agency (EPA) is approving elements of a State Implementation Plan (SIP) submission from the State of Oklahoma for the 2012 Fine Particulate Matter (PM
This rule is effective on July 14, 2017.
The EPA has established a docket for this action under Docket ID No. EPA–R06–OAR–2015–0142. All documents in the docket are listed on the
Wendy Jacques, 214–665–7395,
Throughout this document “we,” “us,” and “our” means the EPA.
The background for this action is discussed in detail in our November 21, 2016 proposal (81 FR 83184). In that proposed rule, we proposed to partially approve and partially disapprove the June 16, 2016, infrastructure SIP submission from Oklahoma, which addresses the requirements of CAA sections 110(a)(1) and (2) as applicable to the 2012 PM
At this time, we are not acting on the portions of the 2012 PM
We are approving the portions of the June 16, 2016 Oklahoma infrastructure SIP submission for the 2012 PM
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 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).
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 August 14, 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, Interstate transport of pollution, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides.
40 CFR part 52 is amended as follows:
42 U.S.C. 7401
(e) * * *
Environmental Protection Agency (EPA).
Direct final rule.
Pursuant to the Federal Clean Air Act (CAA or Act), the Environmental Protection Agency (EPA) is approving a State Implementation Plan (SIP) revision submitted by the State of Texas for the 2008 8-hour ozone national ambient air quality standards (NAAQS). The SIP revision being approved pertains to CAA 2008 ozone NAAQS requirements for vehicle inspection and maintenance (I/M) and nonattainment new source review (NNSR) in the Dallas/Fort Worth ozone nonattainment area (DFW area).
This rule is effective on September 12, 2017 without further notice, unless the EPA receives relevant adverse comment by July 14, 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–2015–0833, at
Mr. Carl Young, 214–665–6645,
Throughout this document, “we,” “us,” and “our” mean the EPA.
In 2008 we revised the 8-hour ozone primary and secondary NAAQS to a level of 0.075 parts per million (ppm) to provide increased protection of public health and the environment (73 FR 16436, March 27, 2008). The 2008 8-hour ozone NAAQS replaced the 1997 8-hour ozone NAAQS of 0.08 ppm. The DFW area was classified as a “Moderate” ozone nonattainment area for the 2008 8-hour ozone NAAQS and initially given an attainment date of no later than December 31, 2018 (77 FR 30088 and 77 FR 30160, May 21, 2012). The DFW area consists of Collin, Dallas, Denton, Ellis, Johnson, Kaufman, Parker, Rockwall, Tarrant and Wise counties.
On December 23, 2014, the D.C. Circuit Court issued a decision rejecting, among other things, our attainment deadlines for the 2008 ozone nonattainment areas, finding that we did not have statutory authority under the CAA to extend those deadlines to the end of the calendar year.
On July 10, 2015, Texas submitted a SIP revision for the DFW area based on an attainment date of December 31, 2018. Texas further revised the SIP to address an attainment date of July 20, 2018 and submitted it on August 5, 2016. Copies of the SIP revisions are available at
As a moderate ozone nonattainment area and under the anti-backsliding requirements of the previous standards, Texas is required to implement I/M and NNSR programs. These were also requirements under the previous ozone standards. In the August 5, 2016 SIP revision Texas discusses these requirements and noted: (1) That the DFW area meets the CAA requirements to implement an I/M program and (2) since the Dallas/Fort Worth 1997 ozone nonattainment area was not redesignated to attainment prior to the revocation of the 1979 1-hour ozone NAAQS and the 1997 ozone NAAQS, anti-backsliding NNSR requirements for Serious areas still apply. Texas also noted that a redesignation substitute demonstration was submitted for the 1997 ozone NAAQS to satisfy anti-backsliding requirements for the revoked NAAQS in the DFW area. Anti-backsliding requirements ensure air quality in nonattainment areas does not get worse after an air quality standard is revoked (81 FR 81276, 81288, November 17, 2016). The EPA approved Texas SIP (Texas SIP) that incorporates by reference the state's regulations can be found at 40 CFR 52.2270(c).
I/M refers to the inspection and maintenance programs for in-use vehicles required under the CAA. The applicable requirements for ozone nonattainment areas that are required to adopt I/M programs are described in CAA sections 182(a)(2)(B), 182(b)(4), 182(c)(3), and 184(b)(1)(A) and further defined in 40 CFR 51.350 (“Applicability”) of the I/M rule (40 CFR part 51, subpart S). Under these cumulative requirements, Moderate ozone nonattainment areas in urbanized areas with 1990 Census populations of 200,000 or more are required to adopt basic I/M programs, while Serious and higher classified ozone nonattainment areas outside of the northeast Ozone Transport Region with 1980 Census-defined urbanized populations of 200,000 or more are required to adopt enhanced I/M programs (40 CFR 51.350(a)(2) and (4)).
Previously, we revoked (1) the 1979 1-hour ozone NAAQS (69 FR 23951, April 30, 2004 and 70 FR 44470, August 3, 2005) and (2) the 1997 8-hour ozone NAAQS (80 FR 12264, March 6, 2015). Because the DFW area was classified as Serious nonattainment for these revoked ozone NAAQS, an enhanced I/M program is required in the DFW area for anti-backsliding purposes (40 CFR 51.1100(o)). Ozone classifications can be found in CAA section 181 and 40 CFR 51.1103. The Serious classification is one classification higher than the Moderate classification.
The Texas SIP includes 30 TAC Section 114.2 (Inspection and Maintenance Definitions) and 30 TAC Section 114.50 (Vehicle Emissions Inspection Requirements) except for 30 TAC Section 114.50(b)(2). In a 2001 final rule, we did not approve 30 TAC Section 114.50(b)(2) as part of the Texas SIP as (1) it placed an additional reporting burden upon commanders at Federal facilities regarding affected Federal vehicles that is not imposed upon any other affected non-federal vehicle and (2) additional reporting requirement is not an essential element for an approvable I/M program, since affected Federal vehicles are also subject to the same reporting requirements as other affected non-federal vehicles (66 FR 57261, 57262, November 14, 2001).
Under these provisions Collin, Dallas, Denton, Ellis, Johnson, Kaufman, Parker, Rockwall and Tarrant counties are included in an enhanced I/M program. An enhanced program is required for anti-backsliding purposes since these counties were classified as Serious nonattainment for the 1997 8-hour ozone NAAQS (75 FR 79302, December 20, 2010). The program requires that gasoline powered light-duty vehicles, and light and heavy-duty trucks between two and twenty-four years old, that are registered or required to be registered in the I/M program area, including fleets, are subject to annual inspection and testing. Wise County is not required to be included in the I/M program as it is not included in the urbanized area.
The applicable NNSR requirements for the various ozone nonattainment classifications are described in CAA section 182 and further defined in 40 CFR part 51, subpart I (Review of New Sources and Modifications). Under these requirements new major sources or major modifications at existing sources in an ozone nonattainment area must comply with the lowest achievable emission rate and obtain sufficient emission offsets. The emission offset ratio required for Moderate ozone nonattainment areas is 1.15 to 1 (CAA section 182(b)(5)).
The Texas SIP includes 30 TAC Section 116.12 (Nonattainment and Prevention of Significant Deterioration Review Definitions) and 30 TAC Section 116.150 (New Major Source or Major Modification in Ozone Nonattainment Area). These provisions require new major sources or major modifications at existing sources in the DFW area to comply with the lowest achievable emission rate and obtain emission offsets at the Moderate classification ratio of 1.15 to 1. Therefore, since the provisions in the Texas SIP already include the CAA NNSR requirements
We note that at the time of the SIP revisions, except for Wise County, the Serious area NNSR permitting requirements for the 1997 8-hour ozone NAAQS applied for the DFW area to meet anti-backsliding requirements. Moderate area NNSR permitting requirements applied to Wise County. In November 2016, we approved a redesignation substitute for the DFW area, which addressed both the 1-hour and 1997 ozone standards. This action found that the area was meeting these standards and was expected to continue to meet these standards. Based on this finding, EPA, as part of the redesignation substitute, removed the Serious area NNSR requirement so that only Moderate area NNSR requirements apply to the DFW area (81 FR 78688, November 8, 2016).
We are approving revisions to the Texas SIP submitted on August 5, 2016, that pertain to 2008 ozone NAAQS requirements for vehicle I/M and NNSR for the DFW area. As discussed above, the Texas SIP includes provisions to implement these Moderate area ozone nonattainment requirements.
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 health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
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 August 14, 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 June 1, 2017 through the order of succession outlined in Regional Order R6–1110.13, a copy of which is included in the docket for this action.
Environmental protection, Air pollution control, Incorporation by reference, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.
40 CFR part 52 is amended as follows:
42 U.S.C. 7401
(e) * * *
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is finalizing action on revisions to the Imperial County Air Pollution Control District (ICAPCD or District) portion of the California State Implementation Plan (SIP). We are finalizing full approval of two rules. Both rules update and revise the District's New Source Review (NSR) permitting program for new and modified sources of air pollution. We are also finalizing a technical correction to a previous action that will remove one rule from the SIP.
This rule will be effective on July 14, 2017.
The EPA has established a docket for this action under Docket No. EPA–R09–OAR–2015–0621. All documents in the docket are listed on the
Thien Khoi Nguyen, EPA Region IX, (415) 947–4120,
Throughout this document, the terms “we,” “us,” and “our” refer to EPA.
For the purpose of this document, we are giving meaning to certain words or initials as follows:
(i) The word or initials
(ii) The initials
(iii) The initials
(iv) The initials or words
(v) The word or initials
(vi) The initials
(vii) The initials
On December 19, 2016, the EPA proposed a full approval of two rules and a limited approval and limited disapproval (LA/LD) of one rule (as noted in Table 1) submitted by CARB for incorporation into the ICAPCD portion of the California SIP. 81 FR 91895. Table 1 also lists the dates the rules were adopted by ICAPCD and submitted by CARB, which is the governor's designee for California SIP submittals.
The EPA proposed to approve Rules 204 and 206 as part of ICAPCD's NSR permitting program because we determined that these rules meet the statutory requirements for SIP revisions as specified in sections 110(l) and 193 of the CAA. Rules 204 and 206, together with Rule 207, satisfy the substantive statutory and regulatory requirements for a NSR permit program as contained in CAA section 110(a)(2)(c) and 40 CFR 51.160–51.164. We also proposed a limited approval and limited disapproval of Rule 207. We do not intend to finalize that proposed action. Instead, we intend to take a new rulemaking action to conditionally approve Rule 207 into the Imperial County portion of the California SIP. We also proposed to remove Rule 103 (Exemptions) as a technical correction to a previous action approving Rule 202 (Exemptions) into the ICAPCD portion of the California SIP, which superseded and replaced Rule 103. 76 FR 26615 (May 9, 2011).
The EPA's proposed action provided a 30-day public comment period. During this period, we received no comments. Therefore, as authorized by CAA section 110(k)(3) and 301(a), the EPA is finalizing approval of Rule 204 (Applications) and Rule 206 (Processing of Applications) into the ICAPCD portion of the California SIP. This action will incorporate the submitted rules into the SIP.
In this action we are also finalizing a technical correction to our previous action approving Rule 202 into the ICAPCD portion of the California SIP.
In the proposed action, we also proposed a limited approval and limited disapproval of Rule 207 (New and Modified Stationary Source Review). We do not intend to finalize that proposed action. Instead, we intend to take a new rulemaking action to conditionally approve Rule 207 into the Imperial County portion of 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 ICAPCD rules listed in Table 1 of this document. The EPA has made, and will continue to make, these rules generally available electronically through
Additional information about these statutes and Executive Orders can be found at
This action is not a significant regulatory action and was therefore not submitted to the Office of Management and Budget (OMB) for review.
This action does not impose an information collection burden under the PRA because this action does not impose additional requirements beyond those imposed by state law.
I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on small entities beyond those imposed by state law.
This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531–1538, and does not significantly or uniquely affect small governments. This action does not impose additional requirements beyond those imposed by state law. Accordingly, no additional costs to State, local, or tribal governments, or to the private sector, will result from this action.
This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.
This action does not have tribal implications, as specified in Executive Order 13175, because the SIP 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, and will not impose substantial direct costs on tribal governments or preempt tribal law. Thus, Executive Order 13175 does not apply to this action.
The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2–202 of the Executive Order. This action is not subject to Executive Order 13045 because it does not impose additional requirements beyond those imposed by state law.
This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.
Section 12(d) of the NTTAA directs the EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. The EPA believes that this action is not subject to the requirements of section 12(d) of the NTTAA because application of those requirements would be inconsistent with the CAA.
The EPA lacks the discretionary authority to address environmental justice in this rulemaking.
This action is subject to the CRA, and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a “major rule” as defined by 5 U.S.C. 804(2).
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by August 14, 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)).
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, New source review, Ozone, Particulate matter, Reporting and recordkeeping requirements, Volatile organic compounds.
42 U.S.C. 7401
Part 52, chapter I, title 40 of the Code of Federal Regulations is amended as follows:
42 U.S.C. 7401
(b) * * *
(14) * * *
(ii) Previously approved on May 31, 1972 in paragraph (b)(14) of this section and now deleted with replacement in paragraph (c)(351)(i)(A)(
(c) * * *
(279) * * *
(i) * * *
(A) * * *
(
(
(442) * * *
(i) * * *
(A) * * *
(
Environmental Protection Agency (EPA).
Final rule.
Pursuant to the Federal Clean Air Act (CAA or the Act), the Environmental Protection Agency (EPA) is approving a revision to a State Implementation Plan (SIP) submitted by the State of New Mexico on March 14, 2014. New Mexico's SIP revision addresses requirements of the Act and the EPA's rules that require New Mexico to submit a periodic report assessing progress toward the reasonable progress goals (RPGs) for mandatory Class I Federal areas in and outside New Mexico with a determination of the adequacy of the State's existing regional haze SIP.
This rule is effective on July 14, 2017.
The EPA has established a docket for this action under Docket ID No. EPA–R06–OAR–2014–0237. All documents in the docket are listed at the
Mr. James E. Grady, (214) 665–6745;
Throughout this document “we,” “us,” or “our” each mean “the EPA.”
The background for this action is discussed in detail in the EPA's November 3, 2015 proposal.
The proposal and the accompanying technical support document (TSD) provide detailed descriptions of New Mexico's SIP revision and the rationale for the EPA's proposed approval of the State's submittal. Please see the docket for these and other documents regarding the proposal.
The public comment period for the proposal closed on December 3, 2015. The EPA received one set of comments in a letter dated December 3, 2015, from the National Parks Conservation Association and the San Juan Citizens Alliance regarding the EPA's proposal. The comment letter is included in the publicly posted docket associated with this action at
Additionally, the comment misperceives the basis for inclusion of the SMP in the SIP. The visibility goal announced in section 169A of the CAA is both to prevent future impairment as well as remedy existing impairment. Regional haze SIPs accordingly may include programs to avert increases in emissions. The SMP is generally designed to limit increases in emissions, rather than to reduce existing emissions. As such, there would be little purpose for the State to try to estimate the specific emission reductions achieved through implementation of the program.
Additionally, although the regional haze SIP also cited the PSD and NSR programs, the primary benefit from these programs is to limit emission increases rather than precisely working to achieve reductions in existing emissions. Given this, there would be little purpose for New Mexico to try to estimate the specific emission reductions achieved through the implementation of these programs.
New Mexico's progress report, however, also provided information on other visibility-impairing pollutants. Section 3.5 of the progress report discussed New Mexico's baseline emissions inventory for 2002 and an estimated emissions inventory for 2008. The 2002 inventory was developed by the WRAP for use in the initial WRAP regional haze SIP strategy development. The 2008 inventory was based on WRAP inventory work for the West-wide Jumpstart Air Quality Modeling Study (WestJumpAQMS) and the Deterministic & Empirical Assessment of Smoke's Contribution to Ozone (DEASCO3) modeling project efforts. The pollutants inventoried were SO
Regarding the issue of projected inventories, § 51.309(d)(10)(i)(D) states that emission estimates must be projected forward as necessary and appropriate to account for emissions changes during “the applicable 5-year period.” This phrase is meant to refer to “the past 5 years,” a phrase that itself is not clearly defined in the rule. The progress report was required to be submitted in 2013 and was submitted in February 2014. Thus, a projection for point sources would at most have included estimates for 2013. In light of this, we do not believe that a projection
The five-year average deciview values for the most recent period 2007–2011 indicated visibility improvement for all Class I areas (relative to 2000–2004 baseline period) except White Mountain, which was slightly worse by 0.2 dv. It is important to note that White Mountain visibility improved in the 2005–2009 and 2006–2010 periods compared to the baseline period 2000–2004. The data supports the conclusion that the 2007–2011 visibility conditions at White Mountain were higher than the 2000–2004 baseline due to elevated coarse mass levels in 2011 from high wind events.
The 2007–2011 visibility conditions at Bandelier and San Pedro parks were higher than in the intermediate periods, due to elevated particulate organic matter levels in 2011 from impacts of fires, but better than in 2000–2004.
For all the areas, the 2007–2011 visibility levels were better than the RPGs for the 20% best days. This is also true for five of the areas for the 20% worst days. The commenter did not suggest any particular reasons to expect that visibility will degrade in these areas for the best/worst days where it is already better than the 2018 RPGs.
As noted, three Class I sites were not yet meeting the 2018 RPGs for the 20% worst days in 2007–2011. The progress report explains that in this period White Mountain was adversely affected by coarse mass from high wind events, and San Pedro and Bandelier were affected by particulate organic matter from natural and anthropogenic fires. In 2005–2009, these three areas were below or very close to the 2018 RPGs.
In summary, we conclude that the State's visibility assessment is adequate. Wildfires or dust storms might again affect visibility in the 2018 timeframe, but New Mexico expects further reduction of SO
New Mexico does not have a progress report requirement to list all Class I areas impacted by future reductions from the SJGS. However, state and federal technical records for the BART determination at SJGS provide information on this area of interest.
The EPA is approving New Mexico's regional haze progress report SIP revision (submitted on March 11, 2014) as meeting the applicable regional haze requirements set forth in 40 CFR 51.309(d)(10).
40 CFR 51.309(d)(10)(i)(A) requires a description of the status of implementation of all control measures included in the regional haze SIP for achieving RPGs for Class I areas both within and outside the State. New Mexico adequately addressed the status of control measures in the progress report regional haze SIP as required by the provisions under 40 CFR 51.309(d)(10)(i)(A). All major control measures (including BART) were identified and the emission reduction strategy behind each control was explained. New Mexico included a summary of the implementation status associated with each control measure and quantified the benefits where possible. In addition, the progress report SIP adequately outlined the compliance time-frame for all controls.
40 CFR 51.309(d)(10)(i)(B) requires a summary of the emission reductions achieved throughout the State through implementation of control measures mentioned in 40 CFR 51.309(d)(10)(i)(A). The progress report must identify and estimate emission reductions to date in visibility-impairing pollutants from the SIP control measures identified for implementation. New Mexico has adequately summarized the emission reductions achieved throughout the State in the progress report regional haze SIP as required under 40 CFR 51.309(d)(10)(i)(B).
40 CFR 51.309(d)(10)(i)(C) requires that for each mandatory Class I Federal area within the State, the State must assess visibility conditions and changes, with values for most impaired and least impaired days expressed in terms of five-year averages of these annual values. New Mexico has adequately addressed the requirements under 40 CFR 51.309(d)(10)(i)(C) to include summaries of monitored visibility data as required by the Regional Haze Rule.
40 CFR 51.309(d)(10)(i)(D) requires an analysis tracking the change over the
40 CFR 51.309(d)(10)(i)(E) requires an assessment of any significant changes in anthropogenic emissions within or outside the State that have occurred over the past five years that have limited or impeded progress in reducing pollutant emissions and improving visibility in Class I areas impacted by the State's sources. New Mexico has adequately addressed the requirements under 40 CFR 51.309(d)(10)(i)(E) to show that the major contributors of anthropogenic emissions are being reduced and visibility is improving without having limited or impeded progress.
40 CFR 51.309(d)(10)(i)(F) calls for an assessment of whether the current implementation plan elements and strategies in the regional haze SIP are sufficient to enable the State, or other states with mandatory Federal Class I areas affected by emissions from the State, to meet all established RPGs. New Mexico has adequately addressed the requirements under 40 CFR 51.309(d)(10)(i)(F). New Mexico referenced the improving visibility trends with appropriately supported data with a focus on future implementation of BART controls.
40 CFR 51.309(10)(i)(G) requires a review of the State's visibility monitoring strategy and any modifications to the strategy as necessary. New Mexico has adequately addressed the sufficiency of the monitoring strategy as required by the provisions under 40 CFR 51.309(d)(10)(i)(G). New Mexico reaffirmed the continued reliance upon the IMPROVE monitoring network. New Mexico also explained the importance of the IMPROVE monitoring network for tracking visibility trends at the Class I areas and identified no expected changes in this network.
Under 40 CFR 51.309(d)(10)(ii), states are required to submit, at the same time as the progress report SIP, a determination of the adequacy of the existing regional haze SIP and take one of four possible actions based on information in the progress report. New Mexico stated in the progress report SIP that the current Section 309 and 309(g) regional haze SIPs are adequate to meet the State's 2018 RPGs and require no further revision at this time. The EPA is approving this negative declaration from New Mexico.
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, if the choices meet the criteria of the CAA. Accordingly, this action merely approves the information and determinations in the State's progress report 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, 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 this rulemaking does not involve technical standards; 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).
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 August 14, 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 the requirements. (See section 307(b)(2).)
Environmental protection, Air pollution control, Best available retrofit technology, Incorporation by reference, Intergovernmental relations, Nitrogen oxides, Particulate matter, Reporting and recordkeeping requirements, Regional haze, Sulfur dioxide, Visibility, Volatile organic compounds.
40 CFR part 52 is amended as follows:
42 U.S.C. 7401
(e) * * *
Environmental Protection Agency (EPA).
Final rule; delay of effective date.
The Environmental Protection Agency (EPA) is delaying the effective date of the Risk Management Program Amendments for an additional 20 months, to allow EPA to conduct a reconsideration proceeding and to consider other issues that may benefit from additional comment. The new effective date of the rule is February 19, 2019. The Risk Management Program Amendments were published in the
The effective date of the rule amending 40 CFR part 68 published at 82 FR 4594 (January 13, 2017), as delayed at 82 FR 4594 (January 26, 2017) and 82 FR 13968 (March 16, 2017), is further delayed until February 19, 2019.
The EPA has established a docket for the rule amending 40 CFR part 68 under Docket ID No. EPA–HQ–OEM–2015–0725. All documents in the docket are listed on the
James Belke, United States Environmental Protection Agency, Office of Land and Emergency Management, 1200 Pennsylvania Ave. NW., (Mail Code 5104A), Washington, DC 20460; telephone number: (202) 564–8023; email address:
Electronic copies of this document and related news releases are available on EPA's Web site at
This final rule applies to those facilities, referred to as “stationary sources” under the Clean Air Act (CAA), that are subject to the chemical accident prevention requirements at 40 CFR part 68. This includes stationary sources holding more than a threshold quantity (TQ) of a regulated substance in a process. Table 5 provides industrial sectors and the associated NAICS codes for entities potentially affected by this action. The Agency's goal is to provide a guide for readers to consider regarding entities that potentially could be affected by this action. However, this action may affect other entities not listed in this table. If you have questions regarding the applicability of this action to a particular entity, consult the person(s) listed in the introductory section of this action under the heading entitled
This final action and pertinent documents are located in the docket (see
Under CAA section 307(b)(1), judicial review of this final rule is available only by filing a petition for review in the U.S. Court of Appeals for the District of Columbia Circuit (the Court) by August 14, 2017. Under CAA section 307(d)(7)(B), only an objection to this final rule that was raised with reasonable specificity during the period for public comment can be raised during judicial review.
On January 13, 2017, the EPA issued a final rule amending 40 CFR part 68, the chemical accident prevention provisions under section 112(r)(7) of the CAA (42 U.S.C. 7412(r)). The amendments addressed various aspects of risk management programs, including prevention programs at stationary sources, emergency response preparedness requirements, information availability, and various other changes to streamline, clarify, and otherwise technically correct the underlying rules. Collectively, this rulemaking is known as the “Risk Management Program Amendments.” For further information on the Risk Management Program Amendments, see 82 FR 4594 (January 13, 2017).
On January 26, 2017, the EPA published a final rule delaying the effective date of the Risk Management Program Amendments from March 14, 2017, to March 21, 2017, see 82 FR 8499. This revision to the effective date of the Risk Management Program Amendments was part of an EPA final rule implementing a memorandum dated January 20, 2017, from the Assistant to the President and Chief of Staff, entitled “Regulatory Freeze Pending Review.” This memorandum directed the heads of agencies to postpone until 60 days after the date of its issuance the effective date of rules that were published prior to January 20, 2017 but which had not yet become effective.
In a letter dated February 28, 2017, a group known as the “RMP Coalition,”
Under CAA section 307(d)(7)(B), the Administrator may commence a reconsideration proceeding if, in the Administrator's judgement, the petitioner raises an objection to a rule that was impracticable to raise during the comment period or if the grounds for the objection arose after the comment period but within the period for judicial review. In either case, the Administrator must also conclude that the objection is of central relevance to the outcome of the rule. The Administrator may stay the effective date of the rule for up to three months during such reconsideration.
In a letter dated March 13, 2017, the Administrator announced the convening of a proceeding for reconsideration of the Risk Management Program Amendments (a copy of “the Administrator's Letter” is included in the docket for this rule, Docket ID No. EPA–HQ–OEM–2015–0725).
The Administrator's authority to administratively stay the effectiveness of a CAA rule pending reconsideration (without a notice and comment rulemaking) is limited to three months (see CAA section 307(d)(7)(B)) EPA believed that three months was insufficient to complete the necessary steps in the reconsideration process for the Risk Management Program Amendments and to consider other issues that may benefit from additional comment.
The statutory authority for this action is provided by section 307(d) of the CAA, as amended (42 U.S.C. 7607(d)), which generally allows the EPA to set effective dates as appropriate unless other provisions of the CAA control, and section 112(r)(7) of the CAA (see section IV.A below).
EPA received a total of 54,117 public comments on the proposed rulemaking. Several public comments were the result of various mass mail campaigns and contained numerous copies of letters or petition signatures. Approximately 54,000 letters and signatures were contained in these several comments. The remaining comments include 108 submissions with unique content (including representative copies of form letter campaigns and joint submissions), and nine duplicate submissions. EPA also held a public hearing on April 19, 2017 where EPA received five written comments and 28 members of the public provided verbal comments (three of the speakers later submitted their testimony as written comments). Comments received during the public hearing are included in the 107 submissions with unique content. A transcript of the hearing testimony is available as a support document in the docket EPA–HQ–OEM–2015–0725 for this rulemaking. A summary of public comments and EPA's response to the comments can be found in the Response to Comments document, also available in the docket.
In the proposed rulemaking, EPA noted that under CAA section 307(d), the Agency may set effective dates as appropriate through notice and comment rulemaking unless another provision of the CAA controls. In the past, EPA has used this authority in conjunction with the reconsideration process when the administrative stay period of three months, which the Administrator may invoke without notice and comment, would be insufficient to complete the necessary process for reconsideration.
Several industry trade associations agreed that EPA had authority under CAA section 307(d) to conduct a notice and comment rulemaking delaying the effective date for this rulemaking. Some noted that, unlike other CAA provisions, there are no provisions in CAA section 112(r)(7) requiring a specific, earlier effective date. Some pointed out that, in contrast to several other CAA provisions (
Other commenters contested EPA's authority to delay the effective date as proposed. A group of advocacy organizations, as well as a legal institute affiliated with a law school, argued that the 90-day stay provision in CAA section 307(d)(7)(B) is the maximum period that a rule can be stayed or have its effectiveness delayed in connection with a reconsideration. Noting that, except for the 90-day stay provision, the subparagraph provides that “reconsideration shall not postpone the effectiveness of the rule,” one commenter contends no additional exceptions can be implied. The commenter supports its position by citing
More generally, commenters opposed to the proposed delay of effectiveness sought to rely on previous findings in the rulemaking record for the Risk Management Program Amendments. Noting that CAA section 112(r)(7)(B) provides that the regulations under that paragraph should provide for the prevention and detection of, and the response to, accidental releases “to the greatest extent practicable,” one commenter argues that a 20-month delay in effectiveness would run counter to the statute when EPA in the Risk Management Program Amendments already determined it was practicable to implement these regulations sooner. The commenter notes that paragraph (B) of CAA section 112(r)(7) requires rules to be applicable to a stationary source no later than three years after promulgation, so extending the effective date 20 months would “inevitably result in pushing some or all of the compliance deadlines far beyond three years.” The commenter viewed EPA as needing a more complete justification than if it were setting “a new policy created on a blank slate.” According to the commenter, EPA failed to justify its changed position. In the view of the commenter, EPA's
Commenters also dispute the basis for convening a reconsideration proceeding by criticizing the BATF West finding itself and whether its publication two days before the close of comments made it impracticable to comment on the report. One commenter noted several of the parties requesting reconsideration in fact mentioned the BATF West finding in their comments. Another commenter objected to EPA not specifying what other issues met the reconsideration standard. More generally, commenters opposed to the delay of effectiveness found EPA lacked sufficient detail in its explanation of the basis for proposing to delay effectiveness of the Risk Management Program Amendments for them to be able to comment. Commenters further asserted that a further delay makes it more likely that another incident like the West Fertilizer explosion and other events discussed in the record, will occur. Commenters also expressed a concern that EPA could repeatedly delay the effective date based on the logic in the proposed rule.
A delay of 20 months is a reasonable length of time to engage in the process of revisiting issues in the underlying Risk Management Program Amendments. Contrary to some commenters assertions (and contrary to the urging of those commenters who asked that we invoke the Administrative Procedure Act (APA) section 705), we did not propose and are not finalizing an indefinite delay of effectiveness. During this period, the pre-Amendments 40 CFR part 68 rules will remain in effect. As we noted when we proposed and finalized the Risk Management Program Amendments, “[t]he [Risk Management Program] regulations have been effective in preventing and mitigating chemical accidents in the United States” (see 82 FR 4595, January 13, 2017). We discuss additional bases for the delay of effectiveness for 20 months in section V of the preamble. For all of these reasons, we conclude that the delay of effectiveness for 20 months is as expeditious as practicable for allowing the rule to go into effect.
We disagree with the view that the three month stay provision in CAA section 307(d)(7)(B) prohibits the use of rulemaking to further delay the effectiveness of rules that are not in effect. As an initial matter, were no reconsideration involved, a rule with a future effective date could have its effective date delayed simply by a timely rulemaking amending its effective date before the original date.
We also disagree with the commenters' view that the phrase “reconsideration shall not postpone the effective date of the rule” is meant to prohibit using a notice and comment procedure or any means other than the three month stay in CAA section 307(d)(7)(B) to delay a rule that is not in effect. In quoting the statute, the comment omits the word “[s]uch.” In context, “such reconsideration” follows a discussion of the process for convening reconsideration and precedes the three month stay provision. A natural reading of the language is that the act of convening reconsideration does not, by itself, stay a rule but that the Administrator, at his discretion, may issue a stay if he has convened a proceeding. The three-month limitation on stays issued without rulemaking under CAA section 307(d)(7)(B) does not limit the availability or length of stays issued through other mechanisms. Furthermore, CAA section 307(d) expressly contemplates the “revision” of rules to which it applies. See CAA section 307(d)(1); see also CAA section 112(r)(7)(E) (regulations under CAA section 112(r) “shall for purposes of sections 113 . . . and 307 . . . be treated as a standard in effect under subsection (d) of [section 112]”). EPA is issuing this rule as a revision of the Risk Management Program Amendments.
The case of
The
In contrast to the “clear statutory command” to promulgate rules for radionuclides once they were found to be hazardous air pollutants, CAA section 112(r) contains no similar mandate to promulgate the Risk Management Program Amendments. There is no dispute that EPA discharged its mandatory duty under CAA section 112(r)(7)(B) to promulgate “reasonable regulations” when it promulgated the Risk Management Program rule in 1996. These rules have been in effect and stationary sources that have present a threshold quantity of a regulated substance must comply with 40 CFR part 68 as in effect. The Risk Management Program Amendments were not promulgated to comply with a court order enforcing a mandatory duty. In contrast to the specific deadlines in the pre-1990 CAA for hazardous air pollutant regulation and the detailed structure in CAA section 112(d)(9) and CAA section 112(q) for addressing radionuclides under the amended CAA, CAA section 112(r)(7)(A) provides the Administrator substantial discretion regarding the setting of an effective date. The statutory framework for a discretionary rule under CAA section 112(r)(7) differs greatly from the “highly circumscribed schedule” analyzed by the
We view the provision in CAA section 112(r)(7)(B) regarding when regulations shall be “applicable” to a stationary source to not prohibit the delay of effectiveness we promulgate in this rule. First, we note that February 2019 is before January 2020 (three years after the January 2017 promulgation), so even assuming the provision in question requires compliance by three years after promulgation of the Risk Management Program Amendments,
While CAA section 112(r)(7)(B) contains a requirement that EPA's regulations “provide, to the greatest extent practicable,” for prevention, detection, and response to accidental releases, that subparagraph places this requirement in the context of a mandate for the regulations to be “reasonable.” The phrase “to the greatest extent practicable” does not prohibit weighing the difficulties of compliance planning and other implementation issues.
This action itself is not the convening of reconsideration, therefore, the questions of whether the arson finding by the BATF was proper are outside the scope of this rule. Even if the comment were within the scope of this rulemaking, the mention of the BATF finding in a few scattered comments does not mean that it was practicable for the public generally and the hundreds of commenters to meaningfully address the significance of the finding for a rule with multiple issues and hundreds of supporting documents. EPA is not taking action under APA section 705 at this time.
Many commenters supported EPA's proposal to delay the effective date of the final rule to February 19, 2019. These commenters included industry associations, regulated facilities, state government agencies, and others. These commenters gave various reasons for delaying the final rule's effective date.
Several commenters indicated the final rule included changes on which the public was never offered an opportunity to comment as required by the CAA. These commenters highlighted a new provision in the final rule requiring regulated facilities to disclose any information relevant to emergency planning to local emergency planners, and a new final rule trigger for third-party audits allowing an implementing agency to require such an audit due to “conditions at the stationary source that could lead to the release of a regulated substance” as issues that warrant reconsideration and delaying the effective date of the final rule. These commenters argued that the public was deprived of effective notice and opportunity to comment on the new provisions.
Many commenters indicated that the finding by the Bureau of Alcohol, Tobacco, and Firearms (BATF) that the West Fertilizer explosion was caused by
Many commenters indicated that the effective date of the rule should be delayed because its information disclosure provisions create security risks, and these risks have not been adequately addressed by EPA in the final rule. Other commenters objected to other specific provisions of the final rule (
A commenter representing a group of State agencies argued that the effective date should be delayed because the final rule created unjustified burdens on state and local emergency responders. Several commenters indicated that EPA did not adequately coordinate with OSHA during the rulemaking process, and that EPA should delay the effective date of and reconsider the rule in order to coordinate any amendments to the Risk Management Program with changes made by OSHA to its Process Safety Management standard.
Some commenters also argued that the effective date should be delayed because EPA did not adequately address small business concerns, or made other procedural errors during the rulemaking process.
Many commenters opposed EPA's proposal to further delay the effective date of the final rule to February 19, 2019. These commenters included environmental advocacy groups, other non-governmental organizations, private citizens, an association representing fire fighters, an academic institution, and others. These commenters gave various reasons for opposing EPA's proposal to delay the final rule's effective date, which are discussed individually below.
Many commenters indicated that EPA should not delay the effective date because delaying the rule's implementation will fail to prevent or mitigate chemical accidents that will cause harm to workers at regulated facilities and members of the public in surrounding communities.
Three commenters claimed that EPA's rulemaking to extend the effective date
The Administrator's Letter of March 13, 2017,
EPA also disagrees with one commenter's assertion that the lack of discussion in the proposed rule of the forgone benefits of the rule during the period of the delay of effectiveness makes the delay arbitrary and capricious. As an initial matter, the regulatory impact analysis for the Risk Management Program Amendments was unable to conclusively show that the benefits of the final rule exceeded its costs. The lack of a quantification of benefits in the final rule regulatory impact analysis would make a quantification of forgone benefits during the period of a delay speculative at best. However, as noted above, most provisions have a compliance date of 2021, therefore any benefits from compliance would not be impacted.
In deciding whether to implement a regulation, EPA may reasonably consider not only its benefits, but also its costs. Petitioners have claimed that the final Risk Management Program Amendments' new provisions that were not included in the proposed rule may actually increase the risks and burdens to states, local communities, emergency responders, and regulated entities rather than fixing the problems identified in the proposed rule. It is completely reasonable for EPA to delay implementation of and reexamine the Risk Management Program Amendments when the Agency becomes aware of information, such as that provided by petitioners, that suggests one or more of these provisions may potentially result in harm to regulated entities and the public.
Petitioners' claims that the new final rule provisions may cause harm to regulated facilities and local communities, and the speculative but likely minimal nature of the forgone benefits, form another rational basis for EPA to delay the effectiveness of the Risk Management Program Amendments and determine whether they remain consistent with the policy goals of the Agency.
EPA also disagrees with a commenter's assertion that delaying the final rule's effective date by 20 months violates the requirement under CAA section 112(r)(7)(A) to assure compliance as expeditiously as practicable, or the requirement under CAA section 112(r)(7)(B) to promulgate reasonable regulations to the greatest extent practicable. EPA believes that the language of these sections of the CAA gives the Administrator broad authority to determine what factors are relevant to establishing effective dates that are practicable (unlike other sections of the CAA, where Congress constrained “as practicable” to include certain defined time limits). In exercising this authority, EPA believes effective dates must account for all relevant factors. In this case, delaying the effective date of the rule during the reconsideration proceeding is reasonable and practicable because the Agency does not wish to cause confusion among the regulated community and local responders by requiring these parties to prepare to comply with, or in some cases, immediately comply with, rule provisions that might be changed during the subsequent reconsideration. This is particularly true for provisions that might result in unanticipated harm to facilities and local communities, as petitioners have alleged may occur. The Agency notes that compliance with most major provisions in the final rule
Lastly, EPA disagrees that it picked the 20-month duration for the proposed delay in effective date “out of a hat,” or provided no explanation or justification for this timeframe. As EPA explained in the proposed rule (82 FR 16148 through 16149, April 3, 2017): “As with some of our past reconsiderations, we expect to take comment on a broad range of legal and policy issues as part of the Risk Management Program Amendments reconsideration . . .,” and,
This timeframe would allow the EPA time to evaluate the objections raised by the various petitions for reconsideration of the Risk Management Program Amendments, consider other issues that may benefit from additional comment, and take further regulatory action. This schedule allows time for developing and publishing any notices that focus comment on specific issues to be reconsidered as well as other issues for which additional comment may be appropriate. A delay of the effective date to February 19, 2019, provides a sufficient opportunity for public comment on the reconsideration in accordance with the requirements of CAA section 307(d), gives us an opportunity to evaluate and respond to such comments, and take any possible regulatory actions, which could include proposing and finalizing a rule to revise the Risk Management Program amendments, as appropriate.
This rationale for the proposed duration of the effective date is neither arbitrary nor capricious.
Several commenters argued that EPA did not provide a valid basis or reasoned explanation for its proposal to delay, for why the petitions should take more than three months to consider, or how the 20-month delay period was determined.
Many commenters indicated that the BATF finding of arson should not cause EPA to reconsider the final rule. These commenters indicated that Executive Order 13650 was not specifically based on the West Fertilizer event, and that EPA did not justify the Risk Management Program Amendments rule on that single incident, but rather that EPA indicated an average of approximately 150 chemical accidents have occurred each year, and the rule's provisions were intended to address all such accidents. Other commenters noted that conditions at West Fertilizer enabled the fire to escalate into a massive detonation, and lack of effective communication contributed to the needless deaths of emergency responders—issues that some rule amendments addressed by improving emergency preparedness. Some commenters also stated that the BATF finding was not actually based on evidence of arson, but rather relied on a process of elimination called “negative corpus” to project a conclusion without evidence, and therefore the BATF finding does not provide grounds for the petitioner's objection to the final rule.
EPA disagrees that the BATF finding of arson as the cause of the West Fertilizer explosion does not provide grounds for reconsideration of the Risk Management Program Amendments final rule. While EPA agrees that the incident was not the sole justification for Executive Order 13650, and the Agency did not solely rely on it as justification for the Risk Management Program Amendments, there is no question that the event was the proximate trigger for Executive Order 13650
Clearly, EPA does not desire to establish regulations that increase security risks. While EPA has not concluded that the final rule would increase such risks, the petitioner's concerns, which are echoed by many other commenters, require careful consideration, and cannot be dismissed out of hand.
Regarding these commenters claims that the BATF relied on an invalid form of reasoning (
Accordingly, EPA has decided to finalize the proposed delay of the effective date to February 19, 2019. This delay will give the Agency an opportunity to reconsider the Risk Management Program Amendments rule, propose changes to the rule as necessary, and provide additional opportunity for members of the public to submit comments on the proposal to EPA.
Some commenters stated that EPA and the petitioners for reconsideration failed to identify objections that either arose after the period for public comment or were impracticable to raise during this period, as required under CAA section 307(d)(7)(B). One of these commenters stated that most of the objections that were raised by petitioners were “simply recycled from the comment period” and that the “remainder address issues that cannot possibly be considered “of central relevance” to the “Chemical Disaster Rule.” This commenter also indicated that several parties commented on the BATF finding during the public comment period for the Risk Management Program Amendments rulemaking, and that this demonstrated that it was not impracticable to raise the issue during the comment period. This commenter noted that EPA had responded to these comments and found that “it would be inappropriate to suspend the rulemaking based on outcomes of the incident investigation of the West Fertilizer explosion.”
While EPA acknowledges that several commenters included the BATF arson finding in their comments on the Risk Management Program Amendments proposed rule, the Agency does not view two days (
Also, when EPA stated, in responding to comments on the proposed Risk Management Program Amendments, that it would be inappropriate to suspend the rulemaking based on outcomes of the incident investigation of the West Fertilizer explosion, the Agency had not yet received the petitions that prompted its reconsideration proceeding, as well as comments on the proposal to delay the rule's effective date, both of which assert that the information disclosure provisions contained in the final Risk Management Program Amendments may actually increase or introduce new security risks to RMP facilities, emergency responders, and communities. EPA believes it would be remiss for the Agency to allow the final rule to become effective without fully evaluating this new information. As previously indicated, EPA does not desire to establish regulations that increase security risks.
Finally, several commenters also stated that EPA added more than 100 new documents to the rulemaking docket after the close of the comment period, and indicated that several of these documents were used by EPA to support the Agency's position on core provisions of the final rule, including the STAA and third-party audit provisions. These commenters stated that because the comment period had already closed when this information was added to the docket, the public was denied an opportunity to review and comment on the additional information. Without taking a position on whether these documents required additional comment under the rulemaking procedures of CAA section 307(d), a benefit of reopening comment on the topics that meet the reconsideration standard of CAA section 307(d)(7)(B)
While noting their opposition to many provisions of the final regulation, an association of state and local emergency planning officials recommended that EPA allow the emergency response coordination activities provisions of § 68.93 and the emergency response program provisions of § 68.95 (and particularly paragraph (c))
Regarding this commenter's recommendation that EPA allow the emergency response program provisions of § 68.95, and particularly paragraph (c), to immediately go into effect, EPA notes that § 68.95(a)(4) also contains a reference to the new exercise requirements of § 68.96, and therefore this provision cannot go into effect without § 68.96. However, § 68.95(c) is already contained in the existing rule. In the Risk Management Program Amendments final rule, EPA simply replaced the phrase “local emergency planning committee” with the acronym “LEPC.” therefore, this requirement will remain in effect with or without the Risk Management Program Amendments final rule becoming effective.
EPA is delaying the effective date of the Risk Management Program Amendments final rule until February 19, 2019. Given the degree of complexity with the issues under review, and the likelihood of significant public interest in this reconsideration, we believe the delay we are adopting in this action is adequate and necessary for the reconsideration. While it is possible that we may require less time to complete the reconsideration, we believe delaying the effective date by a full 20 months is reasonable and prudent. This additional delay of the effective date enables EPA time to evaluate the objections raised by the various petitions for reconsideration of the Risk Management Program Amendments, provides a sufficient opportunity for public comment on the reconsideration in accordance with the requirements of CAA section 307(d), gives us an opportunity to evaluate and respond to such comments, and take any possible regulatory actions, which could include proposing and finalizing a rule to revise or rescind the Risk Management Program Amendments, as appropriate. During the reconsideration, EPA may also consider other issues, beyond those raised by petitioners, that may benefit from additional comment, and take further regulatory action.
The EPA recognizes that compliance dates for some provisions in the Risk Management Program Amendments coincided with the rule's effective date, while compliance dates for other provisions would occur in later years,
Section 553(d) of the APA, 5 U.S.C. Chapter 5, generally provides that rules may not take effect earlier than 30 days after they are published in the
The effective date of the Risk Management Program Amendments, published in the
Additional information about these statutes and Executive Orders can be found at
This action is a significant regulatory action that was submitted to the Office of Management and Budget (OMB) for review. Any changes made in response to OMB recommendations have been documented in the docket.
This action does not impose an information collection burden under the PRA. This final rule would only delay the effective date of the Risk Management Program Amendments finalized on January 13, 2017 (see 82 FR
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 final rule would not impose a regulatory burden for small entities because it only delays the effective date of the Risk Management Program Amendments finalized on January 13, 2017 (see 82 FR 4594). We have therefore concluded that this action will have no net regulatory burden for all directly regulated small entities.
This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531–1538, and does not significantly or uniquely affect small governments. 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. This final rule would only delay the effective date of the Risk Management Program Amendments finalized on January 13, 2017 (see 82 FR 4594) and does not impose new regulatory requirements. Thus, Executive Order 13175 does not apply to this action.
The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2–202 of the Executive Order. This action is not subject to Executive Order 13045 because it does not concern an environmental health risk or safety risk.
This action is not a “significant energy action” because it is not likely to have a significant adverse effect on the supply, distribution or use of energy. This final rule only delays the effective date of the Risk Management Program Amendments finalized on January 13, 2017 (see 82 FR 4594) and does not impose any regulatory requirements.
This action does not involve technical standards.
The EPA believes that this action is not subject to Executive Order 12898 (59 FR 7629, February 16, 1994) because it does not establish an environmental health or safety standard. This final rule only delays the effective date of the Risk Management Program Amendments finalized on January 13, 2017 (see 82 FR 4594) and does not impose any regulatory requirements.
This action is subject to the CRA, and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a “major rule” as defined by 5 U.S.C. 804(2).
Only one major rule provision of the Risk Management Program Amendments has a compliance date that will be extended by delaying the effective date to February 19, 2019. As a result, the costs for that provision are delayed and will not be incurred by the regulated community while the rule is not yet in effect. As discussed below, the costs for this delayed compliance date is small relative to the total costs of the Risk Management Program Amendments and thus, the rule further delaying the effective date is not a major rule.
In the Risk Management Program Amendments, EPA finalized the following compliance dates:
• March 14, 2018—Require compliance with emergency response coordination activities within one year of an effective date of a final rule;
• Provide three years for the owner or operator of a non-responding stationary source to develop an emergency response program in accordance with § 68.95. No specific date was established in the final rule. Instead, the three-year timeframe begins when the owner or operator determines that the facility is subject to the emergency response program requirements of § 68.95;
• March 15, 2021—Comply with new provisions (
• March 14, 2022—Provide regulated sources one additional year (
The compliance dates of March 15, 2021 and March 14, 2022 are not affected by this rule. Therefore, the costs for the majority of the rule provisions are not affected by this rule (
• § 68.48 Safety information—revised to change “Material Safety Data Sheets” to “Safety Data Sheets (SDS);”
• § 68.50 Hazard review—revised to clarify that that the hazard review must include findings from incident investigations;
• § 68.54 & 68.71 Training—revised to clarify that employee training requirements apply to supervisors responsible for directing process operations (under 68.54) and supervisors with process operational responsibilities (under 68.71);
• § 68.60 & 68.81 Incident investigation—revised to require incident investigation reports to be completed within 12 months of the incident, unless the implementing agency approves, in writing, an extension of time;
• § 68.65 Process safety information—revised to require that process safety information be kept up-to-date;
○ Also, changed the note to paragraph (b): To replace “Material Safety Data Sheets” with “Safety Data Sheets (SDS);” and
• § 68.67 Process hazard analysis—revised to require that the PHA must now address the findings from all incident investigations required under § 68.81, as well as any other potential failure scenarios.
The only major rule provision that would be affected by this rule (because its March 14, 2018 compliance date is before the delayed effective date of this rule) is the emergency response coordination provision, which has an estimated annualized cost of $16 M.
Environmental protection, Administrative practice and procedure, Air pollution control, Chemicals, Hazardous substances, Intergovernmental relations, Reporting and recordkeeping requirements.
Environmental Protection Agency (EPA).
Final rule.
This regulation establishes tolerances for residues of spirotetramat in or on multiple commodities which are identified and discussed later in this document. In addition, this regulation removes several previously established tolerances that are superseded by this final rule. Interregional Research Project Number 4 (IR–4) and Bayer CropScience, requested these tolerances under the Federal Food, Drug, and Cosmetic Act (FFDCA).
This regulation is effective June 14, 2017. Objections and requests for hearings must be received on or before August 14, 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–2016–0255, is available at
Michael Goodis, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460–0001; telephone number: (703) 305–7090; email address:
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
You may access a frequently updated electronic version of EPA's tolerance regulations at 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–2016–0255 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 August 14, 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–2016–0255, 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
Pesticide petition 6E8467 submitted by IR–4 Project Headquarters, 500 College Road East, Suite 201 W., Princeton, NJ 08540 requests tolerances for carrot, roots at 0.15 parts per million (ppm); fruit, stone, group 12–12 at 4.5 ppm; and nut, tree, group 14–12 at 0.25 ppm.
Pesticide petition 6F8461 submitted by Bayer CropScience, P.O. Box 12014, 2 T.W. Alexander Drive, Research Triangle Park, NC 27709 requests tolerances on sugar beet, molasses at 0.20 ppm and sugar beet, root at 0.15 ppm.
Summaries of the petitions prepared by the registrant, Bayer CropScience, are available in the docket,
Based upon review of the data supporting the petitions, EPA has revised the tolerance levels for several proposed commodities and corrected several commodity listings. The reason for these changes are explained in Unit IV.D.
Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(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 in establishing a tolerance 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. . . .”
Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), 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 spirotetramat including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with spirotetramat follows.
EPA has evaluated the available toxicity data and considered its 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.
The target organs of toxicity following subchronic and chronic oral exposures to spirotetramat were different in rats and dogs. The thyroid and thymus glands were the target organs identified in subchronic and chronic toxicity studies in dogs while the testes were the target organs identified in rats. The dog was the most sensitive species, and in both rats and dogs, males were more sensitive than females. The thyroid effects in the dog consisted of lower circulating levels of thyroid hormones (T3 and/or T4) along with a reduction in follicle size, a possible indication of reduced amount of colloid. In all dog studies, thymus effects were observed (reduced size, atrophy). In the one-year study, this was described microscopically as involution.
In rats, reported testicular effects consisted of abnormal spermatozoa and hypospermia in the epididymis, decreased testicular weights, and testicular degenerative vacuolation. An investigative subchronic study where rats were dosed with a primary enol metabolite of spirotetramat reproduced the same testicular effects as the parent chemical, suggesting that this metabolite is, at minimum, a primary contributor to the observed male reproductive toxicity. Consistent with this notion, orally administered spirotetramat was demonstrated in rats to be extensively metabolized, and males were noted to achieve much higher systemic exposures than their female counterparts, which helps explain the higher sensitivity of males. Other effects reported in a rat chronic toxicity study were associated with kidney effects consisting of decreased organ weight and tubular dilatation.
In one- and two-generation rat reproductive toxicity studies, male reproductive toxicity (abnormal sperm cells and reproductive performance) similar to that reported in subchronic toxicity studies with adult rats was reported in the first generation (F
There was evidence of increased qualitative susceptibility in the rat developmental study with reduced fetal weight and increased incidences of malformations and skeletal deviations observed at the limit dose, while maternal effects at this dose consisted of only body-weight decrements. There was no evidence of increased quantitative or qualitative susceptibility to offspring following pre- or post-natal exposure to spirotetramat in the rabbit developmental or two-generation reproduction studies.
The only evidence of neurotoxicity in the rat acute neurotoxicity study was based on decreased motor and locomotor activity, which occurred only at relatively high dose levels. The rat subchronic neurotoxicity (SCN) study does not indicate a concern for neurotoxicity, even at relatively high dose levels. The results of an immunotoxicity study in rats do not indicate any functional deficits in immune function.
There is no evidence of carcinogenicity in chronic toxicity/carcinogenicity studies performed in rats and mice. Spirotetramat has been classified as “not likely to be carcinogenic to humans” based on lack of evidence for carcinogenicity in rodent studies. Spirotetramat was also negative for mutagenicity and clastogenicity in
Specific information on the studies received and the nature of the adverse effects caused by spirotetramat as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at
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
A summary of the toxicological endpoints for spirotetramat used for human risk assessment is discussed in Unit III. B. Toxicological Points of Departure/Levels of Concern of the final rule published in the
1.
i.
In estimating acute dietary exposure, EPA used food consumption data from the U.S. Department of Agriculture's (USDA's) National Health and Nutrition Examination Survey, What We Eat in America (NHANES/WWEIA) from 2003 through 2008. As to residue levels in food, EPA assumed tolerance-level residues, 100 percent crop treated (PCT) information for all commodities and Dietary Exposure Evaluation Model (DEEM) 7.81 default processing factors where available.
ii.
iii.
iv.
The Agency did not use percent crop treated estimates.
2.
Based on the Tier 1 Rice Model and Pesticide Root Zone Model Ground Water (PRZM GW), the estimated drinking water concentrations (EDWCs) of spirotetramat and its metabolites and degradates of concern for acute exposures are estimated to be 395 parts per billion (ppb) for surface water and 7.99 ppb for ground water.
Chronic exposures for non-cancer assessments are estimated to be 395 ppb for surface water and 5.36 ppb for ground water.
Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. For both acute and chronic dietary risk assessment, the water concentration value of 395 ppb was used to assess the contribution to drinking water.
3.
Spirotetramat is currently registered for the following uses that could result in residential exposures: Citrus trees grown in residential areas and turf grass including sod farm and golf course turf only. There is the potential for post-application dermal exposure from both residential citrus tree and golf course uses. The golf course use could result in potential post-application dermal exposure; however, there is no dermal hazard and therefore, quantification of dermal risk is not necessary. For the residential citrus tree use, because the product is sold in bulk packaging for agricultural uses and the label requires that handlers wear specific clothing (
Further information regarding EPA standard assumptions and generic inputs for residential exposures may be found at
4.
Unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, EPA has not made a common mechanism of toxicity finding as to spirotetramat and any other substances and spirotetramat does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has not assumed that spirotetramat has a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's Web site at:
1.
2.
3.
i. The toxicity database for spirotetramat is complete.
ii. Although spirotetramat was shown to elicit neurotoxic response in the acute neurotoxicity study; however, concern is low since the effects are well-characterized with clearly established NOAEL/LOAEL values, the selected endpoints are protective of the observed neurotoxic effect, there are no neurotoxic effects seen in the subchronic neurotoxicity study, and the existing toxicological database indicates that spirotetramat is not a neurotoxic chemical.
iii. There is no evidence of quantitative susceptibility of offspring following pre- or postnatal exposure. There is evidence of qualitative susceptibility in the rat developmental study; however, there is no residual uncertainty concerning these effects due to the clear NOAEL/LOAELs in the study for these effects. Moreover, concern for these effects is low since effects were only seen at the limit dose, effects were seen in the presence of maternal toxicity, and selected endpoints are protective of the observed effects.
iv. There are no residual uncertainties identified in the exposure databases. The acute dietary food and drinking water exposure assessment utilizes tolerance-level residues and 100 PCT information for all commodities. The chronic dietary food and drinking water exposure assessment utilizes average field trial residues for some commodities, tolerance-level residues for the remaining commodities, and 100 PCT. The chronic assessment is somewhat refined; however, since it is based on reliable data, it will not underestimate exposure and risk. There are no quantifiable potential exposure/risks from residential citrus tree and golf course uses. The drinking water assessments provide conservative, health-protective, high-end estimates of water concentrations that will not likely be exceeded. These assessments will not underestimate the exposure and risks posed by spirotetramat.
EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.
1.
2.
3.
4.
5.
Adequate enforcement methodology (high-performance liquid chromatography with tandem mass spectrometry (HPLC–MS/MS)) is available to enforce the tolerance expression.
The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755–5350; telephone number: (410) 305–2905; email address:
In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.
The Codex has not established a MRL for spirotetramat.
One comment was received from an anonymous source requesting that the Agency deny IR–4's petition for use of spirotetramat on all food items claiming it is a toxic chemical and its use would result in harm to humans.
Based on available residue data, EPA is establishing tolerance level on sugar beet molasses at 0.30 ppm instead of 0.20 ppm, to cover anticipated residues. In addition, EPA corrected the commodity terminology for “sugar beet root” and “sugar beet molasses” to “beet, sugar, roots” and “beet, sugar, molasses,” respectively, in order to conform to terms used in the Agency's Food and Feed Commodity Vocabulary.
Therefore, tolerances are established for residues of spirotetramat, (
This action establishes tolerances 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 tolerance 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.
The additions read as follows:
(a) * * *
(1) * * *
Environmental Protection Agency (EPA).
Final rule.
This regulation establishes tolerances for residues of isofetamid in or on multiple commodities which are identified and discussed later in this document. ISK Biosciences Corporation requested these tolerances under the Federal Food, Drug, and Cosmetic Act (FFDCA). The regulation also removes the existing time-limited tolerances for residues on “bushberry subgroup 13–07B” and “caneberry subgroup 13–07A” because they are no longer needed as a result of this action.
This regulation is effective June 14, 2017. Objections and requests for hearings must be received on or before August 14, 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–2016–0263, is available at
Michael L. 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 EPA's tolerance regulations at 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–2016–0263 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 August 14, 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–2016–0263, by one of the following methods:
•
•
•
Additional instructions on commenting or visiting the docket, along with more information about
In the
Based upon review of the data supporting the petition, EPA has revised some of the proposed tolerances; determined that tolerances for residues in livestock commodities are not required; and corrected some of the commodity definitions. The reason for these changes are explained in Unit IV.D.
Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(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 in establishing a tolerance 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 . . . .”
Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), 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 isofetamid including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with isofetamid follows.
EPA has evaluated the available toxicity data and considered its 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. The toxicology database is complete for isofetamid. In repeated dose studies, the liver was the primary target organ in the rat, mouse, and dog, as indicated by increased liver weights, changes in the clinical chemistry values, and liver hypertrophy. A second target organ was the thyroid in the rat and dog, as indicated by changes in thyroid weights and histopathology. Adrenal weight changes were observed in the subchronic rat and dog studies. In the rat and dog, the dose levels where toxicity was observed were similar or higher in the chronic studies compared with the respective subchronic studies, showing an absence of progression of liver toxicity with time. There was no evidence of carcinogenicity in the rat or mouse cancer studies; the mutagenicity battery was negative. There are no genotoxicity, neurotoxicity, or immunotoxicity concerns observed in the available toxicity studies. Developmental toxicity was not observed in the rat or rabbit, and offspring effects such as decreased body weight were seen only in the presence of parental toxicity in the multi-generation rat study. Isofetamid is classified as “Not Likely to be Carcinogenic to Humans” based on the absence of increased tumor incidence in acceptable/guideline carcinogenicity studies in rats and mice. Isofetamid is not acutely toxic; it is classified as Toxicity Category III for acute oral and dermal exposure, and Toxicity Category IV for inhalation exposure. Furthermore, it is not irritating to the eye or skin, and it is not a dermal sensitizer.
Specific information on the studies received and the nature of the adverse effects caused by isofetamid as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies are can be found at
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
A summary of the toxicological endpoints for isofetamid used for human risk assessment is discussed in Unit III.B. of the final rule published in the
1.
i.
ii.
iii.
iv.
2.
Based on the Pesticide Flooded Application Model and the Pesticide Root Zone Model Ground Water (PRZM GW) the estimated drinking water concentrations (EDWCs) of isofetamid for chronic exposures for non-cancer assessments are estimated to be 110 parts per billion (ppb) for surface water and 43 ppb for ground water.
Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. For chronic dietary risk assessment, the water concentration value of 110 ppb was used to assess the contribution from drinking water.
3.
Isofetamid is currently registered for the following uses that could result in residential exposures: Turfgrass including golf courses, residential lawns, and recreational turfgrass. It is currently under review for registering use on ornamental plants. The proposed ornamental use is not intended for homeowner use and therefore a quantitative residential handler assessment was not conducted. Additionally, post-application exposures for adults and children are expected to be negligible. However, the existing turf use may result in short- and intermediate-term exposures. Residential exposure may occur by the dermal and incidental oral routes of exposures following the application of isofetamid on residential turf. However, since dermal hazard has not been identified for isofetamid, the only exposure scenario quantitatively assessed is for post-application incidental oral (for children 1 to <2 years old). These exposures have been assessed with current policies, which include the Agency's 2012 Residential Standard Operating Procedures (
Even though a previous risk assessment identified residential handler risk estimates for use in aggregate assessment, based on current policy and that isofetamid products are intended for sale/use to/by professional applicators, residential handler exposure assessments for turf are no longer applicable to the isofetamid aggregate risk assessment. Therefore, the aggregate assessment for this action only includes a risk contribution from residential post-application incidental oral exposure for children 1 to <2 years old.
There is the potential for post-application exposure for individuals as a result of being in an environment that has been previously treated with isofetamid such as residential ornamental lawns. Since dermal hazard has not been identified for isofetamid, a quantitative assessment for dermal exposure is not necessary and the only exposure scenarios quantitatively assessed are for children 1 to <2 years old who may experience short-term incidental oral exposure to isofetamid from treated turf. Intermediate-term incidental oral post-application exposures are possible (
The post-application incidental oral MOE values were calculated based on the scenario of liquid application of isofetamid to turf. Post-application risk estimates for all incidental oral scenarios are not of concern (MOEs range from 5,900 to 4,000,000). The incidental oral scenarios (
4.
EPA has not found isofetamid to share a common mechanism of toxicity with any other substances, and isofetamid does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that isofetamid does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's Web site at
1.
2.
3.
i. The toxicity database for isofetamid is complete.
ii. There is no indication that isofetamid is a neurotoxic chemical and there is no need for a developmental neurotoxicity study or additional UFs to account for neurotoxicity.
iii. There is no evidence that isofetamid results in increased susceptibility in
iv. There are no residual uncertainties identified in the exposure databases. The dietary food exposure assessments were performed based on 100 PCT and tolerance level residues. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to isofetamid in drinking water. EPA used similarly conservative assumptions to assess post application exposure of children as well as incidental oral exposure of toddlers. These assessments will not underestimate the exposure and risks posed by isofetamid.
EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.
1.
2.
3.
Using the exposure assumptions described in this unit for short-term exposures, EPA has concluded the combined short-term food, water, and residential exposures result in an aggregate MOE of 1,600 for children (1–2 years old). Because EPA's level of concern for isofetamid is a MOE of 100 or below, this MOE is not of concern.
4.
5.
6.
Adequate enforcement methodology liquid chromatography with tandem mass spectrometry (LC–MS/MS) method is available to enforce the tolerance expression. Multiresidue methods testing data have been submitted for isofetamid and GPTC. The data indicate that multiresidue methods are not suitable for analysis of isofetamid and GPTC, so the multiresidue methods cannot serve as enforcement methods. The multiresidue data have been forwarded to the Food and Drug Administration (FDA).
In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.
The Codex has not established MRLs for isofetamid. There are no Canadian, Codex, or Mexican maximum residue limits (MRLs) for isofetamid in/on the commodities included in this petition.
All tolerance levels are based upon the Organization for Economic Co-operation and Development's (OECD) tolerance calculation procedures. Thus, the tolerance levels established in this notice for isofetamid in/on bushberry, subgroup 13–07B; cherry, subgroup 12–12A; plum, prune, dried; dried shelled pea and bean, except soybean, subgroup 6C; and succulent shelled pea and bean, subgroup 6B are lower than those requested by the petitioner. The tolerance levels established in this notice for caneberry, subgroup 13–07A and fruit, small vine climbing, except grape, subgroup 13–07E are higher than those requested by the petitioner based on the OECD calculation procedures.
Additionally, the Agency has determined that tolerances requested for residues in livestock commodities are not required. These tolerances fall under 40 CFR 180.6(a)(3) regarding secondary residues in livestock commodities,
The following commodity definitions have been corrected: Bushberry subgroup 13–07B; fruit, small vine climbing, except grape, subgroup 13–07E; pea and bean, dried shelled, except soybean, subgroup 6C; and pea and bean, succulent shelled, subgroup 6B.
Therefore, tolerances are established for residues of isofetamid, in or on apple, wet pomace, at 2.0 parts per million (ppm); bushberry subgroup 13–07B at 5.0 ppm; caneberry subgroup 13–07A at 4.0 ppm; cherry subgroup 12–12A at 4.0 ppm; fruit, pome, group 11–10 at 0.60 ppm; fruit, small vine climbing, except grape, subgroup 13–07E at 10.0 ppm; pea and bean, dried shelled, except soybean, subgroup 6C, at 0.040 ppm; pea and bean, succulent shelled, subgroup 6B, at 0.030 ppm; peach subgroup 12–12B at 3.0 ppm; plum, prune, dried at 1.50 ppm; plum subgroup 12–12C at 0.80 ppm; and vegetable, legume, edible podded, subgroup 6A at 1.50 ppm. Additionally, the existing time-limited tolerances are being removed for both Caneberry subgroup 13–07A at 4.0 ppm, and for Bushberry subgroup 13–07B at 5.0 ppm.
This action establishes tolerances 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 tolerance 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
Therefore, 40 CFR chapter I is amended as follows:
21 U.S.C. 321(q), 346a and 371.
The additions and revision read as follows:
(a) * * *
(b)
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is promulgating technology-based pretreatment standards under the Clean Water Act to reduce discharges of mercury from dental offices into municipal sewage treatment plants known as publicly owned treatment works (POTWs). This final rule requires dental offices to use amalgam separators and two best management practices recommended by the American Dental Association (ADA). This final rule includes a provision to significantly reduce and streamline the oversight and reporting requirements in EPA's General Pretreatment Regulations that would otherwise apply as a result of this rulemaking. EPA expects compliance with this final rule will annually reduce the discharge of mercury by 5.1 tons as well as 5.3 tons of other metals found in waste dental amalgam to POTWs.
The final rule is effective on July 14, 2017. The compliance date, meaning the date that existing sources subject to the rule must comply with the standards in this rule is July 14, 2020. After the effective date of the rule, new sources subject to this rule must comply immediately with the standards in this rule. In accordance with 40 CFR part 23, this regulation shall be considered issued for purposes of judicial review at 1 p.m. Eastern time on June 28, 2017. Under section 509(b)(1) of the CWA, judicial review of this regulation can be had only by filing a petition for review in the U.S. Court of Appeals within 120 days after the regulation is considered issued for purposes of judicial review. Under section 509(b)(2), the requirements in this regulation may not be challenged later in civil or criminal proceedings brought by EPA to enforce these requirements.
EPA has established a docket for this action under Docket ID No. EPA–HQ–OW–2014–0693. All documents in the docket are listed on the
For more information, see EPA's Web site:
Entities potentially regulated by this action include:
This section is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated or affected by this final rule. Other types of entities that do not meet the above criteria could also be regulated. To determine whether your facility would be regulated by this final rule, you should carefully examine the applicability criteria listed in § 441.10 and the definitions in § 441.20 of this final rule and detailed further in Section VI of this preamble. If you still have questions regarding the applicability of this final rule to a particular entity, consult the person listed for technical information in the preceding
This final rule is supported by a number of documents including the Technical and Economic Development Document for the Final Effluent Limitations Guidelines and Standards for the Dental Category (TEDD), Document No. EPA–821–R–16–005. The TEDD and additional records are available in the public record for this final rule and on EPA's Web site at
EPA promulgates this regulation under the authorities of sections 101, 301, 304, 306, 307, 308, and 501 of the CWA, 33 U.S.C. 1251, 1311, 1314, 1316, 1317, 1318, 1342 and 1361 and pursuant to the Pollution Prevention Act of 1990, 42 U.S.C. 13101
The purpose of this final rule is to set a uniform national standard that will greatly reduce the discharge of mercury-containing dental amalgam to municipal sewage treatment plants, known as POTWs, in the United States. Mercury is a potent neurotoxin that bioaccumulates in fish and shellfish, and mercury pollution is widespread and a global concern that originates from many diverse sources such as air deposition from municipal and industrial incinerators and combustion of fossil fuels. Across the U.S., 12 states and at least 18 localities have established mandatory programs to reduce discharges of mercury to POTWs. As a result of these efforts, along with outreach from the ADA to promote voluntary actions to reduce such discharges, approximately 40 percent of the dentists subject to this rule already have installed amalgam separators. Amalgam separators greatly reduce the discharge of mercury-containing amalgam to POTWs. Amalgam separators are a practical, affordable and readily available technology for capturing mercury at dental offices. The mercury collected by these separators can be recycled. This rule will ensure that mercury discharges to POTWs are effectively controlled at dental offices that discharge wastewater to POTWs.
Many studies have been conducted in an attempt to identify the sources of mercury entering POTWs. According to the 2002 Mercury Source Control and Pollution Prevention Program Evaluation Final Report (DCN DA00006) prepared by the Association of Metropolitan Sewerage Agencies (AMSA), dental offices are the main source of mercury discharges to POTWs. A study funded by the ADA published in 2005 estimated that dental offices contributed 50 percent of mercury entering POTWs (DCN DA00163). Mercury is discharged in the form of waste dental amalgam when dentists remove old amalgam fillings from cavities, and from excess amalgam
While dental offices are not a major contributor of mercury to the environment generally, dental offices are the main source of mercury discharges to POTWs. EPA estimates that across the United States 5.1 tons of mercury and an additional 5.3 tons of other metals found in waste dental amalgam are collectively discharged into POTWs annually. Mercury entering POTWs frequently partitions into the sludge, the solid material that remains after wastewater is treated. Mercury from waste amalgam therefore can make its way into the environment from the POTW through the incineration, landfilling, or land application of sludge or through surface water discharge. Once released into the aquatic environment, certain bacteria can change mercury into methylmercury, a highly toxic form of mercury that bioaccumulates in fish and shellfish. In the U.S., consumption of fish and shellfish is the main source of methylmercury exposure to humans. Removing mercury when it is in a concentrated and easy to manage form in dental amalgam, before it becomes diluted and difficult and costly to remove, is a common sense step to prevent mercury from being released into the environment where it can become a hazard to humans.
The ADA, which supported removal and recycling of mercury from wastewater discharged to POTWs in its comments on the 2014 proposed rule (See DCN EPA–HQ–OW–2014–0693–0434), developed best management practices (BMPs) to facilitate this goal and shared its recommendations widely with the dental community (DCN DA00165). The ADA's voluntary amalgam waste handling and disposal practices include the use of amalgam separators to reduce mercury discharges. In addition, some states and localities have implemented mandatory programs to reduce dental mercury discharges that include the use of amalgam separators.
EPA has concluded that requiring dental offices to remove mercury through relatively low-cost and readily available amalgam separators and BMPs makes sense. Capturing mercury-laden waste where it is created prevents it from being released into the environment. This final rule controls mercury discharges to POTWs by establishing a performance standard for amalgam process wastewater based on the use of amalgam separator technology. The rule also requires dental dischargers to adopt two BMPs, one which prohibits the discharge of waste (“or scrap”), and the other which prohibits the use of line cleaners that may lead to the dissolution of solid mercury when cleaning chair-side traps and vacuum lines.
In addition, the rule minimizes the administrative burden on dental offices subject to the rule, as well as on federal, state, and local regulatory authorities responsible for oversight and enforcement of the new standard. Administrative burden was a concern of many of the commenters on the 2014 proposed rule and EPA has greatly reduced that burden through streamlining the administrative requirements in this final rule.
When EPA establishes categorical pretreatment requirements, it triggers additional oversight and reporting requirements in EPA's General Pretreatment Regulations. The General Pretreatment Regulations specify that Control Authorities (which are often the state or POTW) are responsible for administering and enforcing pretreatment standards, including receiving and reviewing compliance reports. While other industries subject to categorical pretreatment standards typically consist of tens to hundreds of facilities, the dental industry consists of approximately 130,000 offices. Application of the default General Pretreatment Regulation oversight and reporting requirements to such a large number of facilities would be much more challenging. Further, dental office discharges differ from other industries for which EPA has established categorical pretreatment standards. Both the volume of wastewater discharged and the quantity of pollutants in the discharge on a per facility basis are significantly less than other industries for which EPA has established categorical pretreatment standards. Accordingly, this final rule exempts dental offices from the General Pretreatment Regulations' oversight and reporting requirements associated with categorical pretreatment standards, reflecting EPA's recognition that the otherwise-applicable regulatory framework for categorical dischargers would be unlikely to have a significant positive impact on overall compliance with the rule across the dental industry, while imposing a substantial burden on state and local regulating authorities.
In order to simplify implementation and compliance for the dental offices and the regulating authorities, the final rule establishes that dental dischargers are not Significant Industrial Users (SIUs) as defined in 40 CFR part 403, and are not Categorical Industrial Users (CIUs) or “industrial users subject to categorical pretreatment standards” as those terms and variations are used in the General Pretreatment Regulations, unless designated such by the Control Authority. While this rule establishes pretreatment standards that require dental offices to reduce dental amalgam discharges, the rule does not require Control Authorities to implement the traditional suite of oversight requirements in the General Pretreatment Regulations that become applicable upon the promulgation of categorical pretreatment standards for an industrial category. This significantly reduces the reporting requirements for dental dischargers that would otherwise apply by instead requiring them to demonstrate compliance with the performance standard and BMPs through a one-time compliance report to their Control Authority. This regulatory approach also eliminates the additional oversight requirements for Control Authorities that are typically associated with SIUs, such as permitting and annual inspections of individual dental offices. It also eliminates additional reporting requirements for the Control Authorities typically associated with CIUs, such as identification of CIUs in their annual pretreatment reports. At the same time, the final rule recognizes the Control Authority's discretionary authority to treat a dental discharger as an SIU and/or CIU if, in the Control Authority's judgement, it is necessary.
EPA estimated the annual costs associated with this rule. EPA's analysis reflects that many dental offices have already taken steps to reduce dental amalgam discharges by discontinuing the use of dental amalgam, adopting the ADA's voluntary best practices, or by meeting existing mandatory state or local requirements. On a national basis, EPA estimates that approximately 40 percent of dental offices subject to this final rule already use amalgam separators (DCN DA00456). Of the remaining 60 percent of dental offices that do not have amalgam separators and that are subject to this final rule, EPA estimates that 20 percent do not place or remove dental amalgam (DCN DA00161). These dentists that do not place or remove dental amalgam—which correspond to 12 percent of the dental offices subject to this final rule—will incur little to no costs as a result of the rule. EPA estimates the remainder (representing 48 percent of the dental offices subject to this final rule) will incur an approximate average annual cost of $800 per office. The total annual cost of this final rule is projected to be $59–$61 million.
This final rule will produce human health and ecological benefits by reducing the estimated annual
Congress passed the Federal Water Pollution Control Act Amendments of 1972, also known as the Clean Water Act (CWA), to “restore and maintain the chemical, physical, and biological integrity of the Nation's waters.” (33 U.S.C. 1251(a)). The CWA establishes a comprehensive program for protecting our nation's waters. Among its core provisions, the CWA prohibits the discharge of pollutants from a point source to waters of the U.S. except as authorized under the CWA. Under section 402 of the CWA, EPA authorizes discharges by a National Pollutant Discharge Elimination System (NPDES) permit. The CWA establishes a two- pronged approach for these permits: Technology-based controls that establish the floor of performance for all dischargers, and water quality-based limits where the technology-based limits are insufficient for the discharge to meet applicable water quality standards. To serve as the basis for the technology-based controls, the CWA authorizes EPA to establish national technology-based effluent limitations guidelines and new source performance standards for discharges from different categories of point sources, such as industrial, commercial, and public sources, that discharge directly into waters of the U.S.
Direct dischargers (those discharging directly to surface waters) must comply with effluent limitations in NPDES permits. Technology-based effluent limitations in NPDES permits for direct dischargers are derived from effluent limitations guidelines (CWA sections 301 and 304) and new source performance standards (CWA section 306) promulgated by EPA, or based on best professional judgment where EPA has not promulgated an applicable effluent guideline or new source performance standard (CWA section 402(a)(1)(B) and 40 CFR 125.3). The effluent guidelines and new source performance standards established by regulation for categories of industrial dischargers are based on the degree of control that can be achieved using various levels of pollution control technology, as specified in the Act.
EPA promulgates national effluent limitations guidelines and standards of performance for major industrial categories for three classes of pollutants: (1) Conventional pollutants (total suspended solids, oil and grease, biochemical oxygen demand, fecal coliform, and pH) as outlined in CWA section 304(a)(4) and 40 CFR 401.16; (2) toxic pollutants (
The CWA also authorizes EPA to promulgate nationally applicable pretreatment standards that restrict pollutant discharges from facilities that discharge pollutants indirectly, by sending wastewater to POTWs, as outlined in sections 307(b), (c) and 304(g) of the CWA. EPA establishes national pretreatment standards for those pollutants that may pass through, interfere with, or may otherwise be incompatible with POTW operations. CWA sections 307(b) and (c) and 304(g). The legislative history of the 1977 CWA amendments explains that pretreatment standards are technology-based and analogous to technology-based effluent limitations for direct dischargers for the removal of toxic pollutants. As further explained in the legislative history, the combination of pretreatment and treatment by the POTW is intended to achieve the level of treatment that would be required if the industrial source were making a direct discharge. Conf. Rep. No. 95–830, at 87 (1977), reprinted in U.S. Congress. Senate. Committee on Public Works (1978), A Legislative History of the CWA of 1977, Serial No. 95–14 at 271 (1978). As such, in establishing pretreatment standards, EPA's consideration of pass through for national technology-based categorical pretreatment standards differs from that described in EPA's General Pretreatment regulations at 40 CFR part 403. For categorical pretreatment standards, EPA's approach for pass through satisfies two competing objectives set by Congress: (1) That standards for indirect dischargers be equivalent to standards for direct dischargers; and (2) that the treatment capability and performance of the POTWs be recognized and taken into account in regulating the discharge of pollutants from indirect dischargers. CWA 301(b)(1)(A)(BPT); and 301(b)(1)(E).
EPA develops Effluent Guidelines Limitations and Standards (ELGs) that are technology-based regulations for specific categories of dischargers. EPA bases these regulations on the performance of control and treatment technologies. The legislative history of CWA section 304(b), which is the heart of the effluent guidelines program, describes the need to press toward higher levels of control through research and development of new processes, modifications, replacement of obsolete plants and processes, and other improvements in technology, taking into account the cost of controls. Congress has also stated that EPA need not consider water quality impacts on individual water bodies as the guidelines are developed; see Statement of Senator Muskie (October 4, 1972), reprinted in U.S. Senate Committee on Public Works, Legislative History of the Water Pollution Control Act Amendments of 1972, Serial No. 93–1, at 170).
There are standards applicable to direct dischargers (dischargers to surface waters) and standards applicable to indirect dischargers (dischargers to POTWs). The types of standards relevant to this rulemaking are summarized here.
BAT represents the second level of stringency for controlling direct discharge of toxic and nonconventional pollutants. In general, BAT-based effluent guidelines and new source performance standards represent the best available economically achievable performance of facilities in the industrial subcategory or category. Following the statutory language, EPA considers the technological availability and the economic achievability in determining what level of control represents BAT. CWA section 301(b)(2)(A). Other statutory factors that EPA considers in assessing BAT are the cost of achieving BAT effluent reductions, the age of equipment and facilities involved, the process employed, potential process changes, and non- water quality environmental impacts, including energy requirements and such other factors as the
NSPS reflect effluent reductions that are achievable based on the best available demonstrated control technology (BADCT). Owners of new facilities have the opportunity to install the best and most efficient production processes and wastewater treatment technologies. As a result, NSPS should represent the most stringent controls attainable through the application of the BADCT for all pollutants (that is, conventional, nonconventional, and toxic pollutants). In establishing NSPS, EPA is directed to take into consideration the cost of achieving the effluent reduction and any non-water quality environmental impacts and energy requirements. CWA section 306(b)(1)(B).
Pretreatment standards apply to dischargers of pollutants to POTWs; Pretreatment Standards for Existing Sources are designed to prevent the discharge of pollutants to POTWs that pass through, interfere with, or are otherwise incompatible with the operation of POTWs, including sludge disposal methods of POTWs. Categorical pretreatment standards for existing sources are technology-based and are analogous to BAT effluent limitations guidelines, and thus the Agency typically considers the same factors in promulgating PSES as it considers in promulgating BAT. See
Like PSES, PSNS are designed to prevent the discharges of pollutants that pass through, interfere with, or are otherwise incompatible with the operation of POTWs. New indirect discharges have the opportunity to incorporate into their facilities the best available demonstrated technologies. In establishing pretreatment standards for new sources, the Agency typically considers the same factors in promulgating PSNS as it considers in promulgating NSPS (BADCT).
Section 304(e) of the CWA authorizes the Administrator to publish regulations, in addition to effluent limitations guidelines and standards for certain toxic or hazardous pollutants, “to control plant site runoff, spillage or leaks, sludge or waste disposal, and drainage from raw material storage which the Administrator determines are associated with or ancillary to the industrial manufacturing or treatment process . . . and may contribute significant amounts of such pollutants to navigable waters.” In addition, section 304(g), read in concert with section 501(a), authorizes EPA to prescribe as wide a range of pretreatment requirements as the Administrator deems appropriate in order to control and prevent the discharge into navigable waters, either directly or through POTWs, any pollutant which interferes with, passes through, or otherwise is incompatible with such treatment works. (see also
EPA published the proposed rule on October 22, 2014, and took public comment through February 20, 2015. During the public comment period, EPA received approximately 200 comments. EPA also held a public hearing on November 10, 2014. Administrative burden was a concern of many of the commenters on the 2014 proposed rule, particularly from regulatory authorities responsible for oversight and enforcement of the new standard. Commenters also provided additional information on amalgam separators (
Currently, 12 states (Connecticut, Louisiana,
The National Pretreatment Program requires industrial dischargers that discharge to POTWs to comply with pretreatment standards. The General Pretreatment Regulations in 40 CFR part 403 establish roles and responsibilities for entities involved in the implementation of pretreatment standards. This section summarizes the roles and responsibilities of Industrial Users (IUs), Control Authorities, and Approval Authorities. For a detailed description, see the preamble for the proposed rule (79 FR 63279–63280; October 22, 2014).
An IU is a nondomestic source of indirect discharge into a POTW, and in this rule is the dental discharger. The Control Authority may be the POTW, the state, or EPA, depending on whether the POTW or the state is approved by EPA to administer the pretreatment program. The Control Authority is the POTW in cases where the POTW has an approved pretreatment program. The Control Authority is the state, where the POTW has not been approved to administer the pretreatment program, but the state has been approved. The Control Authority is EPA where neither the POTW nor the state have been approved to administer the pretreatment program. The Approval Authority is the
Typically, an IU is responsible for demonstrating compliance with pretreatment standards by performing self-monitoring, submitting reports and notifications to its Control Authority, and maintaining records of activities associated with its discharge to the POTW. The Control Authority is the regulating authority responsible for implementing and enforcing pretreatment standards. The General Pretreatment Regulations require certain minimum oversight of IUs by Control Authorities. The required minimum oversight includes receipt and analysis of reports and notifications submitted by IUs, random sampling and analyzing effluent from IUs, and conducting surveillance activities to identify occasional and continuing non-compliance with pretreatment standards. The Control Authority is also responsible for taking enforcement action as necessary. For IUs that are designated as Significant Industrial Users (SIUs), Control Authorities must inspect and sample the SIU effluent annually, review the need for a slug control plan, and issue a permit or equivalent control mechanism. IUs subject to categorical pretreatment standards are referred to as Categorical Industrial Users (CIUs). The General Pretreatment Regulations define SIU to include CIUs. The Approval Authority is responsible for ensuring that POTWs comply with all applicable pretreatment program requirements. Among other things, the Approval Authority receives annual pretreatment reports from the Control Authority. These reports must identify which IUs are CIUs.
On November 6, 2013, the United States joined the Minamata Convention on Mercury, a new multilateral environmental agreement that addresses specific human activities that are contributing to widespread mercury pollution. The agreement identifies dental amalgam as a mercury-added product for which certain measures should be taken. Specifically, the Convention lists nine measures for phasing down the use of mercury in dental amalgam, including promoting the use of best environmental practices in dental offices to reduce releases of mercury and mercury compounds to water and land. Nations that are parties to the Convention are required to implement at least two of the nine measures to address dental amalgam. This final rule contributes to the U.S.'s efforts to meet the measures called for in the treaty.
The industry category affected by this final rule is Offices of Dentists (NAICS 621210), which comprises establishments of health practitioners primarily engaged in the independent practice of general or specialized dentistry, or dental surgery. These practitioners operate individual or group practices in their own offices or in the offices of others, such as hospitals or health maintenance organization medical centers. They can provide either comprehensive preventive, cosmetic, or emergency care, or specialize in a single field of dentistry.
According to the 2012 Economic Census, there are 133,221 U.S. dental offices owned or operated by 125,275 dental firms.
The industry includes mostly small businesses with an estimated over 99 percent of all offices falling below the Small Business Administration (SBA) size standard ($7.5 million in annual revenue). Using Census Bureau data, EPA estimates an average revenue for offices at $787,190 per year with an average of 6.6 employees per establishment.
According to ADA data, approximately 80 percent of the dental industry engages in general dentistry. Approximately 20 percent are specialty dentists such as periodontists, orthodontists, radiologists, maxillofacial surgeons, endodontists, or prosthodontists (DCN DA00460).
Dentistry may also be performed at larger institutional dental offices (military clinics and dental schools). Since EPA does not know if these offices are included in the 2012 Economic Census data, EPA conservatively assumed the largest offices are not present in the data, and so added an estimate of 415 larger institutional dental offices across the nation. For the final rule, EPA updated this number based on comments received on the proposed rule.
Dental amalgam consists of approximately 49 percent mercury by weight. Mercury is the only metal that is in its liquid phase at room temperature, and it bonds well with powdered alloy. This contributes to its durability in dental amalgam. The other half of dental amalgam is usually composed of 35 percent silver, 9 percent tin, 6 percent copper, 1 percent zinc and small amounts of indium and palladium (DCN DA00131).
Sources of dental amalgam discharges generally occur in the course of two categories of activities. The first category of discharges may occur in the course of treating a patient, such as during the placement or removal of a filling. When filling a cavity, dentists overfill the tooth cavity so that the filling can be carved to the proper shape. The excess amalgam is typically rinsed into a cuspidor, or suctioned out of the patient's mouth. In addition to filling new cavities, dentists also remove old restorations that are worn or damaged. Removed restorations also may be rinsed into a cuspidor or suctioned out of the patient's mouth. Based on information in the record (DCN DA00456), removed restorations is the largest contributor of mercury in dental discharges.
The second category of dental amalgam discharges occurs in the course of activities not directly involved with the placement or removal of dental amalgam. Preparation of dental amalgam, disposing of excess amalgam, and flushing vacuum lines with corrosive chemicals present opportunities for dental amalgam to be discharged.
The use of dental amalgam has decreased steadily since the late 1970s as alternative materials such as composite resins and glass ionomers have become more widely available. Estimates show that placements of dental amalgam have decreased on average by about 2 to 3% per year (74 FR 38686; August 4, 2009). Based on this information, EPA estimates that mercury in dental amalgam discharges to POTWs will decrease by about half within the next 25 years. While the use of dental amalgam continues to decline, EPA estimates that approximately 2 tons of mercury would continue to be discharged to POTWs in 2040.
The typical plumbing configuration in a dental office consists of a chair-side trap for each chair, and a central vacuum pump with a vacuum pump filter. Chair-side traps and vacuum pump filters remove approximately 78
An amalgam separator is a device designed to remove solids from dental office wastewater. Amalgam separators remove amalgam particles from the wastewater through centrifugation, sedimentation, filtration, or a combination of any of these methods. Practically all amalgam separators on the market today rely on sedimentation because of its effectiveness and operational simplicity.
The vast majority of amalgam separators on the market today have been evaluated for their ability to meet the current American National Standards Institute's (ANSI) Standard for Amalgam Separators (ANSI/ADA Standard No. 108 for Amalgam Separators). This standard incorporates the International Organization for Standardization (ISO) Standard for Dental Amalgam Separators (
Based on reported removal efficiencies of a range of amalgam separators currently on the market that meet the ISO standard, separators obtain a median of 99 percent removal efficiency (see Chapter 7 of the TEDD) of total dental solids. When existing chair-side traps and vacuum pump filters are used upstream of the amalgam separators, the combined treatment system can achieve total mercury removal rates exceeding 99 percent (DCN DA00008).
Solids collected by the amalgam separator may be a combination of dental amalgam, biological material from patients, and any other solid material sent down the vacuum line. The collected solids must be handled in accordance with federal, state and local requirements. EPA regulates the disposal of mercury-containing hazardous waste under the Resource Conservation and Recovery Act (RCRA). A mercury-containing waste can be considered hazardous in two ways: (1) As a listed hazardous waste; or (2) as a characteristic hazardous waste. Unused elemental mercury being discarded would be a listed hazardous waste (waste code U151). Persons who generate hazardous waste, such as a waste that exhibits the hazardous characteristics for mercury, are subject to specific requirements for the proper management and disposal of that waste. The federal RCRA regulatory requirements differ depending upon how much hazardous waste a site generates per month. Most dental practices generate less than 100 kilograms of non-acute hazardous waste per month and less than 1 kilogram of acute hazardous waste per month. Such facilities are therefore classified as “Very Small Quantity Generators” (VSQGs). VSQGs are not subject to most of the RCRA hazardous waste requirements.
Many states have additional requirements for the handling of mercury, including waste dental amalgam. Chapter 6 of the TEDD provides additional details on the handling requirements for states that require dentists to control dental mercury dischargers. To facilitate compliance with state and local requirements, several amalgam separator manufacturers offer services that facilitate the transport of waste amalgam to facilities that separate mercury from other metals in dental amalgam and recycle the mercury, keeping it out of the environment. EPA recommends that dental dischargers take advantage of such services. In 2012, ADA posted a directory of amalgam recyclers on its Web site. See DCN DA00468.
For more information about amalgam separators, see the proposed rule (79 FR 63265; October 22, 2014).
Mercury from dental amalgam in wastewater is present in both the particulate and dissolved form. The vast majority (>99.6 percent) is particulate (DCN DA00018). An additional process sometimes referred to as “polishing” uses ion exchange to remove dissolved mercury from wastewater. Dissolved mercury has a tendency to bind with other chemicals, resulting in a charged complex. Ion exchange is the process that separates these charged amalgam particles from the wastewater. For ion exchange to be most effective, the incoming wastewater must first be treated to remove solids. Then the wastewater needs to be oxidized (creating a charge on the amalgam particles) in order for the resin or mercury capturing material to capture the dissolved mercury. Therefore, ion exchange will not be effective without first being preceded by a solids collector and an oxidation process. The data available to EPA indicate that total additional mercury reductions with the addition of polishing are typically about 0.5 percent (DCN DA00164). This is not surprising since, as indicated above, dissolved mercury contributes such a small portion to the total amount of mercury in wastewater. In addition to polishing as described above, EPA is aware that vendors are developing amalgam separators with an improved resin for removing dissolved mercury. For additional discussion on polishing, see proposal (79 FR 63266; October 22, 2014).
Commenters on the proposed rule identified wastewater retaining tanks as a third technology to reduce mercury discharges from dental offices to POTWs. Where currently used, these systems collect and retain
In addition to technologies, EPA also identified best management practices currently used in this industry (and included in the ADA BMPs) to reduce dental amalgam discharges. In particular, EPA identified two BMPs to control dental amalgam discharges that would not be captured by an amalgam separator and/or polishing unit. Oxidizing line cleaners can solubilize bound mercury. If oxidizing cleaners are used to clean dental unit water lines, chair side traps, or vacuum lines that lead to an amalgam separator, the line cleaners may solubilize any mercury that the separator has captured, resulting in increased mercury discharges. One BMP ensures the efficiency of amalgam separators by prohibiting use of oxidizing line cleaners including but not limited to, bleach, chlorine, iodine and peroxide, that have a pH lower than 6 or greater than 8.
Flushing waste amalgam from chair-side traps, screens, vacuum pump filters, dental tools, or collection devices into drains also presents additional opportunities for mercury to be discharged from the dental office. The second BMP prohibits flushing waste dental amalgam into any drain.
Consistent with the proposal, dental offices that discharge to POTWs are within the scope of this final pretreatment rule.
The final rule applies to wastewater discharges to POTWs from offices where the practice of dentistry is performed, including large institutions such as dental schools and clinics; permanent or temporary offices, home offices, and facilities; and including dental offices owned and operated by federal, state, or local governments including military bases. The final rule does not apply to wastewater discharges from dental offices where the practice of dentistry consists exclusively of one or more of the following dental specialties: Oral pathology, oral and maxillofacial radiology, oral and maxillofacial surgery, orthodontics, periodontics, or prosthodontics. As described in the TEDD, these specialty practices are not expected to engage in the practice of amalgam restorations or removals, and are not expected to have any wastewater discharges containing dental amalgam.
The final rule also does not apply to wastewater discharges to POTWs from mobile units. EPA proposed to apply the standards to mobile units (typically a specialized mobile self- contained van, trailer, or equipment from which dentists provide services at multiple locations), soliciting comments and data pertaining to them (79 FR 63261; October 22, 2014). However, EPA is not establishing requirements for mobile units at this time because it has insufficient data to do so. EPA does not have, nor did commenters provide, data on the number, size, operation, or financial characteristics of mobile units. EPA also has minimal information on wastewater discharges from mobile units, and/or practices employed to minimize dental amalgam in such discharges. Therefore, any further evaluation of requirements for mobile units is not possible at this time, and the final rule requirements do not apply to mobile units.
After considering all of the relevant factors and dental amalgam management approaches discussed in this preamble and TEDD, as well as public comments, EPA decided to establish PSES based on proper operation and maintenance of one or more ISO 11143
EPA did not establish PSES based on technologies that remove dissolved mercury such as polishing. EPA is not aware of any state or local regulations that require ion exchange or that require removal of dissolved mercury. Commenters raised operational concerns with ion exchange citing a pilot study for the department of Navy. EPA also lacks adequate performance data to assess the efficacy of polishing for nationwide use. While even very small amounts of mercury have environmental effects, EPA lacks sufficient data to conclude that there is a significant difference in the performance between traditional amalgam separators and polishing. Moreover, current information suggests that polishing is not available for nationwide use because the typical dental office may not have adequate space to install the treatment train needed for effective polishing and because there are few polishing systems on the market today in comparison to traditional amalgam separators. Lastly, EPA estimates that the capital costs of the polishing system, as a stand-alone system, are approximately four times that of the amalgam separator even though the costs for chemical use, regenerating the resin, filter replacement, and other operational costs were not reported (DCN DA00122). These factors led EPA to find that polishing is not “available” as that term is used in the CWA.
EPA also did not establish PSES based on wastewater retention tanks. Capital costs for wastewater retention tanks are approximately twice that of the amalgam separator (DCN DA00461). EPA does not have information on the costs incurred by the dental office to send the collected wastewater off-site to a privately owned treatment facility (may also be referred to as a centralized waste treatment facility or CWT). Furthermore, wastewater retention tanks require space, and EPA determined that the typical dental office may not have adequate space to install the tanks. In addition, EPA is only aware of one vendor currently offering this technology and service combination (vendor transfers the collected wastewater to a privately owned treatment facility), and the vendor's service area is limited to a few states. Therefore, EPA did not find this technology to be available to the industry as a whole.
After considering all of the relevant factors and technology options discussed in this preamble and in the TEDD, as well as public comments, EPA decided to establish PSNS based on the same technologies identified above as PSES. As previously noted, under section 307(c) of the CWA, new sources of pollutants into POTWs must comply with standards that reflect the greatest degree of effluent reduction achievable through application of the best available demonstrated control technologies. Congress envisioned that new treatment systems could meet tighter controls than existing sources because of the opportunity to incorporate the most efficient processes and treatment systems into the facility design. The technologies used to control pollutants at existing offices, amalgam separators and BMPs, are fully available to new offices. In addition, data from EPA's record show that the incremental cost of an amalgam separator compared to the cost of opening a new dental office is negligible; therefore, EPA determined that the final PSNS present no barrier to entry (see Section IX below). Similarly, because EPA projects that the incremental non-water quality environmental impacts associated with controls for new sources would not exceed those for existing sources, EPA concludes the non-water quality environmental impacts are acceptable. Therefore, this final rule establishes PSNS that are the same as those for PSES.
EPA rejected other technologies as the basis for PSNS for the same reasons the Agency rejected other technology bases for PSES.
EPA finalized the performance standards based on the same technology identified in the proposed rule, amalgam separators.
EPA proposed a standard that would require dental dischargers to remove a specified percentage of total mercury from amalgam process wastewater and to follow the BMPs. Recognizing the impracticality of collecting and analyzing wastewater samples to demonstrate compliance with the standard for this industry, EPA included a provision by which dental offices could demonstrate compliance by certifying they were following the required BMPs and using an amalgam separator that achieved the specified percentage when tested for conformance with the ISO standard. EPA received comments regarding the proposed requirement. Commenters questioned the specified percent reduction, and raised concerns that the proposed standard could require dental offices to measure the percent removal being achieved by their amalgam separator, which was not the Agency's intent. In response to these comments, the final rule specifies a performance standard—BMPs and the use of an amalgam separator(s) compliant with the ISO standard rather than specifying a numerical reduction requirement. The final rule also includes a provision such that the performance standard can be met with the use of an amalgam removing technology other than an amalgam separator (equivalent device). EPA included this provision to incorporate future technologies that achieve comparable removals of pollutants from dental discharges as amalgam separators but that may not fall under the amalgam separator classification. Because the rule does not include a numerical limit, the performance standards also specify certain operation and maintenance requirements for the amalgam separator or comparable device to ensure they are operated optimally.
The final rule allows dental offices to continue to operate existing amalgam separators for their lifetime or ten years (whichever comes first), as long as the dental discharger complies with the other rule requirements including the specified BMPs, operation and maintenance, reporting, and recordkeeping requirements. Once the separator needs to be replaced or the ten-year period has ended, dental offices will need to replace the amalgam separator with one that meets the requirements of the final rule. EPA does not want to penalize existing dental offices or institutional dental offices that have already installed amalgam separators voluntarily or to comply with state or local requirements. EPA recognizes that these offices may currently have amalgam separators in place that do not meet the ANSI ADA specification or the criteria of the ISO 11143 2008 standard. EPA did not want to establish a rule that would require dental offices with existing separators that still have a remaining useful life to be retrofitted with new separators, both because of the additional costs incurred by dental offices that adopted technology to reduce mercury discharges ahead of EPA's requirements and because of the additional solid waste that would be generated by disposal of the existing separators.
In addition to installing one or more amalgam separators compliant with the ISO 11143 standard (or its equivalent) and implementing the required BMPs, the pretreatment standards specify certain operating and maintenance requirements for the amalgam separator. For example, the final rule requires a documented amalgam separator inspection to ensure the separator is performing properly. As explained in Section V, malfunctioning separators or separators that have reached their capacity are ineffective. Therefore, in order to ensure that mercury is not discharged from the facility, it is important that dentists know the operational status of their amalgam separator (see 40 CFR 441.40(c)). As such, the final rule requires the separator to be inspected per the manufacturer's instructions. In addition, as explained in Section V, the ISO standard specifies non-sedimentation separators must have a visual or auditory warning indicator when the separator is nearly full or operating in by-pass mode. While not required for sedimentation amalgam separators, some manufacturers of sedimentation amalgam separators include visual or auditory warning indicators. Because warning indicators make it easy to detect when the separator is not operating optimally, EPA encourages dental offices to select an amalgam separator with a warning indicator when installing a new amalgam separator.
EPA is aware that some amalgam separator vendors (in addition to providing the needed equipment) or service providers offer service contracts to maintain the system. These vendors also typically provide waste
In the final rule, dental dischargers that do not place dental amalgam, and do not remove dental amalgam except in limited emergency or unplanned, unanticipated circumstances are exempt from any further requirements as long as they certify such in their One-time Compliance Report to their Control Authority. In this way, if, over time, the use of dental amalgam is phased out as a restorative material, the requirements of this rule will no longer apply. By limited circumstances, EPA means, dental offices that remove amalgam at a frequency less than five percent of its procedures. As described below, based on the record, on average, this percent approximates to 9 removals per office per year (DCN DA00467).
Dental amalgam traditionally has been used as a restorative material for cavities because the malleability of newly mixed amalgam makes it easy to place into cavities and because of its durability over time. While still used in many dental offices in the U.S., some dental offices have elected not to use dental amalgam and instead use only non-mercury based filling materials, such as composite resins and glass ionomer cements (DCN DA00495). As explained in Section IV, removed restorations are the largest contributor of mercury in dental discharges. Some dental offices have also elected not to remove amalgam restorations.
EPA recognizes some dental offices only remove dental amalgam extremely infrequently, where there is an unplanned, unanticipated procedure. At the same time, for accepting new patients during the normal course of business, EPA would expect offices to inquire as to whether the patient has mercury fillings and not accept patients that have such fillings unless they install a separator or equivalent treatment in accordance with this rule. EPA proposed that dental offices that certify that they do not place or remove amalgam except in limited emergency circumstances would be exempt from any further requirements of the rule. EPA is clarifying in the final rule that the limited circumstances provision applies to the removal, but not to the placement of dental amalgam. A dental office that stocks amalgam capsules clearly intends to place amalgam, and does not represent the type of limited circumstance this provision is intended to address. Commenters largely supported this approach, and most commenters suggested EPA define limited emergency circumstances. The frequency recommended by these commenters ranged from once a quarter to 96 times a year (DCN DA00467).
EPA is including the limited circumstances provision in the final rule to allow a dental office that does not reasonably expect to place or remove dental amalgam to provide immediate treatment, such as where unplanned, unanticipated removal of the amalgam is necessary at that facility at that time, in the professional judgment of the dentist. EPA's intent is to exclude dental offices from the rule's requirements, other than a one-time report, for unplanned removals. In EPA's view, dental offices that remove amalgam at a frequency more often than five percent of its procedures are not likely engaging in only limited, unplanned removals. EPA estimates that on average, a single chair dental office would remove amalgam 183 times per year (DCN DA00467). An amalgam removal rate that represents less than five percent of this frequency consists of approximately nine removals per year, on average, respectively. However, because EPA does not have, nor did commenters provide, data on the frequency of such unplanned and unanticipated instances nationwide, the final rule does not include a specific definition of limited circumstances. Rather, EPA expects a dental office to carefully consider its operation in light of the information provided above and only certify accordingly to their Control Authority if it meets the situation EPA described.
Dental dischargers subject to this rule must comply with a one-time reporting requirement specified in the final rule in lieu of the otherwise applicable reporting requirements in 40 CFR part 403. Submission of reports as specified in this rule satisfies the reporting requirements in 40 CFR parts 403 and 441. For dental offices that do not place or remove dental amalgam except in limited circumstances, dental offices must submit a One-Time Compliance Report that includes information on the facility and a certification statement that the dental discharger does not place dental amalgam and does not remove amalgam except in limited circumstances. For dental offices that place or remove dental amalgam, the One-Time Compliance Report must include information on the dental facility and its operations and a certification that the dental discharger meets the requirements of the applicable performance standard. Dentists that utilize a third party to maintain their separator must report that information in their One-Time Compliance Report. Dentists that do not utilize a third party to maintain the amalgam separator(s) must provide a description of the practices employed by the office to ensure proper operation and maintenance. EPA suggests dental offices consider use of signs displayed prominently in the office or electronic calendar alerts to remind staff of dates to perform and document monthly inspections, cartridge replacement, etc.
If a dental practice changes ownership (which is a change in the responsible party, as defined in 40 CFR 403.12(l)), the new owner must submit a One-Time Compliance Report that contains the required information.
The One-Time Compliance Report must be signed by (1) a responsible corporate officer if the dental office is a corporation; (2) a general partner or proprietor if the dental office is a partnership or sole proprietorship; or (3) a duly authorized representative of the responsible corporate officer, or general partner or proprietor. This does not preclude a third party from submitting the report on behalf of a dental office as long as the submission also includes a proper signature as described above.
The final rule does not require electronic reporting nor does it prevent electronic reporting. EPA received several comments requesting that EPA develop an electronic compliance reporting system as a part of this final rule. These commenters generally advocated for electronic reporting due to the size of the industry and the proposed annual reporting requirement. During development of the final rule, EPA considered several variations of requirements for dental dischargers to report electronically (which would have necessitated an electronic system). Most commonly, electronic systems are preferable when reports must be submitted on a periodic basis. EPA ultimately decided not to specify electronic reporting in the final rule after it determined the final rule would only require a one-time compliance report from each affected dental discharger.
Still, EPA recognizes that some Control Authorities may prefer to receive the one-time reports electronically or to provide affected
Finally, the final rule requires dental offices to document certain operation and maintenance requirements and maintain all records of compliance, as described in the regulation, and to make them available for inspection.
EPA proposed to amend selected parts of the General Pretreatment Regulations (40 CFR part 403) in order to simplify oversight requirements for the approximately 117,000 dental offices subject to the proposed rule. Specifically, EPA proposed to amend 40 CFR part 403 to create a new classification of categorical industrial users specifically tailored to pretreatment standards for dental offices, dental industrial user (DIU). EPA proposed that as long as a dental office complied with the requirements for DIUs, that it would not be considered an SIU. Among other things, this would have reduced the General Pretreatment Regulation oversight requirements for Control Authorities, such as the requirement to issue a control mechanism and annual inspection and sampling.
EPA received numerous comments related to the proposed change, particularly from the Control Authorities. These commenters largely supported the reduced oversight requirements in the proposal, but encouraged EPA to reduce them further so that dental offices would never be SIUs, primarily due to concerns over the associated burden given the large number of dental offices potentially subject to the rule. In addition, Control Authorities raised concerns that they would have to update state and local laws to take advantage of the proposed changes to part 403 that would reduce the oversight requirements. They also raised concerns about additional reporting requirements for the Control Authorities typically associated with CIUs, such as identifying CIUs in their annual pretreatment report to the Approval Authority.
In response, EPA did not revise the General Pretreatment Standards to create the proposed DIU category and associated requirements. Rather, this rule establishes for the purposes of part 441, that dental dischargers are not SIUs or CIUs as defined in 40 CFR part 403 unless designated as such by the Control Authority. This regulatory structure achieves the same goal as the proposed revisions to the General Pretreatment Standards—simplification of oversight requirements—without creating a need for updates to state and local laws. By establishing that dental dischargers are not SIUs or CIUs in the final rule, EPA eliminates the application of specific oversight and reporting requirements in 40 CFR part 403 such as permitting and annual inspections of dental dischargers for SIUs and CIUs unless the Control Authority chooses to apply these requirements to dental offices. This means that Control Authorities have discretion under the final rule to determine the appropriate manner of oversight, compliance assistance, and enforcement.
Where EPA is the Control Authority, EPA expects to explore compliance monitoring approaches that support sector-wide compliance evaluations, to the extent practicable. States and POTWs that are the Control Authority may elect to use the same approach but are not required to do so. One approach may be periodic review and evaluation of nationwide data on releases of dental amalgam metals (
The final rule applies to both dental offices that are subject to existing mandatory state or local dental amalgam reduction programs and those that are not. Some proposal commenters, many of whom are in states and localities with existing programs, questioned the application of this rule to dentists already subject to state and local programs noting the duplicative requirements. While EPA found that many of the existing programs contained at least one attribute of this final rule (
In addition, requiring all dental offices to meet the same requirements, regardless of the applicability of other
The rule establishes clear requirements for all parties and compliance with the final rule is simple and straightforward for dental offices and the regulating authorities. It requires dental offices to install and operate a separator, to implement two BMPs, and to submit a One-time Compliance Report to the Control Authority. Thereafter, the dental office will be required to conduct ongoing operation and maintenance and maintain associated records. These activities can be facilitated by third parties such as dental office suppliers and amalgam separator manufacturers. EPA does not expect the federal requirements to conflict with existing state or local mandatory amalgam reduction requirements. Rather, EPA concludes this final rule imposes only incremental additional requirements (
The provision of this rule establishing that dental dischargers are not SIUs or CIUs unless designated as such by the Control Authority does not change the otherwise applicable variances and modifications provided by the statute. For example, EPA can develop pretreatment standards different from the otherwise applicable requirements for an individual existing discharger subject to categorical pretreatment standards if it is fundamentally different with respect to factors considered in establishing the standards applicable to the individual discharger. Such a modification is known as a “fundamentally different factors” (FDF) variance. See 40 CFR 403.13 and the preamble to the proposed rule (79 FR 63278–63279, October 22, 2014). FDF variances traditionally have been available to industrial users subject to categorical pretreatment standards. Whether or not a dental discharger is an SIU or CIU, it is subject to categorical pretreatment standards and therefore eligible to apply for an FDF variance.
CWA section 301(b) directs EPA to eliminate the discharge of all pollutants where it is technologically available and economically achievable (after a consideration of the factors specified in section 304(b) of the Act). The first step in such an analysis is typically to identify Pollutants of Concern (POCs)—or the pollutants potentially regulated in the effluent guideline. For this rule, EPA identifies the primary metals in dental amalgam as pollutants of concern: Mercury, silver, tin, copper, and zinc.
Generally, in determining whether pollutants pass through a POTW when considering the establishment of categorical pretreatment standards, EPA compares the median percentage of the pollutant removed by POTWs achieving secondary treatment with the median percentage of the pollutant removed by facilities meeting BAT effluent limitations. EPA deems a pollutant to pass through a POTW when the percentage removed by POTWs is less than the percentage removed by direct dischargers complying with BPT/BAT effluent limitations. In this manner, EPA can ensure that the combined treatment at indirect discharging facilities and POTWs is at least equivalent to that obtained through treatment by a direct discharger, while also considering the treatment capability of the POTW. In the case of this final rulemaking, where EPA is only developing pretreatment standards, EPA compares the POTW removals with removals achieved by indirect dischargers using the technology that otherwise satisfies the BAT factors.
Historically, EPA's primary source of POTW removal data is its 1982 “Fate of Priority Pollutants in Publicly Owned Treatment Works” (also known as the 50 POTW Study). This well documented study presents data on the performance of 50 POTWs achieving secondary treatment in removing toxic pollutants. As part of the development of ELGs for the Centralized Waste Treatment (CWT) Industry promulgated in December 2000, EPA developed and documented a methodology, including data editing criteria, to calculate POTW percent removals for various toxic pollutants from the data collected in the study. EPA provided the opportunity for public comment on the percent removal methodology and the resulting percent removals in the CWT proposal. EPA similarly used and presented this methodology and data in subsequent ELG proposals and final rules. Using its long-standing approach, for this final rule, EPA determined the median percent removal by POTWs achieving secondary treatment is 90.2 percent for total mercury, and 42.6 percent to 88.3 percent for the other pollutants of concern.
As described above, the 50 POTW Study measured pollutant reductions on the basis of total metals. Total metals include particulate (suspended) and dissolved (soluble) forms of the metal. As discussed above, while mercury is present in dental amalgam in both the particulate and dissolved form, the vast majority (>99.6 percent) is particulate. While EPA does not have information on the distribution of the other metals, EPA reasonably assumes the same distribution for the other metals. Because secondary treatment technologies are not designed to remove dissolved metals, EPA assumes dissolved metals are not removed by POTWs and that the percent reductions for POTWs represent particulate reductions.
To determine the median percent removal of the pollutants of concern by amalgam separators, EPA collected information on the efficacy of existing separators. EPA excluded those separators that did not meet the 2008 ISO standards. At proposal, EPA determined the median percent removal of total mercury to be 99.0 percent, which is the reported removal when testing each of the amalgam separators marketed in the U.S. as conforming to the ISO standard (DCN DA00233). Commenters noted that existing data on the effectiveness of separators is measured as a percent reduction in mass, reflecting the dental amalgam particulates (rather than total mercury) collected by the device. EPA agrees the ISO standard evaluates particulates from dental amalgam rather than total mercury, and has adjusted its terminology accordingly. Based on updated information in the record, EPA determined the median percent removal of particulates by amalgam separators that meet the 2008 ISO standards is 99.3 percent. As such, because the median
In addition to comments relating to dissolved mercury, EPA received other comments and data pertaining to the proposed median percent removal of ISO compliant amalgam separators. Some commenters supported the percentage identified in the proposal, noting that certain states require the same level of performance, or identifying separators documented as achieving or exceeding that removal efficiency. Other commenters questioned EPA's use of the data collected when laboratories certify amalgam separators to meet the ISO standard. More specifically, they asserted that the 2008 ISO standard requires the removal efficiency of the amalgam separator to be at least 95 percent on a mass fraction basis and as such, the ISO standard is not a validated test for measuring higher efficiencies. These commenters offered no data to demonstrate that the reported removals in excess of 95 percent were inaccurate, nor did commenters provide other efficiency data for amalgam separators. As it represents the best data available for the final rule, EPA appropriately used the data as reported to estimate the efficacy of amalgam separators for these purposes. EPA notes that even if commenters correctly characterized the minimum percent removal efficiency of amalgam separators meeting the 2008 ISO standard as 95 percent, this is a higher removal rate than the median percent removal by POTWs for all POCs. Therefore, while EPA based its analysis in the final rule on the percent removals as reported, under either case, EPA determines that mercury and the other POCs pass through.
Other commenters stated the 50 POTW Study data were old, and that current POTW removals are higher than 90 percent. Some provided case studies, many of which reflected POTWs with advanced treatment capabilities rather than secondary treatment. In particular, the National Association of Clean Water Agencies (NACWA) submitted data from a nationwide voluntary survey of its members regarding mercury reductions at POTWs. Based on its analysis of the data collected in this survey, NACWA calculated a three-year average removal efficiency of 94 percent.
EPA, however, gave full consideration to the NACWA survey and subjected the mercury influent and effluent data from the 41 POTWs from that survey to similar review and data editing criteria as influent and effluent data collected for the 50 POTW Study. In this way, EPA attempted to give the NACWA data full and equal consideration as the historical data from the 50 POTW Study. EPA created a database of the raw data in order to conduct its analysis. (DCN DA00463). When EPA calculated the median percent removal of the non-edited raw data as submitted by NACWA, the median plant performance was 93.8 percent, with a range of 57.2 percent to 99.1 percent. In reviewing the data used in that calculation, EPA identified numerous data points that would not satisfy the data editing criteria applied in the 50 POTW Study, including data points representing combined data rather than raw data, order of magnitude outlier concentrations, and incorrectly reported units of measure. Other discrepancies between data and analyses from the 50 POTW Study and NACWA survey include upward bias of using data from voluntary respondents, representing non-detect influent concentrations as zero,
Consequently, for all of the reasons identified above, for this final rule, EPA finds that data from the 50 POTW Study continues to represent the best data available to determine the percent removed nationwide by well operated POTWs employing secondary treatment. Based on the information in its record including full consideration of comments, EPA appropriately concludes that the median percent removal of amalgam separators is higher than the median percent removal of POTWs for mercury and the other pollutants of concern. As such, EPA concludes mercury and the other POCs pass through.
This section summarizes EPA's approach for estimating incremental compliance costs to implement changes associated with this rule, while the TEDD provides detailed information on the methodology. The costing methodology for the final rule is the same as that described in the proposal (79 FR 63269; October 22, 2014); however, EPA updated some of the specific data elements. EPA estimated compliance costs using data collected through EPA's Health Services Industry Detailed Study (August 2008) [EPA–821–R–08–014], a review of the literature, information supplied by vendors, and data submitted with comments on the proposed rule. In estimating the total cost of the regulatory options, EPA estimated costs for the following components: Capital costs and other one-time costs; installation costs; annual operation and maintenance costs; and recordkeeping and reporting costs. EPA incorporated information received in comments pertaining to specific elements of the cost analysis, resulting in an increase in the initial installation cost and a minor increase in the average costs of dental amalgam separators that meet the 2008 ISO standard. In addition, EPA adjusted the reporting and recordkeeping costs to reflect the final rule requirements.
The cost estimates reflect the incremental costs attributed only to this final rule. For example, offices required by a state or local program to have an amalgam separator compliant with the 2008 ISO 11143 standard will not incur costs to retrofit a separator as a result of this rule. Others may certify that they do not place or remove amalgam. Such offices may still have costs under this final rule such as those associated with the one-time reporting requirement to certify that they do not place or remove amalgam. EPA's cost methodology assumes dental offices would use the required BMPs in combination with 2008 ISO 11143 amalgam separators to comply with the rule. All final cost estimates are expressed in terms of 2016 dollars.
EPA used a model office approach to calculate costs of this rule. Under this approach, EPA developed a series of model dental offices that exhibited the
EPA used the model approach to estimate costs for offices that place or remove amalgam for this final rule. EPA developed compliance costs for seven models, where each model is based on the number of chairs in an office. The ranges for each model are as follows: 1 to 2 chairs, 3 chairs, 4 chairs, 5 chairs, 6 chairs, 7–14 chairs (average of 10 chairs), and 15 chairs. EPA developed the 15 chairs model specifically to represent large institutional offices. This is discussed separately below in Section VII.B. EPA developed two sets of costs for each model: One for offices that do not use an amalgam separator and one for offices that do use an amalgam separator.
For those offices that currently do not use an amalgam separator, EPA estimated one-time and annual costs. One-time costs include purchase of the separator and installation, and preparation of the One-time Compliance Report. Annual costs, for those offices that do use an amalgam separator, include visual inspection, replacement of the amalgam-retaining unit (
For those offices that already have an amalgam separator, EPA calculated costs for certain incremental annual costs associated with the amalgam separator required for this rule. Because these offices have separators, EPA only included a one-time cost for a One-Time Compliance Report ($23/office). Annual costs for such offices include visual inspection, replacement of the amalgam-retaining unit, separator maintenance and repair, recycling (preparation and services), and recordkeeping. Because these offices have amalgam separators in place, they are already incurring the majority of these costs irrespective of this final rule. As such, for those components (
In
EPA projects that there will be no incremental costs associated with the required BMPs because (1) costs for non-oxidizing, pH neutral line cleaners are roughly equivalent to other line cleaners; and (2) dental offices will not incur additional costs by changing the location for flushing waste amalgam.
Institutional dental offices (
As was the case for costing, EPA does not have office-specific discharge data for the approximately 117,000 dental offices potentially subject to this rule. Instead, EPA modeled the baseline, pre-rule discharges of mercury based on nationwide estimates of amalgam restorations and removals, and did not calculate the pollutant reductions on a per office basis. Rather, EPA calculated average mercury loadings by dividing the total number of annual procedures by the total number of dentists performing the procedure.
Amalgam is comprised of roughly 49 percent mercury, 35 percent silver, 9 percent tin, 6 percent copper and 1 percent zinc (DCN DA00131). As explained earlier in Section VI, EPA concludes that the technology basis would be equally effective in reducing discharges of silver, tin, copper, and zinc as it is in reducing mercury. EPA therefore applied the same approach to estimating reductions of other metals found in dental amalgam. In other words, EPA assumes chair-side traps and the combination of chair-side traps and vacuum filters will result in 68 percent and 78 percent collection of these metals, respectively. Remaining amalgam metals are further reduced by an amalgam separator, as discussed above.
EPA estimates the approximately 55,000 offices that install separators would obtain 99.3 percent removal of particulate mercury through the use of amalgam separators (median removal efficiency of amalgam separators; see Chapter 7 of the TEDD). This would result in reduction of particulate mercury discharges to POTWs by approximately 5.1 tons. Amalgam separators are not effective in removing dissolved mercury. However, dissolved mercury accounts for much less than 1 percent of the total mercury, so the form of mercury removed from discharges to POTWs is assumed to consist of particulate (solids) only.
As explained earlier in Section VI, EPA concludes that the technology basis for this final rule would be equally effective in reducing discharges of silver, tin, copper, and zinc as it is in reducing mercury. Accordingly, EPA estimates a reduction of these metal discharges to POTWs of approximately 5.3 tons.
EPA estimates this final rule would annually reduce particulate mercury and other metal particulate discharges by a total of 10.3 tons.
In order to evaluate final discharges of mercury (and other metals) to waters of the U.S. by the POTW, EPA used its 50 POTW Study to calculate POTW removals of each metal. As explained above, at baseline and prior to implementation of this rule, EPA estimates 5.1 tons of dental mercury particulates are collectively discharged annually to POTWs. Based on the 50 POTW Study, EPA estimates POTWs remove 90.2 percent of dental mercury from the wastewater. Thus, POTWs collectively discharge 1,003 pounds of mercury from dental amalgam to surface waters annually. Under this final rule, 99.8 percent of mercury particulates currently discharged annually to POTWs will be removed prior to the POTW. The POTWs then further remove 90.2 percent of the remaining particulate mercury from the wastewater. This reduces the total amount of dental mercury particulates discharged from POTWs nationwide to surface water to 11 pounds of mercury annually. In other words, discharges of dental mercury to waters of the U.S. from POTWs are expected to be reduced by 992 pounds per year.
This section summarizes EPA's assessment of the total annual costs and impacts of the final pretreatment standards on the regulated industry.
As described earlier in Section VI of this preamble, EPA based the technology standard for the final rule on a widely available technology, amalgam separators, and employment of readily available BMPs. Section VII provides a detailed explanation of how EPA estimated compliance costs for model dental offices. As applicable, EPA annualized the capital costs over a 20-year period at a discount rate of 7 percent and 3 percent
In order to develop a national estimate of social costs
To estimate nationwide social costs, EPA multiplied the estimated total annualized costs of rule compliance for each model office by the estimated number of dental offices represented by that model (
EPA devised a set of tests for analyzing economic achievability. As is often EPA's practice, the Agency conducted a cost-to-revenue analysis to examine the relationship between the costs of the rule to current (or pre-rule) dental office revenues as a screening analysis. In addition, EPA chose to examine the financial impacts of the rule using two measures that utilize the data EPA has on dental office baseline assets and estimated replacement capital costs: (1) Ratio of the Final Rule's Capital Costs to Total Dental Office Capital Assets and (2) Ratio of the Final Rule's Capital Costs to Annual Dental Office Capital Replacement Costs.
EPA did not conduct a traditional closure analysis for this final rule because EPA does not have detailed data on baseline financial conditions of dental offices. Also, closure analyses typically rely on accounting measures such as present value of after-tax cash flow, and such accounting measures are difficult to implement for businesses that are organized as sole proprietorships or partnerships, as typically is the case in the dental industry. EPA considered whether it should exclude these offices from the analyses, which is described further in EPA's proposal (79 FR 63272; October 22, 2014). Because EPA did not receive any comments to the contrary, EPA used the same assumptions for this final rule as it did at proposal with regard to low-revenue offices. EPA concluded that offices making less than $25,400 were baseline closures as traditionally accounted for in cost and economic impact analysis for effluent guidelines rulemakings. Using the Economic Census, EPA estimated that to be approximately 531 offices. Still, because of the uncertainty here, EPA analyzed the impacts twice: (1) Excluding dental offices that could represent baseline closures and (2) including all offices in the analysis. For each of the three analyses conducted below, EPA used the same methodology for the final rule's impact analysis as described in the proposal because EPA did not receive any comments to suggest a different approach for each impact analysis. Lastly, EPA used a 7 percent discount rate for the costs used in these three analyses described below. See the proposed rule for further description of the analyses below (79 FR 63272; October 22, 2014).
To provide an assessment of the impact of the rule on dental offices, EPA used a cost-to-revenue analysis as is standard practice when looking at impacts to small businesses under the Regulatory Flexibility Act (RFA) to determine if a rule has the potential to have a significant impact on a substantial number of small entities. The cost-to-revenue analysis compares the total annualized compliance cost of each regulatory option with the revenue of the entities.
EPA estimated the occurrence of annualized compliance costs exceeding the 1 percent and 3 percent of revenue thresholds for the final rule twice: (1) Excluding dental offices that could represent baseline closures (excluding baseline set-aside offices), and (2) including all offices in the analysis (including baseline set-aside offices).
Table IX–3 summarizes the results from this analysis. As shown there, under either scenario, over 99 percent of dental offices subject to this rule would incur annualized compliance costs of less than 1 percent of revenue. With baseline set-asides excluded from the analysis, 808 offices (0.7 percent of offices using dental amalgam and exceeding the set-aside revenue threshold) are estimated to incur costs exceeding 1 percent of revenue; no offices are estimated to incur costs exceeding 3 percent of revenue. With baseline set-asides included in the analysis, 1,217 offices (1 percent of offices using dental amalgam) are estimated to incur costs exceeding 1 percent of revenue; 174 offices (0.1 percent of offices using dental amalgam) are estimated to incur costs exceeding 3 percent of revenue.
This ratio examines the initial spending on capital costs of compliance in relation to the baseline value of assets on the balance sheet of dental office businesses. EPA assumes a low ratio implies limited impact on dental offices' ability to finance the initial spending on capital costs of the final rule. A high ratio may still allow costs to be financed but could imply a need to change capital planning and budgeting.
Table IX–4 reports the findings from this analysis, specifically the weighted average of the initial spending on the proposed rule's capital costs divided by total assets of dental office across the revenue range/number-of-chairs analysis combinations. With baseline set-asides excluded from the analysis, the resulting initial capital costs to total capital assets values are low, with an average value 0.4 percent to 0.7 percent for the no technology in-place case and zero percent for the technology in-place case. With baseline closures included in the analysis, the resulting initial capital costs to total capital assets values are low, with an average value 0.4 percent to 0.7 percent for the no technology in-place case and 0 percent for the technology in-place case.
EPA also compared the initial spending on capital costs of compliance associated with this rule to the estimated capital replacement costs for a dental office business (
The analyses performed above inform the potential economic impact of this final rule on the dental office sector. In the cost-to-revenue analysis, EPA found that no more than 0.1 percent of offices, mostly in the lower revenue ranges, would potentially incur costs in excess of 3 percent of revenue. The two financial ratios reported in Tables IX–3 and IX–4 show that the final rule will not cause dental offices to encounter difficulty in financing initial spending on capital costs of the final rule. Based on the combined results of the three analyses and that EPA had no data since proposal to suggest otherwise, EPA determined that the final rule is economically achievable. Regarding large offices, EPA notes that, due to a lack of data, the economic impact analyses did not include large institutional offices. EPA did not receive comments indicating large offices would be impacted more or less than other dental offices subject to this rule. Given the results of the economic analysis performed on a range of office sizes indicating that the rule is economically achievable, EPA finds the rule would similarly be achievable for large institutional offices.
EPA determined that the final pretreatment standard for new sources will not be a barrier to entry. EPA relied on data describing the equipment needs and costs for starting a dental practice as compiled in Safety Net Dental Clinic Manual, prepared by the National Maternal & Child Oral Health Resource Center at Georgetown University (see DCN DA00143). Information from the Georgetown Manual demonstrates that the amalgam separator capital costs (based on costs for existing model offices as described in Section VII) comprised 0.2 percent to 0.3 percent of the cost of starting a dental practice as shown in Table IX–6 and, therefore, does not pose a barrier to entry.
EPA often uses cost-effectiveness analysis in the development and revision of ELGs to evaluate the relative efficiency of alternative regulatory options in removing toxic pollutants from effluent discharges to our nation's waters. Although not required by the CWA, and not a determining factor for establishing PSES or PSNS, cost-effectiveness analysis can be a useful
EPA defines the cost-effectiveness of a regulatory option as the incremental annual cost (in 1981 constant dollars to facilitate comparison to ELGs for other industrial categories promulgated over different years) per incremental toxic-weighted pollutant removals for that option. For more information about the methodology, data, and results, see Chapter 12 of the TEDD. EPA determines toxic-weighted pollutant removals for a particular pollutant by multiplying the number of pounds of a pollutant removed by an option by a toxic weighting factor (TWF). The toxic weighting factor for each pollutant measures its toxicity relative to copper,
The costs used in the cost-effectiveness analyses are the estimated annual pre-tax costs described in Section IX, restated in 1981 dollars as a convention to allow comparisons with the reported cost effectiveness of other effluent guidelines. Collectively, the final PSES requirements have a cost-effectiveness ratio of $190–$195/lb-equivalent as shown in Table X–2 below. This cost-effectiveness ratio falls within the range of cost-effectiveness ratios for PSES requirements in other industries. A review of approximately 25 of the most recently promulgated or revised categorical pretreatment standards shows PSES cost-effectiveness ranges from less than $1/lb-equivalent (Inorganic Chemicals) to $380/lb-equivalent (Transportation Equipment Cleaning) in 1981 dollars.
EPA conducted a literature review concerning potential environmental impacts associated with mercury in dental amalgam discharged to surface water by POTWs (DCN DA00148). As discussed above, studies indicate that dental offices are the largest source of mercury entering POTWs. The total annual baseline discharge of dental mercury to POTWs is approximately 10,239 pounds (5.1 tons): 10,198 pounds are in the form of solid particles (99.6 percent) and 41 pounds (0.4 percent) are dissolved in the wastewater (DCN DA00018). Through POTW treatment, approximately 90 percent of dental mercury is removed from the wastewater and transferred to sewage sludge. The 10 percent of dental mercury not removed by POTW treatment is discharged to surface water. EPA estimates that POTWs annually discharge approximately 1,003 pounds of dental mercury nationwide.
The CWA regulations known as
Approximately 18 percent, or 2 billion pounds, of the sewage sludge generated annually by POTWs are surface disposed in sewage sludge mono-fills or municipal landfills. Approximately 1,700 pounds per year of dental mercury are contained in surface disposed sewage sludge. Pollutant limits and monitoring requirements for surface disposed sewage sludge mono-fills are set by 40 CFR part 503 and by 40 CFR part 258 for municipal landfills. There may be additional state or local regulations that are more stringent than the federal biosolids regulations.
The remaining 22 percent, or 2.5 billion pounds, of sewage sludge generated annually by POTWs is disposed of through incineration. Approximately 2,000 pounds per year of dental mercury are contained in incinerated sewage sludge. 40 CFR part 503, subpart E sets requirements for the incineration of mercury and other toxic metals in sludge. For mercury, subpart E provides that incineration of sludge must meet the requirements of the National Emissions Standards for Mercury in subpart E of 40 CFR part 61.
Environmental assessment of impacts associated with POTW discharges of dental mercury is complicated by uncertainties about the fate and transport of mercury in aquatic environments. The elemental form of mercury used in dentistry has low water solubility and is not readily absorbed when ingested by humans, fish, or wildlife. However, elemental mercury may be converted into highly toxic methylmercury in aquatic environments by certain forms of anaerobic sulfate-reducing bacteria. Methylmercury has high potential to become increasingly concentrated up through aquatic food chains as larger fish eat smaller fish.
EPA was unable to assess the specific environmental impacts of dental mercury discharged by POTWs due to insufficient data needed to evaluate several fundamental factors about the discharge, fate, and transport of dental mercury in aquatic environments, including: the degree and geographic extent of dental mercury methylation in aquatic environments, the amount of methylated dental mercury that is taken up by fish and wildlife, the human consumption rates of fish contaminated with methylated dental mercury, and the extent and magnitude of naturally- occurring mercury in aquatic environments.
While EPA did not perform a quantitative environmental benefits analysis of the final rule, due to insufficient data about the aquatic fate and transport of dental mercury discharged by POTWs, EPA was able to assess the qualitative environmental benefits based on existing information. For example, EPA identified studies that show that decreased point-source discharges of mercury to surface water result in lower methylmercury concentrations in fish. Moreover, several studies quantify economic benefits from improved human health and ecological conditions resulting from lower fish concentrations of methylmercury (DCN DA00148). The final pretreatment standards will produce human health and ecological benefits by reducing the estimated annual nationwide POTW discharge of dental mercury to surface water from 1,003 pounds to 11 pounds.
Eliminating or reducing one form of pollution may cause other environmental problems. Sections 304(b) and 306 of the Clean Water Act require EPA to consider non-water quality environmental impacts (including energy requirements) associated with effluent limitations guidelines and standards. To comply with these requirements, EPA considered the potential impact of the technology basis on energy consumption, air pollution, and solid waste generation. As shown below, EPA anticipates that the rule would produce minimal non-water quality environmental impacts and as such determined they are acceptable. Additional information about the analysis of these non-water quality impacts is contained in the TEDD.
Net energy consumption considers the incremental electrical requirements associated with operating and maintaining dental amalgam separators used in combination with BMPs that form the technology basis for the standards. As described in Section V, most amalgam separators use sedimentation, either alone or in conjunction with filtration to remove solids in the waste stream. Most separators rely on gravity or the suction of the existing vacuum system to operate, and do not require an additional electrical power source. As noted in Section V, some separators have warning indicators that require a battery or power source. EPA does not anticipate this would pose any considerable energy requirements. Moreover, the addition of an amalgam separator is likely to reduce energy consumption at dental offices that do not currently employ an amalgam separator as it will prevent small particles from impeding the vacuum pump impeller. A clean impeller is more efficient than a dirty impeller, and thus will draw less energy (DCN DA00465). Upon consideration of all of these factors, EPA concludes there will be no significant energy requirements associated with this final rule.
Unbound mercury is highly volatile and can easily evaporate into the atmosphere. An estimated 99.6 percent of dental mercury discharges are in solid bound form;
In the absence of amalgam separators, a portion of the amalgam rinsed into chair-side drains is collected by chair-side traps. The remainder is discharged to the POTW where the vast majority is removed from the wastewater and becomes part of the POTW sludge that may be land-applied, disposed of in landfills or mono-fills, or incinerated. EPA expect the final rule to increase the use of amalgam separators nationwide by one and a half times with a corresponding increase in collection and recycling of used amalgam from the spent separator canisters. EPA expects the operation and maintenance requirements associated with the amalgam separator compliance option included in the final rule will further promote recycling as the primary means of amalgam waste management, because many amalgam separator manufactures and dental office suppliers have begun offering waste handling services that send dental amalgam waste to retorting and recycling facilities. Nationally, EPA expects less dental amalgam will be discharged to POTWs leading to reductions in the amount of mercury discharged to surface waters and land-applied, landfilled, or released to the air during incineration of sludge. Instead, EPA expects that the waste will be collected in separator canisters and recycled. After the amalgam containing waste has been recycled, the canisters are either recycled or landfilled. For purposes of assessing the incremental solid waste generation, EPA conservatively assumes all of the canisters are landfilled. EPA finds that if each dental office generated an average of 2 pounds of spent canisters per year, the total mass of solid waste generated would still comprise less than 0.0001 percent of the 254 million tons of solid waste generated by Americans annually (DCN DA00496). Based on this evaluation of incremental solid waste generation, EPA concludes there will not be a significant incremental non-water quality impact associated with
This rule references standards from the American National Standards Institute/American Dental Association and the International Organization for Standardization, and in compliance with the National Technology Transfer and Advancement Act (see Section XIV). They are available either at EPA's Water Docket (see
The installation, operation, and maintenance of one or more amalgam separators compliant with either the ADA 2009 standard with the 2011 addendum, or the ISO standard when removing dental amalgam solids from all amalgam process wastewater:
• ANSI/ADA Specification No. 108:2009, American National Standard/American Dental Association Specification No. 108 Amalgam Separators.
• ANSI/ADA Specification No. 108:2009 Addendum, American National Standard/American Dental Association Specification No. 108 Amalgam Separators, Addendum.
• International Standard ISO 11143;2008, Dentistry—Amalgam Separators.
Additional information about these statutes and Executive Orders can be found at
This action is a significant regulatory action that was submitted to the Office of Management and Budget (OMB) for review because it raises novel legal or policy issues. Any changes made in response to OMB recommendations have been documented in the docket. The economic analysis is available in the docket (DCN DA00458) and is briefly summarized in Section IX. The benefits are summarized in Section XI.
The information collection requirements in this final rule have been submitted for approval to the OMB under the Paperwork Reduction Act, 44 U.S.C. 3501
EPA estimates it would take a total annual average of 402,000 hours and $7.2 million for affected dental offices to collect and report the information required in the final rule. This estimate includes effort for each dental office associated with completing a one-time compliance report. EPA based this estimate on average labor rates from the Bureau of Labor Statistics for the dental office personnel involved in collecting and reporting the information required. EPA estimates it would take a total annual average of 34,000 hours and $2.02 million for Control Authorities to review the information submitted by dental offices. EPA estimates that there would be no start-up or capital costs associated with the information described above. Burden is defined at 5 CFR 1320(b).
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR part 9. When OMB approves this ICR, the Agency will announce the approval in the
I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. The small entities subject to the requirements of this action are defined as: (1) A small business in the Dental Office sector (NAICS 621210) with annual receipts of 7.5 million dollars or less (based on SBA size standards); (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for- profit enterprise which is independently owned and operated and is not dominant in its field.
The Agency has determined that 116,014 dental offices out of 116,720 dental offices potentially subject to this final rule meet the small business definition. EPA's analysis of projected impacts on small dental offices is described in detail in Section IX. EPA projects less than 1 percent of 116,720 affected dental offices would incur compliance costs exceeding 1 percent of revenue and no more than 0.2 percent would incur compliance costs exceeding 3 percent of revenue.
Although this final rule will not have a significant economic impact on a substantial number of small entities, EPA nonetheless has tried to reduce the impact of this final rule on small entities. First, this final rule will allow dental offices with existing separators to satisfy the requirements for a period of up to 10 years. Second, EPA significantly reduced the rule's reporting requirements for all affected dental offices as compared to the reporting requirements for other industries with categorical pretreatment standards.
This action does not contain an unfunded mandate 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 annual cost of the final rule is $59 to $61 million; thus, this final rule is not subject to the requirements of sections 202 or 205 of UMRA.
This final rule is also not subject to the requirements of section 203 of UMRA, because it contains no regulatory requirements that may significantly or uniquely affect small governments. EPA has not identified any dental offices that are owned by small governments. While this final rule impacts government entities required to administer pretreatment standards, small governments will generally not be affected. By statute, a small government jurisdiction is defined as a government of a city, county, town, school district or special district with a population of less than 50,000 (5 U.S.C 601). Control authorities are responsible for oversight and administration associated with this final rule. A POTW is required to become a Control Authority when it (or a combination of POTWs operated by the same authority) has a design flow of at least 5 million gallons per day and receives pollutants from industrial users that would pass through or interfere with the operations and cause a violation of the POTW's NPDES permit. The average water use per person is 100 gallons per day so a POTW with a
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 final rule does not have tribal implications, as specified in Executive Order 13175. It does not have substantial direct effects on Tribal governments, on the relationship between the Federal government and Indian Tribes, or on the distribution of power and responsibilities between the Federal government and Indian Tribes. This final rule contains no Federal mandates for Tribal governments and does not impose any enforceable duties on Tribal governments. Thus, Executive Order 13175 does not apply to this final rule.
This action is not subject to Executive Order 13045 because it is not economically significant as defined in Executive Order 12866, and because EPA does not project the environmental health or safety risks addressed by this action present a disproportionate risk to children. This final rule will reduce the amount of mercury from dental amalgam entering POTW's and eventually the nation's waters, which will reduce impacts to the neurological development of children.
This action is not a “significant energy action” because it is not likely to have a significant adverse effect on the supply, distribution or use of energy. EPA determined that any additional energy usage would be insignificant to the total energy usage of Dental Offices and total annual U.S. energy consumption.
This final rule involves technical standards. The Agency decided to use the American National Standards Institute (ANSI) American National Standard/American Dental Association (ADA) Specification 108 for Amalgam Separators (2009) with Technical Addendum (2011) or the International Organization for Standardization (ISO) 11143 Standard (2008) or the International Organization for Standardization (ISO) efficiency standards for amalgam separators (ISO 11143) developed in 1999 and updated in 2008. One approach to meet the standards in this rule is to install and operate an amalgam separator(s) compliant with one of these standards or their equivalent. These voluntary standard setting organizations established a standard for measuring amalgam separator efficiency by evaluating the retention of amalgam mercury using specified test procedures in a laboratory setting. They also include requirements for instructions for use and operation and maintenance.
EPA determined 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 (59 FR 7629, February 16, 1994). While EPA was unable to perform a detailed environmental justice analysis because it lacks data on the location of POTWs to which dental discharges currently occur, this final rule will increase the level of environmental protection for all affected populations without having any disproportionately high and adverse human health or environmental effects on any population, including any minority or low-income population. This final rule will reduce the amount of mercury from dental amalgam entering POTW's and eventually the nation's waters, to benefit all of society, including minority communities.
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, Dental, Dental office, Dentist, Mercury, Pretreatment, Waste treatment and disposal, Water pollution control.
Therefore, 40 CFR part 441 is amended by adding part 441 to read as follows:
33 U.S.C. 1251, 1311, 1314, 1316, 1317, 1318, 1342, and 1361. 42 U.S.C. 13101–13103.
(a) Except as provided in paragraphs (c), (d), and (e) of this section, this part applies to dental dischargers.
(b) Unless otherwise designated by the Control Authority, dental dischargers subject to this part are not Significant Industrial Users as defined in 40 CFR part 403, and are not “Categorical Industrial Users” or “industrial users subject to categorical pretreatment standards” as those terms and variations are used in 40 CFR part 403, as a result of applicability of this rule.
(c) This part does not apply to dental dischargers that exclusively practice one or more of the following dental specialties: Oral pathology, oral and maxillofacial radiology, oral and maxillofacial surgery, orthodontics, periodontics, or prosthodontics.
(d) This part does not apply to wastewater discharges from a mobile unit operated by a dental discharger.
(e) This part does not apply to dental dischargers that do not discharge any amalgam process wastewater to a POTW, such as dental dischargers that collect all dental amalgam process wastewater for transfer to a Centralized Waste Treatment facility as defined in 40 CFR part 437.
(f) Dental Dischargers that do not place dental amalgam, and do not remove amalgam except in limited emergency or unplanned, unanticipated circumstances, and that certify such to
For purposes of this part:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
No later than July 14, 2020, any existing source subject to this part must achieve the following pretreatment standards:
(a) Removal of dental amalgam solids from all amalgam process wastewater by one of the following methods:
(1) Installation, operation, and maintenance of one or more amalgam separators that meet the following requirements:
(i) Compliant with either the American National Standards Institute (ANSI) American National Standard/American Dental Association (ADA) Specification 108 for Amalgam Separators (2009) with Technical Addendum (2011) or the International Organization for Standardization (ISO) 11143 Standard (2008) or subsequent versions so long as that version requires amalgam separators to achieve at least a 95% removal efficiency. Compliance must be assessed by an accredited testing laboratory under ANSI's accreditation program for product certification or a testing laboratory that is a signatory to the International Laboratory Accreditation Cooperation's Mutual Recognition Arrangement. The testing laboratory's scope of accreditation must include ANSI/ADA 108–2009 or ISO 11143.
(ii) The amalgam separator(s) must be sized to accommodate the maximum discharge rate of amalgam process wastewater.
(iii) A dental discharger subject to this part that operates an amalgam separator that was installed at a dental facility prior to June 14, 2017, satisfies the requirements of paragraphs (a)(1)(i) and (ii) of this section until the existing separator is replaced as described in paragraph (a)(1)(v) of this section or until June 14, 2017, whichever is sooner.
(iv) The amalgam separator(s) must be inspected in accordance with the manufacturer's operating manual to ensure proper operation and maintenance of the separator(s) and to confirm that all amalgam process wastewater is flowing through the amalgam retaining portion of the amalgam separator(s).
(v) In the event that an amalgam separator is not functioning properly, the amalgam separator must be repaired consistent with manufacturer instructions or replaced with a unit that meets the requirements of paragraphs (a)(i) and (ii) of this section as soon as possible, but no later than 10 business days after the malfunction is discovered by the dental discharger, or an agent or representative of the dental discharger.
(vi) The amalgam retaining units must be replaced in accordance with the manufacturer's schedule as specified in the manufacturer's operating manual or when the amalgam retaining unit has reached the maximum level, as specified by the manufacturer in the operating manual, at which the amalgam separator can perform to the specified efficiency, whichever comes first.
(2) Installation, operation, and maintenance of one or more amalgam removal device(s) other than an amalgam separator. The amalgam removal device must meet the following requirements:
(i) Removal efficiency of at least 95 percent of the mass of solids from all amalgam process wastewater. The removal efficiency must be calculated in grams recorded to three decimal places, on a dry weight basis. The removal efficiency must be demonstrated at the maximum water flow rate through the device as established by the device manufacturer's instructions for use.
(ii) The removal efficiency must be determined using the average performance of three samples. The removal efficiency must be demonstrated using a test sample of dental amalgam that meets the following particle size distribution specifications: 60 percent by mass of particles that pass through a 3150 µm sieve but which do not pass through a 500 µm sieve, 10 percent by mass of particles that pass through a 500 µm sieve but which do not pass through a 100 µm sieve, and 30 percent by mass of particles that pass through a 100 µm sieve. Each of these three specified particle size distributions must contain a representative distribution of particle sizes.
(iii) The device(s) must be sized to accommodate the maximum discharge rate of amalgam process wastewater.
(iv) The devices(s) must be accompanied by the manufacturer's manual providing instructions for use including the frequency for inspection and collecting container replacement such that the unit is replaced once it has reached the maximum filling level at which the device can perform to the specified efficiency.
(v) The device(s) must be inspected in accordance with the manufacturer's operation manual to ensure proper operation and maintenance, including confirmation that amalgam process wastewater is flowing through the amalgam separating portion of the device(s).
(vi) In the event that a device is not functioning properly, it must be repaired consistent with manufacturer instructions or replaced with a unit that meets the requirements of paragraphs (a)(2)(i) through (iii) of this section as soon as possible, but no later than 10 business days after the malfunction is discovered by the dental discharger, or an agent or representative of the dental discharger.
(vii) The amalgam retaining unit(s) of the device(s) must be replaced as specified in the manufacturer's operating manual, or when the collecting container has reached the maximum filling level, as specified by the manufacturer in the operating manual, at which the amalgam separator can perform to the specified efficiency, whichever comes first.
(viii) The demonstration of the device(s) under paragraphs (a)(2)(i) through (iii) of this section must be documented in the One-Time Compliance Report.
(b) Implementation of the following best management practices (BMPs):
(1) Waste amalgam including, but not limited to, dental amalgam from chair-side traps, screens, vacuum pump filters, dental tools, cuspidors, or collection devices, must not be discharged to a POTW.
(2) Dental unit water lines, chair-side traps, and vacuum lines that discharge amalgam process wastewater to a POTW must not be cleaned with oxidizing or acidic cleaners, including but not limited to bleach, chlorine, iodine and peroxide that have a pH lower than 6 or greater than 8.
(c) All material is available for inspection at EPA's Water Docket, EPA West, 1301 Constitution Avenue NW., Room 3334, Washington, DC 20004, Telephone: 202–566–2426, and is available from the sources listed below.
(1) The following standards are available from the American Dental Association (ADA), 211 East Chicago Ave., Chicago IL 60611–2678, Telephone 312–440–2500,
(i) ANSI/ADA Specification No. 108:2009, American National Standard/American Dental Association Specification No. 108 Amalgam Separators. February 2009.
(ii) ANSI/ADA Specification No. 108:2009 Addendum, American National Standard/American Dental Association Specification No. 108 Amalgam Separators, Addendum. November 2011.
(2) The following standards are available from the American National Standards Institute (ANSI), 25 West 43rd Street, 4th Floor, New York, NY 10036, Telephone 212–642–4900,
(i) International Standard ISO 11143:2008, Dentistry—Amalgam Separators. Second edition, July 1, 2008.
(ii) [Reserved]
As of July 14, 2017, any new source subject to this part must comply with the requirements of § 441.30(a) and (b) and the reporting and recordkeeping requirements of § 441.50.
(a) Dental Dischargers subject to this part must comply with the following reporting requirements in lieu of the otherwise applicable requirements in 40 CFR 403.12(b), (d), (e), and (g).
(1)
(2)
(3)
(ii) The One-Time Compliance Report for dental dischargers subject to the standards of this part must include:
(A) The facility name, physical address, mailing address, and contact information.
(B) Name(s) of the operator(s) and owner(s).
(C) A description of the operation at the dental facility including: The total number of chairs, the total number of chairs at which dental amalgam may be present in the resulting wastewater, and a description of any existing amalgam separator(s) or equivalent device(s) currently operated to include, at a minimum, the make, model, year of installation.
(D) Certification that the amalgam separator(s) or equivalent device is designed and will be operated and maintained to meet the requirements specified in § 441.30 or § 441.40.
(E) Certification that the dental discharger is implementing BMPs specified in § 441.30(b) or § 441.40(b) and will continue to do so.
(F) The name of the third-party service provider that maintains the amalgam separator(s) or equivalent device(s) operated at the dental office, if applicable. Otherwise, a brief description of the practices employed by the facility to ensure proper operation and maintenance in accordance with § 441.30 or § 441.40.
(4)
(5)
(b) Dental Dischargers or an agent or representative of the dental discharger must maintain and make available for inspection in either physical or electronic form, for a minimum of three years:
(1) Documentation of the date, person(s) conducting the inspection, and results of each inspection of the amalgam separator(s) or equivalent device(s), and a summary of follow-up actions, if needed.
(2) Documentation of amalgam retaining container or equivalent container replacement (including the date, as applicable).
(3) Documentation of all dates that collected dental amalgam is picked up or shipped for proper disposal in accordance with 40 CFR 261.5(g)(3), and the name of the permitted or licensed treatment, storage or disposal facility receiving the amalgam retaining containers.
(4) Documentation of any repair or replacement of an amalgam separator or equivalent device, including the date, person(s) making the repair or replacement, and a description of the repair or replacement (including make and model).
(5) Dischargers or an agent or representative of the dental discharger must maintain and make available for inspection in either physical or electronic form the manufacturers operating manual for the current device.
Federal Communications Commission.
Final rule.
In this document, the Commission implemented allocation changes from the World Radiocommunication Conference
Effective July 14, 2017, except for amendments to §§ 97.3, 97.15(c), 97.301(b) through (d), 97.303(g), 97.305(c), and 97.313(k) and (l), which contain new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104–13, that are not effective until approved by the Office of Management and Budget (OMB). The Commission will publish a document in the
Tom Mooring, Office of Engineering and Technology, 202–418–2450,
This is a summary of the Commission's Report and Order, ET Docket No. 15–99, FCC 17–33, adopted March 27, 2017, and released March 29, 2017. The full text of this document is available for inspection and copying during normal business hours in the FCC Reference Center (Room CY–A257), 445 12th Street SW., Washington, DC 20554. The full text may also be downloaded at:
1. On April 23, 2015, the Commission adopted a Notice of Proposed Rulemaking (WRC–12 NPRM) in this proceeding, 80 FR 38315, July 2, 2015. In this Report and Order (WRC–12 R&O), the Commission amended the Table of Frequency Allocations (Allocation Table) in § 2.106 of its rules and a number of related service rules to implement certain radio frequency (RF) allocation decisions from the Final Acts of the World Radiocommunication Conference (Geneva, 2012) (WRC–12 Final Acts). The following are the major actions that the Commission took to support non-Federal spectrum requirements:
• Allocated the 472–479 kHz band to the amateur service on a secondary basis and amended part 97 to provide for amateur service use of this band and of the 135.7–137.8 kHz band.
• Amended part 80 to authorize radio buoy operations in the 1900–2000 kHz band under a ship station license.
• Allocated eight frequency bands in the 4 to 44 MHz range to the radiolocation service for Federal and non-Federal use, limited to oceanographic radars. The Commission also amended part 90 to provide for licensing of oceanographic radars, and required those radars currently operating under an experimental license to conform their operations to the adopted rules within five years of the effective date of this Order.
• Reallocated the 156.7625–156.7875 MHz and 156.8125–156.8375 MHz bands to the mobile-satellite service (MSS) (Earth-to-space) on a primary basis for Federal and non-Federal use, limited to the reception of Automatic Identification Systems (AIS) broadcast messages from ships. The Commission also amended part 80 to permit ships to transmit AIS broadcast messages in these bands, and amended part 25 to permit MSS satellites to receive in these bands and in the existing AIS bands.
• Allocated the 5000–5091 MHz band to the aeronautical mobile (route) service (AM(R)S) on a primary basis for Federal and non-Federal use. AM(R)S use of the 5000–5030 MHz band extends the tuning range for the recently-established Aeronautical Mobile Airport Communications System (AeroMACS) that will support surface applications at airports. AM(R)S use of the 5030–5091 MHz band will support unmanned aircraft systems (UAS).
2. In the
3. As proposed in the
4. The amateur service will share this band with Power Line Carrier (PLC) systems, which electric utility companies use and operate in the 9–490 kHz range under part 15 of the Commission's rules on an unprotected and non-interference basis with respect to authorized radio users. While the Utilities Telecom Council (UTC) objected to the Commission's allocation proposal on the basis that an increased interference potential between amateur operations and PLC systems could deprive utilities of the flexibility needed to deploy PLC systems, the amateur radio community supported this allocation as useful for improving technical knowledge on radio propagation and because they believed that co-existence with PLC systems is possible due to existing amateur service operations on frequencies near 500 kHz under experimental licenses that have not resulted in any interference complaints.
5. The Commission agreed that adding a secondary amateur service allocation to the 472–479 kHz band will provide new opportunities for amateur operators to experiment with equipment, techniques, antennas, and propagation phenomena. The 472–479 kHz band offers amateur service operators different propagation characteristics from the 135.7–137.8 kHz band, which was allocated on a secondary basis to amateur service in the
6. As proposed in the
7. The Commission adopted service rules for the amateur radio service in the 135.7–137.8 kHz (2200 meter band) and 472–479 kHz (630 meter band) bands that will ensure the compatibility of amateur radio operations and PLC systems that operate in these bands, and promote the shared use of these bands. Under these rules, electric utilities will not be required to modify existing PLC systems to accommodate amateur operations, and previously notified amateur stations will not be required to alter their operations to accommodate new or modified PLC operations.
8. As proposed, the Commission will permit amateur stations to operate in the 135.7–137.8 kHz and 472–479 kHz bands when separated by a specified distance from electric power transmission lines with PLC systems that use the same bands. To support the operations of both the amateur service and PLC systems in these bands, the Commission adopted a minimum horizontal separation distance of one kilometer between the transmission line and the amateur station when operating in these bands.
9. Regarding operations in the 135.7–137.8 kHz band, ARRL provided a technical analysis in ET Docket No. 12–338, which concluded that PLC systems “will be sufficiently protected from amateur stations transmitting at an EIRP of 1 W with a separation distance of 1 km from the transmission lines carrying the PLC signals, beyond which there is no interference potential.” UTC agreed with this conclusion and supported a separation distance of at least one kilometer for amateur operation in this band. While ARRL preferred that amateur stations have the option to be located closer to the transmission lines with PLC systems and recommended a notification procedure to address any potential interference to PLC systems, the Commission found that a one kilometer separation distance reasonably ensures that PLC systems and amateur radio stations are unlikely to experience interference. In addition, establishing a zone where amateur use is not authorized will simplify and streamline the process for determining whether an amateur station can transmit in these bands when in proximity to transmission lines upon which PLC systems operate.
10. The Commission adopted the same separation distance for amateur operations in the 472–479 kHz band, as it did for the 135.7–137.8 kHz band, since these bands share the same considerations for co-existence of the two uses.
11. The Commission restricted amateur service operations to fixed locations and prohibited mobile operations in these bands. This restriction will ensure that amateur stations remain at the locations specified in their notification and comply with the separation distance requirements discussed below. UTC and some amateur service commenters supported this restriction. The Commission will allow temporary fixed use at sites that meet its technical rules and follow its notification requirements. In other words, the location of the amateur station must not be located within one kilometer of PLC systems and its operations must be in accordance with part 97 rules.
12. The Commission required amateur operators to notify UTC of the location of their proposed station prior to commencing operations, to confirm that the station is not located within the one kilometer separation distance. Even though several amateur service commenters claimed that they can readily identify transmission lines and compute the separation distance, the Commission found that transmission lines are not always readily identifiable. Further, amateur operators may not be able to determine whether PLC systems operate in the relevant bands on the subject transmission lines. The notification requirement will entail notifying UTC of the operator's call sign and coordinates of the proposed station's location for confirmation that the location is outside the one kilometer separation distance, or the relevant PLC system is not transmitting on the requested bands. UTC, which maintains a database of PLC systems must respond to the notification within 30 days if it objects. If UTC raises no objection, amateur radio operators may commence operations on the band identified in their notification. The Wireless Telecommunications Bureau will issue a public notice providing the details for filing notifications with UTC.
13. The notification procedures the Commission adopted seek to strike a balance between amateur operations used for experimental purposes and PLC operation used by electric utilities for the reliability and security of electric service to the public. These procedures are the least burdensome considering the Commission seeks to ensure that no potential interference occurs from these two uses. A simple notification to UTC with a 30-day waiting period does not appear to be burdensome. Amateur operations can commence as soon as that period expires. While ARRL sought direct access to the PLC database, the Commission noted that UTC has control of the PLC database which can be updated, and found no reason to mandate its release to another party especially considering the sensitive nature of information it contains.
14. If an electric utility seeks to deploy a new or modified PLC system on a transmission line that is within one kilometer of a previously coordinated amateur station, the electric utility must employ a frequency in the 9–490 kHz range that has not been included in the amateur station's notification, as ARRL suggests. If the previously coordinated amateur station no longer operates in the band, the electric utility may deploy a PLC system in that band.
15. As discussed in the
16. The Commission also adopted the power limits proposed in the
17. As discussed in the
18. As discussed in the
19. The Commission amended § 97.303 to list the radiocommunication services that must be protected from harmful interference. Specifically, amateur stations transmitting in the 135.7–137.8 kHz band must not cause harmful interference to, and must accept interference from, stations authorized by the United States Government in the fixed and maritime mobile services and stations authorized by other nations in the fixed, maritime mobile, and radionavigation services. Amateur stations transmitting in the 472–479 kHz band must not cause harmful interference to, and must accept interference from, stations authorized by the Commission in the maritime mobile service and stations authorized by other nations in the maritime mobile and aeronautical radionavigation services.
20. The Commission declined to prohibit automatically controlled stations from operating in these bands. Further, as proposed in the
21. The Commission allocated the 1900–2000 kHz band to the MMS on a primary basis for non-Federal use in ITU Regions 2 and 3, and limited the use of this allocation to radio buoys on the open sea and the Great Lakes. Section 80.5 of the Commission's rules define open sea as the water area of the open coast seaward of the ordinary low-water mark, or seaward of inland waters. This allocation addresses the limited situations where radio buoys cannot be authorized under the radiolocation service allocation because of newer technology that uses features like GPS rather than radiodetermination.
22. In the
23. The Commission recognized ARRL's concerns that radio buoy manufacturers will not be able to ensure where fishing vessels will be using radio buoys. However, the Commission believes that amateur radio and radio buoys can continue to share this frequency band as they have done for many years. Because radio buoys are low-power and narrow-bandwidth devices, while amateur stations tend to use much higher power, the Commission believes that they can continue to be accommodated with minimal impact on amateur radio operations. Any intermittent interference amateur operators may receive in the 1900–2000 kHz band from lower-powered radio buoys is not expected to significantly hamper amateur operations in the band because amateur operators can readily tune around these narrow radio buoy signals and because the adjacent 1800–1900 kHz band is allocated exclusively for amateur radio use. Although the Commission had requested comment on rules that would have effectively permitted radio buoys to operate on any waters where the United States exercises sovereignty, the Commission was persuaded by ARRL's comments to adopt final rules that are better tailored to the places where the commercial fishing fleet can make reasonable and productive use of radio buoys. The Commission thus found it in the public interest to permit commercial fishing vessels to use these buoys on the open sea and the Great Lakes.
24. Also, the Commission amended, as proposed, footnote NG92 to provide that the co-primary services in the 1900–2000 kHz band are protected from harmful interference only to the extent that the offending station is not operating in accordance with the technical rules. This statement clarifies that co-primary allocations in the 1900–2000 kHz band (
25. The Commission declined to make additional spectrum available for radio buoy use. In the
26. The Commission amended part 80 of its rules to authorize the use of frequencies in the 1900–2000 kHz band for radio buoy operations under a ship station license provided that the use of these frequencies is related to commercial fishing operations, the transmitter output power does not exceed 8 watts, and the station antenna height does not exceed 4.6 meters above sea level in a buoy station or 6 meters above the mast of the ship on which it is installed.
27. In the
28. The Commission found it unnecessary to provide the proposed six-month phase-out period for part 90 equipment authorizations considering that no applications for radio buoy equipment operating in the 1900–2000 kHz band have been submitted since the adoption of the
29. The Commission took actions in support of aeronautical mobile (route) service (AM(R)S) surface applications at airports in the 5000–5030 MHz band and unmanned aircraft systems (UAS) in the 5030–5091 MHz band. As proposed, the Commission allocated the 5000–5030 MHz bands to the AM(R)S on a primary basis for Federal and non-Federal use, for systems operating in accordance with international aeronautical standards, limited to surface applications at airports (
30. In the
31. The Commission allocated the 5030–5091 MHz band to the AM(R)S on a primary basis for Federal and non-Federal use and added international footnote 5.443C to this band limiting the use to internationally standardized aeronautical systems and setting limits for unwanted emissions from AM(R)S stations to adjacent band radionavigation-satellite service (RNSS) downlinks to an EIRP density of -75 dBW/MHz. The
32. As proposed, the Commission added an entry in the U.S. Table that reflects the primary aeronautical mobile-satellite (R) service (AMS(R)S) allocation in the 5000–5150 MHz band, previously reflected in a footnote. Further, the Commission adopted two international footnotes that limit the AMS(R)S allocation to internationally standardized aeronautical systems.
33. The Commission did not adopt proposed footnote US162, which would have encouraged fixed service operators transmitting in the adjacent bands (81–86 GHz and 92–94 GHz) to take all reasonable steps to ensure that their unwanted emissions power in the 86–92 GHz passive band does not exceed WRC–12's non-mandatory unwanted emissions levels.
34. The 86–92 GHz band is allocated to the Earth exploration-satellite service (EESS) (passive), radio astronomy service, and space research service (passive). WRC–12 sought to protect the EESS passive sensors that receive in this band, proposed non-mandatory protection requirements from out-of-band emissions from active services in adjacent bands and “urge[d] administrations to take all reasonable steps to ensure” that such emissions do not exceed the recommended maximum levels. The
35. The Commission recognized that the proposed footnote US162 provides emission limits that are significantly more stringent than those in part 101 and concluded that adoption of the footnote would be confusing for incumbent users of the adjacent bands and would not provide any meaningful protection for the EESS passive sensors in the 86–92 GHz band beyond that already required under part 101 of the rules. Further, the adoption of the underlying emission limits for the protection of the EESS passive sensors in the 86–92 GHz band, an action supported by CORF, would require a proceeding in order to develop a record that could support changes to the existing rules. The current proceeding does not provide the appropriate proper framework to address such changes. In addition, there are other proceedings underway addressing part 101 emission
36. As proposed, the Commission extended the U.S. Table of Allocations past the 275–1000 GHz band to 3000 GHz. These bands are “not allocated” to specific services, though passive services such as the EESS, space research service (SRS), and radio astronomy service already utilize portions of the 275–3000 GHz range for scientific observation. The Commission adopted a revised footnote US565 which incorporates language of the new international footnote 5.565 and of the proposed footnote US565.
37. WRC–12 revised international footnote 5.565 to identify an additional 226 gigahertz of spectrum for passive spaceborne sensor use in the 275–990 GHz range. The footnote further urges administrations, when making those frequencies available for active service applications to take all practicable steps to protect these passive services from harmful interference, until the date when the Table of Frequency Allocations is established in the 275–1000 GHz frequency range. CORF, in its comments, generally supported the sharing of frequency allocations where practical, stating that technical factors associated with radio transmission in these high frequencies may well support shared use in many cases. However, CORF objected to the proposed U.S. footnote because it appears to be at odds with international footnote 5.565's “explicit goal of protecting passive uses.”
38. The Commission did not agree with CORF's interpretation and was concerned that the text of international footnote 5.565 could be construed as placing a reservation for future passive service allocations in the U.S. Table, which would inhibit development of other radiocommunication services in this spectrum. Consistent with its tentatively conclusion in the
39. The Commission recognized that the 275–3000 GHz frequency range is used—and may be used more extensively in the future—for experimentation with, and development of, an array of active service applications. Because international footnote 5.565 can be interpreted as establishing an “allocation” for passive uses only, the Commission found that the text of this international footnote must be clarified. In particular, the Commission was not prepared to determine whether the frequency bands identified for use by passive service applications in international footnote 5.565 are entitled to interference protection from a yet-to-be proposed active service. For these reasons, the Commission revised existing footnote US565 to identify expected passive uses of the 275–1000 GHz range and to clarify that this footnote does not establish any priority of use in the U.S. Table, and does not preclude or constrain any active service use or future allocation of frequency bands in the 275–3000 GHz range. This clarifying text is sufficient, given that passive and active services can share frequencies above 275 GHz without constraints, especially considering the atmospheric absorption at these frequencies and the narrowness of the antenna beamwidths, which make sharing among different services possible.
40. The Commission amended §§ 2.100, 2.102, 2.106, 80.215, 80.373, 80.871, 90.7, 90.103, and 90.425 of its rules to implement proposals in the
41.
42.
43.
44.
45.
46.
47.
48.
49.
50. The Regulatory Flexibility Act of 1980, as amended (RFA)
51. In this
52. Second, the Commission required that oceanographic radars, which currently operate under experimental license authority, operate in accordance with the adopted part 90 rules within five years of the effective date of this
53. Third, the Commission reallocated the 156.7625–156.7875 MHz and 156.8125–156.8375 MHz bands from MMS to the mobile-satellite service, and requires that MMS operations in these bands cease as of August 26, 2019. There is a single licensee (BKEP Materials, LLC) authorized to operate three private coast stations in these bands. Based on its review of licenses in the Commission's Universal Licensing System, the Commission has issued 2770 licenses for private coast stations to operate in the 156–157.1 MHz band. The Commission estimated that at least 1000 of these licensees are small entities. Therefore, the Commission found that these reallocations will impact far less than one percent of the total number of small entities operating in the 156–157.1 MHz band.
54. Therefore, the Commission certified that the requirements of this
55. This
56. The Commission will send a copy of this
57. Pursuant to sections 1, 4, 301, 302, and 303 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154, 301, 302a, and 303, this
58. The rule amendments adopted herein
59. The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center,
60.
Radio, Telecommunications.
Radio, Reporting and recordkeeping requirements.
For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR parts 2, 15, 25, 80, 90, and 97 as follows:
47 U.S.C. 154, 302a, 303, and 336, unless otherwise noted.
The ITU
(a) Except as otherwise provided in this section, the assignment of frequencies and bands of frequencies to all stations and classes of stations and the licensing and authorizing of the use of all such frequencies between 8.3 kHz and 275 GHz, and the actual use of such frequencies for radiocommunication or for any other purpose, including the transfer of energy by radio, shall be in accordance with the Table of Frequency Allocations in § 2.106.
The revisions and additions read as follows:
US52 In the VHF maritime mobile band (156–162 MHz), the following provisions shall apply:
(a) Except as provided for below, the use of the bands 161.9625–161.9875 MHz (AIS 1 with center frequency 161.975 MHz) and 162.0125–162.0375 MHz (AIS 2 with center frequency 162.025 MHz) by the maritime mobile and mobile-satellite (Earth-to-space) services is restricted to Automatic Identification Systems (AIS). The use of
(b) Except as provided for below, the use of the bands 156.7625–156.7875 MHz (AIS 3 with center frequency 156.775 MHz) and 156.8125–156.8375 MHz (AIS 4 with center frequency 156.825 MHz) by the mobile-satellite service (Earth-to-space) is restricted to the reception of long-range AIS broadcast messages from ships (Message 27; see most recent version of Recommendation ITU–R M.1371). The frequencies 156.775 MHz and 156.825 MHz may continue to be used by non-Federal ship and coast stations for navigation-related port operations or ship movement until August 26, 2019.
(c) The frequency 156.3 MHz may also be used by aircraft stations for the purpose of search and rescue operations and other safety-related communication.
(d) Federal stations in the maritime mobile service may also be authorized as follows: (1) Vessel traffic services under the control of the U.S. Coast Guard on a simplex basis by coast and ship stations on the frequencies 156.25, 156.55, 156.6 and 156.7 MHz; (2) Inter-ship use of the frequency 156.3 MHz on a simplex basis; (3) Navigational bridge-to-bridge and navigational communications on a simplex basis by coast and ship stations on the frequencies 156.375 and 156.65 MHz; (4) Port operations use on a simplex basis by coast and ship stations on the frequencies 156.6 and 156.7 MHz; (5) Environmental communications on the frequency 156.75 MHz in accordance with the national plan; and (6) Duplex port operations use of the frequencies 157 MHz for ship stations and 161.6 MHz for coast stations.
US115 In the bands 5000–5010 MHz and 5010–5030 MHz, the following provisions shall apply:
(a) In the band 5000–5010 MHz, systems in the aeronautical mobile (R) service (AM(R)S) are limited to surface applications at airports that operate in accordance with international aeronautical standards (
(b) The band 5010–5030 MHz is also allocated on a primary basis to the AM(R)S, limited to surface applications at airports that operate in accordance with international aeronautical standards. In making assignments for this band, attempts shall first be made to satisfy the AM(R)S requirements in the bands 5000–5010 MHz and 5091–5150 MHz. AM(R)S systems used in the band 5010–5030 MHz shall be designed and implemented to be capable of operational modification if receiving harmful interference from the radionavigation-satellite service. Finally, notwithstanding Radio Regulation No. 4.10, stations in the AM(R)S operating in this band shall be designed and implemented to be capable of operational modification to reduce throughput and/or preclude the use of specific frequencies in order to ensure protection of radionavigation-satellite service systems operating in this band.
(c) Aeronautical fixed communications that are an integral part of the AeroMACS system in the bands 5000–5010 MHz and 5010–5030 MHz are also authorized on a primary basis.
US132A In the bands 26.2–26.42 MHz, 41.015–41.665 MHz, and 43.35–44 MHz, applications of radiolocation service are limited to oceanographic radars operating in accordance with ITU Resolution 612 (Rev. WRC–12). Oceanographic radars shall not cause harmful interference to, or claim protection from, non-Federal stations in the land mobile service in the bands 26.2–26.42 MHz and 43.69–44 MHz, Federal stations in the fixed or mobile services in the band 41.015–41.665 MHz, and non-Federal stations in the fixed or land mobile services in the band 43.35–43.69 MHz.
US231 When an assignment cannot be obtained in the bands between 200 kHz and 525 kHz, which are allocated to aeronautical radionavigation, assignments may be made to aeronautical radiobeacons in the maritime mobile bands at 435–472 kHz and 479–490 kHz, on a secondary basis, subject to the coordination and agreement of those agencies having assignments within the maritime mobile bands which may be affected. Assignments to Federal aeronautical radionavigation radiobeacons in the bands 435–472 kHz and 479–490 kHz shall not be a bar to any required changes to the maritime mobile service and shall be limited to non-voice emissions.
US246 No station shall be authorized to transmit in the following bands: 73–74.6 MHz, 608–614 MHz, except for medical telemetry equipment
US511E The use of the band 15.4–15.7 GHz by the radiolocation service is limited to Federal systems requiring a necessary bandwidth greater than 1600 MHz that cannot be accommodated within the band 15.7–17.3 GHz except as described below. In the band 15.4–15.7 GHz, stations operating in the radiolocation service shall not cause harmful interference to, nor claim protection from, radars operating in the aeronautical radionavigation service. Radar systems operating in the radiolocation service shall not be developed solely for operation in the band 15.4–15.7 GHz. Radar systems requiring use of the band 15.4–15.7 GHz for testing, training, and exercises may be accommodated on a case-by-case basis.
US565 The following frequency bands in the range 275–1000 GHz are identified for passive service applications:
The use of the range 275–1000 GHz by the passive services does not preclude use of this range by active services. This provision does not establish priority of use in the United States Table of Frequency Allocations, and does not preclude or constrain any active service use or future allocation of frequency bands in the 275–3000 GHz range.
NG8 In the band 472–479 kHz, non-Federal stations in the maritime mobile service that were licensed or applied for prior to [insert effective date of the WRC–12 R&O] may continue to operate on a primary basis, subject to periodic license renewals.
NG16 In the bands 72–73 MHz and 75.4–76 MHz, frequencies may be authorized for mobile operations in the Industrial/Business Radio Pool, subject to not causing interference to the reception of broadcast television signals on channels 4 and 5.
NG92 The band 1900–2000 kHz is also allocated on a primary basis to the maritime mobile service in Regions 2 and 3 and to the radiolocation service in Region 2, and on a secondary basis to the radiolocation service in Region 3. The use of these allocations is restricted to radio buoy operations on the open sea and the Great Lakes. Stations in the amateur, maritime mobile, and radiolocation services in Region 2 shall be protected from harmful interference only to the extent that the offending station does not operate in compliance with the technical rules applicable to the service in which it operates.
47 U.S.C. 154, 302a, 303, 304, 307, 336, 544a, and 549.
(g)
47 U.S.C. 154, 301, 302, 303, 307, 309, 319, 332, 605, and 721, unless otherwise noted.
(a) * * *
(12) The following frequencies are available for use by the mobile-satellite service (Earth-to-space) for the reception of Automatic Identification Systems (AIS) broadcast messages from ships:
Secs. 4, 303, 307(e), 309, and 332, 48 Stat. 1066, 1082, as amended; 47 U.S.C. 154, 303, 307(e), 309, and 332, unless otherwise noted. Interpret or apply 48 Stat. 1064–1068, 1081–1105, as amended; 47 U.S.C. 151–155, 301–609; 3 UST 3450, 3 UST 4726, 12 UST 2377.
(p) As of [insert effective date of this Report and Order], the Commission will no longer accept applications for certification of non-AIS VHF radios that include channels 75 and 76.
(b) * * *
(1) * * *
Frequencies in the 1900–2000 kHz band are authorized for radio buoy operations under a ship radio station license provided:
(a) The use of these frequencies is related to commercial fishing operations on the open sea and the Great Lakes; and
(b) The output power does not exceed 8 watts and the station antenna height does not exceed 4.6 meters above sea level in a buoy station or 6 meters above the mast of the ship on which it is installed.
Automatic Identification Systems (AIS) are a maritime broadcast service. The simplex channels at 156.775 MHz (AIS 3), 156.825 MHz (AIS 4), 161.975 MHz (AIS 1), and 162.025 MHz (AIS 2), each with a 25 kHz bandwidth, may be authorized only for AIS. In accordance with the Maritime Transportation Security Act, the United States Coast Guard regulates AIS carriage requirements for non-Federal Government ships. These requirements are codified at 33 CFR 164.46, 401.20.
Sections 4(i), 11, 303(g), 303(r), and 332(c)(7) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 161, 303(g), 303(r), and 332(c)(7), and Title VI of the Middle Class Tax Relief and Job Creation Act of 2012, Pub. L. 112–96, 126 Stat. 156.
The revisions and addition read as follows:
(b) * * *
(c) * * *
(3) Operations in this band are limited to oceanographic radars using transmitters with a peak equivalent isotropically radiated power (EIRP) not to exceed 25 dBW. Oceanographic radars shall not cause harmful interference to, nor claim protection from interference caused by, stations in the fixed or mobile services as specified in § 2.106, footnotes 5.132A, 5.145A, and US132A. See Resolution 612 of the ITU Radio Regulations for international coordination requirements and for recommended spectrum sharing techniques.
(c)
(3) Oceanographic radars operating in the bands shown in section 90.103(b) shall transmit a station identification (call sign) on the assigned frequency, in international Morse code at a transmission rate in accordance with paragraph (b)(2) of this section at the end of each data acquisition cycle, but at an interval of no more than 20 minutes.
48 Stat. 1066, 1082, as amended; 47 U.S.C. 154, 303. Interpret or apply 48 Stat. 1064–1068, 1081–1105, as amended; 47 U.S.C. 151–155, 301–609, unless otherwise noted.
(b) * * *
(1)
(2)
Divide EIRP by 1.64 to convert to effective radiated power.
(3)
Multiply ERP by 1.64 to convert to equivalent isotropically radiated power.
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(c) Antennas used to transmit in the 2200 m and 630 m bands must not exceed 60 meters in height above ground level.
The additions read as follows:
(b) * * *
(c) * * *
(d) * * *
(g) In the 2200 m and 630 m bands:
(1) Amateur stations in the 135.7–137.8 kHz (2200 m) and 472–479 kHz (630 m) bands shall only operate at fixed locations. Amateur stations shall not operate within a horizontal distance of one kilometer from a transmission line that conducts a power line carrier (PLC) signal in the 135.7–137.8 kHz or 472–479 kHz bands. Horizontal distance is measured from the station's antenna to the closest point on the transmission line.
(2) Prior to commencement of operations in the 135.7–137.8 kHz (2200 m) and/or 472–479 kHz (630 m) bands, amateur operators shall notify the Utilities Telecom Council (UTC) of their intent to operate by submitting their call signs, intended band or bands of operation, and the coordinates of their antenna's fixed location. Amateur stations will be permitted to commence operations after the 30-day period unless UTC notifies the station that its fixed location is located within one kilometer of PLC systems operating in the same or overlapping frequencies.
(3) Amateur stations in the 135.7–137.8 kHz (2200 m) band shall not cause harmful interference to, and shall accept interference from:
(i) Stations authorized by the United States Government in the fixed and maritime mobile services;
(ii) Stations authorized by other nations in the fixed, maritime mobile, and radionavigation service.
(4) Amateur stations in the 472–479 kHz (630 m) band shall not cause harmful interference to, and shall accept interference from:
(i) Stations authorized by the FCC in the maritime mobile service;
(ii) Stations authorized by other nations in the maritime mobile and aeronautical radionavigation services.
(5) Amateur stations causing harmful interference shall take all necessary measures to eliminate such interference—including temporary or permanent termination of transmissions.
The additions read as follows:
(c) * * *
(k) No station may transmit in the 135.7–137.8 kHz (2200 m) band with a transmitter power exceeding 1.5 kW PEP or a radiated power exceeding 1 W EIRP.
(l) No station may transmit in the 472–479 kHz (630 m) band with a transmitter power exceeding 500 W PEP or a radiated power exceeding 5 W EIRP, except that in Alaska, stations located within 800 kilometers of the Russian Federation may not transmit with a radiated power exceeding 1 W EIRP.
Department of the Treasury.
Request for information.
On January 30, 2017, the President signed Executive Order 13771, Reducing Regulation and Controlling Regulatory Costs, to direct agencies to eliminate two regulations for each new regulation issued and to limit costs for this fiscal year to zero. On February 24, 2017, the President issued Executive Order 13777, Enforcing the Regulatory Reform Agenda, which requires agencies to convene a regulatory reform task force to assist in the implementation of Executive Order 13771. In furtherance of those Executive Orders, this notice invites members of the public to submit views and recommendations for Treasury Department regulations that can be eliminated, modified, or streamlined in order to reduce burdens.
Interested persons are invited to submit comments in response to this notice according to the instructions below. All submissions must refer to the document title. Treasury encourages the early submission of comments.
Heidi Cohen, Office of the General Counsel (General Law, Ethics, and Regulation), 202–622–1142.
Executive Order 13777, Enforcing the Regulatory Reform Agenda, requires agencies to convene a regulatory reform task force to assist in the implementation of Executive Order 13771 as well as Executive Orders 12866 and 13563.
The Department is forming such a task force, which will evaluate existing regulations and make recommendations to the Secretary to prioritize their possible repeal, replacement, or modification, consistent with applicable law. The Executive Order 13777 requires the task force to attempt to identify for repeal, replacement or modification regulations that eliminate jobs or inhibit job creation; are outdated, unnecessary, or ineffective; impose costs that exceed benefits; create a serious inconsistency or otherwise interfere with regulatory reform initiatives and policies; are inconsistent with the requirements of the Information Quality Act (44 U.S.C. 3516 note), or the guidance issued pursuant to that provision; or derive from or implement Executive Orders or other Presidential directives that have been subsequently rescinded or substantially modified.
Executive Order 13777 encourages agencies to seek input from small businesses, state and local governments, trade associations, and other stakeholders significantly affected by regulations. Accordingly, this notice invites interested members of the public to provide input on those Treasury regulations and guidance that should be modified or eliminated in order to reduce burdens. Commenters should identify the regulation by title and citation to the Code of Federal Regulations and should explain how the regulations could be modified, if appropriate, or explain why the regulation should be eliminated. To the extent available, commenters should provide available data and an explanation of regulatory costs and compliance burdens.
In particular, the Department invites comments on regulations, forms, and guidance documents issued or promulgated by the Internal Revenue Service, the Alcohol and Tobacco Tax and Trade Bureau, the Bureau of the Fiscal Service, Departmental Offices (Office of the Secretary), the Financial Crimes Enforcement Network, the Community Development Financial Institutions Fund, the Office of Foreign Assets Control, and Treasury regulations and guidance issued under the Department's Customs Revenue Function (19 CFR chapter 1).
In its Notice 2017–28, Treasury and IRS invited public comment on recommendations for the 2017–2018 Priority Guidance Plan for tax guidance. That notice included a similar request for input pursuant to Executive Orders 13771 and 13777. Today's request for comments is intended to support and not duplicate those efforts. If commenters have already submitted comments in response to Notice 2017–28, those comments will be shared with and may be used by the Department's task force as it evaluates regulations.
The Department advises that this notice and request for comments is issued for information and policy development purposes. Although the Department encourages responses to this notice, such comments do not bind the Department to taking any further actions related to the submission.
Privacy Office, DHS.
Notice of proposed rulemaking.
The Department of Homeland Security is giving concurrent notice of an updated and reissued system of records pursuant to the Privacy Act of 1974 for the “Department of Homeland Security/ALL–025 Law Enforcement Authority in Support of the Protection of Property Owned, Occupied, or Secured by the Department of Homeland Security System of Records” and this proposed rulemaking. In this proposed rulemaking, the Department proposes to exempt portions of the system of records from additional provisions of the Privacy Act because of criminal, civil, and administrative enforcement requirements.
Comments must be received on or before July 14, 2017.
You may submit comments, identified by docket number DHS–2017–0019, by one of the following methods:
•
•
•
For general and privacy questions please contact: Jonathan R. Cantor, (202–343–1717), Acting Chief Privacy Officer, Privacy Office, Department of Homeland Security, Washington, DC 20528.
In accordance with the Privacy Act of 1974, 5 U.S.C. 552a, the Department of Homeland Security (DHS) proposes a new Privacy Act exemption to an existing DHS system of records titled, “DHS/ALL–025 Law Enforcement Authority in Support of the Protection of Property Owned, Occupied, or Secured by DHS System of Records.” The DHS/ALL–025 Law Enforcement Authority in Support of the Protection of Property Owned, Occupied, or Secured by DHS System of Records covers the collection, use, maintenance, and dissemination of records relating to the protection of property owned, occupied, or secured by DHS. The existing Privacy Act exemptions that became effective upon publication of the Final Rule at 74 FR 50901, continue to apply to this system of records. DHS is issuing a Notice of Proposed Rulemaking to add a new exemption from certain provisions of the Privacy Act.
The Privacy Act embodies fair information practice principles in a statutory framework governing the means by which Federal Government agencies collect, maintain, use, and disseminate personally identifiable information. The Privacy Act applies to information that is maintained in a “system of records.” A “system of records” is a group of any records under the control of an agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual. In the Privacy Act, an individual is defined to encompass U.S. citizens and lawful permanent residents. Additionally, and similarly, the Judicial Redress Act (JRA) provides a statutory right to covered persons to make requests for access and amendment to covered records, as defined by the JRA, along with judicial review for denials of such requests. In addition, the JRA prohibits disclosures of covered records, except as otherwise permitted by the Privacy Act.
The Privacy Act allows government agencies to exempt certain records from the access and amendment provisions. If an agency claims an exemption, however, it must issue a Notice of Proposed Rulemaking to make clear to the public the reasons why a particular exemption is claimed.
DHS is claiming an additional exemption from certain requirements of the Privacy Act for DHS/ALL–025 Law Enforcement Authority in Support of the Protection of Property Owned, Occupied, or Secured by DHS System of Records, under 5 U.S.C. 552a(j)(2). Information in DHS/ALL–025 Law Enforcement Authority in Support of the Protection of Property Owned, Occupied, or Secured by DHS System of Records relates to official DHS law enforcement activities. This new exemption is needed to protect information relating to DHS activities from disclosure to subjects or others related to these activities. Specifically, the additional exemptions are required to preclude subjects of these activities from frustrating ongoing operations; to avoid disclosure of activity techniques; to protect the identities and physical safety of confidential informants and law enforcement personnel; to ensure DHS's ability to obtain information from third parties and other sources; to protect the privacy of third parties; and to safeguard classified information. Disclosure of information to the subject of the inquiry could also permit the subject to avoid detection or apprehension.
In appropriate circumstances, when compliance would not appear to interfere with or adversely affect the law enforcement purposes of this system and the overall law enforcement process, the applicable exemptions may be waived on a case by case basis.
A notice of an updated system of records for DHS/ALL–025 Law Enforcement Authority in Support of the Protection of Property Owned, Occupied, or Secured by DHS System of Records is also published in this issue of the
Freedom of information; Privacy.
For the reasons stated in the preamble, DHS proposes to amend chapter I of title 6, Code of Federal Regulations, as follows:
6 U.S.C. 101
38. The DHS/ALL–025 Law Enforcement Authority in Support of the Protection of Property Owned or Occupied by the Department of Homeland Security system of records consists of electronic and paper records and will be used by DHS and its components. The DHS/ALL–025 Law Enforcement Authority in Support of the Protection of Property Owned or Occupied by the Department of Homeland Security system is a repository of information held by DHS in connection with its several and varied missions and functions, including: The enforcement of civil and criminal laws; investigations, inquiries, and proceedings there under; and national security and intelligence activities. The DHS/ALL–025 Law Enforcement Authority in Support of the Protection of Property Owned or Occupied by the Department of Homeland Security system contains information that is collected by, on behalf of, in support of, or in cooperation with DHS and its components and may contain personally identifiable information collected by other federal, state, local, tribal, foreign, or international government agencies. The Secretary of Homeland Security, pursuant to 5 U.S.C. 552a(j)(2), has exempted this system from the following provisions of the Privacy Act: 5 U.S.C. 552a(c)(3), (c)(4); (d); (e)(1), (e)(2), (e)(3), (e)(4)(G), (e)(4)(H), (e)(4)(I), (e)(5), (e)(8); (f), (g)(1). Additionally, the Secretary of Homeland Security, pursuant to 5 U.S.C. 552a(k)(1), (k)(2), and (k)(5), has exempted this system from the following provisions of the Privacy Act: 5 U.S.C. 552a(c)(3); (d); (e)(1), (e)(4)(G), (e)(4)(H), (e)(4)(I); and (f). When a record received from another system has been exempted in that source system under 5 U.S.C. 552a(j)(2), DHS will claim the same exemptions for those records that are claimed for the original primary systems of records from which they originated and claims any additional exemptions set forth here. Exemptions from these particular subsections are justified, on a case-by-case basis to be determined at the time a request is made, for the following reasons:
(a) From subsection (c)(3) and (4) (Accounting for Disclosures) because release of the accounting of disclosures could alert the subject of an investigation of an actual or potential criminal, civil, or regulatory violation to the existence of that investigation and reveal investigative interest on the part of DHS as well as the recipient agency. Disclosure of the accounting would therefore present a serious impediment to law enforcement efforts and/or efforts to preserve national security. Disclosure of the accounting would also permit the individual who is the subject of a record to impede the investigation, to tamper with witnesses or evidence, and to avoid detection or apprehension, which would undermine the entire investigative process.
(b) From subsection (d) (Access to Records) because access to the records contained in this system of records could inform the subject of an investigation of an actual or potential criminal, civil, or regulatory violation to the existence of that investigation and reveal investigative interest on the part of DHS or another agency. Access to the records could permit the individual who is the subject of a record to impede the investigation, to tamper with witnesses or evidence, and to avoid detection or apprehension. Amendment of the records could interfere with ongoing investigations and law enforcement activities and would impose an unreasonable administrative burden by requiring investigations to be continually reinvestigated. In addition, permitting access and amendment to such information could disclose security-sensitive information that could be detrimental to homeland security.
(c) From subsection (e)(1) (Relevancy and Necessity of Information) because in the course of investigations into potential violations of federal law, the accuracy of information obtained or introduced occasionally may be unclear, or the information may not be strictly relevant or necessary to a specific investigation. In the interests of effective law enforcement, it is appropriate to retain all information that may aid in establishing patterns of unlawful activity.
(d) From subsection (e)(2) (Collection of Information from Individuals) because requiring that information be collected from the subject of an investigation would alert the subject to the nature or existence of the investigation, thereby interfering with that investigation and related law enforcement activities.
(e) From subsection (e)(3) (Notice to Subjects) because providing such detailed information could impede law enforcement by compromising the existence of a confidential investigation or reveal the identity of witnesses or confidential informants.
(f) From subsections (e)(4)(G), (e)(4)(H), and (e)(4)(I) (Agency Requirements) and (f) (Agency Rules), because portions of this system are exempt from the individual access provisions of subsection (d) for the reasons noted above, and therefore DHS is not required to establish requirements, rules, or procedures with respect to such access. Providing notice to individuals with respect to the existence of records pertaining to them in the system of records or otherwise setting up procedures pursuant to which individuals may access and view records pertaining to themselves in the system would undermine investigative efforts and reveal the identities of witnesses, and potential witnesses, and confidential informants.
(g) From subsection (e)(5) (Collection of Information) because with the collection of information for law enforcement purposes, it is impossible to determine in advance what information is accurate, relevant, timely, and complete. Compliance with subsection (e)(5) would preclude DHS agents from using their investigative training and exercise of good judgment to both conduct and report on investigations.
(h) From subsection (e)(8) (Notice on Individuals) because compliance would interfere with DHS's ability to obtain, serve, and issue subpoenas, warrants, and other law enforcement mechanisms that may be filed under seal and could result in disclosure of investigative techniques, procedures, and evidence.
(i) From subsection (g)(1) (Civil Remedies) to the extent that the system is exempt from other specific subsections of the Privacy Act.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for certain Bombardier, Inc., Model CL–600–2A12 (CL–601 Variant) and CL–600–2B16 (CL–601–3A, CL–601–3R, and CL–604 Variants) airplanes. This proposed AD was prompted by a determination that the bushing holes on the engine mount rib might not conform to the engineering drawings and that certain inspections of the engine mount rib must be included in the airworthiness limitations section (ALS) of the Instructions for Continued Airworthiness (ICA). This proposed AD would require revising the maintenance or inspection program to incorporate certain airworthiness limitation items (ALIs). We are proposing this AD to address the unsafe condition on these products.
We must receive comments on this proposed AD by July 31, 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 Bombardier, Inc., 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; Widebody Customer Response Center North America toll-free telephone 1–866–538–1247 or direct-dial telephone 1–514–855–2999; fax 514–855–7401; email
You may examine the AD docket on the Internet at
Aziz Ahmed, Aerospace Engineer, Airframe and Mechanical Systems Branch, ANE–171, New York Aircraft Certification Office (ACO), FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516–228–7329; fax 516–794–5531.
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
Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF–2015–09R1, dated June 29, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Bombardier, Inc., Model CL–600–2A12 (CL–601 Variant), and CL–600–2B16 (CL–601–3A, CL–601–3R, and CL–604 Variants) airplanes. The MCAI states:
The aeroplane manufacturer has determined that the bushing holes on the engine mount rib may not conform to the engineering drawings. Non-conforming bushing holes could increase loading on adjacent fasteners, resulting in premature fatigue cracking of the engine mount rib.
In addition, it was also discovered that the inspection requirements for the engine mount rib were not listed in the Airworthiness Limitations Section of the Instructions for Continued Airworthiness.
Failure of the engine mount rib could compromise the structural integrity of the engine mount and could lead to subsequent detachment of an engine.
A new Time Limits/Maintenance Checks (TLMC) Airworthiness Limitations (AWL) task is introduced to ensure that any fatigue cracking of the engine mount rib is detected and corrected.
The original issue of this [Canadian] AD mandated the incorporation of a new TLMC AWL task [into the maintenance or inspection program, as applicable].
Revision 1 of this [Canadian] AD is issued to remove model CL–600–1A11 (600) aeroplanes from the Applicability section of the [Canadian] AD since this model was incorrectly included in the original issue.
You may examine the MCAI in the AD docket on the Internet at
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.
This AD requires revisions to certain operator maintenance documents to include new actions (
We estimate that this proposed AD affects 129 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, 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
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 July 31, 2017.
None.
This AD applies to the Bombardier, Inc., airplanes identified in paragraphs (c)(1), (c)(2), and (c)(3) of this AD, certificated in any category.
(1) Bombardier, Inc., Model CL–600–2A12 (CL–601) airplanes, having serial numbers (S/Ns) 3001 through 3066 inclusive.
(2) Bombardier, Inc., Model CL–600–2B16 (CL–601–3A and CL–601–3R Variants) airplanes, having S/Ns 5001 through 5194 inclusive.
(3) Bombardier, Inc., Model CL–600–2B16 (CL–604 Variant) airplanes, having S/Ns 5301 through 5665 inclusive, and 5701 and subsequent.
Air Transport Association (ATA) of America Code 05, Periodic inspections.
This AD was prompted by a determination that the bushing holes on the engine mount rib may not conform to the engineering drawings and that certain inspections of the engine mount rib must be included in the airworthiness limitations section (ALS) of the Instructions for Continued Airworthiness (ICA). We are issuing this AD to detect and correct failure of an engine mount rib. Failure of an engine mount rib could compromise the structural integrity of the engine mount and could lead to subsequent detachment of an engine.
Comply with this AD within the compliance times specified, unless already done.
Applicable information on tasks required by paragraph (g) of this AD can be found in Chapter 5 of Time Limits/Maintenance Checks (TLMC) Manual PSP 601–5 (for Model CL–600–2A12 (CL–601 Variant) airplanes), TLMC Manual PSP 601A–5 (for CL–600–2B16 (CL–601–3A and CL–601–3R Variants) airplanes), TLMC Manual CL–604 (for Model CL–600–2B16 (CL–604 Variant) airplanes, S/Ns 5301 through 5665 inclusive), and TLMC Manual CL–605 (for Model CL–600–2B16 (CL–604 Variant) airplanes, S/Ns 5701 and subsequent).
After the maintenance or inspection program has been revised as required by paragraph (g) of this AD, no alternative actions (
The following provisions also apply to this AD:
(1)
(2)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) Canadian Airworthiness Directive CF–2015–09R1, dated June 29, 2015, for related information. This MCAI may be found in the AD docket on the Internet at
(2) For more information about this AD, contact Aziz Ahmed, Aerospace Engineer, Airframe and Mechanical Systems Branch, ANE–171, New York Aircraft Certification Office (ACO), FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516–228–7329; fax 516–794–5531.
Environmental Protection Agency (EPA).
Proposed rule.
Pursuant to the Federal Clean Air Act (CAA or Act), the Environmental Protection Agency (EPA) is proposing to approve a State Implementation Plan (SIP) revision submitted by the State of Texas for the
Written comments should be received on or before July 14, 2017.
Submit your comments, identified by EPA–R06–OAR–2015–0833, at
Carl Young, (214) 665–6645,
In the final rules section of this
For additional information, see the direct final rule which is located in the rules section of this
Centers for Medicare & Medicaid Services (CMS), HHS.
Advance notice of proposed rulemaking with comment; extension of comment period.
This document extends the comment period for the advance notice of proposed rulemaking with comment entitled “Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities: Revisions to Case-mix Methodology” that appeared in the May 4, 2017
The comment period for the ANPRM (82 FR 20980) is extended to 5 p.m., eastern daylight time, on August 25, 2017.
In commenting, please refer to file code CMS–1686–ANPRM. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.
You may submit comments in one of four ways (please choose only one of the ways listed):
1.
2.
Please allow sufficient time for mailed comments to be received before the close of the comment period.
3.
4.
a. Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445–G, Hubert H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 20201.
(Because access to the interior of the Hubert H. Humphrey Building is not readily available to persons without Federal Government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.)
b. Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244–1850.
If you intend to deliver your comments to the Baltimore address, please call telephone number (410) 786–7195 in advance to schedule your arrival with one of our staff members.
Comments mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period.
John Kane, (410) 786–0557.
In the advance notice of proposed rulemaking with comment that appeared in the
We have received an inquiry from professional associations and national industry organizations regarding the 60-day comment period for the ANPRM. These organizations stated that by providing all stakeholders additional time to review and comment upon the ANPRM, they will be able to conduct a more comprehensive review of the refinements we are considering to the SNF PPS payment methodology and provide more meaningful comments. In order to maximize the opportunity for the public to provide meaningful input to CMS, we believe that it is important to allow additional time for the public to prepare comments on the ANPRM. In addition, we believe that granting an extension to the public comment period in this instance would further our overall objective to obtain public input on the potential refinements to the SNF PPS we are considering. Therefore, we are extending the comment period for the ANPRM for an additional 60 days. This document announces the extension of the public comment period for the ANPRM until August 25, 2017.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of availability; request for comments.
NMFS announces that the Mid-Atlantic Fishery Management Council has submitted Amendment 6 to the Tilefish Fishery Management Plan for review and approval by the Secretary of Commerce. We are requesting comments from the public on the amendment. Amendment 6 would establish management measures for the blueline tilefish fishery north of the Virginia/North Carolina border, including: Permitting, recordkeeping, and reporting requirements; trip limits for both the commercial and recreational sectors of the fishery; and the process for setting specifications and annual catch limits. In addition, this action would set 2017 harvest limits.
Comments must be received on or before August 14, 2017.
You may submit comments, identified by NOAA–NMFS–2016–0025, by either of the following methods:
•
•
NMFS will accept anonymous comments. Attachments to electronic comments will be accepted via Microsoft Word, Microsoft Excel, WordPerfect, or Adobe PDF file formats only.
Copies of Amendment 6, and of the draft Environmental Assessment and preliminary Regulatory Impact Review (EA/RIR), are available from the Mid-Atlantic Fishery Management Council, 800 North State Street, Suite 201, Dover, DE 19901. The EA/RIR is also accessible via the Internet at:
Douglas Potts, Fishery Policy Analyst, 978–281–9341.
We are soliciting public comments on Amendment 6 and its incorporated documents through the end of the comment period stated in this notice of availability. We will publish a proposed rule in the
The Mid-Atlantic Fishery Management Council developed this amendment to establish management measures for the blueline tilefish fishery north of the Virginia/North Carolina border. This proposed action would establish the management framework for this fishery including: Permitting, recordkeeping, and reporting requirements; trip limits for both the commercial and recreational sectors of the fishery; and the process for setting specifications and annual catch limits. In addition, this action would set harvest quotas and commercial and recreational management measures for the 2017 fishing year. Additional details of the proposed measures are available in the amendment document and the proposed rule.
16 U.S.C. 1801
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (Department) is amending its final results of the administrative review of the antidumping duty order on certain new pneumatic off-the-road tires (OTR Tires) from the People's Republic of China (PRC) for the period of September 1, 2014, through August 31, 2015, to correct a ministerial error. The amended final weighted-average dumping margins for the reviewed firms are listed below in the section entitled, “Amended Final Results.”
Effective June 14, 2017.
Mandy Mallott, AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230; telephone 202–482–6430.
On April 13, 2017, the Department issued the final results of the administrative review of the 2014–2015 period of review.
The merchandise covered by this order includes new pneumatic tires designed for off-the-road and off-highway use, subject to certain exceptions. The subject merchandise is currently classifiable under Harmonized Tariff Schedule of the United States (HTSUS) subheadings: 4011.80.1010, 4011.20.10.25, 4011.20.10.35, 4011.20.50.30, 4011.20.50.50, 4011.61.00.00, 4011.62.00.00, 4011.63.00.00, 4011.69.00.00, 4011.70.00.10, 4011.70.00.50 4011.80.20.20, 4011.92.00.00, 4011.93.40.00, 4011.93.80.00, 4011.94.40.00, 4011.94.80.00, 8716.90.5056, 8716.90.5059, 4011.80.10.10, 4011.80.10.20, 4011.80.20.10, 4011.80.80.10, and 4011.80.80.20. The HTSUS subheadings are provided for convenience and customs purposes only; the written product description of the scope of the order is dispositive. For a complete description of the scope of the order,
Section 751(h) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.224(f) define a “ministerial error” as an error “in addition, subtraction, or other arithmetic function, clerical error resulting from inaccurate copying, duplication, or the like, and any similar type of unintentional error which the Secretary considers ministerial.” We analyzed the petitioners' ministerial error comments and determined, in accordance with section 751(h) of the Act and 19 CFR 351.224(e) and (f), that we made a ministerial error in our calculation of Xugong's margin for the
In accordance with section 751(h) of the Act and 19 CFR 351.224(e), we are correcting this error in the calculation of Xugong's weighted-average dumping margin by using the proper denominator in the calculation of indirect sales expenses,
Additionally, as a result of our revision to Xugong's margin, the Department has also revised the dumping margin for companies not individually examined in the review. As we explained in the
As a result of correcting this ministerial error, we determine that the following weighted-average dumping margins exist for the POR:
The Department's
We intend to disclose the calculations performed regarding these amended final results within five days of the date of publication of this notice to parties in this proceeding, in accordance with 19 CFR 351.224(b).
The Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries covered by this review pursuant to section 751(a)(2)(C) of the Act and 19 CFR 351.212(b)(1).
For Xugong, the Department calculated importer-specific assessment rates on the basis of the ratio of the total amount of dumping calculated for the importer's examined sales to the total entered value of sales, in accordance with 19 CFR 351.212(b)(1). For customers or importers of Xugong for which we do not have entered values, we calculated importer- (or customer-) specific antidumping duty assessment amounts based on the ratio of the total amount of dumping duties calculated for the examined sales of subject merchandise to the total sales quantity of those same sales.
The following cash deposit requirements will be effective for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after April 21, 2017, the publication date of the
This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping and/or countervailing duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of the antidumping and/or countervailing duties occurred and the subsequent assessment of double antidumping duties.
This notice also serves as a reminder to parties subject to administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under the APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
We are issuing and publishing these amended final results of administrative review in accordance with sections 751(a)(1) and 777(i) of the Act.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (the Department) published the
Effective June 14, 2017.
Krisha Hill, Office IV, Enforcement & Compliance, International Trade Administration, Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482–4037.
On February 8, 2017, the Department published the
The products covered by the order include the hydrous and anhydrous forms of citric acid, the dihydrate and anhydrous forms of sodium citrate, otherwise known as citric acid sodium salt, and the monohydrate and monopotassium forms of potassium citrate. Sodium citrate also includes both trisodium citrate and monosodium citrate, which are also known as citric acid trisodium salt and citric acid monosodium salt, respectively. Citric acid and sodium citrate are classifiable under 2918.14.0000 and 2918.15.1000 of the Harmonized Tariff Schedule of the United States (HTSUS), respectively. Potassium citrate and crude calcium citrate are classifiable under 2918.15.5000 and 3824.90.9290 of the HTSUS, respectively. Blends that include citric acid, sodium citrate, and potassium citrate are classifiable under 3824.90.9290 of the HTSUS. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise is dispositive.
In the
The Department considers fifteen companies listed in the
The Department determines that the following companies are part of the PRC-wide entity: (1) Taihe, (2) Anhui BBCA International Co., Ltd., (3) BCH Chemical International Limited, (4) China Chem Source (HK) Co., Ltd., (5) COFCO Biochemical AnHui Co., Ltd., (6) Jiangsu Guoxin Union Energy Co., Ltd., (7) Kaifeng Chemical Co., Ltd., (8) Qingdao Chongzhi International, (9) Qingdao Samin Chemical Co., Ltd., (10) Shanghai Fenhe International Co., Ltd., (11) Sunshine Biotech International Co., Ltd., (12) Tianjin Kaifeng Chemical Co., Ltd., (13) TTCA Co., Ltd., (14) Weifang Ensign Industry Co., Ltd., and (15) Yixing-Union Biochemical Co., Ltd.
The Department will determine, and CBP shall assess, antidumping duties on all appropriate entries covered by this review.
The following cash deposit requirements will be effective upon publication of the final results of this AR for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of review, as provided by section 751(a)(2)(C) of the Tariff Act of 1930, as amended (the Act): (1) For previously investigated or reviewed exporters of merchandise from the PRC which are not under review in this segment of the proceeding but which have separate rates, the cash deposit rate will continue to be the exporter-specific rate published for the most recently completed segment of this proceeding; (2) for all PRC exporters of subject merchandise that have not been found to be entitled to a separate rate, the cash deposit rate will be the rate for the PRC-wide entity, 156.87 percent; and (3) for all non-PRC exporters of subject merchandise which have not received their own rate, the cash deposit rate will be the rate applicable to the exporter(s) of merchandise from the PRC that supplied that non-PRC exporter. These deposit requirements, when imposed, shall remain in effect until further notice.
This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this POR. Failure to comply with this requirement could result in the Department's presumption that reimbursement of antidumping duties has occurred and the subsequent assessment of doubled antidumping duties.
This notice also serves as a reminder to parties subject to the 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 notification of the destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
We are issuing and publishing these results and this notice in accordance with sections 751(a)(1) and 777(i) of the Act and 19 CFR 351.213(d) and 351.221(b)(5).
International Trade Administration, U.S. Department of Commerce.
Notice; invitation for applications.
Under the EU-U.S. Privacy Shield Framework, the U.S. Department of Commerce (DOC) and the European Commission have committed to implement an arbitration mechanism to provide European individuals with the ability to invoke binding arbitration to determine, for residual claims, whether an organization has violated its obligations under the Privacy Shield Framework. The DOC and the European Commission will work together to implement the arbitration mechanism, including by jointly developing a list of at least 20 arbitrators. Parties to a binding arbitration under this Privacy Shield mechanism may only select arbitrators from this list. This notice announces the opportunity to apply for inclusion on the list of arbitrators developed by the DOC and the European Commission.
Applications should be received by July 14, 2017.
Please submit applications to Nasreen Djouini at the U.S. Department of Commerce, either by email at
Nasreen Djouini, International Trade Administration, 202–482–6259 or
The EU-U.S. Privacy Shield Framework was designed by the U.S. Department of Commerce (DOC) and the European Commission (Commission) to provide companies on both sides of the Atlantic with a mechanism to comply with data protection requirements when transferring personal data from the European Union to the United States in support of transatlantic commerce. On July 12, 2016, the Commission deemed the EU-U.S. Privacy Shield Framework (Privacy Shield) adequate to enable data transfers under EU law, and on August 1, 2016, the DOC began accepting self-certifications from U.S. companies to join the program (81 FR 47752; July 22, 2016). For more information on the Privacy Shield, visit
As described in Annex I of the Privacy Shield, the DOC and the Commission have committed to implement an arbitration mechanism to provide European individuals with the ability to invoke binding arbitration to determine, for residual claims, whether an organization has violated its obligations under the Privacy Shield. Organizations voluntarily self-certify to
The DOC and the European Commission seek to develop a list of at least 20 arbitrators. To be eligible for inclusion on the list, applicants must be admitted to practice law in the United States and have expertise in both U.S. privacy law and EU data protection law. Applicants shall not be subject to any instructions from, or be affiliated with, any Privacy Shield organization, or the U.S., EU, or any EU Member State or any other governmental authority, public authority or enforcement authority.
Eligible individuals will be evaluated on the basis of independence, integrity, and expertise:
Evaluation of applications for inclusion on the list of arbitrators will be undertaken by the DOC and the Commission. Selected applicants will remain on the list for a period of 3 years, absent exceptional circumstances, change in eligibility, or for cause, renewable for one additional period of 3 years.
The DOC is in the process of selecting an administrator for Privacy Shield arbitrations.
Arbitrators will be subject to a code of conduct consistent with Annex I of the Privacy Shield Framework and generally accepted ethical standards for arbitrators. The DOC and the Commission agreed to adopt an existing, well-established set of U.S. arbitral procedures to govern the arbitral proceedings, subject to considerations identified in Annex I of the Privacy Shield Framework, including that materials submitted to arbitrators will be treated confidentially and will only be used in connection with the arbitration. For more information, please visit
Eligible individuals who wish to be considered for inclusion on the EU-U.S. Privacy Shield List of Arbitrators are invited to submit applications. Applications must be typewritten and should be headed “Application for Inclusion on the EU-U.S. Privacy Shield List of Arbitrators.” Applications should include the following information, and each section of the application should be numbered as indicated:
OMB has reviewed and approved this information collection on an emergency basis as of [X DATE]. The emergency approval is only valid for 180 days. ITA will submit a request for a 3-year approval through OMB's general PRA clearance process. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act, unless that collection of information displays a currently valid OMB control number.
Written comments regarding the burden estimate for this data collection requirement, or any other aspect of this data collection, to the Office of Information and Regulatory Affairs of OMB, Attention: Desk Officer for the International Trade Administration via email at
Applications will be covered by the Department of Commerce's Privacy Act
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Notice.
Based on affirmative final determinations by the Department of Commerce (the Department) and the International Trade Commission (the ITC), the Department is issuing an antidumping duty order on finished carbon steel flanges from Spain.
June 14, 2017.
Mark Flessner at (202) 482–6312, AD/CVD Operations Office VI, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230.
In accordance with sections 735(d) and 777(i)(1) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.210(c), on April 17, 2017, the Department published its affirmative final determination in the less-than-fair-value (LTFV) investigation of finished carbon steel flanges from Spain.
The merchandise covered by this order is finished carbon steel flanges from Spain.
As stated above, on June 7, 2017, in accordance with section 735(d) of the Act, the ITC notified the Department of its final determination that the industry in the United States producing finished carbon steel flanges is materially injured by reason of the LTFV imports of finished carbon steel flanges from Spain.
Therefore, in accordance with section 736(a)(1) of the Act, the Department will direct U.S. Customs and Border Protection (CBP) to assess, upon further instruction by the Department, antidumping duties equal to the amount by which the NV of the merchandise exceeds the export price (or constructed export price) of the merchandise, for all relevant entries of finished carbon steel flanges from Spain. Antidumping duties will be assessed on unliquidated entries of finished carbon steel flanges from Spain entered, or withdrawn from warehouse, for consumption on or after February 8, 2017, the date of publication of the
In accordance with section 735(c)(1)(B) of the Act, we will instruct CBP to continue to suspend liquidation on all relevant entries of finished carbon steel flanges from Spain. These instructions suspending liquidation will remain in effect until further notice.
We will also instruct CBP to require cash deposits for estimated antidumping duties equal to the estimated weighted-average dumping margins indicated below. Accordingly, effective on the date of publication in the
Section 733(d) of the Act states that instructions issued pursuant to an affirmative preliminary determination may not remain in effect for more than four months, except where exporters representing a significant proportion of exports of the subject merchandise request the Department to extend that four-month period to no more than six months. We received no such request. In the underlying investigation, the Department published the
Therefore, in accordance with section 733(d) of the Act and our practice, we will instruct CBP to terminate the suspension of liquidation and to liquidate, without regard to antidumping duties, unliquidated entries of finished carbon steel flanges from Spain entered, or withdrawn from warehouse, for consumption after June 8, 2017, the date on which the provisional measures expired, until and through the day preceding the date of publication of the ITC's injury determinations in the
The estimated weighted-average dumping margins for this antidumping order are as follows:
This notice constitutes the antidumping duty order with respect to finished carbon steel flanges from Spain pursuant to section 736(a) of the Act. Interested parties can find a list of antidumping duty orders currently in effect at
This order is published in accordance with section and 736(a) of the Act and 19 CFR 351.211(b).
The scope of this order covers finished carbon steel flanges. Finished carbon steel flanges differ from unfinished carbon steel flanges (also known as carbon steel flange forgings) in that they have undergone further processing after forging, including, but not limited to, beveling, bore threading, center or step boring, face machining, taper boring, machining ends or surfaces, drilling bolt holes, and/or de-burring or shot blasting. Any one of these post-forging processes suffices to render the forging into a finished carbon steel flange for purposes of this order. However, mere heat treatment of a carbon steel flange forging (without any other further processing after forging) does not render the forging into a finished carbon steel flange for purposes of this order.
While these finished carbon steel flanges are generally manufactured to specification ASME B16.5 or ASME B16.47 series A or series B, the scope is not limited to flanges produced under those specifications. All types of finished carbon steel flanges are included in the scope regardless of pipe size (which may or may not be expressed in inches of nominal pipe size), pressure class (usually, but not necessarily, expressed in pounds of pressure,
(a) Iron predominates, by weight, over each of the other contained elements:
(b) the carbon content is 2 percent or less, by weight; and
(c) none of the elements listed below exceeds the quantity, by weight, as indicated:
(i) 0.87 percent of aluminum;
(ii) 0.0105 percent of boron;
(iii) 10.10 percent of chromium;
(iv) 1.55 percent of columbium;
(v) 3.10 percent of copper;
(vi) 0.38 percent of lead;
(vii) 3.04 percent of manganese;
(viii) 2.05 percent of molybdenum;
(ix) 20.15 percent of nickel;
(x) 1.55 percent of niobium;
(xi) 0.20 percent of nitrogen;
(xii) 0.21 percent of phosphorus;
(xiii) 3.10 percent of silicon;
(xiv) 0.21 percent of sulfur;
(xv) 1.05 percent of titanium;
(xvi) 4.06 percent of tungsten;
(xvii) 0.53 percent of vanadium; or
(xviii) 0.015 percent of zirconium.
Finished carbon steel flanges are currently classified under subheadings 7307.91.5010 and 7307.91.5050 of the Harmonized Tariff Schedule of the United States (HTSUS). They may also be entered under HTSUS subheadings 7307.91.5030 and 7307.91.5070. The HTSUS subheadings are provided for convenience and customs purposes; the written description of the scope is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (the Department) published the
Based upon our analysis of the comments and information received, we made no changes to the margin calculated for voluntary respondent, Shenzhen Xinboda Industrial Co., Ltd. (Xinboda). As discussed below, the Department continues to find that QTF withheld requested information, significantly impeded the administrative review, and did not cooperate to the best of its ability. Accordingly, we continue to use adverse facts available. However, in a change from the
These determinations and the final dumping margins are discussed below in the “Final Results” section of this notice.
Effective June 14, 2017.
Kathryn Wallace or Alexander Cipolla, AD/CVD Operations, Office VII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230; telephone 202–482–6251 or 202–482–4956, respectively.
The Department published the
The merchandise covered by the order includes all grades of garlic, whole or separated into constituent cloves. Fresh garlic that are subject to the order are currently classified under the Harmonized Tariff Schedule of the United States (HTSUS) 0703.20.0000, 0703.20.0005, 0703.20.0010, 0703.20.0015, 0703.20.0020, 0703.20.0090, 0710.80.7060, 0710.80.9750, 0711.90.6000, 0711.90.6500, 2005.90.9500, 2005.90.9700, 2005.99.9700. Although the HTSUS numbers are provided for convenience and customs purposes, the written product description remains dispositive. For a full description of the scope of this order, please see “Scope of the Order” in the accompanying Issues and Decision Memorandum.
As discussed in the IDM,
We addressed all issues raised in the case and rebuttal briefs by parties in this review in the IDM. Appendix I provides a list of the issues which parties raised. The IDM is a public document and is on file in the Central Records Unit (CRU), Room B8024 of the main Department of Commerce building, as well as electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at
Based on a review of the record and comments received from interested parties regarding our
In the
As discussed in the IDM, in the
As discussed in the
In the
In the
The weighted-average dumping margins for the administrative review are as follows:
Pursuant to section 751(a)(2)(A) and (C) of the Tariff Act of 1930, as amended, (the Act) and 19 CFR 351.212(b), the Department has determined, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries of subject merchandise in accordance with the final results of this review. The Department intends to issue appropriate assessment instructions directly to CBP 15 days after publication of the final results of this administrative review.
Where the respondent reported reliable entered values, we calculated importer- (or customer-) specific
Pursuant to the Department's assessment practice, for entries that were not reported in the U.S. sales databases submitted by companies individually examined during this review, the Department will instruct CBP to liquidate such entries at the PRC-wide entity rate. Additionally, if the Department determines that an exporter had no shipments of the subject merchandise, any suspended entries that entered under that exporter's case number (
The following cash deposit requirements will be effective upon publication of the final results of this administrative review for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided for by section 751(a)(2)(C) of the Act: (1) For the exporter listed above, the cash deposit rate will be the rate established in the final results of review (except, if the rate is zero or
We intend to disclose the calculations performed within five days of the date of publication of this notice to parties in this proceeding in accordance with 19 CFR 351.224(b).
This notice also serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this 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 doubled antidumping duties.
This notice also serves as a reminder to parties subject to administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
We are issuing and publishing these final results of administrative review in accordance with sections 751(a)(1) and 777(i) of the Act and 19 CFR 351.213.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
On December 9, 2016, the Department of Commerce (the Department) published the
Effective June 14, 2017.
Stephanie Moore (for Deacero) or Patricia Tran (for Grupo Simec), AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482–3692 or (202) 482–1503, respectively.
On December 9, 2016, the Department published the
Imports covered by the order are shipments of steel concrete reinforcing bar imported in either straight length or coil form (rebar) regardless of metallurgy, length, diameter, or grade. The merchandise subject to review is currently classifiable under items 7213.10.0000, 7214.20.0000, and 7228.30.8010. The subject merchandise may also enter under other Harmonized Tariff Schedule of the United States (HTSUS) numbers including 7215.90.1000, 7215.90.5000, 7221.00.0015, 7221.00.0030, 7221.00.0045, 7222.11.0001, 7222.11.0057, 7222.11.0059, 7222.30.0001, 7227.20.0080, 7227.90.6085, 7228.20.1000, and 7228.60.6000. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise subject to the order is dispositive.
All issues raised in the case and rebuttal briefs by parties to this administrative review are addressed in the Issues and Decision Memorandum. A list of the issues that parties raised and to which we responded is attached to this notice as an Appendix. The Issues and Decision Memorandum is a public document and is on-file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS).
Based on a review of the record and comments received from interested parties regarding our
For Grupo Simec, we have changed the final margin calculation with respect to the SAS Comparison Market for fixed overhead costs, G&A, and financial expense ratio. However, despite these changes, the weighted-average dumping margin for Grupo Simec has not changed.
As a result of this review, we determine the following weighted-average dumping margins for the period April 24, 2014, through October 31, 2015:
We will disclose the calculations performed to parties in this proceeding within five days of the date of publication of this notice, in accordance with 19 CFR 351.224(b).
The Department shall determine and Customs and Border Protection (CBP) shall assess antidumping duties on all appropriate entries.
We intend to issue assessment instructions directly to CBP 41 days after publication of the final results of this review.
The following cash deposit requirements will be effective upon publication of the notice of final results of administrative review for all shipments of subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication of the final results of this administrative review, as provided by section 751(a)(2)(C) of the Act: (1) The cash deposit rate for respondents noted above will be the rate established in the final results of this administrative review, except if the rate is less than 0.50 percent and, therefore,
This notice also serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f) 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 doubled antidumping duties.
This notice also serves as a reminder to parties subject to administrative protective orders (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return/destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.213(h) and 19 CFR 351.221(b)(5).
International Trade Administration, Department of Commerce.
Notice of opportunity for appointment to serve as a District Export Council member.
The Department of Commerce is currently seeking nominations of individuals for consideration for appointment by the Secretary of Commerce to serve as members of one of the 60 District Export Councils (DECs) nationwide. DECs are closely affiliated with the U.S. Export Assistance Centers (USEACs) of the U.S. and Foreign Commercial Service (US&FCS), and play a key role in the planning and coordination of export activities in their communities.
Nominations for individuals to a DEC must be received by the local USEAC Director by 5:00 p.m. local time on July 28, 2017.
Please contact the Director of your local USEAC for more information on DECs and the nomination process. You may identify your local USEAC by entering your zip code online at
District Export Councils support the mission of US&FCS by facilitating the development of an effective local export assistance network, supporting the expansion of export opportunities for local U.S. companies, serving as a communication link between the business community and US&FCS, and assisting in coordinating the activities of trade assistance partners to leverage available resources. Individuals appointed to a DEC become part of a select corps of trade experts dedicated to providing international trade leadership and guidance to the local business community and assistance to the Department of Commerce on export development issues.
For current DEC members seeking reappointment, the local USEAC Director, in consultation with the DEC Executive Committee, also carefully considers the nominee's activity level during the previous term and demonstrated ability to work cooperatively and effectively with other DEC members and US&FCS staff. As appointees of the Secretary of Commerce in high-profile positions, though volunteers, DEC Members are expected to actively participate in the DEC and support the work of local US&FCS offices. Those that do not support the work of the office or do not actively participate in DEC activities will not be considered for re-nomination.
The Executive Secretary determines which nominees to forward to the US&FCS Office of U.S. Operations for further consideration for recommendation to the Secretary of Commerce in consultation with the local DEC Executive Committee. A candidate's background and character are pertinent to determining suitability and eligibility for DEC membership. Since DEC appointments are made by
15 U.S.C. 1512, 15 U.S.C. 4721.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; request for comments.
The Assistant Regional Administrator for Sustainable Fisheries, Greater Atlantic Region, NMFS, has made a preliminary determination that an Exempted Fishing Permit application from the Coonamessett Farm Foundation to conduct a scallop survey contains all of the required information and warrants further consideration.
Regulations under the Magnuson-Stevens Fishery Conservation and Management Act require publication of this notice intended to provide interested parties the opportunity to comment on applications for proposed Exempted Fishing Permits.
Comments must be received on or before June 29, 2017.
You may submit written comments by any of the following methods:
•
•
Shannah Jaburek, Fisheries Management Specialist, 978–282–8456.
The Coonamessett Farm Foundation submitted a complete application on May 23, 2017, to conduct an optical and dredge survey in the Northern Gulf of Maine (NGOM) Scallop Management Area. The project titled “An Optical Assessment of Sea Scallop Abundance and Distribution in Select Areas of the Northern Gulf of Maine Scallop Management Area” would be funded through the Scallop Research Set-Aside Program. The primary survey instrument would be the HabCam imaging system, consisting of a camera that continuously takes photos and a side scanning sonar, that would be towed approximately 2.5 meters above the ocean floor. A scallop survey dredge would also be deployed to enable collection of biological information. The vessel would be exempt from the Atlantic sea scallop days-at-sea (DAS) allocations at 50 CFR 648.53(b); NGOM management program requirements at § 648.62; crew size restrictions at § 648.51(c); dredge gear restrictions at § 648.51(b); and observer program requirements at § 648.11(g). The vessel would also be temporarily exempt from possession limits and minimum size requirements specified in 50 CFR part 648, subparts B and D through O, for biological sampling purposes only. These exemptions would support an abundance survey of the NGOM Scallop Management Area.
The primary survey instrument will be the HabCam imaging system, but a scallop survey dredge would be deployed to enable collection of biological information. One vessel would conduct the survey in early July 2017 over the course of four days-at-sea. Researchers would conduct 3 dredge tows per day for a maximum of 12 tows using the NMFS survey dredge. The survey dredge is 8 feet (2.4 m) in width equipped with 2-inch (5.1-cm) rings, 4-inch (10.2-cm) diamond twine top, and a 1.5-inch (3.8-cm) diamond mesh liner. All tows would be conducted at speeds between 4.8 to 5.1 knots (2.5 to 2.6 m/s) for 10–15 minutes. The dredge tow locations would be determined during the optical survey using the HabCam system based on scallop abundance. This survey would provide scallop biomass estimates that would support scallop resource management in the NGOM Management Area. The survey will occur in parts of Stellwagen Bank and Jeffrey's Ledge that are open to commercial scallop fishing. No dredge tows will occur in a habitat closed area.
In addition to collecting Habcam image data, scientific personnel will record detailed catch information on scallops, finfish, and invertebrates from dredge tows. No fish or scallops will be retained for commercial purposes, but frozen samples of scallop meats may be retained. All bycatch would be returned to the sea as soon as practicable following data collection. These exemptions will allow CFF to conduct experimental dredge towing without being charged DAS, as well as deploy gear that is not consistent with current scallop regulations. Participating vessels need crew size waivers to accommodate science personnel. Exemption from possession limit and minimum sizes would ensure the vessel is not in conflict with possession regulations while collecting catch data. The project would also be exempt from the sea scallop observer program requirements because activities conducted on the trip are not consistent with normal fishing operations.
If approved, the applicant may request minor modifications and extensions to the EFP throughout the year. EFP modifications and extensions may be granted without further notice if they are deemed essential to facilitate completion of the proposed research and have minimal impacts that do not change the scope or impact of the initially approved EFP request. Any fishing activity conducted outside the scope of the exempted fishing activity would be prohibited.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of SEDAR 51 pre-assessment webinar for Gulf of Mexico gray snapper.
The SEDAR 51 assessment process of Gulf of Mexico gray snapper will consist of a Data Workshop, a series of assessment webinars, and a Review Workshop.
The SEDAR 51 pre-assessment webinar will be held June 27, 2017, from 1 p.m. to 3 p.m. Eastern Time.
Julie A. Neer, SEDAR Coordinator; (843) 571–4366; email:
The Gulf of Mexico, South Atlantic, and Caribbean Fishery Management Councils, in conjunction with NOAA Fisheries and the Atlantic and Gulf States Marine Fisheries Commissions have implemented the Southeast Data, Assessment and Review (SEDAR) process, a multi-step method for determining the status of fish stocks in the Southeast Region. SEDAR is a multi-step process including: (1) Data Workshop, (2) a series of assessment webinars, and (3) A Review Workshop. The product of the Data Workshop is a report that compiles and evaluates potential datasets and recommends which datasets are appropriate for assessment analyses. The assessment webinars produce a report that describes the fisheries, evaluates the status of the stock, estimates biological benchmarks, projects future population conditions, and recommends research and monitoring needs. The product of the Review Workshop is an Assessment Summary documenting panel opinions regarding the strengths and weaknesses of the stock assessment and input data. Participants for SEDAR Workshops are appointed by the Gulf of Mexico, South Atlantic, and Caribbean Fishery Management Councils and NOAA Fisheries Southeast Regional Office, HMS Management Division, and Southeast Fisheries Science Center. Participants include data collectors and database managers; stock assessment scientists, biologists, and researchers; constituency representatives including fishermen, environmentalists, and NGO's; International experts; and staff of Councils, Commissions, and state and federal agencies.
The items of discussion during the post-Data Workshop webinar are as follows:
1. Panelists will present finalized data for review and recommendation.
2. Panelists will begin discussing the modeling framework and initial model recommendations
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 identified in this notice and any issues arising after publication of this notice that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency.
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to the Council office (see
The times and sequence specified in this agenda are subject to change.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The Mid-Atlantic Fishery Management Council's (MAFMC) Atlantic Bluefish Advisory Panel will hold a public meeting, jointly with the Atlantic States Marine Fisheries Commission (ASMFC) Atlantic Bluefish Advisory Panel.
The meeting will be held on Tuesday, June 27, 2017, from 9 a.m. to 12 p.m. For agenda details, see
Christopher M. Moore, Ph.D., Executive Director, Mid-Atlantic Fishery Management Council, telephone: (302) 526–5255.
The purpose of this meeting is for the Advisory Panels to create a fishery performance report (FPR). The intent of this report is to facilitate a venue for structured input from the Advisory Panels for the Atlantic Bluefish specifications process. The FPR will be used by the MAFMC's Scientific and Statistical Committee (SSC) and the Atlantic Bluefish Monitoring Committee (MC), when reviewing (at future meetings in July), and if necessary revising, the current measures designed to achieve the recommended Atlantic Bluefish catch and landings limits for 2018. In addition, the MAFMC and ASMFC will consider input from the Advisory Panels in August when reviewing these specifications.
Although other non-emergency issues not on the agenda may come before this group for discussion, those issues may not be the subject of formal action during this meeting. Actions will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under Section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the Council's intent to take final action to address the emergency.
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aid should be directed to M. Jan Saunders, (302) 526–5251, at least 5 days prior to the meeting date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The Mid-Atlantic Fishery Management Council's (Council's) Summer Flounder, Scup, and Black Sea Bass Advisory Panel (AP) will hold a public meeting, jointly with the Atlantic States Marine Fisheries Commission's (ASMFC) Summer Flounder, Scup, and Black Sea Bass Advisory Panel.
The meeting will be held on Wednesday, June 28, 2017, from 10 a.m. until 4:30 p.m.
Christopher M. Moore, Ph.D., Executive Director, Mid-Atlantic Fishery Management Council; telephone: (302) 526–5255.
The Council's Summer Flounder, Scup, and Black Sea Bass AP will meet jointly with the ASMFC's Summer Flounder, Scup, and Black Sea Bass AP. The purpose of this meeting is to discuss recent performance of the commercial and recreational fisheries for summer flounder, scup, and black sea bass, and develop annual Fishery Performance Reports for these fisheries. The Council and the ASMFC will consider the Fishery Performance Reports later in 2017 when reviewing previously implemented 2018 fishery specifications (
Although other non-emergency issues not on the agenda may come before this group for discussion, those issues may not be the subject of formal action during this meeting. Actions will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under Section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the Council's intent to take final action to address the emergency.
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aid should be directed to M. Jan Saunders, (302) 526–5251, at least 5 days prior to the meeting date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; selection of an authorized distributor.
NMFS announces the renewal of two prohibited species donation (PSD) permits to SeaShare, authorizing this organization to distribute Pacific salmon and Pacific halibut to economically disadvantaged individuals under the PSD program. Salmon and halibut are caught incidentally during directed fishing for groundfish with trawl gear off Alaska. This action is necessary to comply with provisions of the PSD program and is intended to promote the goals and objectives of the North Pacific Fishery Management Council.
The permits are effective from June 14, 2017 through June 15, 2020.
Electronic copies of the PSD permits for salmon and halibut prepared for this action may be obtained from the Alaska Region Web site at
Megan Mackey, 907–586–7228.
Fishing for groundfish by U.S. vessels in the exclusive economic zone of the Bering Sea and Aleutian Islands management area (BSAI) and Gulf of Alaska (GOA) is managed by NMFS in accordance with the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area (BSAI FMP) and the Fishery Management Plan for Groundfish of the Gulf of Alaska (GOA FMP). These fishery management plans (FMPs) were prepared by the North Pacific Fishery Management Council under the Magnuson-Stevens Fishery Conservation and Management Act, 16 U.S.C. 1801
Retention of incidentally caught prohibited species is prohibited in the groundfish fisheries except for salmon and halibut for the purposes of the PSD program. Amendments 26 and 29 to the BSAI and GOA FMPs, respectively, authorize a salmon donation program and were approved by NMFS on July 10, 1996; a final rule implementing this program was published in the
Section 679.26 authorizes the voluntary distribution of salmon and halibut taken incidentally in the groundfish trawl fisheries off Alaska to economically disadvantaged individuals by tax-exempt organizations through an authorized distributor. The Administrator, Alaska Region, NMFS (Regional Administrator), may select one or more tax-exempt organizations to be authorized distributors, as defined by § 679.2, based on the information submitted by applicants under § 679.26. After review of qualified applicants, NMFS must announce the selection of each authorized distributor in the
Currently, SeaShare, a tax-exempt organization founded to help the seafood industry donate to U.S. hunger relief efforts, is the sole authorized distributor of salmon and halibut taken incidentally in the groundfish trawl fisheries off Alaska. SeaShare's current salmon and halibut PSD permits became effective June 11, 2014, and authorize SeaShare to participate in the PSD program through June 12, 2017 (79 FR 33526, June 11, 2014).
On April 17, 2017, the Regional Administrator received an application from SeaShare to renew its salmon and halibut PSD permits. The Regional Administrator reviewed the application and determined that it is complete and that SeaShare continues to meet the requirements for an authorized distributor under the PSD program. As required by § 679.26(b)(2), the Regional Administrator based his selection on the following criteria:
1.
2.
In 2011, participation in the PSD program expanded beyond the BSAI to include GOA processors and vessels. Table 1 shows the total pounds of headed-and-gutted and steaked salmon and halibut donated to food bank organizations from 2014 through 2016. NMFS does not have information to convert accurately the net weights of salmon and halibut to numbers of salmon and numbers of halibut.
3.
Halibut
Chinook salmon PSC limits are established for the Bering Sea and central and western GOA pollock fisheries that, when attained, result in the closure of pollock fishing. The Chinook salmon PSC limits for the Bering Sea pollock fisheries were originally established by Amendment 91 to the BSAI FMP (75 FR 53026, August 30, 2010) and established for the central and western GOA pollock fisheries by Amendment 93 to the GOA FMP (77 FR 42629, July 20, 2012). In 2016, Amendment 110 to the BSAI FMP was implemented to improve the management of Chinook and chum salmon bycatch in the Bering Sea pollock fishery by creating a comprehensive salmon bycatch avoidance program (81 FR 37534, June 10, 2016). In 2015, Amendment 97 to the GOA FMP established annual Chinook salmon PSC limits for the groundfish trawl fisheries, except for pollock trawl fisheries, in the Western and Central GOA (79 FR 71350, December 2, 2014). While salmon incidental catch amounts tend to vary between years, making it difficult to accurately predict future incidental take amounts, the total, or maximum, amount of annual Chinook salmon incidental catch in the Bering Sea and GOA pollock fisheries is constrained by the PSC limits.
4.
NMFS issues PSD permits to SeaShare for a 3-year period unless the permits are suspended or revoked under § 679.26. The permits may not be transferred; however, they may be renewed following the application procedures in § 679.26.
If the authorized distributor modifies the list of participants in the PSD program or delivery locations, the authorized distributor must submit a modified list of participants or a modified list of delivery locations to the Regional Administrator.
These permits may be suspended, modified, or revoked under 15 CFR part 904 for violation of § 679.26 or other regulations in 50 CFR part 679.
This action is taken under § 679.26.
16 U.S.C. 773
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; issuance of an incidental harassment authorization.
In accordance with the regulations implementing the Marine Mammal Protection Act (MMPA) as amended, notification is hereby given that NMFS has issued an incidental harassment authorization (IHA) to Chevron to incidentally harass, by Level B harassment only, marine mammals during construction activities associated with the Richmond Refinery Long Wharf Maintenance and Efficiency Project (WMEP) in San Francisco Bay, California.
The Authorization is in effect for one year beginning January 1, 2018 through December 31, 2018.
Robert Pauline, Office of Protected Resources, NMFS, (301) 427–8401.
An electronic copy of Chevron's application and supporting documents, as well as a list of the references cited in this document, may be obtained online at:
Sections 101(a)(5)(A) and (D) of the MMPA (16 U.S.C. 1361
An authorization for incidental takings shall be granted if NMFS finds that the taking will have a negligible impact on the species or stock(s), will not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant), and if the permissible methods of taking and requirements pertaining to the mitigation, monitoring and reporting of such takings are set forth.
NMFS has defined “negligible impact” in 50 CFR 216.103 as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.
The MMPA states that the term “take” means to harass, hunt, capture, kill or attempt to harass, hunt, capture, or kill any marine mammal.
Except with respect to certain activities not pertinent here, the MMPA defines “harassment” as: Any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).
On July 21, 2014, NMFS received a request from Chevron for authorization to take marine mammals incidental to pile driving and removal associated with the WMEP in San Francisco Bay, California. The project was delayed due to funding constraints. Chevron submitted a revised version of the request on November 16, 2016, which was deemed adequate and complete on January 12, 2017. Chevron will undertake the WMEP in order to comply with current Marine Oil Terminal Engineering and Maintenance Standards (MOTEMS) requirements and to improve safety and efficiency at the Long Wharf. Construction would start in 2018, and be complete by the fourth quarter of 2022. Therefore, Chevron expects to request additional IHAs in association with this multi-year project. The effective dates for this first IHA would be from January 1, 2018 through December 31, 2018. The use of both vibratory and impact pile driving during pile removal and installation during the four-year construction period is expected to produce underwater sound at levels that have the potential to result in Level B (behavioral) harassment of marine mammals. However, only impact driving will occur during 2018 and will be covered under the issued IHA. Species expected to occur in the area and for which take is authorized include California sea lion (
Chevron's Richmond Refinery Long Wharf (Long Wharf) is the largest marine oil terminal in California. Its operations are regulated primarily by the California State Lands Commission (CSLC) through a State Lands lease, Article 5 of CSLC regulations, and MOTEMS (California Building Code (CBC) Chapter 31F). The Long Wharf has existed in its current location since the early 1900s (Figure 1–1 in Application). The Berth 2 fender system (timber pile and whaler) was designed and installed in 1940. Marine loading arms, gangways, and fender systems at Berths 1, 3 and 4 were installed in 1972. The Berth 4 fender panels were replaced in 2011 and the Berth 1 fender panels were replaced in 2012. The existing configuration of these systems have limitations to accepting more modern, fuel efficient vessels with shorter, parallel mid-body hulls and in some cases do not meet current MOTEMS requirements.
The purpose of the WMEP is to comply with current MOTEMS requirements and to improve safety and efficiency at the Long Wharf. To meet MOTEMS requirements, the fendering system at Berth 2 is being updated and the Berth 4 loading platform will be seismically retrofitted to stiffen the structure and reduce movement of the Long Wharf in the event of a level 1 or 2 earthquake. Safety will be improved by replacing gangways and fire monitors. Efficiency at the Long Wharf will be improved by updating the fender system configuration at Berth 4 to accommodate newer, more fuel efficient vessels and thus reduce idling time for vessels waiting to berth. Further, efficiency will be improved by updating the fender system at Berth 1 to accommodate barges, enabling balanced utilization across Berths 1, 2, and 3.
Project construction will start in 2018 and be completed by the fourth quarter of 2022. Pile driving activities will be timed to occur within the standard NMFS work windows for listed fish species (June 1 through November 30) during those 4 years. The effective date for this initial IHA will be from January 1, 2018 through December 31, 2018. Over the course of the multi-year project, 249 piles of various sizes will be installed via impact and vibratory driving; 161 piles will be removed via vibratory removal; and 209 driving days are planned. During the first year of construction covered under this IHA, 8,24-inch concrete piles will be installed by impact driving over 4 workdays at Berth 2.
The Long Wharf is located in San Francisco Bay (the Bay) just south of the eastern terminus of the Richmond-San Rafael Bridge (RSRB) in Contra Costa County. The wharf is located in the northern portion of the Central Bay, which is generally defined as the area between the RSRB, Golden Gate Bridge, and San Francisco-Oakland Bay Bridge. The South Bay is located south of the San Francisco-Oakland Bay Bridge. San Pablo Bay extends north of the RSRB.
The complete multi-year project will involve modifications at 4 berths (Berths 1, 2, 3, and 4) as shown in Figure 1–1 in the Application. Planned modifications to the Long Wharf include replacing gangways and cranes, adding new mooring hooks and standoff fenders, adding new dolphins and catwalks, and modifying the fire water system at Berths 1, 2, 3 and/or 4, as well as the seismic retrofit to the Berth 4 loading platform. The type and numbers of piles to be installed, as well as those that will be removed, are summarized in Table 1–1 in the Application and an overview of the modifications at Berths 1 to 4 are shown in Figure 1–2 in the Application.
The combined modifications to Berths 1–4 will require the installation of 141 new concrete piles to support new and replacement equipment and their associated structures. The Berth 4 loading platform will add 8, 60-inch diameter steel piles as part of the seismic retrofit.
The project will also add 4 clusters of 13 composite piles each (52 total) as markers and protection of the new batter (driven at an angle) piles on the east side of the Berth 4 retrofit. The project will remove 106 existing timber piles, two existing 18-inch and two existing 24-inch concrete piles. A total of 12 24-inch temporary steel piles will also be installed and removed during the seismic retrofit of Berth 4.
The modifications at each berth are summarized below.
Modifications at Berth 1 include the following:
• Replace gangway to accommodate barges and add a new raised fire monitor.
• Construct a new 24′ x 20′ mooring dolphin and hook to accommodate barges.
• Construct a new 24′ x 25′ breasting dolphin and 13′ x 26′ breasting point with standoff fenders to accommodate barges. The new breasting dolphin will require removal of an existing catwalk and two piles and moving a catwalk to a slightly different location to maintain access to currently existing dolphins. A new catwalk will be installed to provide access to the new breasting dolphin.
• A portion of the existing gangway will be removed. The remaining portion is used for other existing services located on its structure.
Much of this work will be above the water or on the deck of the terminal. The mooring dolphin and hook, breasting dolphin, and new gangway will require installation of 42 new 24-inch square concrete piles using impact driving methods.
Modifications at Berth 2 include the following:
• Install new gangway to replace portable gangway and add a new elevated fire monitor.
• Replace one bollard with a new hook.
• Install four new standoff fenders (to replace timber fender pile system).
• Replace existing auxiliary and hose cranes and vapor recovery crane to accommodate the new standoff fenders.
• Remove the existing timber fender pile system along the length of the Berth (~650 ft.)
• Three (3) existing brace piles (22-inch square concrete jacketed timber piles) would be removed by cutting below the mud line if possible.
These modifications will require the installation of 51 new 24-inch square concrete piles, using impact driving methods, to support the gangway, standoff fenders, hose crane, and auxiliary crane. To keep Berth 2 operational during construction, four temporary fenders will be installed, supported by 36 temporary 14-inch H-piles driven using vibratory methods. It is expected that the H-piles would largely sink under their own weight and would require very little driving. The H-piles and temporary fenders will be removed once the permanent standoff fenders are complete. The auxiliary and hose cranes are being replaced with cranes with longer reach to accommodate the additional distance of the new standoff fenders. The new vapor recovery crane would be mounted on an existing pedestal and not require in-water work.
Modifications at Berth 3 include the following:
• Install new fixed gangway to replace portable gangway and add a new raised fire monitor. The gangway would be supported by four, 24-inch square concrete piles. This would be the only in-water work for modifications at Berth 3.
Modifications at Berth 4 include the following:
• Install two new 36′ x 20′ dolphins with standoff fenders (two per dolphin) and two catwalks.
• Seismically retrofit the Berth 4 loading platform including bolstering and relocation of piping and electrical facilities.
The new fenders would add 44 new 24-inch square concrete piles.
The seismic retrofit would structurally stiffen the Berth 4 Loading Platform under seismic loads. This will require cutting holes in the concrete decking and driving 8, 60-inch diameter hollow steel batter piles, using impact pile driving. To accommodate the new retrofit, an existing sump will be replaced with a new sump and two, 24-inch square concrete piles will be removed or cut to the mudline. The engineering team has determined that to drive the 60-inch batter piles, twelve temporary steel piles, 24 inches in diameter, will be needed to support templates for the angled piles during driving. Two templates are required, each 24 feet by 4 feet and supported by up to six 24-inch steel pipe piles. The templates will be above water. The project would also add 4 clusters of 13 composite piles each (52 total composite piles) as markers and protection of the new batter piles on the east side of the retrofit. See Table 1 for pile summary information.
Note that the issued IHA covers actions occurring during 2018 only. These actions include the installation of 8, 24-inch concrete piles by impact hammer driving over 4 workdays. These piles will replace existing auxiliary and hose cranes and vapor recovery crane at Berth 2. Impact installation will occur utilizing a DelMag D62 22 or similar diesel hammer, producing approximately 165,000 ft lbs maximum energy (may not need full energy) over a duration of approximately 20 minutes per pile.
Mitigation, monitoring, and reporting measures are described in in detail later in the document (
A notice of NMFS's proposal to issue an IHA to Chevron was published in the
Although 35 species of marine mammals can be found off the coast of California, few species venture into San Francisco Bay, and only Pacific harbor seals (
The effects of underwater noise from construction activities for the project have the potential to result in behavioral harassment of marine mammals in the vicinity of the action area. The
The primary impacts to marine mammal habitat are associated with elevated sound levels produced by impact pile driving in the area. However, other potential impacts to the surrounding habitat from physical disturbance are also possible. The project would not result in permanent impacts to habitats used directly by marine mammals, such as haulout sites, but may have potential short-term impacts to food sources and minor impacts to the immediate substrate during installation of piles during the project. These potential effects are discussed in detail in the
This section includes an estimate of the number of incidental takes expected to occur as a result of the specified activities considered pursuant to this IHA, which will inform both NMFS' consideration of whether the number of takes is small and the negligible impact determination.
Harassment is the only type of take expected to result from these activities. Except with respect to certain activities not pertinent here, section 3(18) of the MMPA defines “harassment” as: Any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild (Level A harassment); or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering (Level B harassment).
Authorized takes would be by Level B harassment only, in the form of disruption of behavioral for individual marine mammals resulting from exposure to impact driving. Based on the nature of the activity and the anticipated effectiveness of the mitigation measures (
In order to estimate the potential incidents of take that may occur incidental to the specified activity, we must first estimate the extent of the sound field that may be produced by the activity and then consider the sound field in combination with information about marine mammal density or abundance in the project area. We first provide information on applicable sound thresholds for determining effects to marine mammals before describing the information used in estimating the sound fields, the available marine mammal density or abundance information, and the method of estimating potential incidences of take.
During the installation of piles, the project has the potential to increase airborne noise levels. Airborne pile-driving root means square (RMS) noise levels above the NMFS airborne noise thresholds are not expected to extend to the Castro Rocks haul-out site, which is located 650 meters (m) north of Long Wharf. In addition, the Castro Rocks haul out is subject to high levels of background noise from the Richmond Bridge, ongoing vessel activity at the Long Wharf, ferry traffic, and other general boat traffic. Any pinnipeds that surface in the area over which the airborne noise thresholds may be exceeded would have already been exposed to underwater noise levels above the applicable thresholds and thus would not result in an additional incidental take. Airborne noise is not considered further.
This formula does not account for loss due to scattering and absorption, which is assumed to be zero here. The degree to which underwater sound propagates away from a sound source is dependent on a variety of factors, most notably the water bathymetry and presence or absence of reflective or absorptive conditions including in-water structures and sediments. Spherical spreading occurs in a perfectly unobstructed (free-field) environment not limited by depth or water surface, resulting in a 6 dB reduction in sound level for each doubling of distance from the source (20*log(range)). Cylindrical spreading occurs in an environment in which sound propagation is bounded by the water surface and sea bottom, resulting in a reduction of 3 dB in sound level for each doubling of distance from the source (10*log(range)). As is common practice in coastal waters, here we assume practical spreading loss (4.5 dB reduction in sound level for each doubling of distance) here. Practical spreading is a compromise that is often used under conditions where water increases with depth as the receiver moves away from the shoreline, resulting in an expected propagation environment that would lie between spherical and cylindrical spreading loss conditions.
Level A Zone—Chevron's Level A harassment zone was calculated by utilizing the methods presented in Appendix D of NMFS' Guidance and the accompanying User Spreadsheet. The Guidance provides updated PTS onset thresholds using the cumulative SEL (SEL
The User Spreadsheet accounts for weighting functions using Weighting Factor Adjustments (WFAs), and NMFS used the recommended values for impact driving therein (2 kilohertz (kHz)). Pile driving durations were estimated based on similar project experience. NMFS' new acoustic thresholds use dual metrics of SELcum and peak sound level (PK) for impulsive sounds (
Utilizing the User Spreadsheet, NMFS applied the updated PTS onset thresholds for impulsive PK and SELcum in the new acoustic guidance to determine distance to the isopleths for PTS onset for impact pile driving. In determining the cumulative sound exposure levels, the Guidance considers the duration of the activity, the sound exposure level produced by the source during a 24-hr period, and the generalized hearing range of the receiving species. In the case of the duel metric acoustic thresholds for impulsive sound, the larger of the two isopleths for calculating PTS onset is used. Results in Table 4 display the Level A injury zones for the various hearing groups.
The zone of influence (ZOI) refers to the area(s) in which SPLs equal or exceed NMFS' current Level B harassment thresholds (160 dB for impulse sound). Calculated radial distances to the 160 dB threshold assume a field free of obstruction. Assuming a source level of 171 dB RMS, installation of the 24-inch concrete piles is expected to produce underwater sound exceeding the Level B 160 dB RMS threshold over a distance of 54 meters (177 feet) (Table 5).
Castro Rocks is the largest harbor seal haul out site in the northern part of San Francisco Bay and is the second largest pupping site in the Bay (Green
Tidal stage is a major controlling factor of haul out usage at Castro Rocks with more seals present during low tides than high tide periods (Green
Relatively few California sea lions are expected to be present in the project area during periods of pile driving, as there are no haul-outs utilized by this species in the vicinity. However, monitoring for the RSRB did observe small numbers of this species in the north and central portions of the Bay during working hours. During monitoring that occurred over a period of May 1998 to February 2002, California sea lions were sighted at least 90 times in the northern portion of the Central Bay and at least 57 times near the San Francisco-Oakland Bay Bridge in the Central Bay. During monitoring for the San Francisco-Oakland Bay Bridge Project in the Central Bay, California sea lions were observed on 69 occasions in the vicinity of the bridge over a 14-year period from 2000–2014 (Caltrans 2015b). The limited data regarding these observations do not allow a quantitative assessment of potential take. Given the limited driving time, low number of sea lions that are likely to be found in the northern part of the Bay, and small size of the level B zone, NMFS is authorizing a total of two incidents of take for California sea lions.
A small but growing population of harbor porpoises utilizes San Francisco Bay. Harbor porpoises are typically spotted in the vicinity of Angel Island and the Golden Gate Bridge (6 and 12 km southwest respectively) (Keener 2011), but may utilize other areas in the Central Bay in low numbers, including the project area. The density and frequency of this usage throughout the Bay is unknown. For this IHA, NMFS is not authorizing take of any harbor porpoise since the exclusion zone will be conservatively set at 55 m, which is larger than the Level B zone isopleth of 54 m, and take can be avoided.
The only whale species that enters San Francisco bay with any regularity is the gray whale. Gray whales occasionally enter the Bay during their northward migration period, and are most often sighted in the Bay between February and May. Most venture only about 2 to 3 km past the Golden Gate Bridge, but gray whales have occasionally been sighted as far north as San Pablo Bay. Impact pile driving is not expected to occur during this time, however, and gray whales are not likely to be present at other times of year. Furthermore, the exclusion zone of 55 m for this species is larger than the Level B zone isopleth of 54 m. As such, NMFS is not authorizing any gray whale take.
Table 6 shows estimated Level B take for authorized species.
Under section 101(a)(5)(D) of the MMPA, NMFS shall prescribe the permissible methods of taking by harassment pursuant to such activity, and other means of effecting the least practicable impact on such species or stock and its habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of such species or stock for subsistence uses.
To ensure that the “least practicable impact” will be achieved, NMFS evaluates mitigation measures in consideration of the following factors in relation to one another:
• The manner in which, and the degree to which, the successful implementation of the measure(s) is expected to reduce impacts to marine mammals, marine mammal species or stocks, their habitat; and
• their availability for subsistence uses (latter where relevant); the proven or likely efficacy of the measures; and the practicability of the measures for applicant implementation.
The following measures would apply to Chevron's mitigation through the exclusion zone and zone of influence (ZOI):
NMFS will require a 15 m exclusion zone for harbor seals and California sea lions. In order to prevent any take of the cetacean species, a 55 m exclusion zone will be required for harbor porpoises and gray whales, which exceeds the Level B harassment isopleth. A shutdown will occur prior to a marine mammal entering the shutdown zones. Activity will cease until the observer is confident that the animal is clear of the shutdown zone. The animal will be considered clear if:
• It has been observed leaving the shutdown zone; or
• It has not been seen in the shutdown zone for 30 minutes for cetaceans and 15 minutes for pinnipeds.
In order to document observed incidents of harassment, monitors will record all marine mammals observed within the ZOI. Due to the relatively small ZOI and to the monitoring locations chosen by Chevron we expect that two monitors will be able to observe the entire ZOI.
The shutdown zone and ZOI shall be monitored throughout the time required to install a pile. If a harbor seal or California sea lion is observed entering the ZOI, a Level B exposure shall be recorded and behaviors documented. That pile segment shall be completed without cessation, unless the animal approaches the shutdown zone. Pile installation shall be halted immediately before the animal enters the Level A zone.
If any marine mammal species other than those for which take is authorized, or if a species for which authorization has been granted but the number of authorized takes has been met enters or approaches the ZOI, all activities shall be shut down until the animal is observed leaving the ZOI or it has not been observed in the ZOI for 30 minutes for cetaceans and 15 minutes for pinnipeds.
If a marine mammal is present within a shutdown zone, ramping up shall be delayed until the animal(s) leaves the relevant shutdown zone. Activity shall begin only after the MMO has determined, through sighting, that the animal(s) has moved outside the relevant shutdown zone or it has not been observed in the shutdown zone for 30 minutes for cetaceans and 15 minutes for pinnipeds.
If an authorized species is present in the Level B harassment zone, ramping up shall begin and a Level B take shall be documented. Ramping up shall occur when these species are in the Level B harassment zone whether they entered the Level B zone from the Level A zone, or from outside the project area.
Based on our evaluation of the applicant's measures, as well as other measures considered by NMFS, we have determined that the required mitigation measures provide the means effecting the least practicable impact on the affected species or stocks and their habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance.
In order to issue an IHA for an activity, Section 101(a)(5)(D) of the MMPA states that NMFS must set forth, requirements pertaining to the monitoring and reporting of such taking. The MMPA implementing regulations at 50 CFR 216.104 (a)(13) indicate that requests for authorizations must include the suggested means of accomplishing the necessary monitoring and reporting that will result in increased knowledge of the species and of the level of taking or impacts on populations of marine mammals that are expected to be present in the action area. Effective reporting is critical both to compliance as well as ensuring that the most value is obtained from the required monitoring.
Monitoring and reporting requirements prescribed by NMFS should contribute to improved understanding of one or more of the following:
• Occurrence of marine mammal species or stocks in the action area (
• Nature, scope, or context of likely marine mammal exposure to potential stressors/impacts (individual or cumulative, acute or chronic), through better understanding of: (1) Action or environment (
• Individual marine mammal responses (behavioral or physiological) to acoustic stressors (acute, chronic, or cumulative), other stressors, or cumulative impacts from multiple stressors;
• How anticipated responses to stressors impact either: (1) Long-term fitness and survival of individual marine mammals; or (2) populations, species, or stocks;
• Effects on marine mammal habitat (
• Mitigation and monitoring effectiveness.
Chevron will collect sighting data and will record behavioral responses to construction activities for marine mammal species observed in the project location during the period of activity. Monitoring will be conducted by qualified marine mammal observers (MMO), who are trained biologists, with the following minimum qualifications:
• Independent observers (
• At least one observer must have prior experience working as an observer;
• Other observers may substitute education (undergraduate degree in biological science or related field) or training for experience;
• Ability to conduct field observations and collect data according to assigned protocols;
• Experience or training in the field identification of marine mammals, including the identification of behaviors;
• Sufficient training, orientation, or experience with the construction operation to provide for personal safety during observations;
• Writing skills sufficient to prepare a report of observations including but not limited to the number and species of marine mammals observed; dates and
• Ability to communicate orally, by radio or in person, with project personnel to provide real-time information on marine mammals observed in the area as necessary; and
• NMFS will require submission and approval of observer CVs.
Chevron will monitor the exclusion zones and Level B harassment zone before, during, and after pile driving, with at least two observers located at the best practicable vantage points. Based on our requirements, the Marine Mammal Monitoring Plan would implement the following procedures for pile driving:
• During observation periods, observers will continuously scan the area for marine mammals using binoculars and the naked eye;
• Monitoring shall begin 30 minutes prior to impact pile driving;
• Observers will conduct observations, meet training requirements, fill out data forms, and report findings in accordance with this IHA;
• If the exclusion zone is obscured by fog or poor lighting conditions, pile driving will not be initiated until the exclusion zone is clearly visible. Should such conditions arise while impact driving is underway, the activity would be halted;
• Observers will be in continuous contact with the construction personnel via two-way radio. A cellular phone will be used for back-up communications and for safety purposes;
• Observers will implement mitigation measures including monitoring of the shutdown and monitoring zones, clearing of the zones, and shutdown procedures; and
• At the end of the pile-driving day, post-construction monitoring will be conducted for 30 minutes beyond the cessation of pile driving.
Sound Source Verification (SSV) testing of impact driving will be conducted under this IHA. Little data exist for source levels associated with installation of 24-in square concrete piles (including data on single strike sound exposure level metrics). Chevron will conduct in-situ measurements during installation of four out of eight piles. The SSV will be conducted by an acoustical firm with prior experience conducting SSV tests. NMFS must approve the acoustic monitoring plan. Final results will be sent to NMFS. Findings will be used to establish Level A and Level B isopleths during impact driving of 24-in square concrete piles for future IHA's associated with this project.
We require that observers use approved data forms. Among other pieces of information, chevron will record detailed information about any implementation of shutdowns, including the distance of animals to the pile being driven, a description of specific actions that ensued, and resulting behavior of the animal, if any. In addition, Chevron will attempt to distinguish between the number of individual animals taken and the number of incidents of take, when possible. We require that, at a minimum, that the following information be recorded on sighting forms:
• Date and time that permitted construction activity begins or ends;
• Weather parameters (
• Species, numbers, and, if possible, sex and age class of observed marine mammals;
• Construction activities occurring during each sighting;
• Marine mammal behavior patterns observed, including bearing and direction of travel;
• Specific focus should be paid to behavioral reactions just prior to, or during, soft-start and shutdown procedures;
• Location of marine mammal, distance from observer to the marine mammal, and distance from pile driving activities to marine mammals;
• Record of whether an observation required the implementation of mitigation measures, including shutdown procedures and the duration of each shutdown; and
• Other human activity in the area. Record the hull numbers of fishing vessels if possible.
Chevron shall submit a draft report to NMFS within 90 days of the completion of marine mammal monitoring, or 60 days prior to the issuance of any subsequent IHA for this project (if required), whichever comes first. The annual report would detail the monitoring protocol, summarize the data recorded during monitoring, and estimate the number of marine mammals that may have been harassed. If no comments are received from NMFS within 30 days, the draft final report will become final. If comments are received, a final report must be submitted up to 30 days after receipt of comments. Reports shall contain the following information:
• Summaries of monitoring effort (
• Analyses of the effects of various factors influencing detectability of marine mammals (
• Species composition, occurrence, and distribution of marine mammal sightings, including date, numbers, age/size/gender categories (if determinable), and group sizes.
In the unanticipated event that the specified activity clearly causes the take of a marine mammal in a manner prohibited by the IHA (if issued), such as an injury (Level A harassment), serious injury or mortality (
• Time, date, and location (latitude/longitude) of the incident;
• Name and type of vessel involved (if applicable);
• Vessel's speed during and leading up to the incident (if applicable);
• Description of the incident;
• Status of all sound source used in the 24 hours preceding the incident;
• Water depth;
• Environmental conditions (
• Description of all marine mammal observations in the 24 hours preceding the incident;
• Species identification or description of the animal(s) involved;
• Fate of the animal(s); and
• Photographs or video footage of the animal(s) (if equipment is available).
Activities would not resume until NMFS is able to review the circumstances of the prohibited take. NMFS would work with Chevron to determine necessary actions to minimize the likelihood of further prohibited take and ensure MMPA compliance.
Chevron would not be able to resume their activities until notified by NMFS via letter, email, or telephone.
In the event that Chevron discovers an injured or dead marine mammal, and the lead MMO determines that the cause of the injury or death is unknown and the death is relatively recent (
In the event that Chevron discovers an injured or dead marine mammal, and the lead MMO determines that the injury or death is not associated with or related to the activities authorized in the IHA (
NMFS has defined negligible impact 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 (50 CFR 216.103). A negligible impact finding is based on the lack of likely adverse effects on annual rates of recruitment or survival (
To avoid repetition, this introductory discussion of our analyses applies to all the species listed in Table 7 given that the anticipated effects of Chevron's construction activities involving impact pile driving on marine mammals are expected to be relatively similar in nature. There is no information about the nature or severity of the impacts, or the size, status, or structure of any species or stock that would lead to a different analysis for this activity, or else species-specific factors would be identified and analyzed.
Impact pile driving activities associated with the project, as outlined previously, have the potential to disturb or displace marine mammals. Specifically, the specified activities may result in take, in the form of Level B harassment (behavioral disturbance), from underwater sounds generated from pile driving. Potential takes could occur if individuals of these species are present in the ensonified zone when in-water construction is under way.
No marine mammal stocks for which incidental take authorization are listed as threatened or endangered under the ESA or determined to be strategic or depleted under the MMPA. No injuries or mortalities are anticipated to occur as a result of Chevron's impact pile driving activities. The relatively low marine mammal density and small shutdown zones make injury takes of marine mammals unlikely. In addition, the Level A exclusion zones would be thoroughly monitored before the impact pile driving occurs and driving activities would be would be postponed if a marine mammal is sighted entering the exclusion zones. The likelihood that marine mammals will be detected by trained observers is high under the environmental conditions described for the project. The employment of the soft-start mitigation measure would also allow marine mammal in or near the ZOI or exclusion zone to move away from the impact driving sound source. Therefore, the mitigation and monitoring measures are expected to eliminate the potential for injury and reduce the amount and intensity of behavioral harassment. Furthermore, the pile driving activities analyzed here are similar to, or less impactful than, numerous construction activities conducted in other similar locations which have taken place with no reported injuries or mortality to marine mammals, and no known long-term adverse consequences from behavioral harassment.
The takes that are anticipated and authorized are expected to be limited to short-term Level B harassment (behavioral) as only eight piles will be driven over 4 days with each pile requiring approximately 20 minutes of driving time. Marine mammals present near the action area and taken by Level B harassment would most likely show overt brief disturbance (
The project is not expected to have significant adverse effects on affected marine mammals' habitat. While EFH for several species does exist in the project area, the activities would not permanently modify existing marine mammal habitat. The activities may cause fish to leave the area temporarily. This could impact marine mammals' foraging opportunities in a limited portion of the foraging range; but, because of the short duration of the activities and the relatively small area of affected habitat, the impacts to marine mammal habitat are not expected to cause significant or long-term negative consequences.
In summary, this negligible impact analysis is founded on the following factors: (1) The possibility of non-auditory injury, serious injury, or mortality may reasonably be considered discountable; (2) the anticipated incidents of Level B harassment consist of, at worst, temporary modifications in behavior; (3) the short duration of in-water construction activities (4 days, 160 minutes total driving time); (4) limited spatial impacts to marine mammal habitat; and (5) the presumed efficacy of the mitigation measures in reducing the effects of the specified activity to the level of least practicable impact. In combination, we believe that these factors, as well as the available body of evidence from other similar activities, demonstrate that the potential effects of the specified activity will have only short-term effects on individuals.
Based on the analysis contained herein of the likely effects of the specified activity on marine mammals and their habitat, and taking into consideration the implementation of the monitoring and mitigation measures, NMFS finds that the total marine mammal take from the activity will have a negligible impact on all affected marine mammal species or stocks.
As noted above, only small numbers of incidental take may be authorized under Section 101(a)(5)(D) of the MMPA for specified activities other than military readiness activities. The MMPA does not define small numbers and so, in practice, NMFS compares the number of individuals taken to the most appropriate estimation of the relevant species or stock size in our determination of whether an authorization is limited to small numbers of marine mammals.
The numbers of animals authorized to be taken would be considered small relative to the relevant stocks or populations (<0.01 percent for both species as shown in Table 7) even if each estimated taking occurred to a new individual. However, the likelihood that each take would occur to a new individual is extremely low. Further, these takes are likely to occur only within some small portion of the overall regional stock.
Based on the analysis contained herein of the activity (including the mitigation and monitoring measures) and the anticipated take of marine mammals, NMFS finds that small numbers of marine mammals will be taken relative to the population size of the affected species or stocks.
There are no relevant subsistence uses of the affected marine mammal stocks or species implicated by this action. Therefore, NMFS has determined that the total taking of affected species or stocks would not have an unmitigable adverse impact on the availability of such species or stocks for taking for subsistence purposes.
Issuance of an MMPA authorization requires compliance with the ESA. No incidental take of ESA-listed species is authorized or expected to result from this activity. Therefore, NMFS has determined that consultation under section 7 of the ESA is not required for this action.
Issuance of an MMPA authorization requires compliance with NEPA. NMFS has established categorical exclusion (CE) status under NEPA for this action. As such, we have determined the issuance of the IHA is consistent with categories of activities identified in CE B4 of the Companion Manual for NAO 216–6A and we have not identified any extraordinary circumstances listed in Chapter 4 of the Companion Manual for NAO 216–6A that would preclude this categorical exclusion. NMFS has prepared a CE memorandum for the record.
As a result of these determinations, NMFS has issued an IHA to Chevron for the harassment of small numbers of harbor seals and California sea lions incidental to the Richmond Refinery Long Wharf Maintenance and Efficiency Project in San Francisco Bay, California effective for one year beginning January 1, 2018, provided the previously mentioned mitigation, monitoring and reporting requirements are incorporated.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of an Outreach meeting of the North Pacific Fishery Management Council and St. Paul Residents.
The North Pacific Fishery Management Council (Council) will meet June 26 through June 27, 2017.
Several Council members and Council staff will be meeting with community members and organizations on Monday, June 26 and Tuesday, June 27, 2017.
Meetings will be held in the Community Center on St. Paul Island, AK.
Steve MacLean, Council staff; telephone: (907) 271–2809.
Public outreach meetings with St. Paul community members and organizations will be held. Issues for discussion will include the local halibut fishery and halibut bycatch, the Bering Sea Crab fishery, conservation of Northern Fur Seals, and other pertinent fishery management issues. All meetings are open to the public. The Agenda is subject to change, and the latest version will be posted at
Although other non-emergency issues not on the agenda may come before this group for discussion, those issues may not be the subject of formal action during these meetings. Actions will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under Section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the Council's intent to take final action to address the emergency.
These meetings are physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Shannon Gleason at (907) 271–2809 at least 7 working days prior to the meeting date.
Department of Defense.
Renewal of Federal Advisory Committee.
The Department of Defense (DoD) is publishing this notice to announce that it is renewing the charter for the Board of Visitors, Marine Corps University (“the Board”).
Jim Freeman, Advisory Committee Management Officer for the Department of Defense, 703–692–5952.
This committee's charter is being renewed in accordance with the Federal Advisory Committee Act (FACA) of 1972 (5 U.S.C., Appendix, as amended) and 41 CFR 102–3.50(d). The charter and contact information for the Board's Designated Federal Officer (DFO) can be obtained at
The Board provides the Secretary of Defense and the Deputy Secretary of Defense with independent advice and recommendations on matters pertaining to the Marine Corps University. The Board shall be composed of at least 7 and not more than 11 members who must be eminent authorities in the fields of education, defense, management, economics, leadership, academia, national military strategy, or international affairs. Members who are not full-time or permanent part-time Federal officers or employees are appointed as experts or consultants pursuant to 5 U.S.C. 3109 to serve as special government employee members. Members who are full-time or permanent part-time Federal officers or employees are appointed pursuant to 41 CFR 102–3.130(a) to serve as regular government employee members. Each member is appointed to provide advice on behalf of the Government on the basis of their best judgment without representing any particular point of view and in a manner that is free from conflict of interest. Except for reimbursement of official Board-related travel and per diem, members serve without compensation. The DoD, as necessary and consistent with the Board's mission and DoD policies and procedures, may establish subcommittees, task forces, or working groups to support the Board, and all subcommittees must operate under the provisions of FACA and the Government in the Sunshine Act. Subcommittees will not work independently of the Board and must report all recommendations and advice solely to the Board for full deliberation and discussion. Subcommittees, task forces, or working groups have no authority to make decisions and recommendations, verbally or in writing, on behalf of the Board. No subcommittee or any of its members can update or report, verbally or in writing, directly to the DoD or any Federal officers or employees. The Board's DFO, pursuant to DoD policy, must be a full-time or permanent part-time DoD employee, and must be in attendance for the duration of each and every Board/subcommittee meeting. The public or interested organizations may submit written statements to the Board membership about the Board's mission and functions. Such statements may be submitted at any time or in response to the stated agenda of planned Board meetings. All written statements must be submitted to the Board's DFO who will ensure the written statements are provided to the membership for their consideration.
Federal Student Aid (FSA), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995, ED is proposing an extension of an existing information collection.
Interested persons are invited to submit comments on or before August 14, 2017.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Jo-Anne Cheatom, 202–377–3730.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection
Environmental Protection Agency (EPA).
Notice.
This notice announces EPA's approval of the State of Minnesota's request to revise its National Primary Drinking Water Regulations Implementation EPA-authorized program to allow electronic reporting.
EPA's approval is effective July 14, 2017 for the State of Minnesota's National Primary Drinking Water Regulations Implementation program, if no timely request for a public hearing is received and accepted by the Agency.
Karen Seeh, U.S. Environmental Protection Agency, Office of Environmental Information, Mail Stop 2823T, 1200 Pennsylvania Avenue NW., Washington, DC 20460, (202) 566–1175,
On October 13, 2005, the final Cross-Media Electronic Reporting Rule (CROMERR) was published in the
On March 27, 2017, the Minnesota Department of Health (MDH) submitted an amended application titled “Compliance Monitoring Data Portal” for revision to its EPA-approved drinking water program under title 40 CFR to allow new electronic reporting. EPA reviewed MDH's request to revise its EPA-authorized program and, based on this review, EPA determined that the application met the standards for approval of authorized program revision set out in 40 CFR part 3, subpart D. In accordance with 40 CFR 3.1000(d), this notice of EPA's decision to approve Minnesota's request to revise its Part 142—National Primary Drinking Water Regulations Implementation program to allow electronic reporting under 40 CFR part 141 is being published in the
MDH was notified of EPA's determination to approve its application with respect to the authorized program listed above.
Also, in today's notice, EPA is informing interested persons that they may request a public hearing on EPA's action to approve the State of Minnesota's request to revise its authorized public water system program under 40 CFR part 142, in accordance with 40 CFR 3.1000(f). Requests for a hearing must be submitted to EPA within 30 days of publication of today's
In the event a hearing is requested and granted, EPA will provide notice of the hearing in the
Environmental Protection Agency (EPA).
Notice.
EPA is announcing the availability of a final test guideline, Laboratory Product Performance Testing Methods for Bed Bug Pesticide Products; OCSPP Test Guideline 810.3900. This test guideline is part of a series of test guidelines established by the Office of Chemical Safety and Pollution Prevention (OCSPP) for use in testing pesticides and chemical substances. The test guidelines serve as a compendium of accepted scientific methodologies and protocols that are intended to provide data to inform regulatory decisions. This test guideline provides guidance for conducting a study to determine pesticide product performance against bed bugs, and is used by EPA, the public, and companies that submit data to EPA.
Michael L. Goodis, P.E., Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460–0001; telephone number: (703) 305–7090; email address:
EPA is announcing the availability of a final test guideline, Laboratory Product Performance Testing Methods for Bed Bug Pesticide Products; OCSPP Test Guideline 810.3900.
This test guideline is part of a series of test guidelines established by OCSPP for use in testing pesticides and chemical substances to develop data for submission to the agency under the Federal Food, Drug, and Cosmetic Act (FFDCA) section 408 (21 U.S.C. 346a), the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) (7 U.S.C. 136
The test guidelines provide guidance for conducting the test, and are also used by EPA, the public, and companies that are subject to data submission requirements under TSCA, FIFRA, and/or FFDCA. As guidance documents, the test guidelines are not binding on either EPA or any outside parties, and EPA may depart from the test guidelines where circumstances warrant and without prior notice. At places in this guidance, the agency uses the word “should.” In this guidance, use of “should” with regard to an action means that the action is recommended rather than mandatory. The procedures contained in the test guidelines are recommended for generating the data that are the subject of the test guideline, but EPA recognizes that departures may be appropriate in specific situations. You may propose alternatives to the recommendations described in the test guidelines, and the agency will assess them for appropriateness on a case-by-case basis.
This action is directed to the public in general. Although this action may be of particular interest to those persons who are or may be required to conduct testing of pesticides and chemical substances for submission to EPA under TSCA, FIFRA, and/or FFDCA, the agency has not attempted to describe all the specific entities that may be affected by this action.
1.
2.
EPA is announcing the availability of a final test guideline under Series 810.3900 entitled “Laboratory Product Performance Testing Methods for Bed Bug Pesticide Products” and identified as OCSPP Test Guideline 810.3900. This guideline provides recommendations for the design and execution of laboratory studies to evaluate the performance of pesticide products intended to repel, attract, and/or kill the common bed bug (
EPA-registered pesticide products are an important part of pest management programs for the control of bed bugs. The agency developed the product performance guideline to standardize the approaches to testing methods to ensure the quality and validity of the efficacy data for these types of products. The agency attended entomology and bed bug specific conferences, consulted with leading bed bug academics, and consulted peer-reviewed scientific journal articles on the issues associated with the guideline to draft the original document. Further, EPA sought advice and recommendations from the FIFRA Scientific Advisory Panel (SAP). The SAP meeting, held on March 6–7, 2012, was announced in the
7 U.S.C. 136
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA), Office of the Science Advisor announces two separate public meetings of the Human Studies Review Board (HSRB) to advise the Agency on the ethical and scientific review of research involving human subjects.
A virtual public meeting will be held on Wednesday, July 26, 2017, from 1:00 p.m. to approximately 5:00 p.m. Eastern Time. A separate, subsequent teleconference meeting is planned for Friday, September 15, 2017, from 2:00 p.m. to approximately 3:30 p.m. Eastern Time for the HSRB to finalize its Final Report of the July 26, 2017 meeting and review other possible topics.
Both of these meetings will be conducted entirely by telephone and on the Internet using Adobe Connect. For detailed access information visit the HSRB Web site:
Any member of the public who wishes to receive further information should contact the HSRB Designated Federal Official (DFO), Jim Downing on telephone number (202) 564–2468; fax number: (202) 564–2070; email address:
The HSRB encourages the public's input. You may participate in these meetings by following the instructions in this section.
1. Oral comments. Requests to present oral comments during either meeting will be accepted up to Noon Eastern Time on Wednesday, July 19, 2017, for the July 26, 2017 meeting and up to Noon Eastern Time on Friday, September 8, 2017 for the September 15, 2017 teleconference. To the extent that time permits, interested persons who have not pre-registered may be permitted by the HSRB Chair to present oral comments during either meeting at the designated time on the agenda. Oral comments before the HSRB are generally limited to five minutes per individual or organization. If additional time is available, further public comments may be possible.
2. Written comments. Submit your written comments prior to the meetings. For the Board to have the best opportunity to review and consider your comments as it deliberates, you should submit your comments by Noon Eastern Time on Wednesday, July 19 2016, for the July 26, 2017 meeting, and by noon Eastern Time on Friday, September 8, 2017 for the September 15, 2017 teleconference. If you submit comments after these dates, those comments will be provided to the HSRB members, but you should recognize that the HSRB members may not have adequate time to consider your comments prior to their discussion. You should submit your comments to the DFO, Jim Downing listed under
The HSRB is a Federal advisory committee operating in accordance with the Federal Advisory Committee Act 5 U.S.C. App.2 section 9. The HSRB provides advice, information, and recommendations on issues related to scientific and ethical aspects of third-party human subjects research that are submitted to the Office of Pesticide Programs (OPP) to be used for regulatory purposes.
Topic for discussion. On Wednesday, July 26, 2017, EPA's Human Studies Review Board will consider one topic: Field evaluation of three topically applied insect repellent products containing IR3535 against mosquitoes in Florida.
The Agenda and meeting materials for this topic will be available in advance of the meeting at
On September 15, 2017, the Human Studies Review Board will review and finalize their draft Final Report from the July 26, 2017 meeting, in addition to other topics that may come before the Board. The HSRB may also discuss planning for future HSRB meetings. The agenda and the draft report will be available prior to the teleconference at
Meeting minutes and final reports. Minutes of these meetings, summarizing the matters discussed and recommendations made by the HSRB, will be released within 90 calendar days of the meeting. These minutes will be available at
Notice is given that a complaint has been filed with the Federal Maritime Commission (Commission) by Tarik Afif Chaouch, hereinafter “Complainant,” against Demetrios Air Freight Co., Demetrios International Shipping Co., Inc., and Troy Container Line LTD, hereinafter “Respondents.” Complainant states it hired the Respondents to ship two cars to Algiers, Algeria.
Complainant alleges that due to an error the Respondents made on the bill
Complainant seeks reparations in the amount of $21,086.70, and other relief. The full text of the complaint can be found in the Commission's Electronic Reading Room at
This proceeding has been assigned to the Office of Administrative Law Judges. The initial decision of the presiding officer in this proceeding shall be issued by June 8, 2018, and the final decision of the Commission shall be issued by December 21, 2018.
The Centers for Disease Control and Prevention (CDC) has submitted the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The notice for the proposed information collection is published to obtain comments from the public and affected agencies.
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address any of the following: (a) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) Evaluate the accuracy of the agencies estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (c) Enhance the quality, utility, and clarity of the information to be collected; (d) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
To request additional information on the proposed project or to obtain a copy of the information collection plan and instruments, call (404) 639–7570 or send an email to
The National Electronic Health Records Survey (NEHRS) (OMB Control No. 0920–1015, Expires 04/30/2017)— Reinstatement with Change—National Center for Health Statistics (NCHS), Centers for Disease Control and Prevention (CDC).
Section 306 of the Public Health Service (PHS) Act (42 U.S.C. 242k), as amended, authorizes that the Secretary of Health and Human Services (DHHS), acting through NCHS, shall collect statistics on “utilization of health care” in the United States. NEHRS was originally designed as a mail supplement to the National Ambulatory Medical Care Survey (NAMCS). Questions in NEHRS have been asked in NAMCS starting in 2001.
The purpose of NEHRS is to measure progress toward goals for electronic health records (EHRs) adoption. NEHRS target universe consists of all non-Federal office-based physicians (excluding those in the specialties of anesthesiology, radiology, and pathology) who are engaged in direct patient care.
NEHRS is the principal source of data on national and state-level EHR adoption in the United States. In 2008 and 2009, the sample size was 2,000 physicians annually. Starting in 2010, the annual sample size was increased five-fold, from 2,000 physicians to 10,302 physicians. The increased sample size allows for more reliable national estimates as well as state-level estimates on EHR adoption without having to be combined with NAMCS. For these reasons, in 2012 NEHRS became an independent survey, not as a supplement under NAMCS.
NEHRS collects information on characteristics of physician practices, the capabilities of EHRs in those practices, and intent to apply for meaningful use incentive payments. These data, together with trend data, may be used to monitor the adoption of EHR as well as accessing factors associated with EHR adoption. In 2017, a set of follow-up questionnaires will be incorporated into the survey that focuses on content related to physician attitudes on using EHRs.
Users of NEHRS data include, but are not limited to, Congressional offices, Federal agencies, state and local governments, schools of public health, colleges and universities, private industry, nonprofit foundations, professional associations, clinicians, researchers, administrators, and health planners. There is no cost to the respondents other than their time. The total estimated annualized burden hours are 6,295.
Centers for Medicare & Medicaid Services, HHS.
Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (the PRA), federal agencies are required to publish notice in the
Comments must be received by August 14, 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:
1.
2.
To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, you may make your request using one of following:
1. Access CMS' Web site address at
2. Email your request, including your address, phone number, OMB number, and CMS document identifier, to
3. Call the Reports Clearance Office at (410) 786–1326.
William Parham at (410) 786–4669.
This notice sets out a summary of the use and burden associated with the following information collections. More detailed information can be found in each collection's supporting statement and associated materials (see
Under the PRA (44 U.S.C. 3501–3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA requires federal agencies to publish a 60-day notice in the
1.
This information collection request is related to the statutorily required virtual group election process proposed in the CY 2018 Quality Payment Program proposed rule. A virtual group is a combination of Tax Identification Numbers (TINs), which would include at least two separate TINs associated with a solo practitioner TIN and National Provider Identifier (TIN/NPI) or group with 10 or fewer MIPS eligible clinicians and another solo practitioner (TIN/NPI) or group with 10 or fewer MIPS eligible clinicians.
Section 1848(q)(5)(I) of the Act requires that CMS establish and have in place a process to allow an individual MIPS eligible clinician or group consisting of not more than 10 MIPS eligible clinicians to elect, with respect to a performance period for a year to be in a virtual group with at least one other such individual MIPS eligible clinician or group. The Act also provides for the use of voluntary virtual groups for certain assessment purposes, including the election of practices to be a virtual group and the requirements for the election process.
Section 1848(q)(5)(I)(i) of the Act also provides that MIPS eligible clinicians electing to be a virtual group must: (1) Have their performance assessed for the quality and cost performance categories in a manner that applies the combined performance of all the MIPS eligible clinicians in the virtual group to each MIPS eligible clinician in the virtual group for the applicable performance period; and (2) be scored for the quality and cost performance categories based on such assessment.
CMS will use the data collected from virtual group representatives to determine eligibility to participate in a virtual group, approve the formation of that virtual group, based on determination of each TIN size, and assign a virtual group identifier to the virtual group. The data collected will
The purpose of MIPPA funding is to enhance state efforts to provide assistance to Medicare beneficiaries through statewide and local coalition building focused on intensified outreach activities to beneficiaries likely to be eligible for the Low Income Subsidy program (LIS) or the Medicare Savings Program (MSP), and to assist those beneficiaries in applying for benefits. ACL will provide MIPPA program funding to State Health Insurance Assistance Programs (SHIPs), Area Agencies on Aging (AAAs), and Aging and Disability Resource Center programs (ADRCs) to inform Medicare beneficiaries about available Medicare program benefits. ACL seeks plans from states that will describe how the MIPPA program funds will be used for beneficiary outreach, education, and one-on-one application assistance over the next year.
ACL requests that states submit a one (1) year state plan with specific project strategies to expand, extend, or enhance their one-on-one assistance, education, and group outreach efforts to Medicare beneficiaries on Medicare and assistance programs for those with limited incomes. States should describe how the SHIP, AAA, and ADRC efforts will be coordinated to provide outreach to beneficiaries with limited incomes statewide. States that are eligible to apply are asked to review previous MIPPA plans and update these plans to reflect successes achieved to date and direct their efforts to enhance and expand their MIPPA outreach activities. State agencies may prepare either one statewide plan or separate plans for each eligible State agency.
These awards will be made in the form of grants to State Agencies for each MIPPA Priority Area:
Priority Area 1—Grants to State Agencies (the State Unit on Aging or the State Department of Insurance) that administer the State Health Insurance Assistance Program (SHIP) to provide enhanced outreach to eligible Medicare beneficiaries regarding their benefits, enhanced outreach and application assistance to individuals who may be eligible for the Medicare Low Income Subsidy (LIS) or the Medicare Savings Program (MSP), and for the purposes of conducting outreach activities aimed at preventing disease and promoting wellness.
Priority Area 2—Grants to State Units on Aging for Area Agencies on Aging to provide enhanced outreach to eligible Medicare beneficiaries regarding their Medicare benefits, enhanced outreach and one-on-one application assistance to individuals who may be eligible for the LIS or the MSP, and for the purposes of conducting outreach activities aimed at preventing disease and promoting wellness.
Priority Area 3—Grants to State Units on Aging that administer the Aging and Disability Resource Centers to provide outreach to individuals regarding Medicare Part D benefits, benefits available under the LIS and MSP, and for the purposes of conducting outreach activities aimed at preventing disease and promoting wellness.
ACL intends to make available, under this program announcement, grant awards for the three MIPPA priority areas. Funding will be distributed through a formula as identified in statute. The amounts allocated are based upon factors defined in statute and will be distributed to each priority area based on the formula. ACL will fund total project periods of up to one (1) year contingent upon availability of federal funds.
Priority Area 1—SHIP: $11.5 million in FY 2017 for state agencies that administer the SHIP Program.
Priority Area 2—AAA: $7.9 million in FY 2017 for State Units on Aging for Area Agencies on Aging and for Native American programs. Funding for Native American Programs ($270,000) is deducted from Priority 2 and is being allocated through a separate process.
Priority Area 3—ADRC: $6 million in FY 2017 for State Agencies that received an ACL, Centers for Medicare and Medicaid Services (CMS), Veterans Health Administration (VHA) Aging and Disability Resource Center (ADRC)/No Wrong Door System (NWD) grant to support the development of their ADRC/NWD Systems.
1. Eligible Applicants for MIPPA Priority Areas 1, 2 and 3: Awards made under this announcement, by statute, will be made only to agencies of State Governments.
Eligibility may change if future funding is available.
2. Cost Sharing or Matching is not required.
3. DUNS Number.
All grant applicants must obtain and keep current a D–U–N–S number from
4. Intergovernmental Review
Executive Order 12372, Intergovernmental Review of Federal Programs, is not applicable to these grant applications.
Application kits/Program Instructions are available at
To receive consideration, applications must be submitted by 11:59 p.m. Eastern time on August 14, 2017, through
Direct inquiries regarding programmatic issues to U.S. Department of Health and Human Services, Administration for Community Living, Office of Healthcare Information and Counseling, Washington, DC 20201, attention: Isaac C. Long or by calling 202–795–7315 or by email
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is announcing an opportunity for public comment on the proposed collection of certain information by the Agency. Under the Paperwork Reduction Act of 1995 (PRA), Federal Agencies are required to publish notice in the
Submit either electronic or written comments on the collection of information by August 14, 2017.
You may submit comments as follows. Late, untimely filed comments will not be considered. Electronic comments must be submitted on or before August 14, 2017. The
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:
•
• 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
JonnaLynn Capezzuto, FDA PRA Staff, Office of Operations, Food and Drug Administration, Three White Flint North, 10A63, 11601 Landsdown St., North Bethesda, MD 20852, 301–796–3794.
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. “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 provide a 60-day notice in the
With respect to the following collection of information, FDA invites comments on these topics: (1) Whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (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, when appropriate, and other forms of information technology.
We have regulatory oversight for color additives used in foods, drugs, cosmetics, and medical devices. Section 721(a) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379e(a)) provides that a color additive shall be deemed to be unsafe unless it meets the requirements of a listing regulation, including any requirement for batch certification, and is used in accordance with the regulation. We list color additives that have been shown to be safe for their intended uses in Title 21 of the Code of Federal Regulations (CFR). We require batch certification for all color additives listed in 21 CFR part 74 and for all color additives provisionally listed in 21 CFR part 82. Color additives listed in 21 CFR part 73 are exempted from certification.
The requirements for color additive certification are described in 21 CFR part 80. In the certification procedure, a representative sample of a new batch of color additive, accompanied by a “request for certification” that provides information about the batch, must be submitted to FDA's Office of Cosmetics and Colors. FDA personnel perform chemical and other analyses of the representative sample and, providing the sample satisfies all certification requirements, issue a certification lot number for the batch. We charge a fee for certification based on the batch weight and require manufacturers to keep records of the batch pending and after certification.
Under § 80.21, a request for certification must include: Name of color additive, manufacturer's batch number and weight in pounds, name and address of manufacturer, storage conditions, statement of use(s), certification fee, and signature of person requesting certification. Under § 80.22, a request for certification must include a sample of the batch of color additive that is the subject of the request. The sample must be labeled to show: Name of color additive, manufacturer's batch number and quantity, and name and address of person requesting certification. Under § 80.39, the person to whom a certificate is issued must keep complete records showing the disposal of all of the color additive covered by the certificate. Such records are to be made available upon request to any accredited representative of FDA until at least 2 years after disposal of all of the color additive.
The purpose for collecting this information is to help us assure that only safe color additives will be used in foods, drugs, cosmetics, and medical devices sold in the United States. The required information is unique to the batch of color additive that is the subject of a request for certification. The manufacturer's batch number is used for temporarily identifying a batch of color additive until FDA issues a certification lot number and for identifying a certified batch during inspections. The manufacturer's batch number also aids in tracing the disposal of a certified batch or a batch that has been denied certification for noncompliance with the color additive regulations. The manufacturer's batch weight is used for assessing the certification fee. The batch weight also is used to account for the disposal of a batch of certified or certification-denied color additive. The batch weight can be used in a recall to determine whether all unused color additive in the batch has been recalled. The manufacturer's name and address and the name and address of the person requesting certification are used to contact the person responsible should a question arise concerning compliance with the color additive regulations. Information on storage conditions pending certification is used to evaluate whether a batch of certified color additive is inadvertently or intentionally altered in a manner that would make the sample submitted for certification analysis unrepresentative of the batch. We check storage information during inspections. Information on intended uses for a batch of color additive is used to assure that a batch of certified color additive will be used in accordance with the requirements of its listing regulation. The statement of the fee on a certification request is used for accounting purposes so that a person requesting certification can be notified promptly of any discrepancies.
We estimate the burden of this collection of information as follows:
We base our estimate on our review of the certification requests received over the past 3 fiscal years (FY). The annual burden estimate for this information collection is 3,536 hours. The estimated reporting burden for this information collection is 1,655 hours and the estimated recordkeeping burden for this information collection is 1,881 hours. From FY 2014 to FY 2016, we processed an average of 7,524 responses (requests for certification of batches of color additives) per year. There were 38 different respondents, corresponding to an average of approximately 198 responses from each respondent per year. Using information from industry personnel, we estimate that an average of 0.22 hour per response is required for reporting (preparing certification requests and accompanying samples) and an average of 0.25 hour per response is required for recordkeeping.
Our Web-based Color Certification information system allows submitters to request color certification online, follow their submissions through the process, and obtain information on account status. The system sends back the certification results electronically, allowing submitters to sell their certified color before receiving hardcopy certificates. Any delays in the system result only from shipment of color additive samples to FDA's Office of Cosmetics and Colors for analysis.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) has determined the regulatory review period for HETLIOZ and is publishing this notice of that determination as required by law. FDA has made the determination because of the submission of an application to the Director of the U.S. Patent and Trademark Office (USPTO), Department of Commerce, for the extension of a patent which claims that human drug product.
Anyone with knowledge that any of the dates as published (in the
You may submit comments as follows: Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before August 14, 2017. The
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:
•
• 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 drug products, the testing phase begins when the exemption to permit the clinical investigations of the drug becomes effective and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the human drug product and continues until FDA grants permission to market the drug product. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of 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 drug product will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(1)(B).
FDA has approved for marketing the human drug product HETLIOZ (tasimelteon). HETLIOZ is indicated for treatment of Non-24-Hour Sleep-Wake Disorder. Subsequent to this approval, the USPTO received a patent term restoration application for HETLIOZ (U.S. Patent No. 5,856,529) from Vanda Pharmaceuticals, Inc., and the USPTO requested FDA's assistance in determining this patent's eligibility for patent term restoration. In a letter dated October 20, 2015, FDA advised the USPTO that this human drug product had undergone a regulatory review period and that the approval of HETLIOZ 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 HETLIOZ is 5,802 days. Of this time, 5,556 days occurred during the testing phase of the regulatory review period, while 246 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the USPTO applies several statutory limitations in its calculations of the actual period for patent extension. In its application for patent extension, this applicant seeks 5 years 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.
The Food and Drug Administration (FDA or Agency) is announcing an opportunity for public comment on the proposed collection of certain information by the Agency. Under the Paperwork Reduction Act of 1995 (PRA), Federal Agencies are required to publish notice in the
Submit either electronic or written comments on the collection of information by August 14, 2017.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before August 14, 2017. The
Submit electronic comments in the following way:
•
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.” We will review this copy, including the claimed confidential information, in our 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
JonnaLynn Capezzuto, Office of Operations, Food and Drug Administration, Three White Flint North, 10A63, 11601 Landsdown St., North Bethesda, MD 20852, 301–796–3794.
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. “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 provide a 60-day notice in the
With respect to the following collection of information, FDA invites comments on these topics: (1) Whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (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, when appropriate, and other forms of information technology.
The Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (the Bioterrorism Act) added section 414 of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 350c), which requires that persons who manufacture, process, pack, hold, receive, distribute, transport, or import food in the United States establish and maintain records identifying the immediate previous sources and immediate subsequent recipients of food. Sections 1.326 through 1.363 of our regulations (21 CFR 1.326 through 1.363) set forth the requirements for recordkeeping and records access. The requirement to establish and maintain records improves our ability to respond to, and further contain, threats of serious adverse health consequences or death to humans or animals from accidental or deliberate contamination of food.
Information maintained under these regulations will help us identify and locate quickly contaminated or potentially contaminated food and inform the appropriate individuals and food facilities of specific terrorist threats. Our regulations require that records for non-transporters include the name and full contact information of sources, recipients, and transporters; an adequate description of the food, including the quantity and packaging; and the receipt and shipping dates (§§ 1.337 and 1.345). Required records for transporters include the names of consignor and consignee, points of origin and destination, date of shipment, number of packages, description of freight, route of movement and name of each carrier participating in the transportation, and transfer points through which shipment moved (§ 1.352). Existing records may be used if they contain all of the required information and are retained for the required time period.
Section 101 of the FDA Food Safety Modernization Act (FSMA) (Pub. L. 111–353) amended section 414(a) of the FD&C Act and expanded our access to records. Specifically, FSMA expanded our access to records beyond records relating to the specific suspect article of food to records relating to any other article of food that we reasonably believe is likely to be affected in a similar manner. In addition, we can access records if we believe that there is a reasonable probability that the use of or exposure to an article of food, and any other article of food that we reasonably believe is likely to be affected in a similar manner, will cause serious adverse health consequences or death to humans or animals. To gain access to these records, our officer or employee must present appropriate credentials and a written notice, at reasonable times and within reasonable limits and in a reasonable manner.
On February 23, 2012, we issued an interim final rule in the
FDA estimates the burden of this collection of information as follows:
This estimate is based on our estimate of the number of facilities affected by the final rule entitled “Establishment and Maintenance of Records Under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002,” published in the
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is requesting that any industry organization interested in participating in the selection of a nonvoting industry representative to serve on the Device Good Manufacturing Practice Advisory Committee (DGMPAC) in the Center for Devices and Radiological Health notify FDA in writing. FDA is also requesting nominations for a nonvoting industry representative to serve on DGMPAC. A nominee may either be self-nominated or nominated by an organization to serve as a nonvoting industry representative. Nominations will be accepted for the upcoming vacancy effective with this notice.
Any industry organizations interested in participating in the selection of an appropriate nonvoting member to represent industry interests must send a letter stating that interest to FDA by July 14, 2017 (see sections I and III of this document for further details). Concurrently, nomination materials for prospective candidates should be sent to FDA by July 14, 2017.
All statements of interest from industry organizations interested in participating in the selection process of nonvoting industry representative nominations should be sent to Margaret Ames (see
Margaret Ames, Office of Management, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 5264, Silver Spring, MD 20993, 301–796–5960, FAX: 301–847–8505, email:
Section 520 of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 360j), as amended, provides that DGMPAC shall be composed of two representatives of interests of the device manufacturing industry. The Agency is requesting nominations for a nonvoting industry representative on DGMPAC. FDA is publishing a separate document announcing the request for notification for voting members on DGMPAC.
DGMPAC reviews proposed regulations issuance regarding good manufacturing practices governing the methods used in, and the facilities and controls used for, the manufacture, packaging, storage, installation, and servicing of devices, and makes recommendations regarding the feasibility and reasonableness of those proposed regulations. The committee also reviews and makes recommendations on proposed guidelines developed to assist the medical device industry in meeting the good manufacturing practice requirements, and provides advice with regard to any petition submitted by a manufacturer for an exemption or variance from good manufacturing practice regulations.
Persons nominated for DGMPAC should possess appropriate qualifications to understand and contribute to the committee's work as described in the committee's function.
Any industry organization interested in participating in the selection of an appropriate nonvoting member to represent industry interests should send a letter stating that interest to the FDA contact (see
Individuals may self-nominate and/or an organization may nominate one or more individuals to serve as a nonvoting industry representative. Contact information, a current curriculum vitae, and the name of the committee of interest should be sent to the FDA Advisory Committee Membership Nomination Portal (see
FDA seeks to include the views of women and men, members of all racial and ethnic groups, and individuals with and without disabilities on its advisory committees and, therefore, encourages nominations of appropriately qualified candidates from these groups. Specifically, in this document, nominations for nonvoting representatives of industry interests are encouraged from the device manufacturing industry.
This notice is issued under the Federal Advisory Committee Act (5 U.S.C. app. 2) and 21 CFR part 14, relating to advisory committees.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is requesting nominations for voting members to serve on the National Mammography Quality Assurance Advisory Committee in the Center for Devices and Radiological Health. FDA seeks to include the views of women and men, members of all racial and ethnic groups, and individuals with and without disabilities on its advisory committees and, therefore, encourages nominations of appropriately qualified candidates from these groups.
Nominations received on or before August 14, 2017, will be given first consideration for membership on the National Mammography Quality Assurance Advisory Committee. Nominations received after August 14, 2017, will be considered for nomination to the committee as later vacancies occur.
All nominations for membership should be submitted electronically by logging into the FDA Advisory Nomination Portal:
Regarding all nomination questions for membership: Sara Anderson, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. G616, Silver Spring, MD 20993, 301–796–7047, email:
FDA is requesting nominations for voting members on the National Mammography Quality Assurance Advisory Committee.
The National Mammography Quality Assurance Advisory Committee advises the Commissioner of Food and Drugs (the Commissioner) or designee on: (1) Developing appropriate quality standards and regulations for mammography facilities; (2) developing appropriate standards and regulations for bodies accrediting mammography facilities under this program; (3) developing regulations with respect to sanctions; (4) developing procedures for monitoring compliance with standards; (5) establishing a mechanism to investigate consumer complaints; (6) reporting new developments concerning breast imaging that should be considered in the oversight of mammography facilities; (7) determining whether there exists a shortage of mammography facilities in rural and health professional shortage areas and determining the effects of personnel on access to the services of such facilities in such areas; (8) determining whether there will exist a sufficient number of medical physicists after October 1, 1999; and (9) determining the costs and benefits of compliance with these requirements.
The committee consists of a core of 15 members, including the Chair. Members and the Chair are selected by the Commissioner or designee from among physicians, practitioners, and other health professionals, whose clinical practice, research specialization, or professional expertise includes a significant focus on mammography. Almost all non-Federal members of this committee serve as Special Government Employees. Members will be invited to serve for terms of up to 4 years.
Any interested person may nominate one or more qualified persons for membership on the advisory committee. Self-nominations are also accepted. Nominations must include a current, complete resume or curriculum vitae for each nominee, including current business address and/or home address, telephone number, and email address if available. Nominations must specify the advisory committee for which the nominee is recommended. Nominations must also acknowledge that the nominee is aware of the nomination unless self-nominated. FDA will ask potential candidates to provide detailed information concerning such matters related to financial holdings, employment, and research grants and/or contracts to permit evaluation of possible sources of conflict of interest.
This notice is issued under the Federal Advisory Committee Act (5 U.S.C. app. 2) and 21 CFR part 14, relating to advisory committees.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) has determined the regulatory review period for NEUROPACE RNS SYSTEM 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 medical device.
Anyone with knowledge that any of the dates as published (see the
You may submit comments as follows. Please note that late, untimely filed comments will not be
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:
•
• 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 medical devices, the testing phase begins with a clinical investigation of the device and runs until the approval phase begins. The approval phase starts with the initial submission of an application to market the device and continues until permission to market the device is granted. Although only a portion of a regulatory review period may count toward the actual amount of extension that the Director of USPTO may award (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 medical device will include all of the testing phase and approval phase as specified in 35 U.S.C. 156(g)(3)(B).
FDA has approved for marketing the medical device NEUROPACE RNS SYSTEM. NEUROPACE RNS SYSTEM is indicated as an adjunctive therapy in reducing the frequency of seizures in individuals 18 years of age or older with partial onset seizures who have undergone diagnostic testing that localized no more than 2 epileptogenic foci, are refractory to two or more antiepileptic medications, and currently have frequent and disabling seizures (motor partial seizures, complex partial seizures, and/or secondarily generalized seizures). Subsequent to this approval, the USPTO received patent term restoration applications for NEUROPACE RNS SYSTEM (U.S. Patent Nos. 6,016,449; 6,360,122; and 6,810,285) from NeuroPace, Inc., and the USPTO requested FDA's assistance in determining the patents' eligibility for patent term restoration. In a letter dated November 2, 2015, FDA advised the USPTO that this medical device had undergone a regulatory review period and that the approval of NEUROPACE RNS SYSTEM 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 NEUROPACE RNS SYSTEM is 3,796 days. Of this time, 2,694 days occurred during the testing phase of the regulatory review period, while 1102 days occurred during the approval phase. These periods of time were derived from the following dates:
1.
2.
3.
This determination of the regulatory review period establishes the maximum potential length of a patent extension. However, the USPTO applies several statutory limitations in its calculations of the actual period for patent extension. In its applications for patent extension, the applicant seeks 5 years 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.
The Food and Drug Administration (FDA) is announcing an opportunity for public comment on the proposed collection of certain information by the Agency. Under the Paperwork Reduction Act of 1995 (the PRA), Federal Agencies are required to publish notice in the
Submit either electronic or written comments on the collection of information by August 14, 2017.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. Electronic comments must be submitted on or before August 14, 2017. The
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:
•
• 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
Jonnalynn Capezzuto, Office of Operations, Food and Drug Administration, 8455 Colesville Rd., COLE–14526, Silver Spring, MD 20993–0002, 301–796–3794,
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. “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 provide a 60-day notice in the
With respect to the following collection of information, FDA invites comments on these topics: (1) Whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (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, when appropriate, and other forms of information technology.
Section 1701(a)(4) of the Public Health Service Act (42 U.S.C. 300u(a)(4)) authorizes the FDA to conduct research relating to health information. Section 1003(d)(2)(C) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 393(b)(2)(c)) authorizes FDA to conduct research relating to drugs and other FDA regulated products in carrying out the provisions of the FD&C Act.
FDA regulates prescription drug promotion directed to healthcare professionals (HCPs) and consumers (section 502(n) of the FD&C Act (21 U.S.C. 352(n)). In the course of promoting their products, pharmaceutical sponsors (sponsors) may present a variety of information including the indication, details about the administration of the product, efficacy information, and clinical trial data. In an effort to present often complicated information concisely, sponsors may not include relevant information in the body of the text or visual display of the claim. Additionally, sponsors may not always present limitations to the claim in the main body of the text or display. In these cases, sponsors typically include disclosures of information somewhere in the promotional piece.
There is little or no published research on disclosures in prescription drug promotion, either directed to consumers or to HCPs. Previous research on the effectiveness of disclosures has been conducted primarily in the dietary supplement arena (Refs. 1–4). Thus, the proposed research will examine the effectiveness of clear and conspicuous disclosures in prescription drug promotion directed to both of these populations. The purpose of our study is to determine how useful disclosures regarding prescription drug information are when presented prominently and adjacent to claims.
To address this research question, we have designed a set of studies that cover both consumers and HCPs, as well as three different types of claims: Scope of treatment, ease of use, and statistical significance (see table 1). The scope of treatment claim can be thought of as a disease-awareness claim; that is, a broader discussion of a medical condition that may include disease characteristics beyond what the promoted drug has been shown to treat, followed by a disclosure of this nature. The ease of use claim is a simple claim of easy drug administration that omits specific important details that contribute to a more difficult drug administration than suggested. Finally, the statistical significance claim will be
Each participant will view three different mock promotional print pieces for different prescription drug products. For each of the three promotional pieces, they will be randomized to see an ad with a weak disclosure, a strong disclosure, or no disclosure. We will manipulate the strength of disclosure by including additional concluding information (strong) or not (weak) in the disclosure statement. In all cases, disclosures will be adjacent to claims and written in font clear enough to be detected.
Technically speaking, these designs can be viewed as 3 within-subjects 1 × 3 designs with level of disclosure as a between subject factor. In other words, we will analyze the results of the scope of treatment disclosures independently of the ease of use disclosures and statistical significance disclosures, even though each participant will see one of each. The claims and disclosures are different enough that practice effects should be moderated, but we will counterbalance the order of ads shown to minimize potential bias.
Because promotional pieces intended for HCPs and consumers have different levels of complexity and medical depth, and because the amount of knowledge expected between the two groups differs, the studies will use separate mock promotional pieces and ask slightly different comprehension questions of each group. We will maintain as much similarity across groups as possible for descriptive comparisons.
Both consumers and HCPs will be recruited from Internet panels. Because promotional pieces will represent three different medical conditions, we will obtain a general population sample of consumers and a HCP sample of primary care physicians. Eligible participants who agree to participate will view mock promotional pieces and answer questions about their comprehension of the main messages in the promotion, perceptions of the product, attention to disclosures and intention to ask a HCP about it (consumers) or to prescribe the product (HCPs). Questionnaires are available upon request.
Pretests will be conducted before conducting the main studies in order to ensure the mock promotional pieces are realistic and that the questionnaire flows well and questions are reasonable. We will supplement the findings of the pretests with two small eye-tracking studies. Researchers use eye-tracking technology to capture viewing behavior that is independent of self-report. The technology measures where and for how long participants glanced at or examined particular parts of a display. It has been used in studies of consumer print advertising (Refs. 6–8) and Internet promotion (Refs. 9–10). To our knowledge, there is little or no published research using eye-tracking technology with HCPs.
We will use these small eye-tracking studies to determine what parts of each promotional piece consumers and HCPs actually viewed. Specifically, we will be able to determine whether they looked at the disclosure statement at all, and we can obtain a rough idea of how long they looked at it. This data will complement the self-reported items on the questionnaire. Moreover, we will use this data, as well as the pretest data, to improve the main studies. For this part of the study, 20 consumers and 20 HCPs will view the promotional pieces.
FDA estimates the burden of this collection of information as follows:
Food and Drug Administration, HHS.
Notice of public workshop; request for comments.
The Food and Drug Administration (FDA, the Agency, or we) is announcing a public workshop entitled “Data and Methods for Evaluating the Impact of Opioid Formulations with Properties Designed to Deter Abuse in the Postmarket Setting: A Scientific Discussion of Present and Future Capabilities.” The purpose of the public workshop is to host a scientific discussion with expert panel members and interested stakeholders about the challenges in using the currently available data and methods for assessing the impact of opioid formulations with properties designed to deter abuse on opioid misuse, abuse, addiction, overdose, and death in the postmarket setting. The goal of this meeting is to discuss ways to improve the analysis and interpretation of existing data, as well as to discuss opportunities and challenges for collecting and/or linking additional data to improve national surveillance and research capabilities in this area. To assist in the workshop discussion, FDA is making available an issues paper that provides a brief overview of the currently available data resources used for evaluating the impact of opioid formulations with properties designed to deter abuse; summarizes some of the key methodological issues in this area; and outlines the issues that we would like to discuss during the upcoming workshop, including enhancing existing resources, applying new methodology, and creating new resources.
The public workshop will be held on July 10 and 11, 2017, from 8:30 a.m. to 5 p.m. Submit either electronic or written comments on this public workshop by September 11, 2017. Late, untimely filed comments will not be considered. Electronic comments must be submitted on or before September 11, 2017. The
The public workshop will be held at the Sheraton Silver Spring Hotel, 8777 Georgia Ave., Silver Spring, MD 20910. The hotel's phone number is 301–589–0800.
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:
•
• 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
Cynthia Kornegay, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 22, Rm. 2456, Silver Spring, MD, 20993–0002, 301–796–0187,
In this 2-day public workshop, FDA plans to host a scientific discussion with expert panel members and interested stakeholders about the challenges in using the currently available data and methods for assessing the impact of opioid formulations with properties designed to deter abuse on opioid misuse, abuse, addiction, overdose, and death in the postmarket setting. The goal of this meeting is to discuss ways to improve the analysis and interpretation of existing data, as well as to discuss opportunities and challenges for collecting and/or linking additional data to improve national surveillance and research capabilities in this area.
FDA has developed an issues paper entitled “Data and Methods for Evaluating the Impact of Opioid Formulations with Properties Designed to Deter Abuse in the Postmarket Setting.” This issues paper (1) provides a brief overview of the currently available data resources used for evaluating opioid formulations with properties designed to deter abuse; (2) summarizes some of the key methodological issues in this area; and (3) outlines the issues we would like to discuss during the upcoming workshop, including modifying existing resources, applying new methodology, and creating new resources. The issues paper can be found on the Internet at
Registration is free and based on space availability, with priority given to early registrants. Persons interested in attending this public workshop must register by June 26, 2017. Early registration is recommended because seating is limited; therefore, FDA may limit the number of participants from each organization. Registrants will receive confirmation when they have been accepted. If time and space permit, onsite registration on the day of the public meeting/public workshop will be provided beginning at 7:30 a.m.
If you need special accommodations due to a disability, please contact Cherice Holloway at
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
U.S. Customs and Border Protection, Department of Homeland Security.
General notice.
This document announces that U.S. Customs and Border Protection has changed the date on which the semi-annual examination for an individual broker's license will be held in October 2017.
The customs broker's license examination scheduled for October 2017 will be held on Wednesday, October 25, 2017.
Neila Venne, Broker Management Branch, Office of Trade, (843) 579–6407,
Section 641 of the Tariff Act of 1930, as amended (19 U.S.C. 1641), provides that a person (an individual, corporation, association, or partnership) must hold a valid customs broker's license and permit in order to transact customs business on behalf of others, sets forth standards for the issuance of broker's licenses and permits, and provides for the taking of disciplinary action against brokers that have engaged in specified types of infractions. This section also provides that an examination may be conducted to assess an applicant's qualifications for a license.
The regulations issued under the authority of section 641 are set forth in Title 19 of the Code of Federal Regulations, part 111 (19 CFR 111). Part 111 sets forth the regulations regarding the licensing of, and granting of permits to, persons desiring to transact customs business as customs brokers. These regulations also include the qualifications required of applicants and the procedures for applying for licenses and permits. Section 111.11 of the CBP Regulations (19 CFR 111.11) sets forth the basic requirements for a broker's license and in paragraph (a)(4) of that section provides that an applicant for an individual broker's license must attain a passing grade (75 percent or higher) on a written examination.
Section 111.13 of the CBP Regulations (19 CFR 111.13) sets forth the requirements and procedures for the written examination for an individual broker's license and states that written customs broker license examinations will be given on the first Monday in April and October unless the regularly scheduled examination date conflicts with a national holiday, religious observance, or other foreseeable event.
To avoid concerns related to the commencement of the federal government's 2018 fiscal year, CBP has decided to change the regularly scheduled date of the examination. This document announces that CBP has scheduled the October 2017 customs broker's license examination for Wednesday, October 25, 2017.
Privacy Office, Department of Homeland Security.
Notice of modified Privacy Act System of Records.
In accordance with the Privacy Act of 1974, the Department of Homeland Security proposes to modify and reissue a current Department of Homeland Security system of records titled, “Department of Homeland Security/ALL–025 Law Enforcement Authority in Support of the Protection of Property Owned, Occupied, or Secured by the Department of Homeland Security System of Records.” This system of records allows the Department of Homeland Security to collect and maintain records on the results of law enforcement activities in support of the protection of property owned, occupied, or secured by the Department of Homeland Security and its Components, including the Federal Protective Service, and individuals maintaining a presence or access to such property. The Department of Homeland Security is updating this system of records notice to, among other things, (1) modify the category of individuals, (2) modify the category of records, (3) modify two existing routine uses, and (4) add a new routine use. The Department of Homeland Security is also issuing a Notice of Proposed Rulemaking to add a new exemption from certain provisions of the Privacy Act, elsewhere in the
This system of records notice does not apply to the facilities and perimeters secured by the U.S. Secret Service. Records pertaining to perimeters and facilities secured by the U.S. Secret Service, other than those records subject to the Presidential Records Act, are covered under Department of Homeland Security/U.S. Secret Service-004 Protection Information System of Records, 76 FR 66940, October 28, 2011.
This modified system will be included in the Department of Homeland Security's inventory of record systems.
Submit comments on or before July 14, 2017. This modified system will be effective July 14, 2017.
You may submit comments, identified by docket number DHS–2017–0019 by one of the following methods:
•
•
•
For general questions and privacy issues please contact: Jonathan R. Cantor (202) 343–1717, Acting Chief Privacy Officer, Privacy Office, Department of Homeland Security, Washington, DC 20528–0655.
In accordance with the Privacy Act of 1974, 5 U.S.C. 552a, the Department of Homeland Security (DHS) proposes to modify and reissue a current DHS system of records titled, “DHS/ALL–025 Law Enforcement Authority in Support of the Protection of Property Owned, Occupied, or Secured by DHS System of Records.”
The DHS/ALL–025 Law Enforcement Authority in Support of the Protection of Property Owned, Occupied, or Secured by DHS System of Records covers the collection, use, maintenance, and dissemination of records relating to the protection of property owned, occupied, or secured by DHS. DHS is updating this system of records notice to, among other things, (1) expand the category of individuals to include persons involved in any event, and any witnesses to such event, that affects or impacts the safety, security, or protection of the property, facility, or occupant; (2) remove applicants and contractors who have or had access to classified information as a category of individuals and associated categories of records relating to personnel security because that information has existing coverage under DHS/ALL–023 Department of Homeland Security Personnel Security Management System of Records; (3) add Closed-circuit television (CCTV) recording and audio recordings as categories of records; (4) add Alien File Numbers, also known as an individual's A-Number as a category of records; (5) modify routine use “E” to be in conformity with Office of Management and Budget Memorandum M–17–12; (6) modify routine use “F” to specifically include Federal Protective Service guards and (7) add a new routine use “M,” which will permit DHS to share information with individuals involved in incidents occurring on federal facilities, their insurance companies, and their attorneys for the purpose of adjudicating a claim. This notice also includes non-substantive changes to simplify the formatting and text of the previously published notice. In addition to the existing Privacy Act exemptions that continue to apply to this system of records, DHS is issuing a Notice of Proposed Rulemaking to add a new exemption from certain provisions of the Privacy Act. This system will be included in DHS's inventory of record systems.
The Privacy Act embodies fair information practice principles in a statutory framework governing the means by which Federal Government agencies collect, maintain, use, and disseminate individuals' records. The Privacy Act applies to information that is maintained in a “system of records.” A “system of records” is a group of any records under the control of an agency from which information is retrieved by the name of an individual or by some identifying number, symbol, or other identifying particular assigned to the individual. In the Privacy Act, an individual is defined to encompass U.S. citizens and lawful permanent residents. Additionally, and similarly, the Judicial Redress Act (JRA) provides a statutory right to covered persons to make requests for access and amendment to covered records, as defined by the JRA, along with judicial review for denials of such requests. In addition, the JRA prohibits disclosures of covered records, except as otherwise permitted by the Privacy Act.
Below is the description of the DHS/ALL–025 Law Enforcement Authorities in Support of the Protection of Property Owned, Occupied, or Secured by DHS Security Systems of Records.
In accordance with 5 U.S.C. 552a(r), DHS has provided a report of this system of records to the Office of Management and Budget and to Congress.
Department of Homeland Security (DHS)/ALL–025 Law Enforcement Authorities in Support of the Protection of Property Owned, Occupied, or Secured by the Department of Homeland Security System of Records.
Unclassified, sensitive, for official use only, and classified.
Records are maintained at several DHS Headquarters locations and Component offices, in both Washington, DC and field locations.
For Headquarters components of DHS: Chief, Physical Security Division (202) 447–5010, Office of Security, Department of Homeland Security, Washington, DC 20528. For DHS Components, the System Manager can be found at
40 U.S.C 1315; 44 U.S.C. 3101; and E.O. 9397 as amended by E.O. 13478; E.O. 10450; E.O. 12968, 5 CFR 731; 5 CFR 732; 5 CFR 736; 32 CFR 147; and DCID 6/4.
The purpose of this system is to maintain and record the results of law enforcement activities in support of the protection of property owned, occupied, or secured by DHS and its components, including the Federal Protective Service (FPS), and individuals maintaining a presence or access to such property. It will also be used to pursue criminal prosecution or civil penalty action against individuals or entities suspected of offenses that may have been committed against property owned, occupied, or secured by DHS or persons on the property.
Categories of individuals covered by this system include:
• Individuals or entities involved in, or suspected of being involved in, criminal acts against the buildings, grounds, and property that are owned, occupied, or secured by DHS or against persons who are in or on such buildings, grounds, or property. This category includes property located within or outside of the United States;
• Individuals who provide information that is relevant to the investigation, such as victims and witnesses, and who report such crimes or acts;
• Persons involved in any event, or witnesses an event that affects or impacts the safety, security, or protection of the property, facility, or occupant;
• Current, former, or retired DHS personnel who travel outside the United States while employed by DHS.
Categories of records in the system may include:
• Individual's or entity's name;
• Alias;
• Digital video recordings and CCTV recordings;
• Audio recordings;
• Date of birth, place of birth, and age;
• Social Security number;
• Alien File Number (A-Number);
• Duty/work address and telephone number;
• Race and ethnicity;
• Citizenship;
• Sex;
• Marital status;
• Identifying marks (
• Height and weight;
• Eye and hair color;
• Biometric data (
• Home address, telephone number, and other contact information;
• Driver's license information and citations issued;
• Vehicle information;
• Date, location, nature and details of the incident/offense;
• Alcohol, drugs, or weapons involvement;
• Bias against any particular group;
• Confinement information to include location of correctional facility;
• Gang/cult affiliation, if applicable;
• Release/parole/clemency eligibility dates;
• Foreign travel notices and reports including briefings and debriefings;
• Notices and reports with foreign contacts;
• Reports of investigation;
• Statements of individuals, affidavits, and correspondence;
• Documentation pertaining to criminal activities;
• Investigative surveys;
• Certifications pertaining to qualifications for employment, including but not limited to education, firearms, first aid, and CPR;
• Technical, forensic, polygraph, and other investigative support to criminal investigations to include source control documentation and regional information;
• Data on individuals to include: Victims, witnesses, complainants, offenders, and suspects;
• Records of possible espionage, foreign intelligence service elicitation activities, and terrorist collection efforts directed at the Department or its staff, contractors, or visitors;
• Records of close coordination with the intelligence and law enforcement community.
Records are obtained from sources contacted during investigations; state, tribal, international, and local law enforcement; and federal departments and agencies.
In addition to those disclosures generally permitted under 5 U.S.C. 552a(b) of the Privacy Act, all or a portion of the records or information contained in this system may be disclosed outside DHS as a routine use pursuant to 5 U.S.C. 552a(b)(3) as follows:
A. To the Department of Justice (DOJ), including Offices of the U.S. Attorneys, or other federal agency conducting litigation or in proceedings before any court, adjudicative, or administrative body, when it is relevant or necessary to the litigation and one of the following is a party to the litigation or has an interest in such litigation:
1. DHS or any component thereof;
2. Any employee or former employee of DHS in his/her official capacity;
3. Any employee or former employee of DHS in his/her individual capacity when DOJ or DHS has agreed to represent the employee; or
4. The United States or any agency thereof.
B. To a congressional office from the record of an individual in response to an inquiry from that congressional office made at the request of the individual to whom the record pertains.
C. To the National Archives and Records Administration (NARA) or General Services Administration pursuant to records management inspections being conducted under the authority of 44 U.S.C. 2904 and 2906.
D. To an agency or organization for the purpose of performing audit or oversight operations as authorized by law, but only such information as is necessary and relevant to such audit or oversight function.
E. To appropriate agencies, entities, and persons when:
1. DHS determines that the use of information from this system of records is reasonably necessary and otherwise compatible with the purpose of collection to assist another federal recipient agency or entity in (a) responding to a suspected or confirmed breach or (b) preventing, minimizing, or remedying the risk of harm to individuals, the recipient agency or entity (including its information systems, programs, and operations), the Federal Government, or national security, resulting from a suspected or confirmed breach; or
2. DHS suspects or has confirmed that there has been a breach of this system of records; and (a) DHS has determined that as a result of the suspected or confirmed breach, there is a risk of harm to individuals, harm to DHS (including its information systems, programs, and operations), the Federal Government, or national security; and (b) the disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with DHS's efforts to respond to the suspected or confirmed breach or to prevent, minimize, or remedy such harm.
F. To contractors and their agents, grantees, experts, consultants, FPS Contract Guard companies, and others performing or working on a contract, service, grant, cooperative agreement, or other assignment for DHS, when necessary to accomplish an agency function related to this system of records. Individuals provided information under this routine use are subject to the same Privacy Act requirements and limitations on disclosure as are applicable to DHS officers and employees.
G. To an appropriate federal, state, tribal, local, international, or foreign law enforcement agency or other appropriate authority charged with investigating or prosecuting a violation or enforcing or implementing a law, rule, regulation, or order, when a record, either on its face or in conjunction with other information, indicates a violation or potential violation of law, which includes criminal, civil, or regulatory violations and such disclosure is proper and consistent with the official duties of the person making the disclosure.
H. To an appropriate federal, state, local, tribal, foreign, or international agency or contract provider, if the information is relevant and necessary to a requesting agency's decision concerning the hiring or retention of an individual, or issuance of a security clearance, license, contract, grant, or other benefit, or if the information is relevant and necessary to a DHS decision concerning the hiring or retention of an employee or contractor, the issuance of a security clearance, the reporting of an investigation of an employee or contractor, the letting of a contract, or the issuance of a license, grant, or other benefit, and disclosure is appropriate to the proper performance of the official duties of the person making the request.
I. To a court, magistrate, or administrative tribunal in the course of presenting evidence, including disclosures to opposing counsel or witnesses in the course of civil discovery, litigation, or settlement negotiations or in connection with criminal law proceedings or pursuant to the order of a court of competent jurisdiction.
J. To third parties during the course of a law enforcement investigation to the extent necessary to obtain information pertinent to the investigation, provided disclosure is appropriate to the proper performance of the official duties of the officer making the disclosure.
K. To a federal, state, local agency, or other appropriate entities or individuals, or through established liaison channels to selected foreign governments, in order to provide intelligence, counterintelligence, or other information for the purposes of intelligence, counterintelligence, or antiterrorism activities authorized by United States law, E.O., or other applicable national security directive.
L. To a public or professional licensing organization when such information indicates, either by itself or in combination with other information, a violation or potential violation of professional standards, or reflects on the moral, educational, or professional qualifications of an individual who is licensed or who is seeking to become licensed.
M. To individuals involved in incidents occurring on federal facilities, their insurance companies, and their attorneys for the purpose of adjudicating a claim, such as personal injury, traffic accident, or other damage to property. The release of personal information is limited to that required to adjudicate a claim.
N. To the news media and the public, with the approval of the Chief Privacy Officer in consultation with counsel, when there exists a legitimate public interest in the disclosure of the information, when disclosure is necessary to preserve confidence in the integrity of DHS, or when disclosure is necessary to demonstrate the accountability of DHS's officers, employees, or individuals covered by the system, except to the extent the Chief Privacy Officer determines that release of the specific information in the context of a particular case would constitute a clearly unwarranted invasion of personal privacy.
DHS stores records in this system electronically or on paper in secure facilities in a locked drawer behind a locked door. The records may be stored on magnetic disc, tape, and digital media.
Records may be retrieved by individual name, Social Security number, or other personal identifier listed in “Categories of Records,” when applicable.
Records are pending National Archives and Records Administration approval. DHS has proposed the following retention schedule: Records are maintained in accordance with N1–563–08–4, Item 1. Records are maintained for 20 years after the end of the fiscal year in which the case was closed and are then destroyed. No records will be destroyed until the retention schedule is approved.
DHS safeguards records in this system according to applicable rules and policies, including all applicable DHS automated systems security and access policies. DHS has imposed strict controls to minimize the risk of compromising the information that is being stored. Access to the computer system containing the records in this system is limited to those individuals who have a need to know the information for the performance of their official duties and who have appropriate clearances or permissions.
The Secretary of Homeland Security has exempted this system from the notification, access, and amendment procedures of the Privacy Act, and those of the JRA if applicable, because it is a law enforcement system. However, DHS will consider individual requests to determine whether or not information may be released. Thus, individuals seeking access to and notification of any record contained in this system of records, or seeking to contest its content, may submit a request in writing to the Chief Privacy Officer and Headquarters or component's FOIA Officer, whose contact information can be found at
When seeking records about yourself from this system of records or any other Departmental system of records, your request must conform with the Privacy Act regulations set forth in 6 CFR part 5. You must first verify your identity, meaning that you must provide your full name, current address, and date and place of birth. You must sign your request, and your signature must either be notarized or submitted under 28 U.S.C. 1746, a law that permits statements to be made under penalty of perjury as a substitute for notarization. In addition, you should:
• Explain why you believe the Department would have information on you;
• Identify which component(s) of the Department you believe may have the information about you;
• Specify when you believe the records would have been created; and
• Provide any other information that will help the FOIA staff determine which DHS component agency may have responsive records;
If your request is seeking records pertaining to another living individual, you must, in accordance with 6 CFR 5.21, include a statement from that individual certifying his/her agreement for you to access his/her records.
Without the above information, the component(s) may not be able to conduct an effective search, and your request may be denied due to lack of specificity or lack of compliance with applicable regulations.
For records covered by the Privacy Act or covered JRA records, see “access procedures” above.
See “Record Access procedure.”
The Secretary of Homeland Security, pursuant to 5 U.S.C. 552a(j)(2), has exempted this system from the following provisions of the Privacy Act: 5 U.S.C. 552a(c)(3), (c)(4); (d); (e)(1), (e)(2), (e)(3), (e)(4)(G), (e)(4)(H), (e)(4)(I), (e)(5), (e)(8); (f); (g)(1). Additionally, the Secretary of Homeland Security, pursuant to 5 U.S.C. 552a(k)(1), (k)(2), and (k)(5), has exempted this system from the following provisions of the Privacy Act: (c)(3); (d); (e)(1), (e)(4)(G), (e)(4)(H), (e)(4)(I); (f). When this system receives a record from another system exempted in that source system under 5 U.S.C. 552a(j)(2), DHS will claim the same exemptions for those records that are claimed for the original primary systems of records from which they originated and claims any additional exemptions set forth here.
75 FR 5614; 74 FR 2903.
Bureau of Indian Affairs, Interior.
Notice of availability.
This notice advises the public that the Bureau of Indian Affairs (BIA) as lead agency, with the Confederated Tribes of the Colville Reservation (Tribes) and the United States Environmental Protection Agency (EPA) serving as cooperating agencies, has prepared a Draft Programmatic Environmental Impact Statement (DEIS) for the 2015 Colville Reservation Integrated Resource Management Plan (IRMP). This notice announces that the DEIS is now available for public review.
Any comments on the DEIS must arrive on or before the date 45 days after the EPA publishes a Notice of Availability of the DEIS in the
The DEIS is available for public review online at
You may mail or hand-deliver written comments to Mr. Stanley Speaks, Northwest Regional Director, Bureau of Indian Affairs, 911 Northeast 11th Avenue Portland, Oregon 97232–4169. You may also mail comments to BIA Colville Agency Superintendent Debra Wulff, P.O. Box 111, Nespelem, Washington 99155–0111 or hand deliver to the Superintendent's office at 10 Nez Perce Street, Nespelem, Washington. You can also submit comments by email to:
Ms. Debra Wulff, Superintendent, Bureau of Indian Affairs, Colville Agency, P.O. Box 111, Nespelem, Washington 99155–0111, (509) 634–2316.
The Tribes have prepared an IRMP for the natural and cultural resources of the Colville Reservation. The plan updates the original IRMP that was prepared and implemented in 2000. The IRMP incorporates management goals and objectives for the commercial forest, rangeland and agricultural lands of the Reservation.
The Tribes' forest products industry, livestock grazing, and agriculture have the potential to impact the natural and human environments of the Reservation. The DEIS analyzes the potential impacts associated with these activities. These include impacts to land resources such as geology, minerals, and soils, watershed function, surface and groundwater resources, air quality, biological resources, cultural and paleontological resources, socioeconomic conditions, transportation and forest access roads, land use, public services, noise, aesthetics, recreation, climate change, cumulative effects, and indirect and growth inducing effects.
The DEIS considers five management alternatives developed by the Tribes' IRMP Core Team. The interdisciplinary team developed these management alternatives for consideration and analysis and designated a preferred alternative (Alternative 2) that was approved by the Colville Business Council in June 2014. The team also conducted a community survey in 2014 that asked community members to choose a preferred alternative. All groups were unanimous in selecting Alternative 2 as the preferred alternative. The alternatives are:
A Notice of Intent (NOI) to prepare an EIS was released in the
To obtain a compact disc copy of the DEIS, please provide your name and address in writing or by voicemail to Debra Wulff, Bureau of Indian Affairs, at the address or phone number above in the
This notice is published pursuant to Sec. 1503.1 of the Council of Environmental Quality Regulations (40 CFR parts 1500 through 1508) and Sec. 46.305 of the Department of the Interior Regulations (43 CFR part 46), implementing the procedural requirements of the NEPA of l969, as amended (42 U.S.C. 4371,
National Park Service, Interior.
Notice.
The Field Museum of Natural History, in consultation with the appropriate Indian tribes or Native Hawaiian organizations, has determined that the cultural items listed in this notice meet the definition of sacred objects. Lineal descendants or representatives of any Indian tribe or Native Hawaiian organization not identified in this notice that wish to claim these cultural items should submit a written request to the Field Museum of Natural History. If no additional claimants come forward, transfer of control of the cultural items to the lineal descendants, Indian tribes, or Native Hawaiian organizations stated in this notice may proceed.
Lineal descendants or representatives of any Indian tribe or Native Hawaiian organization not identified in this notice that wish to claim these cultural items should submit a written request with information in support of the claim to the Field Museum of Natural History at the address in this notice by July 14, 2017.
Helen Robbins, Field Museum of Natural History, 1400 South Lake Shore Drive, Chicago, IL 60605, telephone (312) 665–7317, email
Notice is here given in accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), 25 U.S.C. 3005, of the intent to repatriate cultural items under the control of the Field Museum of Natural History, Chicago, IL, that meet the definition of sacred objects under 25 U.S.C. 3001.
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA, 25 U.S.C. 3003(d)(3). The determinations in this notice are the sole responsibility of the museum, institution, or Federal agency that has control of the Native American cultural items. The National Park Service is not responsible for the determinations in this notice.
In August of 1892, two cultural items were removed from the Quinault Indian Reservation in the State of Washington. Museum records indicate that these cultural items are Quinault in origin, and were collected by Reverend Myron Eells on behalf of the Washington World's Fair Commission for display at the World's Columbian Exposition. The two sacred objects are tamahnousing figures, and were accessioned by The Field Museum of Natural History in 1893. One sacred object is a red painted wooden anthropomorphic figure with rattles around its neck (cat. 19789). The figure represents the spirit djilo'tsanomic, who helped heal soul loss and would have been used by a shaman. The second sacred object is a cedar bark figure with attached rattles (cat. 19645). A similar figure is described by Ronald Olson as a “doctor of the setting sun.” According to Hilary Stewart, it would have been used in a Salmon Ceremony. Both figures are spirit helpers that would be used as tamahnousing items by practitioners of the traditional Quinault tamahnousing religion. They are ceremonial objects that are necessary today for the revitalization and present-day practice of Quinault traditional religion.
The Quinault are culturally affiliated with the area from which the sacred objects were removed. This assessment is supported by archival records and reports, museum records, Department of the Interior sources, academic sources, and correspondence with Quinault representatives.
Officials of the Field Museum of Natural History have determined that:
• Pursuant to 25 U.S.C. 3001(3)(C), the two cultural items described above are specific ceremonial objects needed by traditional Native American religious leaders for the practice of traditional Native American religions by their present-day adherents.
• Pursuant to 25 U.S.C. 3001(2), there is a relationship of shared group identity that can be reasonably traced between the sacred objects and the Quinault Indian Nation (previously listed as the Quinault Tribe of the Quinault Reservation, Washington).
Lineal descendants or representatives of any Indian tribe or Native Hawaiian organization not identified in this notice that wish to claim these cultural items should submit a written request with information in support of the claim to Helen Robbins, Field Museum of Natural History, 1400 South Lake Shore Drive, Chicago, IL 60605, telephone (312) 665–7317, email
The Field Museum of Natural History is responsible for notifying the Quinault Indian Nation (previously listed as the Quinault Tribe of the Quinault Reservation, Washington) that this notice has been published.
National Park Service, Interior.
Notice.
The San Bernardino County Sheriff-Coroner has completed an inventory of human remains, in consultation with the appropriate Indian Tribes or Native Hawaiian organizations, and has determined that there is no cultural affiliation between the human remains and any present-day Indian Tribes or Native Hawaiian organizations. Representatives of any Indian Tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains should submit a written request to the San Bernardino County Sheriff-Coroner. If no additional requestors come forward, the human remains may be reinterred.
Representatives of any Indian Tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains should submit a written request with information in support of the request to the San Bernardino County Sheriff-Coroner at the address in this notice by July 14, 2017.
Robert Hunter, Diplomat—ABMDI, Unidentified Persons Coordinator, San Bernardino County
Notice is here given in accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), 25 U.S.C. 3003, of the completion of an inventory of human remains under the control of the San Bernardino County Sheriff-Coroner, San Bernardino, CA. The human remains were removed from an unknown location.
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA, 25 U.S.C. 3003(d)(3). The determinations in this notice are the sole responsibility of the museum, institution, or Federal agency that has control of the Native American human remains. The National Park Service is not responsible for the determinations in this notice.
A detailed assessment of the human remains was made by the San Bernardino County Sheriff-Coroner professional staff in consultation with the California Native American Heritage Commission.
At an unknown date, human remains representing, at minimum, two individuals were removed from an unknown location. On October 4, 1996, the San Bernardino County Sherriff-Coroner's office took custody of two skulls and placed them into curation at the Coroner facility. The human remains were determined to be Native American based on context and an anthropological examination. Between October 1996 and October 2016, numerous attempts were made to determine a most likely decedent with local area Indian Tribes and the California Native American Heritage Commission. No Indian Tribes in California were willing to accept the human remains without clear provenience. No known individuals were identified. No funerary objects were present.
Pursuant to 43 CFR 10.16, the Secretary of the Interior may recommend that culturally unidentifiable human remains with no “tribal land” or “aboriginal land” provenience be reinterred under State or other law. In January 2017, the San Bernardino County Sheriff-Coroner requested that the Secretary, through the Native American Graves Protection and Repatriation Review Committee, recommend the proposed re-interment of the culturally unidentifiable Native American human remains in this notice, according to State or other law. The Review Committee, acting pursuant to its responsibility under 25 U.S.C. 3006(c)(5), considered the request at its March 2017 meeting and recommended to the Secretary that the proposed re-interment proceed. An April 2017 letter on behalf of the Secretary of the Interior from the National Park Service Associate Director for Cultural Resources, Partnerships, and Science transmitted the Secretary's independent review and concurrence with the Review Committee that:
• No Indian Tribes objected to the proposed re-interment, and
• the San Bernardino County Sheriff-Coroner may proceed with the proposed re-interment of the culturally unidentifiable human remains.
Re-interment is contingent on the publication of a Notice of Inventory Completion in the
Officials of the San Bernardino County Sheriff-Coroner have determined that:
• Pursuant to 25 U.S.C. 3001(9), the human remains described in this notice are Native American based on context and other artifacts found with the human remains.
• Pursuant to 25 U.S.C. 3001(9), the human remains described in this notice represent the physical remains of two individuals of Native American ancestry.
• Pursuant to 25 U.S.C. 3001(2), a relationship of shared group identity cannot be reasonably traced between the Native American human remains and any present-day Indian Tribe.
• Pursuant to 43 CFR 10.11(c)(1), a “tribal land” or “aboriginal land” provenience cannot be ascertained.
• Pursuant to 43 CFR 10.10(g)(2)(ii) and 43 CFR 10.16, the human remains may be reinterred according to the law of San Bernardino County, CA.
Representatives of any Indian Tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains should submit a written request with information in support of the request to Robert Hunter, Diplomat—ABMDI, Unidentified Persons Coordinator, San Bernardino County Sheriff-Coroner, 175 South Lena Road, San Bernardino, CA 92418, telephone (909) 387–2978, by July 14, 2017. After that date, if no additional requestors have come forward, the human remains may be reinterred.
The San Bernardino County Sheriff-Coroner is responsible for notifying the California Native American Heritage Commission that this notice has been published.
National Park Service, Interior.
Notification of boundary revision.
The boundary of Wilson's Creek National Battlefield is modified to include 40 acres of land located in Christian County, Missouri, immediately adjacent to the boundary of the national battlefield. The United States will accept a donation from Civil War Trust containing 40 acres of land.
The effective date of this boundary revision is June 14, 2017.
The map depicting this boundary revision is available for inspection at the following locations: National Park Service, Land Resources Program Center, Midwest Region, 601 Riverfront Drive, Omaha, Nebraska 68102 and National Park Service, Department of the Interior, 1849 C Street NW., Washington, DC 20240.
Chief Realty Officer Daniel L. Betts, National Park Service, Land Resources Program Center, Midwest Region, 601 Riverfront Drive, Omaha, Nebraska 68102, telephone (402) 661–1780.
Notice is hereby given that, pursuant to 54 U.S.C. 100506(c), the boundary of Wilson's Creek National Battlefield is modified to include 40 acres of adjacent land identified as Tract 01–147. The boundary revision is depicted on Map No. 410/133,135, dated June 2016.
Specifically, 54 U.S.C. 100506(c) provides that, after notifying the House Committee on Natural Resources and the Senate Committee on Energy and Natural Resources, the Secretary of the Interior is authorized to make this boundary revision upon publication of notice in the
National Park Service, Interior.
Notice.
The Allen County-Fort Wayne Historical Society has completed an inventory of human remains and associated funerary objects, in consultation with the appropriate Indian Tribes or Native Hawaiian organizations, and has determined that there is no cultural affiliation between the human remains and associated funerary objects and any present-day Indian Tribes or Native Hawaiian organizations. Representatives of any Indian Tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains and associated funerary objects should submit a written request to the Allen County-Fort Wayne Historical Society. If no additional requestors come forward, transfer of control of the human remains and associated funerary objects to the Indian Tribes or Native Hawaiian organizations stated in this notice may proceed.
Representatives of any Indian Tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains and associated funerary objects should submit a written request with information in support of the request to the Allen County-Fort Wayne Historical Society at the address in this notice by July 14, 2017.
Walter Font, Curator, Allen County-Fort Wayne Historical Society, 302 East Berry Street, Fort Wayne, IN 46802, telephone (260) 426–2882, email
Notice is here given in accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), 25 U.S.C. 3003, of the completion of an inventory of human remains and associated funerary objects under the control of the Allen County-Fort Wayne Historical Society, Fort Wayne, IN. The human remains and associated funerary objects were removed from Allen County, IN.
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA, 25 U.S.C. 3003(d)(3) and 43 CFR 10.11(d). The determinations in this notice are the sole responsibility of the museum, institution, or Federal agency that has control of the Native American human remains and associated funerary objects. The National Park Service is not responsible for the determinations in this notice.
A detailed assessment of the human remains was made by the Allen County-Fort Wayne Historical Society professional staff in consultation with the Indiana University-Purdue University, Fort Wayne, Archaeology Survey office, and representatives of the Miami Tribe of Oklahoma and the Pokagon Band of Potawatomi Indians, Michigan and Indiana.
On an unknown date, human remains representing, at minimum, 1 individual were removed from an unknown site in northeast Indiana, mostly likely in Allen County, IN. In September 2013, the human remains were found during a collection inventory without identification or provenance data. Sex and age are indeterminate. No known individuals were identified. The 2 associated funerary objects are one ceramic bead and one broken slate gorget.
On an unknown date, human remains representing, at minimum, 1 individual were removed from an unknown site in northeast Indiana, mostly likely in Allen County, IN. In September 2013, the human remains were found during a collection inventory without identification or provenance data. Sex and age are indeterminate. No known individuals were identified. No associated funerary objects are present.
On an unknown date, human remains representing, at minimum, 1 individual were removed from an unknown site in northeast Indiana, mostly likely in Allen County, IN. In September 2013, the human remains were found during a collection inventory without identification or provenance data. Sex and age are indeterminate. No known individuals were identified. The 3 associated funerary objects are one glass vial containing a deer tooth, one pottery sherd, and one piece of a strap handle.
On unknown dates, human remains representing, at minimum, 3 individuals were removed from unknown sites in northeast Indiana, mostly likely in Allen County, IN. In the late 1990s, the human remains were found during a collection inventory without identification or provenance data. Sex and age are indeterminate. No known individuals were identified. No associated funerary objects are present.
Officials of the Allen County-Fort Wayne Historical Society have determined that:
• Pursuant to 25 U.S.C. 3001(9), the human remains described in this notice are Native American based on an examination by the Indiana University-Purdue University, Fort Wayne, Archaeology Survey office, in November 2013.
• Pursuant to 25 U.S.C. 3001(9), the human remains described in this notice represent the physical remains of 6 individuals of Native American ancestry.
• Pursuant to 25 U.S.C. 3001(3)(A), the 5 objects described in this notice are reasonably believed to have been placed with or near individual human remains at the time of death or later as part of the death rite or ceremony.
• Pursuant to 25 U.S.C. 3001(2), a relationship of shared group identity cannot be reasonably traced between the Native American human remains and associated funerary objects and any present-day Indian Tribe.
• Treaties, Acts of Congress, or Executive Orders, indicate that the land from which the Native American human remains and associated funerary objects were removed is the aboriginal land of the Miami Tribe of Oklahoma.
• Pursuant to 43 CFR 10.11(c)(1), the disposition of the human remains and associated funerary objects may be to the Miami Tribe of Oklahoma.
Representatives of any Indian Tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains and associated funerary objects should submit a written request with information in support of the request to Walter Font, Curator, Allen County-Fort Wayne Historical Society, 302 East Berry Street, Fort Wayne, IN 46802, telephone (260) 426–2882, email
The Allen County-Fort Wayne Historical Society is responsible for notifying the Miami Tribe of Oklahoma and the Pokagon Band of Potawatomi Indians, Michigan and Indiana, that this notice has been published.
National Park Service, Interior.
Notice; correction.
The Arkansas Archeological Survey has corrected an inventory of human remains published in a Notice of Inventory Completion in the
George Sabo, Director, Arkansas Archeological Survey, 2475 North Hatch Avenue, Fayetteville, AR 72704, telephone (479) 575–3556.
Notice is here given in accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), 25 U.S.C. 3003, of the correction of an inventory of human remains under the control of the Arkansas Archeological Survey, Fayetteville, AR. The human remains were removed from multiple counties in the state of Arkansas.
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA, 25 U.S.C. 3003(d)(3). The determinations in this notice are the sole responsibility of the museum, institution, or Federal agency that has control of the Native American human remains. The National Park Service is not responsible for the determinations in this notice.
This notice corrects the minimum number of individuals published in a Notice of Inventory Completion in the
In the
The Arkansas Archeological Survey is responsible for notifying The Osage Nation (previously listed as the Osage Tribe) that this notice has been published.
National Park Service, Interior.
Notice.
The Heard Museum, in consultation with the appropriate Indian tribes or Native Hawaiian organizations, has determined that the cultural items listed in this notice meet the definition of sacred objects and objects of cultural patrimony. Lineal descendants or representatives of any Indian tribe or Native Hawaiian organization not identified in this notice that wish to claim these cultural items should submit a written request to the Heard Museum. If no additional claimants come forward, transfer of control of the cultural items to the lineal descendants, Indian tribes, or Native Hawaiian organizations stated in this notice may proceed.
Lineal descendants or representatives of any Indian tribe or Native Hawaiian organization not identified in this notice that wish to claim these cultural items should submit a written request with information in support of the claim to the Heard Museum at the address in this notice by July 14, 2017.
David M. Roche, Heard Museum, 2301 North Central Avenue, Phoenix, AZ 85004, telephone (602) 251–0226, email
Notice is here given in accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), 25 U.S.C. 3005, of the intent to repatriate a cultural item under the control of the Heard Museum, Phoenix, AZ, that meets the definition of sacred object and object of cultural patrimony under 25 U.S.C. 3001.
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA, 25 U.S.C. 3003(d)(3). The determinations in this notice are the sole responsibility of the museum, institution, or Federal agency that has control of the Native American cultural items. The National Park Service is not responsible for the determinations in this notice.
In 1907, one cultural item was created by Jack Tonto (a.k.a. Tonto Jack) for Taylor Gabbard, who lived in the Arizona Territory. The cultural item was passed down to his descendants, exhibited at a branch of the Phoenix Public Library for a number of years, and published online. On April 17, 2014, the cultural item was donated to the Heard Museum and accessioned into their collection. The cultural item is a painted hide.
Representatives of the San Carlos Apache Tribe of the San Carlos Reservation, Arizona; Tonto Apache Tribe of Arizona; White Mountain Apache Tribe of the Fort Apache Reservation, Arizona; and Yavapai-Apache Nation of the Camp Verde Indian Reservation, Arizona, have identified the painted hide as affiliated with the Yavapai-Apache Nation of the Camp Verde Indian Reservation, Arizona. They further identify imagery on the hide as having been made for a specific use in a specific ceremony. The practitioner of this ceremony used this cultural item, along with specific songs and prayers to animate the cultural item with power from the creation and specific products of the creation, for the purpose of blessing. Medicine people today practice this ceremony as it has always been practiced. Due to the nature, the beliefs, and the items integral to this ceremony, the hide has ongoing historical, traditional, and cultural importance central to Western Apache culture.
The last part of the ceremony for which this item was made, following the death of the individual for whom it was made, involves placing the hide in a secure location away from human habitation. Failing to put this hide away properly after its more active use or removing this item from its resting place, thus interrupting the unfolding ritual, poses great danger to those who come in contact with it. Putting the item away properly can only be
Officials of the Heard Museum have determined that:
• Pursuant to 25 U.S.C. 3001(3)(C), the one cultural item described above is a specific ceremonial object needed by traditional Native American religious leaders for the practice of traditional Native American religions by their present-day adherents.
• Pursuant to 25 U.S.C. 3001(3)(D), the one cultural item described above has ongoing historical, traditional, or cultural importance central to the Native American group or culture itself, rather than property owned by an individual.
• Pursuant to 25 U.S.C. 3001(2), there is a relationship of shared group identity that can be reasonably traced between the sacred object and object of cultural patrimony and Yavapai-Apache Nation of the Camp Verde Indian Reservation, Arizona.
Lineal descendants or representatives of any Indian tribe or Native Hawaiian organization not identified in this notice that wish to claim these cultural items should submit a written request with information in support of the claim to David M. Roche, Heard Museum, 2301 North Central Avenue, Phoenix, AZ 85004, telephone (602) 251–0226, email
The Heard Museum is responsible for notifying the San Carlos Apache Tribe of the San Carlos Reservation, Arizona; Tonto Apache Tribe of Arizona; White Mountain Apache Tribe of the Fort Apache Reservation, Arizona; and Yavapai-Apache Nation of the Camp Verde Indian Reservation, Arizona, that this notice has been published.
National Park Service, Interior.
Notice.
The University of Michigan has completed an inventory of human remains and associated funerary objects, in consultation with the appropriate Indian tribes or Native Hawaiian organizations, and has determined that there is a cultural affiliation between the human remains and associated funerary objects and present-day Indian tribes or Native Hawaiian organizations. Lineal descendants or representatives of any Indian tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains and associated funerary objects should submit a written request to the University of Michigan. If no additional requestors come forward, transfer of control of the human remains and associated funerary objects to the lineal descendants, Indian tribes, or Native Hawaiian organizations stated in this notice may proceed.
Lineal descendants or representatives of any Indian tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains and associated funerary objects should submit a written request with information in support of the request to the University of Michigan at the address in this notice by July 14, 2017.
Dr. Ben Secunda, NAGPRA Project Manager, University of Michigan, Office of Research, 4080 Fleming Building, 503 Thompson Street, Ann Arbor, MI 48109–1340, telephone (734) 647–9085, email
Notice is here given in accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), 25 U.S.C. 3003, of the completion of an inventory of human remains and associated funerary objects under the control of the University of Michigan, Ann Arbor, MI. The human remains and associated funerary objects were removed from the Backlund Mound Group site (20ME2), Menominee County, MI.
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA, 25 U.S.C. 3003(d)(3). The determinations in this notice are the sole responsibility of the museum, institution, or Federal agency that has control of the Native American human remains and associated funerary objects. The National Park Service is not responsible for the determinations in this notice.
A detailed assessment of the human remains was made by the University of Michigan Museum of Anthropological Archaeology (UMMAA) professional staff in consultation with representatives of the Hannahville Indian Community, Michigan; Ho-Chunk Nation of Wisconsin; Keweenaw Bay Indian Community, Michigan; Lac Vieux Desert Band of Lake Superior Chippewa Indians of Michigan; Match-e-be-nash-she-wish Band of Pottawatomi Indians of Michigan; Menominee Indian Tribe of Wisconsin; Nottawaseppi Huron Band of the Potawatomi, Michigan (previously listed as the Huron Potawatomi, Inc.); and Pokagon Band of Potawatomi Indians, Michigan and Indiana (hereafter “The Consulted Tribes”).
Additional requests for consultation were sent to the Bad River Band of the Lake Superior Tribe of Chippewa Indians of the Bad River Reservation, Wisconsin; Bois Forte Band (Nett Lake) of the Minnesota Chippewa Tribe, Minnesota; Chippewa-Cree Indians of the Rocky Boy's Reservation, Montana; Citizen Potawatomi Nation, Oklahoma; Fond du Lac Band of the Minnesota Chippewa Tribe, Minnesota; Forest County Potawatomi Community, Wisconsin; Grand Portage Band of the Minnesota Chippewa Tribe, Minnesota; Lac Courte Oreilles Band of Lake Superior Chippewa Indians of Wisconsin; Lac du Flambeau Band of Lake Superior Chippewa Indians of the Lac du Flambeau Reservation of Wisconsin; Leech Lake Band of the Minnesota Chippewa Tribe, Minnesota; Mille Lacs Band of the Minnesota Chippewa Tribe, Minnesota; Prairie Band of Potawatomi Nation, Kansas; Quechan Tribe of the Fort Yuma Indian Reservation, California and Arizona; Red Cliff Band of Lake Superior Chippewa Indians of Wisconsin; Red Lake Band of Chippewa Indians, Minnesota; St. Croix Chippewa Indians of Wisconsin; Sokaogon Chippewa Community, Wisconsin; Turtle
In the summer of 1956, human remains representing, at minimum, 20 individuals were removed from the Backlund Mound Group site (20ME2) in Menominee County, MI. Archeologists from the UMMAA excavated three low, conical mounds on the bank of the Menominee River. Two features within one of the mounds held human remains and funerary objects. In one feature, the human remains consist of 1 child, 4–8 years old, sex indeterminate, and an infant, sex indeterminate. Another feature within the mound, described as a rock-capped ossuary, held the human remains of, at minimum, 18 individuals. The human remains consist of 1 older adult, possibly female; 1 adult female over 50 years old; 4 adult males over 50 years old; 1 adult female over 40 years old; 1 adult male, 30–50 years old; 1 adult male, 35–49 years old; 1 adult male, 30–40 years old; 1 young adult, possibly male, 20–35 years old; 1 adult male, age indeterminate; 1 young adult female, 20–25 years old; 1 adolescent, 11–14 years old, sex indeterminate; 1 child, 8–10 years old, sex indeterminate; 1 child, age and sex indeterminate; 1 neonate; and 1 cremated adult. One lot of DNA extractions, taken from the human remains in this collection between 1996 and 2006, are also included in this notice. The burials have been dated to the Late Woodland Period (A.D. 1350, +/−110 years) based on Carbon 14 analysis of charcoal from the site. No known individuals were identified. Three associated funerary objects found in the mound fill are one copper spear point; one perforated long bone fragment, possibly deer; and one lot of beak fragments from a female eagle.
The human remains have been determined to be Native American, based on cranial morphology and dental traits. A relationship of shared group identity can be reasonably traced between the Native American human remains from this site and the Menominee Indian Tribe of Wisconsin, based on multiple lines of evidence. The mode of burial, specifically ossuary burial within a conical mound, suggests a merging of practices between the large ossuary burials recorded at late pre-contact sites in the northern Great Lakes area and earlier practices of mound burial observed among northern forager groups. The ceramic assemblage collected from contemporary midden deposits identified at the site is strongly suggestive of Algonquian origin. The site is located within the aboriginal lands of the Menominee as described in traditional and historical accounts, and at a date that makes these descriptions relevant.
Officials of the University of Michigan have determined that:
• Pursuant to 25 U.S.C. 3001(9), the human remains described in this notice represent the physical remains of 20 individuals of Native American ancestry.
• Pursuant to 25 U.S.C. 3001(3)(A), the 3 objects described in this notice are reasonably believed to have been placed with or near individual human remains at the time of death or later as part of the death rite or ceremony.
• Pursuant to 25 U.S.C. 3001(2), there is a relationship of shared group identity that can be reasonably traced between the Native American human remains and associated funerary objects and the Menominee Indian Tribe of Wisconsin.
Lineal descendants or representatives of any Indian tribe or Native Hawaiian organization not identified in this notice that wish to request transfer of control of these human remains and associated funerary objects should submit a written request with information in support of the request to Dr. Ben Secunda, NAGPRA Project Manager, University of Michigan, Office of Research, 4080 Fleming Building, 503 Thompson Street, Ann Arbor, MI 48109–1340, telephone (734) 647–9085, email
The University of Michigan is responsible for notifying The Consulted Tribes and The Tribes Invited to Consult that this notice has been published.
National Park Service, Interior.
Notice.
The State Historical Society of North Dakota, in consultation with the appropriate Indian Tribes or Native Hawaiian organizations, has determined that the cultural items listed in this notice meet the definition of objects of cultural patrimony. Lineal descendants or representatives of any Indian Tribe or Native Hawaiian organization not identified in this notice that wish to claim these cultural items should submit a written request to the State Historical Society of North Dakota. If no additional claimants come forward, transfer of control of the cultural items to the lineal descendants, Indian Tribes, or Native Hawaiian organizations stated in this notice may proceed.
Lineal descendants or representatives of any Indian Tribe or Native Hawaiian organization not identified in this notice that wish to claim these cultural items should submit a written request with information in support of the claim to the State Historical Society of North Dakota at the address in this notice by July 14, 2017.
Melissa Thompson, State Historical Society of North Dakota, 612 East Boulevard Avenue, Bismarck, ND 58505, telephone (701) 328–2691, email
Notice is here given in accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), 25 U.S.C. 3005, of the intent to repatriate cultural items under the control of the State Historical Society of North Dakota, Bismarck, ND, that meet the definition of objects of cultural patrimony under 25 U.S.C. 3001.
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA, 25 U.S.C. 3003(d)(3). The determinations in this notice are the sole responsibility of the museum, institution, or Federal agency that has control of the Native American cultural items. The National Park Service is not responsible for the determinations in this notice.
On an unknown date, an unknown number of cultural items were removed from an unknown site in an unknown location. In August of 2016, a wooden anthropomorphic figurine was found in the Museum Division storage space. The cultural item was found in a box dating to the 1950s that was used for storage of items in the possession of the State Historical Society of North Dakota (SHSND), but never formally accessioned or cataloged into the museum collection. Museum opinion is that the figurine was placed in the storage box in the 1950s, but no other provenance information is available. The object of cultural patrimony is a Can Otina. It is an object that does not belong to an individual, though individuals care for it. It is an object that would be used for protection of the camp, portending future events, helping with planting or finding food or medicines, or serving the needs of the community in other ways. It is a helper to the people and an essential part of tribal identity and the maintenance of tribal traditions.
The Can Otina was identified by a Dakota spiritual leader as belonging to the Sisitunwan (Dwellers by the Fish Camp-Ground) fire of the Oceti Sakowin (Seven Council Fires) that make up what is often referred to as the “Sioux Nation.” In addition to the Sisitunwan, the Oceti Sakowin is composed of the Wahpetunwan, Bdewakantunwan, Wahpekute, Ihanktunwan, Ihanktunwanna, and Titunwan peoples, all of whom are Dakota, Lakota, or Nakota. The Sisitunwan are Dakota people. Their first reservation land was negotiated under the Treaty of Traverse des Sioux in 1851, and then initially reduced under the Treaty of 1858, relegating this council fire to a strip of land bordering the Minnesota River in southern Minnesota. These treaties were unilaterally abrogated by the United States Government after the U.S.-Dakota War of 1862 and Dakota people were force-marched and ethnically-cleansed from their Minnesota homeland in 1863. By the late 1880s, Sisitunwan and Wahpetunwan Dakota people began returning to this portion of Minnesota and reestablishing a community near what was formerly called the Upper Sioux Agency. A new, vastly smaller reservation was established by the federal government in 1938, all of which is located on the original reservation treaty land. Upper Sioux is one of the few Oceti Sakowin reservations where a distinct segment of the population specifically identifies as Sisitunwan (others include Spirit Lake, Fort Peck, and the Sisseton-Wahpeton Sioux Tribe), though people with Sisitunwan blood continue to live on most, if not all, Oceti Sakowin reservation communities. The distinctive Sisitunwan identity still pervasive at Upper Sioux makes this community a strong choice for repatriation of Sisitunwan NAGPRA collections.
Officials of the State Historical Society of North Dakota have determined that:
• Pursuant to 25 U.S.C. 3001(3)(D), the one cultural item described above has ongoing historical, traditional, or cultural importance central to the Native American group or culture itself, rather than property owned by an individual.
• Pursuant to 25 U.S.C. 3001(2), there is a relationship of shared group identity that can be reasonably traced between the object of cultural patrimony and the Upper Sioux Community, Minnesota.
Lineal descendants or representatives of any Indian Tribe or Native Hawaiian organization not identified in this notice that wish to claim these cultural items should submit a written request with information in support of the claim to Melissa Thompson, State Historical Society of North Dakota, 612 East Boulevard Avenue, Bismarck, ND 58505, telephone (701) 328–2691, email
The State Historical Society of North Dakota is responsible for notifying the Upper Sioux Community, Minnesota, that this notice has been published.
United States International Trade Commission.
Notice.
June 8, 2017.
Justin Enck (202–205–3363), Office of Investigations, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202–205–1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202–205–2000. General information concerning the Commission may also be obtained by accessing its internet server (
On March 1, 2017, the Commission established a schedule for the conduct of this review (82 FR 13132, March 9, 2017). Subsequently, counsel for the domestic interested parties filed a request for consideration of cancellation of the hearing. Counsel indicated a willingness to submit written testimony and responses to any Commission questions in lieu of an actual hearing. No other party has entered an appearance in this review. Consequently, the public hearing in connection with this review, scheduled to begin at 9:30 a.m. on Thursday, June 22, 2017, at the U.S. International Trade Commission Building, is cancelled. Parties to this review should respond to any written questions posed by the Commission in their posthearing briefs, which are due to be filed on July 3, 2017.
For further information concerning this investigation see the Commission's notice cited above and the Commission's Rules of Practice and Procedure, part 201, subparts A through E (19 CFR part 201), and part 207, subparts A and C (19 CFR part 207).
This investigation is being conducted under authority of title VII of the Tariff Act of 1930; this notice is published pursuant to section 207.21 of the Commission's rules.
By order of the Commission.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has received a complaint entitled
Lisa R. Barton, Secretary to the Commission, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436, telephone (202) 205–2000. The public version of the complaint can be accessed on the Commission's Electronic Document Information System (EDIS) at
General information concerning the Commission may also be obtained by accessing its Internet server at United States International Trade Commission (USITC) at
The Commission has received a complaint and a submission pursuant to § 210.8(b) of the Commission's Rules of Practice and Procedure filed on behalf of Rio Brands, LLC on June 8, 2017. The complaint alleges violations of section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) in the importation into the United States, the sale for importation, and the sale within the United States after importation of certain backpack chairs. The complaint names as respondent GCI Outdoor, Inc. of Higganum, CT. The complainant requests that the Commission issue a limited exclusion order, a cease and desist order, and impose a bond upon respondents' alleged infringing articles during the 60-day Presidential review period pursuant to 19 U.S.C. 1337(j).
Proposed respondents, other interested parties, and members of the public are invited to file comments, not to exceed five (5) pages in length, inclusive of attachments, on any public interest issues raised by the complaint or § 210.8(b) filing. Comments should address whether issuance of the relief specifically requested by the complainant in this investigation would affect the public health and welfare in the United States, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, or United States consumers.
In particular, the Commission is interested in comments that:
(i) Explain how the articles potentially subject to the requested remedial orders are used in the United States;
(ii) identify any public health, safety, or welfare concerns in the United States relating to the requested remedial orders;
(iii) identify like or directly competitive articles that complainant, its licensees, or third parties make in the United States which could replace the subject articles if they were to be excluded;
(iv) indicate whether complainant, complainant's licensees, and/or third party suppliers have the capacity to replace the volume of articles potentially subject to the requested exclusion order and/or a cease and desist order within a commercially reasonable time; and
(v) explain how the requested remedial orders would impact United States consumers.
Written submissions must be filed no later than by close of business, eight calendar days after the date of publication of this notice in the
Persons filing written submissions must file the original document electronically on or before the deadlines stated above and submit 8 true paper copies to the Office of the Secretary by noon the next day pursuant to § 210.4(f) of the Commission's Rules of Practice and Procedure (19 CFR 210.4(f)). Submissions should refer to the docket number (“Docket No. 3229”) in a prominent place on the cover page and/or the first page. (
Any person desiring to submit a document to the Commission in confidence must request confidential treatment. All such requests should be directed to the Secretary to the Commission and must include a full statement of the reasons why the Commission should grant such treatment.
This action is taken under the authority of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and of §§ 201.10 and 210.8(c) of the Commission's Rules of Practice and Procedure (19 CFR 201.10, 210.8(c)).
By order of the Commission.
United States International Trade Commission.
Notice.
The Commission hereby gives notice of the scheduling of an expedited review pursuant to the Tariff Act of 1930 (“the Act”) to determine whether termination of the suspended investigation on uranium from Russia would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.
May 8, 2017.
Jordan Harriman (202–205–2610), Office of Investigations, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202–205–1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202–205–2000. General information concerning the Commission may also be obtained by accessing its internet server (
For further information concerning the conduct of this review and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A and B (19 CFR part 201), and part 207, subparts A, D, E, and F (19 CFR part 207).
In accordance with sections 201.16(c) and 207.3 of the rules, each document filed by a party to the review must be served on all other parties to the review (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service.
This review is being conducted under authority of title VII of the Tariff Act of 1930; this notice is published pursuant to section 207.62 of the Commission's rules.
By order of the Commission.
Office of Juvenile Justice and Delinquency Prevention, Justice.
Notice of webinar meeting.
The Office of Juvenile Justice and Delinquency Prevention (OJJDP) has scheduled a webinar meeting of the Federal Advisory Committee on Juvenile Justice (FACJJ).
The webinar meeting will take place online on Monday, July 17, 2017, at 12:00 p.m.–2:00 p.m. ET.
Jeff Slowikowski, Designated Federal Official, OJJDP,
The Federal Advisory Committee on Juvenile Justice (FACJJ), established pursuant to Section 3(2)A of the Federal Advisory Committee Act (5 U.S.C. App.2), will meet to carry out its advisory functions under Section 223(f)(2)(C–E) of the Juvenile Justice and Delinquency Prevention Act of 2002. The FACJJ is composed of representatives from the states and territories. FACJJ member duties include: Reviewing federal policies regarding juvenile justice and delinquency prevention; advising the OJJDP Administrator with respect to particular functions and aspects of OJJDP; and advising the President and Congress with regard to State perspectives on the operation of OJJDP
To participate in, or view the webinar meeting, FACJJ members and the public must pre-register online. Members and interested persons must link to the webinar registration portal through
An on-site room is available for members of the public interested in viewing the webinar in person. If members of the public wish to view the webinar in person, they must notify Melissa Kanaya by email message at
FACJJ members will not be physically present in Washington, DC for the webinar. They will participate in the webinar from their respective home jurisdictions.
Office of the Secretary, Department of Labor.
Notice.
The Department of Labor (DOL) is submitting the Employment and Training Administration (ETA) sponsored information collection request (ICR) titled, “Petition for Classifying Labor Surplus Areas,” to the Office of Management and Budget (OMB) for review and approval for continued use, without change, in accordance with the Paperwork Reduction Act of 1995 (PRA). Public comments on the ICR are invited.
The OMB will consider all written comments that agency receives on or before July 14, 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 by mail to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL–ETA, Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503; by Fax: 202–395–5806 (this is not a toll-free number); or by email:
Michel Smyth by telephone at 202–693–4129, TTY 202–693–8064, (these are not toll-free numbers) or by email at
44 U.S.C. 3507(a)(1)(D).
This ICR seeks to extend PRA authority for the Petition for Classifying Labor Surplus Areas (LSA) information collection. Under Executive Orders 12073 (Federal Procurement in Labor Surplus Areas) and 10582 (Uniform Procedures, Buy American Act), the DOL issues an annual list showing each LSA used by a Federal or State entity in a number of actions such as procurement and property transfer. The annual LSA list is updated during the year, based upon petitions submitted to the DOL by State Workforce Agencies requesting additional areas for LSA certification. This information collection provides the processes by which a State can submit a petition for additional LSA certification. E.O. 12073 section 1–301 authorizes this information collection.
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless it is approved by the OMB under the PRA and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid Control Number.
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 August 31, 2017. The DOL seeks to extend PRA authorization for this information collection for three (3) more years, without any change to existing requirements. The DOL 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,
The Legal Services Corporation's Finance Committee will meet telephonically on June 26, 2017. The meeting will commence at 2:00 p.m., EDT, and will continue until the conclusion of the Committee's agenda.
John N. Erlenborn Conference Room, Legal Services Corporation Headquarters, 3333 K Street NW., Washington, DC 20007.
Members of the public who are unable to attend in person but wish to listen to the public proceedings may do so by following the telephone call-in directions provided below.
•
•
• When connected to the call, please immediately “MUTE” your telephone. Members of the public are asked to keep their telephones muted to eliminate background noises. To avoid disrupting the meeting, please refrain from placing the call on hold if doing so will trigger recorded music or other sound. From time to time, the Chair may solicit comments from the public.
Open.
Katherine Ward, Executive Assistant to the Vice President & General Counsel, at (202) 295–1500. Questions may be sent by electronic mail to
LSC complies with the Americans with Disabilities Act and Section 504 of the 1973 Rehabilitation Act. Upon request, meeting notices and materials will be made available in alternative formats to accommodate individuals with disabilities. Individuals needing other accommodations due to disability in order to attend the meeting in person or telephonically should contact Katherine Ward, at (202) 295–1500 or
National Archives and Records Administration (NARA).
Notice of proposed extension request.
NARA proposes to request an extension from the Office of Management and Budget (OMB) of approval to use a voluntary survey of visitors to our downtown facility in Washington, DC. We use the American Association of State and Local History (AASLH) customer survey to ask a random sample of visitors to the National Archives Museum whether the Museum is successfully achieving its goals, and to help us determine if we need to make any modifications to our services. The survey takes 12 minutes. We invite you to comment on certain aspects of this proposed information collection.
We must receive written comments on or before August 14, 2017.
Send comments to Paperwork Reduction Act Comments (MP), Room 4100; National Archives and Records Administration; 8601 Adelphi Road; College Park, MD 20740–6001, or email them to
Contact Tamee Fechhelm by telephone at 301–837–1694, or by email at
We invite the public and Federal agencies to comment on information collections we propose to renew. We submit proposals to renew information collections first through a public comment period and then to OMB for review and approval pursuant to the Paperwork Reduction Act of 1995 (PRA; 44 U.S.C. 3501
National Archives and Records Administration (NARA).
Notice.
NARA is requesting an extension from the Office of Management and Budget (OMB) of approval to use the following three information collections. We use the first information collection form to advise requesters of the procedures they should follow to request certified copies of records for use in civil litigation or criminal actions in courts of law, and the information they need to provide us so that we can identify the correct records. Veterans, military dependents, and other authorized people use the second information collection form to request information from, or copies of, documents in military personnel, military medical, and dependent medical records. Genealogical researchers use the National Archives Trust Fund (NATF) forms contained in the third information collection to order records for genealogical research. We invite you to comment on these three proposed information collections.
OMB must receive written comments at the address below on or before July 14, 2017.
Send comments to Mr. Nicholas A. Fraser, desk officer for NARA, by mail to Office of Management and Budget, New Executive Office Building, Washington, DC 20503, by fax to 202–395–5167, or by email to
Please direct requests for additional information or copies of the proposed information collection and supporting statement to Tamee Fechhelm by phone at 301–837–1694 or by email to
We invite the public and Federal agencies to comment on information collections we propose to renew. We submit proposals to renew information collections first through a public comment period and then to OMB for review and approval pursuant to the Paperwork Reduction Act of 1995 (PRA; 44 U.S.C. 3501
We invite comments on: (a) Whether the proposed information collections are necessary for NARA to properly perform its functions, including whether the information will have practical utility; (b) our estimates of the information collection's burden on respondents; (c) ways to enhance the quality, utility, and clarity of the information we propose to collect; (d) ways to minimize the burden on respondents of collecting the information, including through use of information technology; and (e) whether these collections affect small businesses. All comments will become a matter of public record. In this notice, NARA solicits comments concerning the following information collections:
1.
2.
3.
We use these National Archives Trust Fund (NATF) forms to process requests for certain types of genealogical research documents. We need to handle requests for these types of records by order due to the volume of requests we receive for them; otherwise, we would not be able to get documents to people in a timely way. The forms also allow us to collect specific information from the researcher that we need to search for the records they want. The forms are: NATF 84, National Archives Order for Copies of Land Entry Files; NATF 85, National Archives Order for Copies of Pension or Bounty Land Warrant Applications; and NATF 86, National Archives Order for Copies of Military Service Records. As a convenience, the paper forms allow researchers to provide credit card information to authorize billing and expedited mailing of the copies. Researchers can instead use Order Online! (
Nuclear Regulatory Commission.
Renewal of existing information collection; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) invites public comment on the renewal of Office of Management and Budget (OMB) approval for an existing collection of information. The information collection is entitled, “Nondiscrimination in Federally Assisted Commission Programs.”
Submit comments by August 14, 2017. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received on or before this date.
You may submit comments by any of the following methods:
•
•
For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
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–2017–0133 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:
•
•
•
•
Please include Docket ID NRC–2017–0133 in the subject line of your comment submission, in order to ensure that the NRC is able to make your comment submission available to the public in this docket.
The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC posts all comment submissions at
If you are requesting or aggregating comments from other persons for submission to the NRC, 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 the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment submissions 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, “10 CFR part 4, Nondiscrimination in Federally Assisted Commission Programs.” 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
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
The NRC is seeking comments that address the following questions:
1. Is the proposed collection of information necessary for the NRC to properly perform its functions? Does the information have practical utility?
2. Is the estimate of the burden of the information collection accurate?
3. Is there a way to enhance the quality, utility, and clarity of the information to be collected?
4. How can the burden of the information collection on respondents be minimized, including the use of automated collection techniques or other forms of information technology?
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Exemption and combined license amendment; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is granting an exemption to allow a departure from the certification information of Tier 1 of the generic design control document (DCD) and is issuing License Amendment Nos. 78 and 77 to Combined Licenses (COLs), NPF–91 and NPF–92 for the Vogtle Electric Generating Plant (VEGP) Units 3 and 4, respectively. The COLs were issued to Southern Nuclear Operating Company (SNC), and Georgia Power Company, Oglethorpe Power Corporation, MEAG Power SPVM, LLC, MEAG Power SPVJ, LLC, MEAG Power SPVP, LLC, Authority of Georgia, and the City of Dalton, Georgia (the licensee) for construction and operation of the
The granting of the exemption allows the changes to Tier 1 information asked for in the amendment. Because the acceptability of the exemption was determined in part by the acceptability of the amendment, the exemption and amendment are being issued concurrently.
The exemption and amendment were issued on May 25, 2017.
Please refer to Docket ID NRC–2008–0252 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:
•
•
•
Chandu Patel, Office of New Reactors, U.S. Nuclear Regulatory Commission, Washington, DC 20555–0001; telephone: 301–415–3025; email:
The NRC is granting an exemption from Paragraph B of Section III, “Scope and Contents,” of appendix D, “Design Certification Rule for the AP1000,” to part 52 of title 10 of the
Part of the justification for granting the exemption was provided by the review of the amendment. Because the exemption is necessary in order to issue the requested license amendment, the NRC granted the exemption and issued the amendment concurrently, rather than in sequence. This included issuing a combined safety evaluation containing the NRC staff's review of both the exemption request and the license amendment. The exemption met all applicable regulatory criteria set forth in §§ 50.12, 52.7, and Section VIII.A.4 of appendix D to 10 CFR part 52. The license amendment was found to be acceptable as well. The combined safety evaluation is available in ADAMS under Accession No. ML17072A320.
Identical exemption documents (except for referenced unit numbers and license numbers) were issued to the licensee for VEGP Units 3 and 4 (COLs NPF–91 and NPF–92). The exemption documents for VEGP Units 3 and 4 can be found in ADAMS under Accession Nos. ML17072A318 and ML17072A315, respectively. The exemption is reproduced (with the exception of abbreviated titles and additional citations) in Section II of this document. The amendment documents for COLs NPF–91 and NPF–92 are available in ADAMS under Accession Nos. ML17072A316 and ML17072A314, respectively. A summary of the amendment documents is provided in Section III of this document.
Reproduced below is the exemption document issued to VEGP Units 3 and Unit 4. It makes reference to the combined safety evaluation that provides the reasoning for the findings made by the NRC (and listed under Item 1) in order to grant the exemption:
1. In an application dated October 26, 2016, the licensee requested from the Commission an exemption to allow departures from Tier 1 information in the certified DCD incorporated by reference in 10 CFR part 52, appendix D, as part of license amendment request 15–028, “Boric Acid Storage Tank Suction Point ITAAC Changes.”
For the reasons set forth in Section 3.1 of the NRC staff's Safety Evaluation, which can be found in ADAMS under Accession No. ML17072A320, the Commission finds that:
A. The exemption is authorized by law;
B. the exemption presents no undue risk to public health and safety;
C. the exemption is consistent with the common defense and security;
D. special circumstances are present in that the application of the rule in this circumstance is not necessary to serve the underlying purpose of the rule;
E. the special circumstances outweigh any decrease in safety that may result from the reduction in standardization caused by the exemption; and
F. the exemption will not result in a significant decrease in the level of safety otherwise provided by the design.
2. Accordingly, the licensee is granted an exemption from the certified DCD Tier 1 information related to the boric acid storage tank (BAST) available volume at the suction point, chemical and volume control system (CVS) makeup flow rate, and BAST installation, as described in the licensee's request dated October 26, 2016. This exemption is related to, and necessary for the granting of License Amendment Nos. 78 and 77 for Units 3 and 4, respectively, which is being issued concurrently with this exemption.
3. As explained in Section 5.0 of the NRC staff's Safety Evaluation (ADAMS Accession No. ML17072A320), this exemption meets the eligibility criteria for categorical exclusion set forth in 10
4. This exemption is effective as of the date of its issuance.
By letter dated October 26, 2016 (ADAMS Accession No. ML16300A325), the licensee requested that the NRC amend the COLs for VEGP, Units 3 and 4, COLs NPF–91 and NPF–92. The proposed amendment is described in Section I of this
The Commission has determined for these amendments that the application complies with the standards and requirements of the Atomic Energy Act of 1954, as amended (the Act), and the Commission's rules and regulations. The Commission has made appropriate findings as required by the Act and the Commission's rules and regulations in 10 CFR chapter I, which are set forth in the license amendment.
A notice of consideration of issuance of amendment to facility operating license or combined license, as applicable, proposed no significant hazards consideration determination, and opportunity for a hearing in connection with these actions, was published in the
The Commission has determined that these amendments satisfy the criteria for categorical exclusion in accordance with 10 CFR 51.22. Therefore, pursuant to 10 CFR 51.22(b), no environmental impact statement or environmental assessment need be prepared for these amendments.
Using the reasons set forth in the combined safety evaluation, the staff granted the exemption and issued the amendment that the licensee requested on October 26, 2016. The exemption and amendment were issued on May 25, 2017, as part of a combined package to the licensee (ADAMS Accession No. ML17072A312).
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Exemption and combined license amendment; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is granting an exemption to allow a departure from the certification information of Tier 1 of the generic design control document (DCD) and is issuing License Amendment No. 73 to Combined Licenses (COLs), NPF–93 and NPF–94. The COLs were issued to South Carolina Electric & Gas Company, (SCE&G); for construction and operation of the Virgil C. Summer Nuclear Station (VCSNS) Units 2 and 3, located in Fairfield County, South Carolina.
The granting of the exemption allows the changes to Tier 1 information asked for in the amendment. Because the acceptability of the exemption was determined in part by the acceptability of the amendment, the exemption and amendment are being issued concurrently.
The exemption and amendment were issued on May 24, 2017.
Please refer to Docket ID NRC–2008–0441 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:
•
•
•
Billy Gleaves, Office of New Reactors, U.S. Nuclear Regulatory Commission, Washington, DC 20555–0001; telephone: 301–415–5848; email:
The NRC is granting an exemption from Paragraph B of Section III, “Scope and Contents,” of appendix D, “Design Certification Rule for the AP1000,” to part 52 of title 10 of the
Part of the justification for granting the exemption was provided by the review of the amendment. Because the exemption is necessary in order to issue the requested license amendment, the NRC granted the exemption and issued the amendment concurrently, rather
Identical exemption documents (except for referenced unit numbers and license numbers) were issued to SCE&G for VCSNS Units 2 and 3 (COLs NPF–93 and NPF–94). The exemption documents for VCSNS Units 2 and 3 can be found in ADAMS under Accession Nos. ML17072A117 and ML17072A118, respectively. The exemption is reproduced (with the exception of abbreviated titles and additional citations) in Section II of this document. The amendment documents for COLs NPF–93 and NPF–94 are available in ADAMS under Accession Nos. ML17072A111 and ML17072A114, respectively. A summary of the amendment documents is provided in Section III of this document.
Reproduced below is the exemption document issued to VCSNS Units 2 and Unit 3. It makes reference to the combined safety evaluation that provides the reasoning for the findings made by the NRC (and listed under Item 1) in order to grant the exemption:
1. In an application dated September 29, 2016, SCE&G requested from the Commission an exemption to allow departures from Tier 1 information in the certified DCD incorporated by reference in 10 CFR part 52, appendix D, as part of license amendment request 15–11, “Boric Acid Storage Tank Suction Point ITAAC Changes.”
For the reasons set forth in Section 3.1 of the NRC staff's Safety Evaluation, which can be found in ADAMS under Accession No. ML17072A125, the Commission finds that:
A. The exemption is authorized by law;
B. the exemption presents no undue risk to public health and safety;
C. the exemption is consistent with the common defense and security;
D. special circumstances are present in that the application of the rule in this circumstance is not necessary to serve the underlying purpose of the rule;
E. the special circumstances outweigh any decrease in safety that may result from the reduction in standardization caused by the exemption; and
F. the exemption will not result in a significant decrease in the level of safety otherwise provided by the design.
2. Accordingly, SCE&G is granted an exemption from the certified DCD Tier 1 information related to the boric acid storage tank (BAST) available volume at the suction point, chemical and volume control system (CVS) makeup flow rate, and BAST installation, as described in SCE&G's request dated September 29, 2016. This exemption is related to, and necessary for the granting of License Amendment No. 73, which is being issued concurrently with this exemption.
3. As explained in Section 5.0 of the NRC staff's Safety Evaluation (ADAMS Accession No. ML17072A125), this exemption meets the eligibility criteria for categorical exclusion set forth in 10 CFR 51.22(c)(9). Therefore, pursuant to 10 CFR 51.22(b), no environmental impact statement or environmental assessment needs to be prepared in connection with the issuance of the exemption.
4. This exemption is effective as of the date of its issuance.
By letter dated September 29, 2016 (ADAMS Accession No. ML16273A557), SCE&G requested that the NRC amend the COLs for VCSNS, Units 2 and 3, COLs NPF–93 and NPF–94. The proposed amendment is described in Section I of this
The Commission has determined for these amendments that the application complies with the standards and requirements of the Atomic Energy Act of 1954, as amended (the Act), and the Commission's rules and regulations. The Commission has made appropriate findings as required by the Act and the Commission's rules and regulations in 10 CFR Chapter I, which are set forth in the license amendment.
A notice of consideration of issuance of amendment to facility operating license or combined license, as applicable, proposed no significant hazards consideration determination, and opportunity for a hearing in connection with these actions, was published in the
The Commission has determined that these amendments satisfy the criteria for categorical exclusion in accordance with 10 CFR 51.22. Therefore, pursuant to 10 CFR 51.22(b), no environmental impact statement or environmental assessment need be prepared for these amendments.
Using the reasons set forth in the combined safety evaluation, the staff granted the exemption and issued the amendment that SCE&G requested on September 29, 2016.
The exemption and amendment were issued on May 24, 2017, as part of a combined package to SCE&G (ADAMS Accession No. ML17072A069).
For the Nuclear Regulatory Commission.
The ACRS Subcommittee on APR1400 will hold a meeting on June 20–21, 2017, at 11545 Rockville Pike, Room T–2B1, Rockville, Maryland 20852.
The meeting will be open to public attendance with the exception of portions that may be closed to protect information that is proprietary pursuant to 5 U.S.C. 552b(c)(4). The agenda for the subject meeting shall be as follows:
The Subcommittee will review the APR1400 design control document review, Chapter 7, “Instrumentation and Controls” and Chapter 18, “Human Factors Engineering.” The Subcommittee will hear presentations by and hold discussions with the NRC staff and Korea Hydro & Nuclear Power Company regarding this matter. The Subcommittee will gather information, analyze relevant issues and facts, and formulate proposed positions and actions, as appropriate, for deliberation by the Full Committee.
Members of the public desiring to provide oral statements and/or written comments should notify the Designated Federal Official (DFO), Christopher Brown (Telephone 301–415–7111 or Email:
Detailed meeting agendas and meeting transcripts are available on the NRC Web site at
If attending this meeting, please enter through the One White Flint North Building, 11555 Rockville Pike, Rockville, Maryland 20852. After registering with Security, please contact Mr. Theron Brown (Telephone 240–888–9835) to be escorted to the meeting room.
Nuclear Regulatory Commission.
Combined licenses and record of decision; issuance.
The U.S. Nuclear Regulatory Commission (NRC) has issued a combined license (No. NPF–103) to Virginia Electric and Power Company (doing business as Dominion Virginia Power) for North Anna Unit 3. In addition, the NRC has prepared a Summary Record of Decision (ROD) that supports the NRC's decision to issue the above-named combined license.
Combined license NPF–103 became effective on June 2, 2017.
Please refer to Docket ID NRC–2008–0066 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:
•
•
•
James Shea, telephone: 301–415–1388, email:
Under section 2.106 of title 10 of the
Accordingly, the combined license was issued on June 2, 2017, and became effective immediately.
The NRC has prepared a Final Safety Evaluation Report (FSER) and Final Supplemental Environmental Impact Statement (FSEIS) that document the information reviewed and the NRC's conclusion. The Commission has also issued its memorandum and order documenting its final decision on the uncontested hearing held on March 23, 2017, which serves as the ROD in this proceeding. The NRC also prepared a document summarizing the ROD to accompany its actions on the combined license application; this “Summary ROD” incorporates by reference materials contained in the FSEIS. The FSER, FSEIS, Summary ROD, and accompanying documentation included in the combined license package, as well as the Commission's hearing decision and Summary ROD, are available online in the ADAMS Public Document collection at
The documents identified in the following table are available to interested persons through the ADAMS Public Documents collection. A copy of the combined license application is also available for public inspection at the NRC's PDR and at
For the Nuclear Regulatory Commission.
Pending before this Licensing Board is a request for a hearing and petition to intervene submitted on April 18, 2017 by the City of Miami, the Village of Pinecrest, and the City of South Miami (Petitioners).
The [Final Safety Evaluation Report (FSER)] is deficient in concluding that [Florida Power & Light Company (FPL)] has demonstrated that it possesses or has reasonable assurance of obtaining the funds necessary to cover estimated construction costs and related fuel cycle costs and FPL has failed to indicate source(s) of funds to cover these costs.
After reviewing the petition and the subsequently filed related pleadings,
The Board will hear argument from counsel for the parties in the following order: (1) Petitioners; (2) FPL; and (3) the NRC Staff. Petitioners will have 60 minutes of argument time, and they may reserve up to 20 minutes of that time for rebuttal. FPL and the NRC Staff will each have 30 minutes of argument time.
The following list includes topics the parties should address during oral argument. This list is not intended to be exclusive.
On or before Friday, June 16, parties shall provide by email to the Board and the service list the name of the attorney who will present oral argument. The Board's law clerk, Kimberly Hsu, will provide the dial-in number and passcode to be used by counsel for the oral argument. No witnesses, other representatives of the parties, or members of the public will be heard during the argument. However, individuals who wish to hear the oral argument live on the listen-only telephone line may do so, and should contact Ms. Hsu at
Rockville, Maryland.
For the Atomic Safety and Licensing Board.
Nuclear Regulatory Commission.
Exemption; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is issuing an exemption in response to a request submitted by Entergy Nuclear Operations, Inc. (Entergy) on November 9, 2016, and supplemented on January 9, 2017, for its general license to operate an independent spent fuel storage installation (ISFSI) at the Vermont Yankee Nuclear Power Station (VYNPS). This exemption would permit the VYNPS to load and store certain low-enriched channeled undamaged fuel assemblies with higher enriched fuel assemblies in the same HI–STORM 100 multi-purpose canister (MPC)–68M using Certificate of Compliance (CoC) No. 1014, Amendment No. 10.
June 14, 2017.
Please refer to Docket ID NRC–2017–0134 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:
•
•
• 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.
Yen-Ju Chen, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555; telephone: 301–415–1018; email:
The VYNPS began operation in 1972. The reactor was permanently shut down on December 29, 2014. The VYNPS currently stores spent boiling-water reactor (BWR) fuel assemblies at its ISFSI in thirteen (13) HI–STORM 100 casks under CoC No. 1014, Amendment No. 2. The remaining spent fuel assemblies were removed from the reactor and transferred to the spent fuel pool. Entergy, which owns the facility, submitted the VYNPS Post-Shutdown Decommissioning Activities Report (PSDAR) to the NRC on December 19, 2014. In the PSDAR, Entergy stated its intention to move all of the spent nuclear fuel assemblies into dry cask storage by 2020 and put the plant into SAFSTOR
Consistent with subpart K of part 72 of title 10 of the
By letter dated November 9, 2016, as supplemented on January 9, 2017, Entergy submitted a request for an exemption from those provisions of 10 CFR 72.212(a)(2), 72.212(b)(3), 72.212(b)(5)(i), 72.212(b)(11), and 72.214 that require compliance with the terms, conditions, and specifications of CoC No. 1014, Amendment No. 10, for the VYNPS to load and store certain low-enriched channeled undamaged fuel assemblies with higher enriched fuel assemblies in the same Holtec HI–STORM 100 MPC–68M canister.
Pursuant to 10 CFR 72.7, the Commission may, upon application by any interested person or upon its own initiative, grant such exemptions from the requirements of the regulations of 10 CFR part 72 as it determines are authorized by law and will not endanger life or property or the common defense and security, and are otherwise in the public interest.
The NRC staff prepared a safety evaluation report (SER) (ADAMS Accession No. ML17054C788) to document the evaluation of the proposed mixed-enrichment fuel loading arrangement to assure continued protection of public health and safety, common defense and security, and the environment. As summarized below, the NRC's safety review concludes that the requested exemption does not affect the ability of the cask system to meet the requirements of 10 CFR part 72.
This exemption would permit the VYNPS to load and store certain low-enriched (up to 3.3 wt.% U–235) channeled BWR fuel assemblies classified as undamaged per CoC No. 1014, Amendment No. 10, in the same MPC with higher enriched (planar-average initial enrichment up to 4.8 wt.% U–235) BWR fuel assemblies. The provisions from which the NRC is granting the exemption require the VYNPS to follow the conditions of CoC No. 1014, Amendment No. 10, that when loading certain low-enriched channeled undamaged BWR fuel assemblies in an MPC–68M, all fuel assemblies in the same MPC are limited to 3.3 wt.% U–235 maximum planar-average initial enrichment.
Section 72.7 allows the Commission to grant exemptions from the requirements of 10 CFR part 72 if the exemption is authorized by law and will not endanger life or property nor the common defense and security. Issuance of this exemption is consistent with the Atomic Energy Act of 1954, as amended, and not otherwise inconsistent with NRC's regulations or other applicable laws. Therefore, issuance of the exemption is authorized by law.
Approval of this exemption request will allow VYNPS to load and store certain low-enriched channeled undamaged BWR fuel assemblies in the same HI–STORM 100 MCP–68M canister, with higher enriched BWR fuel assemblies. As discussed in the SER and summarized in the following sections, the NRC staff finds that Entergy's proposed action is acceptable and will not endanger life or property.
The classification of certain low-enriched channeled BWR fuel as undamaged for the Holtec HI–STORM 100 system was reviewed previously and approved by the NRC in Amendment No. 9, Revision 1, on March 21, 2016. The CoC has a restriction that when loading certain low-enriched channeled undamaged BWR fuel (limited to 3.3 wt.% U–235), all fuels in the same MPC are limited to 3.3 wt.% U–235 maximum planar-average initial enrichment.
Entergy stated that the VYNPS has a large number of assemblies that fall into the category of low-enriched channeled undamaged BWR fuel. These assemblies can be mixed with higher enriched fuel in the same cask to reduce dose rates because placing the low-enriched
The NRC staff reviewed the requested exemption and determined that it does not change the fundamental design, components, or safety features of the storage system. The NRC staff evaluated the applicable potential safety impacts of granting the exemption to assess the potential for any danger to life or property or the common defense and security. Specifically, the NRC staff reviewed the applicant's criticality and shielding evaluations for the proposed exemption.
Based on its review, the NRC staff has determined that under the requested exemption, the storage system will continue to meet the safety requirements of 10 CFR part 72 and the offsite dose limits of 10 CFR part 20 and, therefore, will not endanger life or property. The NRC staff also finds that the exemption would not endanger common defense and security.
In considering whether granting the exemption is in the public interest, the NRC staff considered the alternative of not granting the exemption. If the exemption was not granted, in order to comply with the CoC, when the VYNPS loaded certain low-enriched channeled undamaged BWR fuel, all fuels in the same MPC would be limited to 3.3 wt.% U–235 maximum planar-average initial enrichment.
Entergy stated that granting the exemption is in the public interest since it will reduce operational dose rate by loading certain low-enriched channeled undamaged BWR fuel with higher enriched BWR fuel in the same MPC, and NRC staff confirms this statement in Section B.6 of the SER. Additionally, granting the exemption would support VYNPS's cask loading schedule as part of its decommissioning effort.
The NRC staff concludes that allowing the VYNPS to load certain low-enriched channeled undamaged BWR fuel with higher enriched BWR fuel in the same MPC would continue to provide adequate protection of public health and safety. Therefore, granting the exemption is otherwise in the public interest.
The NRC staff also considered whether there would be any significant environmental impacts associated with the exemption. For this proposed action, the NRC staff performed an environmental assessment pursuant to 10 CFR 51.30. The environmental assessment concluded that the proposed action would not significantly impact the quality of the human environment. The NRC staff concluded that the proposed action would not result in any changes in the types or amounts of any radiological or non-radiological effluents that may be released offsite, and there is no significant increase in occupational or public radiation exposure because of the proposed action. The Environmental Assessment and the Finding of No Significant Impact was published on June 6, 2017 (82 FR 26144).
Accordingly, the Commission has determined that, pursuant to 10 CFR 72.7, this exemption is authorized by law, will not endanger life or property or the common defense and security, and is otherwise in the public interest. Therefore, the Commission hereby grants Entergy an exemption from those provisions of 10 CFR 72.212(a)(2), 10 CFR 72.212(b)(3), 10 CFR 72.212(b)(5)(i), 10 CFR 72.214, and the portion of 10 CFR 72.212(b)(11) that require compliance with terms, conditions, and specifications of the CoC No. 1014, Amendment No. 10, for the VYNPS to load and store certain low-enriched channeled undamaged fuel assemblies with higher enriched fuel assemblies in the same Holtec HI–STORM 100 MPC–68M canister.
The documents identified in the following table are available to interested persons through one or more of the methods indicated in the
The exemption is effective upon issuance.
For the Nuclear Regulatory Commission.
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing for the Commission's consideration concerning negotiated service agreements. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202–789–6820.
The Commission gives notice that the Postal Service filed request(s) for the Commission to consider matters related to negotiated service agreement(s). The request(s) may propose the addition or removal of a negotiated service agreement from the market dominant or the competitive product list, or the modification of an existing product currently appearing on the market dominant or the competitive product list.
Section II identifies the docket number(s) associated with each Postal Service request, the title of each Postal Service request, the request's acceptance date, and the authority cited by the Postal Service for each request. For each request, the Commission appoints an officer of the Commission to represent the interests of the general public in the proceeding, pursuant to 39 U.S.C. 505 (Public Representative). Section II also establishes comment deadline(s) pertaining to each request.
The public portions of the Postal Service's request(s) can be accessed via the Commission's Web site (
The Commission invites comments on whether the Postal Service's request(s) in the captioned docket(s) are consistent with the policies of title 39. For request(s) that the Postal Service states concern market dominant product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3622, 39 U.S.C. 3642, 39 CFR part 3010, and 39 CFR part 3020, subpart B. For request(s) that the Postal Service states concern competitive product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3632, 39 U.S.C. 3633, 39 U.S.C. 3642, 39 CFR part 3015, and 39 CFR part 3020, subpart B. Comment deadline(s) for each request appear in section II.
1.
2.
3.
4.
This notice will be published in the
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to extend the operation of Penny Pilot Program through December 31, 2017. The text of the proposed rule change is provided below.
The Board of Directors may establish minimum quoting increments for options traded on the Exchange. When the Board of Directors determines to change the minimum increments, the Exchange will designate such change as a stated policy, practice, or interpretation with respect to the administration of this Rule within the meaning of subparagraph (3)(A) of subsection 19(b) of the Exchange Act and will file a rule change for effectiveness upon filing with the Commission. Until such time as the Board of Directors makes a change to the minimum increments, the following minimum increments shall apply to options traded on the Exchange:
(1) No change.
(2) No change.
(3) The decimal increments for bids and offers for all series of the option classes participating in the Penny Pilot Program are: $0.01 for all option series quoted below $3 (including LEAPS), and $0.05 for all option series $3 and above (including LEAPS). For QQQQs, IWM, and SPY, the minimum increment is $0.01 for all option series. The Exchange may replace any option class participating in the Penny Pilot Program that has been delisted with the next most actively-traded, multiply-listed option class, based on national average daily volume in the preceding six calendar months, that is not yet included in the Pilot Program. Any replacement class would be added on the second trading day following [January 1, 2017]
(4) No change.
The text of the proposed rule change is also available on the Exchange's Web site (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Penny Pilot Program (the “Pilot Program”) is scheduled to expire on June 30, 2017. C2 proposes to extend the Pilot Program until December 31, 2017. C2 believes that extending the Pilot Program will allow for further analysis of the Pilot Program and a determination of how the Pilot Program should be structured in the future.
During this extension of the Pilot Program, C2 proposes that it may replace any option class that is currently included in the Pilot Program and that has been delisted with the next most actively traded, multiply listed option class that is not yet participating in the Pilot Program (“replacement class”). Any replacement class would be determined based on national average daily volume in the preceding six months,
C2 is specifically authorized to act jointly with the other options exchanges participating in the Pilot Program in identifying any replacement class.
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
C2 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. Specifically, the Exchange believes that, by extending the expiration of the Pilot Program, the proposed rule change will allow for further analysis of the Pilot Program and a determination of how the Program shall be structured in the future. In doing so, the proposed rule change will also serve to promote regulatory clarity and consistency, thereby reducing burdens on the marketplace and facilitating investor protection. In addition, the Exchange has been authorized to act jointly in extending the Pilot Program and believes the other exchanges will be filing similar extensions.
The Exchange 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
A proposed rule change filed under Rule 19b–4(f)(6)
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.
All submissions should refer to File Number SR–C2–2017–020. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On April 20, 2017, NYSE Arca, Inc. (“Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to list and trade the Shares under NYSE Arca Equities Rule 8.600, which governs the listing and trading of Managed Fund Shares on the Exchange. The Shares will be offered by the IndexIQ Active ETF Trust (“Trust”), which is registered with the Commission as an open-end management investment company.
The Exchange has made the following representations and statements in describing the Funds and their investment strategies, including each Fund's portfolio holdings and investment restrictions.
According to the Exchange, for purposes of the filing, the term “Municipal Bonds” as applied to each of the Funds means the following:
• Municipal lease obligations (and certificates of participation in such obligations);
• municipal general obligation bonds (including industrial development bonds issued pursuant to federal tax law), which are issued for either project or enterprise financings in which the bond issuer pledges to the bondholders the revenues generated by the operating projects financed from the proceeds of the bond issuance;
• limited obligation bonds, which are payable only from the revenues derived from a particular facility or class of facilities or, in some cases from the proceeds of a special excise or other specific revenue source;
• municipal revenue bonds (which are typically secured by revenues generated by the issuer), including revenue anticipation notes;
• municipal bond anticipation notes (which are normally issued to provide interim financial assistance until long-term financing can be arranged);
• municipal bonds that feature credit enhancements, such as lines of credit, letters of credit, municipal bond insurance, and standby bond purchase agreements;
• discount municipal bonds (which may be originally issued at a discount to par value or sold at market price below par value);
• premium municipal bonds, which are sold at a premium to par value;
• zero coupon municipal bonds, which are issued at an original issue discount, with the full value, including accrued interest, paid at maturity;
• taxable municipal bonds, including Build America Bonds;
• municipal notes;
• municipal cash equivalents;
• private activity bonds (including without limitation industrial development bonds);
• pre-refunded and escrowed to maturity municipal bonds; and
• securities issued by entities whose underlying assets are Municipal Bonds (
For each Fund, the Subadviser's investment process will begin with an assessment of macro factors that may impact the municipal bond market, as well as other regulatory, tax, governmental, and technical factors that may impact the municipal bond market. Following the assessment of these factors, the Subadviser will develop an investment strategy to position a Fund among various sectors of the municipal bond market and different states. The Subadviser then will employ a fundamental, “bottom-up” credit research analysis to select individual Municipal Bonds.
According to the Exchange, the Fund will seek current income exempt from federal income tax. The Fund, under normal market conditions,
According to the Exchange, the Fund will seek current income exempt from federal income tax. The Fund, under normal market conditions, will invest at least 80% of its assets in Municipal Bonds. The Fund generally will maintain a dollar-weighted average portfolio duration of three years or less.
According to the Exchange, the Fund will seek current income exempt from federal income tax. The Fund, under normal market conditions, will invest at least 80% of its assets in Municipal Bonds. The Fund generally will maintain a dollar-weighted average duration within plus or minus two years of the dollar-weighted average duration of the S&P Municipal Bond Intermediate Index.
With respect to each of the Funds, while a Fund, under normal market conditions, will invest at least 80% of its assets in Municipal Bonds, as described above, a Fund may invest its remaining assets in other assets and financial instruments, as described below.
Each Fund may invest in shares of exchange-traded funds (“ETFs”) and money market funds.
Each Fund may hold up to an aggregate amount of 15% of its net assets in illiquid assets (calculated at the time of investment) deemed illiquid by the Adviser, consistent with Commission guidance. Each Fund will monitor its portfolio liquidity on an ongoing basis to determine whether, in light of current circumstances, an adequate level of liquidity is being maintained, and will consider taking appropriate steps in order to maintain adequate liquidity if, through a change in values, net assets, or other circumstances, more than 15% of a Fund's net assets are held in illiquid assets. Illiquid assets include securities subject to contractual or other restrictions on resale and other instruments that lack readily available markets as determined in accordance with Commission staff guidance.
Each Fund's investments will be consistent with its investment objective and will not be used to provide multiple returns of a benchmark or to produce leveraged returns.
Each Fund may invest more than 25% of its total assets in Municipal Bonds that are related in such a way that an economic, business or political development or change affecting one such security could also affect the other securities. However, a Fund's investments will be diversified among a minimum of ten different sectors of the municipal bond market.
A Fund's investments will be diversified among at least 15 different states, with no more than 30% of a Fund's securities invested in municipal securities from a single state.
Under normal market conditions, no security (excluding Treasury securities) will represent more than 25% of the weight of the portfolio, and the five highest weighted securities will not, in the aggregate, account for more than 50% of the weight of a Fund. No Municipal Bond held by a Fund will exceed 5% of the weight of a Fund's portfolio and no single Municipal Bond issuer will account for more than 8% of the weight of a Fund's portfolio. A Fund will hold Municipal Bonds of a minimum of 25 non-affiliated issuers.
The Exchange states that it is submitting the proposed rule change because the portfolios for the Funds will not meet all of the “generic” listing requirements of Commentary .01 to NYSE Arca Equities Rule 8.600 applicable to the listing of Managed Fund Shares. The Exchange states that each Fund's portfolio will meet all the requirements set forth in Commentary .01 to NYSE Arca Equities Rule 8.600 except for those set forth in Commentary .01(b)(1), which requires that components that in the aggregate account for at least 75% of the fixed income weight of the portfolio each shall have a minimum original principal amount outstanding of $100 million or more.
After careful review, the Commission finds that the Exchange's proposal to list and trade the Shares is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange.
The Commission also finds that the proposal to list and trade the Shares on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the Act,
The approximate value of each Fund's investments on a per-Share basis, the Indicative Intra-Day Value (“IIV”) (which is the Portfolio Indicative Value, as defined in NYSE Arca Equities Rule 8.600(c)(3)), will be disseminated every 15 seconds during the Exchange's Core Trading Session (ordinarily 9:30 a.m. to 4:00 p.m., Eastern Time) by one or more major market data vendors.
Information regarding market price and trading volume of the Shares will be continually available on a real-time basis throughout the day on brokers' computer screens and other electronic services. Information regarding the previous day's closing price and trading volume information for the Shares will be publicly available and published daily in the financial section of newspapers. Quotation information from brokers and dealers or pricing services will be available for Municipal Bonds and Other Investments. Price information for money market funds will be available from the applicable investment company's Web site and from market data vendors. Pricing information regarding Municipal Bonds and Other Investments (other than money market funds) will generally be available through nationally recognized data service providers through subscription agreements. Trade price and other information relating to Municipal Bonds is available through the Municipal Securities Rulemaking Board's EMMA system. Upon the commencement of operations of a Fund, a copy of the Funds' prospectus will be available on the Funds' Web site (
The Commission further believes that the proposal to list and trade the Shares is reasonably designed to promote fair disclosure of information that may be necessary to price the Shares appropriately and to prevent trading when a reasonable degree of transparency cannot be assured. The Exchange will obtain a representation from the issuer of the Shares that the NAV per Share for each Fund will be calculated daily and that the NAV and the Disclosed Portfolio for each Fund will be made available to all market participants at the same time.
The Exchange represents that it has a general policy prohibiting the distribution of material, non-public information by its employees. In addition, Commentary .06 to NYSE Arca Equities Rule 8.600 further requires that personnel who make decisions on the open-end fund's portfolio composition must be subject to procedures designed to prevent the use and dissemination of material, non-public information regarding the open-end fund's portfolio. The Exchange represents that the Adviser and Sub-Adviser are not registered as broker-dealers; however, each of the Adviser and the Sub-Adviser is affiliated with a broker-dealer, and each of the Adviser and Sub-Adviser has implemented and will maintain a fire wall with respect to their relevant personnel and each such broker-dealer affiliate regarding access to information concerning the composition of, and/or changes to, a portfolio.
Prior to the commencement of trading, the Exchange will inform its Equity Trading Permit Holders in an Information Bulletin (“Bulletin”) of the special characteristics and risks associated with trading the Shares. The Exchange represents that trading in the Shares will be subject to the existing trading surveillances, administered by the Financial Industry Regulatory Authority (“FINRA”) on behalf of the Exchange, or by regulatory staff of the Exchange, which are designed to detect violations of Exchange rules and applicable federal securities laws.
The Exchange represents that it deems the Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities.
In support of this proposal, the Exchange has made the following additional representations:
(1) The Shares of each Fund will conform to the initial and continued listing criteria under NYSE Arca Equities Rule 8.600.
(2) The Exchange has appropriate rules to facilitate transactions in the Shares during all trading sessions.
(3) Trading in the Shares will be subject to the existing trading surveillances, administered by FINRA on behalf of the Exchange, or by regulatory staff of the Exchange, which are designed to detect violations of Exchange rules and applicable federal securities laws. The Exchange represents that these procedures are adequate to properly monitor Exchange trading of the Shares in all trading sessions and to deter and detect violations of Exchange rules and federal securities laws applicable to trading on the Exchange.
(4) The Exchange or FINRA, on behalf of the Exchange, or both, will communicate as needed regarding trading in the Shares and ETFs with other markets and other entities that are members of the Intermarket Surveillance Group (“ISG”), and the Exchange or FINRA, on behalf of the Exchange, or both, may obtain trading information regarding trading in the Shares and ETFs from such markets and other entities. In addition, the Exchange may obtain information regarding trading in the Shares and ETFs from markets and other entities that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. FINRA, on behalf of the Exchange, is able to access, as needed, trade information for certain fixed income securities held by a Fund reported to FINRA's Trade Reporting and Compliance Engine. FINRA also can access data obtained from the Municipal Securities Rulemaking Board relating to municipal bond trading activity for surveillance purposes in connection with trading in the Shares.
(5) Prior to the commencement of trading, the Exchange will inform its Equity Trading Permit Holders in a Bulletin of the special characteristics and risks associated with trading the Shares. Specifically, the Bulletin will discuss: (a) The procedures for purchases and redemptions of Shares in creation unit aggregations (and that Shares are not individually redeemable); (b) NYSE Arca Equities Rule 9.2(a), which imposes a duty of due diligence on its Equity Trading Permit Holders to learn the essential facts relating to every customer prior to trading the Shares; (c) the risks involved in trading the Shares during the Opening and Late Trading Sessions when an updated IIV will not be calculated or publicly disseminated; (d) how information regarding the IIV and the Disclosed Portfolio is disseminated; (e) the requirement that Equity Trading Permit Holders deliver a prospectus to investors purchasing newly issued Shares prior to or concurrently with the confirmation of a transaction; and (f) trading information. In addition, the Bulletin will discuss any exemptive, no-action, and interpretive relief granted by the Commission from any rules under the Act.
(6) For initial and continued listing, a Fund will be in compliance with Rule 10A–3 under the Act,
(7) A minimum of 100,000 Shares for each Fund will be outstanding at the commencement of trading on the Exchange.
(8) Each Fund's investments will be consistent with its investment objective and will not be used to provide multiple returns of a benchmark or to produce leveraged returns.
(9) Under normal market conditions, each Fund will invest at least 80% of its assets in Municipal Bonds.
(10) Each Fund's investments will be diversified among a minimum of ten different sectors of the Municipal Bond market.
(11) Each Fund's investments will be diversified among at least 15 different states, with no more than 30% of a Fund's securities invested in municipal securities from a single state.
(12) Under normal market conditions, no security (excluding Treasury securities) will represent more than 25% of the weight of the portfolio of a Fund, and the five highest weighted securities will not, in the aggregate, account for more than 50% of the weight of a Fund.
(13) No Municipal Bond held by a Fund will exceed 5% of the weight of that Fund's portfolio, and no single Municipal Bond issuer will account for more than 8% of the weight of a Fund's portfolio.
(14) Each Fund will hold Municipal Bonds of a minimum of 25 non-affiliated issuers.
(15) Each Fund may hold up to an aggregate amount of 15% of its net assets in illiquid assets (calculated at the time of investment) deemed illiquid by the Adviser, consistent with Commission guidance. Each Fund will monitor its portfolio liquidity on an ongoing basis to determine whether, in light of current circumstances, an adequate level of liquidity is being maintained, and will consider taking appropriate steps in order to maintain adequate liquidity if, through a change in values, net assets, or other circumstances, more than 15% of a Fund's net assets are held in illiquid assets.
(16) The ETFs in which a Fund may invest will be listed and traded in the U.S. on registered exchanges.
The Exchange has represented that all statements and representations made in the filing regarding (a) the description of the portfolio, (b) limitations on portfolio holdings or reference assets, or (c) the applicability of Exchange listing rules specified in the filing shall constitute continued listing requirements for listing the Shares of a Fund on the Exchange. The issuer has represented to the Exchange that it will advise the Exchange of any failure by a Fund to comply with the continued listing requirements, and, pursuant to its obligations under Section 19(g)(1) of the Act, the Exchange will monitor for compliance with the continued listing requirements.
This approval order is based on all of the Exchange's representations, including those set forth above and in Amendment Nos. 1 and 2, and the Exchange's description of the Funds. The Commission notes that the Funds and the Shares must comply with the requirements of NYSE Arca Equities Rule 8.600 to be initially and continuously listed and traded on the Exchange.
For the foregoing reasons, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Exchange Act” or “Act”)
The MSRB filed with the Commission a proposed rule change to amend MSRB Rule G–26, on customer account transfers, to modernize the rule and promote a uniform customer account transfer standard for all brokers, dealers, municipal securities brokers and municipal securities dealers (collectively, “dealers”) (“proposed rule change”).
The text of the proposed rule change is available on the MSRB's Web site at
In its filing with the Commission, the MSRB 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 MSRB 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 modernize Rule G–26 and promote a uniform customer account transfer standard for all dealers. The MSRB believes that, by including certain provisions parallel to the customer account transfer rules of other SROs, particularly FINRA Rule 11870, in current Rule G–26, as outlined below, the transfer of customer securities account assets will be more flexible, less burdensome, and more efficient, while reducing confusion and risk to investors and allowing them to better move their municipal securities to their dealer of choice.
Rule G–26 requires dealers to cooperate in the transfer of customer accounts and specifies procedures for carrying out the transfer process. Such transfers occur when a customer decides to transfer an account from one dealer, the carrying party (
The MSRB adopted Rule G–26 in 1986 as part of an industry-wide initiative to create a uniform customer account transfer standard by applying a customer account transfer procedure to all dealers that are engaged in municipal securities activities.
On January 6, 2017, the MSRB published a request for comment, proposing a number of draft amendments to Rule G–26 to maintain consistency with the rules of the NSCC, the NYSE and FINRA by conforming to significant updates to those other SRO rules that have relevance to municipal securities and municipal security-only customer account transfers.
In 1989, the NSCC expanded ACATS to include the transfer of customer account residual credit positions. These are assets in the form of cash or securities that can result from dividends, interest payments or other types of assets received by the carrying party after the transfer process is completed, or which were restricted from being included in the original transfer.
The MSRB is proposing to update Rule G–26 to include the transfer of customer account residual credit positions, which would benefit both customers and dealers by substantially decreasing the paperwork, risks, inefficiencies and costs associated with the practice of check issuance and initiation of securities deliveries to resolve residual credit positions.
In 1994, the NYSE and FINRA amended their rules to permit partial or non-standard customer account transfers (
The MSRB is proposing to update Rule G–26 to permit partial account transfers under the same time frames applicable to transfers of entire accounts, which the MSRB believes would provide dealers with the ability to facilitate more efficient and expeditious transfers, as well as increase accountability for dealers and reduce difficulties encountered by customers related to transfers.
In 1998, the NSCC modified ACATS to better facilitate and expedite the transfer of a customer account containing third-party and/or proprietary products that the receiving party is unable to receive or carry.
Although most securities can be transferred, dealers vary in their ability to accept and support certain third-party investment products. Under the NSCC's prior customer account transfer procedures, and the current procedures outlined in Rule G–26, a customer that wishes to transfer its entire account to another dealer would submit a signed transfer instruction to the receiving party.
A customer account could also contain assets that are nontransferable but have not yet been identified as nontransferable (
The NSCC's modifications regarding third-party and proprietary products allow the receiving party to review the asset validation report, designate those nontransferable assets it is unable to receive/carry, provide the customer with a list of those assets, and require instructions from the customer regarding their disposition.
Under current Rule G–26, a customer can initiate a transfer of a municipal securities account from one dealer to another by giving written notice to the receiving party.
ACATS has been modified over time to provide a more seamless and timely customer account transfer process. Specifically, in 1994, the NSCC accelerated the time (from two days to one day) in which accounts are transferred by reducing the time a receiving party has after receipt of the transfer instruction to determine whether to accept, reject or request adjustments to the account.
Because Rule G–26 applies to manual customer account transfers, in addition to automated processes, the MSRB is, at this time, not incorporating by reference changes in the time frame of the transfer cycle as determined by future changes in the ACATS time frames made by the NSCC. The MSRB believes that the current time frames are sufficiently long to accommodate manual processes, but it would be important for the MSRB to evaluate the ability of bank dealers and other dealers with municipal securities-only accounts, which are subject to Rule G–26, to perform such processes under shorter time frames before adopting any such proposal in the future.
In response to a specific question in the Request for Comment,
Under current Rule G–26, if there are nontransferable assets included in a transfer instruction, there are multiple options available to the customer for their disposition, and the carrying party must request further instructions from the customer with respect to which option the customer would like to exercise.
Under current Rule G–26, one of the disposition options for nontransferable assets available to customers is liquidation.
FINRA Rule 11870(c)(3)(C) provides an option for nontransferable assets that are proprietary products to be transferred, physically and directly, in the customer's name to the customer. The MSRB believes that some municipal securities that are nontransferable assets could similarly be transferred, physically and directly, to the customer, so the proposed rule change would add this option to the alternative dispositions available to customers.
Rule G–26 currently does not provide a time frame for the carrying party to effect the disposition of nontransferable assets as instructed by the customer. FINRA Rule 11870(c)(5) requires that the money balance resulting from liquidation must be distributed, and any transfer instructed by the customer must be initiated, within five business days following receipt of the customer's disposition instruction. The MSRB believes it is important to provide clarity as to the timing of these dispositions to ensure that customer transfers are handled expeditiously.
Current Rule G–26(d) establishes, as part of the transfer procedures, the requirements for validation of the transfer instructions and completion of the transfer. To detail the specific validation/exception and completion processes more clearly and to better harmonize with FINRA Rule 11870, the proposed rule change would provide the provisions describing those processes in new, separate sections of the rule.
Under current Rule G–26(d)(iv)(A), upon validation of a transfer instruction, the carrying party must “freeze” the account to be transferred and return the transfer instruction to the receiving party with an attachment indicating all securities positions and money balance in the account as shown on the books of the carrying party. Because the proposed rule change would allow for partial account transfers of specifically designated municipal securities assets, the proposed rule change would require the account freeze only for validation of the transfer of an entire account, as the
Additionally, current Rule G–26(d)(iv)(B) requires the carrying party to include a then-current market value for all assets to be transferred. FINRA Rule 11870(d)(5) provides that the original cost should be used as the value if a then-current value cannot be determined for an asset. The proposed rule change would include a provision substantially similar to the FINRA provision to provide clarity on how any such municipal securities should be valued and to improve harmonization between the MSRB and FINRA rules.
As part of the validation process, current Rule G–26 provides that the carrying party may take certain exceptions to the transfer instructions authorized by the customer and provided by the receiving party. Specifically, Rule G–26(d)(ii) allows a carrying party to take exception to a transfer instruction only if it has no record of the account on its books or the transfer instruction is incomplete.
Additionally, FINRA Rule 11870(d)(2) precludes a carrying party from taking an exception and denying validation of the transfer instruction because of a dispute over security positions or the money balance in the account to be transferred, and it requires the carrying party to transfer the positions and/or money balance reflected on its books for the account. The MSRB believes this provision will be equally valuable to transfers covered under Rule G–26 to ensure that customers are able to hold their municipal securities at their dealers of choice.
During the validation process for a customer account transfer, there is a risk that the parties to the transfer fail to identify certain nontransferable assets, resulting in the improper transfer of those assets. FINRA Rule 11870(c)(1)(E) explicitly requires that the parties promptly resolve and reverse any such misidentified nontransferable assets, update their records and bookkeeping systems and notify the customer of the action taken. The MSRB believes it is important to add this explicit requirement to Rule G–26 to ensure that dealers address any errors in the transfer process promptly.
FINRA Rule 11870(d)(8) allows the receiving party to reject a full account transfer if the account would not be in compliance with its credit policies or minimum asset requirements. A receiving party may not reject only a portion of the account assets (
Rule G–26(f) currently provides that any discrepancies relating to positions or money balances that exist or occur after transfer of a customer account must be resolved promptly.
When both the carrying party and the receiving party are direct participants in a clearing agency that is registered with the SEC and offers automated customer securities account transfer capabilities, Rule G–26(h) currently requires the account transfer procedure to be accomplished pursuant to the rules of and through such registered clearing agency.
When both the carrying party and the receiving party are direct participants in a clearing agency registered with the SEC offering automated customer securities account transfer capabilities, FINRA Rule 11870(n) requires each party to transfer credit balances that occur in any transferred account assets (both cash and securities) through the automated service within 10 business days after the credit balances accrue to the account for a minimum period of six months. Given that the majority of customer account transfers subject to Rule G–26 occur manually, the MSRB believes it is important to provide clarity on the obligation and timing required to transfer such credit balances for any customer account transfer, so the proposed rule change would include a provision with the same 10-business-day requirement as FINRA Rule 11870(n) that is not limited to when both parties are direct participants in a clearing agency registered with the SEC offering automated customer securities account transfer capabilities.
Current Rule G–26 does not itself include any requirement for policies and procedures, but Supplementary Material .01 to FINRA Rule 11870 requires the establishment, maintenance and enforcement of written procedures to affect and supervise customer account transfers. The MSRB believes it is important for dealers to document the procedures they follow to effect customer account transfers and to require explicitly written procedures for supervision of the same, which is consistent with MSRB Rule G–27, on supervision. Accordingly, the proposed rule change would include such a requirement.
Neither current Rule G–26 nor any other MSRB rule specifically addresses transfer fees. However, FINRA Rule 11650, on transfer fees, specifies that the party at the instance of which a transfer of securities is made shall pay all service charges of the transfer agent. The MSRB believes it is important to clarify which party is responsible for the fees incurred for a customer account transfer. Accordingly, the proposed rule change would include a provision identical to FINRA Rule 11650.
Section 15B(b)(2) of the Act
Section 15B(b)(2)(C) of the Act
The MSRB believes that the proposed rule change is consistent with the provisions of Sections 15B(b)(2)
The MSRB also believes that the proposed rule change is consistent with
The MSRB believes that the proposed rule change is consistent with Section 15B(b)(2)(G) of the Act
Section 15B(b)(2)(C) of the Act
The MSRB does not believe the proposed rule change will create a burden on competition, as all municipal securities brokers and municipal securities dealers would be subject to the same modified requirements for customer account transfers. The MSRB believes that the proposed rule change may reduce inefficiencies that stem from uncertainty and confusion associated with existing Rule G–26. The MSRB also believes that dealers may benefit from clarifications and revisions that more closely reflect the securities industry standard, which may, in turn, reduce operational risk to dealers and investors. Finally, the MSRB believes that the proposed rule change will make the transfer of customer municipal securities account assets more flexible, less burdensome, and more efficient, while reducing confusion and risk to investors and allowing them to more conveniently move their municipal securities to their dealer of choice.
The MSRB received three comment letters in response to the Request for Comment.
SIFMA supported the stated purpose of the draft amendments to modernize Rule G–26 and promote a uniform customer account transfer standard, but it suggests some alternative approaches to achieve that end. Specifically, SIFMA recognized that Rule G–26 is only applicable to municipal securities brokers and municipal securities dealers, particularly those with municipal security-only accounts and bank dealers, but believes the rule is unnecessary. Further, SIFMA noted that the firms subject to Rule G–26 are a small fraction of the total number of firms and, for the most part, are not direct clearing participants of the NSCC and, therefore, not eligible to participate in the ACATS process.
Although SIFMA is correct that most of the firms subject to Rule G–26 do not participate in ACATS, SIFMA did not recognize that, from the rule's inception, it has been intended to cover these firms, which are not subject to NSCC, FINRA or NYSE rules, regardless of how few of them there may be and regardless of how few customer account transfers they may perform.
SIFMA alternatively suggested that, if the MSRB does not eliminate Rule G–26, it should amend the rule to incorporate FINRA Rule 11870 by reference, similar to what the NYSE has done in its Rule 412 and what the Board has done in MSRB Rule G–41, on anti-money laundering compliance programs.
Although amending Rule G–26 to incorporate FINRA Rule 11870 by reference could be a simple and efficient solution to provide a uniform industry standard, the MSRB does not typically incorporate other regulators' rules by reference. The MSRB believes that, while the incorporation by reference approach suggested by SIFMA may enhance harmonization with FINRA's rules, that approach would raise significant concerns for the MSRB, given its statutory mandate and mission. For example, if FINRA or its staff were to provide an interpretation of FINRA Rule 11870, the MSRB automatically would be adopting that interpretation without deliberately considering the issues that may be unique to, or the interpretation's ramifications for, the municipal securities market. Further, there are municipal securities dealers that are not members of FINRA. Those dealers may not have notice of FINRA's rule interpretations unless the MSRB were to monitor FINRA's rulemaking and independently notify dealers. Therefore, if the MSRB were to regulate customer account transfers over which it has jurisdiction by simply incorporating a FINRA rule by reference, the MSRB potentially could be seen as delegating its core mission to protect investors, issuers, and the public interest and to promote a fair and efficient municipal market.
As discussed in the Request for Comment, FINRA Rule 11870(f)(1) requires that any fail contracts resulting from an account transfer, which includes municipal securities, be included in a dealer's fail file and that, not later than 30 business days following the date delivery was due, the dealer shall take steps to obtain physical possession or control of the municipal securities so failed to receive by initiating a buy-in procedure or otherwise.
To avoid these inconsistencies and uncertainties, the draft amendments in the Request for Comment proposed to amend the definition of “nontransferable asset” to include any customer long position in a municipal security that allocates to a short position, which resulted from either the carrying party's trading activity or failure to receive the securities it purchased to fill a customer's municipal securities order (
SIFMA recognized the inconsistency between Rule G–26 and FINRA Rule 11870, as well as the complexity in CNS created by the inconsistency; however, it disagreed with the MSRB's analysis that the draft amendment to the definition of “nontransferable asset” would reduce counterparty risk and increase customer confidence, and it believed that it would be disruptive to industry practice and outside of standard ACATS procedures. SIFMA stated that “[a]utomated systems fail to be efficient if they require manual processes, such as validating if a long municipal security position is allocated to a short firm position.” BDA also had concerns and believes that the proposed amendment to the definition is unworkable. BDA stated that significant operational changes would have to occur in order to make the change feasible because current dealer systems are not designed to code or segregate inter-dealer transaction fails and account transfer fails, and because most firms track fails at the firm level, not at the account level for compliance with regulatory issues, such as properly tracking substitute interest. BDA urged the MSRB to engage in dealer outreach to find a different solution that better aligns with existing dealer systems and processes.
As an alternative to amending the definition of “nontransferable asset,” SIFMA believed that FINRA Rule 11870 must be amended as soon as practicable to reflect the recent amendments to Rule G–12 relating to close-outs to eliminate the inconsistency in the time frames. Accordingly, SIFMA suggested that FINRA simply cross-reference Rule G–12(h), and any amendments thereto, for any fail contracts in municipal securities resulting from customer account transfers.
Given both SIFMA's and BDA's concerns about the operational changes needed and the corresponding costs that would result from such a change, the MSRB, at this time, does not believe amending the definition of “nontransferable asset” to include any customer long position in a municipal security that allocates to a short position is appropriate, particularly without certainty that FINRA would similarly amend FINRA Rule 11870 to ensure that all short municipal securities positions in customer account transfers receive identical treatment.
As discussed above, in response to comments from SIFMA, the proposed rule change would amend the definition of “nontransferable asset” to include proprietary products of the carrying party and would allow for either the carrying party or the receiving party (or both) to provide the list of nontransferable assets to a customer and request their disposition.
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.
For the Commission, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to allow a former reverse merger company to qualify for initial listing under any applicable listing standard after satisfying the required seasoning period.
The text of the proposed rule change is set forth below. Proposed new language is italicized; deleted text is in brackets.
(a)–(b) No change.
(1) A Company that is formed by a Reverse Merger (a “Reverse Merger Company”) shall be eligible to submit an application for initial listing only if the combined entity has, immediately preceding the filing of the initial listing application:
(A) No change.
(B) maintained a closing price [of $4 per share or higher]
(2) In addition to satisfying all of Nasdaq's other initial listing requirements, a Reverse Merger Company will only be approved for listing if, at the time of approval, it has:
(A) No change.
(B) maintained a closing price [of $4 per share or higher]
(3) No change.
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.
In 2011, Nasdaq adopted additional requirements (the “Reverse Merger Rules”) for companies applying to list after consummating a reverse merger with a shell company (a “Reverse Merger Company”).
At the time Nasdaq adopted the Reverse Merger Rules, all companies were required to achieve a minimum $4 bid price for listing. Subsequently, in 2012, Nasdaq modified its listing requirements to add an alternative to the $4 minimum bid price per share requirement (the “Alternative Price Requirement”).
At the time, because Nasdaq did not yet have sufficient experience with the Reverse Merger Rules or any experience with the new alternative price criteria, Nasdaq did not allow Reverse Merger Companies to list under the Alternative Price Requirement.
Nasdaq now believes it is appropriate to allow a former Reverse Merger Company to qualify for initial listing under any applicable listing standard, including the Alternative Price Requirement, after satisfying the seasoning period required by the Reverse Merger Rules. In making this change, Nasdaq notes that the Reverse Merger Rules' seasoning period requires that a company must wait at least one year after it files with the Commission or other Regulatory Authority all required information about the transaction, including audited financial statements for the combined entity and that the Reverse Merger Company must have timely filed all required periodic financial reports with the Commission or other Regulatory Authority for the prior year, including at least one annual report with financial statements for a full fiscal year commencing after it filed the necessary information about the transaction. Nasdaq believes that, upon completion of this period, it is appropriate to treat a Reverse Merger Company in the same manner as any other company and to permit listing under any of Nasdaq's applicable listing requirements, including the Alternative Price Requirement.
Rule 3a51–1 under the Act
To address concerns about the potential manipulation of lower priced stocks to meet the initial listing requirements, securities listing under the Alternative Price Requirement are
In addition, if a security listed under the Alternative Price Requirement subsequently achieves a $4 closing price over at least five consecutive business days, and the issuer and the security satisfy all other relevant initial listing criteria, then such security would no longer be considered as having listed under the Alternative Price Requirement. While this potentially could provide an incentive for market participants to manipulate the price of the security in order to achieve the $4 closing price and no longer be considered as having listed under the Alternative Price Requirement, Nasdaq adopted measures designed to address those concerns for any company listed under the Alternative Price Requirement, which the Commission concluded should help reduce the potential for price manipulation to achieve the $4 closing price, and in this respect are designed to prevent fraudulent and manipulative acts and practices consistent with Section 6(b)(5) of the Act. Specifically, Nasdaq will conduct a robust, wholesale review of the issuer's compliance with all applicable initial listing criteria, including qualitative and quantitative standards, at the time the $4 closing price is achieved, and will have a reasonable basis to believe that that price was legitimately, and not manipulatively, achieved. Nasdaq also applies enhanced surveillance procedures to monitor securities listed under the Alternative Price Requirement in the period around when they achieve $4, and would no longer be considered as having listed under the Alternative Price Requirement, to identify anomalous trading that would be indicative of potential price manipulation. These measures would also apply to a Reverse Merger Company listed under the proposed rule change.
Accordingly, Nasdaq proposes to remove references within the Reverse Merger Rule requiring the security of a Reverse Merger company to achieve a $4 minimum bid price and replace those references with a requirement that the security satisfy the share price requirement applicable to the initial listing standard under which the Reverse Merger company is qualifying to list.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. To the contrary, by eliminating a disparity between Nasdaq's rules and those of NYSE MKT, the proposed rule change will enhance competition.
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.
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 merge the OpenView depth-of-book product into TotalView, and to amend the Exchange's fees at Rules 7023 and 7026 to reflect the merger of these two products, as described further below. The Exchange has designated the proposed amendments to be operative on August 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 amend the Exchange's fees at Rules 7023 and 7026 to merge the OpenView depth-of-book product into TotalView.
TotalView, the Exchange's complete depth data feed product for Nasdaq-listed securities, provides every eligible order at every price level for all Nasdaq members, as well as Net Order Imbalance information.
TotalView and OpenView may be purchased through monthly subscription fees or enterprise license fees. Different fee structures apply if purchasers opt to view TotalView or OpenView using an Enhanced Display Solution (“EDS”) or utilize the data in a non-display fashion using a Managed Data Solution (“MDS”). The current fees associated with TotalView and OpenView that will be affected by the proposed changes, set forth in Rules 7023 and 7026, are as follows:
1.
2.
3.
4.
5.
6.
The Exchange proposes to amend the fees at Rules 7023 and 7026 to merge OpenView into TotalView. In substance, the Exchange will combine all fees for TotalView and OpenView into a single sum, without increasing the total price of the two products, and make a number of conforming changes to delete specific references to OpenView. The specific fee changes to Rules 7023 and 7026 are as follows:
1.
2.
3.
4.
5.
6.
In addition to all of these changes, the definition of OpenView will be removed from the current Rule book at Rule 7023(a)(1)(B), and the data provided in OpenView will be added to the definition of TotalView currently in Rule 7023(a)(1)(C), which will be re-designated as Rule 7023(a)(1)(B).
The proposed rule change will lower administrative costs and simplify the purchase of depth-of-book products, with no impact on fees for most customers. Almost all purchasers of depth products already purchase OpenView in conjunction with TotalView or Level 2, and prices will not change for these customers. Most of the limited number of customers purchasing TotalView or OpenView alone are in the process of phasing out the practice, and will not be materially affected by the proposed change.
Depth-of-book customers that purchase TotalView and OpenView together have to manage separate reporting, billing and approvals for two products that they utilize as a single product. The resulting administrative burden applies to four separate categories of fees: (i) Non-Professional per Subscriber fees for TotalView
Nasdaq has engaged in discussions with Distributors that purchase OpenView without TotalView or Level 2—or TotalView or Level 2 without OpenView—and determined that this practice is being phased out. This practice had its origins before Nasdaq became an Exchange, when Nasdaq did not trade a significant number of securities listed on other exchanges. Now, Nasdaq routinely trades the securities of other exchanges, and the rationale for this practice is obsolete. As such, Nasdaq does not expect merging OpenView into TotalView to have a long-term impact on customers that are
No transition time is needed to merge OpenView into TotalView—they are already offered in a compatible formats [sic] and Distributors require no time to modify their systems to accommodate the change.
The proposed fees are optional in that they apply only to firms that elect to purchase these products. The proposed changes do not impact the cost of any other Nasdaq product.
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 current market model, 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 integrate Nasdaq TotalView and OpenView into a single depth-of-book product is an equitable allocation of reasonable dues, fees or other charges. Almost all purchasers of Nasdaq depth-of-book products already treat TotalView and OpenView as a single, combined product, and the proposed changes will reduce administrative burden. Customers that do not currently purchase both products are already in the process of deciding whether to purchase either both products, or neither, and the proposed fee change—which leaves the total cost of OpenView and TotalView unchanged—is unlikely to alter that decision. The fees for TotalView and OpenView, like all proprietary data fees, are constrained by the Exchange's need to compete for order flow, and are subject to competition from other products and among broker-dealers for customers. If Nasdaq is incorrect in its assessment of these markets, there are no barriers to entry for competitors with substantially similar products.
The Exchange believes that the proposed fee changes are an equitable allocation because the fees appropriately reflect the value of depth-of-market data to customers as well as industry practice in which most customers purchase the current versions of TotalView and OpenView concurrently. The proposed fee changes are not unfairly discriminatory because the Exchange will apply the same fee to all similarly-situated subscribers.
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 question of whether the prices of depth-of-view products are constrained by competitive forces was examined in 2016 by an Administrative Law Judge in an application for review by the Securities Industry and Financial Markets Association of actions taken by Self-Regulatory Organizations.
The proposed changes will integrate Nasdaq TotalView and OpenView into a single depth-of-book product. If the proposed product revisions are unattractive to market participants, it is likely that the Exchange will lose market share.
Market forces constrain fees for TotalView, like all depth-of-book products, in three respects. First, all fees related to TotalView are constrained by competition among exchanges and other entities attracting order flow. Firms make decisions regarding depth-of-book products and other proprietary data based on the total cost of interacting with the Exchange, and order flow would be harmed by the supracompetitive pricing of any proprietary data product. Second, the prices of TotalView are constrained by the existence of substitutes that are offered, or may be offered, by entities that offer proprietary data. Third, competition among Distributors for customers will further constrain the cost of TotalView.
Fees related to TotalView 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, and the BATS exchanges. 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, the BATS exchanges, 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 proprietary 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 proprietary 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. Data fees are but one factor in a total platform analysis. If the cost of the product exceeds its expected value, the broker-dealer will choose not to buy it. A supracompetitive increase in the fees charged for either transactions or proprietary data has the potential to impair revenues from both products. In this manner, the competition for order flow will constrain prices for proprietary data products.
The price of depth-of-book data is constrained by the existence of competition from other exchanges, such as NYSE and the BATS exchanges, which sell proprietary depth-of-book data. While a small number of highly sophisticated traders purchase depth-of-book products from multiple exchanges, most customers do not. Because most customers would not pay an excessive price for TotalView when substitute data is available from other proprietary sources, the Exchange is constrained in its pricing decisions.
Competition among Distributors provides another form of price discipline for proprietary data products to ensure that fees are equitable, fair, reasonable and not unfairly discriminatory. If the price of TotalView were set above competitive levels, Distributors purchasing TotalView would be at a disadvantage relative to their competitors, and would therefore either purchase a substitute or forego the product altogether.
In summary, market forces constrain the price of depth-of-book data such as TotalView through competition for order flow, competition from substitute products, and in the competition among vendors for customers.
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 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.
In notice document 2017–11151, beginning on page 25038, in the issue of Wednesday, May 31, 2017, make the following correction:
1. On page 25041, in the first column, in the last sentence, “June 20, 2017” should read “June 21, 2017”.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to extend the operation of Penny Pilot Program through December 31, 2017. The text of the proposed rule change is provided below.
(additions are
The Board of Directors may establish minimum increments for options traded on the Exchange. When the Board of Directors determines to change the minimum increments, the Exchange will designate such change as a stated policy, practice, or interpretation with respect to the administration of Rule 6.42 within the meaning of subparagraph (3)(A) of subsection 19(b) of the Exchange Act and will file a rule change for effectiveness upon filing with the Commission. Until such time as the Board of Directors makes a change to the minimum increments, the following minimum increments shall apply to options traded on the Exchange:
(1) No change.
(2) No change.
(3) The decimal increments for bids and offers for all series of the option classes participating in the Penny Pilot Program are: $0.01 for all option series quoted below $3 (including LEAPS), and $0.05 for all option series $3 and above (including LEAPS). For QQQQs, IWM, and SPY, the minimum increment is $0.01 for all option series. The Exchange may replace any option class participating in the Penny Pilot Program that has been delisted with the next most actively-traded, multiply-listed option class, based on national average daily volume in the preceding six calendar months, that is not yet included in the Pilot Program. Any replacement class would be added on the second trading day following [January 1, 2017]
(4) No change.
.01–.04 No change.
The text of the proposed rule change is also available on the Exchange's Web site (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Penny Pilot Program (the “Pilot Program”) is scheduled to expire on June 30, 2017. CBOE proposes to extend the Pilot Program until December 31, 2017. CBOE believes that extending the Pilot Program will allow for further analysis of the Pilot Program and a determination of how the Pilot Program should be structured in the future.
During this extension of the Pilot Program, CBOE proposes that it may replace any option class that is currently included in the Pilot Program and that has been delisted with the next most actively traded, multiply listed option class that is not yet participating in the Pilot Program (“replacement class”). Any replacement class would be determined based on national average daily volume in the preceding six months,
CBOE is specifically authorized to act jointly with the other options exchanges participating in the Pilot Program in identifying any replacement class.
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
CBOE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Specifically, the Exchange believes that, by extending the expiration of the Pilot Program, the proposed rule change will allow for further analysis of the Pilot Program and a determination of how the Program shall be structured in the future. In doing so, the proposed rule change will also serve to promote regulatory clarity and consistency, thereby reducing burdens on the marketplace and facilitating investor protection. In addition, the Exchange has been authorized to act jointly in extending the Pilot Program and believes the other exchanges will be filing similar extensions.
The Exchange 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
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 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.
U.S. Small Business Administration (SBA).
Amendment 1.
This is an amendment of the Presidential declaration of a major disaster for Public Assistance Only for the State of Washington (FEMA–4309–DR), dated 04/21/2017.
Effective 05/24/2017.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW., Suite 6050, Washington, DC 20416.
The notice of the President's major disaster declaration for Private Non-Profit organizations in the State of Washington, dated 04/21/2017, is hereby amended to include the following areas as adversely affected by the disaster.
All other information in the original declaration remains unchanged.
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 of request for public comment.
The Department of State is seeking Office of Management and Budget (OMB) approval for the information collection described below. In accordance with the Paperwork Reduction Act of 1995, we are requesting comments on this collection from all interested individuals and organizations. The purpose of this notice is to allow 60 days for public comment preceding submission of the collection to OMB.
The Department will accept comments from the public up to August 14, 2017.
You may submit comments by any of the following methods:
•
•
•
You must include the DS form number (if applicable), information collection title, and the OMB control number in any correspondence.
Direct requests for additional information regarding the collection listed in this notice, including requests for copies of the proposed collection instrument and supporting documents, to Paul Mungai, Office of Specialized and Technical Agencies, Department of State, 2401 E Street NW., #L409, Washington, DC 20037, who may be reached on 202–663–2407 or at
•
•
•
•
•
•
•
•
•
•
•
•
We are soliciting public comments to permit the Department to:
• Evaluate whether the proposed information collection is necessary for the proper functions of the Department.
• Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used.
• Enhance the quality, utility, and clarity of the information to be collected.
• Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Please note that comments submitted in response to this Notice are public record. Before including any detailed personal information, you should be aware that your comments as submitted, including your personal information, will be available for public review.
By virtue of the authority vested in the Secretary of State by the laws of the United States, including section 1 of the State Department Basic Authorities Act (22 U.S.C. 2651a) and 10 U.S.C. 332, I hereby delegate to the Assistant Secretary for Political-Military Affairs, to the extent authorized by law, the authority to concur with the Secretary of Defense on requests to establish Defense Institution Capacity Building Programs pursuant to 10 U.S.C. 332.
Notwithstanding this delegation of authority, any function or authority delegated herein may be exercised by the Secretary, a Deputy Secretary, the Under Secretary for Arms Control and International Security, or by other senior Department officials pursuant to a delegation of authority. Any reference in this delegation of authority to any statute or delegation of authority shall be deemed to be a reference to such statute or delegation of authority as amended from time to time.
This delegation of authority supersedes Delegation of Authority 410, dated November 30, 2016, and shall be published in the
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:
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Announcement of reestablishment of the Commercial Space Transportation Advisory Committee (COMSTAC).
FAA announces the reestablishment of the COMSTAC, a Federal Advisory Committee that provides information, advice, and recommendations to the Department of Transportation and the Administrator of the Federal Aviation Administration (FAA) on the critical matters facing the U.S. commercial space transportation industry. This reestablishment will take effect 15 days after the publication of this announcement, and will expire after 2 years.
Di Reimold, COMSTAC Designated Federal Officer/Executive Director, FAA, Commercial Space Transportation, 800 Independence Avenue SW., Rm. 331, Washington, DC 20591, telephone (202) 267–7635, Email
Pursuant to Section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92–463), FAA is giving notice of the reestablishment the COMSTAC. The primary goals of COMSTAC are to: Evaluate economic, technological, and institutional developments relating to the U.S. commercial space transportation industry; provide a forum for the discussion of problems involving the relationship between industry activities and government requirements; and make recommendations to the FAA Administrator on issues and approaches for Federal policies and programs regarding the industry. COMSTAC membership consists of senior executives from the commercial space transportation industry; representatives from the satellite industry, both manufacturers and users; state and local government officials; representatives from firms providing insurance, financial investment and legal services for commercial space activities; and representatives from academia, space advocacy organizations, and industry associations. Complete information regarding COMSTAC is available on the FAA Web site at:
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The IRS, 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 continuing information collections, as required by the Paperwork Reduction Act of 1995. The IRS is soliciting comments concerning the requirements for reducing the rate of future benefit accrual.
Written comments should be received on or before August 14, 2017 to be assured of consideration.
Direct all written comments to Laurie Brimmer, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW., Washington, DC 20224. Requests for additional information or copies of the regulations should be directed to LaNita Van Dyke, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW., Washington, DC 20224, or through the Internet at
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number.
Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Pursuant to United States Code, Title 31, section 5135(b)(8)(C), the United States Mint announces the Citizens Coinage Advisory Committee (CCAC) public meeting scheduled for:
Interested members of the public may either attend the meeting in person or dial in to listen to the meeting at (866) 564–9287/Access Code: 62956028.
Any member of the public interested in submitting matters for the CCAC's consideration is invited to submit them by fax to the following number: 202–756–6525.
In accordance with 31 U.S.C. 5135, the CCAC:
Advises the Secretary of the Treasury on any theme or design proposals relating to circulating coinage, bullion coinage, Congressional Gold Medals, and national and other medals.
Advises the Secretary of the Treasury with regard to the events, persons, or places to be commemorated by the issuance of commemorative coins in each of the five calendar years succeeding the year in which a commemorative coin designation is made.
Makes recommendations with respect to the mintage level for any commemorative coin recommended.
Members of the public interested in attending the meeting in person will be admitted into the meeting room on a first-come, first-serve basis as space is limited. Conference Room A&B can accommodate up to 50 members of the public at any one time. In addition, all persons entering a United States Mint facility must adhere to building security protocol. This means they must consent to the search of their persons and objects in their possession while on government grounds and when they enter and leave the facility, and are prohibited from bringing into the facility weapons of any type, illegal drugs, drug paraphernalia, or contraband.
The United States Mint Police Officer conducting the screening will evaluate whether an item may enter into or exit from a facility based upon federal law, Treasury policy, United States Mint Policy, and local operating procedure; and all prohibited and unauthorized items will be subject to confiscation and disposal.
31 U.S.C. 5135(b)(8)(C).
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the Veterans Benefits Administration (VBA), Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden and it includes the actual data collection instrument.
Comments must be submitted on or before July 14, 2017.
Submit written comments on the collection of information through
Cynthia Harvey-Pryor, Enterprise Records Service (005R1B), Department of Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 20420, (202) 461–5870 or email
Pub. L. 89 754 1013, 8 U.S.C. 3702(b)(2), 38 U.S.C. 3714.
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
By direction of the Secretary.
Veterans Benefit Administration, Department of Veterans Affairs.
Notice.
Veterans Benefit Administration (VBA), Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Written comments and recommendations on the proposed collection of information should be received on or before August 14, 2017.
Submit written comments on the collection of information through Federal Docket Management System (FDMS) at
Cynthia Harvey-Pryor at (202) 461–5870.
Under the PRA of 1995, 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.
Public Law 104–13; 44 U.S.C. 3501–3521.
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the
Comments must be submitted on or before July 14, 2017.
Submit written comments on the collection of information through
Cynthia Harvey-Pryor, Enterprise Records Service (005R1B), Department of Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 20420, (202) 461–5870 or email
Under the PRA of 1995, 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.
Public Law 104–13; 44 U.S.C. 3501–21.
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the Veterans Benefits Administration (VBA), Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden and it includes the actual data collection instrument.
Comments must be submitted on or before July 14, 2017.
Submit written comments on the collection of information through
Cynthia Harvey-Pryor, Enterprise Records Service (005R1B), Department of Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 20420, (202) 461–5870 or email
44 U.S.C. 3501–21.
38 U.S.C. 1310 established Dependency and Indemnity Compensation (DIC), a benefit payable to the survivors of a Veteran who dies from a service-connected or compensable disability.
38 U.S.C. 1315 established Dependency and Indemnity Compensation to parents (known as Parents' DIC). Parents' DIC is monthly benefit payable to the surviving parent(s) of a deceased Veteran. The monthly benefit payable is dependent of the parent(s) based on the parent's (parents') annual income. An additional monthly amount is payable if the parent is a patient in a nursing home, blind, or so nearly blind or significantly disabled as to need or require the regular aid and attendance of another person.
38 CFR 3.59 defines the term “Parent” as “. . . a natural mother or father (including the mother of an illegitimate child or the father of an illegitimate child if the usual family relationship existed), mother or father through adoption, or a person who for a period of not less than 1 year stood in the relationship of a parent to a veteran at any time before his or her entry into active service.”
The information collected will be used by VBA to evaluate a claimant's parental relationship to a deceased
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
By direction of the Secretary.
Office of Information and Technology, Department of Veterans Affairs.
Notice.
The Office of Information and Technology (OIT), Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information used by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Written comments and recommendations on the proposed collection of information should be received on or before July 14, 2017.
Submit written comments on the collection of information through
Cynthia Harvey-Pryor, Enterprise Records Service (005R1B), Department of Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 20420, (202) 461–5870 or email
44 U.S.C. 3501–21.
a. Application of Service Representative for Placement on Mailing List, VA Form 3215.
b. Request for and Consent to Release of Information from Claimant's Records, VA Form 3288.
c. Request to Correspondent for Identifying Information, VA Form Letter 70–2.
d. 38 CFR 1.519(A) Lists of Names and Addresses.
a. VA operates an outreach services program to ensure Veterans and beneficiaries have information about benefits and services to which they may be entitled. To support the program, VA distributes copies of publications to Veterans Service Organizations' representatives to be used in rendering services and representation of veterans, their spouses and dependents. Service organizations complete VA Form 3215 to request placement on a mailing list for specific VA publications.
b. Veterans or beneficiaries complete VA Form 3288 to provide VA with a written consent to release his or her records or information to third parties such as insurance companies, physicians and other individuals.
c. VA Form Letter 70–2 is used to obtain additional information from a correspondent when the incoming correspondence does not provide sufficient information to identify a Veteran. VA personnel use the information to identify the Veteran, determine the location of a specific file, and to accomplish the action requested by the correspondent such as processing a benefit claim or file material in the individual's claims folder.
d. Title 38 U.S.C. 5701(f)(1) authorized the disclosure of names or addresses, or both of present or former members of the Armed Forces and/or their beneficiaries to nonprofit organizations (including members of Congress) to notify Veterans of Title 38 benefits and to provide assistance to Veterans in obtaining these benefits. This release includes VA's Outreach Program for the purpose of advising Veterans of non-VA Federal State and local benefits and programs.
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
a. Application of Service Representative for Placement on Mailing List, VA Form 3215—25 hours.
b. Request for and Consent to Release of Information From Claimant's Records, VA Form 3288—18,875 hours.
c. Request to Correspondent for Identifying Information, VA Form Letter 70–2—3,750 hours.
d. 38 CFR 1.519(A) Lists of Names and Addresses—50 hours.
a. Application of Service Representative for Placement on Mailing List, VA Form 3215—10 minutes.
b. Request for and Consent to Release of Information From Claimant's Records, VA Form 3288—7.5 minutes.
c. Request to Correspondent for Identifying Information, VA Form Letter 70–2—5 minutes.
d. 38 CFR 1.519(A) Lists of Names and Addresses—60 minutes.
a. Application of Service Representative for Placement on Mailing List, VA Form 3215—150.
b. Request for and Consent to Release of Information From Claimant's Records, VA Form 3288—151,000.
c. Request to Correspondent for Identifying Information, VA Form Letter 70–2—45,000.
d. 38 CFR 1.519(A) Lists of Names and Addresses—50.
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the VBA, Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden and it includes the actual data collection instrument.
Comments must be submitted on or before July 14, 2017.
Submit written comments on the collection of information through
Cynthia Harvey-Pryor, Enterprise Records Service (005R1B), Department of Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 20420, (202) 461–5870 or email
44 U.S.C. 3501–21.
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
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
The Veterans Benefits Administration (VBA), Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Written comments and recommendations on the proposed collection of information should be received on or before August 14, 2017.
Submit written comments on the collection of information through
Cynthia Harvey-Pryor at (202) 461–5870.
Under the PRA of 1995, 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.
Public Law 104–13; 44 U.S.C. 3501–3521.
By direction of the Secretary.
Veterans Health Administration, Department of Veterans Affairs.
Notice.
Veterans Health Administration (VHA), Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Written comments and recommendations on the proposed collection of information should be received on or before August 14, 2017.
Submit written comments on the collection of information through Federal Docket Management System (FDMS) at
Cynthia Harvey-Pryor at (202) 461–5870.
Under the PRA of 1995, 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, VHA invites comments on: (1) Whether the proposed collection of information is necessary for the proper performance of VHA's functions, including whether the information will have practical utility; (2) the accuracy of VHA'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.
38 CFR 17.63.
By direction of the Secretary.
Internal Revenue Service (IRS), Treasury.
Notice of proposed rulemaking, notice of public hearing, and withdrawal of notice of proposed rulemaking.
This document contains proposed regulations regarding implementation of section 1101 of the Bipartisan Budget Act of 2015 (BBA), which was enacted into law on November 2, 2015. Section 1101 of the BBA repeals the current rules governing partnership audits and replaces them with a new centralized partnership audit regime that, in general, assesses and collects tax at the partnership level. These proposed regulations provide rules for partnerships subject to the new regime, including procedures for electing out of the centralized partnership audit regime, filing administrative adjustment requests, and the determination of amounts owed by the partnership or its partners attributable to adjustments that arise out of an examination of a partnership. The proposed regulations also address the scope of the centralized partnership audit regime and provide definitions and special rules that govern its application, including the designation of a partnership representative. The proposed regulations affect partnerships for taxable years beginning after December 31, 2017 and any partnerships that elect application of the centralized partnership audit regime pursuant to § 301.9100–22T for taxable years beginning after November 2, 2015 and before January 1, 2018. This document also provides notice of a public hearing on these proposed regulations. This document also withdraws the notice of proposed rulemaking published in the
Written or electronic comments must be received by August 14, 2017. Outlines of topics to be discussed at the public hearing scheduled for September 18, 2017, at 10 a.m. must be received by August 14, 2017.
Send submissions to: CC:PA:LPD:PR (REG–136118–15), Room 5207, 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 8:00 a.m. and 4:00 p.m. to CC:PA:LPD:PR (REG–136118–15), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW., Washington, DC 20224. Alternatively, taxpayers may submit comments electronically via the Federal eRulemaking Portal at
Concerning the proposed regulations, Jennifer Black of the Office of Associate Chief Counsel (Procedure and Administration), (202) 317–6834; concerning the submission of comments and requests for a public hearing, Regina Johnson, (202) 317–6901 (not toll-free numbers).
This document contains proposed regulations to amend the Procedure and Administration Regulations (26 CFR part 301) under Subpart—Tax Treatment of Partnership Items to implement the centralized partnership audit regime enacted by section 1101 of the BBA, Public Law 114–74.
The BBA was enacted on November 2, 2015, and was amended by the Protecting Americans from Tax Hikes Act of 2015, Public Law 114–113, div. Q (PATH Act) on December 18, 2015. Section 1101(a) of the BBA removes subchapter C of chapter 63 of the Internal Revenue Code (Code) effective for partnership taxable years beginning after December 31, 2017. Subchapter C of chapter 63 contains the unified partnership audit and litigation rules that were enacted as part of the Tax Equity and Fiscal Responsibility Act of 1982, Public Law 97–248 (TEFRA). These partnership audit and litigation rules are commonly referred to as the TEFRA partnership procedures or simply TEFRA.
Section 1101(b) of the BBA also removes subchapter D of chapter 63 of the Code (subchapter D) and part IV of subchapter K of chapter 1 of the Code (part IV of subchapter K), rules applicable to electing large partnerships, effective for partnership taxable years beginning after December 31, 2017. Subchapter D contains the audit rules for electing large partnerships, and part IV of subchapter K prescribes the income tax treatment for such partnerships.
Section 1101(c) of the BBA replaces the rules to be removed by section 1101(a) and (b) with a centralized partnership audit regime. Section 1101(c) adds a new subchapter C to chapter 63, consisting of sections 6221 through 6241 of the Code. The BBA also makes related and conforming amendments to other provisions of the Code.
Pursuant to section 1101(g)(1) of the BBA, the amendments made by section 1101, which repeal the TEFRA partnership procedures and the rules applicable to electing large partnerships and which create the centralized partnership audit regime, generally apply to returns filed for partnership taxable years beginning after December 31, 2017. Section 1101(g)(2) provides that, in the case of an administrative adjustment request under section 6227 as amended by the BBA, the amendments made by section 1101 apply to requests with respect to returns filed for partnership taxable years beginning after December 31, 2017. Similarly, section 1101(g)(3) provides that, in the case of an election to use the alternative to payment of the imputed underpayment by the partnership under section 6226 as amended by the BBA, the amendments made by section 1101 apply to elections with respect to returns filed for partnership taxable years beginning after December 31, 2017.
Section 1101(g)(4) provides that a partnership may elect (at such time and in such form and manner as the Secretary may prescribe) for the amendments made under section 1101 (other than the election out of the centralized partnership audit regime under section 6221(b) as added by the BBA) to apply to any return of a partnership filed for partnership taxable years beginning after November 2, 2015 (the date of the enactment of the BBA) and before January 1, 2018.
On December 18, 2015, President Obama signed into law the PATH Act. Section 411 of the PATH Act corrects and clarifies certain amendments made by the BBA. The amendments under the PATH Act are effective as if included in section 1101 of the BBA, and therefore, subject to the effective dates in section 1101(g) of the BBA.
On August 5, 2016, the Treasury Department and the IRS published temporary regulations (TD 9780, 81 FR 51795) and a notice of proposed rulemaking (REG–105005–16, 81 FR 51835) in the
On December 6, 2016, Congress introduced the Tax Technical Corrections Act of 2016 (H.R. 6439, S. 3506) (Tax Technical Corrections Act) which contains what are described as technical corrections to the centralized partnership audit regime and other corrections to the Bipartisan Budget Act of 2015. The Tax Technical Corrections Act addresses a number of the provisions of the centralized partnership audit regime enacted as part of BBA. The Tax Technical Corrections Act, however, was not enacted by Congress.
Section 6221(a), as added by the BBA, provides the scope of items that are subject to adjustment under the centralized partnership audit regime. That section provides that any adjustment to items of income, gain, loss, deduction, or credit of a partnership for a partnership taxable year (and any partner's distributive share thereof) shall be determined, and any tax attributable thereto shall be assessed and collected, at the partnership level. The applicability of any penalty, addition to tax, or additional amount which relates to an adjustment to any such item or share shall also be determined at the partnership level.
Prior to the enactment of TEFRA, any adjustment to an item attributable to a partner's interest in a partnership required the IRS to open an examination for each partner and follow deficiency procedures to adjust items from a partnership and determine the resulting tax. Separate proceedings for each partner often resulted in inconsistent treatment of various partners with respect to the same items from a partnership. In some cases, inconsistent results occurred in the partner-level examinations themselves. In other cases, not all partners allocated the same items from the partnership were subject to an IRS examination because, for instance, the period of limitations on assessment had expired for some, but not all, partners. In addition, each partner could challenge the IRS adjustment in separate partner-level proceedings in different litigation forums and appellate venues, resulting in different outcomes with respect to the same partnership item. Over time, the size and complexity of partnerships increased, multiplying the disparate treatment of partners with respect to the same items from a partnership and increasing the burden on the IRS in examining and assessing tax related to partnership issues at the partner level.
In 1982, in response to these difficulties, Congress enacted the TEFRA partnership procedures to establish unified rules to allow the IRS to make adjustments to “partnership items” at the partnership level in one proceeding. Partnership items are those items that are more appropriately determined at the partnership level than at the partner level, as provided by regulation. Section 6231(a)(3) (prior to amendment by the BBA). The regulations under section 6231 (prior to amendment by the BBA) define partnership items by listing the items that are more appropriately adjusted at the partnership level within the framework of TEFRA. § 301.6231(a)(3)–1. Items on a partner return that are not partnership items are not subject to adjustment at the partnership level by the IRS under TEFRA, but rather are adjusted with respect to each partner at the partner level in a proceeding outside of the TEFRA regime (generally, under deficiency procedures).
Once a TEFRA proceeding is final, the IRS makes corresponding computational adjustments to each partner's return to reflect the proper treatment of partnership items. Section 6230(a)(1) (prior to amendment by the BBA). A computational adjustment may include adjustments to “affected items” of the partner. § 301.6231(a)(6)–1. An “affected item” is any item on a partner's return that is affected by a partnership item. Section 6231(a)(5) (prior to amendment by the BBA). When making a computational adjustment, if partner-level factual determinations are necessary to properly determine the tax, the IRS is required to follow the deficiency procedures at the partner level. Section 6230(a)(2)(A)(i) (prior to amendment by the BBA). Any item on the partner's return that is neither a partnership item nor an affected item is not subject to TEFRA and must be adjusted in a separate deficiency proceeding.
The TEFRA partnership procedures automatically exempt certain partnerships with ten or fewer direct partners. Section 6231(a)(1)(B) (prior to amendment by the BBA). For those small partnerships, the IRS must follow deficiency procedures for each partner, which requires the IRS to adjust items from the partnership on each partner's return and to assess the resulting tax subject to the deficiency procedures in a separate proceeding at the partner level.
Since the enactment of TEFRA, the number and complexity of partnerships have continued to increase. The number of large partnerships, in particular, has increased dramatically. In 1997, Congress recognized some of the difficulties facing the IRS under TEFRA when auditing complex, large partnership structures and in response enacted a streamlined, elective audit regime for certain large partnerships (ELP regime). Sections 6240 through 6255 (prior to amendment by the BBA). The ELP regime allowed certain partnerships with 100 or more partners to elect the application of simplified reporting rules and a centralized audit regime with features similar to the regime enacted under the BBA. The ELP regime was a legislative response to the recognition that:
[a]udit procedures for large partnerships are inefficient and more complex than those for other large entities. The IRS must assess any deficiency arising from a partnership audit against a large number of partners, many of whom cannot easily be located and some of whom are no longer partners. In addition, audit procedures are cumbersome and can be complicated further by the intervention of partners acting individually.
Since 1997, the number and complexity of partnerships has continued to increase, reflecting a shift in how business entities are structured—toward partnerships and away from C corporations. The ELP regime attempted to address some of the difficulties the IRS faced auditing large partnerships under TEFRA; however, the ELP regime is elective and only a handful of partnerships elected application of the ELP regime.
In 2013, Congress requested that the Government Accountability Office (GAO) investigate partnerships and the IRS's audit rate of partnerships. The GAO report concluded that from 2002 to 2011 “the number of large partnerships
When the IRS completes an examination of a large partnership under TEFRA, the IRS must pass the audit adjustments to partnership items on to the ultimate partners, a complex and time-consuming process. This requires the IRS to link potentially thousands of partner returns, including through tiers of partners that are themselves partnerships, to determine the proper share of the adjustments for each ultimate partner flowing from adjustments to partnership items. This process is “paper and labor intensive. When hundreds of partners' returns have to be adjusted, the costs involved limit the number of audits IRS can conduct.” GAO–14–732, cover page, summary. In the meantime, while the IRS is determining these linkages, the period of limitations for the IRS to assess tax with respect to each partner continues to run.
Specifically, the GAO reported that without “legislative action, the IRS's ability [to effectively audit]” partnerships would not improve. GAO–14–732, cover page, summary. At the time of the 2014 GAO report, Congress and the Administration had put forth legislative proposals that “would allow IRS to collect tax at the partnership level instead of having to pass it through to the taxable partners.” GAO–14–732 at 31.
In 2015, Congress enacted the BBA to replace the TEFRA partnership procedures and the ELP regime with the centralized partnership audit regime, which contained many aspects of the legislative proposals referenced in the GAO report. The centralized partnership audit regime, when fully effective for partnership taxable years beginning after December 31, 2017, will be the exclusive method by which the IRS may audit a partnership in one unified proceeding. For those partnerships that will be subject to the centralized partnership audit regime that were previously exempt from TEFRA (for example, a partnership with no more than 10 partners, none of which is a pass-through entity), the centralized partnership audit regime replaces the separate partner-level deficiency proceedings as the sole method for auditing the partnership unless an eligible partnership elects out of the centralized regime.
The centralized partnership audit regime enacted in the BBA addresses many of the shortcomings of TEFRA identified by the GAO and practitioners. For instance, “unlike prior law, distinctions between partnership items and affected items are no longer made” in the centralized partnership audit regime. Joint Comm. on Taxation, JCS–1–16,
Under TEFRA, the statute broadly defines a partnership item as any item more appropriately determined at the partnership level. Section 6231(a)(3) (prior to amendment by the BBA). In keeping with the statute, the regulations under TEFRA broadly define the term partnership item to include all items of income, gain, deduction, loss, or credit, as well as other related items such as expenditures, tax preferences, exempt income, partnership liabilities, guaranteed payments, certain basis adjustments, character and the percentage of partnership interests, and items arising from the determination at the partnership level of partnership assets, investments, transactions and operations, such as investment tax credits and at risk rules. See generally § 301.6231(a)(3)–1.
Nothing in the text or legislative history of the BBA, or the events leading to enactment of the new regime, indicates that Congress's use of the phrase “income, gain, deduction, loss, or credit” in section 6221(a) was intended to adopt a more limited set of items to be adjusted at the partnership level than the items included in the broad definition of partnership items under the TEFRA regulations. It would be illogical to conclude that Congress intended to limit the scope of what the IRS could adjust at the partnership level under an expanded centralized partnership audit regime. Such a narrow interpretation could mean that rather than increase the ability of the IRS to audit large partnerships in one unified proceeding, BBA would significantly increase the number of issues affecting partnerships that the IRS would be required to audit at the partner level, meaning that in large partnerships with thousands of partners, the IRS would have to audit issues related to the same partnership multiple times, for each partner, rather than just once at the partnership level. Given the GAO's criticism in GAO–14–732 of the low partnership audit rate, it does not follow that Congress enacted a new partnership audit regime that weakens the IRS's ability to conduct audits at the partnership level and forces the IRS to open additional partner-level proceedings to re-audit the same partnership.
The centralized partnership audit regime purposefully avoids the terms partnership items, affected items, computational adjustments, and nonpartnership items that caused so much litigation under TEFRA and does so by adopting the single phrase “income, gain, deduction, loss, or credit” as the scope of the regime. Removing the distinctions between the different types of items and adjustments was an effort to streamline the examination and judicial process to allow centralized collection of the correct amount of tax had the partnership and the partners reported items from the partnership correctly. The centralized partnership audit regime limits the burden on the IRS in both the examination of partnerships and the judicial process—changes that were designed to increase the ability of the IRS to audit large partnerships. IRS received comments in response to Notice 2016–23, 2016–13 I.R.B. 490, that agreed that the use of the term “income, gain, deduction, loss, or credit” in the centralized partnership audit regime was an attempt to reduce the challenges the IRS faced under TEFRA and does not limit the scope of items subject to audit, assessment, and collection at the partnership level.
Under the centralized partnership audit regime, the IRS is no longer required to determine each partner's share of the adjustments made to partnership items followed by a separate computational adjustment for each partner to assess the correct tax due as a result of the partnership audit. Instead, under the default rules of section 6225, the partnership is liable for an imputed underpayment based on the adjustments made at the partnership level. The imputed underpayment calculation may, for some partnerships, overstate the amount of tax due had the
To reach the correct amount of tax, the IRS makes one set of adjustments at the partnership level and allows the partnership, through modification, to adjust the imputed underpayment amount down to the correct amount of tax. To determine the amount of an imputed underpayment that reflects “tax due as closely as possible to the tax due if the partnership and partners had correctly reported and paid,” the breadth of what the IRS must be able to adjust at the partnership level must be at least as broad as the different type of adjustments made under TEFRA.
Furthermore, under the modification provisions, the partnership (and its partners if they may amend their returns) takes on the burden of further refining the adjustments to reflect the correct amount of tax. Where all partners amend their returns taking all of the adjustments into account, the IRS, the partnership and its partners have effectively mirrored the result of a TEFRA audit, including the final partner-level computational adjustments. This can only be possible if the scope of what the IRS may adjust at the partnership level is sufficiently broad.
As such, the proposed regulations take an expansive view of the scope of the centralized partnership audit regime to cover all items and information related to or derived from the partnership. Accordingly, under proposed § 301.6221(a)–1 all items required to be shown or reflected on the partnership's return and information in the partnership's books and records related to a determination of such items, as well as factors that affect the determination of items of income, gain, loss, deduction, or credit, are subject to determination and adjustment at the partnership level under the centralized partnership audit regime.
In general, the centralized partnership audit regime applies to all partnerships with partnership taxable years beginning after December 31, 2017 for any partnership (domestic or foreign) required to file a return under section 6031. Section 6241(1). Section 6221(b), as added by the BBA, allows eligible partnerships to elect out of the centralized partnership audit regime. The fact that all partnerships are covered by the centralized partnership audit regime unless they elect out distinguishes the centralized partnership audit regime from the TEFRA partnership procedures. Under TEFRA, only partnerships with more than 10 partners and partnerships with at least one partner that is not a U.S. individual, a C corporation, or an estate of a deceased partner are automatically covered by the regime. Section 6231(a)(1)(B) (prior to amendment by the BBA). However, partnerships not automatically subject to TEFRA can make an affirmative election into TEFRA. Section 6231(a)(1)(B)(ii) (prior to amendment by the BBA).
Partnerships that elect out of the centralized partnership audit regime are subject to the pre-TEFRA audit procedures under which the IRS must separately assess tax with respect to each partner under the deficiency procedures under subchapter B of chapter 63. As described in section 2.A. of the Background section of this preamble, enactment of TEFRA was a reaction to the complexity and burden of the pre-TEFRA deficiency procedures in the case of partnerships; however, since TEFRA was enacted, the IRS and taxpayers have identified numerous issues with that regime. The centralized partnership audit regime is intended to simplify TEFRA's burdensome processes and to increase the IRS's ability to examine partnerships, particularly large and tiered partnerships, and to make the process of assessing tax resulting from those audits more efficient. The limited opt-out nature of the centralized partnership audit regime, which requires the partnership to take affirmative action to elect out of the regime, increases the likelihood that a partnership will be subject to the more streamlined adjustment, assessment, and collection procedures of the centralized partnership audit regime, thereby increasing the number of partnerships the IRS is able to examine under the centralized partnership audit regime. Limiting the number of partnerships that can elect out of the centralized partnership audit regime to those entities specifically permitted under the statute is necessary to carry out this goal.
There are two conditions that must be met for a partnership to be eligible to elect out of the centralized partnership audit regime. First, a partnership must have 100 or fewer partners. Under the statute, a partnership has 100 or fewer partners when it is required to furnish 100 or fewer statements under section 6031(b), currently Schedule K–1,
Second, a partnership must only have eligible partners. Under the statute, eligible partners are individuals, C corporations, foreign entities that would be treated as C corporations if they were domestic, S corporations, and estates of deceased partners. Section 6221(b)(1)(C). Under section 6221(b)(1)(D)(i), a partnership may elect out of the centralized partnership audit regime only on a timely filed return for a taxable year (including extensions).
A partnership must include, in the manner prescribed by the Secretary, a disclosure of the name and taxpayer identification number (TIN) of each partner of the partnership. Section 6221(b)(1)(D)(ii). In the case of an election out by a partnership with an S corporation partner, the election also must include, in the manner prescribed by the Secretary, a disclosure of the name and TIN of each person to whom an S corporation partner is required to furnish a statement for the taxable year of the S corporation ending with or within the partnership taxable year that is subject to the election. Section 6221(b)(2)(A)(i). A partnership must notify each partner of the election in the manner prescribed by the Secretary. Section 6221(b)(1)(E).
Section 6221(b)(2)(B) permits the Secretary to prescribe alternative identification procedures for foreign partners. The Secretary may by
TEFRA includes a requirement that a partner treat items from the partnership consistent with the partnership's treatment of such items on the partnership's return. Section 6222 (prior to amendment by the BBA). TEFRA permits the partner to notify the IRS of inconsistent treatment of an item by the partner on the partner's return and avoid having a computational adjustment made to the inconsistently treated item without the IRS first completing a proceeding at the partnership level. The IRS could either accept the partner's inconsistent treatment of the item, open up an audit of the partnership to address the item at the partnership level, or open up audit of the partner to address the inconsistent item. If the IRS examined the partnership or the partner, all items for that taxable year would be subject to the examination.
Section 6222, as amended by the BBA, includes a similar requirement of consistency and rules for notification of the inconsistency, but the consequences of failing to treat items consistently are different. Under TEFRA, the consequence of filing inconsistently is that the IRS is not required to conduct a partnership-level proceeding before making computational adjustments at the partner level and assessing any deficiency attributable to the adjustment of an item to make it consistent with the partnership return. Section 6222 now states that any underpayment of tax by a partner resulting from a failure to treat an item consistently shall be assessed and collected as if the underpayment were on account of a mathematical or clerical error appearing on the partner's return, permitting the IRS to immediately assess and collect such tax.
Section 6222(a) requires a partner to treat on the partner's return each item of income, gain, loss, deduction or credit attributable to a partnership subject to subchapter C of chapter 63 in a manner that is consistent with the treatment of such item on the partnership return. If the partner fails to comply with the requirements of section 6222(a), any underpayment of tax resulting from that failure may be assessed and collected as if such underpayment were on account of a mathematical or clerical error appearing on the partner's return. Section 6222(b). The procedures under section 6213(b)(2), which permit a taxpayer to request an abatement of a mathematical or clerical error assessment, do not apply in these situations. Section 6222(b).
Section 6222(c) provides an exception for situations in which a partner notifies the IRS of the inconsistent treatment on the partner's return. Under section 6222(c)(1), if the partnership has filed a return and the partner's treatment of an item on the partner's return is (or may be) inconsistent with the treatment of that item on the partnership return, the provisions of section 6222(a) (requiring consistent treatment) and (b) (allowing math error treatment to adjust inconsistent items) will not apply to that item if the partner files with the Secretary a statement identifying the inconsistency. Section 6222(c)(1)(A)(i). The exception also applies if the partnership has not filed a return, and the partner files a statement identifying the inconsistency. Section 6222(c)(1)(A)(ii).
In cases where a partner receives incorrect information in a statement furnished by a partnership, section 6222(c)(2) provides that the partner is treated as having notified the IRS of an inconsistency if the partner satisfactorily demonstrates to the Secretary that the treatment of the item on the partner's return is consistent with the treatment of the item on the statement furnished to that partner by the partnership, and the partner elects to have this provision apply. Under section 6222(d), any final decision with respect to an inconsistent position identified under section 6222(c) in a proceeding to which the partnership is not a party is not binding on the partnership.
Section 6223 provides that each partnership shall designate in the manner prescribed by the Secretary a partner or other person with a substantial presence in the United States as the partnership representative who shall have the sole authority to act on behalf of the partnership. Section 6223(a). In any case in which such designation is not in effect, the statute provides that the Secretary may select any person as the partnership representative. Section 6223(a). A partnership and all partners of such partnership are bound by actions taken under subchapter C of chapter 63 by the partnership and by any final decision in a proceeding brought under subchapter C of chapter 63 with respect to the partnership. Section 6223(b).
Section 6223 and the concept of the partnership representative replace the tax matters partner (TMP) framework that exists under the TEFRA partnership procedures. Under TEFRA, a partnership is required to designate a TMP who acts as a liaison between the partnership and the IRS. That TMP must be a general partner and may be an individual or an entity.
The requirements placed on the designation of the TMP under TEFRA make it difficult in many cases to identify a qualified TMP. First, only general partners of the partnership may be the TMP. Because the TMP has to be a partner, the partnership cannot designate a non-partner, such as a non-partner manager, even if that person is in the best position to understand and have available the partnership's books and records. In some cases, the TMP has to be a particular partner, such as the partner with the highest profits interest, who may not be knowledgeable about the partnership's taxes. See, for example, § 301.6231(a)(7)–1(m)(2).
Even if a qualified TMP is identified, the IRS may be unable to contact the TMP because the TMP is out of the country or simply unreachable. Furthermore, in the case of a TMP that is an entity rather than an individual, the IRS must identify and track down an individual who can act for the entity. As a result, under TEFRA, partnerships and the IRS may spend a significant amount of time determining whether a person designated is even eligible to serve as the TMP before the IRS can proceed with a partnership examination.
Additionally, while the TMP has the authority to bind the partnership, it cannot bind other partners in the partnership. A partner who is not the TMP also has rights during an examination, including certain notification rights and the right to participate in the proceeding. The rights of the partners to intervene in the examination and to contradict the actions taken by the TMP cause confusion during examinations and increase the administrative burden on the IRS.
In contrast, the centralized partnership audit regime introduces the concept of the partnership representative, which is intended to address the shortcomings of the TMP as the representative of the partnership under TEFRA. First, unlike the TMP who must be a partner, a partnership representative can be any person, including a non-partner. This allows the partnership to select the person best
Second, unlike the TMP who could act for the partnership but whose actions did not bind other partners and could be contradicted by those partners, section 6223(b) provides that the partnership representative has the sole authority to bind the partnership, and all partners and the partnership are bound by the actions of the partnership representative and any final decision in a proceeding brought under subchapter C of chapter 63. The centralized partnership audit regime does not include a statutory right to notice of, or to participate in, the partnership-level proceeding for any person other than the partnership and the partnership representative.
Section 6225 as amended by the BBA addresses partnership adjustments made by the IRS under the centralized partnership audit regime and the determination of any resulting imputed underpayment. Section 6225(a)(1) provides that in the case of any adjustment by the Secretary in the amount of any item of income, gain, loss, deduction, or credit of the partnership, or any partner's distributive share thereof, the partnership shall pay any imputed underpayment with respect to such adjustment in the adjustment year as provided in section 6232. Any adjustment that does not result in an imputed underpayment must be taken into account by the partnership in the adjustment year. Section 6225(a)(2). Except for an adjustment to an item of credit, which is taken into account as a separately stated item, an adjustment not resulting in an imputed underpayment must be taken into account as a reduction in non-separately stated income or as an increase in non-separately stated loss (whichever is appropriate) in accordance with section 702(a)(8). Section 6225(a)(2)(A)–(B).
An imputed underpayment with respect to a partnership adjustment for the partnership's reviewed year is determined in accordance with section 6225(b). Under that section, adjustments to similar items of income, gain, loss, or deduction are netted with each other, treating any net increase or decrease in loss as a decrease or increase, respectively, in income. Section 6225(b)(1)(A)–(B). The net amount is then multiplied by the highest rate of tax in effect for the reviewed year under section 1 (individual rates) or section 11 (corporate rates). Section 6225(b)(1)(A). The product is then increased or decreased, as the case may be, by any adjustments to items of credit. Section 6225(c).
Section 6225(b)(2) provides that in the case of an adjustment that reallocates the distributive share of an item from one partner to another, such adjustment shall be taken into account when determining the imputed underpayment by disregarding any decrease in any item of income or gain and any increase in an item of deduction, loss, or credit.
Under section 6225(c), a partnership may modify an imputed underpayment under procedures established by the Secretary. Anything required to be submitted to the Secretary under the procedures for modification of the imputed underpayment must be submitted within 270 days following the date the notice of proposed partnership adjustment (NOPPA) is mailed under section 6231 by the IRS, unless that period is extended with the consent of the Secretary. Section 6225(c)(7). Any modification of the imputed underpayment amount shall be made only upon approval of the requested modification by the Secretary. Section 6225(c)(8).
Under section 6225(c)(2), modification procedures shall provide that if one or more partners files amended returns (notwithstanding section 6511) for the taxable year of the partners that includes the end of the reviewed year of the partnership, such returns take into account all adjustments made by the Secretary that are properly allocable to such partners (and for any other taxable year with respect to which a tax attribute is affected by reason of the adjustments made by the Secretary), and payment of any tax due is included with the amended returns, the imputed underpayment shall be determined without regard to the portion of the adjustments taken into account in the amended returns. In the case of any adjustment that reallocates the distributive share of any item from one partner to another, a modification described in section 6225(c)(2) shall apply only if amended returns are filed by all partners affected by such adjustment.
Under section 6225(c)(3), modification procedures shall provide for determining the imputed underpayment without regard to the portion thereof that the partnership demonstrates is allocable to a partner that would not owe tax by reason of its status as a tax-exempt entity (as defined in section 168(h)(2)).
Under section 6225(c)(4), modification procedures shall provide for taking into account a rate of tax lower than the rate of tax described in section 6225(b)(1)(A) (that is, the highest rate under section 1 or section 11) with respect to any portion of an imputed underpayment that the partnership demonstrates is allocable to a partner that is a C corporation or, in the case of a capital gain or qualified dividend, is an individual. In no event shall the lower rate determined under section 6225(c)(4) be lower than the highest rate in effect for the reviewed year with respect to the type of income and taxpayer (that is, a C corporation or an individual). For the purposes of the lower rate for capital gains and qualified dividends, an S corporation shall be treated as an individual. Section 6225(c)(4)(A). The portion of an imputed underpayment to which the lower rate applies with respect to a partner shall be determined by reference to the partner's distributive share of the items to which the imputed underpayment relates. Section 6225(c)(4)(B)(i). If an imputed underpayment is attributable to the adjustment of more than one item, and any partner's distributive share of such items is not the same with respect to all such items, the portion of the imputed underpayment to which the lower rate applies with respect to a partner shall be determined by reference to the amount which would have been the partner's distributive share of net gain or loss if the partnership had sold all of its assets at their fair market value as of the close of the reviewed year of the partnership. Section 6225(c)(4)(B)(ii).
Section 6225(c)(5) provides that, in the case of a publicly traded partnership (as defined in section 469(k)(2)), the modification procedures shall provide for determining the imputed underpayment without regard to the portion thereof that the partnership demonstrates is attributable to a net decrease in a specified passive activity loss that is allocable to a specified partner and for the partnership to take such net decrease into account as an adjustment in the adjustment year with respect to the specified partners to which such net decrease relates. Section 6225(c)(5)(A). For purposes of section 6225(c)(5), the term “specified passive
Section 6225(c)(6) provides that the Secretary may by regulations or guidance provide for additional procedures to modify imputed underpayment amounts on the basis of such other factors as the Secretary determines are necessary or appropriate to carry out the purposes of section 6225(c).
Section 6226 provides an alternative to the general rule under section 6225(a)(1) that the partnership must pay the imputed underpayment. Under section 6226, the partnership may elect to have its reviewed year partners take into account the adjustments made by the IRS and pay any tax due as a result of those adjustments. In this case, the reviewed year partners must pay any tax resulting from taking into account the adjustments and the partnership is not required to pay the imputed underpayment.
In order to elect application of section 6226, a partnership must take two steps with respect to an imputed underpayment. First, the partnership must make an election in the manner provided by the Secretary no later than 45 days after the date the FPA is mailed by the IRS under section 6231. Section 6226(a)(1). Second, the partnership must furnish, at such time and in such manner as provided by the Secretary, a statement of each partner's share of any adjustment as determined in the FPA to its reviewed year partners. Section 6226(a)(2). If the partnership takes these two steps in the time and manner prescribed by the statute and by the Secretary, section 6225 does not apply with respect to the imputed underpayment, and each partner must take its share of the adjustments into account as provided in section 6226(b). Section 6226(a) (flush language). An election under section 6226 is revocable only with the consent of the Secretary.
Section 6226(b) describes how the adjustments subject to the section 6226 election are taken into account by the reviewed year partners. Under section 6226(b)(1), each partner's tax imposed by chapter 1 of subtitle A of the Code (chapter 1 tax) is increased by the aggregate of the adjustment amounts as determined under section 6226(b)(2). This increase in chapter 1 tax is reported on the return for the partner's taxable year that includes the date the statement described under section 6226(a) is furnished to the partner by the partnership (reporting year).
The adjustment amounts determined under section 6226(b)(2) fall into two categories. In the case of the taxable year of the partner that includes the end of the partnership's reviewed year (first affected year), the adjustment amount is the amount by which the partner's chapter 1 tax would increase for the partner's first affected year if the partner's share of the adjustments were taken into account in that year. Section 6226(b)(2)(A). In the case of any taxable year after the first affected year, and before the reporting year (that is, the intervening years), the adjustment amount is the amount by which the partner's chapter 1 tax would increase by reason of the adjustment to tax attributes determined under section 6226(b)(3) in each of the intervening years. Section 6226(b)(2)(B). The adjustment amounts determined under section 6226(b)(2)(A) and (B) are added together to determine the aggregate of the adjustment amounts for purposes of determining the increase to the partner's chapter 1 tax in accordance with section 6226(b)(1).
Section 6226(b)(3) provides two rules regarding adjustments to tax attributes that would have been affected if the partner's share of adjustments were taken into account in the first affected year. First, in the case of an intervening year, any tax attribute must be appropriately adjusted for purposes of determining the adjustment amount for that intervening year in accordance with section 6226(b)(2)(B). Section 6226(b)(3)(A). Second, in the case of any subsequent taxable year (that is, a year, including the reporting year, that is subsequent to the intervening years referenced in 6226(b)(3)(A)), any tax attribute must be appropriately adjusted. Section 6226(b)(3)(B).
Section 6226(c) provides rules for the treatment of penalties and interest determined under section 6221 at the partnership level when an election is made under section 6226. Notwithstanding the provisions of section 6226(a) and (b) (regarding the requirements for making an election and how partners take into account adjustments), any penalties, additions to tax, or additional amounts are determined under section 6221 at the partnership level, and the reviewed year partners of the partnership are liable for any such penalty, addition to tax, or additional amount. Section 6226(c)(1).
In contrast, section 6226(c)(2) provides that interest is determined at the partner level. Section 6226(c)(2)(A). Interest is calculated from the due date of the partner's return for the taxable year to which the increase in tax is attributable taking into account any increases attributable to a change in tax attributes for an intervening year as determined under section 6226(b)(2). Section 6226(c)(2)(B). The interest is computed at the underpayment rate under section 6621(a)(2), substituting five percentage points for three percentage points for purposes of section 6621(a)(2)(B) (the sum of the federal short-term rate plus five percentage points instead of three percentage points).
Section 6227 provides a mechanism for a partnership to file an administrative adjustment request (AAR) to correct errors on a partnership return for a prior year. A partnership may file a request for administrative adjustment in the amount of one or more items of income, gain, loss, deduction, or credit of the partnership for any partnership taxable year. Section 6227(a). Any adjustment requested in an AAR is taken into account for the partnership taxable year in which the AAR is made. Section 6227(b). Under section 6227, only a partnership may file an AAR. Therefore, a partner who is not also the partnership representative acting on behalf of the partnership may not file an AAR.
Under section 6227(c), a partnership has three years from the later of the filing of the partnership return or the due date of the partnership return (excluding extensions) to file an AAR for that taxable year. However, a
Under section 6227(b), if an adjustment results in an imputed underpayment, the adjustment may be determined and taken into account in one of two ways. The partnership may determine and take the adjustment into account for the partnership taxable year in which the AAR is filed under rules similar to the rules under section 6225, relating to payment of the imputed underpayment by the partnership, except that the provisions under section 6225 pertaining to modification of the imputed underpayment based on amended returns by partners, the time for submitting information to the Secretary for purposes of modification, and approval by the Secretary of any modification do not apply. Section 6227(b)(1). Alternatively, the partnership and the partners may determine and take the adjustment into account under rules similar to the rules under section 6226 relating to the alternative to the partnership payment of the imputed underpayment, except that the additional 2 percentage points of interest imposed under section 6226 does not apply. Section 6227(b)(2).
In the case of an adjustment that would not result in an imputed underpayment, section 6227(b) requires that the partnership and the reviewed year partners must determine and take the adjustment into account under rules similar to the rules under section 6226 with appropriate adjustments. This provision ensures that the partners for the year to which the adjustments relate benefit from any refund that may result from such adjustments.
Section 6241(1) defines the term “partnership” for purposes of subchapter C of chapter 63 as any partnership required to file a return under section 6031(a). Section 6241(2) defines the term “partnership adjustment” as any adjustment in the amount of any item of income, gain, loss, deduction, or credit of a partnership, or any partner's distributive share thereof. Section 6241(3) defines the term “return due date” as the due date prescribed for filing the partnership return for such taxable year (determined without regard to extensions).
Section 6225(d)(1) defines the term “reviewed year” as the partnership taxable year to which the item being adjusted relates. Section 6225(d)(2) defines the term “adjustment year” to mean, in the case of an adjustment pursuant to the decision of a court in a proceeding brought under section 6234, the taxable year in which such decision becomes final; in the case of an administrative adjustment request under section 6227, the taxable year in which such administrative adjustment request is made; and, in any other case, the taxable year in which a notice of the final partnership adjustment (FPA) is mailed under section 6231.
Section 6241(6)(A) provides that, in a case under Title 11 of the United States Code (Title 11 case), the running of any period of limitations provided in subchapter C of chapter 63 for making a partnership adjustment (or provided in section 6501 or 6502 for the assessment or collection of any imputed underpayment determined under subchapter C of chapter 63) is suspended for the period during which the Secretary is prohibited by reason of the Title 11 case from making the partnership adjustment or assessing or collecting any amounts due under subchapter C of chapter 63. Section 6241(6)(A)(i) provides that in the case of the period of limitations for making adjustments or making an assessment, the suspension period includes an additional 60 days. Section 6241(6)(A)(ii) provides that in the case of the period of limitations on collection, the suspension period includes an additional six months.
Section 6241(6)(A) provides that a rule similar to the rule of section 6213(f)(2) applies for purposes of section 6232(b), the limitation on assessments under subchapter C of chapter 63. Section 6213(f) clarifies that the limitation on assessment under section 6213(a) with respect to deficiencies does not prohibit the Secretary from filing of a proof of claim in a bankruptcy case. Thus, the limitation on assessment under section 6232(b) similarly does not prohibit the filing of a proof of claim in bankruptcy.
Under section 6241(6)(B), the running of the 90-day period to file a petition for readjustment under section 6234 is suspended during the period during which the partnership is prohibited by reason of a bankruptcy case from filing the petition for readjustment and for an additional 60 days.
Section 6241(4) provides that any payments required to be made under subchapter C of chapter 63 are nondeductible under subtitle A.
Section 6241(5) provides the general rule that, for purposes of section 6234 (regarding judicial review of partnership adjustments), a principal place of business located outside the United States is treated as located in the District of Columbia.
Section 6241(7) provides that, where a partnership ceases to exist before a partnership adjustment under subchapter C of chapter 63 takes effect, the partnership adjustment shall be taken into account by the former partners of the partnership pursuant to regulations prescribed by the Secretary.
Section 6241(8) provides that, to the extent provided by regulations, the provisions of subchapter C of chapter 63 shall extend to the taxable year of an entity for which a partnership return is filed by the entity (even if it is determined that the entity is not a partnership or that there is no entity for such taxable year), to the items of such entity, and to any person holding an interest in such entity.
On February 13, 2009, a notice of proposed rulemaking (REG–138326–07) regarding the conversion of partnership items related to listed transactions was published in the
Proposed § 301.6221(a)–1(a) provides that all adjustments and items relating to a partnership are determined at the partnership level under the centralized partnership audit regime. Accordingly, the proposed regulations provide that the centralized partnership audit regime covers any adjustment to items of income, gain, loss, deduction, or credit of a partnership and any partner's distributive share of those adjusted items. Further, the proposed regulations provide that any chapter 1 tax resulting
Proposed § 301.6221(a)–1(b)(1) defines the phrase “income, gain, loss, deduction, or credit” for purposes of the centralized partnership audit regime broadly so that the phrase includes: The character, timing, source, and amount of items; the character, timing, and source of the partnership's activities; contributions to and distributions from the partnership; the partnership's basis in its assets and the value of those assets; the amount and character of partnership liabilities; the separate category (for purposes of the foreign tax credit limitation), timing, and amount of the partnership's creditable foreign tax expenditures; elections made by the partnership; items related to transactions between a partnership and any partner (including disguised sales and guaranteed payments); any items related to terminations of a partnership; and partners' capital accounts. Proposed § 301.6221(a)–1(b)(2) defines the phrase “a partner's distributive share” to include any partner's share of any item determined at the partnership level; the nature and amount of the partner's interest in the partnership; whether any special allocations apply to any partner; the character and timing of any item or activity required to be taken into account by the partner which is related to any item adjusted at the partnership level under subchapter C of chapter 63; and any amount required to be taken into account by the partner if the partnership makes an election under section 6226.
Proposed § 301.6221(a)–1(b)(3) defines the term “tax” for purposes of § 301.6221(a)–1 to mean tax imposed by chapter 1 of subtitle A of the Code. Accordingly, for purposes of assessment and collection at the partnership level, taxes imposed by other chapters of the Code are not included in the term “tax.” Those taxes that are not covered by the centralized partnership audit regime include taxes imposed by chapter 2 (Tax on Self-Employment Income), chapter 2A (Unearned Income Medicare Contribution), chapter 3 (Withholding of Tax on Nonresident Aliens and Foreign Corporations), chapter 4 (Taxes to Enforce Reporting on Certain Foreign Accounts), and chapter 6 (Consolidated Returns). In addition, taxes imposed by other subtitles of the Code, such as subtitle C (Employment Taxes), are not included within the scope of the centralized partnership audit regime. Accordingly, the IRS may separately examine the partnership or its partners outside the centralized partnership audit regime for purposes of determining and assessing these types of taxes.
In some circumstances, adjustments made under the centralized partnership audit regime may have an effect on the determination of taxes imposed by provisions of the Code outside of chapter 1. For example, if it is determined in a proceeding under the centralized partnership audit regime that a partnership has additional unreported ordinary income, that determination could form the basis for a separate determination that one or more of the partners in that partnership owe additional self-employment tax under chapter 2 of the Code. Additionally, as clarified in proposed § 301.6221(a)–1(d), determinations regarding items covered by the centralized partnership audit regime may be relied upon by the IRS when making determinations of taxes not covered by chapter 1 to the extent they are relevant in making such determinations. For instance, if the IRS determines as part of the centralized partnership audit regime that an individual who is treated as a partner in the partnership has received additional unreported ordinary income from the partnership, the IRS is not precluded from separately examining the partnership or that individual for purposes of determining whether that individual is an employee and not a partner of the partnership for purposes of imposing subtitle C employment taxes with regard to that income or examining the individual for purposes of determining whether the individual owes additional self-employment tax on the income. Any such determinations made in a separate examination outside the centralized partnership audit regime will be solely for purposes of the taxes not covered by chapter 1, will not constitute determinations for purposes of chapter 1, and will not constitute an administrative proceeding with respect to the partnership for purposes of subchapter C of chapter 63. The IRS may use all procedures available, such as obtaining the books and records of the partnership, to make determinations of items covered by the centralized partnership audit regime solely for purposes of taxes not covered by chapter 1. Any determinations for taxes other than chapter 1 taxes are not covered by the centralized partnership audit regime under subchapter C of chapter 63.
Proposed § 301.6221(a)–1(a) provides that the applicability of any penalty, addition to tax, or additional amount that relates to an adjustment under subchapter C of chapter 63 is determined at the partnership level. Proposed § 301.6221(a)–1(c) provides that any defenses to any penalty, addition to tax, or additional amount under subchapter C of chapter 63 may only be raised or considered in a partnership proceeding initiated under subchapter C of chapter 63. The partnership representative (as defined in section 6223 and the regulations thereunder) is the sole representative of the partnership. Accordingly, only the partnership representative may raise defenses to penalties, additions to tax, or additional amounts, including the partnership's defenses and defenses that relate to any partner. For example, if the partnership believes it has a viable reasonable cause defense, the partnership representative must raise this defense as part of the partnership proceeding. Any defense, whether it relies on facts and circumstances relating to the partnership or one or more partners or any other person, that is not raised by the partnership before a final determination under subchapter C of chapter 63 is waived and will not be considered if raised by any other person, including a partner that receives a section 6226 statement as a result of the partnership making an election under section 6226.
Proposed § 301.6221(b)–1(b) provides that only an eligible partnership may elect out of the centralized partnership audit regime. Under that section, a partnership is an eligible partnership if it has 100 or fewer partners during the year and, if at all times during the taxable year, all partners are eligible partners, as defined in proposed § 301.6221(b)–1(b)(3).
Under proposed § 301.6221(b)–1(b)(2), a partnership has 100 or fewer partners during the year if it is required to furnish 100 or fewer statements under section 6031(b) during the taxable year for which the partnership makes the election. When determining whether a partnership is required to furnish 100 or fewer statements under section 6031(b) during the taxable year, only statements required to be furnished by the partnership under section 6031(b) for
The proposed regulations include a special rule for partnerships that have S corporation partners. As described in proposed § 301.6221(b)–1(b)(2)(ii), any statements required to be furnished by the S corporation partner under section 6037(b) for the taxable year of the S corporation ending with or within the partnership's taxable year are taken into account for purposes of determining whether the partnership is required to furnish 100 or fewer statements for the taxable year. For instance, if an S corporation with 50 shareholders is a partner in a partnership, in addition to the statement the partnership is required to furnish to the S corporation, the 50 statements that the S corporation is required to furnish to its shareholders under section 6037(b) are taken into account for purposes of determining whether the partnership is required to issue 100 or fewer statements. As illustrated in Example 5 of proposed § 301.6221(b)–1(b)(2)(iii), the special rule under proposed § 301.6221(b)–1(b)(2)(ii) does not apply to partners that are not S corporations.
Pursuant to section 6221(b), the determination of whether the partnership has 100 or fewer partners is made by counting the number of statements required to be furnished under section 6031(b). Under TEFRA, section 6231(a)(1)(B) (prior to amendment by the BBA) specifically states that a husband and wife were treated as a single partner for purposes of determining whether the partnership had 10 or fewer partners (the TEFRA small partnership exception). Section 6221(b) contains no similar language. Accordingly, the principles of section 6031(b), which do not treat a husband and wife as a single partner, apply for purposes of determining whether the partnership has 100 or fewer partners. Examples 1 and 2 in proposed § 301.6221(b)–1(b)(2)(iii) illustrate this point.
Proposed § 301.6221(b)–1(b)(3)(i) defines the term “eligible partner” as any person who is an individual, C corporation, eligible foreign entity, S corporation, or an estate of a deceased partner. Under this proposed rule, a C corporation is an entity defined in section 1361(a)(2), including a regulated investment company (RIC) under section 851 and a real estate investment trust (REIT) under section 856. The Treasury Department and the IRS intend to continue to treat an organization that is determined to be, or claims to be, exempt from tax under section 501(a) and is classified as a corporation under section 7701(a)(3) as a C corporation for purposes of proposed § 301.6221(b)–1(b)(3), consistent with Revenue Ruling 2003–69, 2003–1 C.B. 1118 (treating tax-exempt corporations as C corporations for purposes of the TEFRA small partnership exception). This treatment does not extend to an organization that is determined to be, or claims to be, exempt from tax under section 501(a) that is not classified as a corporation under section 7701(a)(3) as a C corporation, such as trusts.
An “eligible foreign entity” is defined in proposed § 301.6221(b)–1(b)(3)(iii) as any foreign entity that is classified as a per se corporation under § 301.7701–2(b)(1), (3)–(8), is classified by default as an association taxable as a corporation under § 301.7701–3(b)(2)(i)(B), or is classified as an association taxable as a corporation in accordance with an election under the provisions of § 301.7701–3(c).
Proposed § 301.6221(b)–1(b)(3)(ii) clarifies that the term “eligible partner” does not include partnerships, trusts, foreign entities that are not eligible foreign entities, disregarded entities, nominees, other similar persons that hold an interest on behalf of another person, and estates that are not estates of a deceased partner.
A number of comments received in response to Notice 2016–23 suggested that the Treasury Department and the IRS should exercise the regulatory authority provided in section 6221(b)(2)(C) to expand the types of entities that are eligible partners for purposes of the election out. Specifically, commenters requested that entities such as disregarded entities, trusts, partnerships, and partners who use nominees should be considered eligible partners for purposes of the election out rules. The commenters also suggest that there may be certain partnership structures that could be efficiently examined at the ultimate taxpayer level even if a partner is not one of the eligible partners listed in section 6221(b). The Treasury Department and the IRS considered these comments, but have declined in these proposed regulations to exercise the authority under section 6221(b)(2)(C) to expand the types of entities that are eligible partners for purposes of the election out rules or to create separate election out provisions for specific partnership structures. When a partnership elects out of the centralized partnership audit regime, the IRS must examine and assess tax with respect to each ultimate partner under the deficiency procedures under subchapter B of chapter 63. Enactment of TEFRA was a reaction to the complexity and burden of these deficiency procedures with respect to partnerships. The increasing number and complexity of partnerships since TEFRA was enacted revealed that the TEFRA procedures were inadequate for the IRS to effectively audit partnerships. The centralized partnership audit regime is intended to enhance the IRS's ability to examine partnerships, particularly large and highly tiered partnerships. If the proposed regulations broaden the scope of the election out provisions to include additional types of partners or partnership structures, the IRS will face additional administrative burden in examining those structures and partners under the deficiency rules. Comments on any potential expansion of the election out rules are particularly helpful if they address the additional burdens any such expansion would impose on the IRS and not just the decreased burden on taxpayers resulting from the suggested change.
Proposed § 301.6221(b)–1(c) provides the time, form, and manner for the partnership to make an election out of the centralized partnership audit regime, and unless all of these requirements are satisfied an election will not be valid. The requirements under proposed § 301.6221(b)–1(c) are described below.
First, under proposed § 301.6221(b)–1(c)(1), a partnership may make the election only on a timely filed partnership return (including extensions) (that is, Form 1065,
In response to Notice 2016–23, some commenters requested that the election out rules should not penalize a partnership that does not timely file a return. Section 6221(b) specifically prescribes that the election must be made on a timely filed return. Accordingly, the proposed regulations conform with the statute and require the election under section 6221(b) to be made on a timely filed return.
Second, proposed § 301.6221(b)–1(c)(2) provides that a partnership must disclose to the IRS the names, correct TINs, and federal tax classifications of all partners of the partnership and, if there is an S corporation partner, the names, correct TINs, and federal tax classifications of all persons to whom an S corporation partner is required to furnish statements during the S corporation partner's taxable year ending with or within the partnership's taxable year at issue, and any other information regarding those partners (and shareholders) as required by the IRS in forms and instructions. The Treasury Department and the IRS recognize that section 6221(b)(2)(B) grants authority to the Secretary to provide for alternative identification of any foreign partners. However, in most cases, partners (including foreign partners) in partnerships that file a Form 1065,
Finally, proposed § 301.6221(b)–1(c)(3) provides that a partnership that elects out of the centralized partnership audit regime must notify each of its partners that the partnership made the election. This notification must be made within 30 days of making the election. The proposed regulations do not mandate the form of the notice that the partnership must provide to its partners. Accordingly, the notice may be in writing, electronic, or other form chosen by the partnership.
Proposed § 301.6221(b)–1(d) clarifies that any election out of the centralized partnership audit regime by an eligible partnership that is a partnership-partner (as defined in proposed § 301.6241–1(a)(7)) has no effect on the application of the centralized partnership audit regime to that partnership-partner in its capacity as a partner in another partnership. The Treasury Department and the IRS intend this provision to make clear that the effect of adjustments on a partnership-partner that is a partner in a partnership that is subject to the centralized partnership audit regime are determined under the centralized partnership audit regime even if that partnership-partner has made a valid election under section 6221(b). The examples in proposed § 301.6221(b)–1(d)(2) illustrate these principles.
Proposed § 301.6221(b)–1(e) provides that, if a partnership makes an election under this section, the IRS may rely on that election for all purposes unless and until the IRS determines that the election is invalid. The Treasury Department and the IRS intend proposed § 301.6221–1(e) to provide certainty to partnerships and the IRS because whether an election out is valid will determine whether the IRS must conduct a proceeding with respect to the partnership under the centralized partnership audit regime or whether the IRS will follow deficiency procedures with respect to the direct or indirect partners of the partnership to examine items that, absent a valid election, would be subject to the centralized partnership audit regime. Proposed § 301.6221–1(e) provides that an election that is not fully compliant with all the applicable rules, including an election by a partnership not eligible to make the election, may still be relied upon by the partnership unless challenged by the IRS, and the IRS may also rely upon an election in determining whether a partnership is subject to the centralized partnership audit regime. As a result, it will be clear to partnerships, direct and indirect partners, and the IRS which examination and adjustment regime should apply to the items otherwise subject to the centralized partnership audit regime.
As discussed in the Background, the centralized partnership audit regime is designed to make it easier for the IRS to examine partnerships and collect any resulting underpayments through one centralized proceeding. For partnerships that elect out, the IRS will be required to open deficiency proceedings at the partner level to adjust items associated with the partnership, resolve issues, and assess and collect any tax that may result from the adjustments. Each partner-level deficiency proceeding is subject to its own statute of limitations and venue, which often results in separate partner-by-partner determinations with respect to the same item. Nevertheless, the IRS intends to increase the number of partnership audits for both partnerships that are subject to the centralized partnership audit regime and partnerships that have elected out of the partnership audit regime.
In addition, to ensure that the election out rules are not used solely to frustrate IRS compliance efforts, the IRS intends to carefully review a partnership's decision to elect out of the centralized partnership audit regime. This review will include analyzing whether the partnership has correctly identified all of its partners for federal income tax purposes notwithstanding who the partnership reports as its partners. For instance, the IRS will be reviewing the partnership's partners to confirm that the partners are not nominees or agents for the beneficial owner.
In addition, the IRS intends to carefully scrutinize whether two or more partnerships that have elected out should be recast under existing judicial doctrines and general federal tax principles as having formed one or more constructive or de facto partnerships for federal income tax purposes. The types of arrangements that the IRS will carefully review include those where the profits or losses of partners are determined in whole or in part by the profits or losses of partners in another partnership, and those that purport to be something other than a partnership, such as the co-ownership of property. If it is determined that two or more partnerships that have elected out of the centralized partnership audit regime have formed a constructive or de facto partnership for a particular partnership taxable year and are recast as such by the IRS, that constructive or de facto partnership will be subject to the centralized partnership audit regime because that constructive or de facto partnership will not have filed a partnership return and, therefore, will not have made a timely election out as required under section 6221(b)(1)(D)(i) and these proposed regulations. The constructive or de facto partnership may also have more than 100 partners or an ineligible partner, making it ineligible to elect out.
Proposed § 301.6222–1(a)(1) provides that a partner's treatment of each item of income, gain, loss, deduction, or credit attributable to a partnership must be consistent with the treatment of those items on the partnership return, including treatment with respect to the amount, timing, and characterization of those items. Additionally, proposed § 301.6222–1(a)(1) clarifies that the determination of whether a partner treats an item consistently with the partnership return is determined with reference to the treatment of that item on the partnership return filed with the IRS, and not with reference to any schedule or other information provided or furnished by the partnership to the partner, for example, a schedule K–1 furnished to the partner by the partnership, unless the election under proposed § 301.6222–1(d), regarding incorrect statements or information, applies.
Proposed § 301.6222–1(a)(2) provides that a partnership-partner is subject to section 6222 and the regulations thereunder regardless of whether the partnership-partner has made an election out of the centralized partnership audit regime under section 6221(b). Proposed § 301.6222–1(a)(3) provides that a partner's return is considered automatically inconsistent if the partnership does not file a return, unless the partner notifies the IRS of this inconsistency in accordance with proposed § 301.6222–1(c).
For purposes of these proposed regulations, the term “treatment of items on a partnership return” is defined under proposed § 301.6222–1(a)(4) to take into account treatment of all items reported by the partnership, regardless of the form that the reporting of the partnership return position with respect to that item takes (that is, regardless of whether the return position with respect to an item is reflected on an original return or reflected on a statement issued as a result of a partnership-initiated adjustment or an IRS-initiated adjustment). Accordingly, the term treatment of items on a partnership return includes not only the treatment of an item on the partnership's return filed with the IRS under section 6031(a), but also includes any amendment or supplement to such return, such as an administrative adjustment request filed under section 6227 and the regulations thereunder, as well as the treatment of an item on any statement, schedule or list, and any amendment or supplement thereto, filed by the partnership with the IRS, including statements filed pursuant to section 6226. Proposed § 301.6222–1(a)(5) provides examples illustrating the rules requiring consistent reporting by partners.
Section 6222(b) provides that when a partner fails to treat items attributable to a partnership consistently with the treatment of those items on the partnership return, the IRS may assess and collect any underpayment of tax that results from that inconsistency as if it were on account of a mathematical or clerical error appearing on the partner's return; however the ability to request an abatement of the assessment under section 6213(b)(2) does not apply. Section 6213(b) provides the general rules for assessments of amounts of tax arising out of mathematical or clerical errors. In general, section 6213(b)(1), permits the IRS to immediately assess and collect tax that arises on account of a mathematical or clerical error appearing on a taxpayer's return, notwithstanding the general restrictions on assessment and collection of deficiencies under section 6213(a). Section 6213(b)(2) gives the taxpayer 60 days to request an abatement of that assessment.
Section 6222(b) specifically states that the IRS may assess an underpayment of tax as if it were on account of a mathematical or clerical error on the partner's return. Section 6222(b), however, does not define the term underpayment for these purposes, and the term underpayment is not defined elsewhere under subchapter C of chapter 63. The term underpayment is defined in section 6664(a); however, that definition is expressly limited to part I of subchapter A of chapter 68 of the Code. Section 6213(b)(1), which discusses assessments arising out of mathematical or clerical errors, refers to the amount of tax due in excess of that shown on the return on account of the error. Because section 6222(b) refers explicitly to mathematical or clerical error and other provisions under 6213(b), proposed § 301.6222–1(a) provides that the underpayment of tax described under 6222(b) is the amount of tax due that results from adjusting the item on the partner's return to make the treatment of the item consistent with the treatment of such item on the partnership return.
Accordingly, proposed § 301.6222–1(b) provides that the IRS may assess and collect any underpayment of tax that results from adjusting a partner's inconsistently reported item to conform that item with the treatment on the partnership return as if the resulting underpayment of tax were on account of a mathematical or clerical error appearing on the partner's return. A partner may not request an abatement of that assessment. See proposed § 301.6222–1(b)(2).
In instances where the partner is itself a partnership, section 6232(d)(1)(B) provides for the use of rules similar to the rules of section 6213(b). Accordingly, proposed § 301.6222–1(b) states that if the partner is itself a partnership, any adjustment on account of such partnership's failure to treat an item consistently will be treated as an adjustment on account of a mathematical or clerical error. Also, in accordance with section 6232(d)(2), proposed § 301.6222–1(b) states that the procedures under section 6213(b)(2) for requesting abatements do not apply.
Proposed § 301.6222–1(c) states that the provisions of proposed § 301.6222–1(a) (consistent reporting requirement) and proposed § 301.6222–1(b) (math error treatment) do not apply to items that the partner properly identifies as being treated inconsistently with the partnership return. In order to properly identify an item, the proposed regulations provide that the partner must attach a statement identifying the inconsistency to the partner's return on which the item is treated inconsistently. Proposed § 301.6222–1(c)(1).
Proposed § 301.6222–1(c)(2) coordinates the rules regarding notice of inconsistent treatment under proposed § 301.6222–1(c)(1) with situations where a partner is bound to the treatment of an item under section 6223 as result of actions taken by the partnership under subchapter C of chapter 63 or by any final decision in a proceeding brought under subchapter C of chapter 63 with respect to the partnership. For instance, as noted in the proposed regulations under section 6226, the election under section 6226 and the filing and furnishing of statements under that section are actions of the partnership under section 6223. See proposed § 301.6226–1(d). Because the partner is bound by the treatment of an item reflected in a statement filed by the partnership under section 6226, the partner is precluded from treating that item inconsistently under section 6222. The fact that the partner files a notice of inconsistent treatment does not change the fact that the partner is bound by the treatment of the items in the section 6226 statement. Any other result would undermine the purpose of section 6223, which provides certainty and finality with respect to actions
Situations may arise in which a partner treats several items inconsistently from how the partnership treated those same items, but the partner notifies the IRS only of some, but not all, of the inconsistencies. Proposed § 301.6222–1(c)(3) clarifies that the exception to the consistent reporting requirement and math error treatment applies only to the inconsistent positions that are specifically identified to the IRS in a proper notification.
Under section 6223(b), a final decision in an administrative or judicial proceeding with respect to a partnership under the centralized partnership audit regime is binding on the partnership and all partners of the partnership. In contrast, under section 6222(d), a final determination in an administrative or judicial proceeding with respect to a partner's identified inconsistent position is not binding on the partnership if the partnership is not a party to the proceeding. Accordingly, section 6222(d) provides that the IRS may conduct a proceeding with respect to the partner, that is, a proceeding that does not involve the partnership, where the partner notified the IRS of an inconsistent position under 6222(c). Section 6222(d) does not, however, preclude the IRS from conducting a proceeding with respect to the partnership.
In some cases, the IRS may determine that conducting a partnership proceeding under the centralized partnership audit regime under subchapter C of chapter 63 is appropriate, for instance when the IRS disagrees with both the partner's and the partnership's treatment of the item or when multiple partners treat an item inconsistently from the treatment by the partnership. In other cases, the IRS may determine that a partner proceeding, which generally would be under deficiency procedures in subchapter B of chapter 63, is appropriate, for instance when the IRS determines that the partner's inconsistent treatment is incorrect. Accordingly, proposed § 301.6222–1(c)(4)(i) clarifies that in the case of an identified inconsistency, the IRS may conduct both a proceeding with respect to the partner (a proceeding in which the partnership would not be involved) and a proceeding with respect to the partnership. Proposed § 301.6222–1(c)(4)(ii) provides that any final decision with respect to an inconsistent position identified in a notice to the IRS under section 6222(c) in a proceeding to which the partnership is not a party is not binding on the partnership.
Proposed § 301.6222–1(c)(4)(ii) also provides that if the IRS conducts a separate proceeding with respect to a partner, the IRS is not required to conform items on the partner's return to make those items consistent with the treatment of the items on the partnership return. Rather, if the IRS disagrees with the partner's treatment of an inconsistent item, the IRS may adjust the item to conform to the proper treatment of such item under federal tax law. Proposed § 301.6222–1(c)(5) provides examples illustrating the provisions under proposed § 301.6222–1(c).
Proposed § 301.6222–1(d) provides that a partner has provided notice to the IRS of an inconsistency if the partner treats an item consistently with incorrect information that the partnership furnished to the partner and makes an election to allow such treatment. The proposed regulations provide that the partner makes the election after being notified by the IRS of an adjustment due to treatment of an item on the partner's return inconsistent with the treatment of that item on the partnership's return. As part of the election, the proposed regulations require the partner to demonstrate that the treatment of the item on the partner's return is consistent with the treatment of that item on the incorrect schedule or information furnished to the partner by the partnership. Proposed § 301.6222–1(d)(2) provides that this election must be made within 60 days from the date of the notice informing the partner of the inconsistent treatment. The election must be clearly identified as an election under section 6222(c)(2)(B), signed by the partner making the election, and must be accompanied by copies of the schedule or other information furnished to the partner by the partnership as well as the notice mailed by the IRS informing the partner of the conforming adjustment. If it is not clear that the partner's treatment of the item on the partner's return is consistent with the information provided by the partnership, the election must include an explanation of how the partner's treatment is consistent. Proposed § 301.6222–1(d)(3) provides examples illustrating the provisions under proposed § 301.6222–1(d).
One comment in response to Notice 2016–23 suggested that when a partner notifies the IRS of an inconsistency, the notification of inconsistent treatment should be included with the partner's return for the tax year in which the partner took the inconsistent position, rather than create a separate notification process. The Treasury Department and the IRS agree with this comment. Accordingly, the proposed regulations require a partner to attach a notification of inconsistent treatment to the partner's return on which the item is treated inconsistently. A separate notification process is necessary, however, when a partner receives an incorrect statement, schedule, or other information from the partnership because the partner generally will not know about the inconsistency.
Proposed § 301.6223–1 provides rules requiring a partnership to designate a partnership representative (proposed § 301.6223–1(a)), rules describing the eligibility requirements for a partnership representative (proposed § 301.6223–1(b)), rules describing designation of the partnership representative (proposed § 301.6223–1(c)–(f)), and rules describing the termination of a designation of a partnership representative (proposed § 301.6223–1(d)–(f)).
Proposed § 301.6223–1(b)(1) provides that a partnership may designate any person as defined in section 7701(a)(1), including an entity, that meets the requirements of proposed § 301.6223–1(b)(2), (b)(3), and (b)(4), to be the partnership representative. The partnership representative must have a substantial presence in the United States and must have the capacity to act. If an entity is designated as the partnership representative, the partnership must identify and appoint an individual to act on the entity's behalf. The appointed individual must also have a substantial presence in the United States and the capacity to act. Accordingly, provided the person is otherwise eligible, the partnership may
Proposed § 301.6223–1(b)(2) provides that the partnership representative must have a substantial presence in the United States. Proposed § 301.6223–1(b)(2)(i) provides that a person has a substantial presence in the United States for the purposes of section 6223 if three criteria are met. First, the person must be able to meet in person with the IRS in the United States at a reasonable time and place as is necessary and appropriate as determined by the IRS. Second, the partnership representative must have a street address in the United States and a telephone number with a United States area code where the partnership representative can be reached by United States mail and telephone during normal business hours in the United States. Third, the partnership representative must have a U.S. TIN.
The proposed regulations do not use the substantial presence test as described in section 7701(b)(3) (substantial presence test) because the purpose of the substantial presence test is to determine whether an alien individual should be treated as a resident alien for U.S. tax purposes. In contrast, the purpose of requiring that the partnership representative have a substantial presence in the United States is to ensure ease of communication so the audit process can proceed smoothly. As a result, proposed § 301.6223–1(b)(2) does not adopt the substantial presence test in section 7701(b)(3).
Communication between the IRS and the partnership representative is fundamental to an efficient administrative proceeding, both for the IRS and the partnership. As a result, if the partnership designates an entity as the partnership representative (an entity partnership representative), proposed § 301.6223–1(b)(3) requires the partnership to appoint an individual (designated individual) as the sole individual to act on behalf of the entity partnership representative. Like the partnership representative itself, the designated individual must meet the substantial presence requirements of proposed § 301.6223–1(b)(2). If the partnership does not appoint a designated individual, the IRS may determine the partnership representative designation is not in effect. See proposed § 301.6223–1(f).
In addition, a person must have the capacity to act as the partnership representative or the designated individual. Proposed § 301.6223–1(b)(4) describes specific events that cause a person to lose the capacity to act and includes a catch-all provision for unforeseen circumstances in which the IRS reasonably determines that the partnership representative or designated individual may no longer have the capacity to act.
The proposed regulations provide that a person designated by the partnership as the partnership representative is deemed to satisfy the substantial presence requirements and have capacity to act unless and until the IRS determines the person is ineligible. See proposed § 301.6223–1(b)(1). If a partnership representative never met, or no longer meets, the requirements of proposed § 301.6223–1(b), the designation of the partnership representative is valid and remains in effect until the partnership, the partnership representative, or the IRS takes an affirmative action to terminate that designation. This can happen in one of three ways. The partnership representative may resign pursuant to proposed § 301.6223–1(d), the partnership may revoke the designation pursuant to proposed § 301.6223–1(e), or the IRS may determine a designation is not in effect under proposed § 301.6223–1(f). Until one of those events occurs, the designation is valid and remains in effect. For the validity of actions taken by the partnership representative during the period when the designation was in effect, see proposed § 301.6223–2(b).
Proposed § 301.6223–1(c) describes the manner in which a partnership designates the partnership representative. A partnership must designate the partnership representative on the partnership's return filed for the partnership taxable year. A partnership must designate a partnership representative separately for each taxable year. A designation for one taxable year is not effective for any other taxable year. A designation for a partnership taxable year remains in effect until the designation is terminated under proposed § 301.6223–1(d) (resignation), proposed § 301.6223–1(e) (revocation), or proposed § 301.6223–1(f) (determination that the designation is not in effect).
Under the TEFRA partnership procedures, a TMP may be designated, including through a resignation or revocation, at any time after the filing of the initial partnership return by submitting a new designation to the IRS. The IRS processes each of these subsequent designations regardless of whether the partnership is examined, creating unnecessary work for the IRS because very often the TMP is not required to take any action on behalf of the partnership or the partners.
The partnership representative rules are intended to be an improvement over the TMP rules. As a result, the partnership representative rules have been crafted to avoid the resource drain created by processing unnecessary resignations, revocations, and subsequent designations of TMPs. Accordingly, the proposed regulations provide that a partnership representative designation may not be changed (either by resignation or revocation) until the IRS issues a notice of administrative proceeding to the partnership, except when the partnership files a valid administrative adjustment request (AAR) in accordance with section 6227 and proposed § 301.6227–1.
The proposed regulations provide that the partnership or the partnership representative may change the initial designation of the partnership representative simultaneously with filing an AAR, but the form used for filing an AAR may not be used solely for the purpose of changing the partnership representative. The Treasury Department and the IRS understand that there may be other circumstances that warrant allowing a partnership or partnership representative to change the partnership representative designation and request comments regarding such other circumstances.
Specifically, proposed § 301.6223–1(d) allows a partnership representative to resign by notifying the partnership and the IRS in writing. The partnership representative may not resign prior to the issuance of a notice of administrative proceeding (except in conjunction with the filing of an AAR), but the partnership representative may resign at any time after the issuance of the notice of an administrative proceeding. The partnership representative may resign regardless of whether that person was designated by the partnership or the IRS. The resigning partnership representative may, but is not required to, designate a successor partnership representative. If the resigning partnership representative does not designate a successor, the IRS will determine that the designation is not in effect under proposed § 301.6223–1(f) and provide the partnership with an opportunity to designate a new partnership representative. If the partnership fails to designate a new partnership representative, the IRS will designate a new partnership representative
Proposed § 301.6223–1(e) describes the rules which allow the partnership to revoke the partnership representative designation and designate a successor. This revocation provision is an exception to the general rule that the partnership representative has the sole authority to act on behalf of the partnership. In general, a change in the partnership representative or designated individual should only occur when the partnership representative resigns and appoints a successor under proposed § 301.6223–1(d). However, there may be circumstances where the partnership would like to change the designation, and the partnership representative or designated individual will not resign. Proposed § 301.6223–1(e) provides flexibility to the partnership in these circumstances, allowing the partnership, through its partners, to revoke a prior designation.
In the case of a revocation, the partnership must notify the IRS in writing and must also notify the partnership representative whose designation is being revoked of the revocation. Like resignations under proposed § 301.6223–1(d), the partnership may not revoke the partnership representative designation prior to the issuance of a notice of an administrative proceeding except in conjunction with the filing of a valid AAR. A revocation is effective 30 days after the date the notice of revocation is sent to the IRS. See proposed § 301.6223–1(e)(1). Upon the receipt of a valid revocation, the IRS will notify the partnership and any partnership representative whose designation is being revoked of the acceptance of the revocation.
Proposed § 301.6223–1(e)(3) provides the rules for who may sign a revocation. In general, the partnership representative is the sole representative of the partnership. The revocation provision provides a limited exception to this rule and allows, solely for purposes of revocation, other partners to act on behalf of the partnership. Under the proposed regulations, a general partner as shown on the partnership return at the close of the taxable year for which the partnership representative was designated must sign the revocation. If no general partner has the capacity to act on behalf of the partnership (as described in proposed § 301.6223–1(b)(4)(i)–(v)), proposed § 301.6223–1(e)(3)(i) provides that any reviewed year partner in the partnership may sign the revocation. Proposed § 301.6223–1(e)(3)(ii) provides definitions with respect to limited liability companies (LLCs) and rules for which members of an LLC may sign a revocation. For purposes of which partners may sign a revocation, member-managers are treated as general partners, and other members are treated as a partner other than a general partner. If there is no member-manager, the proposed regulations provide that each member is treated as a member-manager for purposes of this section.
Additionally, proposed § 301.6223–1(e) provides that any revocation must include a statement signed under penalties of perjury that the partner signing the revocation is authorized by the partnership to revoke the designation and has provided a copy of the revocation to the partnership and partnership representative.
The combination of requiring the partner making the revocation to attest under penalties of perjury that the partner is authorized to act for the partnership and requiring the partner to notify the partnership and partnership representative helps ensure that any partnership representative revocation is consistent with the wishes of the partnership. The notification that the revocation has been accepted that the partnership and the partnership representative receive from the IRS provides further notice to the partnership and allows for the partnership to take action against unauthorized revocations and designations.
There may be circumstances in which more than one general partner in the partnership makes a revocation within a short period of time. In that circumstance, the IRS may not be able to readily determine the identity of the proper partnership representative. To allow the IRS to identify the correct partnership representative, proposed § 301.6223–1(e)(5) provides if the IRS receives multiple revocations or subsequent designations within a 90-day period, the IRS may determine that a designation is not in effect due to multiple revocations and follow the procedures under proposed § 301.6223–1(f) to designate a new partnership representative. These rules do not require that the IRS designate a person designated in any of the revocations received. If the IRS designates a partnership representative under proposed § 301.6223–1(f), proposed § 301.6223–1(e)(4) provides that the partnership must receive the IRS's permission to later revoke the designation.
Proposed § 301.6223–1(f) provides the rules regarding how the IRS makes a determination that a designation of a partnership representative is not in effect, as well as how the IRS will designate a partnership representative if a designation is not in effect.
Proposed § 301.6223–1(f) provides that when the IRS determines a designation is not in effect, the IRS will notify the partnership and the last partnership representative, if there was one, of the IRS's determination. The designation is terminated as of the day the IRS notifies the partnership that no designation is in effect. Proposed § 301.6223–1(f)(4) provides that except in cases where the partnership designation is not in effect because there were multiple revocations, the partnership will have 30 days to designate a successor partnership representative before the IRS will designate a new partnership representative. If the IRS has already received multiple revocations from different partners and determined it is unable to ascertain which partnership representative the partnership wants to designate, proposed § 301.6223–1(f)(4) provides that the IRS will notify the partnership that the designation is not in effect and designate a new partnership representative pursuant to proposed § 301.6223–1(f)(5) without providing the partnership with an opportunity to designate a partnership representative. This rule avoids creating further confusion between the partnership and the IRS, which would delay the designation and the administrative proceeding.
Proposed § 301.6223–1(f)(1) provides that if there is no designation of a partnership representative in effect, the IRS may select any person to serve as partnership representative. There is no distinction between the authority of a partnership representative designated by the partnership and one selected by the IRS. For that reason, the proposed regulations refer to the IRS's
Under proposed § 301.6223–1(f)(5), the IRS will notify the partnership of its designation by providing the partnership with the name, address, and telephone number of the new partnership representative. Under
Proposed § 301.6223–1(f)(5)(ii) provides that the IRS may designate any person as the partnership representative. In designating a person as the partnership representative, the IRS will consider whether the person is a partner in the partnership, either in the reviewed year or at the time the designation is made. In addition, the IRS may consider the other remaining factors listed in proposed § 301.6223–1(f)(5)(ii).
Once the IRS has designated a partnership representative, the partnership may not revoke that designation without the consent of the IRS. See proposed § 301.6223–1(f)(3)(iii). The examples under proposed § 301.6223–1(f)(6) illustrate the operation of the rules described above.
Proposed § 301.6223–2 describes the binding nature of actions taken by the partnership representative on behalf of the partnership under subchapter C of chapter 63 and of the partnership with respect to its partners. Under proposed § 301.6223–2, the partnership and all partners are bound by the actions of the partnership and the partnership representative and by any final decision in a proceeding brought under subchapter C of chapter 63. The partnership representative binds the partnership and its partners by the partnership representative's actions, including: Agreeing to settlements, agreeing to a notice of final partnership adjustment, making an election under section 6226, and agreeing to an extension of the period for adjustments under section 6235. In addition, all persons whose tax liability is determined, in whole or in part, by taking into account, directly or indirectly (such as indirect partners), adjustments to any item within the scope of the centralized partnership audit regime under section 6221(a), by the IRS in a notice of final partnership adjustment in a proceeding brought under subchapter C of chapter 63, or in a final decision of a court under subchapter C of chapter 63 are similarly bound. This binding authority extends to all partners, including those partners who have elected out of the centralized partnership audit regime under section 6221(b).
Proposed § 301.6223–2(c)(1) provides that the partnership representative has the sole authority to act on behalf of the partnership in any examination or other proceeding under subchapter C of chapter 63. Similarly, proposed § 301.6223–2(c)(2)(ii) provides that a designated individual has the sole authority to act on behalf of the partnership representative and the partnership. Except for a partner that is also the partnership representative or a designated individual, proposed § 301.6223–2(c)(1) provides that partners may not participate in or contest the results of an examination or other proceeding involving a partnership without permission of the IRS. Proposed § 301.6223–2(c)(1) also provides that no other person, regardless of whether that person's tax liability is affected by the actions of the partnership, may participate in the partnership proceeding under subchapter C of chapter 63.
Proposed § 301.6223–2(c)(1) states that the broad authority of the partnership representative may not be limited by state law, partnership agreement, or any other document or agreement. Any action taken by the partnership representative with respect to the centralized partnership audit regime under the Code and federal tax regulations is valid and binding on the partnership for purposes of tax law regardless of any other provision of state law, partnership agreement, or any other document or agreement.
Proposed § 301.6223–2(c)(2)(i) provides that the partnership representative, by virtue of being designated, has the authority to bind the partnership for purposes of the centralized partnership audit regime. Similarly, under proposed § 301.6223–2(c)(2)(ii), the designated individual's authority to bind the partnership representative and the partnership is derived by virtue of the appointment of that designated individual.
The examples under proposed § 301.6223–2(d) illustrate the operation of the rules described above.
A number of comments made specific suggestions about whom the IRS should designate as the partnership representative when no partnership representative designation is in effect. The suggestions ranged from designating the partner with the largest profits interest or the greatest percentage ownership interest to designating any partner that can sign the partnership return. Commenters suggested that partners with small investments, nominal profits interests, or other minor roles in the partnership would not be suitable to adequately represent the partnership during an administrative proceeding. The proposed regulations, however, establish rules to provide more flexibility for the IRS to designate a partnership representative to avoid some of the shortcomings of TEFRA, including the complexity and difficulty of locating a qualified TMP.
Accordingly, the proposed regulations allow the IRS to designate any person after first considering partners from the reviewed year or at the time the designation is made, but it also provides several factors that the IRS may consider in determining whom to select. This rule balances the needs of the government and the partnership.
Other suggestions included requiring that the IRS select a partnership representative that has authority to bind the partnership under state law. The proposed regulations do not limit whom the IRS may designate based on state law. The sole authority to bind the partnership for all purposes is derived from the Code and applies for purposes of the internal revenue laws. Therefore, proposed regulations are drafted so that federal, rather than state law, controls with respect to the rules regarding the partnership representative for purposes of the centralized partnership audit regime.
Some commenters requested that there be no restrictions on whom the partnership can designate as the partnership representative other than the requirement of substantial presence in the United States. These suggestions included allowing entities, even entities with no employees, to be appointed as the partnership representative. The proposed regulations adopt these suggestions by allowing the partnership to designate any person, including an entity, to be the partnership representative provided, in the case of an entity designated as partnership representative, the partnership also identify a designated individual to act on behalf of the entity partnership representative. The proposed regulations require that both an entity partnership representative and the designated individual have substantial presence in the United States. Provided an entity with no employees otherwise meets the requirements of proposed § 301.6223–1, the proposed regulations would allow that entity to be the partnership representative.
Some commenters suggested that the proposed rules require the partnership representative to provide notice to all
Proposed § 301.6225–1(a) provides the general rule that if a partnership adjustment results in an imputed underpayment, the partnership must pay the imputed underpayment in the adjustment year. As described in proposed § 301.6225–1(a)(3), the partnership adjustments and any imputed underpayment resulting from such adjustments are set forth in a NOPPA mailed to the partnership and partnership representative. The partnership may request modification with respect to an imputed underpayment set forth in the NOPPA under the procedures described in proposed § 301.6225–2.
The IRS and taxpayers both have an interest in resolving the issues raised by the IRS under the centralized partnership audit regime in the most efficient manner. An administrative proceeding under the centralized partnership audit regime is conducted under the same principles applicable to examinations generally. For instance, after providing the partnership and partnership representative with a notice of administrative proceeding, consistent with IRS general examination procedures, the IRS will endeavor to work with the partnership representative to set a schedule for information document requests (IDRs) and partnership responses to the IDRs. In general, the IRS informs the partnership representative about potential items and transactions that raise issues and provides information about adjustments that will be included in the NOPPA.
As part of this process, the IRS may agree to review certain information prior to the issuance of the NOPPA in an effort to resolve issues in an expedited fashion and eliminate the need to make certain adjustments. In addition, the modification process may move faster if relevant information is provided to the IRS employees conducting the administrative proceeding prior to issuance of the NOPPA. However, once the NOPPA is issued, the modification procedures under proposed § 301.6225–2 are the partnership's only formal route to request changes to an imputed underpayment set forth in the NOPPA.
Proposed § 301.6225–1(a)(2) provides that unless the IRS determines otherwise, all applicable preferences, restrictions, limitations, and conventions will be taken into account as if the adjusted item was originally taken into account by the partnership or the partners in the manner most beneficial to the partnership or partners. Therefore, the IRS calculates an imputed underpayment by taking into account the applicable internal revenue laws, including provisions that may limit or restrict the ability of a partner to reduce income or take advantage of tax benefits flowing from the partnership. For instance, if the adjustment is a reduction of qualified research expenses, the IRS may determine the amount of the adjustment as if all partners claimed a credit with respect to their allocable portion of such expenses under section 41, rather than a deduction under section 174. To the extent supported by the facts, the partnership may take steps through the modification procedures set forth in proposed § 301.6225–2 to provide the IRS with information about specific partners and how those partners took items from the partnership into account.
The modification process, discussed later in this preamble, is the method for the partnership to request that the IRS modify an imputed underpayment to more closely reflect the tax consequences that would have resulted if the partners had taken the adjusted items into account correctly on their original returns for the year that includes the reviewed year of the partnership.
Proposed § 301.6225–1(c) provides rules for the calculation of an imputed underpayment. Proposed § 301.6225–1(c)(1) provides that the imputed underpayment is calculated by multiplying the total netted partnership adjustment by the highest rate of federal income tax in effect for the reviewed year (as defined in proposed § 301.6241–1(a)(8)) under section 1 or 11. The product of that amount is then increased or decreased by any adjustment made to the partnership's credits. If the result of this summation is a net positive adjustment, the resulting amount is the imputed underpayment, and, if it results in a net non-positive amount, the result is an adjustment that does not result in an imputed underpayment. See proposed § 301.6225–1(c)(2).
Proposed § 301.6225–1(c)(3) defines the
Under proposed § 301.6225–1(d), adjustments are grouped together, which provides a framework for the netting of adjustments appropriately. Within each grouping, adjusted items may be further divided into subgroupings depending on their character or to account for preferences, sources, categories, limitations, or other restrictions under Title 26 (for example, adjustments to short-term capital gain will generally be in a different subgrouping from adjustments to long-term capital gain). See proposed § 301.6225–1(d)(1). The groupings and subgroupings provide the IRS with the ability to net adjustments according to applicable limitations and restrictions, but the Treasury Department and the IRS seek comments on any specific items that may require special rules or special subgroupings.
Proposed § 301.6225–1(d)(2)(i) provides that there are three types of groupings, and that the adjustments are divided in order into those groupings. First, adjustments that reallocate items among the partners (reallocation grouping) are grouped together. Second, adjustments to the partnership's credits (credit grouping) are grouped together. Third, all remaining adjustments (residual grouping) are grouped together according to the character, preferences, restrictions, and other limitations of the item adjusted. Within each grouping, there might be more than one subgrouping based on a partnership's particular adjustments. For instance, within the residual grouping, there might be an ordinary subgrouping as well as a capital subgrouping. Adjustments that generally affect, or that are affected by, the application of
Proposed § 301.6225–1(d)(2)(ii) describes the reallocation grouping. Any adjustment that reallocates an item from one or more partners to one or more other partners is treated as two adjustments. The first adjustment is a decrease in the amount of the items allocated by the partnership on its return to one or more partners. The second adjustment is an increase in the amount of the items allocated by the IRS to the other partner(s). Each adjustment is grouped in its own reallocation subgrouping to prevent the two adjustments from netting to zero. After application of the netting rules under proposed § 301.6225–1(d)(3), any net non-positive adjustment is disregarded in the calculation of the imputed underpayment under proposed § 301.6225–1(d)(3)(ii)(A). An adjustment that results in a net non-positive adjustment is an adjustment that does not result in an imputed underpayment because the reallocation of an item among partners is one of the circumstances described in proposed § 301.6225–1(c)(2).
The credit grouping described in proposed § 301.6225–1(d)(2)(iii) includes all adjustments to items that the partnership claimed or could have claimed as a credit on the partnership's return. The Treasury Department and the IRS seek comments on whether additional rules should be proposed regarding how the credits are grouped together, or whether such credits should be applied in a particular order, similar to the order required for general business credits as reported on Form 3800,
A paragraph is reserved in proposed § 301.6225–1(d)(2)(iv) for special rules relating to the treatment of certain creditable expenditures. This paragraph is reserved to provide rules applicable with respect to adjustments to items that are, or could be, reported by the partnership as expenditures that may be treated as a credit when taken into account by a partner. The Treasury Department and the IRS also seek comments on the appropriate treatment of items reported by the partnership as expenditures that may be treated as a credit when taken into account by a partner.
The third grouping is the residual grouping, which is described in proposed § 301.6225–1(d)(2)(v). The residual grouping includes all other adjustments, which are grouped according to character (for instance, ordinary or capital) and other limitations under the Code. The adjustments of a particular partnership may warrant further subgroupings for other items (for instance, long-term capital versus short-term capital). An adjustment that recharacterizes the character of an item is treated as two separate adjustments, one adjustment decreasing the amount of the item as reported by the partnership and a second adjustment increasing the amount of the item as recharacterized by the IRS. Each adjustment is grouped separately with similar items.
Proposed § 301.6225–1(d)(3) describes the rules for netting items after separating the items into their groupings and subgroupings. First, proposed § 301.6225–2(d)(3)(i) provides that the IRS will net items within the same grouping or subgrouping. For instance, all ordinary adjustments (assuming no other restrictions under the Code) are netted against each other, regardless of whether such adjustments were part of related transactions or whether they were increases or decreases to income, but none of the ordinary adjustments are netted against the adjustments in the capital subgrouping. Adjustments in the capital subgrouping are netted against each other within that subgrouping. Adjustments from one taxable year may not be netted against adjustments from another taxable year, even if they would otherwise be part of the same subgrouping. See proposed § 301.62251–1(c)(4).
Once adjustments within each subgrouping have been netted, each grouping or subgrouping will have either a net positive adjustment (as defined in proposed § 301.6225–1(d)(3)(ii)(B)) or a net non-positive adjustment (as defined in proposed § 301.6225–1(d)(3)(ii)(C)). Any netted amount that is a net non-positive adjustment in the reallocation grouping or the residual grouping is an adjustment that does not result in an imputed underpayment under proposed § 301.6225–1(c)(2), and the rules described in proposed § 301.6225–3 apply regarding the treatment of the partnership adjustments that were netted giving rise to that net non-positive adjustment. Any such net non-positive adjustment is disregarded for the remaining purpose of calculating the imputed underpayment. See proposed § 301.6225–1(c)(2) (which lists this netting step as another circumstance in which net non-positive adjustments are adjustments that do not result in an imputed underpayment) and § 301.6225–1(d)(3)(ii)(A).
The exception to this rule under proposed § 301.6225–1(d)(3)(ii)(A) (regarding disregarding net non-positive adjustments) is with respect to the credit grouping because adjustments to credits are applied to the total netted partnership adjustment after the rate is applied as described in proposed § 301.6225–1(c)(1). If the net credits reduce the amount calculated under proposed § 301.6225–1(c)(1) to zero or less than zero, the partnership adjustments resulting in the total netted partnership adjustment and the adjustments to credits taken into account in calculating the zero or less than zero amount are all partnership adjustments that do not result in an imputed underpayment under proposed § 301.6225–1(c)(2).
Proposed § 301.6225–1(d)(3)(iii) describes how adjustments are treated within each particular grouping or subgrouping (other than the credit grouping) for purposes of netting. Increased gain is treated as increased income, decreased gain is treated as decreased income, increased loss is treated as decreased income, and decreased loss is treated as increased income. The credit grouping is excluded from this treatment because any adjustment to a credit does not result in an increase or decrease of income but rather in an adjustment to the amount of tax owed after the tax rate is applied under proposed § 301.6225–1(c)(1).
Proposed § 301.6225–1(e) provides rules for multiple imputed underpayments. Each administrative proceeding that ends with the determination by the IRS of an imputed underpayment will result in a general imputed underpayment. The IRS may determine, in its discretion, a specific imputed underpayment on the basis of certain adjustments allocated to one partner or a group of partners based on the items or adjustments having the same or similar characteristics, based on the group of partners sharing similar characteristics, or based on the partners having participated in the same or similar transactions. There may be multiple specific imputed underpayments depending on the adjustments. For instance, some transactions may not involve all partners, and there may be a reason to place certain adjustments or even entire groupings into a specific imputed underpayment (described in proposed § 301.6225–1(e)(2)(iii)), while other adjustments remain in a general imputed underpayment (described in proposed § 301.6225–1(e)(2)(ii)).
For example, if a partnership intends to elect the alternative to payment of an imputed underpayment under section
The option to create multiple imputed underpayments provides flexibility for the partnership, the partners, and the IRS to address fact-specific issues that may arise as part of the administrative proceeding at the partnership level. If the partnership would like to change the number or composition of the imputed underpayments that are listed on the NOPPA, the partnership may request modification under proposed § 301.6225–2(d)(6).
The examples in proposed § 301.6225–1(f) demonstrate the rules of this section.
Proposed § 301.6225–2(a) provides general rules for modification of an imputed underpayment. A partnership that has received a NOPPA may request modification of a proposed imputed underpayment. The effect of modification on the proposed imputed underpayment is described in proposed § 301.6225–2(b). Only the partnership representative may request modification of an imputed underpayment.
With respect to adjustments that do not result in an imputed underpayment, modification is only permissible if the partnership also has an imputed underpayment that is eligible to be modified under proposed § 301.6225–2. Section 6225(c) refers to modification of the imputed underpayment and does not address modification with respect to adjustments that do not result in an imputed underpayment. Section 6225(c)(2)(B), however, requires a partner whose allocable share of a reallocation adjustment does not result in an imputed underpayment to file an amended return and take into account the partner's share in order for the partnership to receive modification of the imputed underpayment. As a result, section 6225 clearly contemplates the possibility of requesting modification with respect to an adjustment that does not result in an imputed underpayment. Accordingly, proposed § 301.6225–2(a) allows for such modifications provided the partnership has an imputed underpayment that is set forth in the NOPPA. If the NOPPA does not set forth an imputed underpayment, the partnership may not request a modification with respect to adjustments that do not result in an imputed underpayment under proposed § 301.6225–2.
Proposed § 301.6225–2(b) provides the rules describing the effect of modification on the calculation of the imputed underpayment. Some modifications may result in excluding certain adjustments, or portions thereof, from the calculation of the imputed underpayment, such as modification under proposed § 301.6225–2(d)(2), (d)(3), (d)(5), (d)(7), (d)(8), and, if applicable, (d)(9). When the IRS approves one of those types of modification, the portion of the partnership adjustment attributable to that partner (or indirect partner) is removed from the calculation of the netted grouping amounts under proposed § 301.6225–1, resulting in a reduction of the total netted partnership adjustments underlying the calculation of the imputed underpayment. This reduction in the total netted partnership adjustments does not, however, affect the amount of the partnership adjustment itself, only whether the adjustment is included in the calculation of the imputed underpayment. For instance, assume the IRS makes an adjustment by increasing the valuation of an asset from $100 to $1100 (a $1000 adjustment). One partner files an amended return to take into account that partner's 50 percent share of the adjustment. The result is that only $500 worth of adjustments are included in the imputed underpayment calculation. The value of the asset remains $1100 as determined by the IRS, and the adjustment remains $1000, notwithstanding the amended return that is filed by the partner.
Proposed § 301.6225–2(b)(3) provides that modification with respect to a partnership with partners for which rate modification under section 6225(c)(4) and proposed § 301.6225–2(d)(4) is approved affects the taxable rate applied to the total netted partnership adjustment and does not affect the extent to which partnership adjustments factor into the calculation of the imputed underpayment. This rule may also apply in appropriate circumstances to modifications under proposed § 301.6225–2(d)(8) and proposed § 301.6225–2(d)(9). Proposed § 301.6225–2(b)(3) provides the method for calculating the partnership's “rate-modified netted partnership adjustment” and imputed underpayment when rate modification under proposed § 301.6225–2(d)(4) is approved.
A specific rule applies to rate modification with respect to special allocations that requires each partner's distributive share to be determined based on the amount of net gain or loss to the partner that would result if the partnership had sold all of its assets at their fair market value as of the close of the reviewed year of the partnership. See proposed § 301.6225–2(b)(3)(iv). If a partnership requests more than one type of modification, proposed § 301.6225–2(b)(1) provides an ordering rule that states that rate modification is applied after the other types of modification specified in proposed § 301.6225–2(d).
Proposed § 301.6225–2(b)(4) provides that the IRS may prescribe other guidance regarding the effect of other modifications referenced in proposed § 301.6225–2(d)(9), and the Treasury Department and the IRS seek comments on other appropriate modifications and their effect on the calculation of an imputed underpayment. In particular, the Treasury Department and the IRS request comments on modifications that may be considered appropriate where a partner is a foreign person and thus may be subject to gross basis taxation under section 871(a) or 881(a), or where a partner, indirect partner, or the partnership is entitled to a modified rate under the Code or as a resident of a country that has in effect an income tax treaty with the United States.
Proposed § 301.6225–2(c) provides time, form, and manner rules for when a partnership may request modification. Modification must be requested in the form and manner prescribed by the IRS within the 270-day period described in proposed § 301.6225–2(c)(3)(i). The Treasury Department and the IRS request comments on the coordination of these rules with the mutual agreement procedures available under income tax treaties that a partnership, partner, or indirect partner may invoke in order to determine eligibility for treaty benefits that may affect the calculation of the imputed underpayment.
Proposed § 301.6225–2(c)(1) provides that a determination with respect to a modification request does not preclude the IRS under section 7605(b) from initiating an administrative proceeding with respect to a partner, even if the IRS approves modification based on the
Similarly, if the IRS approves a modification based on the tax-exempt status of a partner, the IRS is not precluded from examining whether the partner was in fact tax-exempt for the same year in a separate proceeding. A review of or request for any information or documents provided as part of modification does not constitute an examination, inspection, or administrative proceeding with respect to any person other than the partnership. Accordingly, even in the case of an election under section 6226, and where certain modifications may affect what adjustments a partner take into account under proposed § 301.6226–3, nothing in these proposed regulations prohibits the IRS from examining that partner's return and re-determining items that were affected by a previously approved modification.
A partnership requesting modification must substantiate the facts supporting a request for modification to the satisfaction of the IRS. The particular documents and other information that may be required are based on the type of modification requested. The IRS may, in forms, instructions, or other guidance, require particular documents or other information to substantiate a particular type of modification or impose other information-reporting or recordkeeping requirements on partnerships requesting modification.
For all requests, the partnership representative must furnish to the IRS upon request, a detailed description of the structure, allocations, ownership, and ownership changes of the partnership, its partners, and, if relevant, any indirect partners for each taxable year relevant to the request, as well as all partnership agreements (including side agreements) for each relevant taxable year with respect to each modification request. In the case of a modification requested by the partnership with respect to an indirect partner, the IRS may require certain information related to the pass-through partner(s) through which the indirect partner holds its interest in the partnership subject to the administrative proceeding. For instance, in the case of amended return modification by an indirect partner, the IRS may require the partnership to provide any information necessary to determine whether the indirect partner has taken the correct amount of the adjustments into account. Such information may include information similar to amended returns for any partnership-partner through which the adjustments are flowed before being taken into account by the indirect partner. The IRS will deny modification if a partnership fails timely to provide information the IRS determines is necessary to support and substantiate a request for modification.
Proposed § 301.6225–2(c)(3)(ii) provides that the partnership may request an extension of the 270-day period described in proposed § 301.6225–2(c)(3)(i), and proposed § 301.6225–2(c)(3)(iii) provides that the 270-day period described in proposed § 301.6225–2(c)(3)(i) closes early when the partnership representative and the IRS agree, in writing, to waive the 270-day delay between the mailing of the NOPPA and when the IRS may first issue an FPA described in section 6231(a) (flush language). The waiver of the 270-day period would prevent the partnership from providing modification-related information after the date the waiver was executed, and it would also allow the IRS to issue an FPA earlier than normal. This may be desirable for a partnership if the partnership does not intend to seek modification, but the partnership does want to litigate the adjustments or make an election under section 6226. This could also occur in conjunction with the partnership's waiver of the requirement that the IRS issue an FPA before making a partnership adjustment, for example, if the partnership agrees to the adjustments. Proposed § 301.6225–2(c)(4) describes the method by which the IRS will approve modification requests.
Proposed § 301.6225–2(d) provides seven enumerated types of modifications the IRS will consider if requested by the partnership. Additionally, the IRS may consider alternative forms of modification under proposed § 301.6225–2(d)(9). Unless otherwise stated in proposed § 301.6225–2(d), a partnership may request any or all of the types of modification described in that paragraph. See proposed § 301.6225–2(d)(1).
A partnership may request modification of an imputed underpayment if a reviewed year partner (or indirect partner) of a partnership files one or more amended returns that take into account a partnership adjustment or a portion of a partnership adjustment. See proposed § 301.6225–2(d)(2)(i). The reviewed year partner (or indirect partner) filing the amended return(s) must take into account the appropriate adjustments (or portion thereof) and also address the effects of such adjustments on any tax attributes (as defined in proposed § 301.6241–1(a)(10)) that must be adjusted because the partnership adjustments were taken into account. For the partnership to receive modification as a result of a partner's amended returns, the partner must file amended returns for all years with respect to which any tax attribute is affected by reason of the partnership adjustment(s) taken into account and include any payment due. The Treasury Department and the IRS seek comments on how best to streamline this process for ease of administering the amended return modification process.
The partners' amended returns must be filed with the IRS in accordance with the applicable forms and instructions prescribed by the IRS, and the partnership representative must provide affidavits from each partner for which modification is sought that the partner did in fact file amended returns and make appropriate payments. See proposed § 301.6225–2(d)(2)(iii). Any payment due as a result of adjustments taken into account on an amended return is due at the time the partner's amended return is filed. See proposed § 301.6225–2(d)(2)(ii).
Any partner that files an amended return for modification purposes and is required to make a payment of any kind with that amended return must do so prior to the expiration of the period of limitations under section 6501 for the modification year(s). See proposed § 301.6225–3(d)(2)(v). Section 6225(c)(2) provides that partners may file amended returns “notwithstanding section 6511,” and consequently, a partner may file an amended return that seeks a refund (such as in the case of a reallocation of a distributive share as described in proposed § 301.6225–2(d)(2)(vi)) at any time. A request for refund filed as part of an amended return filed for modification purposes outside the period set forth in 6511 may only request a refund for adjustments related to the partnership proceeding and relevant correlative adjustments. A
If, however, the IRS must make an assessment to collect a payment due with respect to an amended return filed during modification, the partner's period of limitations under section 6501 must not have expired at the time the amended return is filed. Nothing in the proposed regulations prevents partners from signing an extension of the period of limitations for partnership adjustments at the time the IRS initiates the partnership administrative proceeding or at any other time prior to the expiration of the period of limitations under section 6501. The IRS recognizes that securing such extensions may not be possible in all cases, but doing so may be an option for certain partners and partnerships. Alternatively, there may be other modification alternatives for a partner whose assessment period under section 6501 with respect to the modification years (as defined in proposed § 301.6225–2(d)(2)(iv)) has expired. A partner may, for example, be able to enter into a closing agreement that allows for treatment similar to an amended return and to make a payment on behalf of the partnership's liability in recognition of what the partner would have filed and paid if the partner's assessment period had not already expired.
In general, there is no requirement that all reviewed year partners of a partnership file amended returns for the partnership to request amended return modification. However, in the case of a reallocation adjustment, in general, in order for the IRS to approve the modification, all partners affected by the reallocation adjustment must file amended returns related to the reallocation adjustment. See proposed § 301.6225–2(d)(2)(vi). In certain cases, a partnership may be able to demonstrate that a partner subject to a reallocation adjustment has taken into account that partner's relevant adjustment via some other type of modification that may not require an amended return. For instance, if one partner is a tax-exempt entity for which the partnership may request modification based on that partner's tax-exempt status (as described in proposed § 301.6225–2(d)(3)), and that partner is subject to a reallocation adjustment, it may be unnecessary for the tax-exempt partner to file an amended return in order for the partnership to request modification in accordance with the requirements of proposed § 301.6225–2(d)(2)(vi). Such determinations will depend on the facts and circumstances related to the particular modification and are within the discretion of the IRS.
The Treasury Department and the IRS propose a specific rule that addresses pass-through partners in proposed § 301.6225–2(d)(2)(vii). A pass-through partner (as defined in proposed § 301.6241–1(a)(5)) may, for modification purposes only, file an amended return and take into account its allocable share of the adjustments. A pass-through partner that does so must pay an amount calculated in the same manner as the safe harbor amount under proposed § 301.6226–2(g) on the pass-through partner's share of the partnership adjustment except that, for purposes of calculating the payment amount, instead of using the tax rate under section 6225(b)(1)(A), the tax rate is the rate determined by substituting the total net income of the pass-through partner for the taxable year (as adjusted) for taxable income in section 1(c) of the Code (determined without regard to section 1(h)).
An amended return filed by a pass-through partner without a payment (when required based on the adjustments) will not result in modification for the partnership. See proposed § 301.6225–2(d)(2)(vii). An amended return filed by a pass-through partner is not an administrative adjustment request as defined in section 6227 and the regulations thereunder, but rather is a stand-alone document that is filed solely for modification purposes.
Regardless of the number of pass-through partners or tiers involved in a partnership structure, all amended returns filed by a pass-through partner and its owners must be filed with the IRS and any tax, penalties, additions to tax, and interest due with respect to such amended returns must be paid within the 270-day modification period described in proposed § 301.6225–2(c)(3)(i). Modification is allowed to the extent amended returns are filed and any necessary payments are made within the 270-day time period.
Because amended return modification requires a partner to fully take into account all adjustments allocable to that partner, a partnership may not request additional modification with respect to a partner who files and takes into account adjustments on an amended return. See proposed § 301.6225–2(d)(2)(i). This restriction exists because a partner that files an amended return has fully accounted for the adjustment and allowing, for example, a further rate reduction would produce a double benefit at the partnership level.
If a partner files an amended return for modification purposes which leads to a reduction in the imputed underpayment based on the IRS's approval of that modification request, the partner waives its ability to file further amended returns for the modification years with respect to items related to the partnership adjustments and the imputed underpayment unless the partner receives permission from the IRS to do so. See proposed § 301.6225–2(d)(2)(vii)(B). The intent of this provision is to prevent a partner from filing an amended return for modification purposes, paying some additional amount due and then, after the partnership receives modification, filing another amended return claiming a refund for the same amount on which the partnership relied as part of its modification request.
In addition, partners filing amended returns under section 6225 do so as part of the proceeding under subchapter C of chapter 63, which means that they are bound by the partnership representative's actions pursuant to section 6223. If the partnership representative agrees to an imputed underpayment that was modified due to a partner filing an amended return, the partner is bound to that modification through section 6223 and may not change the partner's position related to the partnership adjustments that were taken into account in a way that is inconsistent with the partnership representative's actions. Nonetheless, the IRS understands that situations may arise in which a partner needs to file a further amended return for an unrelated reason, and the partner may request permission from the IRS to do so if necessary. The Treasury Department and the IRS seek comments on the most efficient ways that taxpayers may request permission from the IRS to file a subsequent amended return.
In addition, a partner can only file an amended return with respect to items stemming from a partnership under the procedures set forth in subchapter C of chapter 63, that is, the amended return modification procedures. See proposed § 301.6225–2(d)(2)(vii)(A).
A partnership may request modification based on the status of its tax-exempt partners. If the IRS approves that modification, the imputed underpayment is calculated without regard to the portion of the partnership adjustment that is allocable to the tax-
For the purposes of modification, section 6225(c)(3) provides that a tax-exempt entity is defined pursuant to section 168(h)(2). Proposed § 301.6225–2(d)(3)(ii) further provides that status as a tax-exempt entity for purposes of modification is determined in accordance with the definitions provided under section 168(h)(2)(A), (C), and (D) without reference to section 168(h)(2)(B) and (E). Section 168(h)(2)(B) and (E) do not define categories of entities that are treated as tax-exempt entities, but rather impose limits on the extent to which certain property leased to tax-exempt entities is entitled to special treatment as “tax-exempt use property” with respect to depreciation deductions available to a lessor. As such, those provisions are inapplicable to the determination of tax-exempt status for purposes of the modification process.
Some tax-exempt entities may receive income for which they are subject to tax. For example, section 511 imposes a tax on unrelated business taxable income received by certain tax-exempt entities. Additionally, section 871, section 881, and section 882 impose tax on certain income received by foreign persons. A partnership may request modification based on an adjustment allocable to a tax-exempt partner only to the extent that the partnership demonstrates to the satisfaction of the IRS that the tax-exempt partner would not have been subject to tax with respect to the adjustment allocable to the partner for the reviewed year. See proposed § 301.6225–2(d)(3)(iii).
A partnership's decision either to request or not to request modification in the course of an audit under these proposed regulations may raise issues concerning whether and to what extent any benefit that might result from its request or failure to request modification could be considered to have been provided to any person in lieu of to a tax-exempt partner (whether a current or former partner, and at any “tier” of the partnership). For example, such a transfer of benefit may raise issues for one or more partners with respect to: (1) The status of a tax-exempt partner because of private inurement or private benefit under section 501(c); (2) excise taxes under chapter 42 of subtitle D of the Code or under sections 4975, 4976, or 4980; or (3) requirements under title I of the Employee Retirement Income Security Act of 1974, Public Law 93–406 (88 Stat. 829 (1974)) as amended (ERISA), such as the fiduciary responsibility rules under part 4 thereof. Some of these issues may be addressed by including appropriate provisions in the partnership agreement. However, the Treasury Department and the IRS request comments from the public on whether guidance is needed to address these potential issues and, if so, on possible ways to resolve such issues. Any such comments related to title I of ERISA will be shared with the Department of Labor.
Section 6225(c)(4) provides the opportunity for a partnership to request to modify an imputed underpayment by changing the tax rate applied to the portion of the total netted partnership adjustment allocable to a C corporation or an individual with respect to capital gains and qualified dividends. If the partnership has partners that are C corporations or individuals, the partnership may request that a lower rate apply to those portions, but that lower rate will be the highest rate in effect with respect to the type of income and partner for whom modification is requested. See proposed § 301.6225–2(d)(4).
Section 6225(c)(5) provides an opportunity for publicly traded partnerships (as defined in section 469(k)(2)) to request to modify an imputed underpayment in the case of a net decrease in a specified passive activity loss for specified partners. Proposed § 301.6225–2(d)(5)(ii) defines specified passive activity losses, and proposed § 301.6225–2(d)(5)(iii) defines specified partners. This modification is available both to partnerships that are publicly traded partnerships and with respect to partners (and indirect partners) that are publicly traded partnerships. The partnership requesting modification must report to all specified partners that the partnership has adjusted the amount of their suspended passive loss carryovers at the end of the adjustment year by the amount of any passive losses applied in connection with such modifications. The reduction in suspended passive loss carryovers is binding on the specified partners pursuant to section 6223 and the regulations thereunder. The Treasury Department and the IRS seek comments on how the requirement to notify partners can most efficiently be accomplished.
Section 6225(c)(6) provides that the IRS may prescribe additional types of modification through regulations. In these proposed regulations, the IRS is proposing three specific additional methods of modification and one general provision for additional types of modification to be considered at a later time.
Proposed § 301.6225–2(d)(6) allows a partnership to request modification of the number and composition of imputed underpayments. This provision specifically allows modifications of the process described in proposed § 301.6225–1(e), in which a specific imputed underpayment may be appropriate. The IRS is not obligated to implement this modification if it determines it is appropriate to reflect the partnership adjustments in imputed underpayments in a manner different than requested by the partnership. For instance, the IRS may determine it is appropriate to deny the calculation of a specific imputed underpayment by the partnership if, as a result of the specific imputed underpayment calculation, there is an increase in number of the partnership adjustments that net to a net non-positive amount, causing them to be disregarded and treated as adjustments that do not result in an imputed underpayment, which would shift the net losses away from the partnership and the reviewed year and to the adjustment year.
A special modification has been allowed in proposed § 301.6225–2(d)(7) for partners that are qualified investment entities described in section 860. These entities may distribute deficiency dividends after the NOPPA has been issued, and, if the entities do so in compliance with section 860 and the regulations thereunder, the IRS will treat the amount allowed as a deficiency dividend deduction under section 860(a) as having been taken into account by a partner in a manner similar to an amended return modification. One concern regarding this form of modification is that a NOPPA proposes an imputed underpayment, but it is not a final amount, in that the partnership may still challenge the amount in the IRS Office of Appeals or in court, but, once a deficiency dividend is distributed and claim therefore is filed, the qualified investment entities have no opportunity to change their position if the partnership obtains a favorable result at a later date. Given this lack of finality, the Treasury Department and the IRS seek comments on whether this provision adequately allows qualified
Finally, the IRS may take into account any closing agreements entered into by partners pursuant to section 7121 and will allow appropriate modification based on the contents of that closing agreement. See proposed § 301.6225–2(d)(8). This type of modification may provide some flexibility for taxpayers for which other forms of modification may prove burdensome or difficult. In certain cases, however, closing agreements may not be appropriate for partners seeking to modify an imputed underpayment because the finality of a closing agreement may limit a partnership's ability to challenge the underlying adjustments in the IRS Office of Appeals or in court.
In addition to the enumerated types of modification described in proposed § 301.6225–2(d)(2) through (8), the IRS may, in its discretion, consider alternative types of modification not specifically discussed in proposed § 301.6225–2(d); the documentation necessary to substantiate such modifications may be set forth in forms, instructions, or other guidance prescribed by the Department of Treasury or the IRS. See proposed § 301.6225–2(d)(9). The IRS may issue further guidance to establish procedures related to additional alternative forms of modification. As with all forms of modification, the partnership must demonstrate that an alternative modification is accurate and appropriate.
The examples in proposed § 301.6225–2(e) demonstrate the rules of § 301.6225–2.
Proposed § 301.6225–1(c)(2) sets forth the three circumstances in which partnership adjustments do not result in an imputed underpayment. Under that paragraph, a partnership adjustment does not result in an imputed underpayment: (1) If the adjustment relates to a distributive share reallocation that is disregarded under proposed § 301.6225–1(d)(2)(ii), (2) if after grouping and netting the adjustments, the result is a net non-positive adjustment under proposed § 301.6225–1(d)(3)(ii), or (3) if the calculation under proposed § 301.6225–1(c)(1) of this section results in an amount that is zero or less than zero.
Proposed § 301.6225–3 sets forth the rules for the treatment of adjustments that do not result in an imputed underpayment. In general, such an adjustment is taken into account by the partnership in the adjustment year as a reduction in non-separately stated income or as an increase in non-separately stated loss depending on whether the adjustment is to an item of income or loss. One of the exceptions to this rule is for separately stated items under section 702. Proposed § 301.6225–3(b)(2) provides that if an adjustment is to an item that is required to be separately stated under section 702, the adjustment shall be taken into account by the partnership on its adjustment year return as an adjustment to such separately stated item. Proposed § 301.6225–3(b)(3) provides that an adjustment to a credit is also taken into account as a separately stated item. However, if a section 6226 election is made with respect to an imputed underpayment, these rules do not apply to adjustments that are disregarded in computing the imputed underpayment with respect to which the section 6226 election was made. Such adjustments are taken into account by the reviewed year partners under section 6226.
Generally, the proposed regulations are silent with respect to the allocation of adjustments that do not result in an imputed underpayment, leaving their allocation to the partnership agreement. Section 301.6225–3(b)(3) proposes rules, however, governing those allocations, or lack thereof, in limited circumstances.
An adjustment that does not result in an imputed underpayment pursuant to § 301.6225–1(c)(2)(i) is allocated to those adjustment year partners who are the reviewed year partners with respect to whom the amount was reallocated. This rule is intended to prevent the allocation of such an item back to the partner from whom it was reallocated in connection with the audit. If the reviewed year partners with respect to whom the amount was reallocated are not adjustment year partners, then such adjustment is allocated to the adjustment year partners who are the successors to those reviewed year partners or, if no successors are identifiable or do not exist, among adjustment year partners according to the adjustment year partners' distributive shares.
If as part of the modification process under § 301.6225–2, a partner takes into account an adjustment that would otherwise not result in an imputed underpayment, the adjustment is not allocated to any partner for the adjustment year because the reviewed year partner has already taken its share of the adjustment into account. See proposed § 301.6225–3(b)(5). Allocating such an adjustment in the adjustment year would result in double counting.
In addition, if proposed § 301.6226–3 applies with respect to an adjustment that does not result in an imputed underpayment, proposed § 301.6225–3 does not apply to that adjustment, and the adjustments are taken into account under the rules governing section 6226. See proposed § 301.6225–3(b)(6). Finally, the rules of subchapter K apply with respect to adjustments taken into account under § 301.6225–3. See proposed § 301.6225–3(c).
As discussed above, section 6225 generally requires that adjustments be taken into account for purposes of computing the imputed underpayment, except that adjustments that do not result in an imputed underpayment are taken into account in the adjustment year. Section 6241(4) prescribes the treatment of the imputed underpayment as a nondeductible payment by the partnership, but is otherwise silent regarding the effect of the adjustments themselves on the partnership, the reviewed year partners, or the adjustment year partners. In response to Notice 2016–23, 2016–12 I.R.B. 490, commenters requested that the effect of partnership adjustments on basis be addressed in the regulations. One commenter recommended that regulations provide that a partnership that pays an imputed underpayment attributable to an adjustment to an item of income, gain, loss, or deduction, allocate that item in the adjustment year to the adjustment year partners treating such items as items of income, gain, loss, or deduction as non-taxable or deductible under sections 705(a)(1)(B) or (2)(B). The commenter explained that adjustments to basis and capital accounts are necessary to ensure that inside and outside basis remain congruent and to ensure that income, gain, loss, and deduction are not taxed twice. The Treasury Department and the IRS intend to adopt the approach the commenter recommended and to provide additional rules providing for adjustments to the inside basis and book value of any partnership property if the partnership adjustment is a change to an item of gain, loss, amortization or depreciation (
The commenter that recommended that a partnership allocate adjustment items in the adjustment year to the adjustment year partners as items described in sections 705(a)(1)(B) or (2)(B) also recommended that the allocations should be made in accordance with the partnership agreement and subject to the existing “substantial economic effect” requirements under section 704. The Treasury Department and the IRS request comments on whether, instead, it would be appropriate to allocate partnership adjustments that result in an imputed underpayment (meaning they are not taken into account by the partnership in the adjustment year under section 6225(a)(2)) only to adjustment year partners that are allocated part of the section 705(a)(2)(B) expense related to the partnership's payment of the imputed underpayment. The Treasury Department and the IRS also request comments on whether partnership adjustments arising from a reviewed year allocation that is reallocated from one partner to another partner require special rules restricting their allocations in the adjustment year to the partners from and to whom the item was reallocated and how to address successor partners or situations where the reviewed year partner has received a liquidating distribution and is no longer a partner.
Another commenter suggested that the IRS should have to provide evidence of a net underpayment of tax prior to making an adjustment because in some cases the tax may simply have been paid by the wrong partner (for example, with a reallocation adjustment). This suggestion is contrary to the compliance function of the IRS, and therefore, the IRS has declined to propose such a rule. The suggestion is also contrary to the statutory framework of the centralized partnership audit regime generally, and the rules for determining the imputed underpayment specifically. Section 6225(b)(2) specifically provides rules for how the IRS should make reallocation adjustments, which appear to be contrary to the commenter's suggestion.
Another commenter asked for safeguards similar to the mitigation provisions to prevent an overpayment of tax. The proposed regulations do not specifically address the mitigation provisions already in place under the Code, but there is nothing in the proposed regulations related to the centralized partnership audit regime that would prevent a partner or the partnership from pursuing mitigation, if appropriate. Therefore, no change in the mitigation procedures is necessary.
Commenters requested that the IRS address credit recapture situations and how those items are affected by the centralized partnership audit regime. The proposed regulations do not specifically address those issues. However, proposed § 301.6225–1(a)(2) provides that the calculation of the imputed underpayment will take into account all applicable preferences, restrictions, limitations, and conventions under the Code. Therefore, the proposed regulations provide flexibility to permit the IRS, during the examination, to account for credit recapture. The Treasury Department and IRS request additional comments on how credits should be managed within the framework of the proposed regulations.
One commenter discussed several ways to account for adjustments to creditable foreign tax expenditures (CFTEs) under the BBA. One recommended approach was to account for a decrease to CFTEs as a decrease to credits, while treating an increase to CFTEs as an adjustment that is disregarded for purposes of the imputed underpayment (to account for limitations and other considerations). Under this recommendation, an increase in CFTEs that is disregarded for purpose of calculating the imputed underpayment would be reported as a separately stated item in the adjustment year. The commenter noted that taxpayers would have the option to achieve an accurate result through the modification process. This recommendation is generally consistent with the broader approach taken in the proposed regulations; however, the Treasury Department and the IRS are reserving on the treatment of CFTEs and other adjustments affecting the amount of foreign tax credit that might be allowable to partners. The comments received did not provide a detailed recommendation with respect the treatment of other adjustments relating to the foreign tax credit calculation, and the Treasury Department and IRS request comments on how adjustments affecting foreign tax credit calculations should be taken into account within the framework of the centralized partnership audit regime, including possible ways to account for adjustments to items sourced or calculated at the partner level, such as interest expense and deemed paid credits.
Commenters asked that the tax attributes of adjustment year partners be taken into account when determining modification. This suggestion was not adopted for a number of reasons. First, section 6225(d) and proposed § 301.6241–1(a)(1) provide that the adjustment year is not determined until the adjustments are final. The partnership must seek modification prior to when the adjustment year is determined, potentially more than a calendar year before and even longer if the partnership seeks judicial review of the FPA. Because the adjustment year has not yet been determined at the time modification must be requested, there would be no way for the IRS or the partnership to know who the adjustment year partners should be.
Further, the text of section 6225 indicates that reviewed year partners are the appropriate partners with respect to which modification may be requested. For instance, the amended return modification provision under section 6225(c)(2)(A)(i) explicitly requires a partner to file an amended return for the partner's taxable year which includes the end of the reviewed year of the partnership. When filing that amended return, the partner must take the adjustments “properly allocable to such partners” in the reviewed year into account. Section 6225(c)(2)(A)(ii). It would be nonsensical for an adjustment year partner that was not also a reviewed year partner to file an amended return for the reviewed year taking any amount into account. Similarly, section 6225(b)(1)(A) provides that the imputed underpayment is calculated based on the highest tax rate in effect for the reviewed year, and rate modification under section 6225(c)(4)(A) relates specifically to a reduction in the rates in effect for the reviewed year by allowing for application of the rate of tax lower than the rate described in subsection (b)(1)(A), that is, the reviewed year rates. Finally, with respect to rate modifications under the rule for special allocations in section 6225(c)(4)(B)(ii), by statute, the rate modification is based specifically on a partner's distributive share of net gains and losses if the partnership had sold all of its assets at the close of the reviewed year. Such a rule cannot be applied to an adjustment year partner that was not also a reviewed year partner. In light of the statutory references to the reviewed year, it would be incongruous to key certain modifications off of the reviewed year partners and others off of adjustment year partners.
In addition, the partnership can control who its current year partners are and could admit partners to the partnership for the sole purpose of improving the results of a modification, even attempting to inappropriately eliminate the imputed underpayment. As a result, modification generally must
Commenters requested clarification as to how modification would apply if only some of the partners filed amended returns. Section 6225(c)(2)(B) requires that all affected partners file amended returns only in the case of an adjustment involving the reallocation of distributive shares among partners. Proposed § 301.6225–2(b) provides the rules for how modification adjustments are taken into account in calculating the modified imputed underpayment, and proposed § 301.6225–2(d)(2) provides specific rules related to amended return modification. Other than in the case of a reallocation adjustment, these rules allow some partners to file amended returns without requiring that all partners file amended returns. A partnership will be granted amended return modification to the degree that the partners (or indirect partners) in a partnership participate in the amended return modification process.
Even in the case of a reallocation adjustment, if the partners can demonstrate the affected partners' adjustments were fully taken into account through some other form of modification, the IRS may determine that that requirement was met without all partners' filing amended returns because the partners have met the spirit of the statute's requirements (that is, taking into account adjustments at the partner level). With the exception of the reallocation adjustment rule, if some partners choose to participate in amended return modification, the partnership will receive modification for those partners' amended returns. The partnership will not receive modification for partners that choose not to file amended returns unless those partners satisfy another modification provision as demonstrated by the partnership.
Commenters requested clarification regarding whether a partner may file an amended return if the statute of limitations on assessment was closed for the year the partnership return was filed or to allow partners to file limited amended returns related to closed years. Proposed § 301.6225–2(d)(2)(v) prevents partners from filing amended returns for modification purposes that require payment of tax after the period of limitations on assessment under section 6501 is closed. Although section 6225(c)(2) provides that amended returns may be filed “notwithstanding section 6511,” the statute provides no such exception for the statute of limitations under section 6501. As a result, there are limits on which partners will be permitted to file an amended return under the modification procedures. Partners that are precluded from filing amended returns due to an expired section 6501 period may be eligible for other forms of modification, such as closing agreement modification under proposed § 301.6225–2(d)(8), or partners and the partnership may choose to make other arrangements where the partner pays the imputed underpayment on behalf of the partnership outside of the modification procedures.
Commenters requested that partners be able to modify at various tiers within a partnership's ownership structure (that is, modification of indirect partners). This suggestion has been adopted. For example, see the amended return modification under proposed § 301.6225–2(d)(2)(vii), which provides a special rule for pass-through partners. Under these rules, if the modification provisions are satisfied with respect to indirect partners, partnerships may seek modification with respect to the partners as well as the indirect partners.
Another commenter asked for an additional 270 days after the issuance of the notice of final partnership adjustment, during which the partners could file amended returns. Section 6225(c) provides that the information required for modification purposes must be provided to the IRS within 270 days of the issuance of the NOPPA unless the IRS consents to an extension. The proposed regulations closely follow these rules. Accordingly, a request for an extension of the 270-day period will be considered by the IRS on a case by case basis. See proposed § 301.6225–2(c)(3).
Commenters requested that partners be allowed to certify that they have filed amended returns so that the partners do not have to provide their amended return information directly to the partnership or the partnership representative. This suggestion was incorporated in proposed § 301.6225–2(d)(2)(iii). Under this section, partners must file their returns in accordance with forms and instructions for filing amended returns for modification purposes, and the partnership representative must provide certifications from those partners to the IRS employee conducting the administrative proceeding.
Commenters requested that the IRS allow the partners to pay any taxes due related to their amended returns either at the time the amended returns are filed or through any available IRS administrative collection process. The Treasury Department and the IRS declined to propose this rule at this time. The IRS seeks comments as to how the IRS might allow more flexibility for taxpayers with respect to payment, while at the same time ensuring that partners in partnerships that request amended return modification are committed to taking into account the adjustments relevant to their amended returns.
Commenters requested that an alternative modification be available to partners that involved a summary or schedule of adjustments that reflect what would happen if an amended return were filed, rather than requiring the partners to file amended returns. The IRS will take into account closing agreements entered into as partners to the degree they affect the imputed underpayment, and partners could use this modification option to accomplish the goal of avoiding amended returns. The Treasury Department and the IRS request comments on additional possible options for modification that would simplify the amended return process as well as the process for other types of modification.
Commenters requested that the IRS permit modifications for taxes already paid, for example, on a partner's reviewed year return filed inconsistently with the partnership's reviewed year return. This suggestion was not adopted, but the IRS will allow modification with respect to closing agreements entered into by partners and other modification options. See proposed § 301.6225–2(d). Other commenters requested that the IRS allow qualified investment entities to use the deficiency dividend procedures under section 860 in modification. The proposed regulations adopt this suggestion. See proposed § 301.6225–2(d)(7).
Proposed § 301.6226–1(a) provides that a partnership may elect under section 6226 to “push out” adjustments to its reviewed year partners rather than paying the imputed underpayment determined under section 6225. If a partnership makes a valid election in accordance with proposed § 301.6226–1,
Proposed § 301.6226–1(b)(1) provides that if a partnership makes a valid election in accordance with proposed § 301.6226–1, the reviewed year partners of the partnership are liable for tax, penalties, additions to tax, and additional amounts, as well interest on such amounts, after taking into account their share of the partnership adjustments determined in the FPA. Any modifications approved by the IRS under proposed § 301.6225–2 are also reported to the reviewed year partners. In addition, under proposed § 301.6226–1(b)(2), adjustments that do not result in an imputed underpayment described in § 301.6225–1(c)(2)(i) and (ii) are not taken into account by the partnership in the adjustment year and instead are included in the reviewed year partners' share of the partnership adjustments reported to the reviewed year partners of the partnership.
Under proposed § 301.6226–1(c), an election under section 6226 is not valid unless the partnership complies with all the provisions for making the election under proposed § 301.6226–1 and the provisions under proposed § 301.6226–2 requiring the partnership to furnish statements to the reviewed year partners and file those statements electronically with the IRS. An election under proposed § 301.6226–1 may only be revoked with the consent of the IRS.
Proposed § 301.6226–1(c)(2) provides that if the IRS determines that an election under section 6226 is invalid, the IRS will notify the partnership and the partnership representative (within 30 days of the determination) that the election is invalid and provide the reason why the election is invalid. Proposed § 301.6226–1(c)(2) provides that a final determination that the election is invalid means that the partnership is liable for any imputed underpayment to which the election related, as well as any penalties and interest with respect to the imputed underpayment determined under section 6233. An election under proposed § 301.6226–1 is valid until the IRS determines the election is invalid.
Under proposed § 301.6226–1(c)(3), a partnership may only make an election under section 6226 within 45 days of the date the FPA was mailed by the IRS. The time for filing the election may not be extended. The election must be signed by the partnership representative and filed with the IRS in accordance with forms, instructions, and other guidance. Proposed § 301.6226–1(c)(4)(i). Proposed § 301.6226–1(c)(4)(ii) provides that the election must include the name, address, and correct taxpayer identification number (TIN) of the partnership, the taxable year to which the election relates, the imputed underpayment(s) to which the election applies (if there is more than one imputed underpayment in the FPA), each reviewed year partner's name, address, and correct TIN, and any other information required under forms, instructions, and other guidance. A copy of the FPA to which the election relates must also be attached to the election.
As stated in proposed § 301.6226–1(d), an election under section 6226, which includes filing and furnishing the statements described in proposed § 301.6226–2, is an action taken by the partnership under section 6223 and the regulations thereunder. Accordingly, all reviewed year partners are bound by the election and each reviewed year partner must take the adjustments on the statement into account in accordance with section 6226(b) and report and pay additional chapter 1 tax (if any) pursuant to proposed § 301.6226–3. Therefore, a reviewed year partner may not treat items reflected on a statement described in proposed § 301.6226–2 inconsistently with how those items are treated on the statement that the partnership files with the IRS. See proposed § 301.6222–1(c)(2) (regarding items the treatment of which a partner is bound to under section 6223).
The Treasury Department and the IRS request comments from the public on whether guidance is needed on how to address potential issues arising with respect to tax-exempt entities as a result of an election under section 6226 and, if so, on possible ways to resolve such issues. For instance, if a tax exempt entity's share of the amounts under section 6226 is investment income, issues may arise regarding how a section 6226 election might affect the entity's public support calculation (if the entity is a publicly-supported organization) or the applicable net investment income tax (if the entity is a private foundation).
Proposed § 301.6226–2(a) provides that a partnership making an election under section 6226 must furnish statements to the reviewed year partners with respect to the partner's share of the adjustments and file those statements with the IRS in the time, form, and manner prescribed by proposed § 301.6226–2(b) and (c). Proposed § 301.6226–2(a) further provides that the statements furnished to the reviewed year partners under section 6226 are in addition to, and must be filed and furnished separate from, any other statements required to be filed with the IRS and furnished to the partners for the taxable year, including any Schedules K–1,
Under proposed § 301.6226–2(b), the statements must be furnished to the reviewed year partners no later than 60 days after the date the partnership adjustments become finally determined. The partnership adjustments become finally determined upon the later of the expiration of the time to file a petition under section 6234 or, if a petition is filed under section 6234, the date when the court's decision becomes final. Accordingly, if an FPA is mailed on June 30, 2020, and no petition is filed by the partnership, the partnership adjustments reflected in the FPA become finally determined on September 28, 2020 (at the conclusion of the 90-day petition period under section 6234). An example under proposed § 301.6226–2(b)(3) illustrates these rules.
Under proposed § 301.6226–2(b)(2), a partnership must furnish the statement to each reviewed year partner in accordance with the forms, instructions, or other guidance prescribed by the IRS. If the statements are mailed, it must mail the statements to each reviewed year partner using the current or last address for that partner that is known to the partnership. If a statement is returned to the partnership as undeliverable, a partnership must exercise reasonable due diligence to identify a correct address for the
Under proposed § 301.6226–2(d), if a partnership discovers an error on a statement filed with the IRS, the partnership must correct the error within 60 days of the due date for furnishing the statements to partners and filing the statements with the IRS, as described in proposed § 301.6226–2(b) and (c). Under proposed § 301.6226–2(d)(2)(ii), if a partnership discovers an error after this 60-day period, the partnership may only correct the statements with the permission of the IRS in accordance with the forms, instructions, or other guidance prescribed by the IRS. If the IRS discovers an error in the statements, the IRS may require the partnership to correct the errors. If a partnership fails to correct an error as required by the IRS, the IRS may treat this as a failure to properly furnish statements to partners and file the statements with the IRS, and thus, allow the IRS to determine that the election under proposed § 301.6226–1 is invalid with the result that the partnership is liable for the imputed underpayment to which the election related. A partnership corrects an error in a statement by electronically filing the corrected statement with the IRS and furnishing the corrected statement to the affected reviewed year partner in accordance with the forms, instructions, and other guidance prescribed by the IRS. The adjustments contained on a corrected statement are taken into account by the reviewed year partner in accordance with proposed § 301.6226–3 for the reporting year (as defined in proposed § 301.6226–3(a)). Proposed § 301.6226–2(d)(4). Because reviewed year partners cannot file inconsistently with any statements furnished by the partnership under proposed § 301.6226–2 (see proposed § 301.6226–1(d)), this provision provides a partner a period during which the partner may notify the partnership of any errors in a statement and have the partnership furnish a corrected statement to the partner and file the corrected statement with the IRS.
The statements described in proposed § 301.6226–2 must include the name and correct TIN of the reviewed year partner; the current or last address of the reviewed year partner that is known to the partnership; the reviewed year partner's share of items originally reported to the partner (taking into account any adjustments made under section 6227); the reviewed year partner's share of the partnership adjustments and any penalties, additions to tax, or additional amounts; modifications attributable to the reviewed year partner; the reviewed year partner's share of any amounts attributable to adjustments to the partnership's tax attributes in any intervening year (as defined in proposed § 301.6226–3) resulting from the partnership adjustments allocable to the partner; the reviewed year partner's safe harbor amount and interest safe harbor amount (if applicable), as determined in accordance with proposed § 301.6226–2(g); the date the statement is furnished to the partner; the partnership taxable year to which the adjustments relate; and any other information required by the forms, instructions, or other guidance prescribed by the IRS. Proposed § 301.6226–2(e).
Under proposed § 301.6226–2(f), a reviewed year partner's share of the adjustments that must be taken into account by the reviewed year partner must be reported to the reviewed year partner in the same manner as originally reported on the return filed by the partnership for the reviewed year. If the adjusted item was not reflected in the partnership's reviewed year return, the adjustment must be reported in accordance with the rules that apply with respect to partnership allocations, including under the partnership agreement. However, if the adjustments, as finally determined, are allocated to a specific partner or in a specific manner, the partner's share of the adjustment must follow how the adjustment is allocated in that final determination. Proposed § 301.6226–2(f)(1). In all cases, adjustments taken into account on any amended returns or closing agreements that are approved during the modification process under proposed § 301.6225–2(d)(2) and that are disregarded in determining the imputed underpayment are ignored for purposes of determining the reviewed year partners' share of the adjustments. However, these modifications are listed separately on the statements provided to the reviewed year partners. Although modifications are ignored for purposes of reporting the adjustments to the reviewed year partners, any reviewed year partner that took an adjustment into account and paid tax through an amended return or closing agreement as part of modification with respect to that adjustment will not be taxed a second time with respect to that adjustment. This is true for two reasons. First, the partnership will inform the partner of any such adjustment in the statement furnished to that partner, per proposed § 301.6226–2(e). Therefore, the partner will know upon receipt of a statement that certain adjustments were taken into account by the partner and that those adjustments were disregarded in determining the imputed underpayment. Second, when computing the partner's tax that stems from such an adjustment (as described in proposed § 301.6226–3), the partner will account for the adjustment as part of that process, and the computation of the tax will reflect that the partner had already paid tax with respect to that adjustment during the modification phase of the audit. An example in proposed § 301.6226–3(g) illustrates this concept.
Any penalties, additions to tax, or additional amounts are reported to the reviewed year partners in the same proportion as each partner's share of the adjustments to which the penalties relate, unless the penalty, addition to tax, or additional amount is specifically allocated to a specific partner(s) or in a specific manner by a final court decision or in the FPA, if no petition is filed. Proposed § 301.6226–2(f)(2). Accordingly, if a penalty is determined with respect to a specific item or items, that penalty is reported to the reviewed year partners in the same manner as the adjustments to that specific item or items, unless otherwise provided in the FPA or a final court decision, for instance in a situation where there are partner-specific defenses to a penalty determined at the partnership level. If a penalty, addition to tax, or additional amount does not relate to a specific adjustment, each reviewed year partner's share of the penalty, addition to tax, or additional amount is determined in accordance with how such items would have been allocated under rules that apply with respect to partnership allocations, including under the partnership agreement, unless it is allocated to a specific partner in a specific manner in a final determination of the adjustments, in which case it is allocated in accordance with the final determination.
Under proposed § 301.6226–3, a reviewed year partner that is furnished a statement under proposed § 301.6226–2 is required to pay any additional chapter 1 tax (additional reporting year tax) for the partner's taxable year which includes the date the statement was furnished to the partner in accordance with proposed § 301.6226–2 (the reporting year) that results from taking into account the adjustments reflected in the statement. The additional reporting year tax is either the aggregate of the adjustment amounts, as determined in proposed § 301.6226–3(b), or, if an election is made under proposed § 301.6226–3(c), a safe harbor amount.
In addition to being liable for the additional reporting year tax, the reviewed year partner of a partnership that makes an election under section 6226 must also pay, for the reporting year, the partner's share of any penalties, additions to tax, or additional amounts reflected in the statement, and any interest on such amounts. Interest is determined in accordance with proposed § 301.6226–3(d).
Under proposed § 301.6226–3(b), the aggregate of the adjustment amounts is the aggregate of the correction amounts determined under proposed § 301.6226–3(b). There are two correction amounts for these purposes—one for the partner's taxable year which includes the reviewed year of the partnership (first affected year) and a second correction amount for the partner's taxable years after the first affected year and before the reporting year (intervening years). These correction amounts cannot be less than zero, and any amount below zero after applying the rules in proposed § 301.6226–3(b) does not reduce any correction amount, any tax in the reporting year, or any other amount.
Under proposed § 301.6226–3(b)(2), the correction amount for the first affected year is the amount by which the reviewed year partner's chapter 1 tax would increase for the first affected year by taking into account the adjustments reflected in the statement provided to the reviewed year partner under proposed § 301.6226–2. The correction amount for the first affected year is calculated by first determining the amount of chapter 1 tax that would have been imposed for the first affected year if the items as adjusted in the statement had been correctly reported in the first affected year. From that amount is subtracted the sum of the amount of chapter 1 tax shown by the partner on the return for the first affected year (which includes amounts shown on an amended return for such year, including an amended return filed under section 6225(c)(2) by the reviewed year partner) plus any amounts not shown but previously assessed (or collected without assessment) less any rebates made (as defined in § 1.6664–2(e)). In other words, the correction amount is equal to A minus (B plus C minus D). A is the amount of chapter 1 tax that would have been imposed had the items as adjusted been properly reported on the return for the first affected year. B is the amount shown as chapter 1 tax on the return for the first affected year (including amended returns filed under section 6225(c)(2) by a reviewed year partner). C represents any amounts not so shown previously assessed (or collected without assessment). D is the amount of rebates made. For purposes of applying this definition, an amount previously assessed includes an amount that was previously assessed as a result of the partner taking into account adjustments under section 6226(b) pursuant to an election made by a partnership other than the partnership making the current election.
Under proposed § 301.6226–3(b)(3), the aggregate correction amount for all intervening years is the sum of the correction amounts for each intervening year. Determining the correction amount for each intervening year is a year-by-year determination. The correction amount for each intervening year is the amount by which the reviewed year partner's chapter 1 tax would increase by taking into account any adjustments to any tax attributes. The correction amount for each intervening year is calculated by determining the amount of chapter 1 tax that would have been imposed for the intervening year if any tax attribute for the intervening year had been adjusted after taking into account the partner's share of the adjustments for the first affected year (and if any tax attribute for the intervening year had been adjusted after taking into account any adjustments to tax attributes in any prior intervening year(s)). From that amount is subtracted the sum of the amount of chapter 1 tax shown by the partner on the return for the intervening year (which includes amounts shown on an amended return for such year, including an amended return filed under section 6225(c)(2) by the reviewed year partner) plus any amounts not shown but previously assessed (or collected without assessment) less any rebates made (as defined in § 1.6664–2(e)).
For instance, if a partner had a net operating loss on his original return for the first affected year that was carried forward into the intervening years, the net operating loss (a tax attribute as defined in proposed § 301.6241–1(a)(10)) in the first intervening year after the first affected year is reduced by any portion of the net operating loss utilized to offset the adjustments in the first affected year. This reduction may not only affect the first intervening year after the first affected year, but if not fully absorbed in that intervening year, it may have a cascading effect through the intervening years as the intervening years are adjusted to reflect the adjustment to the net operating loss carryforward.
A number of comments received in response to Notice 2016–23 suggested that the Treasury Department and the IRS should permit calculation of the additional reporting year tax to account for any decreases in chapter 1 tax that may have resulted in the first affected year or any intervening year after taking into account the partner's share of the partnership adjustments. However, section 6226(b) specifically describes the correction amounts as amounts by which a partner's chapter 1 tax would increase for each respective year. Section 6226(b)(2)(A) and (B). Accordingly, the proposed regulations reflect the statute and do not permit any decreases in chapter 1 tax that would result for the first affected year or for any intervening year to factor into the calculation of the additional reporting year tax.
Under proposed § 301.6226–3(c), a partner that is furnished a statement described in proposed § 301.6226–2 may elect under this section to pay the safe harbor amount (or the interest safe harbor amount, in the case of certain individuals) shown on the statement in lieu of the additional reporting year tax. The election is made on the partner's return for the reporting year. If a partner is furnished multiple statements described in proposed § 301.6226–2, the partner may elect to pay the safe harbor amount from some or all of the statements. For instance, if the IRS examined two partnership taxable years in the same administrative proceeding, and an election under section 6226 was made with respect to all imputed underpayments for both years, the partnership would be required to furnish separate statements to its reviewed year partners and to calculate
Proposed § 301.6226–2(g) provides rules for the partnership to compute the safe harbor amount and the interest safe harbor amount, which cannot be less than zero, for inclusion in the section 6226 statement furnished to each reviewed year partner and filed with the IRS. For purposes of calculating the safe harbor amount, all of the allocation rules of proposed § 301.6226–2(f) apply. Under proposed § 301.6226–2(g), the safe harbor amount for each reviewed year is calculated in the same manner as the imputed underpayment under proposed § 301.6225–1 except that the adjustments allocated to the partner on the statement (including any amounts attributable to adjustments to partnership tax attributes) are used instead of the adjustments that are taken into account for purposes of determining the imputed underpayment under proposed § 301.6225–1. With one exception, any approved modifications of the imputed underpayment, including a rate modification under section 6225(c)(4), has no effect on the determination of the safe harbor amount for any partner.
The one exception is where a reviewed year partner filed an amended return, or entered into a closing agreement, during the modification phase under section 6225(c)(2), and as a result, the imputed underpayment, to which an election under this section relates, was determined without regard to the adjustments taken into account on the amended return or in the closing agreement. In that case, such adjustments are not taken into account in determining that partner's safe harbor amount.
In addition to the safe harbor amount, a partnership must calculate an interest safe harbor amount for partners who are individuals and who have a calendar year taxable year. The interest safe harbor amount is calculated at the rate set forth in proposed § 301.6226–3(d)(4) from the due date (without extension) of the individual reviewed year partner's return for the first affected year until the due date (without extension) of the individual reviewed year partner's return for the reporting year.
A separate safe harbor amount (and interest safe harbor amount, if applicable) is calculated for each separate statement furnished to the partner under proposed § 301.6226–2. For example, if there are multiple reviewed years, the partner would receive a separate statement for each reviewed year, and there would be a separate safe harbor calculation and amount for each statement.
The purpose of the safe harbor amount (and the interest safe harbor amount) is to provide a simplified method for the reviewed year partner to take into account the reviewed year partner's share of the adjustments with respect to the partnership's reviewed year. Determining what the reviewed year partner's increase in chapter 1 tax would be in the partner's first affected year if the adjustments were taken into account in that year, the increase in chapter 1 tax that would have occurred as a result of any adjustment to the tax attributes for each intervening year, and interest due for the first affected year and each intervening year could be very complex. In addition, because the statute only permits adjustments to increase, but not decrease, chapter 1 tax for any taxable year, adjustments taken into account under section 6226(b) do not fully reflect the tax consequences of treating the items correctly in the reviewed year. While the safe harbor amount also does not reflect the tax consequences of treating the items correctly in the reviewed year any better than the method prescribed by the statute, it is a reasonable alternative to approximate the tax that would have been due. In some cases, many years may have lapsed between the first affected year and the last intervening year, further complicating the calculation. Accordingly, while determination of the aggregate of the correction amounts provides a close but imperfect approximation of the partner's tax that would have been due if the partnership return was correct in the reviewed year, some partners may decide that the complexity and cost of doing the calculations necessary to determine the aggregate of the correction amounts is not worth the effort given that the aggregate of the correction amounts may not be exactly what the tax due would have been if the partnership return was correct in the reviewed year.
Under the proposed regulations, the safe harbor amount is computed so that partners filing amended returns under section 6225(c)(2) or entering into closing agreements are not paying tax twice on the same adjustment. In addition, the safe harbor amount is determined by multiplying the net adjustments against the highest tax rate under section 6225(b)(1)(A). Use of a fixed rate rather than requiring the reviewed year partner to determine the rate in the first affected year and the intervening years allows the partnership to compute the safe harbor amount for the reviewed year partner, further reducing burden on the reviewed year partner.
The election under section 6226 is a partnership election and the partners are bound by the election. See section 6223(b); proposed § 301.6226–1(d). Although reviewed year partners can avoid the computation under section 6226(b) by filing an amended return (or entering into a closing agreement) and paying the tax and interest due in accordance with section 6225(c)(2) during the modification phase of the audit, not all partners are willing or able to amend their returns for the relevant year. Therefore, the Treasury Department and the IRS believe that it is important to allow partners an option to pay a simplified safe harbor amount in lieu of computing the correction amounts described under proposed § 301.6226–3(b) and a simplified interest safe harbor amount for certain individuals in lieu of computing the interest on the safe harbor amount under proposed § 301.6226–3(d)(2).
Any reviewed year partner may elect to pay the safe harbor amount, including reviewed year partners that are partnership-partners or S corporation partners.
Reviewed year partners are also liable for interest on any correction amount for the first affected year and any intervening years under proposed § 301.6226–3(d)(1). If the partner elects to pay the safe harbor amount, a reviewed year partner that is an individual may also elect to pay the interest safe harbor amount. For all other partners and individuals that do not elect the safe harbor amount, interest applies under proposed § 301.6226–3(d)(2). Interest on the correction amounts and the safe harbor amount is determined at the partner level. Under proposed § 301.6226–3(d)(4), the rate of interest is calculated using the underpayment rate under section 6621(a)(2), except that when determining that rate, five percentage points are used instead of three percentage points, with the result that the underpayment rate for purposes of
Under proposed § 301.6226–3(d)(1), a reviewed year partner is liable for interest on any correction amount from the first affected year and any intervening years from the due date of the return (without extension) for the applicable tax year (that is, the year to which the additional tax is attributable) until the correction amount is paid. For purposes of calculating interest, the safe harbor amount and any penalties, additions to tax, or additional amounts are attributable to adjustments taken into account for the first affected year. Therefore, proposed § 301.6226–3(d)(2) and (3) provide that the reviewed year partner is liable for interest on the safe harbor amount and any penalties, additions to tax, or additional amounts from the due date of the return for the corresponding first affected year (without extension) until the reviewed year partner pays such amounts.
The proposed regulations under section 6226 coordinate the rules under the centralized partnership audit regime with the deficiency dividend procedures under section 860 for partners that are RICs and REITs. In general, section 860 allows RICs and REITs to be relieved from the payment of a deficiency in (or to receive a credit or refund of) certain taxes including, among certain others, taxes imposed by sections 852(b)(1) and (3), 857(b)(1) or (3), and, if the entity fails the distribution requirements of section 852(a)(1)(A) or 857(a)(1), as applicable, the corporate income tax imposed by section 11(a) or 1201(a). The procedure provided by section 860 is to allow an additional deduction for “deficiency dividends” within the meaning of section 860(f) that meets the requirements of section 860 in computing the deduction for dividends paid for the taxable year for which a “determination” within the meaning of section 860(e) is made. Under proposed § 301.6226–2(h), if a statement described in proposed § 301.6226–2 is furnished to a reviewed year partner that is a RIC or REIT, the RIC or REIT may take into account the adjustments reflected in the statement that also are “adjustments” within the meaning of section 860(d) by using the deficiency dividend procedures set forth in section 860, subject to the limitations described in proposed § 301.6226–3(b)(4). Accordingly, a REIT or a RIC may utilize the deficiency dividend procedures under section 860 if the REIT or RIC receives a statement from a partnership under proposed § 301.6226–2 that includes adjustments within the meaning of section 860(d).
Section 301.6226–3(b)(4) of the proposed regulations coordinates rules for the deficiency dividend procedures set forth in section 860 with the rules for determining the additional reporting year tax under § 301.6226–3(b) with respect to any adjustments shown on a statement furnished to a RIC or REIT under proposed § 301.6226–2. Under these rules, if the statement described in proposed § 301.6226–2 results in any adjustment (within the meaning of section 860(d)) to a RIC or REIT for the first affected year or any intervening year, the RIC or REIT may make a determination under section 860(e)(4) and Rev. Proc. 2009–28, 2009–1 C.B. 1011, and avail itself of the deficiency dividend procedures set forth in section 860 and the regulations thereunder. If the RIC or REIT utilizes the deficiency dividend procedures with respect to adjustments in a statement described in proposed § 301.6226–2, the RIC or REIT may claim a deduction for deficiency dividends against the adjustments furnished to the RIC or REIT (to the extent they qualify as adjustments under section 860(d)) in calculating any correction amounts for the first affected year and any intervening year to the extent that the RIC or REIT makes deficiency dividend distributions under section 860(f) and complies with all requirements of section 860 and the regulations thereunder.
Also, if a RIC or REIT claims a deficiency dividends deduction, interest under proposed § 301.6226–3(d) is only calculated on any correction amount determined after deducting any deficiency dividend deduction from the adjustments taken into account by the RIC or REIT. Nothing in proposed § 301.6226–3(b)(4) affects a RIC's or REIT's liability for any interest on the deficiency dividend distribution under section 860(c)(1). Therefore, a RIC or a REIT will be liable for interest under section 860(c)(1) as to any deficiency dividend distribution as well as interest on any correction amount as determined under proposed § 301.6226–3(d). Because the deficiency dividend distribution is deductible in calculating the correction amounts, in no event will a RIC or REIT pay both interest under section 860(c)(1) and section 6226 as to the same amount.
Finally, as clarified in proposed § 301.6226–3(b)(4), a deficiency dividend deduction used in calculating any correction amount has no effect on a RIC or REIT's liability for any penalties reflected in the statement furnished to the RIC or REIT under proposed § 301.6226–2.
The proposed regulations reserve on rules that would apply when statements described in proposed § 301.6226–2 are provided to foreign partners, including foreign entities, or certain domestic partners. In general, certain amounts received by a partnership that are allocable to a foreign partner may be subject to withholding under chapter 3 of subtitle A of the Code (chapter 3), and certain amounts allocable to a foreign or domestic partner may be subject to withholding under chapter 4 of subtitle A of the Code (chapter 4). To the extent that amounts are withheld by the partnership or other withholding agent under chapter 3 or 4, and remitted to the IRS, such amounts are creditable by the foreign partner or domestic partner to offset the chapter 1 tax that the partner otherwise would owe in the absence of the withholding. The purpose of chapter 3 withholding is to ensure compliance by foreign persons with respect to income subject to tax under chapter 1, by requiring the partnership (or other withholding agent) to withhold and remit the tax that would normally be paid by the foreign person on payments or income allocated to the foreign person. The purpose of chapter 4 withholding is to ensure that information reporting about U.S. persons that use certain offshore financial accounts or passive foreign entities is available to the IRS to enhance tax compliance. The withholding imposed under chapter 4 may be imposed on certain foreign financial institutions, account holders of a financial account, or passive non-financial foreign entities with substantial U.S. owners, to incentivize the information required under chapter 4 to be reported and available to the IRS.
It is the view of the Treasury Department and the IRS that, consistent with the purposes of chapters 3 and 4, if adjustments in a statement described in proposed § 301.6226–2 represent additional income allocable to a foreign or domestic partner that was not accounted for in the reviewed year, and the partnership elects under section 6226 to have the partners take into account the adjustments, such income should be subject to the rules in chapters 3 and 4 in the adjustment year to the same extent that such amounts would have been if they had been properly accounted for by the partnership in the reviewed year. Accordingly, the Treasury Department
Additionally, the Treasury Department and the IRS also intend to issue regulations to address situations where a direct partner in the partnership is a foreign entity, such as a trust or corporation, that may not be liable for U.S. federal income tax with respect to one or more adjustments, but an owner of the direct partner is, or could be liable for tax with respect to such amount. For example, if a direct partner in the audited partnership is a controlled foreign corporation, the foreign corporation as a direct partner may not have a U.S. tax liability with respect to a given adjustment; however, the adjustment may impact the tax liability of its U.S. shareholder(s). The tax effects on the U.S. shareholder(s) may arise in the adjustment year, an intervening year, or some subsequent year, depending on the specific facts and circumstances. Comments are requested on how the reporting obligations concerning foreign entities should be modified to ensure that statements issued under section 6226 are timely reflected on the returns of the U.S. owners of such entities.
Section 6226(a) provides that the election under that section must be made within 45 days of the date the FPA is mailed. Section 6234(a) provides that the partnership may petition for readjustment within 90 days of the date the FPA is mailed. The proposed regulations coordinate these rules so that an election can be made during the time frame provided under section 6226 without cutting off the partnership's right to challenge the adjustments in court within the time frame provided for in section 6234.
As clarified under proposed § 301.6226–1(e), an election under proposed § 301.6226–1 does not affect the partnership's ability to file a petition under section 6234 to challenge adjustments determined in an FPA. The proposed regulations do this by providing that while the election under section 6226 must be filed within 45 days of the date the FPA is mailed, the filing and furnishing of the statements, is not required until 60 days after the adjustments are finally determined. Proposed § 301.6226–2(b). Under proposed § 301.6226–2(b), the partnership adjustments become finally determined upon the later of the expiration of the time to file a petition under section 6234 or, if a petition is filed under section 6234, the date when the court's decision becomes final. Accordingly, a partnership can make an election under section 6226, petition for readjustment, and then file and furnish statements once the adjustments are finally determined. If, after going to court, a partnership that filed the election within the 45-day period determines that it no longer wishes to have section 6226 apply, the partnership can request IRS consent to revoke the election.
A number of comments received in response to Notice 2016–23 suggested that a pass-through partner who receives a statement described in proposed § 301.6226–2 should be able to flow through the adjustments to its owners instead of paying tax on the adjustments at the first tier. Under this approach, the adjustments would flow through the tiers until a partner that is not a pass-through partner receives the adjustment. The proposed regulations reserve on this issue.
Under section 6226(a)(2), if a partnership elects the alternative to the payment of the imputed underpayment, the partnership is required to furnish statements to “each partner of the partnership for the reviewed year.” Under section 6226(b), a reviewed year partner's tax imposed by chapter 1 for the reporting year is increased by the aggregate of the correction amounts for the first affected year and any intervening years. Section 7701(a)(2) defines “partner” as a member in a partnership (that is, a direct partner). Accordingly, if a partnership makes an election under section 6226, section 6226(b) requires the partnership's direct partners from the reviewed year to take into account the adjustments. Neither section 7701(a)(2) nor section 6226 makes any distinction in this respect between those direct partners that are themselves pass-through entities, and direct partners that are not pass-through entities, such as individuals and C corporations.
Section 6226 is prescriptive regarding the election to push out the partnership adjustments resulting from a centralized partnership audit proceeding rather than paying the imputed underpayment. First, the partnership subject to the proceeding must make the election no later than 45 days after the FPA is mailed to the partnership, and the partnership must furnish and file statements reflecting the reviewed year partners' shares of the adjustments. Section 6226(a)(1) and (2). Second, section 6226(b) provides that each direct partner's chapter 1 tax for the taxable year including the date the statement is furnished (reporting year) is increased by an amount that represents the tax that should have been paid by the partner if in the reviewed year the items adjusted were correctly reported on the partnership's return and taken into account by the direct partner.
In the case of a partnership that is itself a partner, the General Explanation of Tax Legislation Enacted for 2015 (Bluebook) explained that the partnership-partner “pays the tax attributable to adjustments with respect to the [first affected year] and the intervening years, calculated as if it were an individual . . . for the taxable year . . . .” JCS–1–16 at 70. To account for the fact that partnerships are not liable for chapter 1 tax, the Bluebook provides that, “a partnership that receives a statement from the audited partnership is treated similarly to an individual who receives a statement from the audited partnership.”
In December 2016, both the House of Representatives and the Senate introduced bipartisan technical corrections that would resolve this issue by providing that a partner that is a partnership or S corporation may elect to either pay an imputed underpayment under rules similar to section 6225 or flow the adjustments through the tiers. See Tax Technical Corrections Act of 2016 (H.R. 6439, 114th Cong. (2016)); Tax Technical Corrections Act of 2016 (S. 3506, 114th Cong. (2016)).
The Technical Corrections Act's approach to allow a partnership or S corporation to flow adjustments through the tiers presents significant administrative concerns. First and foremost, allowing such entities to flow through the tiers will result in complexities, challenges, and inefficiencies similar to what occurred under TEFRA. Under TEFRA, following the conclusion of an administrative or judicial proceeding, the IRS was expected to work through the various tiers and calculate, assess, and collect the tax at the ultimate partner level. Allowing partners under BBA to flow adjustments through the tiers presents similar, if not greater, burdens since multiple returns are implicated, from the reviewed year through the adjustment year and all intervening years, in verifying, assessing and collecting the tax, interest and penalties. The IRS would have to undertake this labor intensive process of tracking, validating, and reconciling adjustments and payments through countless tiers. Indeed, as the GAO noted in its most recent report on large partnerships and TEFRA, almost two-thirds of large partnerships in 2011 had more than 1,000 direct and indirect partners, and hundreds of large partnerships had more than 100,000 direct and indirect partners.
Another significant concern is that BBA presents a bifurcated process where the tax is determined and later assessed and collected through a self-reporting process by the partners. The process of flowing adjustments to the reviewed year partners occurs after the audit/litigation is concluded. The assessment process under BBA, whereby the partners are required to calculate the tax, interest, and penalties and report them on their next filed return, presents a challenge because of the passage of time. Even compliant taxpayers, who receive statements in the middle of the tax year may not understand their significance, and may not know exactly how to utilize this information. This would necessitate additional compliance resources by the IRS to check the adjustment year reporting to verify that the adjustments were indeed correctly reported by every tier and by all direct and indirect partners.
The costs involved in administering these processes will limit the overall number of audits that can be undertaken, which in turn will limit the IRS's ability to meaningfully address tax noncompliance for this segment of taxpayers, as well as limit the overall revenue collection from these entities, including, for example, as partners die, dissolve, become insolvent, or are not able to be located due to the passage of time.
In light of these administrative concerns and the need for public comment on more immediately relevant aspects of these regulations, the proposed regulations reserve this issue. See proposed § 301.6226–2(e). However, the Treasury Department and the IRS are considering an approach under section 6226 for tiered partnerships for pushing the adjustments beyond the first tier partners that will be the subject of other proposed regulations to be published in the near future. The Treasury Department and the IRS seek comments on how the IRS might administer the requirements of section 6226 in tiered structures, including comments on the information tracking and other information sharing from the partnership under examination with respect to its direct and indirect partners to the IRS that are necessary for the IRS to monitor whether adjustments are properly flowed through the tiers and to determine that the proper taxpayers take into account the correct amount of adjustments and report the correct amount of any resulting tax, interest, and penalties. The Treasury Department and the IRS are also specifically interested in comments on reducing noncompliance and collection risk in tiered structures, while at the same time limiting the administrative costs of the IRS.
In addition, the Treasury Department and the IRS are interested in comments as to how to treat under section 6226 a direct partner in the partnership that is an estate or trust, or a foreign entity, such as a trust or corporation that may not be liable for U.S. federal income tax with respect to one or more adjustments, but an owner of the direct partner is, or could be, liable for tax with respect to such amount. For instance, if a direct partner in the audited partnership is a controlled foreign corporation, the foreign corporation as a direct partner may not have a U.S. tax liability with respect to a given adjustment; however, the adjustment may impact the tax liability of its U.S. shareholder(s). The tax effects on the U.S. shareholder(s) may arise in the first affected year, an intervening year, or some subsequent year, depending on the specific facts and circumstances. The Treasury Department and the IRS request comments on how the safe harbor amount should be computed with respect to such foreign partners.
As discussed previously in this preamble, section 6226(b)(3) requires that any tax attribute which would have been affected if the partnership adjustments were taken into account for the reviewed year, be appropriately adjusted for purposes of computing the amount by which the tax imposed under chapter 1 would increase for any intervening year. As with section 6225, however, section 6226 does not explicitly provide that tax attributes affected by reason of a partnership adjustment should be adjusted for all purposes, and not just for purposes of taking the adjustments into account to calculate the additional reporting year tax, and that the adjustments to tax those attributes should continue to have effect after the adjustment year.
As in the case of a partnership that did not elect the application of section 6226 with respect to an imputed underpayment, the Treasury Department and the IRS have determined that it is appropriate to adjust the adjustment year partners' outside bases and capital accounts and a partnership's basis and book value in property when one of those tax attributes is affected by reason of a partnership adjustment. However, given that the tax imposed under section 6226 includes the amount by which the tax imposed under chapter 1 would increase for any intervening year, a different approach is appropriate.
The purpose of the partnership adjustments is to create a new, accurate starting point for later taxable years; therefore, it is necessary to adjust the adjustment year partners' outside bases and capital accounts despite the fact that it is the reviewed year partners who pay additional tax under section 6226. Providing mechanical rules to govern the adjustments to adjustment year
The Treasury Department and the IRS have determined that, in the adjustment year, adjustment year partners' outside bases and capital accounts and a partnership's basis and book value in property should be adjusted to what they would have been if the adjustments were made in the reviewed year to reviewed year partners and property and then modified to take into account all intervening events considered in computing the amount by which the tax imposed under chapter 1 would increase for any intervening year—for example, amortization or depreciation of property. In some cases, the reviewed year partner may not be an adjustment year partner, or the partnership might, in an intervening year, have disposed of property to which an adjustment relates. Accordingly, rules will also need to provide how adjustments to adjustment year partners' outside bases and capital accounts and a partnership's basis and book value in property are made when there have been: (1) Sales of property, (2) distributions of property to partners, (3) contributions of property to corporations or lower-tier partnerships, (4) other nonrecognition transfers of property, (5) sales of partnership interests, (6) transfers of partnership interests in nonrecognition transactions, and (7) contributions to the partnership. In addition, the Treasury Department and the IRS are considering whether partnerships should be required to recompute basis adjustments under sections 734 and 743 that resulted from distributions or transfers in intervening years to take into account adjustments to partners' outside bases and a partnership's basis in property. The Treasury Department and the IRS are also considering whether and how an adjustment should be made to the basis of property distributed in an intervening year when an adjustment to the partnership's basis in that property or an adjustment to the recipient partner's outside basis would otherwise have been appropriate.
It seems appropriate that any outside basis and capital account adjustments that need to be made are made with respect to the adjustment year partners who are the reviewed year partners who received a statement of the partner's share of any adjustment to income, gain, loss, deduction or credit. The Treasury Department and the IRS believe that if a reviewed year partner transfers its partnership interest in an intervening year, it is appropriate for the transferee adjustment year partner's capital account and outside basis to be adjusted in the adjustment year. Whether the interest was transferred in a recognition transaction or a nonrecognition transaction, however, is relevant to the amount of the adjustment to the transferee's outside basis, but not capital account, because the transferee in either case succeeds to the capital account of the transferor, however, in a recognition transaction, the transferee would have taken a cost basis in the interest upon a transfer in which gain was recognized. The Treasury Department and the IRS request comments regarding whether and how to adjust the outside bases and capital accounts of adjustment year partners if the reviewed year partner whose basis and capital account should have been adjusted is no longer a partner as a result of a liquidating distribution and thus no other partner has succeeded to the liquidating partner's capital account.
Finally, comments are requested on how, or if, these regulations should address partnerships that do not maintain capital accounts.
Proposed § 301.6227–1(a) describes the general rules for filing an administrative adjustment request (AAR). In accordance with section 6227(a), proposed § 301.6227–1(a) provides that a partnership may file an AAR with respect to one or more items of income, gain, loss, deduction, or credit of the partnership and any partner's distributive share thereof for any partnership taxable year as determined under section 6221 and the regulations thereunder. Proposed § 301.6227–1(a) requires a partnership to determine whether the adjustments requested in the AAR result in an imputed underpayment in accordance with proposed § 301.6227–2(a) for the reviewed year, that is, the taxable year to which the adjustments relate (see proposed § 301.6241–1(a)(8)). If the requested adjustments result in an imputed underpayment, proposed § 301.6227–1(a) provides that the partnership takes the adjustments into account under proposed § 301.6227–2(b), which requires the partnership to pay the imputed underpayment unless the partnership makes an election under proposed § 301.6227–2(c). If the partnership makes an election under proposed § 301.6227–2(c), the reviewed year partners take the adjustments into account in accordance with proposed § 301.6227–3, which provides rules similar to section 6226. Under proposed § 301.6227–1(a), if the adjustments do not result in an imputed underpayment, the reviewed year partners must take the adjustments into account under the rules of proposed § 301.6227–3.
Proposed § 301.6227–1(a) clarifies that only a partnership may file an AAR and that a partner may not file an AAR unless the partner is doing so in his or her capacity as partnership representative for the partnership. Additionally, in certain cases, a partner that is itself a partnership subject to subchapter C of chapter 63 (that is, the partnership has not elected out of the centralized partnership regime under section 6221(b)) may file an AAR in response to the filing of an AAR by the partnership of which it is a partner. See proposed § 301.6227–3(c) for the rules regarding certain partnership-partners filing AARs. In addition, proposed § 301.6227–1(a) clarifies that a partnership may not file an AAR solely to provide the partnership an opportunity to change a designation of the partnership representative.
Proposed § 301.6227–1(b) provides that an AAR may only be filed by a partnership with respect to any partnership taxable year for which a partnership return has been filed. In general, a partnership may not file an AAR with respect to a partnership taxable year more than three years after the later of the date the partnership return for such partnership taxable year was filed or the last day for filing such partnership return determined without regard to extensions. In addition, the proposed regulations provide that an AAR may not be filed with respect to a partnership taxable year after a notice of administrative proceeding with respect to such taxable year has been mailed by the IRS under section 6231.
The proposed regulations reserve on rules to coordinate the rules under section 6227 with the requirements in section 905(c) when the AAR includes an adjustment to the amount of creditable foreign tax incurred by the partnership. Comments are requested on how a partnership can fulfill the requirements of section 905(c), including those rules relating to the assessment and collection of interest on certain refunds of creditable foreign taxes, while taking into account the objectives and purposes of the
Proposed § 301.6227–1(c)(1) provides that an AAR must be filed in accordance with the forms, instructions, and other guidance prescribed by the IRS and must include any required statements, forms, and schedules. An AAR must be signed under penalties of perjury by the partnership representative. This requirement is consistent with section 6223 which states that the partnership representative has the sole authority to act on behalf of the partnership under subchapter C of chapter 63. See proposed § 301.6223–2.
Under proposed § 301.6227–1(c)(2), a valid AAR must include the adjustments requested; any required statements described in proposed § 301.6227–1(e), including any transmittal with respect to such statements as prescribed in forms, instructions, and other guidance; and any other information prescribed by the IRS in forms, instructions, or other guidance. Proposed § 301.6227–1(d) provides that where reviewed year partners are required to take into account adjustments requested in an AAR, the partnership must furnish a copy of the statement filed with the IRS to the reviewed year partner to whom the statement relates. If the partnership mails the statement, it must be mailed to the current or last address of the reviewed year partner that is known to the partnership. The copy of the statement must be furnished to the reviewed year partner on the date the partnership files the AAR with the IRS.
Proposed § 301.6227–1(c) describes the statements that must be issued to reviewed year partners in the case of an election under proposed § 301.6227–2(c) or an AAR not resulting in an imputed underpayment under proposed § 301.6227–2(d). Each statement must include the name and correct TIN of the reviewed year partner; the current or last address of the partner that is known to the partnership; the reviewed year partner's share of items originally reported to the partner (taking into account any adjustments made pursuant to a prior AAR filed under section 6227); the reviewed year partner's share of the adjustments requested in the AAR (as described in proposed § 301.6227–1(c)(2)); the date the statement is furnished to the partner; the partnership taxable year to which the adjustments relate (the reviewed year); and any other information required by the forms, instructions, or other guidance prescribed by the IRS. Proposed § 301.6227–1(e).
Proposed § 301.6227–1(e)(2) describes the reviewed year partners' share of the adjustments requested in an AAR for purposes of the statements described in proposed § 301.6227–1(e)(1). Under proposed § 301.6227–1(e)(2), except when a specific partner's share of an item is reflected on an AAR in a specific manner in accordance with the provisions of the partnership agreement and in accordance with the principles of section 704(b), each reviewed year partner's share of an adjustment must be determined and reported to the reviewed year partner in the same manner as the item to which the adjustment relates was originally determined and reported on the partnership return for the reviewed year. If the item to which the adjustment relates was not reflected on the partnership's reviewed year return, the reviewed year partners' respective shares of the adjustment must be determined and reported to the reviewed year partners in accordance with the manner in which the allocation of the items to which the adjustment relates would have been made under the partnership agreement and subject to the principles of section 704(b) in the reviewed year. If the adjustments, as requested in the AAR, allocate items to a specific partner or in a specific manner, the statement must reflect the adjustment as allocated in accordance with the AAR.
Proposed § 301.6227–1(f) provides that the filing of an AAR under proposed § 301.6227–1(b) and the filing and furnishing of statements as described in proposed § 301.6227–1(c) and proposed § 301.6227–1(d) are actions taken by the partnership under section 6223 and the regulations thereunder. Section 6223 states that a partnership and all partners of such partnership shall be bound by actions taken by the partnership under subchapter C of chapter 63. Accordingly, proposed § 301.6227–1(f) provides that, unless otherwise determined by the IRS, a partner's share of the adjustments requested in an AAR as reflected on a statement described in proposed § 301.6227–1(e) are binding on the partner. Under proposed § 301.6227–1(f), a partner must treat the adjustments on the partner's return consistently with how the adjustments are treated on the statement that the partnership files with the IRS. See proposed § 301.6222–1(c)(2) (regarding items the treatment of which a partner is bound to under section 6223).
Proposed § 301.6227–1(g) provides that the IRS may, within the period provided under section 6235, conduct a proceeding with respect to the partnership for the taxable year to which the AAR relates and adjust items subject to subchapter C of chapter 63, including the items adjusted in the AAR. In the case of an AAR, the Service may make adjustments with respect to the partnership taxable year to which the AAR pertains within three years from the date the AAR is filed. Proposed § 301.6227–1(g) provides that the IRS may re-determine adjustments requested in an AAR, including modifications applied by the partnership to the imputed underpayment. If the partnership adjustments determined by the IRS increase any imputed underpayment, the additional amount is assessed in the same manner and subject to the same restrictions as any other imputed underpayment. See section 6232.
Proposed § 301.6227–2 describes how adjustments requested in an AAR are determined and taken into account by a partnership. Proposed § 301.6227–2(a)(1) provides the rules for determining whether an imputed underpayment results from adjustments requested in an AAR by referring to the proposed § 301.6225–1.
Under proposed § 301.6227–2(a)(2), in the case of an AAR, a partnership may reduce the imputed underpayment as a result of certain modifications permitted under proposed § 301.6225–2. Those modifications are modifications that relate to tax-exempt partners, rate modification, modification related to certain passive losses of publicly traded partnerships, modification applicable to qualified investment entities described in section 860, and other modifications to the extent permitted under future IRS guidance. The modifications described in proposed § 301.6227–2 are the only modifications a partnership can use in an AAR context. Other types of modification, such as modifications under proposed § 301.6225–2 with respect to amended returns and closing agreements are not available in the case of an AAR.
In addition, proposed § 301.6227–2(a)(2)(i) provides that a partnership does not need to seek IRS approval prior to modifying an imputed underpayment that results from adjustments requested in an AAR. However, proposed § 301.6227–2(a)(2)(ii) provides that modifications to the imputed underpayment resulting from adjustments requested in an AAR can be taken into account by the partnership only if the AAR that is filed includes notification to the IRS of the modification, a description of the effect
Proposed § 301.6227–2(b)(1) provides that when the adjustments requested in an AAR result in an imputed underpayment, the partnership must pay the imputed underpayment (as reduced by modifications meeting the requirements of proposed § 301.6227–2(a)(2)(ii)) at the time the partnership files the AAR, unless the partnership makes the election under proposed § 301.6227–2(c) to have its reviewed year partners take such adjustments into account. The partnership's payment of the imputed underpayment is treated as a nondeductible expenditure under section 705(a)(2)(B) in accordance with proposed § 301.6241–4.
Proposed § 301.6227–2(b)(2) provides the rules for determining penalties and interest with respect to an imputed underpayment resulting from adjustments requested in the AAR. As provided in proposed § 301.6227–2(b)(2), the IRS may impose any penalty, addition to tax, and additional amount with respect to such an imputed underpayment in accordance with section 6233(a)(3). In the case of any failure to pay an imputed underpayment at the time an AAR is filed, the IRS may impose any penalty, addition to tax, and additional amount in accordance with section 6233(b)(3). Interest on an imputed underpayment is determined under chapter 67 for the period beginning on the date after the due date of the partnership return for the reviewed year (determined without regard to extension) and ending on the earlier of the date payment of the imputed underpayment is made with the AAR, or the due date of the partnership return for the adjustment year. See section 6233(a)(2). In the case of any failure to pay an imputed underpayment before the due date of the partnership return for the adjustment year, any interest is determined in accordance with section 6233(b)(2).
The Treasury Department and the IRS intend in future guidance to cross reference proposed § 301.6225–4 for rules regarding adjustments to partners' outside bases and capital accounts and a partnership's basis and book value in property when the adjustments requested in an AAR result in an imputed underpayment and the partnership does not elect under proposed § 301.6227–2(c) to have its reviewed year partners take such adjustments into account.
Proposed § 301.6227–2(c) provides that a partnership may elect to have its reviewed year partners take into account adjustments requested in an AAR that result in an imputed underpayment in lieu of the partnership paying that imputed underpayment. If the partnership makes a valid election under proposed § 301.6227–2(c), the partnership is no longer required to pay the imputed underpayment resulting from the adjustments requested in the AAR. Rather, each reviewed year partner must take into account its share of such adjustments in accordance with proposed § 301.6227–3. For these purposes, any modification requested under proposed § 301.6227–2(a)(2) is disregarded, and all adjustments requested in the AAR are taken into account by each reviewed year partner in accordance with proposed § 301.6227–3.
When the adjustments requested in an AAR do not result in an imputed underpayment, the reviewed year partners must take into account their shares of such adjustments in accordance with proposed § 301.6227–3. Proposed § 301.6227–2(d) provides that in that situation the partnership must furnish statements to the reviewed year partners and file a copy of those statements with the IRS in accordance with proposed § 301.6227–1.
Reviewed year partners take adjustments requested in an AAR filed by the partnership into account in two circumstances: (1) The adjustments requested in the AAR result in an imputed underpayment and the partnership elects under proposed § 301.6227–2(c) to have its reviewed year partners take the adjustments into account, or (2) the adjustments requested in the AAR do not result in an imputed underpayment as described in § 301.6227–2(d). Proposed § 301.6227–3 describes how reviewed year partners take into account adjustments requested in an AAR.
Generally, under proposed § 301.6227–3, a reviewed year partner who receives a statement described in proposed § 301.6227–1(e) must treat that statement as if it were provided under section 6226(a)(2). Under proposed § 301.6227–3(b), the reviewed year partner must pay any amount of tax, penalties, additions to tax, additional amounts, and interest that results from taking into account such adjustments in accordance with proposed § 301.6226–3, except that, the rules under proposed § 301.6226–3(c) (allowing the reviewed year partner to elect to pay a safe harbor amount), proposed § 301.6226–3(d)(2) (regarding interest on the safe harbor amount), and proposed § 301.6226–3(d)(4) (regarding the increased rate of interest) do not apply. Comments are requested regarding whether the election to pay a safe harbor amount under proposed § 301.6226–3(c) should be available in the case of a partner that must take into account adjustments requested in an AAR under proposed § 301.6227–3.
Furthermore, proposed § 301.6227–3(b)(1) provides that the restriction in proposed § 301.6226–3(b)(1) that the correction amount for the first affected year and any intervening year cannot be less than zero does not apply in the case of taking into account adjustments requested by the partnership in an AAR. The reason for this is two-fold. First, unlike an adjustment request under section 6227, which is a voluntary request for adjustment initiated by the partnership, the rules under sections 6225 and 6226 are designed to address adjustments that are determined by the IRS after it initiated a proceeding with respect to of the partnership. In cases where the partnership is requesting adjustments that will reduce a partner's tax liability, such adjustment request mirrors the voluntary compliance of a partnership self-reporting amounts on its original return, which may include losses resulting in refunds for partners. For this reason, partners taking adjustments into account should similarly be able to claim refunds when applicable. In cases where adjustments in an AAR would increase tax due, such voluntary compliance by partnerships should be encouraged and only allowing unfavorable effects from such adjustments would discourage partnership voluntary compliance.
Second, section 6226(b)(2) specifically provides that only increases in tax are taken into account by the
Proposed § 301.6227–3(b)(2) allows the reviewed year partner to claim a refund where the partnership incorrectly allocated items from the partnership in the reviewed year and provides that when a partner (other than a pass-through partner) takes into account adjustments requested in an AAR, and those adjustments result in a decrease in tax, the partner may use that decrease to reduce the partner's chapter 1 tax for the taxable year which includes the date the statement was furnished to the partner (reporting year), and may make a claim for refund of any overpayment that results. The reduction is treated in a manner similar to a refundable credit under section 6401(b). Nothing under the proposed rules, however, will entitle a pass-through partner to a refund to which the pass-through partner would not otherwise be entitled under the Code. Proposed § 301.6227–3(b)(3) provide examples to illustrate the operation of these rules.
The Treasury Department and the IRS intend in future guidance to cross reference proposed § 301.6226–4 for rules regarding adjustments to partners' outside bases and capital accounts and a partnership's basis and book value in property when reviewed year partners take adjustments requested in an AAR filed by the partnership into account.
Proposed § 301.6227–3(c) is reserved to provide rules for pass-through partners (as defined in proposed § 301.6241–1(a)(5)) to take into account adjustments requested in an AAR. Section 6227 provides that adjustments requested in an AAR that result in an imputed underpayment may be taken into account by the partnership and partners under rules similar to the rules of section 6226. In the case of an adjustment that does not result in an imputed underpayment, rules similar to the rules of section 6226 shall apply with appropriate adjustments. Rules under section 6226 pertaining to pass-through partners have been reserved under proposed § 301.6226–3(e). Accordingly, the proposed regulations under section 6227 also reserve on rules with respect to pass-through partners until the rules under section 6226 regarding such partners are established.
Proposed § 301.6241–1(a) contains definitions for purposes of subchapter C of chapter 63 and these proposed regulations. Proposed § 301.6241–1(a)(8) defines the term “reviewed year” to mean the partnership taxable year to which the adjustments relate. Proposed § 301.6241–1(a)(9) defines the term “reviewed year partner” to mean any person who held an interest in a partnership at any time during the reviewed year. Proposed § 301.6241–1(a)(1) defines the term “adjustment year” to mean the partnership taxable year in which a decision of a court becomes final (if a petition is filed under section 6234), an AAR is made, or, in any other case, when an FPA is mailed (or if the partnership waives its right to an FPA, the year the waiver is executed by the IRS). Proposed § 301.6241–1(a)(2) defines an “adjustment year partner” to mean any person who held an interest in a partnership at any time during the adjustment year of the partnership.
Proposed § 301.6241–1(a)(5) defines the term “pass-through partner” to mean a pass-through entity that holds an interest in a partnership. A pass-through entity is a partnership (including a foreign entity that is classified as a partnership under § 301.7701–3(b)(2)(i)(A) or (c)), an S corporation, a trust, (other than a trust described in the next sentence), and a decedent's estate. The term “pass-through partner” does not include disregarded entities described in § 301.7701–2(c)(2)(i) or a trust that is wholly owned by only one person, whether the grantor or another person, and the trust reports the owner's information to payors under § 1.671–4(b)(2)(i)(A). In addition, the term “pass-through partner” does not include entities such as a registered investment company under section 851 or a real estate investment trust under section 856.
Proposed § 301.6241–1(a)(7) defines the term “partnership-partner” to mean a partnership that holds an interest in a partnership. A partnership-partner is a type of pass-through partner as defined in proposed § 301.6241–1(a)(5).
Proposed § 301.6241–1(a)(4) defines an “indirect partner” as any person who has an interest in the partnership through their interest in one or more pass-through partners. For example, a shareholder in an S corporation that is a partner in a partnership is an indirect partner of that partnership.
Under proposed § 301.6241–1(a)(6), the term “partnership adjustment” means any adjustment to the amount of any item of income, gain, loss, deduction, or credit as defined in proposed § 301.6221(a)–1(b)(1), or any partner's distributive share thereof, as described under proposed § 301.6221(a)–1(b)(2).
Proposed § 301.6241–1(a)(3) defines the term “imputed underpayment” as any amount determined in accordance with proposed § 301.6225–1.
For purposes of subchapter C of chapter 63, proposed § 301.6241–1(a)(10) defines the term “tax attribute”. Under this definition, a tax attribute is anything that can affect, with respect to a partnership or partner, the amount or timing of an item of income, gain, loss, deduction or credit as defined in proposed § 301.6221(a)–1(b)(1) or that can affect the amount of tax due in any taxable year. Examples of tax attributes include, but are not limited to, basis and holding period, as well as the character of items of income, gain, loss, deduction, or credit and carryovers and carrybacks of such items.
Under proposed § 301.6241–2(a)(1), if a partnership is a debtor in a Title 11 bankruptcy case, the running of any period of limitations under section 6235 for making a partnership adjustment, and under sections 6501 and 6502 for assessment or collection of any imputed underpayment, is suspended during the period the bankruptcy case prohibits the IRS from making the adjustment, assessment, or collection. The suspension runs until the prohibition ends, plus 60 days in the case of an
While proposed § 301.6241–2(a)(1) follows the language in section 6241(6) to suspend the adjustment, assessment, and collection periods when those actions are prohibited by a bankruptcy case, the Bankruptcy Code does not prohibit two of those actions—adjustment or assessment. No provision of the automatic stay in section 362(a) of Title 11 prevents tax audits or the issuance of an FPA, the mechanism for adjustment, and the making of a tax assessment is expressly allowed under section 362(b)(9) of Title 11 notwithstanding the general stay against tax assessments in section 362(a)(6) of Title 11.
Proposed § 301.6241–2(a)(2) clarifies that the filing of a proof of claim or request for payment and the taking of other actions in the partnership's bankruptcy case do not violate the restrictions in section 6232(b) prohibiting assessment or collection during the 90-day period to petition for judicial review under section 6234 and, if a petition is filed, before the court's decision becomes final.
Under proposed § 301.6241–2(a)(3), the period to petition for judicial review is suspended while the bankruptcy case prevents the partnership from filing a petition under section 6234, and for 60 days thereafter.
Proposed § 301.6241–2(a)(4) clarifies that bankruptcy law does not prohibit audits, mailing of notices under section 6231, demands for unfiled returns, assessments or notice or demand for payment of assessments.
Proposed § 301.6241–3 follows section 6241(7) and provides that if the IRS determines that any partnership (including a partnership-partner) ceases to exist before a partnership adjustment under subchapter C of chapter 63 takes effect, the partnership adjustment is taken into account by the former partners of the partnership.
Under proposed § 301.6241–3(c), a partnership adjustment takes effect when all amounts due under subchapter C of chapter 63 resulting from the partnership adjustment are fully paid by the partnership. Therefore, if a partnership does not pay the amounts owed, the partnership adjustment resulting in the imputed underpayment or other amount due has not taken effect. As a result, former partners of a partnership may be required to take into account partnership adjustments if a partnership does not pay an imputed underpayment (and any applicable interest, penalties, additions to tax, or additional amounts) under section 6225 or section 6227. Additionally, former partners of a partnership-partner may be required to take into account partnership adjustments if a partnership-partner does not pay any amount due (including any applicable interest, penalties, additions to tax, or additional amounts) under section 6226 or section 6227 as a result of receiving a statement from a partnership in which it is a partner under proposed § 301.6226–2 or proposed § 301.6227–2.
As provided in proposed § 301.6241–3(a)(3), the provisions of proposed § 301.6241–3 do not apply to partnerships that have a valid election in effect under section 6221(b) and the regulations thereunder. Accordingly, the former partners of a partnership that has elected out of the centralized partnership audit regime are not required to take partnership adjustments into account under proposed § 301.6241–3.
Under proposed § 301.6241–3(b)(1), the IRS may, in its discretion, determine that a partnership ceases to exist. Only the IRS may determine that a partnership has ceased to exist. No other person, including the partnership, the partnership representative, nor any partner, current or former, has the ability to make this determination for purposes of invoking the provisions of section 6241(7) and the proposed regulations. The IRS is not required to make a determination that a partnership ceases to exist even if the definition in proposed § 301.6241–3(b)(2) applies with respect to such partnership. If the IRS determines that any partnership has ceased to exist for purposes of these rules, the IRS will notify the partnership and the former partners, in writing, at their last known address, within 30 days of the determination. If the IRS determines that a partnership (or partnership-partner) has ceased to exist, the partnership is no longer liable for any remaining amounts owed resulting from a partnership adjustment that is required to be taken into account by a former partner. Proposed § 301.6241–3(a)(2).
Proposed § 301.6241–3(b)(2) defines the term “cease to exist” for purposes of section 6241(7). Under proposed § 301.6241–3(b)(2), a partnership ceases to exist if the partnership terminates within the meaning of section 708(b)(1)(A) or does not have the ability to pay, in full, any amount that the partnership owes under subchapter C of chapter 63. See JCS–1–16 at 80 (noting that a partnership ceases to exist if it terminates under section 708(b)(1)(A), as well as when the partnership “has no significant income, revenue, assets, or activities at the time the partnership adjustment takes effect”). A partnership does not have the ability to pay if the IRS determines that the account with respect to the partnership is not collectible based on the information that the IRS has at the time of the determination. In making that determination, the IRS will rely on existing guidance regarding when a taxpayer account is not collectible and is not required to develop additional facts that are not known to the IRS at the time the decision is made.
Proposed § 301.6241(b)(2)(i) provides that the IRS will not determine that a partnership has ceased to exist solely because: (i) A partnership has technically terminated under section 708(b)(1)(B); (ii) the partnership had made a valid election under section 6226 and the regulations thereunder with respect to any imputed underpayment; or (iii) the partnership has not paid any amount the partnership is liable for under subchapter C of chapter 63. If a partnership terminates under section 708(b)(1)(A), the partnership ceases to exist on the last day of the partnership's final taxable year. If a partnership does not have the ability to pay, the partnership ceases to exist on the date that the IRS makes a determination under proposed § 301.6241–3(b)(2)(i) that the partnership ceases to exist. Proposed § 301.6241–3(b)(2)(ii).
Proposed § 301.6241–3 only applies if the IRS has determined that a partnership has ceased to exist before a partnership adjustment determined in a partnership-level proceeding under the centralized partnership audit regime takes effect. As described in proposed § 301.6241–3(c), for purposes of this section, a partnership adjustment takes effect when all amounts due under subchapter C of chapter 63 resulting from the partnership adjustment are fully paid by the partnership. However, in no event may the IRS determine that a partnership ceases to exist with respect to a partnership adjustment after the expiration of the period of limitations on collection applicable to the amount due resulting from such adjustment. Proposed § 301.6241–3(b)(2)(iii). In the event that a partnership pays some, but not all, of any amount due resulting from a partnership adjustment before a partnership ceases to exist, the former partners of the partnership that has ceased to exist are not required to take into account the portion of the partnership adjustments with respect to which any amounts have been paid by the partnership. Proposed § 301.6241–3(c)(2). In cases of partial payment, the
If the IRS determines that a partnership ceases to exist, the partnership adjustments are taken into account by the former partners of the partnership. Under proposed § 301.6241–3(d)(1)(i), the term “former partners” means the adjustment year partners of a partnership that has ceased to exist. If any adjustment year partner is a partnership-partner that the IRS has determined has ceased to exist, the partners of the partnership-partner for the partnership-partner's taxable year that includes the end of the adjustment year of the partnership that has ceased to exist are the former partners for purposes of this section. Proposed § 301.6241–3(d)(1)(ii). If there are no adjustment year partners of a partnership, including where there are no partners of a partnership-partner, (for instance, because the partnership ceased to exist before the adjustment year), the term “former partners” means the partners of the partnership (or partnership-partner) during the last taxable year for which a partnership return was filed under section 6031(b). Proposed § 301.6241–3(d)(2).
Under proposed § 301.6241–3(e), the former partners of a partnership that has ceased to exist take the partnership adjustment into account as if the partnership had made an election under section 6226 and the regulations thereunder. A former partner must take into account the former partner's share of a partnership adjustment reflected in the statement provided to the former partner in accordance with proposed § 301.6226–3.
If a partnership is notified by the IRS that it has ceased to exist, the partnership must furnish statements to its former partners reflecting the former partner's share of the partnership adjustments required to be taken into account, and file the statements with the IRS, no later than 30 days after the date of the notice from the IRS in which the IRS determines that the partnership ceases to exist. Proposed § 301.6241–3(e)(2)(ii). The statements must conform to the requirements under proposed § 301.6226–2 except that the adjustments are taken into account by the former partners rather than the reviewed year partners. Proposed § 301.6241–3(e)(2)(i). If the statements are not timely furnished to the former partners, the IRS may furnish statements to the former partners to inform those partners of their share of the adjustments. Proposed § 301.6241–3(e)(3). If the IRS furnishes the statements to the former partners, the IRS will notify the former partner in writing of such partner's share of the partnership adjustment based on the information reasonably available to the IRS at the time such notification is provided. A notification issued by the IRS is treated the same as a statement required to be furnished and filed under proposed § 301.6241–3(e)(2).
Proposed § 301.6241–3(f) provides examples that illustrate the provisions of this section.
Proposed § 301.6241–4 provides generally that the payment of any amount under subchapter C of chapter 63 is nondeductible, and must be treated as an expenditure described in section 705(a)(2)(B) (that is, not deductible and not properly chargeable to a capital account). Accordingly, a payment by a partnership of any amount required to be paid under subchapter C of chapter 63, including any imputed underpayment, any amount under proposed § 301.6226–3 (regarding reviewed year partners taking into account partnership adjustments), and any interest, penalties, additions to tax, or additional amounts with respect to such amounts is treated as an expenditure described in section 705(a)(2)(B).
Proposed § 301.6241–5 extends the provisions of the centralized partnership audit regime to a taxable year for which any entity files a partnership return (Form 1065,
Proposed § 301.6241–5(c) provides exceptions to the general rules in proposed § 301.6241–5(a). Under proposed § 301.6241–5(c)(1), the provisions of subchapter C of chapter 63 do not apply to taxable years for which a valid election under section 6221(b) to elect out of the centralized partnership audit regime is in effect. Under proposed § 301.6241–5(c)(2), the provisions of subchapter C of chapter 63 do not apply to taxable years for which a partnership return is filed solely to make an election described in section 761(a) (election out of subchapter K of chapter 1 for certain unincorporated organizations).
Certain IRS regulations, including this one, are exempt from the requirements of Executive Order 12866, as supplemented and reaffirmed by Executive Order 13563. Therefore, a regulatory impact assessment is not required. However, pursuant to Executive Order 13789, the Treasury Department is currently reviewing the scope and implementation of the existing exemption for certain tax regulations from the review process set forth in Executive Order 12866. Because the proposed regulations would not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply.
Pursuant to section 7805(f) of the Code, this notice of proposed rulemaking has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.
IRS Revenue Procedures, Revenue Rulings, Notices and other guidance cited in this preamble are published in the Internal Revenue Bulletin (or Cumulative Bulletin) and are available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by visiting the IRS Web site at
Before these proposed regulations are adopted as final regulations, consideration will be given to any electronic and written comments that are submitted timely to the IRS as prescribed in this preamble under the
A public hearing has been scheduled for September 18, 2017, beginning at 10:00 a.m. in the IRS Auditorium, Internal Revenue Building, 1111 Constitution Avenue NW., Washington, DC. Due to building security procedures, visitors must enter at the
The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who wish to present oral comments at the hearing must submit written or electronic comments and an outline of the topics to be discussed and the time to be devoted to each topic by August 14, 2017. A period of 10 minutes will be allocated to each person for making comments.
An agenda showing the scheduling of the speakers will be prepared after the deadline for receiving outlines has passed. Copies of the agenda will be available free of charge at the hearing.
The principal authors of these proposed regulations are Jennifer M. Black, Joy E. Gerdy-Zogby, and Steven L. Karon of the Office of the Associate Chief Counsel (Procedure and Administration). However, other personnel from the Treasury Department and the IRS participated in their development.
Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements.
Accordingly, under the authority of 26 U.S.C. 7805, the notice of proposed rulemaking (REG–138326–07) that was published in the
Accordingly, 26 CFR part 301 is proposed to be amended as follows:
26 U.S.C. 7805 * * *
(a)
(b)
(1)
(A) the character, timing, source, and amount of the partnership's income, gain, loss, deductions, and credits, including whether an item is deductible, tax-exempt, or a tax-preference item;
(B) the character, timing, and source of the partnership's activities, including whether the partnership's activities are passive or active;
(C) contributions to, and distributions from, the partnership, including the value, amount, and character of those contributions and distributions (for example, for purposes of sections 704(c), 721(b), 721(c), 737, and 751(b));
(D) the partnership's basis in its assets, the character and type of the assets, and the value (or revaluation such as under § 1.704–1(b)(2)(iv)(f) or (s) of this chapter) of the assets; including any effect the character or value of the partnership's assets has on the sale or exchange of an interest in the partnership (for example, for purposes of section 751(a));
(E) the amount and character of partnership liabilities, including whether a liability is recourse or nonrecourse and any changes to those liabilities from the preceding tax year;
(F) the separate category, timing, and amount of the partnership's creditable foreign tax expenditures described in § 1.704–1(b)(4)(viii)(b) of this chapter;
(G) any elections made by the partnership and the consequences or effects of those elections, including a section 754 election, any election referenced in section 703(b), a section 761 election, and an election under sections 6221(b) or 6226(a);
(H) items related to transactions between a partnership and any person including disguised sales, guaranteed payments, section 704(c) allocations, and transactions to which section 707 applies;
(I) any item resulting from a partnership terminating under section 708(b)(1)(A), including as a result of a transaction under Rev. Rul. 99–6 (1999–1 C.B. 432) (see § 601.601(d)(2) of this chapter);
(J) items and any effects from a technical termination under section 708(b)(1)(B); and
(K) partner capital accounts, including the release of a partner from a deficit restoration obligation.
(ii)
(A) the legal and factual determinations that underlie the determination of items of income, gain, loss, deduction, or credit;
(B) the partnership's accounting practices and methods;
(C) whether any person is a partner in the partnership;
(D) whether a partnership exists for tax purposes, including whether multiple partnerships should be treated as a single partnership;
(E) whether any items or transactions of the partnership, the adjustments to which are determined under subchapter C of chapter 63, lack economic substance or should otherwise be disregarded, collapsed, recharacterized, or attributed to other persons (for example, under the step transaction doctrine), including whether the
(F) the period of limitations on making adjustments under subchapter C of chapter 63;
(G) the period of limitations on the assessment of amounts attributable to adjustments determined under subchapter C of chapter 63, except for the period of limitations under section 6501 with regard to assessments of tax attributable to adjustments taken into account by partners as a result of an election under section 6226;
(H) partners' outside bases, but only to the extent the partners' outside bases relate to an adjustment determined under subchapter C of chapter 63; and
(I) any determinations necessary to calculate the imputed underpayment (as defined in § 301.6241–1(a)(3)) under section 6225, including whether items adjusted under subchapter C of chapter 63 are limited (or subject to limitations) under the Internal Revenue Code (or a treaty), and the facts and circumstances specific to any partner(s) that might affect the calculation of an imputed underpayment or modification requested by the partnership with respect to an imputed underpayment.
(2)
(i) the partner's share of items adjusted under subchapter C of chapter 63, including the type of partnership interest(s) the partner holds and the percentage interest of a partner in the partnership;
(ii) the allocation of any item determined under subchapter C of chapter 63;
(iii) any special allocations applicable to any partner;
(iv) the character, source, and timing of any item or activity required to be taken into account by the partner which is related to any item adjusted under subchapter C of chapter 63; and
(v) any amount required to be taken into account by any person under section 6226.
(3)
(c)
(2)
The IRS initiates an administrative proceeding with respect to Partnership's taxable year under subchapter C of chapter 63. During the proceeding, the IRS mails to Partnership a notice of proposed partnership adjustment under section 6231 that imposes a section 6662 accuracy-related penalty with respect to an imputed underpayment on the grounds that the imputed underpayment is attributable to negligence or disregard of rules or regulations. Partnership believes that the actions of A, a partner in the partnership for the taxable year subject to the administrative proceeding, demonstrate that A had reasonable cause and acted in good faith with respect to how A reported on A's Federal income tax return the items that were adjusted and gave rise to the imputed underpayment subject to the penalty. Partnership provides this information to the IRS during the administrative proceeding in response to the notice of proposed partnership adjustment. The IRS will take this penalty defense into account when determining whether the portion of the penalty that relates to the adjustments attributable to A applies at the partnership level.
Same facts as in
(d)
(e)
(2)
(a)
(b)
(i) the partnership has 100 or fewer partners as determined in accordance with paragraph (b)(2) of this section, and
(ii) each statement the partnership is required to furnish under section 6031(b) for the partnership taxable year is furnished to a partner that was an eligible partner (as defined in paragraph (b)(3) of this section) for the partnership's entire taxable year.
(2)
(ii)
(iii)
During its 2020 partnership taxable year, Partnership has four partners each owning an interest in Partnership. Two of the partners are Spouse 1 and Spouse 2 who are married to each other during all of 2020. Spouse 1 and Spouse 2 each own a separate interest in Partnership. The two other partners are unmarried individuals. Under section 6031(b), Partnership is required to furnish a separate statement (that is, Schedule K–1 (Form 1065),
The facts are the same as in
At the beginning of 2020, Partnership, which has a taxable year ending December 31, 2020, has three partners—individuals A, B, and C. Each individual owns an interest in Partnership. On June 30, 2020, Individual A dies, and A's interest in Partnership becomes an asset of A's estate. A's estate owns the interest for the remainder of 2020. On September 1, 2020, B sells his interest in Partnership to Individual D, who holds the interest for the remainder of the year. Under section 6031(b), Partnership is required to furnish five statements for its 2020 taxable year—one each to Individual A, the estate of Individual A, Individual B, Individual D, and Individual C. Therefore, for purposes of paragraph (b)(2) of this section, Partnership has five partners during its 2020 taxable year.
During its 2020 taxable year, Partnership has 51 partners—50 partners who are individuals and S, an S corporation. S and Partnership are both calendar year taxpayers. S has 50 shareholders during the 2020 taxable year. Under section 6031(b), Partnership is required to furnish 51 statements for the 2020 taxable year—one to S and one to each of Partnership's 50 partners who are individuals. Under section 6037(b), S is required to furnish a statement (that is, Schedule K–1 (Form 1120–S),
During its 2020 taxable year, Partnership has two partners, A, an individual, and E, an estate of a deceased partner. E has 10 beneficiaries. Under section 6031(b), Partnership is required to furnish two statements, one to A and one to E. Any statements that E may be required to furnish to its beneficiaries are not taken into account for purposes of paragraph (b)(2) of this section. Therefore, Partnership has two partners under paragraph (b)(2) of this section.
(3)
(ii)
(A) a partnership,
(B) a trust,
(C) a foreign entity that is not an eligible foreign entity described in paragraph (b)(3)(iii) of this section,
(D) a disregarded entity described in § 301.7701–2(c)(2)(i),
(E) a nominee or other similar person that holds an interest on behalf of another person, or
(F) an estate of an individual other than a deceased partner.
(iii)
(iv)
During the 2020 taxable year, Partnership has four equal partners. Two partners are individuals. One partner is a C corporation. The fourth partner, D, is a partnership. Because D is a partnership, D is not an eligible partner under paragraph (b)(3)(i) of this section. Accordingly, Partnership is not an eligible partnership under paragraph (b)(1) of this section and, therefore, cannot make the election under paragraph (a) of this section for its 2020 taxable year.
During its 2020 taxable year, Partnership has four equal partners. Two partners are individuals. One partner is a C corporation. The fourth partner, S, is an S corporation. S has ten shareholders. One of S's shareholders is a disregarded entity and one is a qualified small business trust. S is an eligible partner under paragraph (b)(3)(i) of this section even though S's shareholders would not be considered eligible partners if those shareholders held direct interests in Partnership. See § 301.6221(b)–1(b)(3)(i). Accordingly, Partnership meets the requirements under paragraph (b)(3) of this section for its 2020 taxable year.
During its 2020 taxable year, Partnership has two equal partners, A, an individual, and C, a disregarded entity, wholly owned by B, an individual. C is not an eligible partner under paragraph (b)(3)(i) of this section. Accordingly, Partnership is not an eligible partnership under paragraph (b)(1)(ii) of this section and, therefore, is ineligible to make the election under paragraph (a) of this section for its 2020 taxable year.
(c)
(2)
(3)
(d)
(2)
During its 2020 taxable year, Partnership, a calendar year taxpayer, has two partners. One partner, A, is also a calendar year partnership. A files a valid election out of the centralized partnership audit regime with its timely filed partnership return for its 2020 taxable year. Notwithstanding A's valid election out of the centralized partnership audit regime, A is subject to the same rules as any partner in a partnership subject to the rules under subchapter C of chapter 63, including the consistency requirements of section 6222 and the regulations thereunder.
The IRS mails to Partnership, a calendar year taxpayer, a notice of final partnership adjustment under section 6231 with respect to Partnership's 2020 taxable year. Partnership timely elects the alternative to payment of imputed underpayment under section 6226 and the regulations thereunder. One of Partnership's partners is A, a calendar year partnership. A made a valid election out of the centralized partnership audit regime with its timely filed partnership return for its 2020 taxable year. Partnership must provide A with a statement under section 6226 containing A's share of the adjustments for Partnership's 2020 taxable year. A is subject to the same rules as any partner in a partnership subject to the rules under subchapter C of chapter 63.
(e)
(2)
(f)
(a)
(2)
(3)
(4)
(i) the treatment of an item on the partnership's return of partnership income filed with the IRS under section 6031, and any amendment or supplement thereto, including an administrative adjustment request (AAR) filed pursuant to section 6227 and the regulations thereunder; and
(ii) the treatment of an item on any statement, schedule or list, and any amendment or supplement thereto, filed by the partnership with the Internal Revenue Service (IRS), including any statements filed pursuant to section 6226 and the regulations thereunder.
(5)
B is a partner in Partnership during 2018 and 2019. Both B and Partnership are calendar year taxpayers. In December 2018, Partnership receives an advance payment for services to be performed in 2019 and reports this amount as income on its partnership return for 2018. B includes its distributive share of income from the advance payment on B's income tax return for 2019 and not on B's income tax return for 2018. B did not file a notice of inconsistent treatment with respect to the advanced payment. B's treatment of the income attributable to Partnership is inconsistent with the treatment of that item by Partnership on its partnership return.
C is a partner in Partnership during 2018. Partnership incurred start-up costs before it was actively engaged in its business. Partnership capitalized these costs on its 2018 partnership return. C deducted his distributive share of the start-up costs on C's 2018 income tax return. C's treatment of the start-up costs is inconsistent with the treatment of that item by Partnership on its partnership return.
D is a partner in Partnership during 2018. Partnership reports a loss of $100,000 on its partnership return for 2018. On the 2018 Schedule K–1 attached to the partnership return, Partnership reports $5,000 as D's distributive share of that loss. On the 2018 Schedule K–1 furnished to D, however, Partnership reports $15,000 as D's distributive share of the loss. D reports the
D was a partner in Partnership during 2018. Partnership reports a loss of $100,000 on its partnership return for 2018. In 2020, Partnership files an AAR under section 6227 reporting that the amount of the loss on its 2018 partnership return is $90,000, rather than $100,000 as originally reported. Pursuant to section 6227 and the regulations thereunder, Partnership elects to have its partners take the adjustment into account, and furnishes D a statement showing D's share of the reduced loss for 2018. D fails to take his share of the reduced loss for 2018 into account in accordance with section 6227 and the regulations thereunder. D has not satisfied the requirements of paragraph (a) of this section because D has not taken into account his share of the loss in a manner consistent with how Partnership treated such items on the partnership return actually filed.
E was a partner in Partnership during 2018. In 2021, Partnership receives a notice of final partnership adjustment in an administrative proceeding under subchapter C of chapter 63 with respect to Partnership's 2018 taxable year. Partnership properly elects the application of section 6226 and furnishes to E a statement of E's share of adjustments with respect to Partnership's 2018 taxable year. E fails to take his share of the adjustments into account in accordance with section 6226 and the regulations thereunder. E has not satisfied the requirements of paragraph (a) of this section because E has not taken into account his share of adjustments with respect to Partnership's 2018 taxable year in a manner consistent with how Partnership treated such items on the partnership return actually filed.
In 2018, E is a partner in Partnership. E is a partnership-partner with a 2018 taxable year that ends on the same day as Partnership's 2018 taxable year. E has filed a valid election under section 6221(b) in effect with respect to E's 2018 partnership taxable year. Notwithstanding E's election under section 6221(b) for its 2018 taxable year, E is subject to section 6222 for taxable year 2018. E must treat, on its 2018 partnership return, any items attributable to E's interest in Partnership in a manner that is consistent with the treatment of those items on the 2018 partnership return actually filed by Partnership.
(b)
(2)
(3)
(4)
D, an individual, is a partner in Partnership. D and Partnership are both calendar year taxpayers and Partnership does not have an election under section 6221(b) in effect for its 2018 taxable year. On its partnership return for taxable year 2018, Partnership reports $100,000 in ordinary income. On the Schedule K–1 attached to the partnership return, as well as on the Schedule K–1 furnished to D, Partnership reports $15,000 as D's distributive share of the $100,000 in ordinary income. D reports only $5,000 of the $15,000 of ordinary income on his 2018 income tax return. The IRS may determine the amount of tax that results from adjusting the ordinary income attributable to D's interest in Partnership reported on D's 2018 income tax return from $5,000 to $15,000 and assess that resulting underpayment in tax as if it was on account of a mathematical or clerical error appearing on D's return. D may not request an abatement of that assessment under section 6213(b).
F was a partner in Partnership during 2018. In 2021, Partnership receives a notice of final partnership adjustment in an administrative proceeding under subchapter C of chapter 63 with respect to Partnership's 2018 taxable year. Partnership properly elects the application of section 6226 and files with the IRS a statement of F's share of adjustments with respect to Partnership's 2018 taxable year. F fails to report one adjustment, F's share of a decrease in the amount of losses for 2018, on F's return as required by section 6226 and the regulations thereunder. The IRS may determine the amount of tax that results from adjusting the decrease in the amount of losses on F's return to be consistent with the amount included on the section 6226 statement filed with the IRS and may assess the resulting underpayment in tax as if it was on account of a mathematical or clerical error appearing on F's return. F may not request an abatement of that assessment under section 6213(b).
(c)
(2)
(3)
(4)
(ii)
(5)
B is a partner in Partnership during 2018. B treats a deduction and a capital gain attributable to Partnership on B's 2018 income tax return in a manner that is inconsistent with the treatment of those items by Partnership on its 2018 partnership return. B reports the inconsistent treatment of the deduction in accordance with paragraph (c)(1) of this section, but not the inconsistent treatment of the gain. Because B did not notify the IRS of the inconsistent treatment of the gain in accordance with paragraph (c)(1) of this section, the IRS may determine the amount of tax that results from adjusting the gain reported on B's 2018 income tax return in order to make the treatment of that gain consistent with how the gain was treated on Partnership's partnership return. Pursuant to paragraph (c)(3) of this section, the IRS may assess and collect the underpayment of tax resulting from the adjustment to the gain as if it was on account of a mathematical or clerical error appearing on B's return.
On its 2018 partnership return, Partnership treats partner E's distributive share of ordinary loss attributable to Partnership as $8,000. E, however, claims an ordinary loss of $9,000 as attributable to Partnership on its 2018 income tax return and notifies the IRS of the inconsistent treatment in accordance with paragraph (c)(1) of this section. As a result of the notice of inconsistent treatment, the IRS conducts a separate proceeding under subchapter B of chapter 63 of the Internal Revenue Code with respect to E's 2018 income tax return, a proceeding to which Partnership is not a party. During the proceeding, the IRS determines that the proper amount of E's distributive share of the ordinary loss from Partnership is $3,000. During the same proceeding, the IRS also determines that E overstated a charitable contribution deduction in the amount of $2,500 on its 2018 income tax return. The determination of the adjustment of E's share of ordinary loss is not binding on Partnership. The charitable contribution deduction is not attributable to Partnership or to another partnership subject to the provisions of subchapter C of chapter 63. The IRS may determine the amount of tax that results from adjusting the $9,000 ordinary loss deduction to $3,000 and from adjusting the charitable contribution deduction. Pursuant to paragraph (c)(4)(ii) of this section, the IRS is not limited to only adjusting the ordinary loss of $9,000, as originally reported on E's partner return, to $8,000, as originally reported by Partnership on its partnership return, nor is the IRS prohibited from adjusting the charitable contribution deduction in the proceeding with respect to E.
(d)
(i) Demonstrates that the treatment of the item on the partner's return is consistent with the treatment of that item on the statement, schedule, or other form prescribed by the IRS and furnished to the partner by the partnership, and
(ii) The partner makes an election in accordance with paragraph (d)(2) of this section.
(2)
(ii)
(A) Clearly identified as an election under section 6222(c)(2)(B);
(B) Signed by the partner making the election;
(C) Accompanied by a copy of the statement, schedule, or other form furnished to the partner by the partnership and a copy of the IRS notice that notified the partner of the inconsistency; and
(D) Include any other information required in forms, instructions, or other guidance prescribed by the IRS.
(iii)
(3)
E is a partner in Partnership for 2018. On its 2018 partnership return, Partnership reports that E's distributive share of ordinary income attributable to Partnership is $1,000. Partnership furnishes to E a Schedule K–1 for 2018 showing $500 as E's distributive share of ordinary income. E reports $500 of ordinary income attributable to Partnership on its 2018 income tax return consistent with the Schedule K–1 furnished to E. The IRS notifies E that E's treatment of the ordinary income attributable to Partnership on its 2018 income tax return is inconsistent with how Partnership treated the ordinary income allocated to E on its 2018 partnership return. Within 60 days of receiving the notice from the IRS of the inconsistency, E files an election with the IRS in accordance with paragraph (d)(2) of this section. Because E made a valid election under section 6222(c)(2)(B) and paragraph (d)(1) of this section, E is treated as having notified the IRS of the inconsistency with respect to the ordinary income attributable to Partnership under paragraph (c)(1) of this section.
(e)
(2)
(a)
(b)
(2)
(i) The person is available to meet in person with the IRS in the United States at a reasonable time and place, as is necessary and appropriate, as determined by the IRS;
(ii) The person has a street address that is in the United States and a telephone number with a United States area code where the person can be reached during normal business hours; and
(iii) The person has a United States taxpayer identification number.
(3)
(ii)
(4)
(i) Death;
(ii) A court order adjudicating that the person does not have the capacity to manage his or her person or estate;
(iii) A court order enjoining the person from acting on behalf of the partnership or the entity partnership representative;
(iv) Incarceration;
(v) Liquidation or dissolution under state law in the case of an entity partnership representative; or
(vi) Any similar situation where the IRS reasonably determines the person may no longer have the capacity to act.
(c)
(2)
(3)
Partnership properly designates A as its partnership representative for taxable year 2018 on its 2018 partnership return. Partnership designates B as its partnership representative for taxable year 2021 on its 2021 partnership return. In 2022, the IRS
(d)
(2)
(3)
(e)
(2)
(ii)
(3)
(ii)
(B)
(
(
(
(iii)
(A) A certification under penalties of perjury that the person signing the form—
(
(
(B) A statement that the person signing the form is revoking the designation of the partnership representative; and
(C) A subsequent designation of a partnership representative in accordance with forms and instructions prescribed by the IRS.
(4)
(5)
(6)
Partnership properly designates B as partnership representative for its 2018 taxable year on its 2018 partnership return. In 2020, Partnership mails written notification to the IRS to revoke designation of B as its partnership representative for Partnership's 2018 taxable year. The revocation is not made in connection with an AAR for Partnership's 2018 taxable year, and the IRS has not mailed Partnership a notice of administrative proceeding under section 6231 with respect to Partnership's 2018 taxable year. Because the revocation was not made during a time permitted under paragraph (e)(2) of this section, the revocation is not effective and B remains the partnership representative for Partnership's 2018 taxable year.
During an administrative proceeding with respect to Partnership's 2018 taxable year, Partnership provides IRS with written notification to revoke its designation of B as its partnership representative for the 2018 taxable year. The written notification does not include a designation of a new partnership representative for Partnership's 2018 taxable year. Because the revocation does not include a designation of a new partnership representative as required under paragraph (e)(1) of this section, the revocation is not effective and B remains the partnership representative for Partnership's 2018 taxable year.
(f)
(2)
(i) the partnership failed to make a valid designation under paragraph (c) of this section;
(ii) the partnership representative or the designated individual does not have substantial presence (as described in paragraph (b)(2) of this section, as applicable) or does not have capacity to act (as described in paragraph (b)(4) of this section);
(iii) the partnership failed to appoint a designated individual (as described in paragraph (b)(3) of this section, as applicable); or
(iv) no successor designation or appointment was made in the case of a resignation without a designation or appointment of a successor as described in paragraphs (d)(1) and (3) of this section.
(3)
(4)
(5)
(ii)
(A) The views of the partners having a majority interest in the partnership regarding the designation;
(B) The general knowledge of the person in tax matters and the administrative operation of the partnership;
(C) The person's access to the books and records of the partnership;
(D) Whether the person is a United States person (within the meaning of section 7701(a)(30)).
(6)
The IRS determines that Partnership has designated a partnership representative that does not have substantial presence in the United States as defined in paragraph (b)(2) of this section. The IRS may determine that the designation is not in effect and designate a new partnership representative after following the procedures in paragraph (f) of this section.
Partnership designates as its partnership representative a corporation but fails to appoint a designated individual to act on behalf of the corporation as required under paragraph (b)(3) of this section. The IRS may determine that the partnership representative designation is not in effect and may designate a new partnership representative after following the procedures in paragraph (f) of this section.
The partnership representative resigns pursuant to paragraph (d) of this section without designating a new partnership representative. The IRS mails Partnership a notification informing Partnership that no designation is in effect and that the IRS plans to designate a new partnership representative. Partnership fails to respond within 30 days of the IRS's notification. The IRS will designate a partnership representative pursuant to paragraph (f) of this section.
Partnership designated on its partnership return a partnership representative, PR1. After Partnership received a notice of administrative proceeding, general partner, GP1, signs and submits to the IRS the form described in paragraph (e)(3) of this section requesting the revocation of the current partnership representative PR1 and the designation of a successor partnership representative, PR2. Sixty days later, general partner, GP2, signs and submits a form described in paragraph (e)(3) of this section requesting the revocation of the newly appointed PR2 and the designation of PR3 as the new partnership representative. The IRS may accept GP2's revocation and subsequent designation of PR3 or, because GP2's revocation was within 90 days of GP1's revocation, the IRS may determine, pursuant to paragraphs (e)(5) and (f)(2) of this section that there is no designation in effect due to multiple revocations. The IRS may then designate a new partnership representative pursuant to paragraph (f) of this section without allowing the partnership an opportunity for additional, possibly conflicting, designations.
(g)
(h)
(2)
(a)
(b)
(c)
(2)
(ii)
(d)
Partnership designates a partnership representative, PR, on its partnership return for 2020. PR is a partner in Partnership. The partnership agreement for Partnership includes a clause that requires PR to consult with an identified management group of partners in Partnership before taking any action with respect to an administrative proceeding before the IRS. The IRS initiates an administrative proceeding with respect to Partnership's 2020 taxable year. During the course of the administrative proceeding, PR consents to an extension of the period for adjustments under section 6235(b) allowing additional time for the IRS to mail a final notice of partnership adjustment. PR failed to consult with the management group of partners prior to agreeing to this extension of time. PR's consent provided to the IRS to extend the time period is valid and binding on Partnership because, pursuant to section 6223, PR, as the designated partnership representative, has authority to bind Partnership and all its partners.
Partnership designates a partnership representative, PR, on its partnership return for 2020. PR is not a partner in Partnership. During an administrative proceeding with respect to Partnership's 2020 taxable year, PR agrees to certain IRS adjustments and within 45 days after the issuance of the notice of final partnership adjustment (FPA), elects the alternative to payment of the imputed underpayment under section 6226 and the regulations thereunder. Certain partners in Partnership challenge the actions taken by PR during the administrative proceeding and the validity of the section 6226 statements furnished to those partners, alleging that PR was never authorized to act on behalf of Partnership under state law or the partnership agreement. Because PR was designated by Partnership as the partnership representative, under section 6223 and this section, PR was authorized to act on behalf of Partnership for all purposes under subchapter C of chapter 63, and the IRS may rely on that designation as conclusive evidence of PR's authority to act on behalf of Partnership.
Partnership designates an entity partnership representative, EPR, and appoints an individual A, as the designated individual, on its partnership return for 2020. EPR is a C corporation. A is unaffiliated with EPR and is not an officer, director, or employee of EPR. During an administrative proceeding with respect to Partnership's 2020 taxable year, A, acting for EPR, agrees to an extension of the period for adjustments under section 6235(b). The IRS mails an FPA within the extended period for adjustments as agreed to by EPR, but after the expiration of the period had no agreement been entered into. Partnership challenges the FPA as untimely, alleging that A was not authorized under state law to act on behalf of EPR and thus the extension agreement was invalid. Because A was appointed by the partnership as the designated individual to act on behalf of EPR, A was authorized to act on behalf of EPR for all purposes under subchapter C of chapter 63, and the IRS may rely on that identification as conclusive evidence of A's authority to act on behalf of EPR and Partnership.
The partnership representative, PR, consents to an extension of the period for adjustment under section 6235(b) for Partnership for the partnership taxable year. After signing the consent, PR resigns as partnership representative in accordance with § 301.6223–1. The extension of the period under section 6235(b) remains valid even after PR resigns.
Partnership designates a partnership representative who is unable to meet with the IRS in person in the United States as required by § 301.6223–1(b). Although the partnership representative does not have substantial presence in the United States within the meaning of § 301.6223–1(b)(2), until a termination occurs under § 301.6223–1(d) or (e) or the IRS determines the partnership representative is ineligible under § 301.6223–1(b) and terminates the designation under § 301.6223–1(f), the partnership representative designation remains in effect, and Partnership and all its partners are bound by the actions of the partnership representative.
(e)
(2)
(a)
(2)
(3)
(b)
(c)
(i) Multiplying the total netted partnership adjustment (as determined under paragraph (c)(3) of this section) by the highest rate of Federal income tax in effect for the reviewed year (as defined in § 301.6241–1(a)(8)) under section 1 or 11, and
(ii) Increasing or decreasing the product in paragraph (c)(1)(i) of this section by the net increase or net decrease in credits resulting from partnership adjustments (as determined under paragraph (d) of this section).
(2)
(i) The adjustment relates to a distributive share reallocation that is disregarded under paragraph (d)(2)(ii) of this section;
(ii) After grouping and netting the adjustments as described in paragraph (d) of this section, the result of netting any grouping or subgrouping is a net non-positive adjustment (as described in paragraph (d)(3) of this section); or
(iii) The calculation under paragraph (c)(1) of this section results in an amount that is zero or less than zero.
(3)
(i) The sum of all net positive adjustments in the residual grouping as determined in accordance with paragraph (d)(2)(v) of this section, plus
(ii) The sum of all net positive adjustments in the reallocation grouping as determined in accordance with paragraph (d)(2)(ii) of this section.
(4)
(d)
(2)
(A) First, each partnership adjustment that reallocates the distributive share of an item forms its own grouping which is taken into account in accordance with paragraph (d)(2)(ii) of this section (reallocation grouping);
(B) Second, adjustments to credits are taken into account in a grouping under paragraph (d)(2)(iii) of this section (credit grouping);
(C) Third, adjustments to creditable expenditures are taken into account in a grouping under paragraph (d)(2)(iv) of this section (creditable expenditure grouping); and
(D) Fourth, the remaining adjustments are taken into account in the residual grouping under paragraph (d)(2)(v) of this section (residual grouping).
(ii)
(iii)
(iv)
(v)
(3)
(ii)
(B)
(C)
(iii)
(A) An increase in gain is treated as an increase in income;
(B) A decrease in gain is treated as a decrease in income;
(C) An increase in loss is treated as a decrease in income; and
(D) A decrease in a loss is treated as an increase in income.
(e)
(2)
(ii)
(iii)
(f)
Partnership reports on its 2019 partnership return $100 of ordinary income and an ordinary deduction of <$70>. The IRS initiates an administrative proceeding with respect to Partnership's 2019 taxable year and determines that ordinary income was $105 instead of $100 ($5 adjustment) and that the ordinary deduction was <$80> instead of <$70> (<$10> adjustment). Neither item is subject to special restrictions or limitations. Pursuant to paragraph (d) of this section, the adjustments are both in the residual grouping. The <$10> adjustment to the ordinary deduction is netted with the $5 adjustment to ordinary income because they are both ordinary in character and neither is subject to restrictions or limitations. After netting these adjustments, the total netted partnership adjustment is <$5>, which does not result in an imputed underpayment and therefore, the underlying adjustments (that is, the <$10> adjustment to the ordinary deduction and the $5 adjustment to ordinary income) are taken into account by Partnership in the adjustment year in accordance with § 301.6225–3.
Partnership reports on its 2019 partnership return ordinary income of $300, long-term capital gain of $125, long-term capital loss of <$75>, a depreciation deduction of <$100>, and a tax credit that can be claimed by the partnership of $5. In an administrative proceeding with respect to the partnership's 2019 taxable year, the IRS determines ordinary income of $500 ($200 adjustment), long-term capital gain of $200 ($75 adjustment), long-term capital loss of <$25> ($50 adjustment), a depreciation deduction of <$70> ($30 adjustment), and a tax credit of $3 ($2 adjustment). Pursuant to paragraph (d) of this section, the tax credit is in the credit grouping under paragraph (d)(2)(iii) of this section. The remaining adjustments are part of the residual grouping under paragraph (d)(2)(v) of this section. The adjustment to ordinary income and the depreciation deduction are grouped together in an ordinary subgrouping within the residual grouping and netted with each other because they are both ordinary in character and neither is subject to differing restrictions or limitations. Pursuant to paragraph (d)(3)(iii) of this section, for purposes of netting, the decrease in the depreciation
Partnership reported on its 2019 partnership return long-term capital gain of $125 and long-term capital loss of <$75>. In an administrative proceeding with respect to Partnership's 2019 taxable year, the IRS determines the long-term capital gain should have been reported as ordinary income of $125, resulting in an increase in ordinary income of $125 ($125 adjustment) as well as a decrease of long-term capital gain of $125 (<$125> adjustment). Under paragraph (d)(2) of this section, these adjustments are part of the residual grouping, but are in a separate subgrouping because of their different character, that is, the increase in ordinary income is part of an ordinary subgrouping and the decrease in long-term capital gain is part of a long-term capital subgrouping, both within the residual grouping. There are no other adjustments for the 2019 taxable year. The $125 decrease in long-term capital gain is a net non-positive adjustment in the long-term capital subgrouping and as a result is an adjustment that does not result in an imputed underpayment. The $125 increase in ordinary income results in a net positive adjustment. Because the ordinary subgrouping is the only subgrouping resulting in a net positive adjustment, $125 is the total netted partnership adjustment. Under paragraph (c)(1)(i) of this section, $125 is multiplied by 40 percent resulting in an imputed underpayment of $50.
Partnership reported a $100 deduction for certain expenses on its 2019 partnership return and a $100 deduction with respect to the same expenses on its 2020 partnership return. The IRS initiates an administrative proceeding with respect to Partnership's 2019 and 2020 taxable years and determines that Partnership improperly accelerated accrual of a portion of the expenses with respect to the deduction in 2019 that should have been taken into account in 2020. Therefore, for taxable year 2019, the IRS determines that Partnership should have reported a deduction of $75 with respect to the expenses ($25 adjustment) in 2019. However, for 2020, the IRS determines that Partnership should have reported a deduction of $125 with respect to these expenses (<$25> adjustment). There are no other adjustments for the 2019 and 2020 partnership taxable years. Pursuant to paragraph (c)(4) of this section, the adjustments for 2019 and 2020 are not netted with each other. The 2019 adjustment of $25 is multiplied by 40 percent resulting in an imputed underpayment of $10 for Partnership's 2019 taxable year. The $25 increase in the deduction for 2020 is an adjustment that does not result in an imputed underpayment. Therefore, there is no imputed underpayment for 2020.
On its partnership return for the 2020 taxable year, Partnership reported ordinary income of $100 million and a capital gain of $50 million. Partnership had four equal partners during the 2020 tax year, all of whom were individuals. On its partnership return for the 2020 tax year, the capital gain was allocated to partner E and the ordinary income was allocated to all partners based on their interests in Partnership. In an administrative proceeding with respect to Partnership's 2020 taxable year, the IRS determines that for 2020 the capital gain allocated to E should have been $75 million instead of $50 million and that Partnership should have recognized an additional $10 million in ordinary income. In the NOPPA mailed by the IRS, the IRS may determine pursuant to paragraph (e) of this section that there is a general imputed underpayment with respect to the increase in ordinary income and a specific imputed underpayment with respect to the increase in capital gain specially allocated to E.
(g)
(2)
(a)
(b)
(2)
(3)
(ii)
(iii)
(A) For each partnership adjustment in the total netted partnership adjustment that is subject to an approved rate modification under paragraph (d)(4) of this section, determine each reviewed year partner's (as defined in § 301.6241–1(a)(9)) or indirect partner's (as defined in § 301.6241–1(a)(4)) distributive share of the partnership adjustment subject to modification based on how each adjustment subject to rate modification would be properly allocated to such partner in the reviewed year (as defined in § 301.6241–1(a)(8)).
(B) Multiply the portion of each partnership adjustment determined under paragraph (b)(3)(iii)(A) of this section by the tax rate applicable to such portion under paragraph (d)(4) of this section.
(C) Add all of the amounts calculated under paragraph (b)(3)(iii)(B) of this section with respect to each partnership adjustment subject to an approved rate modification under paragraph (d)(4).
(iv)
(4)
(c)
(2)
(ii)
(3)
(ii)
(iii)
(4)
(d)
(2)
(ii)
(iii)
(iv)
(v)
(B)
(vi)
(vii)
(B)
(C)
(vii)
(B)
(3)
(ii)
(iii)
(4)
(5)
(ii)
(iii)
(A) The person is a partner of a publicly traded partnership;
(B) The person is an individual, estate, trust, closely held C corporation, or personal service corporation; and
(C) The person has a specified passive activity loss with respect to the publicly traded partnership.
(iv)
(6)
(7)
(ii)
(8)
(9)
(e)
The IRS mails a NOPPA to Partnership for the 2019 partnership taxable year proposing a single partnership adjustment increasing ordinary income by $100, resulting in a $40 imputed underpayment ($100 multiplied by the 40 percent tax rate). Partner, A, held a 20 percent interest in Partnership during 2019. Partnership requests modification under paragraph (d)(2) of this section based on A filing an amended return for the 2019 taxable year taking into account $20 of the partnership adjustment and paying the tax and interest due attributable to A's share of the increased income and based on A's effective tax rate for 2019. No tax attribute in any other taxable year of A is affected by A taking into account A's share of the partnership adjustment for 2019. IRS approves the modification and the $20 increase in ordinary income allocable to A is therefore not included in the calculation of the total netted partnership adjustment (determined in accordance with § 301.6225–1). Partnership's total netted partnership adjustment is reduced to $80 ($100 adjustment less $20 taken into account by A), and the imputed underpayment is reduced to $32 (total netted partnership adjustment of $80 after modification multiplied by 40 percent).
The IRS initiates an administrative proceeding with respect to Partnership's 2019 taxable year. Partnership has two equal partners during its 2019 taxable year: An individual, A, and a partnership-partner, B. For 2019, B has two equal partners: A tax-exempt entity, C, and an individual, D. The IRS mails a NOPPA to Partnership for its 2019 taxable year showing a single partnership adjustment increasing Partnership's ordinary income by $100, resulting in a $40 imputed underpayment ($100 total netted partnership adjustment multiplied by 40 percent). Partnership requests modification under paragraph (d)(3) of this section with respect to B's partner, C, a tax-exempt entity. Partnership's partnership representative provides the IRS with documentation demonstrating to the IRS's satisfaction that C holds a 25 percent indirect interest in Partnership through its interest in B and that C is a tax-exempt entity defined in paragraph (d)(3)(ii) of this section that is not subject to tax with respect to its share of the partnership adjustment allocated to B which is $25 (50 percent × 50 percent × $100). IRS approves the modification and the $25 increase in ordinary income allocable to C is not included in the calculation of the total netted partnership adjustment (determined in accordance with § 301.6225–1). Partnership's total netted partnership adjustment is reduced to $75 ($100 adjustment less C's share of the adjustment, $25), and the imputed underpayment is reduced to $30 (total netted partnership adjustment of $75, after modification, multiplied by 40 percent).
The facts are the same as in
The facts are the same as in
The facts are the same as in
The IRS mails a NOPPA to Partnership for the 2019 taxable year proposing two partnership adjustments based on an IRS determination that two assets, asset X and asset Y, owned by Partnership were overvalued. The partnership adjustment with respect to asset X results in increased ordinary income of $75 and the partnership adjustment with respect to asset Y results in an increase in depreciation of $25, which under § 301.6225–1(d)(3)(iii) is treated as a $25 decrease in income. The total netted partnership adjustment (determined in accordance with § 301.6225–1) is $50 ($75–$25), resulting in an imputed underpayment of $20 ($50 multiplied by 40 percent). Under the partnership agreement in effect for Partnership's 2019 taxable year, the adjustments attributable to both of these assets are allocated to the partners consistent with their ownership percentages in Partnership. Partnership requests a modification under paragraph (d)(6) of this section to calculate two imputed underpayments with respect to the partnership adjustments for 2019: A general imputed underpayment with respect to $50 of the increase in income related to the adjustment of the value of asset X and a specific imputed underpayment with respect to $25 of the increase in income related to the adjustment of the value of asset X and the $25 decrease in income related to the adjustment of the value of asset Y. If approved by the IRS, the general imputed underpayment, as modified, is $20 ($50 multiplied by 40 percent) and the specific imputed underpayment would result in zero (increase in income of $25 attributable to asset X offset by the decrease in income of $25 attributable to asset Y), causing those two adjustments to be disregarded and taken into account by the partnership in the adjustment year as adjustments that do not result in an imputed underpayment. The IRS may determine that the creation of the specific imputed underpayment is not appropriate in this circumstance and deny the partnership's modification request because the adjustments are not related to allocations to particular partners and also because the proposed modification results in an increase in net non-positive adjustments. See § 301.6225–1(e)(2)(iii).
(f)
(2)
(a)
(b)
(2)
(3)
(4)
(5)
(6)
(c)
(d)
(2)
(a)
(b)
(2)
(c)
(2)
(3)
(4)
(ii)
(A) The name, address, and correct taxpayer identification number (TIN) of the partnership,
(B) The taxable year to which the election relates,
(C) A copy of the FPA to which the election relates,
(D) In the case of an FPA that includes more than one imputed underpayment, identification of the imputed underpayment(s) to which the election applies,
(E) Each reviewed year partner's name, address, and correct TIN, and
(F) Any other information prescribed by the IRS in forms, instructions, and other guidance.
(d)
(e)
(f)
(2)
(a)
(b)
(i) The expiration of the time to file a petition under section 6234, or
(ii) If a petition under section 6234 is filed, the date when the court's decision becomes final.
(2)
(3)
During Partnership's 2020 taxable year, A, an individual, was a partner in Partnership and had an address at 123 Main St. On February 1, 2021, A sold his interest in Partnership and informed Partnership that A moved to 456 Broad St. On March 15, 2021, Partnership mails A's statement under section 6031(b) for the 2020 taxable year to 456 Broad St. On June 1, 2023, A moves again but does not inform Partnership of A's new address. In 2023, the IRS initiates an administrative proceeding with respect to Partnership's 2020 taxable year and mails a notice of final partnership adjustment (FPA) to Partnership for that year. Partnership makes a timely election under section 6226 in accordance with § 301.6226–1 and on May 31, 2024, timely mails a statement described in paragraph (a) of this section to A at 456 Broad St. Although the statement was mailed to the last address for A that was known to Partnership, it is returned to Partnership as undeliverable because unknown to Partnership, A had moved. After undertaking reasonable diligence as to the correct address of A, Partnership is unable to ascertain the correct address. Therefore, pursuant to paragraph (b)(2) of this section, Partnership has properly furnished the statement to A.
The facts are the same as in
Partnership is a calendar year taxpayer. The IRS initiates an administrative proceeding with respect to Partnership's 2020 taxable year. On January 1, 2024, the IRS mails an FPA with respect to the 2020 taxable year to Partnership. Partnership makes a timely election under section 6226 in accordance with § 301.6226–1. Partnership timely files a petition for readjustment under section 6234 with the Tax Court. The IRS prevails, and the Tax Court sustains all of the adjustments in the FPA with respect to the 2020 taxable year. The time to appeal the Tax Court decision expires, and the Tax Court decision becomes final on April 10, 2025. Under paragraph (b)(1)(ii) of this section, the adjustments in the FPA are finally determined on April 10, 2025, and Partnership must furnish the statements described in paragraph (a) of this section to its reviewed year partners and electronically file the statements with the IRS no later than June 9, 2025. See paragraph (c) of this section for the rules regarding filing the statements with the IRS.
(c)
(d)
(2)
(ii)
(3)
(4)
(e)
(1) The name and correct TIN of the reviewed year partner to whom the statement is being furnished;
(2) the current or last address of the reviewed year partner that is known to the partnership;
(3) the reviewed year partner's share of items as originally reported for the reviewed year to the partner on statements furnished to the partner under section 6031(b) and, if applicable, section 6227;
(4) the reviewed year partner's share of partnership adjustments determined under paragraph (f)(1) of this section;
(5) modifications with respect to the reviewed year partner determined under paragraph (f)(2) of this section;
(6) the reviewed year partner's share of any amounts attributable to adjustments to the partnership's tax attributes (as defined in § 301.6241–1(a)(10)) for any intervening year (as defined in § 301.6226–3(b)(3)) resulting from the partnership adjustments in the reviewed year;
(7) the reviewed year partner's share of any penalties, additions to tax, or additional amounts determined under paragraph (f)(3) of this section;
(8) the reviewed year partner's safe harbor amount and, if applicable, interest safe harbor amount, as described under paragraph (g) of this section;
(9) the date the statement is furnished to the reviewed year partner;
(10) the partnership taxable year to which the adjustments relate; and
(11) any other information required by forms, instructions, and other guidance prescribed by the IRS.
(f)
(ii)
(iii)
(2)
(3)
(g)
(2)
(ii)
(B)
(iii)
(h)
(2)
(3)
(i)
(2)
(a)
(b)
(2)
(i) The sum of—
(A) The amount of chapter 1 tax shown by the partner on the return for the first affected year (which includes amounts shown on an amended return for such year, including an amended return filed under section 6225(c)(2) by the reviewed year partner or an indirect partner (as defined in § 301.6241–1(a)(4)) that holds its interest in the partnership through its interest in the reviewed year partner with respect to the first affected year of the indirect partner), plus
(B) Amounts not so shown previously assessed (or collected without assessment) (as defined in § 1.6664–2(d) of this chapter), less
(ii) The amount of rebates made (as defined in § 1.6664–2(e) of this chapter).
The definition of correction amount also may be expressed as—
(3)
(i) The sum of—
(A) The amount of chapter 1 tax shown by the partner on the return for the intervening year (which includes amounts shown on an amended return for such year, including an amended return filed under section 6225(c)(2) by a reviewed year partner or an indirect partner that holds its interest in the partnership through its interest in the reviewed year partner), plus
(B) Amounts not so shown previously assessed (or collected without assessment) (as defined in § 1.6664–2(d) of this chapter), over
(ii) The amount of rebates made (as defined in § 1.6664–2(e) of this chapter).
The definition of correction amount also may be expressed as—
(4)
(c)
(d)
(2)
(ii)
(3)
(4)
(e)
(f)
(g)
On its partnership return for the 2020 tax year, Partnership reported ordinary income of $1,000 and charitable contributions of $400. On June 1, 2023, the IRS mails a notice of final partnership adjustment (FPA) to Partnership for Partnership's 2020 year disallowing the charitable contribution in its entirety and asserting an imputed underpayment plus a penalty of $32 (a 20 percent accuracy-related penalty under section 6662(b)). Partnership makes a timely election under section 6226 in accordance with § 301.6226–1 with respect to the imputed underpayment in the FPA for Partnership's 2020 year and files a timely petition in the Tax Court challenging the partnership adjustments. The Tax Court determines that Partnership is not entitled to any of the claimed $400 in charitable contributions and upholds the penalty of $32. The decision regarding Partnership's 2020 tax year becomes final on December 15, 2025. Pursuant to § 301.6225–2(b)(1), the partnership adjustments are finally determined on December 15, 2025. On February 1, 2026, Partnership files the statements described under § 301.6226–2 with the IRS and furnishes to partner A, an individual who was a partner in Partnership during 2020, a statement described in § 301.6226–2. A had a 25 percent interest in Partnership during all of 2020 and was allocated 25 percent of all items from Partnership for that year. The statement shows A's share of ordinary income reported on Partnership's return for the reviewed year of $250 and A's share of the charitable contribution reported on Partnership's return for the reviewed year of $100. The statement also shows no adjustment to A's share of ordinary income, but does show an adjustment to A's share of the charitable contribution, a reduction of $100 resulting in $0 charitable contribution allocated to A from Partnership for 2020. In addition, the statement reports $8 as A's share of the penalty (25 percent of $32) related to the imputed underpayment resulting from the denial of the charitable contribution. The statement also shows A's safe harbor amount and interest safe harbor amount, as determined under § 301.6226–2(g). A does not elect to pay the safe harbor amount and therefore must pay the additional reporting year tax as determined in accordance with paragraph (b) of this section, in addition to A's share of the penalty and interest. A computes his additional reporting year tax as follows. First, A determines the correction amount for the first affected year (the 2020 taxable year) by taking into account A's share of the partnership adjustment (<100> reduction in charitable contribution) for the 2020 taxable year. A determines the amount by which his chapter 1 tax for 2020 would have increased if the $100 adjustment to the charitable contribution from Partnership were taken into account for that year. There is no adjustment to tax attributes in A's intervening years as a result of the adjustment to the charitable contribution for 2020. Therefore, A's aggregate of the adjustment amounts is the correction amount for 2020, A's first affected year. In addition to the aggregate of the adjustment amount being added to the chapter 1 tax that A owes for 2026, the reporting year, A's tax liability for 2026 includes the $8 penalty and any interest on the correction amount for the first affected year and the penalty determined in accordance with paragraph (d) of this section. Interest on the correction amount for the first affected tax year runs from April 15, 2021, the due date of A's 2020 return (the first affected tax year) until A pays this amount. In addition, interest runs on the $8 penalty from April 15, 2021, the due date of A's 2020
The facts are the same as in
On its partnership return for the 2020 tax year, Partnership reported an ordinary loss of $500 million. On June 1, 2023, the IRS mails an FPA to Partnership for the 2020 taxable year determining that $300 million of the $500 million in ordinary loss should be recharacterized as a long-term capital loss. Partnership has no long-term capital gain for its 2020 tax year. The FPA for Partnership's 2020 tax year reflects an adjustment of an increase in ordinary income of $300 million (as a result of the disallowance of the recharacterization of $300 million from ordinary loss to long-term capital loss) and an imputed underpayment related to that adjustment, as well as an adjustment of an additional $300 million in long-term capital loss for 2020 which does not result in an imputed underpayment pursuant to under § 301.6225–1(c)(2)(ii). Partnership makes a timely election under section 6226 in accordance with § 301.6226–1 with respect to the imputed underpayment in the FPA and does not file a petition for readjustment under section 6234. Accordingly, under § 301.6226–1(b)(2) and § 301.6225–3(b)(6), the adjustment year partners (as defined in § 301.6241–1(a)(2)) do not take into account the $300 million long-term capital loss that does not result in an imputed underpayment. Rather, the reviewed year partners will take into account the $300 million long-term capital loss. The time to file a petition expires on August 30, 2023. Pursuant to § 301.6225–2(b), the partnership adjustments become finally determined on August 30, 2023. On September 30, 2023, Partnership files with the IRS statements described in § 301.6226–2 and furnishes statements to all of its reviewed year partners in accordance with § 301.6226–2. One partner of Partnership in 2020, B (an individual), had a 25 percent interest in Partnership during all of 2020 and was allocated 25 percent of all items from Partnership for that year. The statement filed with the IRS and furnished to B shows B's allocable share of the ordinary loss reported on Partnership's return for the 2020 taxable year as $125 million. The statement also shows an adjustment to B's allocable share of the ordinary loss in the amount of <$75 million>, resulting in a corrected ordinary loss allocated to B of $50 million for taxable year 2020 ($125 million originally allocated to B less $75 million which is B's share of the adjustment to the ordinary loss). In addition, the statement shows an increase to B's share of long-term capital loss in the amount of $75 million (B's share of the adjustment that did not result in the imputed underpayment with respect to Partnership). The statement also shows B's safe harbor amount and interest safe harbor amount, as determined under § 301.6226–2(g). B does not elect to pay the safe harbor amount and therefore must pay the additional reporting year tax as determined in accordance with paragraph (b) of this section. B computes his additional reporting year tax as follows. First, B determines the correction amount for the first affected year (the 2020 taxable year) by taking into account B's share of the partnership adjustments (a $75 million reduction in ordinary loss and an increase of $75 million in capital loss) for the 2020 taxable year. B determines the amount by which his chapter 1 tax for 2020 would have increased if the $75 adjustment to ordinary loss and the $75 million adjustment to capital loss from Partnership were taken into account for that year. Second, B determines if there is any increase in chapter 1 tax for any intervening year as a result of the adjustment to the ordinary and capital losses for 2020. B's aggregate of the adjustment amounts is the correction amount for 2020, B's first affected year plus any correction amounts for any intervening years. B is also liable for any interest on the correction amount for the first affected year and for any intervening year as determined in accordance with paragraph (d) of this section.
On its partnership return for the 2020 tax year, Partnership reported ordinary income of $100 million and a capital gain of $40 million. Partnership had four equal partners during the 2020 tax year: E, F, G, and H, all of whom were individuals. On its partnership return for the 2020 tax year, the entire capital gain was allocated to partner E and the ordinary income was allocated to all partners based on their equal (25 percent) interest in Partnership. The IRS initiates an administrative proceeding with respect to Partnership's 2020 taxable year and determines that the capital gain should have been allocated equally to all four partners and that Partnership should have recognized an additional $10 million in ordinary income. No modifications were approved by the IRS and no penalties are imposed. On June 1, 2023, the IRS mails an FPA to Partnership reflecting the reallocation of the $40 million capital gain so that F, G, and H each have $10 million increase in capital gain and E has a $30 million reduction in capital gain for 2020. In addition, the FPA reflects the partnership adjustment increasing ordinary income by $10 million. The FPA reflects a general imputed underpayment with respect to the increase in ordinary income and a specific imputed underpayment with respect to the increase in capital gain allocated to F, G, and H. In addition, the FPA reflects a $30 million partnership adjustment that does not result in an imputed underpayment, that is, the reduction of $30 million in capital gain with respect to E. Partnership makes a timely election under section 6226 in accordance with § 301.6226–1 with respect to the specific imputed underpayment relating to the reallocation of capital gain. Partnership does not file a petition for readjustment under section 6234. The time to file a petition expires on August 30, 2023. Pursuant to § 301.6225–2(b), the partnership adjustments become finally determined on August 30, 2023. Partnership timely pays and reports the general imputed underpayment relating to the partnership adjustment to ordinary income. On September 30, 2023, Partnership files with the IRS statements described in § 301.6226–2 and furnishes statements to its partners reflecting their share of the partnership adjustments as finally determined in the FPA that relate to the specific imputed underpayment, that is, the reallocation of capital gain. The statements for F, G, and H each reflect a partnership adjustment of an additional $10 million of capital gain for 2020. The statements also show that each partner's safe harbor amount and interest safe harbor amount, determined under § 301.6226–2(g). F, G, and H elect to pay the safe harbor amount and interest safe harbor amount. The statement for E reflects a partnership adjustment of a reduction of $10 million of capital gain for 2020. The statement also reflects that E's safe harbor amount, as determined under § 301.6226–2(g), is $0 (<$10 million> multiplied by 40 percent but not less than zero). F elects to pay the safe harbor amount, which is zero.
On its partnership return for the 2020 taxable year, Partnership reported a capital loss of $5 million. During an administrative proceeding with respect to Partnership's 2020 taxable year, the IRS mails a notice of proposed partnership adjustment (NOPPA) in which it proposes to disallow $2 million of the reported $5 million capital loss. No penalties are imposed with respect to the $2 million adjustment. F, a C corporation partner with a 50 percent interest in Partnership, received 50 percent of all capital losses for 2020. As part of the modification process described in § 301.6225–2(d)(2) F files an amended return for 2020 taking into account F's share of the partnership adjustment ($1 million reduction in capital loss) and pays the tax owed for 2020, including interest. Also as part of the modification process, F also files amended returns for 2021 and 2022 and paid additional tax (and interest) for these years because the reduction in capital loss for 2020 affected the tax due from F for 2021 and 2022. See § 301.6225–2(d)(2)(iv). The reduction of the capital loss in 2020 did not affect any other taxable year of F. The IRS approves the modification with respect to F and on June 1, 2023, mails an FPA to Partnership for Partnership's 2020 year reflecting the partnership adjustment reducing the capital loss in the amount of $2 million. The FPA also reflects the modification to the imputed underpayment based on the amended returns filed by F taking into account F's share of the reduction in the capital loss. Partnership makes a timely election under section 6226 in
(h)
(2)
(a)
(b)
(c)
(2)
(i) The adjustments requested,
(ii) If a reviewed year partner is required to take into account the adjustments requested under § 301.6227–3, statements described in paragraph (e) of this section, including any transmittal with respect to such statements required by forms, instructions, and other guidance, and
(iii) Other information prescribed by the IRS in forms, instructions, or other guidance.
(d)
(e)
(i) The name and correct TIN of the reviewed year partner to whom the statement is being furnished;
(ii) the current or last address of the partner that is known to the partnership;
(iii) the reviewed year partner's share of items as originally reported on statements furnished to the partner under section 6031(b) and, if applicable, section 6227;
(iv) the reviewed year partner's share of the adjustments as described under paragraph (c)(2) of this section;
(v) the date the statement is furnished to the partner;
(vi) the partnership taxable year to which the adjustments relate; and
(vii) any other information required by forms, instructions, and other guidance prescribed by the IRS.
(2)
(ii)
(iii)
(f)
(g)
(h) Notice of change to the amount of creditable foreign tax expenditures. [Reserved]
(i)
(2)
(a) Determining whether adjustments result in an imputed underpayment—(1)
(2)
(i) The partnership is not required to seek the approval from the Internal Revenue Service (IRS) prior to modifying the amount of any imputed underpayment under paragraph (a)(1) of this section as reported on the AAR; and
(ii) As part of the AAR filed with the IRS in accordance with forms, instructions, and other guidance, the partnership must—
(A) Notify the IRS of any modification,
(B) Describe the effect of the modification on the imputed underpayment,
(C) Provide an explanation of the basis for such modification, and
(D) Provide documentation to support the partnership's eligibility for the modification.
(b)
(2)
(c)
(d)
(e)
(2)
(a)
(b)
(2)
(3)
In 2022, partner A, an individual, received a statement described in paragraph (a) of this section from Partnership with respect to Partnership's 2020 taxable year. Both A and Partnership are calendar taxpayers and A is not claiming any refundable tax credit in 2020. The only adjustment shown on the statement is an increase in ordinary losses. Taking into account the adjustment, A determines that his additional reporting year tax for 2022 (the reporting year) is <$100> (that is, a reduction of $100.) A's chapter 1 tax for 2022 (without regard to any additional reporting year tax) is $150. Applying the rules in paragraph (b)(2) of this section, A's chapter 1 tax for 2022 is reduced to $50 ($150 chapter 1 tax without regard to the additional reporting year tax plus <$100> additional reporting year tax).
The facts are the same as in
(c)
(d)
(2)
(a)
(1)
(i) In the case of an adjustment pursuant to the decision of a court in a proceeding brought under section 6234, such decision becomes final;
(ii) In the case of an administrative adjustment request (AAR) under section 6227, such AAR is made; or
(iii) In any other case, a notice of final partnership adjustment is mailed under section 6231or, if the partnership waives the restrictions under section 6232(b) (regarding limitations on assessment), the date the waiver is executed by the IRS.
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(b)
(2)
(a)
(i) 60 days after the suspension ends, for adjustments or assessments, and
(ii) 6 months after the suspension ends, for collection.
(2)
(3)
(4)
(i) an administrative proceeding with respect to a partnership under subchapter C of chapter 63;
(ii) the mailing of any notice with respect to a proceeding with respect to a partnership under subchapter C of chapter 63, including:
(A) A notice of administrative proceeding,
(B) a notice of proposed partnership adjustment, and
(C) a notice of final partnership adjustment;
(iii) a demand for tax returns;
(iv) the assessment of any tax, including the assessment of any imputed underpayment with respect to a partnership; and
(v) the issuance of notice and demand for payment of an assessment under subchapter C of chapter 63 (but see section 362(b)(9)(D) of Title 11 of the United States Code regarding the timing of when a tax lien takes effect by reason of such assessment).
(b)
(2)
(a)
(2)
(3)
(b)
(2)
(A) The partnership has a technical termination under section 708(b)(1)(B);
(B) A valid election under section 6226 and the regulations thereunder is in effect with respect to any imputed underpayment (as defined in § 301.6241–1(a)(3)); or
(C) The partnership has not paid any amount required to be paid under subchapter C of chapter 63.
(ii)
(iii)
(c)
(2)
(d)
(ii)
(2)
(e)
(2)
(i) the adjustments are taken into account by the applicable former partner (as described in paragraph (d) of this section), rather than the reviewed year partners (as defined in § 301.6241–1(a)(9)), and
(ii) the partnership must furnish statements to the former partners and file the statements with the IRS no later than 30 days after the date of the notification to the partnership that the IRS has determined that the partnership has ceased to exist.
(3)
(f)
The IRS initiates a proceeding under subchapter C of chapter 63 with respect to the 2020 partnership taxable year of Partnership. During 2023, in accordance with section 6235(b), Partnership extends the period of limitations on adjustments under section 6235(a) until December 31, 2025. On February 1, 2025, the IRS mails Partnership a notice of final partnership adjustment (FPA) that determines partnership adjustments that result in a single imputed underpayment. Partnership does not timely file a petition under section 6234 and does not make a valid election under section 6226. On May 1, 2026, the IRS mails Partnership notice and demand for payment of the amount due resulting from the adjustments determined in the FPA. Partnership fails to make a payment. On September 1, 2029, IRS determines Partnership ceases to exist for purposes of this section because the IRS has determined that Partnership does not have the ability to pay under paragraph (b)(2)(i) of this section. Under § 301.6241–1(a)(1), the adjustment year is 2025 and A and B, both individuals, are the only adjustment year
The IRS initiates a proceeding under subchapter C of chapter 63 with respect to the 2020 partnership taxable year of Partnership. G, a partnership, is a partner of Partnership during 2020. On February 3, 2025, the IRS mails Partnership an FPA that determines partnership adjustments that result in a single imputed underpayment. Partnership does not timely file a petition under section 6234, but does make a timely election under section 6226. On May 31, 2025, Partnership timely files and furnishes a statement to G as required by section 6226 and the regulations thereunder. G terminated under section 708(b)(1)(A) on December 31, 2024. On June 1, 2026, the IRS determines that G ceased to exist in 2024 for purposes of this section in accordance with paragraph (b)(2)(i) of this section. J and K, individuals, were the only partners of G during 2024. Therefore, under paragraph (d)(1)(ii) of this section, J and K, the partners of G during G's 2024 partnership taxable year, are the former partners of G for purposes of this section. Therefore, J and K are required to take into account their share of the adjustments contained in the statement furnished by Partnership to G in accordance with paragraph (e) of this section.
(g)
(2)
(a)
(b)
(2)
(a)
(b)
(c)
(1) Entities for any taxable year for which an election under section 6221(b) is in effect, treating the return as if it were filed by a partnership for the taxable year to which the election relates, and
(2) Entities for any taxable year for which a partnership return was filed for the sole purpose of making the election described in section 761(a) (regarding election out of subchapter K for certain unincorporated organizations).
(d)
(2)