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Agricultural Marketing Service, USDA.
Final rule.
This rule increases the assessment rate established for the Florida Tomato Committee (Committee) for the 2011-12 and subsequent fiscal periods from $0.0275 to $0.037 per 25-pound carton of tomatoes handled. The Committee locally administers the marketing order which regulates the handling of tomatoes grown in Florida. Assessments upon tomato handlers are used by the Committee to fund reasonable and necessary expenses of the program. The fiscal period begins August 1 and ends July 31. The assessment rate will remain in effect indefinitely unless modified, suspended, or terminated.
Doris Jamieson, Marketing Specialist, or Christian D. Nissen, Regional Director, Southeast Marketing Field Office, Marketing Order and Agreement Division, Fruit and Vegetable Program, AMS, USDA; Telephone: (863) 324-3375, Fax: (863) 325-8793, or Email:
Small businesses may request information on complying with this regulation by contacting Laurel May, Marketing Order and Agreement Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax: (202) 720-8938, or Email:
This rule is issued under Marketing Agreement No. 125 and Order No. 966, both as amended (7 CFR part 966), regulating the handling of tomatoes grown in Florida, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”
The Department of Agriculture (USDA) is issuing this rule in conformance with Executive Order 12866.
This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the marketing order now in effect, Florida tomato handlers are subject to assessments. Funds to administer the order are derived from such assessments. It is intended that the assessment rate as issued herein will be applicable to all assessable tomatoes beginning August 1, 2011, and continue until amended, suspended, or terminated.
The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.
This rule increases the assessment rate established for the Committee for the 2011-12 and subsequent fiscal periods from $0.0275 to $0.037 per 25-pound carton of tomatoes.
The Florida tomato marketing order provides authority for the Committee, with the approval of USDA, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members of the Committee are producers of Florida tomatoes. They are familiar with the Committee's needs and with the costs for goods and services in their local area and are thus in a position to formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in a public meeting. Thus, all directly affected persons have an opportunity to participate and provide input.
For the 2009-10 and subsequent fiscal periods, the Committee recommended, and USDA approved, an assessment rate that would continue in effect from fiscal period to fiscal period unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Committee or other information available to USDA.
The Committee met on August 23, 2011, and unanimously recommended 2011-12 expenditures of $1,496,452 and an assessment rate of $0.037 per 25-pound carton of tomatoes. In comparison, last year's budgeted expenditures were $1,496,971. The assessment rate of $0.037 is $0.0095 higher than the rate currently in effect.
The Committee estimates the 2011-2012 crop to be approximately 35 million 25-pound cartons, down from the 45 million cartons estimated for last year. At the current assessment rate, assessment income would equal only $962,500, an amount insufficient to cover the Committee's anticipated expenditures. Therefore, the Committee voted to increase the assessment rate in order to generate sufficient funds to meet Committee expenses.
The major expenditures recommended by the Committee for the 2011-12 year include $575,000 for education and promotion, $436,372 for salaries, $250,000 for research, and $64,000 for office space. Budgeted expenses for these items in 2010-11 were $535,500, $436,372, $250,000, and $62,283, respectively.
The assessment rate recommended by the Committee was derived by dividing anticipated expenses by expected shipments of Florida tomatoes. Tomato shipments for the year are estimated at 35 million 25-pound cartons which should provide $1,295,000 in assessment income. Income derived from handler assessments, along with interest income, USDA Market Access Program (MAP) funds, and funds from the Committee's authorized reserve,
The assessment rate established in this rule will continue in effect indefinitely unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Committee or other available information.
Although this assessment rate will be in effect for an indefinite period, the Committee will continue to meet prior to or during each fiscal period to recommend a budget of expenses and consider recommendations for modification of the assessment rate. The dates and times of Committee meetings are available from the Committee or USDA. Committee meetings are open to the public and interested persons may express their views at these meetings. USDA will evaluate Committee recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking will be undertaken as necessary. The Committee's 2011-12 budget and those for subsequent fiscal periods would be reviewed and, as appropriate, approved by USDA.
Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) has considered the economic impact of this rule on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.
There are approximately 100 producers of tomatoes in the production area and approximately 80 handlers subject to regulation under the marketing order. Small agricultural producers are defined by the Small Business Administration (SBA) as those having annual receipts less than $750,000, and small agricultural service firms are defined as those whose annual receipts are less than $7,000,000 (13 CFR 121.201).
Based on industry and Committee data, the average annual price for fresh Florida tomatoes during the 2010-11 season was approximately $13.88 per 25-pound container, and total fresh shipments for the 2010-11 season were 36,100,637 25-pound cartons of tomatoes. Committee data indicates that approximately 21 percent of the handlers handle 90 percent of the total volume shipped. Based on the average price, about 80 percent of handlers could be considered small businesses under SBA's definition. In addition, based on production data, grower prices as reported by the National Agricultural Statistics Service, and the total number of Florida tomato growers, the average annual grower revenue is below $750,000. Thus, the majority of handlers and producers of Florida tomatoes may be classified as small entities.
This rule increases the assessment rate established for the Committee and collected from handlers for the 2011-12 and subsequent fiscal periods from $0.0275 to $0.037 per 25-pound carton of tomatoes. The Committee unanimously recommended 2011-12 expenditures of $1,496,452 and an assessment rate of $0.037 per 25-pound carton of tomatoes. The assessment rate of $0.037 is $0.0095 higher than the 2010-11 rate. The quantity of assessable tomatoes for the 2011-12 season is estimated at 35 million cartons. Thus, the $0.037 rate should provide $1,295,000 in assessment income. Income derived from handler assessments, along with interest income, MAP funds, and funds from the Committee's authorized reserve fund, should be adequate to meet this year's expenses.
The major expenditures recommended by the Committee for the 2011-12 year include $575,000 for Education and Promotion, $436,372 for salaries, $250,000 for research, and $64,000 for office space. Budgeted expenses for these items in 2010-11 were $535,500, $436,372, $250,000, and $62,283, respectively.
The Committee estimates the 2011-12 crop to be approximately 35 million 25-pound cartons, down from the 45 million cartons estimated for last year. At the current assessment rate, assessment income would equal only $962,500, an amount insufficient to cover the Committee's anticipated expenditures. Therefore, the Committee voted to increase the assessment rate in order to generate sufficient funds to meet Committee expenses.
The Committee reviewed and unanimously recommended 2011-12 expenditures of $1,496,452. Prior to arriving at this budget, the Committee considered information from various sources, such as the Committee's Executive Subcommittee, Finance Subcommittee, and Education and Promotion Subcommittee. Alternative expenditure levels were discussed by these groups, based upon the relative value of various education and promotion projects to the tomato industry. The assessment rate of $0.037 per 25-pound carton of assessable tomatoes was then determined by dividing the total recommended budget by the quantity of assessable tomatoes, estimated at 35 million 25-pound cartons for the 2011-12 year. The increased assessment rate should provide $1,295,000 in assessment income. This is approximately $201,452 below the anticipated expenses, which the Committee determined to be acceptable.
A review of historical information and preliminary information pertaining to the upcoming crop year indicates that the grower price for the 2011-12 season could range between $32.80 and $4.83 per 25-pound carton of tomatoes. Therefore, the estimated assessment revenue for the 2011-12 crop year as a percentage of total grower revenue could range between .1 and .8 percent.
This action increases the assessment obligation imposed on handlers. While assessments impose some additional costs on handlers, the costs are minimal and uniform on all handlers. Some of the additional costs may be passed on to producers. However, these costs are offset by the benefits derived by the operation of the marketing order. In addition, the Committee's meeting was widely publicized throughout the Florida tomato industry and all interested persons were invited to attend the meeting and participate in Committee deliberations on all issues. Like all Committee meetings, the August 23, 2011, meeting was a public meeting and all entities, both large and small, were able to express views on this issue.
In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C. Chapter 35), the order's information collection requirements have been previously approved by the Office of Management and Budget (OMB) and assigned OMB No. 0581-0178 Vegetable and Specialty Crops. No changes in those requirements as a result of this action are necessary. Should any changes become necessary, they would be submitted to OMB for approval.
This rule imposes no additional reporting or recordkeeping requirements on either small or large Florida tomato handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce
AMS is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.
A proposed rule concerning this action was published in the
Accordingly, no changes will be made to the rule as proposed, based on the comments received.
A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at:
After consideration of all relevant material presented, including the information and recommendation submitted by the Committee and other available information, it is hereby found that this rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act.
Pursuant to 5 U.S.C. 553, it also found and determined that good cause exists for not postponing the effective date of this rule until 30 days after publication in the
Marketing agreements, Reporting and recordkeeping requirements, Tomatoes.
For the reasons set forth in the preamble, 7 CFR part 966 is amended as follows:
7 U.S.C. 601-674.
On and after August 1, 2011, an assessment rate of $0.037 per 25-pound carton is established for Florida tomatoes.
In Title 15 of the Code of Federal Regulations, Parts 300 to 799, revised as of January 1, 2012, in supplement no. 1 to part 774, make the following corrections:
Federal Energy Regulatory Commission.
Final rule.
In this Final Rule, the Federal Energy Regulatory Commission (Commission) amends its regulations to incorporate by reference the latest version (Version 2.0) of certain business practice standards adopted by the Wholesale Gas Quadrant (WGQ) of the North American Energy Standards Board (NAESB) applicable to natural gas pipelines. In addition, based on the minor corrections and errata made by NAESB and reported to the Commission on May 4, 2012, the Commission will incorporate by reference certain standards that it earlier proposed not to
1. In this Final Rule, the Federal Energy Regulatory Commission (Commission) amends its regulations at 18 CFR 284.12 to incorporate by reference the latest version (Version 2.0) of certain business practice standards adopted by the Wholesale Gas Quadrant (WGQ) of the North American Energy Standards Board (NAESB) applicable to natural gas pipelines including Standards 0.3.19 and 0.3.21 as modified by the minor corrections and errata approved by NAESB. In the Notice of Proposed Rulemaking,
2. Since 1996, the Commission has adopted regulations to standardize the business practices and communication methodologies of interstate natural gas pipelines to create a more integrated and efficient pipeline grid. These regulations have been promulgated in the Order No. 587 series of orders,
3. On March 4, 2011, NAESB filed a report informing the Commission that it had adopted and ratified Version 2.0 of its business practice standards applicable to natural gas pipelines. The Version 2.0 Standards revised the Version 1.9 Standards to include: (1) Standards to support gas-electric interdependency; (2) standards created for Capacity Release redesign due to the elimination of Electronic Data Interchange (EDI) for Capacity Release Upload information; (3) standards to support the Electronic Delivery Mechanism (EDM); (4) standards to support the Customer Security Administration (CSA) Process; (5) standards for pipeline postings of information regarding waste heat; and
4. On June 28, 2011, NAESB filed a report informing the Commission that it had made modifications to the NAESB WGQ Version 2.0 Standards to correct various minor errors. These errata corrections make minor revisions to the NAESB WGQ Standards and Data Elements including revisions to the: (1) Datasets for Additional Standards; (2) Nomination Related Datasets; (3) Flowing Gas Related Standards; (4) Invoicing Related Datasets; (5) EDM Related Standards; and (6) Capacity Release Related Standards and Datasets.
5. Further, on October 11, 2011, NAESB filed a report informing the Commission that it had made additional modifications to the NAESB WGQ Version 2.0 Standards to correct various minor errors in the Nominations Related and Capacity Release Related Datasets.
6. On December 22, 2011, NAESB reported to the Commission that it had made additional modifications to the NAESB WGQ Version 2.0 Standards to correct various minor errors. The errata corrections make minor revisions to the NAESB WGQ Standards and Datasets including revisions to the: (1) Nominations Related Datasets; (2) Capacity Release Related Datasets; and (3) Quadrant Electronic Delivery Mechanism Related Standards.
7. Consistent with its practice in past rulemakings where the Commission found benefits in incorporating by reference NAESB's business practice standards,
It revised Principle 4.1.32; Definitions 0.2.1, 0.2.2, 0.2.3, 5.2.1, 5.2.4, and 5.2.5; Standards 0.3.11 through 0.3.15, 2.3.34, 4.3.16, 4.3.23, 4.3.28, 4.3.29, 4.3.54, 5.3.1 through 5.3.14, 5.3.16, 5.3.19 through 5.3.21, 5.3.24 through 5.3.27, 5.3.31 through 5.3.33, 5.3.38, 5.3.42, 5.3.48, 5.3.50, 5.3.51, 5.3.60, 5.3.62, 5.3.62a, and 5.3.63 through 5.3.69; and Datasets 1.4.1 through 1.4.6, 2.4.1, 2.4.3, 2.4.4, 2.4.6, 2.4.7, 3.4.1, 3.4.4, 5.4.14 through 5.4.17, and 5.4.20 through 5.4.22.
It added Definition 0.2.4; Standards 0.3.18 through 0.3.22, 4.3.100 through 4.3.102, 5.3.70 through 5.3.72; and Datasets 0.4.2, 0.4.3, and 5.4.24 through 5.4.27.
It deleted Standards 5.3.17, 5.3.30, 5.3.43, and 5.3.61; and Datasets 5.4.1 through 5.4.13, 5.4.18, and 5.4.19.
8. The Version 2.0 NOPR proposed not to incorporate by reference Standard 0.3.19, because the Commission found it inconsistent with the requirements of 18 CFR 284.13(d), which does not permit a pipeline to limit the posting of available capacity to a limited number of points, segments, or zones, but requires posting at all receipt and delivery points and on the mainline. Additionally, the Version 2.0 NOPR proposed not to incorporate by reference Standard 0.3.21, because 18 CFR 284.13(d) does not limit the posting of information posting to only two cycles but requires the posting of capacity availability and scheduled capacity “whenever capacity is scheduled.” Also, consistent with past practice, the Commission proposed not to incorporate Standards 4.3.4 and 10.3.2 regarding record retention requirements,
9. In response to the Version 2.0 NOPR, comments were filed by six commenters.
10. On May 8, 2012, the Commission issued a notice providing interested parties an opportunity to file comments with respect to the two corrected standards adopted by NAESB and whether the Commission should incorporate these revised standards into its regulations.
11. After a review of the comments filed in response to the Version 2.0 NOPR, the Commission is amending part 284 of its regulations to incorporate by reference Version 2.0 of the NAESB WGQ's consensus standards, including corrected Standards 0.3.19 and 0.3.21.
12. The NAESB WGQ Version 2.0 standards include new and modified business practice standards to support gas-electric interdependency by further defining the roles and responsibilities of each participant under the Gas/Electric Operational Communication Standards promulgated in Order No. 698,
13. The revised standards also include revisions to facilitate the Commission's FY 2009-2014 Strategic Plan
14. To implement these standards, natural gas pipelines will be required to file tariff sheets to reflect the changed standards by October 1, 2012, to take effect on December 1, 2012, and they will be required to comply with these standards on and after December 1, 2012.
15. NAESB used its consensus procedures to develop and approve the Version 2.0 Standards.
16. The comments on the Version 2.0 NOPR generally supported the adoption of the standards. In the discussion below, we will address the issues raised in the comments.
17. In the Version 2.0 NOPR, the Commission found that two of the proposed standards, WGQ Standards 0.3.19 and 0.3.21, as originally adopted by the WGQ appeared to be inconsistent with the Commission's posting regulations in 18 CFR 284.13(d).
18. On May 4, 2012, NAESB filed a status report informing the Commission that it had finalized corrections to the two standards, which it believed met the Commission's objections to the original standards.
19. Based on the modifications made by NAESB WGQ, the Commission will incorporate by reference the modified standards, as they no longer conflict with the Commission's regulations. As noted in the Version 2.0 NOPR, the original NAESB WGQ Version Standard 0.3.19 allowed the pipeline to choose whether to post Operationally Available Capacity, Operating Capacity, and Total Scheduled Quantity at either a point, segment or zone level.
20. The original NAESB WGQ Version 2.0 Standard 0.3.21 required the posting of total scheduled quantity and operationally available capacity information only at the timely and evening nominations cycles.
21. The Commission incorporated by reference the NAESB Wholesale Electric Quadrant (WEQ) and WGQ Gas/Electric Coordination Standards in Order Nos. 698 and 698-A
22. Spectra Entities state that the Version 2.0 communication standards designed to enhance communication clarity are a good step on the path towards increasing electric reliability.
23. NERC expressed general support for the modifications to Standard 0.3.14 that changed the parties to whom pipelines are required to provide notification of operational flow orders and other critical notices. However, NERC raises a concern about an ambiguity in the language of the standard as modified and urges the Commission to clarify that pipelines must provide notices of operational flow orders and other critical matters to both Balancing Authorities and Reliability Coordinators. NERC states that, with this clarification, it supports the standard as a step in the right direction that will help support the reliability of the bulk power system.
24. Standard 0.3.14 states:
A Transportation Service Provider should provide Balancing Authorities (BA) and/or Reliability Coordinators (RC) and Power Plant Gas Coordinators (PPGC) with notification of operational flow orders and other critical notices through the PPGC's choice of Electronic Notice Delivery mechanism(s) as set forth in NAESB WGQ Standard Nos. 5.2.1, 5.2.2, and 5.3.35-5.3.38.
25. We interpret this standard to include both Balancing Authorities and Reliability Coordinators as affected parties under the Commission regulations who are eligible to request from the pipeline and receive direct notification through email or Electronic Data Interchange of operational flow orders and other critical notices.
26. Spectra's concern with the availability of firm pipeline capacity to serve gas-fired generators is beyond the scope of this rulemaking.
27. INGAA notes that the Commission's policy is not to incorporate NAESB's interpretation of its standards into the Commission's regulations.
28. As stated in the Version 2.0 NOPR, while NAESB's interpretations may provide useful guidance, historically, the Commission's practice has been to not find them determinative and it has not required pipelines to comply with them. Because pipelines are not required to comply with the interpretations, it is not appropriate to include them in the regulations, under which compliance is mandatory. While the Commission has found in the past, and will continue to find, the interpretations a useful interpretative guide to the meaning of standards,
29. INGAA suggests that NAESB developed the term “Operating Capacity,” as used in NAESB WGQ Version 2.0 Standard 0.3.19 and related standards, to comply with a pipeline's requirement to post “design capacity,” per 18 CFR 284.13(d).
30. We will deny INGAA's request for clarification. NAESB defines Operating Capacity as “the total capacity which could be scheduled at (or through) the identified point, segment or zone in the indicated direction of flow.”
31. In the Version 2.0 NOPR, the Commission proposed an implementation schedule that would require compliance with the NAESB WGQ Version 2.0 Standards beginning on the first day of the month after the fourth full month following issuance of the final rule.
32. The Commission also proposed in the Version 2.0 NOPR to increase the transparency of the pipelines' incorporation by reference of the NAESB WGQ Standards so that shippers and the Commission will know which tariff provisions implements each standard as well as the status of each standard.
33. In their comments on the Version 2.0 NOPR, AGA and Southern Star voice support for prompt implementation of the standards.
34. The Commission will require natural gas pipelines to comply with the NAESB WGQ Version 2.0 Standards that we are incorporating by reference in this Final Rule beginning on December 1, 2012. We are requiring this implementation schedule to give the natural gas pipelines subject to these standards adequate time to implement these changes. In addition, pipelines must file tariff records to reflect the changed standards by October 1, 2012.
35. We will grant INGAA's request for clarification and allow sheet based solutions. As noted in Order No. 714, companies may determine to structure their tariffs either using the existing tariff sheet format or as sections.
36. In addition, as proposed in the Version 2.0 NOPR, the Commission is also revising the compliance filing requirements to increase the transparency of the pipelines' incorporation by reference of the NAESB WGQ Standards so that shippers and the Commission will know which tariff provision(s) implements each standard as well as the status of each standard.
(1) The pipelines must designate a single tariff section or tariff sheet(s) under which every NAESB standard is listed.
(2) For each standard, each pipeline must specify in the tariff section or tariff sheet(s) listing all the NAESB standards:
(a) Whether the standard is incorporated by reference;
(b) For those standards not incorporated by reference, the tariff provision that complies with the standard;
(c) A statement identifying any standards for which the pipeline has been granted a waiver, extension of time, or other variance with respect to compliance with the standard.
(3) If the pipeline is requesting a continuation of an existing waiver or extension of time, it must include a table in its transmittal letter that states the standard for which a waiver or extension of time was granted, and the docket number or order citation to the proceeding in which the waiver or extension was granted.
37. This information will give Commission staff and all shippers a common location that identifies the manner in which the pipeline is incorporating all the NAESB WGQ Standards and the standards with which it is required to comply. The Commission will post on its eLibrary Web site (under Docket No. RM96-1-037) a sample tariff format, to provide filers an illustrative example to aid them in preparing their compliance filings.
38. As discussed in the Version 2.0 NOPR, in previous compliance proceedings there has been a marked increase in the number of requests for waivers or for extensions of time to comply with standards. The
(1) All waivers and extensions of time will be granted only in reference to the individual set of NAESB standards being adopted (in this case NAESB WGQ's Version 2.0 Standards). Pipelines will need to seek renewal of any such waivers or extensions for each version of the standards the Commission adopts.
(2) Waivers or extensions of time will not be granted for standards that merely describe the process by which a pipeline must perform a business function, if it performs that function, and where the standard does not require the pipeline to perform the business function.
(3) If a pipeline is seeking a renewal of a waiver or extension of time request, it must justify why the waiver or extension should remain in force and it must provide a citation to an order and docket number of the proceeding in which the initial waiver or extension of time was granted.
(4) The Commission ordinarily will decline to grant waivers in cases where pipelines maintain they should not be required to incur the costs of implementing standards shippers are not interested in using. Instead, the Commission's approach to these requests will be to grant the pipeline an extension of time for compliance until 60 days after the pipeline receives a request to comply with the standard.
(5) The Commission generally will not entertain waiver or extension of time requests for NAESB WGQ Definitions (x.2.z Standards). The NAESB WGQ Definitions specify and elucidate specific terms of generally applicable business practices and do not require a pipeline to perform any action or incur expense to comply with such Definitions. The Commission sees a potential for problems arising if it allows a pipeline to substitute its own definitions for the consensus definitions developed in the NAESB process.
39. In addition, to provide guidance to pipelines in filing requests for waivers or extensions of time, the Commission will explain its policy regarding waivers of the following four general categories of NAESB standards: (1) Business practice standards; (2) requirements to conduct business electronically using the Internet (Internet Business Standards); (3) Commission Internet posting requirements (Internet Posting Standards); and (4) requirements to conduct computer-to-computer transactions using EDI. It is important for pipelines to identify clearly in their filings the specific standards from which they are seeking waivers or extensions of time. In particular, pipelines need to be clear as to whether they are requesting waivers of the Internet Business Standards or the EDI Standards:
(1)
(2)
(3)
(4)
40. MidAmerican filed the only comment on these policies. It argues that 60 days is too short a time period to comply with requests for EDI standards, and recommends that the Commission allow pipelines up to 90 days to comply with a shipper request to implement an EDI dataset not currently supported by the pipeline. MidAmerican argues that the that 90 days is a more reasonable amount of time for compliance, given the technological requirements of the NAESB WGQ EDI related data sets.
41. The Commission cannot determine with certainty exactly how long it will take each pipeline to comply with each individual NAESB WGQ Version 2.0 Standard as this varies, depending on each pipeline's unique circumstances. The policy guidance we are giving in this Final Rule offers a reasonable general rule for meeting compliance obligations that balances both shippers' needs for the Business Practices and provides a reasonable amount of time for the pipelines to comply with the NAESB WGQ Standards. To the extent a pipeline's unique circumstances dictate that it requires additional time to implement a given NAESB WGQ Version 2.0 Standard, the pipeline may raise such issues in its compliance filing or in a request for waiver or extensions of time, so that its shippers will have an opportunity to intervene and raise any concerns with the pipeline's proposals.
42. In section 12(d) of NTT&AA, Congress affirmatively requires federal agencies to use technical standards developed by voluntary consensus standards organizations, like NAESB, as the means to carry out policy objectives or activities determined by the agencies unless use of such standards would be inconsistent with applicable law or otherwise impractical.
43. The Office of Management and Budget's (OMB) regulations require approval of certain information collection requirements imposed by agency rules. Upon approval of a collection(s) of information, OMB will assign an OMB control number and an expiration date. Respondents subject to the filing requirements of a rule will not be penalized for failing to respond to these collections of information unless the collections of information display a valid OMB control number.
44. This Final Rule amends the Commission's regulations at 18 CFR 284.12 to incorporate by reference the latest version (Version 2.0) of certain business practice standards adopted by NAESB's WGQ applicable to natural gas pipelines including Standards 0.3.19 and 0.3.21 as modified by the minor corrections and errata approved by NAESB. In this Final Rule, the Commission also provides guidance on the criteria the Commission will use in deciding whether to grant or deny requests for waivers or extensions of time and modifies the compliance filing requirements to add transparency as to where in the tariff incorporated standards may be found.
45. Under section 3507(d) of the Paperwork Reduction Act of 1995,
46. The Commission solicited comments on the need for this information, whether the information will have practical utility, the accuracy of provided burden estimates, ways to enhance the quality, utility, and clarity of the information to be collected, and any suggested methods for minimizing the respondent's burden, including the use of automated information techniques. No comments were filed raising any objections to the burden estimate presented in the WGQ Version 2.0 NOPR. Accordingly, we will use that same burden estimate in this Final Rule.
Total Annual Hours for Collections.
(Reporting and Recordkeeping, If Appropriate) = 5,152.
Total Cost for all Respondents = $303,968.
47. OMB regulations
The implementation of these data requirements will provide additional transparency to informational posting Web sites and will improve communication standards, including gas-electric communications. The implementation of these standards and regulations will promote the additional efficiency and reliability of the gas industry's operations thereby helping the Commission to carry out its responsibilities under the Natural Gas Act of promoting the efficiency and reliability of the gas industry's operations. In addition, the Commission's Office of Enforcement will use the data for general industry oversight.
48. Interested persons may obtain information on the reporting requirements by contacting the Federal Energy Regulatory Commission, Office of the Executive Director, 888 First Street NE., Washington, DC 20426 [Attention: Ellen Brown, email:
49. Comments concerning these information collections can be sent to the Office of Management and Budget, Office of Information and Regulatory Affairs [Attention: Desk Officer for the Federal Energy Regulatory Commission]. For security reasons, comments should be sent by email to OMB at the following email address:
50. The Commission is required to prepare an Environmental Assessment or an Environmental Impact Statement for any action that may have a significant adverse effect on the human environment.
51. The Regulatory Flexibility Act of 1980 (RFA)
52. The standards being incorporated by reference in this final rule impose requirements only on interstate pipelines, the majority of which are not small businesses. Most companies regulated by the Commission do not fall within the RFA's definition of a small entity. Approximately 161 entities would be potential respondents subject to data collection FERC-545 reporting requirements and also be subject to data collection FERC 549-C reporting requirements. Nearly all of these entities are large entities. For the year 2010 (the most recent year for which information is available), only 10 entities not affiliated with larger companies had annual revenues of less than $25.5 million.
53. The Commission estimates that the one-time implementation cost of these standards is $303,968, or $1,888 per company.
54. Accordingly, pursuant to section 605(b) of the RFA,
55. In addition to publishing the full text of this document in the
56. From FERC's Home Page on the Internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field.
57. User assistance is available for eLibrary and the FERC's Web site during normal business hours from FERC Online Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at
58. These regulations are effective August 27, 2012. The Commission has determined (with the concurrence of the Administrator of the Office of Information and Regulatory Affairs of OMB) that this rule is not a “major rule” as defined in section 351 of the Small Business Regulatory Enforcement Fairness Act of 1996.
Incorporation by reference, Natural gas, Reporting and recordkeeping requirements.
By the Commission.
In consideration of the foregoing, the Commission amends Part 284, Chapter I, Title 18,
15 U.S.C. 717-717z, 3301-3432; 42 U.S.C. 7101-7352; 43 U.S.C. 1331-1356.
(a) * * *
(1) * * *
(i) Additional Standards (Version 2.0, November 30, 2010, with Minor Corrections Applied Through April 30, 2012);
(ii) Nominations Related Standards (Version 2.0, November 30, 2010, with Minor Corrections Applied Through December 2, 2011);
(iii) Flowing Gas Related Standards (Version 2.0, November 30, 2010, with Minor Corrections Applied Through June 3, 2011);
(iv) Invoicing Related Standards (Version 2.0, November 30, 2010, with Minor Corrections Applied Through June 3, 2011);
(v) Quadrant Electronic Delivery Mechanism Related Standards (Version 2.0, November 30, 2010, with Minor Corrections Applied Through December 2, 2011) with the exception of Standard 4.3.4;
(vi) Capacity Release Related Standards (Version 2.0, November 30, 2010, with Minor Corrections Applied Through January 5, 2012); and
(vii) Internet Electronic Transport Related Standards (Version 2.0, November 30, 2010, with Minor Corrections Applied Through January 2, 2011) with the exception of Standard 10.3.2.
The following appendix will not appear in the Code of Federal Regulations.
Mine Safety and Health Administration, Labor.
Notice of OMB approval of information collection requirements.
The Paperwork Reduction Act (PRA) requires this notice to set forth the effectiveness of information collection requirements contained in the final rule on Examinations of Work Areas in Underground Coal Mines for Violations of Mandatory Health or Safety Standards.
On July 17, 2012, the Office of Management and Budget (OMB) approved under the PRA the Department of Labor's information collection request for additional requirements in 30 CFR 75.360, 75.363, and 75.364 for the final rule published in the
George F. Triebsch, Director, Office of Standards, Regulations, and Variances, MSHA, 1100 Wilson Boulevard, Room 2350, Arlington, Virginia 22209-3939,
The Office of Management and Budget (OMB) has approved under the PRA information collection requirements in MSHA's final rule on Examinations of Work Areas in Underground Coal Mines for Violations of Mandatory Health or Safety Standards published in the
Under the PRA, an agency may not conduct an information collection unless it has a currently valid OMB approval. However, OMB had not provided a PRA-required approval for the revised information collection requirements contained in 30 CFR 75.360, 75.363, and 75.364 at the time the final rule was published (44 U.S.C. 3507(a)(2)). Therefore, in accordance with the PRA, the effective date of the additional information collection requirements in the revised standards was delayed until the OMB approved them (44 U.S.C. 3506(c)(1)(B)(iii)(V)).
On July 17, 2012, the OMB approved the Department's information collection request in the final rule under Control Number 1219-0088 under the PRA. The current expiration date for OMB authorization for this information collection is July 31, 2015.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Final rule.
NMFS publishes this final rule to revise the limits on the number of swordfish that fishermen may possess or land during any given Hawaii-based deep-set longline-fishing trip north of the Equator. This rule also revises the definition of deep-set longline fishing to be consistent with the swordfish retention limits. The rule intends to reduce regulatory discards and optimize the yield of swordfish.
This rule is effective August 27, 2012.
NMFS and the Western Pacific Fishery Management Council (Council) prepared a regulatory amendment, including an environmental assessment and regulatory impact review, that provides background information on this rule. The regulatory amendment, identified by identified by NOAA-NMFS-2012-0097, is available from
Brett Wiedoff, Sustainable Fisheries, NMFS PIR, 808-944-2272.
Fishermen in the Hawaii-based deep-set longline fishery have been subject to a limit of 10 swordfish per fishing trip, a limit implemented to discourage shallow-set fishing during a declared deep-set fishing trip. The limit has occasionally forced fishermen to discard swordfish caught in excess of the limit. Fishermen have claimed that, because swordfish stocks are healthy and are not subject to overfishing or approaching an overfished condition, the discards amount to wasted opportunities to sell the excess swordfish, resulting in lost wages and a reduction of the fish supply to seafood consumers.
In response to fishermen's concerns, and based on a recommendation from the Council, NMFS revises the limits on the number of swordfish that may be possessed or landed during a deep-set longline fishing trip north of the Equator. The new limits are, as follows:
• With a NMFS observer on board, there is no limit on swordfish landed or possessed on a trip, regardless of the type of hook used.
• With no NMFS observer on board, the limit is 25 swordfish landed or possessed on a trip, if the vessel uses only circle hooks.
• With no NMFS observer on board, and if the vessel uses any hooks other than circle hooks, the limit is 10 swordfish landed or possessed on a trip.
This rule reduces regulatory discards, and optimizes swordfish yield. This rule supports the National Standards for fishery management in Magnuson-Stevens Fishery Conservation and Management Act, and maximizes the net benefits to the Nation.
This rule also revises the definition of deep-set longline fishing to remove the provision regarding swordfish limits from the definition. This change makes the definition consistent with the revised swordfish retention limits.
This rule is consistent with a final rule issued by NMFS on March 19, 2012 (77 FR 15973) that implemented similar limits on the possession and landing of swordfish for longline fishing off the U.S. west coast.
On June 11, 2012, NMFS published a proposed rule and request for public comment (77 FR 34331). The comment period for the proposed rule ended on July 2, 2012. NMFS received one set of comments that were supportive of the action for the reasons outlined in the preamble of the proposed rule. NMFS did not receive any negative comments on, or suggested changes to, the proposed rule.
There are no changes to the proposed rule.
The Administrator, Pacific Islands Region, NMFS, determined that this action is necessary for the conservation and management of pelagic fisheries in the western Pacific, and that it is consistent with the Magnuson-Stevens Fishery Conservation and Management Act and other applicable laws.
The Chief Council for Regulation of the Department of Commerce certified to the Chief Council for Advocacy of the Small Business Administration during the proposed rule stage that this action would not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here. No comments were received regarding this certification. As a result, a regulatory flexibility analysis was not required and none was prepared.
This final rule has been determined to be not significant for purposes of Executive Order 12866.
Administrative practice and procedure, Fisheries, Fishing, Hawaii, Longline, Sea turtles, Swordfish.
For the reasons set out in the preamble, 50 CFR part 665 is amended as follows:
16 U.S.C. 1801
(j)
(1) If an observer is on board, there is no limit.
(2) If there is no observer on board, and if only circle hooks are used, the limit is 25.
(3) If there is no observer on board, and if any type of hook other than a circle hook is used, the limit is 10.
Rural Utilities Service, USDA.
Notice of proposed rulemaking.
The Rural Utilities Service (RUS or Agency) is proposing policies and procedures for loan and guarantee financial assistance in support of energy efficiency programs (EE Programs) sponsored and implemented by electric utilities for the benefit of rural persons in their service territory. This notice of proposed rulemaking proposes changes to RUS regulations on General and Pre-Loan Policies and Procedures Common to Electric Loans and Guarantees. This regulation was finalized December 20, 1993. The notice of proposed rulemaking also proposes conforming amendments to additional RUS regulations. Under Section two of the Rural Electric Act, RUS is authorized to assist electric borrowers in implementing demand side management, energy efficiency and conservation programs, and on-grid and off-grid renewable energy systems. The scope of this proposed regulation falls within the authority of the Act.
Comments must be submitted on or before September 24, 2012.
Submit comments by either of the following methods: Federal eRulemaking Portal: Go to
Gerard Moore, USDA-Rural Utilities Service, 1400 Independence Avenue SW., Stop 1569, Washington, DC 20250-1569, telephone (202) 205-9692 or email to
The goals of an eligible Energy Efficiency Program that could be funded under this program under this proposed subpart may include: (1) Increasing energy efficiency at the end user level, (2) modifying electric load such that there is a reduction in overall system demand, (3) effecting a more efficient use of existing electric distribution, transmission and generation facilities, (4) attracting new businesses and create jobs in rural communities by investing in energy efficiency, and (5) encouraging the use of renewable energy fuels for both demand side management and the reduction of conventional fossil fuel use within the service territory.
The Energy Efficiency and Conservation Loan Program may include loans supporting energy efficiency activities undertaken by the utility itself, the finance of energy efficiency projects undertaken by others and investments made by the utility to accomplish their obligations under utility energy services contracts.
The new Subpart H. for the Energy Efficiency and Conservation Loan Program can have several economic impacts. The benefits include: (1) The value of purchased energy saved; (2) the value of corresponding avoided generation, transmission and/or distribution; (3) reserve investments as may be displaced or deferred by program activities; and (4) savings in energy bills.
The proposed loan program is estimated to have a maximum funding level of $250 million annually. The estimated administrative cost to the applicant and federal government are relatively low, at about $740,000 total for applicants, and about $1.7 million for the Federal government.
This proposed rule has been reviewed under Executive Order (EO) 12866, “Regulatory Planning and Review,” 58 FR 51735 (Oct. 4, 1993), and has been determined to be significant by the Office of Management and Budget. The EO defines a “significant regulatory action” as one that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect, in a material way, the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this EO. As required by OMB circular A-4 the regulatory impact analysis will be
The agency has also reviewed this regulation pursuant to Executive Order 13563, issued on January 18, 2011 (76 FR 3281, Jan. 21, 2011). EO 13563 is supplemental to and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, agencies are required by Executive Order 13563 to: (1) Propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs (recognizing that some benefits and costs are difficult to quantify); (2) tailor regulations to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations; (3) select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity); (4) to the extent feasible, specify performance objectives, rather than specifying the behavior or manner of compliance that regulated entities must adopt; and (5) identify and assess available alternatives to direct regulation, including providing economic incentives to encourage the desired behavior, such as user fees or marketable permits, or providing information upon which choices can be made by the public.
The Agency conducted a benefit-cost analysis to fulfill the requirements of EO 12866 and 13563. In this analysis, the Agency identifies potential benefits and costs of the Energy Efficiency and Conservation Loan Program to borrowers, and RUS. The analysis contains quantitative estimates of the burden to the public and the Federal government and qualitative descriptions of the expected economic, environmental, and energy impacts associated with the Energy Efficiency and Conservation Loan Program.
The program described by this proposed rule is an eligible purpose/subsidiary program of the Electrification Loans and Loan Guarantee program as listed in the Catalog of Federal Domestic Assistance Programs under number 10.850, Rural Electrification Loans and Loan Guarantees. The Catalog is available on the Internet at
This proposed rule is excluded from the scope of Executive Order 12372, Intergovernmental Consultation, which may require consultation with State and local officials. See the final rule related notice entitled, “Department Programs and Activities Excluded from Executive Order 12372” (50 FR 47034).
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), comments are invited on this information collection for which the Agency has requested approval from the Office of Management and Budget (OMB).
Comments on this proposed rule must be received by September 24, 2012.
Comments are invited on (a) whether the collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility; (b) the accuracy of the Agency's estimate of burden including the validity of the methodology and assumption used; (c) ways to enhance the quality, utility and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques on other forms or information technology.
Comments may be sent to Michele Brooks, Director, Program Development and Regulatory Analysis, Rural Development, U.S. Department of Agriculture, 1400 Independence Avenue SW., Stop 1522, Room 5162 South Building, Washington, DC 20250.
The implementation of effective EE Programs by utilities also benefits rural America by creating jobs and these programs stimulate the economy by catalyzing material and equipment orders needed to implement the programs.
Title 7 CFR part 1710 General and Pre-loan Policies and Procedures Common to Electric Loans and Guarantees, subpart H, Energy Efficiency Programs, will provide for insured or guaranteed loans to new or existing borrowers for EE Programs undertaken by them in their service territory.
Copies of this information collection can be obtained from Thomas P. Dickson, Program Development and Regulatory Analysis, USDA Rural Development, 1400 Independence Avenue SW., STOP 1522, Room 5164, Washington, DC 20250-1522. Telephone: 202-690-4492.
All responses to this information collection and recordkeeping notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.
The Agency is committed to the E-Government Act, which requires Government agencies in general to provide the public the option of submitting information or transacting business electronically to the maximum extent possible.
In accordance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), the Agency will prepare a Programmatic Environmental Assessment (PEA) for this loan program activity as part of this rulemaking process. The PEA will be prepared pursuant to the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.), the Council on Environmental Quality's (CEQ) regulations for implementing NEPA (40 CFR parts 1500-1508), and RUS' NEPA
It has been determined the Regulatory Flexibility Act is not applicable to this rule since the RUS is not required by 5 U.S.C. 551 et seq. or any other provision of law to publish a notice of proposed rulemaking with respect to the subject matter of this rule.
This rule contains no Federal mandates (under the regulatory provisions of title II of the Unfunded Mandates Reform Act of 1995) for State, local, and tribal governments or for the private sector. Therefore, this rule is not subject to the requirements of section 202 and 205 of the Unfunded Mandates Reform Act of 1995.
This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. The Agency has determined that this proposed rule meets the applicable standards in § 3 of the Executive Order. In addition, all state and local laws and regulations that are in conflict with this rule will be preempted, no retroactive effort will be given to this rule, and, in accordance with section 212(e) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6912(e)), administrative appeals procedures, if any, must be exhausted before any action against the Department or its agencies may be initiated.
The policies contained in this rule do not have any substantial direct effect on states and local governments, on the relationship between the national government and the states and locals, or on the distribution of power and responsibilities among the various levels of government. Nor does this rule impose substantial direct compliance costs on state and local governments. Therefore, consultation with the states is not required.
This executive order imposes requirements on Rural Development in the development of regulatory policies that have tribal implications or preempt tribal laws. Between October 2010 and January 2011, the United States Department of Agriculture (USDA) hosted seven regional regulation Tribal consultation sessions to gain input by elected Tribal officials or their designees concerning the impact of this rule on Tribal governments, communities, and individuals. These sessions established a baseline of consultation for future actions, should any be necessary, regarding this rule. As a result of the input received during these sessions, Rural Development has determined that the proposed rule does not have a substantial direct effect on one or more Indian tribe(s) or on either the relationship or the distribution of powers and responsibilities between the Federal Government and Indian tribes. Thus, this proposed rule is not subject to the requirements of Executive Order 13175. If a tribe determines that this rule has implications of which Rural Development is not aware and would like to engage in consultation with Rural Development on this rule, please contact Rural Development's Native American Coordinator at (720) 544-2911 or
RUS proposes to amend 7 CFR part 1710 by adding a new subpart H entitled “Energy Efficiency and Conservation Loan Program”. Under Section 2(a) of the Rural Electrification Act of 1936 (7 U.S.C. 902(a)), the Secretary of Agriculture is explicitly “authorized and empowered to make loans in the several States and Territories of the United States * * * for the purpose of assisting electric borrowers to implement demand side management, energy efficiency and conservation programs, and on-grid and off-grid renewable energy systems.” As noted, Section 6101 of the 2008 Farm Bill inserted the words “and energy efficiency” into this provision which was originally added as an amendment to the RE Act by the Rural Electrification Loan Restructuring Act of 1993 (“RELRA”) (Pub. L. 103-129 sec. 2(c)(1)(B)).
“The REA Act, 7 U.S.C. 904, commits to the discretion of the Administrator the making of loans for rural electrification * * *.”
RUS anticipates that borrowers under this subpart will be generation and transmission (G&T) borrowers or their distribution members or unaffiliated distribution borrowers who are current on their loan payments and in compliance with their loan documents. RUS will only make loans for these purposes to electric utility systems. RUS also anticipates that the EE improvements installation work may be contracted by either the utility or the ultimate recipient, or performed directly by employees of the borrower, at the discretion of the utility designing the EE Program. In all cases, the Eligible Borrower is expected to hold title to the receivables funded by the RUS loan.
RUS is authorized by the RE Act to make loans to implement DSM, EE Programs and conservation programs, and on-grid and off-grid renewable energy systems. Energy Efficiency in this regulation can be defined as the degree a system or component performs its designated function with minimum consumption of resources. Renewable energy systems have a specific role in this regulation. Renewable generation can be used as load modifiers. Load modifiers can increase the efficiency of energy consumption from the utilities perspective and are highly effective at decreasing energy used by decreasing load during system peaks. Renewable energy and conservation savings associated with this regulation are from the utilities perspective, though the energy savings could be realized by both the consumer and utility, depending on the type of project, as the utility is the RUS borrower and is culpable for repayment of the loan. Energy efficiency as contemplated in this proposed regulation may, depending on the given project, accomplish either DSM, energy conservation, or both. The goals of an eligible EE Program under this proposed subpart may include one or more of the following: (1) To increase energy efficiency at the end user level, (2) to modify electric load such that there is a reduction in overall system demand, (3) to effect a more efficient use of existing electric distribution, transmission and generation facilities, and (4) to attract new businesses and create jobs in rural communities by investing in energy efficiency, and (5) to encourage the use of renewable energy fuels to accomplish either DSM or a reduction in the consumption of conventional fossil fuel within the service territory.
The primary differences between the existing energy resource conservation program codified in subpart B of 7 CFR part 1721 (ERC program) and the EE Program proposed in this rulemaking are: (1) The existing ERC program is limited to direct loan principal deferments and is not available for RUS guaranteed loans, (2) the list of eligible loan purposes for this proposed program is more expansive than for the ERC program and, where applicable, emphasizes that the assets in question must be characterized as an integral part of the Consumer's real property that would typically transfer with the title under applicable state law, and (3) the term of financing available under this proposed subpart is longer than the term allowed for principal deferments under the ERC loan program.
Rural electric cooperatives are proponents of energy efficiency measures. According to the National Rural Electric Cooperative Association, 73% of co-ops plan on significantly expanding existing efficiency programs in the next two years, 70% of co-ops offer financial incentives to promote greater energy efficiency, 96% of co-ops have some form of energy efficiency program in place, cooperatives are responsible for nearly 25% of residential peak load management capacity and cooperatives have 10% of retail electricity sales but are responsible for 20% of actual peak demand reduction. Representatives from rural electric cooperatives have commented that access to low interest funds can be the difference between success and failure for an energy efficiency program.
Eligible EE Programs may be comprised of a variety of activities, performed by either the utility or third parties. This proposed rule sets forth the policies and procedures related to eligible EE Programs where the RUS will finance: (1) Energy efficiency activities undertaken by the utility itself, (2) loans made by the utility to finance energy efficiency projects undertaken by others and (3) investments made by the utility to accomplish their obligations under utility energy services contracts. The types of activities that are eligible for RUS financing under this subpart include but are not limited to: (1) Residential and commercial energy audits, (2) community awareness and outreach programs, (3) services, materials and equipment provided by a qualified local contractor to improve energy efficiency at the Consumer level, and (4) energy efficiency loans made by the utility to its customers. RUS is considering allowing fuel switching as an eligible activity under this regulation. Fuel switching would not be designed to be a permanent change from one fuel to another, rather a method to handle peak loads during limited time periods. A description of EE Programs that would qualify for RUS financing may be found in the proposed § 1710.405. Eligible investments are listed in the proposed § 1710.406. Finally, eligible borrowers are defined in the proposed § 1710.404.
The term “Energy efficiency” is used in this part to refer to eligible load modification investments as well as traditional energy efficiency projects. A program to finance photovoltaic (solar) installations, for example, would typically be classified as distributed renewable generation, not energy efficiency. Distributed solar investments, however, including those made by individual Consumers, may also impact the load profile of the interconnected utility in a positive way, or facilitate demand side management, and they would be an eligible purpose for this program where any associated power flow from them into the grid is incidental. Small scale renewable energy systems that are constructed with the primary purpose of supplying energy to the grid would not be considered an energy efficiency investment under this loan program. Such small scale renewable energy systems may be financed under this Agency's traditional loan programs. The operative distinctions between eligible investments under this proposed subpart and the regular loan program are (1) these assets would ordinarily be on the customer side of the meter and (2) to the extent these assets deliver electricity to the grid, it will not exceed an incidental amount. This rulemaking proposes that the small scale renewable energy system investments financed on the Consumer side of the meter under
Some programs designed by utilities may have the utility initially owning an asset even though it is located on a Consumer's premise and the asset is later conveyed to the Consumer after it is paid for or a period of time has elapsed. Where this is the case, RUS is proposing that the application include an additional or revised Schedule C to the RUS mortgage listing these assets as Excepted Property under the RUS mortgage, so as to preclude the assets being captured under the after acquired clause that is standard in the RUS mortgage codified in 7 CFR part 1718. It is the intent of RUS that a release of lien need not be executed by the Agency for the utility to convey to the Consumer clear title to these assets when this Schedule C is recorded.
This proposed rulemaking recognizes that energy may take a variety of forms, not just electricity. The criteria to be met by eligible programs include energy efficiency as measured by Btu
An important distinction between eligible energy efficiency assets to be financed under this new subpart H and other energy efficiency activities is that the assets located at a Consumer's premises, whether or not title is to be held by the utility must, for the most part, be considered an integral part of the real property that would typically transfer with the title under applicable State law (a specified exception relates to lighting) in order to be financed pursuant to an eligible program under this proposed rulemaking.
Eligible programs may provide that the utility will recoup all or part of the costs from specific ratepayers on whose behalf an investment has been made. Recoupment may take the form of Consumer loan repayment or a dedicated tariff. An eligible program under this part must show that the payment terms and loan term offered to the Consumer are generally correlated with the expected life of the applicable assets. An eligible program must also offer an undertaking that funds collected from ratepayers in excess of the current amortization requirements for the RUS loan will be redeployed for EE Program purposes or used to prepay the RUS loan. These prepayments would be in addition to scheduled principal and interest debt service payments.
Applications for program financings under this subpart must fully describe a Business Plan that meets the requirements of § 1710.407.
The Agency recognizes that energy efficiency investments that reduce energy consumption at the Consumer premises (for instance those that affect the power factor) may prompt a need for investments at the system level to sustain the reliability and stability of the grid. The business plan called for in this proposed rulemaking must identify the related system investment to be identified as part of the EE Program, but these system level investments would be reflected in the utility's construction work plan and financed as part of a traditional loan application.
It is not required that an eligible program fund energy audits performed at Consumer premises. However, if the utility proposes to provide audits the rulemaking proposes that the program must also include a provision for assisting Consumers in implementing changes suggested by the audit in those cases where the recommended investments are expected to achieve minimum performance objectives. A program that funds energy audits without providing assistance for implementing audit recommendations included in the audit would not be an eligible program and only those activities that meet minimum performance objectives are eligible to be funded under this program. Only those audit recommendations that taken together will achieve an overall reduction in annualized energy consumption at a specific premise of at least 10% may be financed with RUS loan funds under this subpart.
The list of eligible investments and activities that a qualified plan may incorporate is not intended to be exhaustive. The intent is to facilitate flexibility for the utility's EE Program consistent with the resources and Consumer profiles in its service territory.
Performance thresholds have been established in this regulation. The objective of these thresholds is to ensure a minimum increase in energy efficiency for a given system. This approach also ensures that any energy efficiency upgrades will not be marginal. These thresholds appear as percent increases in system efficiency. At this time there are no standards to apply to each of these systems.
This proposed lending program is designed for utility-designed and directed EE Programs. As such it anticipates that eligible loan purposes will include program administrative and other soft costs, such as marketing expenses, where not more than four percent of the loan budget may be used for these purposes. A utility's program may include acting as an intermediary lender, where the utility uses RUS financing to make Consumer loans to finance these investments on the Consumers' premises. Where this is the case, this rulemaking proposes to cap the interest rate at one percent that the utility can charge.
The process for applying for EE Program loans is intended to largely conform to the Agency's existing process for loans relating to other eligible purposes. Accordingly, the requirements discussed throughout 7 CFR part 1710 are proposed to apply equally to EE Program loans unless otherwise stated after giving effect to the proposed conforming amendments incorporated in this rulemaking. Expenditures by the utility will be reimbursed by the Agency after the fact pursuant to an inventory of work orders system as is typical for our existing loan process. The analytical material needed to support an EE Program loan is different from what is needed to analyze a generation or transmission loan. Accordingly, the proposed subpart H elaborates on what is needed for RUS to approve an EE Program and loans to execute the program. EE Program activity will be captured under a separate energy efficiency work plan. Energy efficiency investments will not be listed on the traditional construction work plan that applies to utility assets financed by RUS.
As with other loans made pursuant to 7 CFR part 1710, a borrower's Environmental Report (ER) is expected to accompany the energy efficiency work plan associated with the loan request. The ER is in accordance with 7 CFR 1794. This Part contains the policies and procedures of the Rural Utilities Service for implementing the requirements of the National Environmental Policy Act. In the case of an EE Program loan, this ER will be expected to reference the PEA as completed by the Agency for EE Program loans, and identify any investments that are proposed in the work plan that were not captured in the PEA.
This new subpart H is not intended to be duplicative of requirements
Subpart H, as required with for all of 1710, will work with DOE, following the requirements set of by the Rural Electrification Act of 1936, Section 16 that states: “the Secretary in making or guaranteeing loans for the construction, operations, or enlargement of generating plants or electric transmission lines or systems shall consider such general criteria consistent with the provisions of this Act as may be published by the Secretary of Energy.”
1. What should be the threshold for determining when small scale renewable energy systems on the Consumer side of the meter is presumed incidental and thereby qualify for reimbursement under this program?
2. What is the appropriate markup above the Treasury-based interest rate paid to RUS that the utility should be allowed to add to cover its administrative costs in the interest rate it establishes for Consumer loans funded under this proposed subpart?
3. What is the appropriate performance thresholds that should be set to ensure products purchased with loan funds are significantly more energy efficient than conventional products, have reasonable payback periods, and perform at least as well as conventional products? Are the percentage energy efficiency improvements for specific projects appropriate measures for this program's energy efficiency standards? Should this rule reference existing energy efficiency standards or criteria such as those from ENERGY STAR, FEMP, ANSI, or other voluntary consensus standards as a means of ensuring products purchased with loan funds are significantly more energy efficiency than conventional products?
4. Should fuel switching be an eligible activity under this programmatic regulation? Should the agency consider any net increases in conventional fossil fuel consumption or emissions due to fuel switching even though the utility's electrical load may be reduced during peak periods? Would limiting fuel switching projects to 50% of the average anticipated electrical load associated with the end user, adequately address any concerns with potential emissions or overall energy generation increases?
5. RUS requests comment on the one percent cap on interest rates that utilities may charge under this program, where the utility uses RUS financing to make Consumer loans to finance these investments on the Consumers' premises. RUS also requests comment on the four percent limit of the loan budget that may be used on administration and other soft costs, such as marketing expenses.
6. RUS requests comment on the appropriate funding cap for this program. Should it be $250 million?
Electric power, Loan programs—energy, Reporting and recordkeeping requirements, Rural areas.
Administrative practice and procedure, Electric power, Electric power rates, Electric utilities, Intergovernmental relations, Investments, Loan programs—energy, Reporting and recordkeeping requirements, Rural areas.
Electric power, Loan programs energy, Rural areas.
Electric power, Loan programs—energy, Reporting and recordkeeping requirements, Rural areas.
Electric power, Loan programs—energy, Reporting and recordkeeping requirements, Rural areas.
For reasons set forth in the preamble, the Agency proposes to amend 7 CFR chapter XVII as follows:
1. The authority citation for part 1710 continues to read as follows:
7 U.S.C. 901
2. In § 1710.2(a) revise the definition of “Demand side management” and add a new definition of “Eligible Energy Efficiency Programs” in alphabetical order to read as follows:
(a) * * *
3. In § 1710.100, amend the first sentence by adding the words “efficiency and” before “energy conservation.”
4. In § 1710.101, amend the second sentence of paragraph (b) by adding the word “direct” before “loans to individual Consumers.”
5. Amend § 1710.102 as follows:
a. Amend the first sentence of paragraph (a) of by adding “energy
b. Amend the first sentence of paragraph (b) by adding “energy efficiency and” before “energy conservation.”
6. Amend § 1710.106 by adding a new paragraph (a)(6), and revising paragraphs (c)(1) and (d) to read as follows:
(a) * * *
(6) Eligible Energy Efficiency and Conservation Programs pursuant to subpart H of this part.
(c) * * *
(1) Electric facilities, equipment, appliances, or wiring located inside the premises of the Consumer, except for assets financed pursuant to an Eligible EE Program, and qualifying items included in a loan for demand side management or energy resource conservation programs, or small scale renewable energy systems.
(d) A distribution borrower may request a loan period of up to 4 years. Except in the case of loans for new generating and associated transmission facilities, a power supply borrower may request a loan period of not more than 4 years for transmission and substation facilities and improvements or replacements of generation facilities. The loan period for new generating facilities and DSM activities will be determined on a case by case basis. The Administrator may approve a loan period shorter than the period requested by the borrower, if in the Administrator's sole discretion, a loan made for the longer period would fail to meet RUS requirements for loan feasibility and loan security set forth in §§ 1710.112 and 1710.113, respectively.
7. In § 1710.109 amend the first sentence of paragraph (a) by adding the words “energy efficiency and conservation program work plan,” after “construction work plan.”
8. Amend § 1710.115 by adding a new paragraph (c) to read as follows:
(c) The term for loans made to finance Eligible EE Programs will be determined in accordance with § 1710.408 of this part.
9. In § 1710.120 add the words “energy efficiency and conservation program work plans,” after “construction work plans,”
10. Amend § 1710.152 by adding a new paragraph (e) to read as follows:
(e)
11. Amend § 1710.202 by adding a new paragraph (d) to read as follows:
(d) Notwithstanding paragraphs (a) through (c) of this section, a power supply borrower that has an outstanding loan for an Eligible EE Program is required to maintain an approved load forecast and an approved load forecast work plan on an ongoing basis.
12. Amend § 1710.203 by adding a new paragraph (f) to read as follows:
(f) Notwithstanding paragraphs (a) through (e) of this section, a distribution borrower that has an outstanding loan for an Eligible EE Program is required to maintain an approved load forecast and an approved load forecast work plan on an ongoing basis.
13. In § 1710.205 amend paragraph (b)(5) by adding the words “and energy efficiency and conservation program” after “demand side management”.
14. Add § 1710.255 to subpart F to read as follows:
(a) All energy efficiency borrowers must maintain a current EEWP approved by their board of directors covering all new construction, improvements, replacements, and retirements of energy efficiency related equipment and activities;
(b) An energy efficiency borrower's EEWP shall cover a period of between 2 and 4 years, and include all facilities to be constructed or improved which are eligible for RUS financing, whether or not RUS financial assistance will be sought or be available for certain facilities. The term for any RUS financing provided for the facilities may be up to 30 years for ground source heat pump systems and up to 15 years for all other energy efficiency improvements and installations. The construction period covered by an EEWP in support of a loan application shall not be shorter than the loan period requested for financing of the facilities;
(c) The borrower's EEWP may only include facilities, equipment and other activities that have been approved by RUS as a part of an Eligible Energy Efficiency and Conservation Program pursuant to subpart H of this part;
(d) The borrower's EEWP must be consistent with the documentation provided as part of the current RUS approved EE Program as outlined in § 1710.410(c); and
(e) The borrower's EEWP must include an estimated schedule for the implementation of included projects.
15. Amend § 1710.300 by redesignating paragraphs (d)(3) through (d)(5) as paragraphs (d)(4) through (d)(6) respectively; and adding a new paragraph (d)(3) to read as follows:
(d) * * *
(3) RUS-approved EE Program work plan;
16. In § 1710.302 amend paragraph (d)(5) by removing the reference “§ 1710.300(d)(5)” and adding in its place “§ 1710.300(d)(6)”.
17a. In subpart I, redesignate §§ 1710.400 through 1710.407 as §§ 1710.500 through 1710.507, respectively.
17b. Add subpart H consisting of §§ 1710.400 through 1710.499, to read as follows:
This subpart establishes policies and requirements that apply to loans and loan guarantees to finance Energy Efficiency and Conservation programs (EE Programs) undertaken by an eligible utility system to finance demand side management, energy efficiency and conservation, or on-grid and off-grid renewable energy system programs that will result in the better management of their system load growth, a more beneficial load profile, or greater optimization of the use of alternative energy resources in their service territory.
EE Programs under this part may be financed at the distribution level or by an electric generation and transmission provider. RUS encourages borrowers to coordinate with the relevant member systems regarding their intention to implement a program financed under this part. RUS also encourages borrowers to leverage funds available under this subpart with State, local, or other funding sources that may be available to implement such programs.
This subpart adapts and modifies, but does not supplant, the requirements for all borrowers set forth elsewhere where the purpose of the loan is to finance an approved EE program. In the event there is overlap or conflict between this subpart and the provisions of this part 1710 or other parts of the Code of Federal Regulations, the provisions of this subpart will apply for loans made or guaranteed pursuant to this subpart.
EE Programs financed under this subpart may be directed at all forms of energy consumed within a utility's service territory, not just electricity, where the electric utility is in a position to facilitate the optimization of the energy consumption profile within its service territory and do so in a way that enhances the financial or physical performance of the rural electric system and enables the repayment of the energy efficiency loan.
For the purpose of this subpart, the following terms shall have the following meanings. In the event there is overlap or conflict between the definitions contained in § 1710.2, the definitions set forth below will apply for loans made or guaranteed pursuant to this subpart.
(a)
(1) Be developed and implemented by an Eligible borrower and applied within its service territory;
(2) Consist of eligible activities and investments as provided in § 1710.406
(3) Provide for the use of State and local funds where available to supplement RUS loan funds;
(4) Incorporate the applicant's policy applicable to the interconnection of distributed resources;
(5) Incorporate a business plan that meets the requirements of § 1710.407;
(6) Incorporate a quality assurance plan that meets the requirements of § 1710.408;
(7) Demonstrate that the program can be expected to be Cost effective;
(8) Demonstrate that the program will have no net negative cumulative impact on the borrower's financial condition over the time period contemplated in the analytical support documents provided pursuant to § 1710.411;
(9) Demonstrate energy savings or peak demand reduction for the service territory overall; and
(10) Be approved in writing by RUS prior to the investment of funds for which reimbursement will be requested.
(b)
(1) Loans made to Consumers located in a rural area where—
(i) The Consumers may be wholesale or retail;
(ii) The loans may be secured or unsecured;
(iii) The loan receivables are owned by the Eligible Borrower;
(iv) The loans are made or serviced directly by the Eligible Borrower or by a financial institution pursuant to a contractual relationship between the Eligible Borrower and the financial institution;
(v) Due diligence is performed to confirm the repayment ability of the Consumer;
(vi) Loans are funded only upon completion of the project financed or to reimburse startup costs that have been incurred;
(vii) The rate charged the Consumer is less than or equal to the direct Treasury rate established daily by the United States Treasury pursuant to § 1710.51(a)(1) or § 1710.52, as applicable, plus 1%, as of the date the Consumer loan is approved; and
(viii) Loans are not used to refinance a preexisting loan.
(2) A tariff that is specific to an identified rural Consumer, premise or class of ratepayer; or
(3) Other financial recoupment mechanisms as may be approved by RUS.
(c)
(ii) All activities other than those included in subparagraph (c)(1)(i) above should be designed to achieve the applicable operating performance targets within the time period contemplated by the analytic support documents for the overall EE Program as approved by RUS.
(2)
(a)
(1) Shall be designed to improve energy efficiency or managed demand on the customer side of the meter;
(2) Shall be Cost effective in the aggregate after giving effect to all activities and investments contemplated in the approved EE Program; and
(3) May apply to all Consumer classes.
(b)
(1) Energy efficiency and conservation measures where assets financed at a Consumer premises can be characterized as an integral part of the real property that would typically transfer with the title under applicable state law.
(2) Small Scale Renewable Energy Systems, including—
(i) On or Off Grid Renewable energy systems;
(ii) Fuel cells;
(3) Demand side management (DSM) investments excluding Smart Grid Investments;
(4) Energy audits;
(5) Utility Energy Services Contracts;
(6) Consumer education and outreach programs;
(7) Power factor correction equipment on the Consumer side of the meter;
(8) Re-lamping to more energy efficient lighting; and
(9) Other activities and investments as approved by RUS as part of the EE Program
(c)
(d)
(1)
(i) Appliance upgrades must achieve a reduction in energy consumption for the appliance equal to or greater than 20%;
(ii) Cooling system improvements must be designed to achieve a SEER increase of not less than 20%, and the improved SEER rating must be greater than or equal to the minimum applicable SEER standard promulgated by the U.S. Department of Energy for the cooling system;
(iii) Building envelope improvements must be designed to achieve a reduction of annualized baseline energy consumption (measured in Btus) greater than 10% for the building;
(2)
(3) Heating system improvements must demonstrate an annualized energy reduction in Btu consumption equal to or greater than 20%.
(4) Activities not otherwise listed in this paragraph (d) must demonstrate energy savings which will be determined on a case by case basis by RUS, but in any event not less than a 10% improvement in energy efficiency.
(e) The borrowers shall follow a bulletin or such other publication as RUS deems appropriate that contains and describes best practices for energy efficiency and conservation measures associated with different technologies. RUS will make this bulletin or publication publicly available and
An Eligible EE Program must have a business plan for implementing the program. The business plan must have the following elements:
(a) Executive summary. The executive summary shall capture the overall objectives to be met by the Eligible EE Program and the timeframe in which they are expected to be achieved.
(b) Organizational background. The background section shall include descriptions of the management team responsible for implementing the Eligible EE Program.
(c) Marketing plan. The marketing section should identify the target Consumers, promotional activities to be pursued and target penetration rates by Consumer category and investment activity.
(d) Operations plan. The operations plan shall include but is not limited to:
(1) A list of the activities and investments to be implemented under the EE Program and the Btu savings goal targeted for each category;
(2) An estimate of the dollar amount of investment by the utility for each category of activities and investments listed under paragraph (d)(1) of this section;
(3) A staffing plan that identifies whether and how outsourced contractors or subcontractors will be used to deliver the program;
(4) A description of the process for documenting and perfecting collateral arrangements for Consumer loans, if applicable; and
(5) The overall Btu savings to be accomplished over the life of the EE Program.
(e) Financial Plan. The financial plan shall include but is not limited to:
(1) A schedule showing sources and uses of funds for the program;
(2) An itemized budget for each activity and investment category listed in the operations plan;
(3) A Cost effectiveness forecast for each activity and investment category listed in the operations plan;
(4) Where applicable, provision for Consumer loan loss reserves. These loan loss reserves will not be funded by RUS.
(5) Identify expected loan delinquency and default rates and report annually on deviations from the expected rates
(f) Risk analysis. The business plan shall include an evaluation of the financial and operational risk associated with each activity and investment category listed in the operations plan, including an estimate of prospective Consumer loan losses consistent with the loan loss reserve to be established pursuant to subparagraph (e)(4) above.
(g) The borrowers shall follow a bulletin or such other publication as RUS deems appropriate that contains and describes best practices for energy efficiency business plans. RUS will make this bulletin or publication publicly available and revise it from time to time as RUS deems it necessary.
An Eligible EE Program must have a quality assurance plan as part of the program. The quality assurance plan must have the following elements:
(a) Quality assurance assessments shall include the use of qualified energy managers or professional engineers to evaluate program activities and investments;
(b) Energy audits shall be performed for energy efficiency investments involving the building envelope at a Consumer premises;
(c) Energy audits must be performed by certified energy auditors; and
(d) Follow up audits shall be performed within one year after installation on all investments made to confirm whether efficiency improvement expectations are being met.
(e) In cases involving energy efficiency upgrades to a single system (such as a ground source heat pump) the new system must be designed and installed by certified and insured professionals acceptable to the utility.
(f) Industry or manufacturer standard performance tests, as applicable, shall be required on any system upgraded as a result of an EE Program. This testing shall indicate the installed system is meeting its designed performance parameters.
(g) In some programs the utility may elect to recommend independent contractors who can perform energy efficiency related work for their customers. In these cases utilities shall monitor the work done by the contractors and confirm that the contractors are performing quality work. Utilities should remove substandard contractors from their recommended lists if the subcontractors fail to perform at a satisfactory level.
(h) Contractors not hired by the utility may not act as agents of the utility in performing work financed under this subpart.
(i) The borrowers shall follow a bulletin or other publication that RUS deems appropriate and contains and describes best practices for energy efficiency quality assurance plans. RUS will make this bulletin or publication publicly available and revise it from time to time as RUS deems it necessary.
(a)
(b)
(c)
(2) Except for the initial advance provided for in paragraph (c)(1) of this section, all advances under this subpart shall be used for reimbursement of expenditures relating to a completed activity or investment; and
(3) Advances shall be in accordance with RUS procedures.
(d)
(2) Financing for Consumer education and outreach programs may not exceed 4% of the total loan amount.
(3) The Rural Utilities Service reserves the right to place a cap on both the total amount of funds an eligible entity can apply for, as well as a cap on the total amount of funds the energy efficiency and Conservation program can utilize in the appropriations. These caps will be announced regularly through the
The required application documentation listed in this section is not all inclusive but is specific to Eligible borrowers requesting a loan under this subpart and in most cases is supplemental to the general requirements for loan applications provided for in this part 1710:
(a) A letter from the Borrower's General Manager requesting a loan under this subpart.
(b) A copy of the board resolution establishing the EE Program that reflects an undertaking that funds collected in excess of then current amortization requirements for the related RUS loan will be redeployed for EE Program
(c) Current RUS-approved EE Program documentation that includes:
(1) A Business Plan that meets the requirements of § 1710.407;
(2) A Quality Assurance Plan that meets the requirements of § 1710.408;
(3) Analytical support documentation that meets the requirements of § 1710.411;
(4) A copy of RUS' written approval of the EE Program.
(d) An EE Program work plan that meets the requirements of § 1710.255;
(e) A statement of whether an initial working capital advance pursuant to § 1710.409(c)(1) is included in the loan budget together with a schedule of how these funds will be used.
(f) A proposed draft Schedule C pursuant to 7 CFR part 1718 that lists assets to be financed under this subpart as excepted property under the RUS mortgage, as applicable.
Applications for loans under this subpart may only be made for eligible activities and investments included in an RUS-approved EE Program. In addition to a business plan and operations plan, a request for EE program approval must include analytical support documentation that demonstrates the program meets the requirements of § 1710.303 and assures RUS of the operational and financial integrity of the EE Program. This documentation must include, but is not necessarily limited to, the following:
(a) A comparison of the utility's projected annual growth in demand after incorporating the EE Program together with an updated baseline forecast on file with RUS, where each includes an inventory of energy consuming devices used by customers in the service territory and a specific time horizon as determined by the utility for meeting the performance objectives established by them for the EE Program;
(b) An itemized estimate of the energy savings and peak demand reduction to be obtained for each category of eligible activities and investments to be pursued;
(c) An evaluation of the Cost effectiveness of each category of eligible activities and investments to be pursued under the EE Program;
(d) Demonstration that the required periods of performance under § 1710.405(c) can reasonably be expected to be met;
(e) A report of discussions and coordination conducted with the power supplier, where applicable, issues identified as a result, and the outcome of this effort.
(f) An estimate of the amount of direct investment in utility-owned generation that will be deferred as a result of the EE Program;
(g) A description of efforts to identify state and local sources of funding and, if available, how they are to be integrated in the financing of the EE Program; and
(h) Copies of sample documentation used by the utility in administering its EE Program.
(i) Such other documents and reports as the Administrator may require.
Nothing in this subpart changes a Borrower's obligation to comply with RUS's accounting, monitoring and reporting requirements. In addition thereto, the Administrator may also require additional management reports that provide the agency with a means of evaluating the extent to which the goals and objectives identified in the EE Plan are being accomplished.
Nothing in this subpart changes a Borrower's obligation to comply with all laws and regulations to which it is subject.
18. The authority citation for part 1717 continues to read as follows:
7 U.S.C. 901
19. Amend § 1717.852 by revising paragraph (b)(2)(ii) to read as follows:
(b) * * *
(2) * * *
(ii) Renewable energy systems and RUS-approved programs of demand side management, energy efficiency and energy conservation; and
20. The authority citation for part 1721 continues to read as follows:
7 U.S.C. 901
21. Amend § 1721.1 by revising paragraph (a) to read as follows:
(a)
22. The authority citation for part 1724 continues to read as follows:
7 U.S.C. 901
23. Amend § 1724.30 by revising paragraph (a) to read as follows:
(a) Each borrower shall select one or more qualified persons to perform the engineering services involved in the planning (including the development of an EE Program eligible for financing pursuant to subpart H of part 1710 of this chapter, design, and construction management of the system.
24. The authority citation for part 1730 continues to read as follows:
7 U.S.C. 901
25. Amend Appendix A to subpart B of Part 1730 by adding a new paragraph 13.f. to read as follows:
13. * * *
f. Energy Efficiency and Conservation Program quality assurance compliance—Rating:__
Federal Aviation Administration (FAA) DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for Eurocopter France (Eurocopter) Model AS350BA helicopters with certain AERAZUR emergency flotation gear container assemblies installed. This proposed AD would require replacing each affected emergency flotation gear container assembly (container assembly) at specified time limits based on the date of manufacture. This proposed AD is prompted by a recognition that container assemblies with an intended operating limitation of 10 years may not have been replaced because the limit is no longer recorded in the Maintenance Program. The proposed actions are intended to prevent failure of the emergency container assembly due to age and subsequent damage to the helicopter and injury to the occupants after an emergency water landing.
We must receive comments on this proposed AD by September 24, 2012.
You may send comments by any of the following methods:
•
•
•
•
For service information identified in this proposed AD, contact American Eurocopter Corporation, 2701 Forum Drive, Grand Prairie, TX 75053-4005, telephone (800) 232-0323, fax (972) 641-3710, or at
Gary Roach, Aviation Safety Engineer, FAA, Rotorcraft Directorate, Regulations and Policy Group, 2601 Meacham Blvd., Fort Worth, Texas 76137, telephone (817) 222-5130, fax (817) 222-5961, email gary.b.roach@faa.gov.
We invite you to participate in this rulemaking by submitting written comments, data, or views. We also invite comments relating to the economic, environmental, energy, or federalism impacts that might result from adopting the proposals in this document. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should send only one copy of written comments, or if comments are filed electronically, commenters should submit only one time.
We will file in the docket all comments that we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, we will consider all comments we receive on or before the closing date for comments. We will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. We may change this proposal in light of the comments we receive.
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued AD No. 2008-0189, dated October 10, 2008, to correct an unsafe condition for the Eurocopter Model AS350BA helicopters with certain AERAZUR emergency flotation gear installed. EASA advises that the container assemblies have an operating life limit of 10 years from the date of manufacture. The EASA AD states that “as of June 2006, this limit is no longer recorded in the Maintenance Program; therefore, after June 2006, container assemblies having already exceeded the 10-year limit could have not been replaced yet.” The EASA AD also states that “floating performance of a helicopter may prove to be insufficient in the event of ditching, in case of failure of a container assembly being operated beyond its operating time limit.”
This helicopter model is manufactured in France and is type certificated for operation in the United States under the provisions of 14 CFR 21.29 and the applicable bilateral agreement. Pursuant to the applicable bilateral agreement, EASA has kept the FAA informed of the situation described above.
We are proposing this AD because we evaluated all known relevant information and determined that an unsafe condition is likely to exist or develop on other products of the same type design.
Eurocopter has issued Alert Service Bulletin No. 25.01.02, dated September 24, 2008 (EASB), which specifies certain times measured from the date of manufacture to replace the container assemblies. EASA classified this EASB as mandatory and issued AD No. 2008-0189, dated October 10, 2008, to ensure the continued airworthiness of these helicopters.
This proposed AD would require determining the manufacturing date of each part-numbered container assembly, and depending on the date, replacing
We do not allow return of the container assemblies to the manufacturer for an inspection and extension of the life limit.
We estimate that this proposed AD would affect 85 helicopters of U.S. registry. We estimate that operators may incur the following costs in order to comply with this AD.
• It would take minimal time to determine the manufacturing date of the container and about
• Required parts would cost about $21,775 for the left container assembly and $26,690 for the right container assembly per helicopter.
Based on these figures, we estimate the total cost impact of the proposed AD on U.S. operators to be $485,075, assuming 10 helicopters require replacement of the right and left container assemblies.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed, 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 to the extent that it justifies making a regulatory distinction; and
4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
We prepared an economic evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
1. The authority citation for part 39 continues to read as follows:
49 U.S.C. 106(g), 40113, 44701.
2. Section 39.13 is amended by adding the following new airworthiness directive (AD):
This AD applies to Model AS350BA helicopters with AERAZUR left-hand emergency flotation gear container assembly (container assembly), part number (P/N) 158170 or 158210-1, or right-hand container assembly, P/N 158171 or 158215-1, installed, certificated in any category.
This AD defines the unsafe condition as failure of the container assembly due to age and subsequent damage to the helicopter. This condition could result in injury to the occupants after an emergency water landing.
You are responsible for performing each action required by this AD within the specified compliance time unless it has already been accomplished prior to that time.
(1) Determine the manufacturing date of each part-numbered container assembly stamped on the cover of the identification plate.
(2) Replace each container assembly with an airworthy container assembly as follows:
(i) For a container assembly with a date of manufacture 12 or more years before the effective date of this AD, replace within 30 days.
(ii) For a container assembly with a date of manufacture 10 or more years and less than 12 years before the effective date of this AD, replace within 60 days.
(iii) For a container assembly with a date of manufacture 9 or more years and less than 10 years before the effective date of this AD, replace before reaching 10 years and 60 days.
(iv) For a container assembly with a date of manufacture less than 9 years before the effective date of this AD, replace before reaching 10 years.
(1) The Manager, Safety Management Group, FAA, may approve AMOCs for this AD. Send your proposal to: Gary Roach, 2601 Meacham Blvd., Fort Worth, Texas 76137; telephone: 817-222-5130, fax: 817-222-5961, email
(2) For operations conducted under a 14 CFR part 119 operating certificate or under 14 CFR part 91, subpart K, we suggest that you notify your principal inspector, or lacking a principal inspector, the manager of the local flight standards district office or certificate holding district office before operating any aircraft complying with this AD through an AMOC.
(1) Eurocopter Alert Service Bulletin No. 25.01.02, dated September 24, 2008, which is not incorporated by reference, contains additional information about the subject of this AD. For service information identified in this AD, contact American Eurocopter Corporation, 2701 Forum Drive, Grand Prairie, TX 75053-4005, telephone (800) 232-0323, fax (972) 641-3710, or at
(2) The subject of this AD is addressed in European Aviation Safety Agency AD No. 2008-0189, dated October 10, 2008.
Joint Aircraft Service Component (JASC) Code: 3212 Emergency Flotation Section.
Federal Aviation Administration, DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for the Eurocopter Deutschland GmbH (Eurocopter) Model MBB-BK 117 C-2 helicopters. This proposed AD is prompted by the discovery that some helicopters have blind rivets installed in the place of solid rivets in the long tail rotor drive shaft. The proposed actions are intended to detect blind rivets installed in the long tail rotor drive shaft, which could lead to failure of the tail rotor drive shaft and subsequent loss of control of the helicopter.
We must receive comments on this proposed AD by September 24, 2012.
You may send comments by any of the following methods:
•
•
•
•
You may examine the AD docket on the Internet at
For service information identified in this proposed AD, contact American Eurocopter Corporation, 2701 N. Forum Drive, Grand Prairie, TX 75052, telephone (972) 641-0000 or (800) 232-0323, fax (972) 641-3775, or at
Jim Grigg, ASW-112, Manager, FAA, Rotorcraft Directorate, Safety Management Group, 2601 Meacham Blvd., Fort Worth, Texas 76137, telephone (817) 222-5126, fax (817) 222-5961, email
We invite you to participate in this rulemaking by submitting written comments, data, or views. We also invite comments relating to the economic, environmental, energy, or federalism impacts that might result from adopting the proposals in this document. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should send only one copy of written comments, or if comments are filed electronically, commenters should submit only one time.
We will file in the docket all comments that we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, we will consider all comments we receive on or before the closing date for comments. We will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. We may change this proposal in light of the comments we receive.
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD No. 2009-0119, dated June 4, 2009, to correct an unsafe condition for the Eurocopter Model MBB-BK 117 C-2 helicopters. EASA advises that an error was discovered in the Eurocopter aircraft maintenance manual (AMM), which erroneously specifies replacing the solid rivets on the long tail rotor drive shaft with blind rivets. All delivered helicopters had the long tail rotor drive shafts installed during production fitted with the correct solid rivets. The long tail rotor drive shafts repaired in-service in accordance with the AMM may have blind rivets installed. This condition, if not corrected, could lead to a significant reduction of the life of the long tail rotor drive shaft, failure of the long tail rotor drive shaft, and subsequent loss of control of the helicopter.
These helicopters have been approved by the aviation authority of the Federal Republic of Germany and are approved for operation in the United States. Pursuant to our bilateral agreement with Germany, EASA, its technical representative, has notified us of the unsafe condition described in its AD. We are proposing this AD because we evaluated all known relevant information and determined that an unsafe condition exists and is likely to exist or develop on other helicopters of these same type designs.
Eurocopter has issued Alert Service Bulletin No. MBB BK117 C-2-65A-003, dated May 4, 2009 (ASB), which specifies inspecting long tail rotor drive shafts to determine what type of rivets are installed. If one or more blind rivets are installed, the ASB specifies replacing the long tail rotor drive shaft assembly with a serviceable long tail rotor drive shaft assembly. EASA classified this ASB as mandatory and issued EASA AD No. 2009-0119, dated June 4, 2009, to ensure the continued airworthiness of these helicopters.
This proposed AD would require, within 100 hours time-in-service (TIS), inspecting the long tail rotor drive shaft assembly for blind rivets. If there are no blind rivets installed on the shaft assembly, no further action would be required by this AD. If there are one or more blind rivets installed on the shaft assembly, this AD would require replacing the shaft assembly of the long tail rotor drive shaft with an airworthy shaft assembly before further flight.
This proposed AD uses the term “TIS” instead of “flight hours.”
We estimate that this proposed AD would affect 88 helicopters of U.S. registry. We estimate that operators may incur the following costs in order to comply with this AD:
• It would take about 2 work hours to inspect and replace the tail rotor at an average labor rate of $85 per work hour.
• Required parts to replace each long tail rotor drive shaft assembly cost about $4,600 each.
Based upon these figures, the total cost per helicopter would be $4,770. The total cost for the entire U.S. fleet would be $419,760, assuming that the long tail rotor drive shaft assembly would be required to be replaced on the entire fleet.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
3. Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction; and
4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
We prepared an economic evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
1. The authority citation for part 39 continues to read as follows:
49 U.S.C. 106(g), 40113, 44701.
2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD):
This AD applies to Model MBB BK117 C-2 helicopters, with long tail rotor drive shaft assembly part number (P/N) B651M1002101 or B651M1002102 installed, certificated in any category.
This AD defines the unsafe condition as the installation of blind rivets instead of solid rivets in the long tail rotor drive shaft. This condition could result in failure of the long tail rotor drive shaft and subsequent loss of control of the helicopter.
You are responsible for performing each action required by this AD within the specified compliance time unless it has already been accomplished prior to that time.
Within 100 hours time-in-service (TIS), inspect the long tail rotor drive shaft assembly for blind rivets as indicated in sections A-A and B-B of Figure 1 to Paragraph (d) of this AD.
(1) If there are no blind rivets installed on the shaft assembly, no further action is required by this AD.
(2) If there are one or more blind rivets installed on the shaft assembly in the areas depicted in Figure 1 to Paragraph (d) of this AD, before further flight, replace the shaft assembly of the long tail rotor drive shaft with an airworthy shaft assembly that does not have blind rivets installed.
(3) After the effective date of this AD, do not install a tail rotor drive shaft assembly that has blind rivets installed.
(1) The Manager, FAA, Safety Management Group, may approve AMOCs for this AD. Send your proposal to: Jim Grigg, ASW-112, Manager, Rotorcraft Directorate, Safety Management Group, 2601 Meacham Blvd., Fort Worth, Texas 76137, telephone (817) 222-5126, fax (817) 222-5961, email
(2) For operations conducted under 14 CFR part 119 operating certificate or under 14 CFR part 91, subpart K, we suggest that you notify your principal inspector, or lacking a principal inspector, the manager of the local flight standards district office or certificate holding district office before operating any aircraft complying with this AD through an AMOC.
(1) Eurocopter Alert Service Bulletin No. MBB BK117 C-2-65A-003, dated May 4, 2009, which is not incorporated by reference, contains additional information about the subject of this AD. For service information identified in this AD, contact American Eurocopter Corporation, 2701 N. Forum Drive, Grand Prairie, TX 75052, telephone (972) 641-0000 or (800) 232-0323, fax (972) 641-3775, or at
(2) The subject of this AD is addressed in European Aviation Safety Agency AD No. 2009-0119, dated June 4, 2009.
Joint Aircraft System/Component (JASC) Code 6510: Tail Rotor Drive Shaft.
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
We propose to adopt a new airworthiness directive (AD) for Eurocopter France (Eurocopter) Model EC130 B4 helicopters with a cabin vibration damper installed. This proposed AD is prompted by a crack and failure of a cabin vibration damper
We must receive comments on this proposed AD by September 24, 2012.
You may send comments by any of the following methods:
•
•
•
•
You may examine the AD docket on the Internet at
For service information identified in this proposed AD, contact American Eurocopter Corporation, 2701 Forum Drive Grand Prairie, TX 75053-4005, telephone (800) 232-0323, fax (972) 641-3710, or at
Gary Roach, Aerospace Engineer, FAA, Regulations and Policy Group, 2601 Meacham Blvd., Fort Worth, Texas 76137; telephone: (817) 222-5130, fax: 817-222-5961; email
We invite you to participate in this rulemaking by submitting written comments, data, or views. We also invite comments relating to the economic, environmental, energy, or federalism impacts that might result from adopting the proposals in this document. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should send only one copy of written comments, or if comments are filed electronically, commenters should submit only one time.
We will file in the docket all comments that we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, we will consider all comments we receive on or before the closing date for comments. We will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. We may change this proposal in light of the comments we receive.
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD No. 2006-0278, dated September 7, 2006 (AD 2006-0278), to correct an unsafe condition for Eurocopter Model EC130 B4 helicopters. EASA advises of a cracked cabin vibration damper blade, which could lead to jamming of a flight control.
This helicopter model is manufactured in France and is type certificated for operation in the United States under the provisions of 14 CFR 21.29 and the applicable bilateral agreement. Pursuant to the applicable bilateral agreement, EASA has kept the FAA informed of the situation described above. The FAA has examined the findings of EASA, reviewed all available information, and determined that AD action is necessary for helicopters of this type design that are certificated for operation in the United States.
We are proposing this AD because we evaluated all known relevant information and determined that an unsafe condition is likely to exist or develop on other helicopters of the same type design.
Eurocopter has issued Alert Service Bulletin (ASB) No. 53A008, Revision 0, dated July 19, 2006 (ASB 53A008), which supersedes ASB No. 05A002, Revision 0, dated July 18, 2006, and specifies installing a cabin vibration damper containment device. EASA classified ASB 53A008 as mandatory and issued AD 2006-0278 to ensure the continued airworthiness of these helicopters.
This proposed AD would require, depending on the modification status of the helicopter, complying with certain portions of ASB 53A008.
The EASA AD requires two daily visual inspections for cracks in the blade of each cabin vibration damper and replacement of a blade if there is a crack; this proposed AD does not. The EASA AD requires compliance by a calendar date. This proposed AD requires compliance within 100 hours time-in-service.
We estimate that this proposed AD would affect 122 helicopters of U.S. registry. We estimate that operators may incur the following costs in order to comply with this AD.
• $340 for 4 work hours to install a vibration damper casing assembly at an average labor rate of $85 per work hour,
• $1,500 for required parts per helicopter, and
• $224,480 total cost for the fleet.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a
1. Is not a “significant regulatory action” under Executive Order 12866;
2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
3. Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction; and
4. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
We prepared an economic evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
1. The authority citation for part 39 continues to read as follows:
49 U.S.C. 106(g), 40113, 44701.
2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD):
This AD applies to Model EC130 B4 helicopters with a cabin vibration damper installed, except those modified in accordance with Modification 073565, certificated in any category.
This AD defines the unsafe condition as a cracked cabin vibration damper blade. This condition could result in failure of the blade, jamming of the flight controls, and subsequent loss of control of the helicopter.
You are responsible for performing each action required by this AD within the specified compliance time unless it has already been accomplished prior to that time.
Within the next 100 hours time-in-service:
(1) For helicopters that have not been modified in accordance with Modification 073521 or Modification 073525, install a vibration damper casing assembly on both sides of the helicopter by following paragraphs 2.B.2.a, and 2.B.5 of the Accomplishment Instructions of Eurocopter Alert Service Bulletin (SB) No. 53A008, dated July 19, 2006 (ASB 53A008).
(2) For helicopters that have been modified in accordance with Modification 073521 either at the time of manufacture or pursuant to Eurocopter SB No. 53-006, Revision 1, dated September 30, 2004; or Modification 073525 either at the time of manufacture or pursuant to Eurocopter SB No. 53-007, Revision 1, dated February 19, 2007, install a vibration damper casing assembly on both sides of the helicopter by following paragraphs 2.B.3.a, 2.B.3.b, and 2.B.5 of the Accomplishment Instructions of ASB 53A008.
(1) The Manager, Rotorcraft Standards Staff, FAA, may approve AMOCs for this AD. Send your proposal to Gary Roach, Aerospace Engineer, FAA, 2601 Meacham Blvd., Fort Worth, Texas 76137; telephone: (817) 222-5130, fax 817-222-5961; email
(2) For operations conducted under 14 CFR part 119 operating certificate or under 14 CFR part 91, subpart K, we suggest that you notify your principal inspector, or lacking a principal inspector, the manager of the local flight standards district office or certificate holding district office before operating any aircraft complying with this AD through an AMOC.
(1) Eurocopter Service Bulletin (SB) No. 53-006, Revision 1, dated September 30, 2004; SB No. 53-007, Revision 1, dated February 19, 2007; and Alert SB No. 05A002, Revision 0, dated July 18, 2006, which are not incorporated by reference, contain additional information about the subject of this AD. For service information identified in this proposed AD, contact American Eurocopter Corporation, 2701 Forum Drive, Grand Prairie, TX 75053-4005, telephone (800) 232-0323, fax (972) 641-3710, or at
(2) The subject of this AD is addressed in European Aviation Safety Agency AD No. 2006-0278, dated September 7, 2006.
Joint Aircraft Service Component (JASC) Code: 1810 Helicopter Vibration Analysis.
U.S. Customs and Border Protection, DHS; Treasury.
Notice of proposed rulemaking; correction.
U.S. Customs and Border Protection (CBP) published a notice of proposed rulemaking in the
Comments must be received on or before August 27, 2012.
Seth Renkema, Office of International Trade,
You may submit comments, identified by docket number, by one of the following methods:
•
•
Interested persons are invited to participate by submitting written data, views, or arguments on CBP's conclusion that the rule may have a significant economic impact on a substantial number of small entities.
On February 22, 2012, CBP published a notice of proposed rulemaking (NPRM) titled “Changes to the In-Bond Process” in the
As part of the development of the NPRM and pursuant to the Regulatory Flexibility Act of 1980, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (RFA/SBREFA) and E.O. 13272, titled “Proper Consideration of Small Entities in Agency Rulemaking,” CBP prepared a regulatory flexibility analysis. Because the initial screening analysis indicated that the rule might significantly affect a substantial number of small entities, CBP was required to conduct an Initial Regulatory Flexibility Analysis (IRFA) to further assess these impacts.
In the NPRM and the IRFA, CBP concluded that the rule may significantly affect a substantial number of small entities. The NPRM summarizes the IRFA, seeks comments on its conclusion and states that the complete IRFA can be found in the docket for the rulemaking. However, CBP inadvertently failed to timely post the IRFA to the docket. The complete IRFA has now been posted to the docket at
Coast Guard, DHS.
Extension of comment period.
The Coast Guard is extending the comment period for the notice of proposed rulemaking (NPRM) entitled “MARPOL Annex I Amendments,” published on April 9, 2012, for 60 days. We have decided to extend the comment period at the request of industry because we omitted from the docket the accompanying Regulatory Analysis, which informs the proposal.
Comments and related material must be submitted to the docket by September 7, 2012.
You may submit comments identified by docket number using any one of the following methods:
(1)
(2)
(3)
See the “Public Participation and Request for Comments” portion of the
If you have questions on this rule, call or email Scott E. Hartley, U.S. Coast Guard Office of Operating and Environmental Standards, (CG-OES-2); telephone 202-372-1437, email
We encourage you to participate in this rulemaking by submitting comments and related materials. All comments received will be posted without change to
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. You may submit your comments and material online at
To submit your comment online, go to
If you submit your comments by mail or hand delivery, submit them in an
To view comments, as well as documents mentioned in this preamble as being available in the docket, go to
Anyone can search the electronic form of comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review a Privacy Act notice regarding our public dockets in the January 17, 2008, issue of the
The Coast Guard published an NPRM entitled “MARPOL Annex I Amendments” on April 9, 2012 (77 FR 21360) proposing to align Coast Guard regulations with recent amendments to Annex I of the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978. The NPRM also proposed to incorporate some elements from the International Convention for the Safety of Life at Sea into our regulations. All comments on this NPRM were originally due by July 9, 2012.
On June 14, 2012, we received a letter from the American Petroleum Institute requesting a 60-day extension of the comment period. It noted that the Regulatory Analysis had not been posted to the docket, and that examination of that document was important in analyzing the proposal. We found that the Regulatory Analysis was in fact not available in the docket as stated in the NPRM, and promptly made it available and ensured it was properly posted to the docket. However, as we wish to give commenters the full amount of time originally provided to review our analysis, we are reopening the comment period to allow commenters the full period to comment on the Regulatory Analysis.
This notice is issued under authority of 5 U.S.C. 552(a).
United States Patent and Trademark Office, Commerce.
Notice of proposed rulemaking.
The Leahy-Smith America Invents Act (AIA) amends the patent laws pertaining to the conditions of patentability to convert the United States patent system from a “first to invent” system to a “first inventor to file” system; treats United States patents and United States patent application publications as prior art as of their earliest effective United States, foreign, or international filing date; eliminates the requirement that a prior public use or sale be “in this country” to be a prior art activity; and treats commonly owned or joint research agreement patents and patent application publications as being by the same inventive entity for purposes of novelty, as well as nonobviousness. The AIA also repeals the provisions pertaining to statutory invention registrations. The current rules of practice in patent cases have a number of provisions based on the conditions of patentability of a “first to invent” patent system. The United States Patent and Trademark Office (Office) is proposing to amend the rules of practice in patent cases to implement the changes to the conditions of patentability in the AIA, and to eliminate the provisions pertaining to statutory invention registrations.
Comments should be sent by electronic mail message over the Internet addressed to:
Comments may also be sent by electronic mail message over the Internet via the Federal eRulemaking Portal. See the Federal eRulemaking Portal Web site (
Although comments may be submitted by postal mail, the Office prefers to receive comments by electronic mail message over the Internet because sharing comments with the public is more easily accomplished. Electronic comments are preferred to be submitted in plain text, but also may be submitted in ADOBE® portable document format or MICROSOFT WORD® format. Comments not submitted electronically should be submitted on paper in a format that facilitates convenient digital scanning into ADOBE® portable document format.
The comments will be available for public inspection at the Office of the Commissioner for Patents, currently located in Madison East, Tenth Floor, 600 Dulany Street, Alexandria, Virginia. Comments also will be available for viewing via the Office's Internet Web site (
Susy Tsang-Foster, Legal Advisor ((571) 272-7711), Pinchus M. Laufer, Senior Legal Advisor ((571) 272-7726), or Eugenia A. Jones, Senior Legal Advisor ((571) 272-7727), Office of Patent Legal Administration, Office of the Deputy Commissioner for Patent Examination Policy.
The rules of practice for patent cases in title 37 of the Code of Federal Regulations (CFR) are currently drafted for examination under the “first to invent” system in effect prior to March 16, 2013. Thus, this notice proposes changes to the rules of practice in title 37, CFR, for consistency with, and to address the examination issues raised by, the changes in section 3 of the AIA.
The Office is proposing to add the definitions provided in the AIA to the rules of practice for the terms commonly used in the rules of practice.
The Office is providing for the submission of affidavits or declarations showing that: (1) A disclosure upon which a claim rejection is based was by the inventor or joint inventor or by a party who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or (2) there was a prior public disclosure by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.
The Office is proposing to provide for the situation in which a U.S. patent or U.S. patent application publication has a prior art effect as of the filing date of a foreign priority application by requiring that the certified copy of the foreign application be filed within the later of four months from the actual filing date of the application or sixteen months from the filing date of the prior foreign application.
The Office is eliminating the provisions directed to statutory invention registrations.
Finally, the Office is proposing additional requirements for nonprovisional applications filed on or after March 16, 2013, that claim the benefit of the filing date of a foreign, provisional, or nonprovisional application filed prior to March 16, 2013. If such a nonprovisional application contains at any time a claim to a claimed invention that has an effective filing date on or after March 16, 2013, the applicant must provide a statement to that effect within the later of four months from the actual filing date of the later-filed application, four months from the date of entry into the national stage in an international application, sixteen months from the filing date of the prior-filed application, or the date that a first claim to a claimed invention that has an effective filing date on or after March 16, 2013, is presented in the application. In addition, if such a nonprovisional application does not contain a claim to a claimed invention that has an effective filing date on or after March 16, 2013, but discloses subject matter not also disclosed in the foreign, provisional, or nonprovisional application, the applicant must provide a statement that the application includes subject matter not disclosed in the foreign, provisional, or nonprovisional application within the later of four months from the actual filing date of the later-filed application, four months from the date of entry into the national stage in an international application, or sixteen months from the filing date of the prior-filed application. This will permit the Office to readily determine whether the nonprovisional application is subject to the changes to 35 U.S.C. 102 and 103 in the AIA.
35 U.S.C. 102(b) as amended by section 3 of the AIA provides for exceptions to the provisions of 35 U.S.C. 102(a). The exceptions in 35 U.S.C. 102(b)(1) provide that a disclosure made one year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under 35 U.S.C. 102(a)(1) if: (1) The disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or (2) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.
35 U.S.C. 102(c) as amended by section 3 of the AIA provides for common ownership under joint research agreements. 35 U.S.C. 102(c) specifically provides that subject matter disclosed and a claimed invention shall be deemed to have been owned by the same person or subject to an obligation of assignment to the same person in applying the provisions of 35 U.S.C. 102(b)(2)(C) if: (1) The subject matter disclosed was developed and the claimed invention was made by, or on behalf of, one or more parties to a joint
35 U.S.C. 102(d) as amended by section 3 of the AIA provides a definition for “effectively filed” for purposes of determining whether a patent or application for patent is prior art to a claimed invention. 35 U.S.C. 102(d) provides that for purposes of determining whether a patent or application for patent is prior art to a claimed invention under 35 U.S.C. 102(a)(2), such patent or application shall be considered to have been effectively filed, with respect to any subject matter described in the patent or application on the earliest of: (1) The actual filing date of the patent or the application for patent; or (2) if the patent or application for patent is entitled to claim a right of priority or the benefit of an earlier filing date under 35 U.S.C. 119, 120, 121, or 365 based upon one or more prior filed applications for patent, the filing date of the earliest such application that describes the subject matter.
The AIA provides a number of definitions for terms used in title 35 of the United States Code.
The AIA amends 35 U.S.C. 103 to provide that a patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in 35 U.S.C. 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.
The AIA eliminates the provisions in 35 U.S.C. 135 for patent interference proceedings and replaces them with patent derivation proceedings.
The AIA repeals the provisions of 35 U.S.C. 104 (special provisions for inventions made abroad) and 157 (statutory invention registrations).
The AIA provides that the changes (other than the repeal of 35 U.S.C. 157) in section 3 which are being implemented in this rulemaking take effect on March 16, 2013, and apply to any application for patent, and to any patent issuing thereon, that contains, or contained at any time: (1) A claim to a claimed invention that has an effective filing date as defined in 35 U.S.C. 100(i) that is on or after March 16, 2013; or (2) a specific reference under 35 U.S.C. 120, 121, or 365(c) to any patent or application that contains, or contained at any time, such a claim.
The AIA also provides that the provisions of 35 U.S.C. 102(g), 135, and 291 in effect on March 15, 2013, shall apply to each claim of an application for patent, and any patent issued thereon, for which the amendments made by this section also apply, if such application or patent contains, or contained at any time: (1) A claim to an invention having an effective filing date as defined in 35 U.S.C. 100(i) that occurs before March 16, 2013; or (2) a specific reference under 35 U.S.C. 120, 121, or 365(c) to any patent or application that contains, or contained at any time, such a claim.
Section 1.9(d)(1) as proposed provides that the term “inventor” or “inventorship” as used in this chapter means the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention.
Section 1.9(e) as proposed provides that the term “joint research agreement” as used in this chapter means a written contract, grant, or cooperative agreement entered into by two or more persons or entities for the performance of experimental, developmental, or research work in the field of the claimed invention.
Section 1.9(f) as proposed provides that the term “claimed invention” as used in this chapter means the subject matter defined by a claim in a patent or
Section 1.55(a)(2) is proposed to be amended to include provisions in current § 1.55(a)(1)(i) and to require that the claim for priority and a certified copy of the foreign application be filed in an application under 35 U.S.C. 111(a) (other than a design application) within the later of four months from the actual filing date of the application or sixteen months from the filing date of the prior foreign application. Section 1.55(a)(2) as proposed also requires the claim for priority to be presented in an application data sheet.
Section 1.55(a)(3) is proposed to be amended to include provisions in current § 1.55(a)(1)(ii) and to require that the claim for priority be made and a certified copy of the foreign application filed within the time limit set forth in the Patent Cooperation Treaty (PCT) and the Regulations under the PCT in an application that entered the national stage from an international application after compliance with 35 U.S.C. 371. Since patent application publications will have a prior art effect as of the earliest priority date (for subject matter disclosed in the priority application) with respect to applications subject to 35 U.S.C. 102, as amended by the AIA, the Office needs to ensure that it has a copy of the priority application by the time of publication. The proposed time period of four months from the actual filing date of the application or sixteen months from the filing date of the prior foreign application is consistent with the international norm for when the certified copy of the foreign application needs to be filed in an application.
Section 1.55(a)(4) is proposed to be amended to require that if a nonprovisional application filed on or after March 16, 2013, claims the benefit of the filing date of a foreign application filed prior to March 16, 2013, and also contains, or contained at any time, a claim to a claimed invention that has an effective filing date on or after March 16, 2013, the applicant must provide a statement to that effect within the later of four months from the actual filing date of the application, four months from the date of entry into the national stage as set forth in § 1.491 in an international application, sixteen months from the filing date of the prior foreign application, or the date that a first claim to a claimed invention that has an effective filing date on or after March 16, 2013, is presented in the application. Section 1.55(a)(4) is also proposed to be amended to require that if a nonprovisional application filed on or after March 16, 2013, claims the benefit of the filing date of a foreign application filed prior to March 16, 2013, does not contain a claim to a claimed invention that has an effective filing date on or after March 16, 2013, but discloses subject matter not also disclosed in the foreign application, the applicant must provide a statement to that effect within the later of four months from the actual filing date of the later-filed application, four months from the date of entry into the national stage as set forth in § 1.491 in an international application, or sixteen months from the filing date of the prior foreign application.
Proposed § 1.55(a)(4) would not require that the applicant identify how many or which claims in the nonprovisional application have an effective filing date on or after March 16, 2013, or that the applicant identify the subject matter in the nonprovisional application not also disclosed in the foreign application. Proposed § 1.55(a)(4) would require only that the applicant state that there is a claim in the nonprovisional application that has an effective filing date on or after March 16, 2013 (e.g., “upon reasonable belief, this application contains at least one claim that has an effective filing date on or after March 16, 2013”), or the applicant state that there is subject matter in the nonprovisional application not also disclosed in the foreign application (e.g., “upon reasonable belief, this application contains subject matter not also disclosed in the foreign application).
If an applicant fails to timely provide such a statement and then later indicates that the nonprovisional application contains a claim having an effective filing date on or after March 16, 2013, or subject matter not also disclosed in the foreign application, the Office may issue a requirement for information under § 1.105 requiring the applicant to identify where (by page and line or paragraph number) there is written description support under AIA 35 U.S.C. 112(a) in the foreign application for the remaining claims in the nonprovisional application. Likewise, if the applicant later seeks to retract a previous statement that the nonprovisional application contains a claim having an effective filing date on or after March 16, 2013, or subject matter not also disclosed in the foreign application, the Office may issue a requirement for information under § 1.105 requiring the applicant to identify where (by page and line or paragraph number) there is written description support under AIA 35 U.S.C. 112(a) in the foreign application for each claim in the nonprovisional application.
This information is needed to assist the Office in determining whether the application is subject to 35 U.S.C. 102 and 103 as amended by the AIA or 35 U.S.C. 102 and 103 in effect on March 15, 2013. If the Office must determine on its own the effective filing date of every claim ever presented in an application filed on or after March 16, 2013, that claims priority to or the benefit of a foreign application filed prior to March 16, 2013, examination costs will significantly increase. This proposed provision is tailored to the transition to 35 U.S.C. 102 and 103 under the AIA. Thus, for a nonprovisional application filed on or after March 16, 2013, that claims the benefit of the filing date of a foreign application, the applicant would not be required to provide any statement if: (1) The nonprovisional application discloses only subject matter also disclosed in a foreign application filed prior to March 16, 2013; or (2) the nonprovisional application claims only the benefit of the filing date of a foreign application filed on or after March 16, 2013.
Section 1.55(c) as proposed contains the provisions regarding waiver of claims for priority and acceptance of unintentionally delayed claims. Section 1.55(c) is proposed to be amended to reference claims for priority under 35 U.S.C. 119(a) through (d) or (f), or 365(a) or 365(b). Section 1.55(c) is proposed to
Section 1.55(d) as proposed contains provisions for the priority document exchange program.
Section 1.55(e) as proposed contains the provisions of current § 1.55(a)(2)-(4). In view of the time period in proposed § 1.55(a), the provisions in current § 1.55(a)(2) and (a)(3) are less relevant, but these provisions are still needed to cover situations where the Office is examining an application within four months from the filing date of the application such as an application examined under the Office's Track I prioritized examination program.
Furthermore, § 1.55(e)(3) as proposed continues to permit the Office to require an English language translation of a non-English language foreign application. Finally, § 1.55(e)(2)(i) and (e)(3)(i) as proposed also reference a derivation proceeding (in addition to an interference) as a situation in which the Office may require the claim for priority and the certified copy, as well as an English language translation, of the foreign application to be submitted earlier.
Section 1.55(f) is proposed to be added to provide that the time periods set forth in § 1.55 are not extendable. The time periods set forth in § 1.55 are currently not extendable. This provision simply avoids the need to separate that the time period is not extendable with respect to each time period set in in § 1.55.
Section 1.78(a) as proposed addresses claims under 35 U.S.C. 119(e) for the benefit of a prior-filed provisional application. Under 35 U.S.C. 119(e)(1), a provisional application must disclose the invention claimed in at least one claim of the later-filed application in the manner provided by 35 U.S.C. 112(a) (except for the requirement to disclose the best mode) for the later-filed application to receive the benefit of the filing date of the provisional application.
Section 1.78(a)(1) as proposed provides that the nonprovisional application or international application designating the United States of America must be filed not later than twelve months after the date on which the provisional application was filed, and that this twelve-month period is subject to 35 U.S.C. 21(b) and 1.7(a). As discussed previously, 35 U.S.C. 21(b) and 1.7(a) provide that when the day, or the last day, for taking any action (e.g., filing a nonprovisional application within twelve months of the date on which the provisional application was filed) or paying any fee in the Office falls on Saturday, Sunday, or a Federal holiday within the District of Columbia, the action may be taken, or fee paid, on the next succeeding secular or business day.
Section 1.78(a)(3) is proposed to be amended to require that if a nonprovisional application filed on or after March 16, 2013, claims the benefit of the filing date of a provisional application filed prior to March 16, 2013, and also contains, or contained at any time, a claim to a claimed invention that has an effective filing date on or after March 16, 2013, the applicant must provide a statement to that effect within the later of four months from the actual filing date of the later-filed application, four months from the date of entry into the national stage as set forth in § 1.491 in an international application, sixteen months from the filing date of the prior-filed provisional application, or the date that a first claim to a claimed invention that has an effective filing date on or after March 16, 2013, is presented in the application. Section 1.78(a)(3) is also proposed to be amended to require that if a nonprovisional application filed on or after March 16, 2013, claims the benefit of the filing date of a provisional application filed prior to March 16, 2013, does not contain a claim to a claimed invention that has an effective filing date on or after March 16, 2013, but discloses subject matter not also disclosed in the provisional application, the applicant must provide a statement to that effect within the later of four months from the actual filing date of the later-filed application, four months from the date of entry into the national stage as set forth in § 1.491 in an international application, or sixteen months from the filing date of the prior-filed provisional application.
Proposed § 1.78(a)(3) would not require that the applicant identify how many or which claims in the nonprovisional application have an effective filing date on or after March 16, 2013, or that the applicant identify the subject matter in the nonprovisional application not also disclosed in the provisional application. Proposed § 1.78(a)(3) would require only that the applicant state that there is a claim in the nonprovisional application that has an effective filing date on or after March 16, 2013 (e.g., “upon reasonable belief, this application contains at least one claim that has an effective filing date on or after March 16, 2013”), or the applicant state that there is subject matter in the nonprovisional application not also disclosed in the provisional application (e.g., “upon reasonable belief, this application contains subject matter not also disclosed in provisional application No. XX/XXX,XXX”).
If an applicant fails to timely provide such a statement and then later indicates that the nonprovisional application contains a claim having an effective filing date on or after March 16, 2013, or subject matter not also disclosed in the provisional application, the Office may issue a requirement for information under § 1.105 requiring the applicant to identify where (by page and line or paragraph number) there is written description support under AIA 35 U.S.C. 112(a) in the provisional application for the remaining claims in the nonprovisional application. Likewise, if the applicant later seeks to retract a previous statement that the nonprovisional application contains a claim having an effective filing date on or after March 16, 2013, or subject matter not also disclosed in the provisional application, the Office may issue a requirement for information under § 1.105 requiring the applicant to identify where (by page and line or paragraph number) there is written description support under AIA 35 U.S.C. 112(a) in the provisional application for each claim in the nonprovisional application.
This information is needed to assist the Office in determining whether the application is subject to 35 U.S.C. 102 and 103 as amended by the AIA or 35 U.S.C. 102 and 103 in effect on March 15, 2013. As discussed previously, if the Office must determine on its own the effective filing date of every claim ever presented in an application filed on or after March 16, 2013, that claims priority to or the benefit of a provisional application filed prior to March 16, 2013, examination costs will significantly increase. This proposed provision is tailored to the transition to 35 U.S.C. 102 and 103 under the AIA. Thus, for a nonprovisional application filed on or after March 16, 2013, that claims the benefit of the filing date of a provisional application, the applicant would not be required to provide any statement if: (1) The nonprovisional application discloses only subject matter also disclosed in a provisional application filed prior to March 16, 2013; or (2) the nonprovisional application claims only the benefit of the filing date of a provisional application filed on or after March 16, 2013.
Sections 1.78(a) and (c) as proposed require the reference to each prior-filed application to be included in an application data sheet.
Section 1.78(a) as proposed otherwise contains the provisions of current § 1.78(a)(4) and (a)(5).
Section 1.78(b) as proposed contains provisions relating to delayed claims under 35 U.S.C. 119(e) for the benefit of prior-filed provisional applications. Section 1.78(b) contains the provisions of current § 1.78(a)(6).
Section 1.78(c) as proposed contains provisions relating to claims under 35 U.S.C. 120, 121, or 365(c) for the benefit of a prior-filed nonprovisional or international application. Section 1.78(c)(1) as proposed provides that each prior-filed application must name as the inventor or a joint inventor an inventor named in the later-filed application. In addition, each prior-filed application must either be: (1) An international application entitled to a filing date in accordance with PCT Article 11 and designating the United States of America; or (2) a nonprovisional application under 35 U.S.C. 111(a) that is entitled to a filing date as set forth in § 1.53(b) or § 1.53(d) for which the basic filing fee set forth in § 1.16 has been paid within the
Section 1.78(c) as proposed does not contain a provision that the prior-filed application disclose the invention claimed in at least one claim of the later-filed application in the manner provided by 35 U.S.C. 112(a). For a later-filed application to receive the benefit of the filing date of a prior-filed application, 35 U.S.C. 120 requires that the prior-filed application disclose the invention claimed in at least one claim of the later-filed application in the manner provided by 35 U.S.C. 112(a) (except for the requirement to disclose the best mode). As discussed previously, § 1.78 as proposed pertains to claims to the benefit of a prior-filed application and the AIA draws a distinction between being entitled to the benefit of a prior-filed application and being entitled to claim the benefit of a prior-filed application.
Section 1.78(c)(2) is proposed to be amended to clarify that identifying the relationship of the applications means identifying whether the later-filed application is a continuation, divisional, or continuation-in-part of the prior-filed nonprovisional application or international application.
Section 1.78(c)(2) is also proposed to be amended to require that if a nonprovisional application filed on or after March 16, 2013, claims the benefit of the filing date of a nonprovisional application filed prior to March 16, 2013, and also contains, or contained at any time, a claim to a claimed invention that has an effective filing date on or after March 16, 2013, the applicant must provide a statement to that effect within the later of four months from the actual filing date of the later-filed application, four months from the date of entry into the national stage as set forth in § 1.491 in an international application, sixteen months from the filing date of the prior-filed nonprovisional application, or the date that a first claim to a claimed invention that has an effective filing date on or after March 16, 2013, is presented in the application. Section 1.78(c)(2) is also proposed to be amended to require that if a nonprovisional application filed on or after March 16, 2013, claims the benefit of the filing date of a nonprovisional application filed prior to March 16, 2013, does not contain a claim to a claimed invention that has an effective filing date on or after March 16, 2013, but discloses subject matter not also disclosed in the prior-filed nonprovisional application, the applicant must provide a statement to that effect within the later of four months from the actual filing date of the later-filed application, four months from the date of entry into the national stage as set forth in § 1.491 in an international application, or sixteen months from the filing date of the prior-filed nonprovisional application.
Proposed § 1.78(c)(2) would not require that the applicant identify how many or which claims in the later-filed nonprovisional application have an effective filing date on or after March 16, 2013, or that the applicant identify the subject matter in the later-filed nonprovisional application not also disclosed in the prior-filed nonprovisional application. Proposed § 1.78(c)(2) would require only that the applicant state that there is a claim in the later-filed nonprovisional application that has an effective filing date on or after March 16, 2013 (e.g., “upon reasonable belief, this application contains at least one claim that has an effective filing date on or after March 16, 2013”), or the applicant state that there is subject matter in the later-filed nonprovisional application not also disclosed in the prior-filed nonprovisional application (e.g., “upon reasonable belief, this application contains subject matter not also disclosed in application No. XX/XXX,XXX”).
If an applicant fails to timely provide such a statement and then later indicates that the later-filed nonprovisional application contains a claim having an effective filing date on or after March 16, 2013, or subject matter not also disclosed in the prior-filed nonprovisional application, the Office may issue a requirement for information under § 1.105 requiring the applicant to identify where (by page and line or paragraph number) there is written description support under AIA 35 U.S.C. 112(a) in the prior-filed nonprovisional application for the remaining claims in the later-filed nonprovisional application. Likewise, if the applicant later seeks to retract a previous statement that the later-filed nonprovisional application contains a claim having an effective filing date on or after March 16, 2013, or subject matter not also disclosed in the prior-filed nonprovisional application, the Office may issue a requirement for information under § 1.105 requiring the applicant to identify where (by page and line or paragraph number) there is written description support under AIA 35 U.S.C. 112(a) in the prior-filed nonprovisional application for each claim in the later-filed nonprovisional application.
This information is needed to assist the Office in determining whether the application is subject to 35 U.S.C. 102 and 103 as amended by the AIA or 35 U.S.C. 102 and 103 in effect on March 15, 2013. As discussed previously, if the Office must determine on its own the effective filing date of every claim ever presented in an application filed on or after March 16, 2013, that claims priority to or the benefit of a nonprovisional application filed prior to March 16, 2013, examination costs will significantly increase. This proposed provision is tailored to the transition to 35 U.S.C. 102 and 103 under the AIA. Thus, for a nonprovisional application filed on or after March 16, 2013, that claims the benefit of the filing date of a nonprovisional application, the applicant would not be required to provide any statement if: (1) The nonprovisional application discloses only subject matter also disclosed in a prior-filed nonprovisional application filed prior to March 16, 2013; or (2) the nonprovisional application claims only the benefit of the filing date of a nonprovisional application filed on or after March 16, 2013.
Sections 1.78(c)(3) through (c)(5) as proposed contain the provisions of current § 1.78(a)(2). Section 1.78(c)(5) as proposed also provides that cross-references to applications for which a benefit is not claimed must not be included in an application data sheet (§ 1.76(b)(5)). Including cross-references to applications for which a benefit is not claimed in the application data sheet may lead the Office to inadvertently schedule the application for publication under 35 U.S.C. 122(b) and § 1.211
Section 1.78(d) as proposed contains provisions relating to delayed claims under 35 U.S.C. 120, 121, or 365(c) for the benefit of prior-filed nonprovisional or international applications. Section 1.78(d) as proposed contains the provisions of current § 1.78(a)(3).
Section 1.78(e) as proposed contains the provisions of current § 1.78(b) pertaining to applications containing conflicting claims.
Section 1.78(f) as proposed addresses applications or patents under reexamination that name different inventors and contain patentably indistinct claims. The provisions are similar to the provisions of current § 1.78(c), but the language has been amended to refer to “the effective filing date of the later claimed invention” in place of “at the time the later invention was made” in view of the change to a first inventor to file system.
Section 1.78(g) as proposed provides that the time periods set forth in § 1.78 are not extendable.
Sections 1.53 and 1.76 would be amended for consistency with the reorganization of § 1.78.
Section 1.104(c)(4)(i) as proposed provides that subject matter that qualifies as prior art under 35 U.S.C. 102(a)(2) and a claimed invention will be treated as commonly owned for purposes of 35 U.S.C. 102(b)(2)(C) if the applicant provides a statement that the prior art and the claimed invention, not later than the effective filing date of the claimed invention, were owned by the same person or subject to an obligation of assignment to the same person.
Section 1.104(c)(4)(ii) as proposed addresses joint research agreements and provides that subject matter that qualifies as prior art under 35 U.S.C. 102(a)(2) and a claimed invention will be treated as commonly owned for purposes of 35 U.S.C. 102(b)(2)(C) on the basis of a joint research agreement under 35 U.S.C. 102(c) if: (1) The applicant provides a statement that the prior art was developed and the claimed invention was made by or on behalf of one or more parties to a joint research agreement, within the meaning of 35 U.S.C. 100(h) and § 1.9(e), that was in effect on or before the effective filing date of the claimed invention, and the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and (2) the application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the joint research agreement.
Section 1.104(c)(5) is proposed to be amended to include the provisions that pertain to commonly owned or joint research agreement subject matter for applications subject to 35 U.S.C. 102 and 103 in effect prior to the effective date of section 3 of the AIA. Thus, § 1.104(c)(5) as proposed is applicable to applications that are subject to 35 U.S.C. 102 and 103 in effect prior to March 16, 2013.
Section 1.104(c)(5)(i) as proposed provides that subject matter which qualifies as prior art under 35 U.S.C. 102(e), (f), or (g) in effect prior to March 16, 2013, and a claimed invention in an application or a patent granted on or after December 10, 2004, will be treated as commonly owned for purposes of 35 U.S.C. 103(c) in effect prior to March 16, 2013, if the applicant provides a statement to the effect that the prior art and the claimed invention, at the time the claimed invention was made, were owned by the same person or subject to an obligation of assignment to the same person.
Section 1.104(c)(5)(ii) as proposed addresses joint research agreements and provides that subject matter which qualifies as prior art under 35 U.S.C. 102(e), (f), or (g) in effect prior to March 16, 2013, and a claimed invention in an application or a patent granted on or after December 10, 2004, will be treated as commonly owned for purposes of 35 U.S.C. 103(c) in effect prior to March 16, 2013, on the basis of a joint research agreement under 35 U.S.C. 103(c)(2) in effect prior to March 16, 2013 if: (1) the applicant provides a statement to the effect that the prior art and the claimed invention were made by or on behalf of the parties to a joint research agreement, within the meaning of 35 U.S.C. 100(h) and § 1.9(e), that was in effect on or before the date the claimed invention was made, and that the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and (2) the application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the joint research agreement. Section 1.104(c)(5)(ii) as proposed makes reference to the definition of joint research agreement contained in 35 U.S.C. 100(h) and § 1.9(e). The AIA did not change the definition of a joint research agreement, but merely moved the definition from 35 U.S.C. 103(c)(3) to 35 U.S.C. 100(h). Thus, the Office proposes to reference the definition of joint research agreement in 35 U.S.C. 100(h) in § 1.104(c)(5)(ii) for simplicity.
Section 1.104(c)(6) is proposed to be added to clarify that patents issued prior to December 10, 2004, from applications filed prior to November 29, 1999, are subject to 35 U.S.C. 103(c) in effect on November 28, 1999.
The provisions of current § 1.104(c)(5) pertain to statutory invention registrations and are thus proposed to be removed. See discussion of the provisions of §§ 1.293 through 1.297.
Section 1.130(a) as proposed provides a mechanism for filing an affidavit or declaration to establish that a disclosure is not prior art in accordance with 35 U.S.C. 102(b) as amended by the AIA. Proposed § 1.130, like §§ 1.131 and 1.132, provides a mechanism for the submission of evidence to disqualify a disclosure as prior art or otherwise
Section 1.130(a)(1) as proposed provides for the situation in which: (1) The disclosure on which the rejection is based was by the inventor or joint inventor; or (2) there was a public disclosure of the subject matter on which the rejection is based by the inventor or a joint inventor prior to the disclosure of the subject matter on which the rejection is based or the date the patent or application on which the rejection is based was effectively filed.
Section 1.130(a)(2) as proposed provides for the situation in which: (1) The disclosure on which the rejection is based was by a party who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or (2) the subject matter disclosed had been publicly disclosed by a party who obtained the subject matter disclosed directly or indirectly from the inventor prior to the disclosure of the subject matter on which the rejection is based or the date the patent or application on which the rejection is based was effectively filed.
Section 1.130(b) as proposed pertains to affidavits or declarations under § 1.130(a)(1) in the situation in which the disclosure on which the rejection is based was by the inventor or joint inventor. Section 1.130(b) as proposed provides that if the disclosure on which the rejection is based is by the inventor or a joint inventor, the affidavit or declaration under § 1.130(a)(1) must provide a satisfactory showing that the inventor or a joint inventor is in fact the inventor of the subject matter of the disclosure. The applicant or patent owner must provide a satisfactory showing that the inventor or a joint inventor is the actual inventor of the subject matter of the disclosure.
Section 1.130(c) as proposed pertains to affidavits or declarations under § 1.130(a)(1) in the situation in which the disclosure on which the rejection is based is not by the inventor or a joint inventor, and thus the applicant or patent owner is attempting to overcome the rejection by showing an earlier public disclosure of the subject matter on which the rejection is based by the inventor or a joint inventor. Section 1.130(c) as proposed provides that in this situation the affidavit or declaration must identify and provide the date of the earlier disclosure of the subject matter by the inventor or a joint inventor and provide a satisfactory showing that the inventor or a joint inventor is the inventor of the subject matter of the earlier disclosure. Section 1.130(c) as proposed also provides that if the earlier disclosure was a printed publication, the affidavit or declaration must be accompanied by a copy of the printed publication. Section 1.130(c) as proposed further provides that if the earlier disclosure was not a printed publication, the affidavit or declaration must describe the disclosure with sufficient detail and particularity to determine that the disclosure is a public disclosure of the subject matter on which the rejection is based. The Office needs these details to determine not only whether the inventor is entitled to disqualify the disclosure under 35 U.S.C. 102(b), but also because if the rejection is based upon a U.S. patent application publication or WIPO published application of another application and such other application is also pending before the Office, this prior disclosure may be prior art under 35 U.S.C. 102(a) to the other application and the Office may need this information to avoid granting two patents on the same invention.
Section 1.130(d) as proposed pertains to affidavits or declarations under § 1.130(a)(2) in the situation in which the disclosure on which the rejection is based was by a party who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor. Section 1.130(d) as proposed provides that if the disclosure on which the rejection is based is by a party who obtained the subject matter disclosed directly or indirectly from the inventor, an affidavit or declaration under § 1.130(a)(2) (alleging derivation) must provide a satisfactory showing that the inventor or a joint inventor is the inventor of the subject matter of the disclosure and directly or indirectly communicated the subject matter of the disclosure to the party. Specifically, the applicant or patent owner must show that a named inventor actually invented the subject matter of the disclosure.
Section 1.130(e) as proposed pertains to affidavits or declarations under § 1.130(a)(2) in the situation in which the disclosure on which the rejection is based is not by a party who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor, and thus the applicant or patent owner is attempting to overcome the rejection by showing an earlier public disclosure of the subject matter on which the rejection is based by a party who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor. Section 1.130(e) as proposed provides that in this situation an affidavit or declaration under § 1.130(a)(2) must identify and provide the date of the earlier disclosure of the subject matter by the party who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor and must also provide a satisfactory showing that the inventor or a joint inventor is the inventor of the subject matter of the earlier disclosure and directly or indirectly communicated the subject matter of the disclosure to the party. Section 1.130(e) as proposed also provides that if the earlier disclosure was a printed publication, the affidavit
Section 1.130 as proposed does not contain a provision that “[o]riginal exhibits of drawings or records, or photocopies thereof, must accompany and form part of the affidavit or declaration or their absence must be satisfactorily explained” (
Section 1.130(f) as proposed provides that the provisions of § 1.130 are not available if the rejection is based upon a disclosure made more than one year before the effective filing date of the claimed invention. This provision is because a disclosure made more than one year before the effective filing date of the claimed invention is prior art under 35 U.S.C. 102(a)(1), and may not be disqualified under 35 U.S.C. 102(b)(1). Note that the provisions of § 1.130 are available to establish that a rejection under 35 U.S.C. 102(a)(2) is based on an application or patent that was effectively filed more than one year before the effective filing date of the application under examination, but not publicly disclosed more than one year before such effective filing date, where the subject matter disclosed was obtained directly or indirectly from the inventor or a joint inventor. As stated previously, if the application or patent was published more than one year before the effective filing date of the application under examination, the applicant would not be able to remove the reference as prior art under 35 U.S.C. 102(a)(1).
Section 1.130(f) as proposed also provides that the Office may require the applicant to file a petition for a derivation proceeding pursuant to § 42.401
Section 1.130(g) as proposed provides that the provisions of § 1.130 apply to applications for patent, and to any patent issuing thereon, that is subject to 35 U.S.C. 102 as amended by the AIA.
Section 1.131(a) is proposed to be amended to refer to 35 U.S.C. 102(e) as 35 U.S.C. 102(e) in effect on March 15, 2013.
Section 1.131(b) is proposed to be amended to provide that the showing of facts provided for in § 1.131(b) is applicable to an oath or declaration under § 1.131(a).
Section 1.131(c) is proposed to be added to include the current provisions of § 1.130, but revised to refer to 35 U.S.C. 102(b) as 35 U.S.C. 102(b) in effect on March 15, 2013, and to refer to 35 U.S.C. 104 as 35 U.S.C. 104 in effect on March 15, 2013.
Section 1.131(d) is proposed to be added to provide that the provisions of § 1.131 apply to applications for patent, and to any patent issuing thereon, that contains, or contained at any time: (1) A claim to a claimed invention that has an effective filing date as defined in 35 U.S.C. 100(i) that is before March 16, 2013; or (2) a specific reference under 35 U.S.C. 120, 121, or 365(c) to any patent or application that contains, or contained at any time, a claim to a claimed invention that has an effective filing date as defined in 35 U.S.C. 100(i) that is before March 16, 2013.
Section 1.131(e) is proposed to be added to provide that, in an application for patent to which the provisions of § 1.130 apply, and to any patent issuing thereon, the provisions of § 1.131 are applicable only with respect to a rejection under 35 U.S.C. 102(g) in effect on March 15, 2013. Section 1.130(g) as proposed provides that the provisions of § 1.130 apply to applications for patent, and to any patent issuing thereon, that is subject to 35 U.S.C. 102 as amended by the AIA. The date of invention is not relevant under the 35 U.S.C. 102 as amended by the AIA. Thus, in an application for patent to which the provisions of § 1.130 apply, and to any patent issuing thereon, a prior art disclosure under 35 U.S.C. 102 as amended by the AIA could not be disqualified or antedated under the provisions of § 1.131 by showing that the inventor previously invented the claimed subject matter.
Accordingly, prior notice and opportunity for public comment are not required pursuant to 5 U.S.C. 553(b) or (c) (or any other law).
Nevertheless, for the reasons set forth herein, the Deputy General Counsel for General Law of the United States Patent and Trademark Office has certified to the Chief Counsel for Advocacy of the Small Business Administration that changes proposed in this notice will not have a significant economic impact on a substantial number of small entities.
The Office is providing for the submission of affidavits or declarations showing that: (1) A disclosure upon which a claim rejection is based was by the inventor or joint inventor or by a party who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or (2) there was a prior public disclosure by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor of an application. The requirements of these proposed provisions are comparable to the current requirements for affidavits and declarations under 37 CFR 1.131 and 1.132 for an applicant to show that a prior art disclosure is the applicant's own work (see case law cited in MPEP § 2132.01) or that a disclosure was derived from the applicant (see case law cited in MPEP § 2137). In addition, the changes proposed in this notice would not result in additional small entities being subject to the need to submit such an affidavit or declaration.
The Office is also proposing to require that the certified copy of the foreign application be filed within the later of four months from the actual filing date of the application or sixteen months from the filing date of the prior foreign application. An applicant is currently required to file the certified copy of the foreign application when deemed necessary by the examiner, but no later than the date the patent is granted (37 CFR 1.55(a)). The proposed time period of four months from the actual filing date of the application or sixteen months from the filing date of the prior foreign application should not have a significant economic impact as sixteen months from the filing date of the prior foreign application is the international norm for when the certified copy of the foreign application needs to be filed in an application (PCT Rule 17). Based upon the data in the Office's Patent Application Locating and Monitoring (PALM) system, 354,248 (98,902 small entity) nonprovisional applications were filed in FY 2011. Of these, 69,733 (7,943 small entity) nonprovisional applications claimed the benefit of a foreign priority application, and 65,900 (15,031 small entity) nonprovisional applications resulted from the entry of an international application into the national stage.
The Office is also proposing the following requirements for nonprovisional applications filed on or after March 16, 2013, that claim the benefit of the filing date of a foreign, provisional, or nonprovisional application filed prior to March 16, 2013: (1) If such a nonprovisional application contains at any time a claim to a claimed invention that has an effective filing date on or after March 16, 2013, the applicant must provide a statement to that effect within the later of four months from the actual filing date of the later-filed application, four months from the date of entry into the national stage in an international application, sixteen months from the filing date of the prior-filed application, or the date that a first claim to a claimed invention that has an effective filing date on or after March 16, 2013, is presented in the application; and (2) if such a nonprovisional application does not contain a claim to a claimed invention that has an effective filing date on or after March 16, 2013, but discloses subject matter not also disclosed in the foreign, provisional, or nonprovisional application, the applicant must provide a statement to that effect within the later of four months from the actual filing date of the later-filed application, four months from the date of entry into the national stage in an international application, or sixteen months from the filing date of the prior-filed application.
Based upon the data in the Office's PALM system, of the 354,248 (98,902 small entity) nonprovisional applications filed in FY 2011, 11,557 (6,833 small entity) nonprovisional applications were identified as continuation-in-part applications, 47,380 (12,444 small entity) nonprovisional applications were identified as continuation applications, 21,943 (4,934 small entity) nonprovisional applications were identified as divisional applications, and 55,492 (27,367 small entity) nonprovisional applications claimed the benefit of provisional application. As discussed above, 69,733 (7,943 small entity) nonprovisional applications claimed the benefit of a foreign priority application, and 65,900 (15,031 small entity) nonprovisional applications resulted from the entry of an international application into the national stage. The Office's experience is that the majority of nonprovisional applications that claim the benefit of the filing date of a foreign, provisional, or nonprovisional application do not disclose or claim subject matter not also disclosed in the foreign, provisional, or nonprovisional application, but the Office generally makes such determinations only when necessary to the examination of the nonprovisional application.
Accordingly, the changes proposed in this notice will not have a significant economic impact on a substantial number of small entities.
I.
The Office will use the statement that a nonprovisional application filed on or after March 16, 2013, that claims the benefit of the filing date of a foreign, provisional, or nonprovisional application filed prior to March 16, 2013, contains, or contained at any time, a claim to a claimed invention that has an effective filing date on or after March 16, 2013, to readily determine whether the nonprovisional application is subject to the changes to 35 U.S.C. 102 and 103 in the AIA. The Office will also use the statement that a nonprovisional application filed on or after March 16, 2013, that claims the benefit of the filing date of a foreign, provisional, or nonprovisional application filed prior to March 16, 2013, does not contain a claim to a claimed invention that has an effective filing date on or after March 16, 2013, but discloses subject matter
The Office is soliciting comments to: (1) Evaluate whether the proposed information requirement is necessary for the proper performance of the functions of the Office, including whether the information will have practical utility; (2) evaluate the accuracy of the Office's estimate of the burden; (3) enhance the quality, utility, and clarity of the information to be collected; and (4) minimize the burden of collecting the information on those who are to respond, including by using appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Please send comments on or before September 24, 2012 to Mail Stop Comments—Patents, Commissioner for Patents, P.O. Box 1450, Alexandria, VA, 22313-1450, marked to the attention of Raul Tamayo, Legal Advisor, Office of Patent Legal Administration, Office of the Deputy Commissioner for Patent Examination Policy. Comments should also be submitted to the Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10202, 725 17th Street NW., Washington, DC 20503, Attention: Desk Officer for the Patent and Trademark Office.
Notwithstanding any other provision of law, no person is required to respond to, nor shall a 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.
Administrative practice and procedure, Courts, Freedom of information, Inventions and patents, Reporting and recordkeeping requirements, Small businesses.
For the reasons stated in the preamble, the USPTO proposes to amend 1 CFR part 37 as follows:
1. The authority citation for 37 CFR part 1 continues to read as follows:
35 U.S.C. 2(b)(2).
2. Section 1.9 is amended by adding paragraphs (d), (e) and (f) to read as follows:
(d)(1) The term inventor or inventorship as used in this chapter means the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention.
(2) The term joint inventor or coinventor as used in this chapter means any one of the individuals who invented or discovered the subject matter of a joint invention.
(e) The term joint research agreement as used in this chapter means a written contract, grant, or cooperative agreement entered into by two or more persons or entities for the performance of experimental, developmental, or research work in the field of the claimed invention.
(f) The term claimed invention as used in this chapter means the subject matter defined by a claim in a patent or an application for a patent.
3. Section 1.53 is amended by revising paragraph (j) to read as follows:
(j)
4. Section 1.55 is amended by revising paragraphs (a), (c), and (d), and by adding paragraphs (e) and (f) to read as follows:
(a) An applicant in a nonprovisional application may claim the benefit of the filing date of one or more prior foreign applications under the conditions specified in 35 U.S.C. 119(a) through (d) and (f), 172, and 365(a) and (b).
(1) The nonprovisional application must be filed not later than twelve months after the date on which the foreign application was filed. This twelve-month period is subject to 35 U.S.C. 21(b) and § 1.7(a).
(2) In an original application filed under 35 U.S.C. 111(a), the claim for priority as well as a certified copy of the foreign application must both be filed within the later of four months from the actual filing date of the application or sixteen months from the filing date of the prior foreign application. The claim for priority must be presented in an application data sheet (§ 1.76(b)(6)). The claim must identify the foreign application for which priority is claimed, as well as any foreign application for the same subject matter having a filing date before that of the application for which priority is claimed, by specifying the application number, country (or intellectual property authority), day, month, and year of its filing. The time periods in this paragraph do not apply in an application under 35 U.S.C. 111(a) if the application is:
(i) A design application; or
(ii) An application filed before November 29, 2000.
(3) In an application that entered the national stage from an international application after compliance with 35 U.S.C. 371, the claim for priority must be made and a certified copy of the foreign application filed within the time
(4) If a nonprovisional application filed on or after March 16, 2013, claims the benefit of the filing date of a foreign application filed prior to March 16, 2013, and also contains, or contained at any time, a claim to a claimed invention that has an effective filing date on or after March 16, 2013, the applicant must provide a statement to that effect within the later of four months from the actual filing date of the application, four months from the date of entry into the national stage as set forth in § 1.491 in an international application, sixteen months from the filing date of the prior foreign application, or the date that a first claim to a claimed invention that has an effective filing date on or after March 16, 2013, is presented in the application. In addition, if a nonprovisional application filed on or after March 16, 2013, claims the benefit of the filing date of a foreign application filed prior to March 16, 2013, does not contain a claim to a claimed invention that has an effective filing date on or after March 16, 2013, but discloses subject matter not also disclosed in the foreign application, the applicant must provide a statement to that effect within the later of four months from the actual filing date of the later-filed application, four months from the date of entry into the national stage as set forth in § 1.491 in an international application, or sixteen months from the filing date of the prior foreign application.
(c) Unless such claim is accepted in accordance with the provisions of this paragraph, any claim for priority under 35 U.S.C. 119(a) through (d) or (f), or 365(a) or (b), not presented in an application data sheet (§ 1.76(b)(6)) within the time period provided by paragraph (a)(2) of this section is considered to have been waived. If a claim for priority under 35 U.S.C. 119(a) through (d) or (f), or 365(a) or (b) is presented after the time period provided by paragraph (a)(2) of this section, the claim may be accepted if the claim identifying the prior foreign application by specifying its application number, country (or intellectual property authority), and the day, month, and year of its filing was unintentionally delayed. A petition to accept a delayed claim for priority under 35 U.S.C. 119(a) through (d) or (f), or 365(a) or (b), must be accompanied by:
(1) The claim under 35 U.S.C. 119(a) through (d) or (f), or 365(a) or (b), and this section to the prior foreign application, unless previously submitted;
(2) A certified copy of the foreign application, unless previously submitted;
(3) The surcharge set forth in § 1.17(t); and
(4) A statement that the entire delay between the date the claim was due under paragraph (a) of this section and the date the claim was filed was unintentional. The Director may require additional information where there is a question whether the delay was unintentional.
(d)(1) The requirement in this section for the certified copy of the foreign application will be considered satisfied if:
(i) The applicant files a request, in a separate document, that the Office obtain a copy of the foreign application from a foreign intellectual property office participating with the Office in a bilateral or multilateral priority document exchange agreement (participating foreign intellectual property office (see § 1.14 (h)(1));
(ii) The foreign application is identified in an application data sheet (§ 1.76(a)(6)); and
(iii) The copy of the foreign application is received by the Office within the period set forth in paragraph (a) of this section or by such later time as may be set by the Office.
(2) If the foreign application was filed at a foreign intellectual property office that is not participating with the Office in a priority document exchange agreement, but a copy of the foreign application was filed in an application subsequently filed in a participating foreign intellectual property office, the request under paragraph (d)(1)(i) of this section must identify the participating foreign intellectual property office and the application number of the subsequent application in which a copy of the foreign application was filed.
(e)(1) The claim for priority and the certified copy of the foreign application specified in 35 U.S.C. 119(b) or PCT Rule 17 must, in any event, be filed within the pendency of the application and before the patent is granted. If the claim for priority or the certified copy of the foreign application is filed after the date the issue fee is paid, it must be accompanied by the processing fee set forth in § 1.17(i), but the patent will not include the priority claim unless corrected by a certificate of correction under 35 U.S.C. 255 and § 1.323.
(2) The Office may require that the claim for priority and the certified copy of the foreign application be filed earlier than provided in paragraph (a) or (e)(1) of this section:
(i) When the application is involved in an interference (see § 41.202 of this title) or derivation (see part 42 of this title) proceeding;
(ii) When necessary to overcome the date of a reference relied upon by the examiner; or
(iii) When deemed necessary by the examiner.
(3) An English language translation of a non-English language foreign application is not required except:
(i) When the application is involved in an interference (see § 41.202 of this title) or derivation (see part 42 of this title) proceeding;
(ii) When necessary to overcome the date of a reference relied upon by the examiner; or
(iii) When specifically required by the examiner.
(4) If an English language translation of a non-English language foreign application is required, it must be filed together with a statement that the translation of the certified copy is accurate.
(f) The time periods set forth in this section are not extendable.
5. Section 1.71 is amended by revising paragraph (g)(1) to read as follows:
(g)(1) The specification may disclose or be amended to disclose the names of the parties to a joint research agreement (35 U.S.C. 102(c)(3)).
6. Section 1.77 is amended by redesignating paragraphs (b)(6) through (b)(12) as paragraphs (b)(7) through (b)(13) and adding a new paragraph (b)(6) to read as follows:
(b) * * *
(6) Statement regarding prior disclosures by the inventor or a joint inventor.
7. Section 1.78 is revised to read as follows:
(a)
(1) The nonprovisional application or international application designating
(2) Each prior-filed provisional application must name as the inventor or a joint inventor an inventor named in the later-filed application. In addition, each prior-filed provisional application must be entitled to a filing date as set forth in § 1.53(c) and the basic filing fee set forth in § 1.16(d) must have been paid for such provisional application within the time period set forth in § 1.53(g).
(3) Any nonprovisional application or international application designating the United States of America that claims the benefit of one or more prior-filed provisional applications must contain, or be amended to contain, a reference to each such prior-filed provisional application, identifying it by the provisional application number (consisting of series code and serial number). If the later-filed application is a nonprovisional application, the reference required by this paragraph must be included in an application data sheet (§ 1.76(b)(5)). If a nonprovisional application filed on or after March 16, 2013, claims the benefit of the filing date of a provisional application filed prior to March 16, 2013, and also contains, or contained at any time, a claim to a claimed invention that has an effective filing date on or after March 16, 2013, the applicant must provide a statement to that effect within the later of four months from the actual filing date of the later-filed application, four months from the date of entry into the national stage as set forth in § 1.491 in an international application, sixteen months from the filing date of the prior-filed provisional application, or the date that a first claim to a claimed invention that has an effective filing date on or after March 16, 2013, is presented in the application. In addition, if a nonprovisional application filed on or after March 16, 2013, claims the benefit of the filing date of a provisional application filed prior to March 16, 2013, does not contain a claim to a claimed invention that has an effective filing date on or after March 16, 2013, but discloses subject matter not also disclosed in the provisional application, the applicant must provide a statement to that effect within the later of four months from the actual filing date of the later-filed application, four months from the date of entry into the national stage as set forth in § 1.491 in an international application, or sixteen months from the filing date of the prior-filed provisional application.
(4) The reference required by paragraph (a)(3) of this section must be submitted during the pendency of the later-filed application. If the later-filed application is an application filed under 35 U.S.C. 111(a), this reference must also be submitted within the later of four months from the actual filing date of the later-filed application or sixteen months from the filing date of the prior-filed provisional application. If the later-filed application is a nonprovisional application entering the national stage from an international application under 35 U.S.C. 371, this reference must also be submitted within the later of four months from the date on which the national stage commenced under 35 U.S.C. 371(b) or (f) in the later-filed international application or sixteen months from the filing date of the prior-filed provisional application. Except as provided in paragraph (b) of this section, failure to timely submit the reference is considered a waiver of any benefit under 35 U.S.C. 119(e) of the prior-filed provisional application. The time periods in this paragraph do not apply if the later-filed application is:
(i) An application filed under 35 U.S.C. 111(a) before November 29, 2000; or
(ii) An international application filed under 35 U.S.C. 363 before November 29, 2000.
(5) If the prior-filed provisional application was filed in a language other than English and both an English-language translation of the prior-filed provisional application and a statement that the translation is accurate were not previously filed in the prior-filed provisional application, applicant will be notified and given a period of time within which to file the translation and the statement in the prior-filed provisional application. If the notice is mailed in a pending nonprovisional application, a timely reply to such a notice must include either a confirmation that the translation and statement were filed in the provisional application or an application data sheet withdrawing the benefit claim to avoid abandonment of the nonprovisional application. The translation and statement may be filed in the provisional application, even if the provisional application has become abandoned.
(b)
(1) The reference required by 35 U.S.C. 119(e) and paragraph (a)(3) of this section to the prior-filed provisional application, unless previously submitted;
(2) The surcharge set forth in § 1.17(t); and
(3) A statement that the entire delay between the date the claim was due under paragraph (a)(4) of this section and the date the claim was filed was unintentional. The Director may require additional information where there is a question whether the delay was unintentional.
(c)
(1) Each prior-filed application must name as the inventor or a joint inventor an inventor named in the later-filed application. In addition, each prior-filed application must either be:
(i) An international application entitled to a filing date in accordance with PCT Article 11 and designating the United States of America; or
(ii) A nonprovisional application under 35 U.S.C. 111(a) that is entitled to a filing date as set forth in § 1.53(b) or § 1.53(d) for which the basic filing fee set forth in § 1.16 has been paid within the pendency of the application.
(2) Except for a continued prosecution application filed under § 1.53(d), any nonprovisional application, or international application designating the United States of America, that claims the benefit of one or more prior-filed nonprovisional applications or international applications designating the United States of America must contain or be amended to contain a reference to each such prior-filed application, identifying it by application number (consisting of the series code
(3) The reference required by 35 U.S.C. 120 and paragraph (c)(2) of this section must be submitted during the pendency of the later-filed application. If the later-filed application is an application filed under 35 U.S.C. 111(a), this reference must also be submitted within the later of four months from the actual filing date of the later-filed application or sixteen months from the filing date of the prior-filed application. If the later-filed application is a nonprovisional application entering the national stage from an international application under 35 U.S.C. 371, this reference must also be submitted within the later of four months from the date on which the national stage commenced under 35 U.S.C. 371(b) or (f) in the later-filed international application or sixteen months from the filing date of the prior-filed application. Except as provided in paragraph (d) of this section, failure to timely submit the reference required by 35 U.S.C. 120 and paragraph (c)(2) of this section is considered a waiver of any benefit under 35 U.S.C. 120, 121, or 365(c) to the prior-filed application. The time periods in this paragraph do not apply if the later-filed application is:
(i) An application for a design patent;
(ii) An application filed under 35 U.S.C. 111(a) before November 29, 2000; or
(iii) An international application filed under 35 U.S.C. 363 before November 29, 2000.
(4) The request for a continued prosecution application under § 1.53(d) is the specific reference required by 35 U.S.C. 120 to the prior-filed application. The identification of an application by application number under this section is the identification of every application assigned that application number necessary for a specific reference required by 35 U.S.C. 120 to every such application assigned that application number.
(5) Cross-references to other related applications may be made when appropriate (see § 1.14), but cross-references to applications for which a benefit is not claimed under title 35, United States Code, must not be included in an application data sheet (§ 1.76(b)(5)).
(d)
(1) The reference required by 35 U.S.C. 120 and paragraph (c)(2) of this section to the prior-filed application, unless previously submitted;
(2) The surcharge set forth in § 1.17(t); and
(3) A statement that the entire delay between the date the claim was due under paragraph (c)(3) of this section and the date the claim was filed was unintentional. The Director may require additional information where there is a question whether the delay was unintentional.
(e)
(f)
(g)
8. Section 1.104 is amended by revising paragraphs (c)(4) and (c)(5) and adding a new paragraph (c)(6) to read as follows:
(c) * * *
(4)(i) Subject matter that qualifies as prior art under 35 U.S.C. 102(a)(2) and a claimed invention will be treated as commonly owned for purposes of 35 U.S.C. 102(b)(2)(C) if the applicant provides a statement that the prior art and the claimed invention, not later than the effective filing date of the claimed invention, were owned by the same person or subject to an obligation of assignment to the same person.
(ii) Subject matter that qualifies as prior art under 35 U.S.C. 102(a)(2) and
(A) The applicant provides a statement that the prior art was developed and the claimed invention was made by or on behalf of one or more parties to a joint research agreement, within the meaning of 35 U.S.C. 100(h) and § 1.9(e), that was in effect on or before the effective filing date of the claimed invention, and the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and
(B) The application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the joint research agreement.
(5)(i) Subject matter which qualifies as prior art under 35 U.S.C. 102(e), (f), or (g) in effect prior to March 16, 2013, and a claimed invention in an application or a patent granted on or after December 10, 2004, will be treated as commonly owned for purposes of 35 U.S.C. 103(c) in effect prior to March 16, 2013, if the applicant provides a statement that the prior art and the claimed invention, at the time the claimed invention was made, were owned by the same person or subject to an obligation of assignment to the same person.
(ii) Subject matter which qualifies as prior art under 35 U.S.C. 102(e), (f), or (g) in effect prior to March 16, 2013, and a claimed invention in an application or a patent granted on or after December 10, 2004, will be treated as commonly owned for purposes of 35 U.S.C. 103(c) in effect prior to March 16, 2013, on the basis of a joint research agreement under 35 U.S.C. 103(c)(2) in effect prior to March 16, 2013 if:
(A) The applicant provides a statement to the effect that the prior art and the claimed invention were made by or on behalf of the parties to a joint research agreement, within the meaning of 35 U.S.C. 100(h) and § 1.9(e), which was in effect on or before the date the claimed invention was made, and that the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and
(B) The application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the joint research agreement.
(6) Patents issued prior to December 10, 2004, from applications filed prior to November 29, 1999, are subject to 35 U.S.C. 103(c) in effect on November 28, 1999.
9. Section 1.109 is added to read as follows:
(a) The effective filing date for a claimed invention in a patent or application for patent, other than in a reissue application or reissued patent, is the earliest of:
(1) The actual filing date of the patent or the application for the patent containing a claim to the invention; or
(2) The filing date of the earliest application for which the patent or application is entitled, as to such invention, to priority to or the benefit of an earlier filing date under 35 U.S.C. 119, 120, 121, or 365.
(b) The effective filing date for a claimed invention in a reissue application or a reissued patent is determined by deeming the claim to the invention to have been contained in the patent for which reissue was sought.
10. Section 1.110 is revised to read as follows:
When more than one inventor is named in an application or patent, the Office may require an applicant or patentee to identify the inventor, and ownership on the effective filing date, of each claimed invention in the application or patent, when necessary for purposes of an Office proceeding.
11. Section 1.130 is revised to read as follows:
(a) When any claim of an application or a patent under reexamination is rejected, the applicant or patent owner may submit an appropriate affidavit or declaration to establish that:
(1) The disclosure on which the rejection is based was by the inventor or joint inventor, the subject matter disclosed had been publicly disclosed by the inventor or a joint inventor before the disclosure of the subject matter on which the rejection is based, or the subject matter disclosed had been publicly disclosed by the inventor or a joint inventor before the date the subject matter in the patent or application on which the rejection is based was effectively filed; or
(2) The disclosure on which the rejection is based was by a party who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor, the subject matter disclosed had been publicly disclosed by a party who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor before the disclosure of the subject matter on which the rejection is based, or the subject matter disclosed had been publicly disclosed by a party who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor before the date the subject matter in the patent or application on which the rejection is based was effectively filed.
(b) If the disclosure on which the rejection is based is by the inventor or a joint inventor, the affidavit or declaration under paragraph (a)(1) of this section must provide a satisfactory showing that the inventor or a joint inventor is in fact the inventor of the subject matter of the disclosure.
(c) If the disclosure on which the rejection is based is not by the inventor or a joint inventor, the affidavit or declaration under paragraph (a)(1) of this section must identify and provide the date of the earlier disclosure of the subject matter by the inventor or a joint inventor and provide a satisfactory showing that the inventor or a joint inventor is the inventor of the subject matter of the earlier disclosure. If the earlier disclosure was a printed publication, the affidavit or declaration must be accompanied by a copy of the printed publication. If the earlier disclosure was not a printed publication, the affidavit or declaration must describe the disclosure with sufficient detail and particularity to determine that the disclosure is a public disclosure of the subject matter on which the rejection is based.
(d) If the disclosure on which the rejection is based is by a party who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor, an affidavit or declaration under paragraph (a)(2) of this section must provide a satisfactory showing that the inventor or a joint inventor is the inventor of the subject matter of the disclosure and directly or indirectly communicated the subject matter of the disclosure to the party.
(e) If the disclosure on which the rejection is based is not by a party who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor, an affidavit or declaration under paragraph (a)(2) of this section must identify and provide the date of the earlier disclosure of the subject matter by the party who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor and also provide a satisfactory showing that the inventor or a joint inventor is the inventor of the subject matter of the earlier disclosure and directly or indirectly communicated
(f) The provisions of this section are not available if the rejection is based upon a disclosure made more than one year before the effective filing date of the claimed invention. The Office may require the applicant to file a petition for a derivation proceeding pursuant to § 42.401
(g) The provisions of this section apply to applications for patent, and to any patent issuing thereon, that contain, or contained at any time:
(1) A claim to a claimed invention that has an effective filing date as defined in 35 U.S.C. 100(i) that is on or after March 16, 2013; or
(2) A specific reference under 35 U.S.C. 120, 121, or 365(c) to any patent or application that contains, or contained at any time, a claim to a claimed invention that has an effective filing date as defined in 35 U.S.C. 100(i) that is on or after March 16, 2013.
12. Section 1.131 is revised to read as follows:
(a) When any claim of an application or a patent under reexamination is rejected, the inventor of the subject matter of the rejected claim, the owner of the patent under reexamination, or the party qualified under §§ 1.42 or 1.47, may submit an appropriate oath or declaration to establish invention of the subject matter of the rejected claim prior to the effective date of the reference or activity on which the rejection is based. The effective date of a U.S. patent, U.S. patent application publication, or international application publication under PCT Article 21(2) is the earlier of its publication date or the date that it is effective as a reference under 35 U.S.C. 102(e) in effect on March 15, 2013. Prior invention may not be established under this section in any country other than the United States, a NAFTA country, or a WTO member country. Prior invention may not be established under this section before December 8, 1993, in a NAFTA country other than the United States, or before January 1, 1996, in a WTO member country other than a NAFTA country. Prior invention may not be established under this section if either:
(1) The rejection is based upon a U.S. patent or U.S. patent application publication of a pending or patented application to another or others which claims the same patentable invention as defined in § 41.203(a) of this title, in which case an applicant may suggest an interference pursuant to § 41.202(a) of this title; or
(2) The rejection is based upon a statutory bar.
(b) The showing of facts for an oath or declaration under paragraph (a) of this section shall be such, in character and weight, as to establish reduction to practice prior to the effective date of the reference, or conception of the invention prior to the effective date of the reference coupled with due diligence from prior to said date to a subsequent reduction to practice or to the filing of the application. Original exhibits of drawings or records, or photocopies thereof, must accompany and form part of the affidavit or declaration or their absence must be satisfactorily explained.
(c) When any claim of an application or a patent under reexamination is rejected under 35 U.S.C. 103 on a U.S. patent or U.S. patent application publication which is not prior art under 35 U.S.C. 102(b) in effect on March 15, 2013, and the inventions defined by the claims in the application or patent under reexamination and by the claims in the patent or published application are not identical but are not patentably distinct, and the inventions are owned by the same party, the applicant or owner of the patent under reexamination may disqualify the patent or patent application publication as prior art. The patent or patent application publication can be disqualified as prior art by submission of:
(1) A terminal disclaimer in accordance with § 1.321(c); and
(2) An oath or declaration stating that the application or patent under reexamination and patent or published application are currently owned by the same party, and that the inventor named in the application or patent under reexamination is the prior inventor under 35 U.S.C. 104 in effect on March 15, 2013.
(d) The provisions of this section apply to applications for patent, and to any patent issuing thereon, that contains, or contained at any time:
(1) A claim to a claimed invention that has an effective filing date as defined in 35 U.S.C. 100(i) that is before March 16, 2013; or
(2) A specific reference under 35 U.S.C. 120, 121, or 365(c) to any patent or application that contains, or contained at any time, a claim to a claimed invention that has an effective filing date as defined in 35 U.S.C. 100(i) that is before March 16, 2013.
(e) In an application for patent to which the provisions of § 1.130 apply, and to any patent issuing thereon, the provisions of this section are applicable only with respect to a rejection under 35 U.S.C. 102(g) in effect on March 15, 2013.
13. Sections 1.293 through 1.297 are removed.
14. Section 1.321 is amended by revising the introductory text of paragraph (d) to read as follows:
(d) A terminal disclaimer, when filed in a patent application or in a reexamination proceeding to obviate double patenting based upon a patent or application that is not commonly owned but resulted from activities undertaken within the scope of a joint research agreement under 35 U.S.C. 102(c), must:
United States Patent and Trademark Office, Commerce.
Request for comments.
The United States Patent and Trademark Office (Office) is publishing
Written comments must be received on or before October 5, 2012.
Comments should be sent by electronic mail message over the Internet addressed to:
Comments may also be sent by electronic mail message over the Internet via the Federal eRulemaking Portal,
Although comments may be submitted by postal mail, the Office prefers to receive comments by electronic mail message over the Internet in order to facilitate posting on the Office's Internet Web site. Plain text is preferred, but comments may also be submitted in ADOBE® portable document format or MICROSOFT WORD® format. Comments not submitted electronically should be submitted on paper, and will be digitally scanned into ADOBE® portable document format.
The comments will be available for public inspection at the Office of the Commissioner for Patents, currently located at Madison Building East, Tenth Floor, 600 Dulany Street, Alexandria, Virginia. Comments also will be available for viewing via the Office's Internet Web site (
Mary C. Till, Senior Legal Advisor (telephone (571) 272-7755; email
The AIA
These proposed guidelines do not constitute substantive rulemaking and do not have the force and effect of law. The proposed guidelines set out the Office's interpretation of 35 U.S.C. 102 and 103 as amended by the AIA, and advise the public and the Patent Examining Corps on how the changes to 35 U.S.C. 102 and 103 in the AIA impact the provisions of the
The AIA replaces pre-AIA 35 U.S.C. 102 with provisions that: (1) A person is not entitled to a patent if the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention (35 U.S.C. 102(a)(1)); and (2) a person is not entitled to a patent if the claimed invention was described in a patent issued under 35 U.S.C. 151, or in an application for patent published or deemed published under 35 U.S.C. 122(b), in which the patent or application, as the case may be, names another inventor, and was effectively filed before the effective filing date of the claimed invention (35 U.S.C. 102(a)(2)). In 35 U.S.C. 100(j), the AIA defines the term “claimed invention” as the subject matter defined by a claim in a patent or an application for a patent. The AIA defines the term “effective filing date” for a claimed invention in a patent or application for patent (other than a reissue application or reissued patent) in 35 U.S.C. 100(i)(1) as meaning the earliest of: (1) The actual filing date of the patent or the application for the patent containing a claim to the claimed invention (claimed invention); or (2) the filing date of the earliest provisional, nonprovisional, international (PCT), or foreign patent application to which the patent or application is entitled to benefit or priority as to such claimed invention. Under pre-AIA 35 U.S.C. 102(a) and (b), knowledge or use of the invention (pre-AIA 35 U.S.C. 102(a)), or public use or sale of the invention (pre-AIA 35 U.S.C. 102(b)), was required to be in the United States to qualify as a prior art activity. Under the AIA, a prior public use, sale activity, or other disclosure has no geographic requirement (i.e., need not be in the United States) to qualify as prior art.
The “first inventor to file” provisions of the AIA eliminate the provisions in pre-AIA 35 U.S.C. 102(c) (abandonment of the invention), 102(d) (premature foreign patenting), 102(f) (derivation), and 102(g) (prior invention by another). Under AIA 35 U.S.C. 102, abandonment of the invention or premature foreign
The AIA provides in 35 U.S.C. 102(b)(1) that a disclosure made one year or less before the effective filing date of a claimed invention shall not be prior art under 35 U.S.C. 102(a)(1) with respect to the claimed invention if: (1) The disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or (2) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor. Thus, AIA 35 U.S.C. 102(b)(1) provides a one-year grace period after a first disclosure of an invention within which to file a patent application. Specifically, AIA 35 U.S.C. 102(b)(1) permits an applicant to disqualify a disclosure of the invention made not more than one year before the effective filing date of the claimed invention that would otherwise be prior art if: (1) The disclosure to be disqualified was by an inventor or by a party who obtained the disclosed subject matter from an inventor; or (2) an inventor or a party who obtained the disclosed subject matter from an inventor had publicly disclosed the subject matter before the date of the reference disclosure to be disqualified. The one-year grace period in AIA 35 U.S.C. 102(b)(1) is measured from the earliest U.S. or foreign patent application to which the patent or application is entitled to benefit or priority as to such invention, whereas the one-year grace period in pre-AIA 35 U.S.C. 102(b) is measured from only the earliest application filed in the United States.
AIA 35 U.S.C. 100(f) defines the term “inventor” as the individual or if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention. AIA 35 U.S.C. 100(g) AIA defines the term “joint inventor” and “co-inventor” to mean any one of the individuals who invented or discovered the subject matter of a joint invention.
The date of invention is not relevant under AIA 35 U.S.C. 102. Thus, a prior art disclosure could not be disqualified or antedated by showing that the inventor invented the claimed invention prior to the effective date of the prior art disclosure of the subject matter (e.g., under the provisions of 37 CFR 1.131).
In accordance with 35 U.S.C. 102(a)(2) of the AIA, a person is not entitled to a patent if the claimed invention was described in a U.S. patent or a U.S. patent application publication that names another inventor and was effectively filed before the effective filing date of the claimed invention. Under 35 U.S.C. 374, a World Intellectual Property Organization (WIPO) publication of a Patent Cooperation Treaty (PCT) international application that designates the United States is deemed a U.S. patent application publication for purposes of AIA 35 U.S.C. 102(a)(2). Thus, under the AIA, WIPO publications of PCT applications that designate the United States are treated in the same way as U.S. patent application publications for prior art purposes, regardless of the international filing date or whether they are published in English. Accordingly, a U.S. patent, a U.S. patent application publication, or a WIPO publication of a PCT application that designates the United States (WIPO published application), that names another inventor and was effectively filed before the effective filing date of the claimed invention, is prior art under 35 U.S.C. 102(a)(2). Compare with treatment under pre-AIA 35 U.S.C. 102(e), where a WIPO publication of a PCT application designating the United States is treated as a U.S. patent application publication under pre-AIA 35 U.S.C. 102(e) only if the PCT application was filed on or after November 29, 2000, and published under PCT Article 21(2) in the English language.
In 35 U.S.C. 102(d), the AIA defines “effectively filed” for the purpose of determining whether a U.S. patent, U.S. patent application publication, or WIPO published application is prior art under 35 U.S.C. 102(a)(2) to a claimed invention. A U.S. patent, U.S. patent application publication, or WIPO published application is considered to have been effectively filed for purposes of its prior art effect under 35 U.S.C. 102(a)(2) with respect to any subject matter it describes on the earlier of: (1) The actual filing date of the patent or the application for patent; or (2) if the patent or application for patent is entitled to claim the benefit or priority of the filing date of an earlier U.S. provisional, U.S. nonprovisional, international (PCT), or foreign patent application, the filing date of the earliest such application that describes the subject matter of the claimed invention. Thus, if the subject matter relied upon is described in the earliest claimed benefit or priority application, a U.S. patent, a U.S. patent application publication or WIPO published application is effective as prior art as of its earliest benefit or priority date, rather than only as of its earliest United States benefit date.
The AIA provides in 35 U.S.C. 102(b)(2)(A) and (B) that a disclosure shall not be prior art to a claimed invention under 35 U.S.C. 102(a)(2) if: (1) The subject matter disclosed was obtained directly or indirectly from the inventor or a joint inventor; or (2) the subject matter disclosed had, before such subject matter was effectively filed under 35 U.S.C. 102(a)(2), been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor. Thus, under the AIA, a U.S. patent, U.S. patent application publication, or WIPO published application that was not issued or published more than one year before the effective filing date of the claimed invention is not prior art to the claimed invention if: (1) The U.S. patent, U.S. patent application publication, or WIPO published application was by a party who obtained the disclosed subject matter from an inventor; or (2) an inventor, or a party who obtained the disclosed subject matter from an inventor, had disclosed the subject matter before the effective filing date of the U.S. patent, U.S. patent application
The AIA provides in 35 U.S.C. 102(b)(2)(C) that a disclosure made in a U.S. patent, U.S. patent application publication, or WIPO published application shall not be prior art to a claimed invention under 35 U.S.C. 102(a)(2) if, not later than the effective filing date of the claimed invention, the subject matter disclosed and the claimed invention were owned by the same person or subject to an obligation of assignment to the same person. This provision replaces the exception in pre-AIA 35 U.S.C. 103(c) that applied only in the context of 35 U.S.C. 103 to prior art that was commonly owned at the time the claimed invention was made, and which qualifies as prior art only under pre-AIA 35 U.S.C. 102(e), (f), or (g). AIA 35 U.S.C. 102(b)(2)(C) provides an exception to prior art that qualifies only under 35 U.S.C. 102(a)(2) but that applies in the context of anticipation or obviousness to prior art that was commonly owned not later than the effective filing date of the claimed invention.
Thus, the AIA provides that certain prior patents and patent applications of co-workers and collaborators are not prior art either for purposes of determining novelty (35 U.S.C. 102) or nonobviousness (35 U.S.C. 103). This exception, however, applies only to AIA 35 U.S.C. 102(a)(2) type of prior art: Namely, U.S. patents, U.S. patent application publications, or WIPO published applications effectively filed, but not published, before the effective filing date of the claimed invention. This exception does not apply to prior art that is available under 35 U.S.C. 102(a)(1), that is, patents, printed publications, public uses, sale activities, or other publicly available disclosures published or occurring before the effective filing date of the claimed invention. A prior disclosure, as defined in 35 U.S.C. 102(a)(1), by a co-worker or collaborator is prior art under 35 U.S.C. 102(a)(1) unless it falls within an exception under 35 U.S.C. 102(b)(1), regardless of whether the subject matter of the prior disclosure and the claimed invention were commonly owned not later than the effective filing date of the claimed invention.
The AIA provides in 35 U.S.C. 102(c) for common ownership of subject matter under joint research agreements. Under 35 U.S.C. 100(h), the term “joint research agreement” is defined as a written contract, grant, or cooperative agreement entered into by two or more persons or entities for the performance of experimental, developmental, or research work in the field of the claimed invention. The AIA 35 U.S.C. 102(c) specifically provides that subject matter disclosed and a claimed invention shall be deemed to have been owned by the same person or subject to an obligation of assignment to the same person in applying the provisions of AIA 35 U.S.C. 102(b)(2)(C) if: (1) The subject matter disclosed was developed and the claimed invention was made by, or on behalf of, one or more parties to a joint research agreement that was in effect on or before the effective filing date of the claimed invention; (2) the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and (3) the application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the joint research agreement.
The AIA provides in 35 U.S.C. 103 that a patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in 35 U.S.C. 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. 35 U.S.C. 103 also provides that patentability shall not be negated by the manner in which the invention was made. This provision tracks pre-AIA 35 U.S.C. 103(a), except that the temporal focus for the obviousness inquiry is before the effective filing date of the claimed invention, rather than at the time of the invention. The provisions of pre-AIA 35 U.S.C. 103(c) have been replaced with 35 U.S.C. 102(b)(2)(C) and (c), and the provisions of pre-AIA 35 U.S.C. 103(b) pertaining to biotechnological processes have been eliminated.
The AIA 35 U.S.C. 102 and 103 take effect on March 16, 2013. These new provisions apply to any patent application that contains or contained at any time: (1) A claimed invention that has an effective filing date that is on or after March 16, 2013; or (2) a designation as a continuation, divisional, or continuation-in-part of an application that contains or contained at any time a claimed invention that has an effective filing date that is on or after March 16, 2013.
The AIA provides that the provisions of pre-AIA 35 U.S.C. 102(g)
Thus, if an application (1) contains or contained at any time any claimed invention having an effective filing date that is before March 16, 2013, or ever claimed a right of priority or the benefit of an earlier filing date under 35 U.S.C. 119, 120, 121, or 365 based upon an earlier application ever containing a claimed invention having an effective filing date that is before March 16, 2013, and (2) also contains or contained at any time any claimed invention having an effective filing date that is on or after March 16, 2013, or ever claimed a right of priority or the benefit of an earlier filing date under 35 U.S.C. 119, 120, 121, or 365 based upon an earlier application ever containing a claimed invention having an effective filing date that is on or after March 16, 2013, then AIA 35 U.S.C. 102 and 103 apply to the application, but each claimed invention is also subject to pre-AIA 35 U.S.C. 102(g).
The AIA defines in 35 U.S.C. 102(a) the prior art that will preclude the grant of a patent on a claimed invention unless an exception in 35 U.S.C. 102(b) is applicable. 35 U.S.C. 102(a) specifically provides that “a person shall be entitled to a patent unless—
(1) The claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention; or
(2) The claimed invention was described in a patent issued under section 151, or in an application for patent published or deemed published under section 122(b), in which the patent or application, as the case may be, names another inventor and was effectively filed before the effective filing date of the claimed invention.”
As an initial matter, Office personnel should note that the introductory phrase “[a] person shall be entitled to a patent unless” remains unchanged from the pre-AIA version of 35 U.S.C. 102. Thus, 35 U.S.C. 102 continues to provide that the Office bears the initial burden of explaining why the applicable statutory or regulatory requirements have not been met if a claim in an application is to be rejected. The AIA also does not change the requirement that in rejecting any claim of an application, the Office must establish a prima facie case of unpatentability.
The categories of prior art documents and events are set forth in the AIA's 35 U.S.C. 102(a)(1) and (a)(2) and serve to qualify prior art activities for purposes of determining whether a claimed invention is novel or non-obvious. The documents upon which a prior art rejection may be based are an issued patent, a published application, and a non-patent printed publication. Evidence that the claimed invention was in public use, on sale, or otherwise available to the public may also be used as the basis for a prior art rejection. Note that a printed publication that does not have a sufficiently early publication date to itself qualify as prior art under 35 U.S.C. 102(a)(1) may still be competent evidence of a previous public use, offer for sale, or other availability of a claimed invention that does have a sufficiently early date to qualify as prior art under 35 U.S.C. 102(a)(1).
The AIA in 35 U.S.C. 102(b) sets out exceptions to 35 U.S.C. 102(a), in that prior art that otherwise would be included in 35 U.S.C. 102(a) shall not be prior art if it falls within an exception in 35 U.S.C. 102(b).
35 U.S.C. 102(b)(1) provides exceptions to the categories of prior art defined in 35 U.S.C. 102(a)(1). 35 U.S.C. 102(b)(1) specifically states that a disclosure made one year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if—
The disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or
The subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.”
35 U.S.C. 102(b)(2) provides exceptions to the categories of prior art defined in 35 U.S.C. 102(a)(2). 35 U.S.C. 102(b)(2) specifically states that a disclosure shall not be prior art to a claimed invention under subsection (a)(2) if—
The subject matter disclosed was obtained directly or indirectly from the inventor or a joint inventor;
The subject matter disclosed had, before such subject matter was effectively filed under subsection (a)(2), been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or
The subject matter disclosed and the claimed invention, not later than the effective filing date of the claimed invention, were owned by the same person or subject to an obligation of assignment to the same person.”
Although some of the prior art provisions of AIA 35 U.S.C. 102(a) and (b) will seem familiar, especially in comparison to pre-AIA 35 U.S.C. 102(a), (b), and (e), the AIA has introduced a number of important changes with respect to prior art documents and activities (disclosures). First, the availability of a disclosure as prior art is measured from the effective filing date of the claimed invention no matter where that filing occurred. Second, the AIA adopts a global view of prior art disclosures and thus does not require that a public use or sale activity be “in this country” to be a prior art activity. Finally, a catch-all “otherwise available to the public” category of prior art is added.
The AIA defines the term “effective filing date” for a claimed invention in a patent or application for patent (other than a reissue application or reissued patent) as the earlier of: (1) The actual filing date of the patent or the application for the patent containing the claimed invention; or (2) the filing date of the earliest application for which the patent or application is entitled, as to such invention, to a right of priority or the benefit of an earlier filing date under 35 U.S.C. 119, 120, 121, or 365.
As under pre-AIA law, the effective filing date of a claimed invention is determined on a claim-by-claim basis and not an application-by-application basis. That is, the principle that different claims in the same application may be entitled to different effective filing dates vis-à-vis the prior art remains unchanged by the AIA.
Finally, the AIA provides that the “effective filing date” for a claimed invention in a reissue patent or application for a reissue patent shall be determined by deeming the claim to the claimed invention to have been contained in the patent for which reissue was sought.
35 U.S.C. 102(a)(1) sets forth prior documents and activities which may preclude patentability. Such documents and activities include prior patenting of the claimed invention, descriptions of the claimed invention in a printed publication, public use of the claimed invention, placing the claimed invention on sale, and otherwise making the claimed invention available to the public.
Although an invention may be described in a patent and not claimed therein, the grant date or publication date of the published application would also be the applicable prior art date for purposes of relying on the subject matter disclosed therein as “described in a printed publication,” provided that the patent was made available to the public on its grant date. It is helpful to note that a U.S. patent that issues after the effective filing date of the claimed invention is not available as prior art under 35 U.S.C. 102(a)(1), but could be available as prior art under 35 U.S.C. 102(a)(2).
While the conditions for patentability of AIA 35 U.S.C. 112(a) require a written description of the claimed invention that would have enabled a person skilled in the art to make as well as use the invention, the prior art provisions of 35 U.S.C. 102(a)(1) and (a)(2) require only that the claimed invention be “described.”
There is an additional important distinction between the written description that is necessary to support a claim under 35 U.S.C. 112(a) and the description sufficient to anticipate the subject matter of the claim under 35 U.S.C. 102.
Additionally, under pre-AIA 35 U.S.C. 102(b), that an invention was “in public use” precluded a patent only if
Under pre-AIA 35 U.S.C. 102(b), if an invention was “on sale” patentability was precluded only if the invention was on sale “in this country.” Under AIA 35 U.S.C. 102(a)(1), there is no geographic limitation on the location where the sale may occur. When formulating a rejection, Office personnel should consider evidence of sales activity of the claimed invention, regardless of where the sale took place.
The language of AIA 35 U.S.C. 102(a)(1) does not expressly state whether a sale must be “sufficiently” public to preclude the grant of a patent on the claimed invention.
The AIA in 35 U.S.C. 102(b)(1)(A) provides exceptions to the prior art provisions of 35 U.S.C. 102(a)(1). These exceptions limit the use of an inventor's own work as prior art, when the inventor has publicly disclosed the work either directly or indirectly. The provisions of 35 U.S.C. 102(b)(1)(A) indicate that a disclosure which would otherwise qualify as prior art under 35 U.S.C. 102(a)(1) is not prior art if the disclosure was made: (1) One year or less before the effective filing date of the claimed invention; and (2) by the inventor or a joint inventor, or by another who obtained the subject matter directly or indirectly from the inventor or joint inventor. These guidelines will first discuss issues pertaining to disclosures within the grace period by the inventor or a joint inventor (“grace period inventor disclosure”) and then subsequently discuss issues pertaining to disclosures within the grace period by another who obtained the subject matter directly or indirectly from the inventor or joint inventor (“grace period non-inventor inventor disclosure”).
An examiner would not apply prior art that falls under 35 U.S.C. 102(a)(1) if it is apparent from the disclosure that it is by the inventor or a joint inventor. Specifically, the examiner would not apply a prior art disclosure that falls under 35 U.S.C. 102(a)(1) if the disclosure: (1) Was made one year or less before the effective filing date of the claimed invention; (2) names the inventor or a joint inventor as an author or an inventor; and (3) does not name additional persons as authors on a printed publication or inventors on a patent. This means that in circumstances where an application names additional persons as inventors relative to the persons named as authors in the publication (e.g., the application names as inventors A, B, and C, and the publication names as authors A and B), and the publication is one year or less before the effective filing date, it is apparent that the disclosure is a grace period inventor disclosure, and the publication would not be treated as prior art under 35 U.S.C. 102(a)(1). If, however, the application names fewer inventors than a publication (e.g., the application names as inventors A and B, and the publication names as authors A, B and C), it would not be readily apparent from the publication that it is by the inventor or a joint inventor and the publication would be treated as prior art under 35 U.S.C. 102(a)(1).
In certain circumstances, an examiner would not apply prior art that falls under 35 U.S.C. 102(a)(1) if it is apparent from the patent application specification that the disclosure is by the inventor or a joint inventor. The Office is concurrently proposing in a separate action (RIN 0651-AC77) to revise the rules of practice to provide that applicants can include a statement of any grace period inventor disclosures in the specification (in proposed 37 CFR 1.77(b)). If the specification contains a specific reference to a grace period inventor disclosure, the Office will consider it apparent from the patent application specification that the disclosure is by the inventor or a joint inventor, provided that the disclosure does not name additional authors or inventors and there is no other evidence to the contrary. The applicant may also provide a copy of the disclosure (e.g., copy of a printed publication), and will be required to provide a copy of the disclosure to disqualify an intervening disclosure under the provisions of 35 U.S.C. 102(b)(1)(B) (discussed subsequently).
An applicant is not required to use the format specified in proposed 37 CFR 1.77 or identify any prior disclosures by the inventor or a joint inventor (unless necessary to overcome a rejection), but identifying any prior disclosures by the inventor or a joint inventor may save applicants (and the Office) the costs related to an Office action and reply, and expedite examination of the application. In this situation, the Office would consider such a disclosure made one year or less before the effective filing date of the claimed invention as falling within the 35 U.S.C. 102(b)(1)(A) exception, and the disclosure would not be treated as prior art under 35 U.S.C. 102(a)(1).
The Office is proposing in a separate action (RIN 0651-AC77) elsewhere in this issue of the
An affidavit or declaration under proposed 37 CFR 1.130(a)(1) could be used to establish that the prior art relied upon in a rejection is an inventor disclosure made during the grace period and subject to the exception of 35 U.S.C. 102(b)(1)(A). Specifically, such an affidavit or declaration could be used to establish that the disclosure upon which the rejection is based: (1) Was made one year or less before the effective filing date of the claimed invention; and (2) had been publicly disclosed by the inventor or joint inventor. The affidavit or declaration must show that the disclosure of the subject matter on which the rejection is based is by the inventor or is by a joint inventor.
As discussed previously, proposed 37 CFR 1.130 would generally provide a mechanism for filing an affidavit or declaration to establish that a disclosure is not prior art due to an exception in AIA 35 U.S.C. 102(b). Proposed 37 CFR 1.130(a)(2) provides for the situation in which: (1) The disclosure on which the
Proposed 37 CFR 1.130(a)(2) thus provides for an affidavit or declaration to establish that the named inventor or joint inventor is the inventor of the disclosed subject matter, and that the subject matter was communicated by the inventor or a joint inventor to another who disclosed it. Such an affidavit or declaration must show that the inventor or a joint inventor is the inventor of the subject matter of the disclosure (in accordance with proposed 37 CFR 1.130(d)), and indicate the communication of the subject matter by the inventor or a joint inventor to another who disclosed the subject matter. Thus, an applicant may benefit from the earlier disclosure by another during the grace period, if the applicant can establish that the inventor or a joint inventor is the actual inventor of the subject matter of the disclosure and that the subject matter was obtained directly or indirectly from the inventor or a joint inventor. Specifically, the applicant must show that a named inventor actually invented the subject matter of the disclosure.
The AIA in 35 U.S.C. 102(b)(1)(B) provides additional exceptions to the prior art provisions of 35 U.S.C. 102(a)(1). These exceptions disqualify a disclosure that occurs after a public disclosure by the inventor, joint inventor, or another who obtained the subject matter directly or indirectly from the inventor or joint inventor. The provisions of 35 U.S.C. 102(b)(1)(B) indicate that a disclosure which would otherwise qualify as prior art under 35 U.S.C. 102(a)(1) is not prior art if the disclosure was made: (1) One year or less before the effective filing date of the claimed invention; and (2) after a public disclosure of the subject matter of the disclosure which would otherwise qualify as prior art under 35 U.S.C. 102(a)(1) by the inventor or a joint inventor or another who obtained the subject matter directly or indirectly from the inventor or a joint inventor.
The exception in 35 U.S.C. 102(b)(1)(B) applies if the “`subject matter' disclosed [in the prior art disclosure] had, before such [prior art] disclosure, been publicly disclosed by the inventor or a joint inventor * * * .”
An affidavit or declaration under 37 CFR 1.130(a)(1) could be used to establish that the subject matter disclosed had been publicly disclosed by the inventor or a joint inventor before the disclosure of the subject matter on which the rejection is based. Such an affidavit or declaration under 37 CFR 1.130(a)(1) must establish that the subject matter disclosed in the cited prior art had been publicly disclosed by the inventor or a joint inventor before the disclosure of the subject matter on which the rejection is based. Specifically, the inventor or joint inventor must establish the date and content of their earlier public disclosure. If the earlier disclosure was a printed publication, the affidavit or declaration must be accompanied by a copy of the printed publication. If the earlier disclosure was not a printed publication, the affidavit or declaration must describe the earlier disclosure with sufficient detail and particularity to determine that the earlier disclosure is a public disclosure of the subject matter.
Alternatively, as discussed previously, an affidavit or declaration under 37 CFR 1.130(a)(2) could establish that the subject matter disclosed had been publicly disclosed by a party who obtained the subject matter directly or indirectly from the inventor or a joint inventor before the disclosure of the subject matter on which the rejection is based. Such an affidavit or declaration under 37 CFR 1.130(a)(2) must establish that the subject matter disclosed in the cited prior art had been publicly disclosed by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor before the disclosure of the subject matter on which the rejection is based. The affidavit or declaration must specifically show that the inventor or a joint inventor is the inventor of the subject matter of the earlier public disclosure and indicate the communication of the subject matter to another who disclosed the subject matter. As discussed previously, this is similar to the current process for disqualifying a publication as being derived from the inventor discussed in MPEP section 2137.
Such an affidavit or declaration under 37 CFR 1.130(a)(2) must also establish the date and content of the earlier public disclosure which was made by another who obtained the subject matter directly or indirectly from the inventor or joint inventor. If the earlier disclosure was a printed publication, the affidavit or declaration must be accompanied by a copy of the printed publication. If the earlier disclosure was not a printed publication, the affidavit or declaration must describe the earlier disclosure with sufficient detail and particularity to determine that the earlier disclosure is a public disclosure of the subject
AIA 35 U.S.C. 102(a)(2) sets forth three types of patent documents that are available prior art as of the date they were effectively filed with respect to the subject matter relied upon in the document: (1) U.S. patents; (2) U.S. patent application publications; and (3) WIPO published applications. These documents may have different prior art effects under pre-AIA 35 U.S.C. 102(e) and AIA 35 U.S.C. 102(a)(2).
A U.S. patent, U.S. patent application publication, or WIPO published application is prior art under 35 U.S.C. 102(a)(1) if its issue or publication date is before the effective filing date of the claim at issue. If the issue date of the U.S. patent or publication date of the U.S. patent application publication or WIPO published application is not before the effective filing date of the claimed invention, it may still be applicable as prior art under 35 U.S.C. 102(a)(2) if it was “effectively filed” before the effective filing date of the claim at issue with respect to the subject matter relied upon to reject the claim. AIA 35 U.S.C. 102(d) sets forth when subject matter described in a U.S. patent, U.S. patent application publication, or WIPO published application was “effectively filed” for purposes of 35 U.S.C. 102(a)(2).
35 U.S.C. 102(d) provides the criteria to determine the date that a U.S. patent, U.S. patent application publication, or WIPO published application was “effectively filed” with respect to the subject matter described in the patent or published application for purposes of constituting prior art under 35 U.S.C. 102(a)(2).
Under 35 U.S.C. 102(d), a U.S. patent, U.S. patent application publication, or WIPO published application is prior art under 35 U.S.C. 102(a)(2) with respect to any subject matter described in the patent or published application as of either its actual filing date (35 U.S.C. 102(d)(1)), or the filing date of a prior application to which there is a priority or benefit claim (35 U.S.C. 102(d)(2)). A U.S. patent, U.S. patent application publication, or WIPO published application “is entitled to claim” priority to, or the benefit of, a prior-filed application if it fulfills the ministerial requirements of: (1) Containing a priority or benefit claim to the prior-filed application; (2) being filed within the applicable filing period requirement (copending with or within twelve months of the earlier filing, as applicable); and (3) having a common inventor or being by the same applicant.
The AIA draws a distinction between actually being entitled to priority to, or the benefit of, a prior-filed application in the definition of effective filing date in 35 U.S.C. 100(i)(2), and merely being entitled to claim priority to, or the benefit of, a prior-filed application in the definition of effectively filed in 35 U.S.C. 102(d).
35 U.S.C. 102(d) does require that the prior-filed application to which a priority or benefit claim is made describe the subject matter from the U.S. patent, U.S. patent application publication, or WIPO published application relied upon in a rejection for that subject matter. However, 35 U.S.C. 102(d) does not require that this description meets the requirements of 35 U.S.C. 112(a). As discussed previously with respect to 35 U.S.C. 102(a), the Office views the description requirement as being the same as the pre-AIA description requirement for a prior art disclosure of an invention.
Another important consequence of 35 U.S.C. 102(d) is its impact on the vitality of the so-called
Under 35 U.S.C. 102(b)(2)(A), certain disclosures will not be considered prior art under 35 U.S.C. 102(a)(2) if the disclosure of the subject matter on which the rejection is based was made by another who obtained the subject matter directly or indirectly from the inventor or a joint inventor.
As discussed previously, proposed 37 CFR 1.130(a)(2) provides for an affidavit or declaration to establish that the named inventor or joint inventor is the inventor of the disclosed subject matter, and that the subject matter was communicated by the inventor or a joint inventor to another who disclosed it. Such an affidavit or declaration must show that the inventor or a joint inventor is the inventor of the subject matter of the disclosure and indicate the communication of the subject matter by the inventor or a joint inventor to another who disclosed the subject matter. Specifically, the inventor must show that a named inventor actually invented the subject matter of the disclosure.
In circumstances where the claims of the cited prior art, which names another inventor and is a U.S. patent, or U.S. patent application publication, and the claims of the application under examination are directed to the same or substantially the same invention, the Office may require an applicant to file a petition for derivation proceeding pursuant to 37 CFR 41.401
35 U.S.C. 102(b)(2)(B) provides another exception to the prior art provisions of 35 U.S.C. 102(a)(2). Specifically, 35 U.S.C. 102(b)(2)(B) indicates that certain disclosures are not prior art if the disclosure of the subject matter of the claimed invention to be disqualified was made after a disclosure of the subject matter by the inventor or a joint inventor or after a disclosure of the subject matter by another who obtained the subject matter directly or indirectly from the inventor or joint inventor. In other words, an inventor, joint inventor, or someone who obtained the subject matter directly or indirectly from the inventor or joint inventor, disclosed the subject matter before the disclosure of the subject matter on which the rejection is based.
As discussed previously with respect to 35 U.S.C. 102(b)(1)(B), the exception in 35 U.S.C. 102(b)(2)(B) requires that the subject matter in the prior disclosure being relied upon under 35 U.S.C. 102(a) be the same “subject matter” as the subject matter publicly disclosed by the inventor before such prior art disclosure for the exception in 35 U.S.C. 102(b)(2)(B) to apply.
As discussed previously, an affidavit or declaration under 37 CFR 1.130(a)(1) could be used to establish that the subject matter disclosed in the cited patent or published application to be disqualified had been publicly disclosed by the inventor or a joint inventor before the date the subject matter in the patent or published application to be disqualified was effectively filed. Specifically, the inventor or joint inventor must establish the date and content of their earlier public disclosure. If the earlier disclosure was a printed publication, the affidavit or declaration must be accompanied by a copy of the printed publication. If the earlier disclosure was not a printed publication, the affidavit or declaration must describe the earlier disclosure with sufficient detail and particularity to determine that the earlier disclosure is a public disclosure of the subject matter.
Alternatively, also as discussed previously, an affidavit or declaration under 37 CFR 1.130(a)(2) could establish that the subject matter
Such an affidavit or declaration under 37 CFR 1.130(a)(2) must also establish the date and content of the earlier public disclosure which was made by another who obtained the subject matter directly or indirectly from the inventor or a joint inventor. If the earlier disclosure was a printed publication, the affidavit or declaration must be accompanied by a copy of the printed publication. If the earlier disclosure was not a printed publication, the affidavit or declaration must describe the earlier disclosure with sufficient detail and particularity to determine that the earlier disclosure was a public disclosure of the subject matter. Any documentation which provides evidence of the public availability of a non-printed publication prior art and any documentation which provides evidence of the communication of the subject matter by the inventor or a joint inventor to the entity that disclosed the subject matter should accompany the affidavit or declaration.
In circumstances where the claims of the cited patent or published application to be disqualified is a U.S. patent, or a U.S. patent application publication of a pending or patented application that names another inventor, and the claims of the application under examination and the cited patent or published application are directed to the same or substantially the same invention, the Office may require applicant to file a petition for derivation proceeding pursuant to 37 CFR 41.401
Under 35 U.S.C. 102(b)(2)(C), there is an exception to the prior art defined in 35 U.S.C. 102(a)(2) if the disclosures of the subject matter on which the rejection is based and the claimed invention, not later than the effective filing date of the claimed invention, were owned by the same person or subject to an obligation of assignment to the same person.
In accordance with 35 U.S.C. 102(a)(2), a U.S. patent, U.S. patent application publication, or WIPO published application that describes a claimed invention of an application under examination may be prior art as of its effective filing date. However, 35 U.S.C. 102(b)(2)(C) excludes published applications or patents from 35 U.S.C. 102(a)(2) if the subject matter disclosed in the potential prior art published application or patent, and the claimed invention of the application under examination “were owned by the same person or subject to an obligation of assignment to the same person.” In this situation, the U.S. patent, U.S. patent application publication, or WIPO published application is not available as prior art under 35 U.S.C. 102(a)(2), so long as the common ownership or obligation to assign existed not later than the effective filing date of the claimed invention.
AIA 35 U.S.C. 102(b)(2)(C) resembles pre-AIA 35 U.S.C. 103(c) in that both concern common ownership, and both offer an avenue by which an applicant may avoid certain rejections. However, there are significant differences between AIA 35 U.S.C. 102(b)(2)(C) and pre-AIA 35 U.S.C. 103(c).
If the provisions of 35 U.S.C. 102(b)(2)(C) are met, a U.S. patent, U.S. patent application publication, or WIPO published application that might otherwise qualify as prior art under 35 U.S.C. 102(a)(2) is not available as prior art under either 35 U.S.C. 102 or 103. In contrast, pre-AIA 35 U.S.C. 103(c) merely provided that if its conditions were met, prior art qualifying only under pre-AIA 35 U.S.C. 102(e), (f), or (g), would not preclude patentability under 35 U.S.C. 103. Under pre-AIA 35 U.S.C. 103(c), prior art qualifying only under pre-AIA 35 U.S.C. 102(e), (f), or (g) could preclude patentability under 35 U.S.C. 102, even if the conditions of pre-AIA 35 U.S.C. 103(c) were met. The consequence of this distinction is that a published application or an issued patent that falls under the common ownership provisions of AIA 35 U.S.C. 102(b)(2)(C) may not be applied in either an anticipation or an obviousness rejection.
It is important to note the circumstances in which the AIA 35 U.S.C. 102(b)(2)(C) exception does not remove U.S. patents, U.S. patent application publications, or WIPO published applications as a basis for any rejection. Even if the U.S. patent or U.S. published application is not prior art under 35 U.S.C. 102 or 103 as a result of AIA 35 U.S.C. 102(b)(2)(C), a double patenting rejection (either statutory under 35 U.S.C. 101 or non-statutory, sometimes called obviousness-type) may still be made on the basis of the U.S. patent or U.S. patent application publication. Furthermore, the U.S. patent, U.S. patent application publication, or WIPO published application that does not qualify as prior art as a result of AIA 35 U.S.C. 102(b)(2)(C) may be cited, in appropriate situations, to indicate the state of the art when making a lack of enablement rejection under 35 U.S.C. 112(a). A document need not qualify as prior art to be applied in the context of double patenting
The Office is concurrently proposing in a separate action (RIN 0651-AC77) to revise the rules of practice to include provisions that pertain to commonly owned or joint research agreement subject matter (proposed 37 CFR 1.104(c)(4) and (c)(5)). Proposed 37 CFR 1.104(c)(4) would be applicable to applications that are subject to AIA 35 U.S.C. 102 and 103. Proposed 37 CFR 1.104(c)(5) would be applicable to applications that are subject to 35 U.S.C. 102 and 103 as in effect on March 15, 2013 (pre-AIA 35 U.S.C. 102 and 103). Proposed 37 CFR 1.104(c)(4)(i) would pertain to commonly owned subject matter under AIA 35 U.S.C. 102 and 103, and proposed 37 CFR 1.104(c)(5)(i) would pertain to commonly owned subject matter under pre-AIA 35 U.S.C. 102 and 103.
An applicant's clear and conspicuous statement on the record will be sufficient to establish that the AIA 35 U.S.C. 102(b)(2)(C) exception applies. When relying on the provisions of pre-AIA 35 U.S.C. 103(c), the applicant or his attorney or agent of record could provide the statement required to disqualify the cited prior art. Because the practice to rely on the AIA 35 U.S.C. 102(b)(2)(C) provisions is similar to previous provisions under pre-AIA 35 U.S.C. 103(c), the statement from the applicant or his attorney or agent of record would still be sufficient to disqualify such disclosures. The statement must indicate that the claimed invention of the application under examination and the subject matter disclosed in the published application or issued patent (prior art) to be excluded under AIA 35 U.S.C. 102(b)(2)(C) were owned by the same person or subject to an obligation of assignment to the same person not later than the effective filing date of the claimed invention. The applicant may present supporting evidence such as copies of assignment documents, but is not required to do so. Unless an examiner has independent evidence which raises doubt as to the veracity of such a statement, the examiner may not request corroborating evidence. The statement under AIA 35 U.S.C. 102(b)(2)(C) will generally be treated by the examiner analogously to statements made under pre-AIA 35 U.S.C. 103(c).
35 U.S.C. 102(c) provides that subject matter disclosed, which might otherwise qualify as prior art, and a claimed invention are treated as having been owned by the same person or subject to an obligation of assignment to the same person in applying the provisions of 35 U.S.C. 102(b)(2)(C) if three conditions are satisfied. First, the subject matter disclosed must have been developed and the claimed invention must have been made by, or on behalf of, one or more parties to a joint research agreement that was in effect on or before the effective filing date of the claimed invention.
The provisions of AIA 35 U.S.C. 102(c) generally track those of the Cooperative Research and Technology Enhancement Act of 2004 (CREATE Act).
In order to invoke a joint research agreement to disqualify a disclosure as prior art, the applicant must provide a statement that the disclosure of the subject matter on which the rejection is based and the claimed invention were made by or on behalf of parties to a joint research agreement under AIA 35 U.S.C. 102(c). The statement must also assert that the agreement was in effect on or before the effective filing date of the claimed invention, and that the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement. When relying on the provisions of pre-AIA 35 U.S.C. 103(c), the applicant or his attorney or agent of record could provide the statement required to disqualify the cited prior art. Because the practice to rely on the 102(c) provisions is similar to previous provisions under pre-AIA 35 U.S.C. 103(c), the statement from the applicant or his attorney or agent of record would still be sufficient to disqualify such disclosures. If the names of the parties to the joint research agreement are not already stated in the application, it is necessary to amend the application to include the names of the parties to the joint research agreement in accordance with 37 CFR 1.71(g). As is the case with establishing common ownership, the applicant may, but is not required to, present evidence supporting the existence of the joint research agreement. Furthermore, the Office will not request corroborating evidence in the absence of independent evidence which raises doubt as to the existence of the joint research agreement.
As discussed previously, the AIA 35 U.S.C. 102(b)(2)(C) exception does not apply to any disclosure made before the effective filing date of the claimed invention under AIA 35 U.S.C. 102(a)(1). Thus, if the issue date of a U.S. patent or publication date of a U.S. patent application publication or WIPO published application is before the effective filing date of the claimed invention, it may be prior art under AIA 35 U.S.C. 102(a)(1) regardless of the fact that the subject matter disclosed and the claimed invention resulted from a joint research agreement.
Although the AIA eliminated pre-AIA 35 U.S.C. 102(f), the patent laws still require that a patent name the actual inventor or joint inventors of the claimed subject matter. The Office presumes that the named inventor or inventors are the actual inventor or joint inventors.
AIA 35 U.S.C. 103 continues to set forth the nonobviousness requirement for patentability.
The most significant difference between the AIA 35 U.S.C. 103 and pre-AIA 35 U.S.C. 103(a) is that AIA 35 U.S.C. 103 determines obviousness as of the effective filing date of the claimed invention, rather than as of the time that the invention was made. Under pre-AIA examination practice, the Office uses the effective filing date as a proxy for the invention date, unless there is evidence of record to establish an earlier date of invention. Thus, as a practical matter during examination, this distinction between the AIA 35 U.S.C. 103 and pre-AIA 35 U.S.C. 103 will result in a difference in practice only when the case under examination is subject to pre-AIA 35 U.S.C. 103, and there is evidence in the case concerning a date of invention prior to the effective filing date. Such evidence is ordinarily presented by way of an affidavit or declaration under 37 CFR 1.131.
Next, AIA 35 U.S.C. 103 differs from that of pre-AIA 35 U.S.C. 103 in that the AIA 35 U.S.C. 103 requires consideration of “the differences between the claimed invention and the prior art,” while pre-AIA 35 U.S.C. 103 refers to “the differences between the subject matter sought to be patented and the prior art.” This difference in terminology does not indicate the need for any difference of approach to the question of obviousness.
Further, the AIA 35 U.S.C. 103 eliminates pre-AIA 35 U.S.C. 103(b), and the AIA does not contain any similar provision. Pre-AIA 35 U.S.C. 103(b) is narrowly drawn, applying only to nonobviousness of biotechnological inventions, and even then, only when specifically invoked by the patent applicant. Pre-AIA 35 U.S.C. 103(b) provides that under certain conditions, “a biotechnological process using or resulting in a composition of matter that is novel under section 102 and nonobvious under subsection [103(a)] of this section shall be considered nonobvious.” In view of the case law since 1995,
Finally, the AIA 35 U.S.C. 103 eliminates pre-AIA 35 U.S.C. 103(c), but corresponding provisions have been introduced in AIA 35 U.S.C. 102(b)(2)(C) and 102(c). Pre-AIA 35 U.S.C. 103(c) applied if subject matter qualified as prior art only under pre-AIA 35 U.S.C. 102(e), (f), or (g), and only in the context of obviousness under pre-AIA 35 U.S.C. 103(a). If subject matter developed by another person was commonly owned with the claimed invention, or if the subject matter was subject to an obligation of assignment to the same person, at the time the claimed invention was made, then pre-AIA 35 U.S.C. 103(a) did not preclude patentability. Furthermore, under the pre-AIA 35 U.S.C. 103(c), if a joint research agreement was in place on or before the date that the claimed invention was made, the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement, and the application for patent was amended to disclose the names of the parties to the joint research agreement, common ownership or an obligation to assign was deemed to exist. As discussed previously, AIA 35 U.S.C. 102(b)(2)(C) and 102(c) expand on this concept. Under the AIA first-inventor-to-file approach, the common ownership, the obligation to assign, or the joint research agreement must exist on or before the effective filing date, rather than on or before the date the invention was made. If the provisions of AIA 35 U.S.C. 102(b)(2)(C) are met, a disclosure is not prior art at all, whereas under pre-AIA 35 U.S.C. 103(c), certain prior art merely was defined as not precluding patentability. Finally, disclosures disqualified as prior art under AIA 35 U.S.C. 102(b)(2)(C) and 102(c) may not be applied in either an anticipation or an obviousness rejection. However, such disclosures could be the basis for statutory double patenting or non-statutory double patenting rejections.
Generally speaking, and with the exceptions noted herein, pre-AIA notions of obviousness will continue to apply under the AIA. It should be noted that AIA 35 U.S.C. 102(a) defines what is prior art both for purposes of novelty under AIA 35 U.S.C. 102 as well as for purposes of obviousness under AIA 35 U.S.C. 103.
Because the changes to 35 U.S.C. 102 and 103 in the AIA apply only to specific applications filed on or after March 16, 2013, determining the effective filing date of a claimed invention for purposes of applying AIA 35 U.S.C. 102 and 103 provisions or pre-AIA 35 U.S.C. 102 and 103 provisions is critical.
The changes to 35 U.S.C. 102 and 103 in the AIA do not apply to any application filed before March 16, 2013. Thus, any application filed before March 16, 2013, is governed by pre-AIA 35 U.S.C. 102 and 103. Note that the filing of a request for continued examination is not the filing of a new application.
AIA 35 U.S.C. 102 and 103 take effect on March 16, 2013. AIA 35 U.S.C. 102 and 103 apply to any patent application that contains or contained at any time a claimed invention that has an effective filing date that is on or after March 16, 2013. If a patent application contains or contained at any time a claimed
In addition, AIA 35 U.S.C. 102 and 103 apply to any patent application that contains or contained at any time a specific reference under 35 U.S.C. 120, 121, or 365(c) to any patent or application that contains or contained at any time a claimed invention that has an effective filing date that is on or after March 16, 2013. Thus, AIA 35 U.S.C. 102 and 103 apply to any patent application that was ever designated as a continuation, divisional, or continuation-in-part of an application that contains or contained at any time a claimed invention that has an effective filing date that is on or after March 16, 2013. This is the situation even if the application is amended to delete its reference as a continuation, divisional, or continuation-in-part to the prior-filed application, and even if the claimed invention having an effective filing date on or after March 16, 2013, in the prior-filed application, is canceled. An application filed on or after March 16, 2013, is governed by pre-AIA 35 U.S.C. 102 and 103 only if: (1) The application does not contain and never contained any claimed invention having an effective filing date on or after March 16, 2013; and (2) the application does not contain and never contained a specific reference under 35 U.S.C. 120, 121, or 365(c)) to an application that contains or contained at any time a claim that has an effective filing date that is on or after March 16, 2013.
Thus, once a claim that has an effective filing date on or after March 16, 2013, is introduced in an application, or is introduced to an application in its continuity chain, AIA 35 U.S.C. 102 and 103 apply to that application and any subsequent continuation, divisional, or continuation-in-part of that application. Specifically, a patent application may be amended to add a claimed invention having an effective filing date on or after March 16, 2013, or a specific reference under 35 U.S.C. 120, 121 or 365(c) to an application containing a claimed invention having an effective filing date on or after March 16, 2013, that results in the application no longer being subject to pre-AIA 35 U.S.C. 102 and 103 but being subject to AIA 35 U.S.C. 102 and 103. However, no amendment to a claim, or to a specific reference under 35 U.S.C. 120, 121 or 365(c), or both, will result in the application changing from being subject to AIA 35 U.S.C. 102 and 103 to being subject to pre-AIA 35 U.S.C. 102 and 103.
Also, AIA 35 U.S.C. 102 and 103 apply to any patent resulting from an application to which AIA 35 U.S.C. 102 and 103 were applied. Similarly, pre-AIA 35 U.S.C. 102 and 103 apply to any patent resulting from an application to which pre-AIA 35 U.S.C. 102 and 103 were applied.
Even if AIA 35 U.S.C. 102 and 103 apply to a patent application, pre-AIA 35 U.S.C. 102(g) also applies to every claim in the application if it: (1) Contains or contained at any time a claimed invention having an effective filing date that occurs before March 16, 2013; or (2) is ever designated as a continuation, divisional, or continuation-in-part of an application that contains or contained at any time a claimed invention that has an effective filing date that occurs before March 16, 2013. Pre-AIA 35 U.S.C. 102(g) also applies to any patent resulting from an application to which pre-AIA 35 U.S.C. 102(g) applied.
Thus, if an application contains, or contained at any time, any claimed invention having an effective filing date that occurs before March 16, 2013, and also contains, or contained at any time, any claimed invention having an effective filing date that is on or after March 16, 2013, AIA 35 U.S.C. 102 and 103 apply to the application, but each claim must also satisfy pre-AIA 35 U.S.C. 102(g) for the applicant to be entitled to a patent.
Thus, when subject matter is claimed in an application having priority to or the benefit of a prior-filed application (e.g., under 35 U.S.C. 120, 121 or 365(c)), care must be taken to accurately determine whether AIA or pre-AIA 35 U.S.C. 102 and 103 applies to the application.
The Office is concurrently proposing the following amendments to 37 CFR 1.55 and 1.78 a separate action (RIN 0651-AC77). First, the Office is proposing to require that if a nonprovisional application filed on or after March 16, 2013, claims the benefit of or priority to the filing date of a foreign, U.S. provisional, U.S. nonprovisional, or international application that was filed prior to March 16, 2013, and also contains or contained at any time a claimed invention having an effective filing date on or after March 16, 2013, the applicant must provide a statement to that effect. Second, the Office is proposing to require that if a nonprovisional application filed on or after March 16, 2013, does not contain a claim to a claimed invention having an effective filing date on or after March 16, 2013, but discloses subject matter not also disclosed in the foreign, provisional, or nonprovisional application, the applicant must provide a statement to that effect. This information will assist the Office in determining whether the application is subject to AIA 35 U.S.C. 102 and 103 or pre-AIA 35 U.S.C. 102 and 103.
Federal Communications Commission.
Proposed rule; solicitation of comments.
In this document, the Wireline Competition Bureau (the Bureau) seeks to develop a more robust record in the pending Rural Health Care reform rulemaking proceeding, which will allow the Commission to craft an efficient permanent program that will help health care providers exploit the potential of broadband to make health care better, more widely available, and less expensive for patients in rural areas.
Comments are due on or before August 23, 2012. Reply comments are due on or before September 7, 2012.
Interested parties may file comments on or before August 23, 2012 and reply comments on or before
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• All hand-delivered or messenger-delivered paper filings for the Commission's Secretary must be delivered to FCC Headquarters at 445 12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes and boxes must be disposed of before entering the building.
• Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.
• U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street SW., Washington DC 20554.
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Chin Yoo, Telecommunications Access Policy Division, Wireline Competition Bureau at (202) 418-0295 or TTY (202) 418-0484. For detailed instructions for submitting comments and additional information on the rulemaking process, see the
This is a synopsis of the Wireline Competition Bureau's Public Notice in WC Docket No. 02-60; DA 12-1166, released July 19, 2012. The complete text of this document is available for inspection and copying during normal business hours in the FCC Reference Information Center, Portals II, 445 12th Street SW., Room CY-A257, Washington, DC 20554. The document may also be purchased from the Commission's duplicating contractor, Best Copy and Printing, Inc., 445 12th Street SW., Room CY-B402, Washington, DC 20554, telephone (800) 378-3160 or (202) 863-2893, facsimile (202) 863-2898, or via the Internet at
1. In this document, the Wireline Competition Bureau seeks to develop a more robust record in the pending Rural Health Care reform rulemaking proceeding, particularly with regard to the proposed Broadband Services Program. The Commission's Rural Health Care Pilot Program has helped foster the creation and growth of numerous state and regional broadband networks of health care providers (HCPs) throughout the country. These Pilot project networks have enabled health care providers in rural areas to tap into the medical and technical expertise of other health care providers on their networks, using telemedicine and other telehealth applications to improve the quality and lower the cost of health care for their patients in rural areas. As the Commission moves forward with reform of the Rural Health Care (RHC) program, it can benefit greatly from the experience of the Pilot projects and the lessons learned in the Pilot Program. A more focused and comprehensive record will help the Commission craft an efficient permanent program that will help health care providers exploit the potential of broadband to make health care better, more widely available, and less expensive for patients in rural areas.
2. In its March 16, 2010, Joint Statement on Broadband, the Commission said that “ubiquitous and affordable broadband can unlock vast new opportunities for Americans, in communities large and small, with respect to * * * health care delivery.” The National Broadband Plan issued that same day recommended, among other things, that the Commission reform its Rural Health Care program in two ways: (1) By replacing the existing Internet Access Fund with a Health Care Broadband Access Fund, and (2) by establishing a Health Care Broadband Infrastructure Fund to subsidize network deployment for HCPs where existing networks are insufficient. Later that year, the Commission issued a Notice of Proposed Rulemaking in this docket proposing, consistent with the National Broadband Plan recommendations, both a Health Infrastructure Program, which would support the construction of new broadband HCP networks in areas of the country where broadband is unavailable or insufficient, and a Health Broadband Services Program, which would support the monthly recurring costs of broadband services for rural HCPs.
3. Since the Commission issued the
4. In recent months, Commission staff has engaged in outreach calls and meetings with many Pilot projects, as well as with other entities knowledgeable about rural health care, telemedicine, and Health IT. Based on what we have learned from the Pilot projects, and in light of the comments and other information filed in this Docket, we have identified several areas relating to the Broadband Services Program proposed in the
5. Section 254(h)(7)(B)(vii) of the Communications Act specifically authorizes funding for consortia of eligible health care providers.
6. In the
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7. One of the benefits of facilitating the establishment and operation of health care networks that serve providers in rural America is improved access to specialized care that typically is more available in urban areas. Historically, support under the Primary Program has only been provided to health care providers that meet the rural health care mechanism's definition of “rural.” In the Pilot Program, however, the Commission permitted non-rural health care providers to participate as part of consortia that include health care providers serving rural areas.
8. In response to the
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9. In the Pilot Program, the Commission allows health care providers to use “any currently available technology” in order to create networks. The Pilot Program funds both recurring costs and non-recurring costs (NRCs) for dedicated broadband networks connecting HCPs in a state or region, including the cost of subscribing to commercial service providers' services. As noted above, although the Pilot Program permitted projects to construct and own broadband network facilities, many projects elected to lease broadband services (which mostly involve recurring costs) rather than constructing and owning the broadband facilities themselves. As of February 29, 2012, the Pilot Program had committed approximately $35 million for construction, $162 million for leased/tariffed facilities or services, and $19 million for network equipment (including engineering and installation). The projects choosing to lease services cite several reasons for that choice, including that the HCPs' core competencies does not include owning or managing communications networks, that the HCPs can obtain the needed broadband without owning the facilities themselves, and that the administrative and other costs associated with broadband network ownership are too great.
10. For the Broadband Services Program, the
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We seek comment on whether there is a need to adopt specific rules in the Broadband Services Program (if adopted), regarding the participation of ineligible HCP sites (
11. The Pilot Program requires projects to prepare Requests for Proposals (RFPs) and to use a competitive bidding process to select broadband infrastructure and service providers. It appears that the competitive bidding process, in combination with bulk purchasing by a large number of health care providers using a single RFP, has led to lower prices, better service quality, and more broadband deployment than the individual HCPs might otherwise have obtained. In the
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Commenters have suggested that the Commission could encourage high capacity broadband networks that would support health care providers' telemedicine and broadband needs by allowing HCPs to enter into long term contracts for such networks with carriers or other telecommunications providers. We seek comment on the benefits and drawbacks of providing funding for multi-year contracts, including long-term prepaid leases and IRUs, in the Broadband Services Program. The Nebraska Statewide Telehealth Network (NSTN) recommends that a “true” evergreen provision be applied to HCPs with multi-year contracts, which would allow for HCPs with multi-year contracts to apply only once for multiple years of funding.
Would permitting evergreen contracts (as they are implemented today, with the annual filing requirement) be sufficient to allow consortia in the Broadband Services Program to reap the potential benefits of multi-year contracts, while minimizing administrative burdens? Or, would evergreen status need to be coupled with a multi-year award, and if so, would three years be sufficient for the term of the award, or would some other period be more appropriate? We note that long-term prepaid leases and IRUs generally involve a large, upfront payment. For example, the full cost for a dark fiber IRU is typically paid for in advance. If the Commission permitted long-term prepaid leases and/or IRUs in the Broadband Services Program, how should it deal with upfront payments? How would funding multi-year contracts impact the calculation and forecasting of demand for RHC support? What protections should be put in place to protect against waste, fraud and abuse? For instance, would the measures used in the Pilot Program for such arrangements be useful in the Broadband Services Program (such as sustainability plans, minimum contract length, and repayment requirements)? If so, should those same measures be used, or should they be modified in any respect?
d.
e.
12. Both the
a.
b.
c.
d.
e.
13. Interested parties may file comments and reply comments on or before the dates indicated on the first page of this document. Comments are to reference WC Docket No. 02-60 and DA 12-1166 and may be filed using the Commission's Electronic Comment Filing System (ECFS).
•
•
Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.
• All hand-delivered or messenger-delivered paper filings for the Commission's Secretary must be delivered to FCC Headquarters at 445 12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes and boxes must be disposed of before entering the building.
• Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.
• U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street SW., Washington, DC 20554.
• People with Disabilities: To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to
(1) Chin Yoo, Telecommunications Access Policy Division, Wireline Competition Bureau, 445 12th Street SW., Room 5-A441, Washington, DC 20554; email:
14. This matter shall be treated as a “permit-but-disclose” proceeding in accordance with the Commission's
Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Proposed rule.
DoD, GSA, and NASA are proposing to amend the Federal Acquisition Regulation (FAR) to provide additional guidance when raising the ceiling price or otherwise changing the scope of work for a time-and-materials (T&M) or labor-hour (LH) contract or order.
Interested parties should submit written comments to the Regulatory Secretariat at one of the addressees shown below on or before September 24, 2012 to be considered in the formation of the final rule.
Submit comments in response to FAR Case 2011-025 by any of the following methods:
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DoD, GSA, and NASA are proposing to revise the FAR to implement a policy that provides additional guidance to address actions required when raising the ceiling price for a T&M or LH contract or order. FAR Case 2009-043, “Time-and-Materials and Labor-Hour Contracts for Commercial Items”, was published as a final rule in the
This FAR case provides additional guidance to address actions required when raising the ceiling price or otherwise changing the general scope of a T&M or LH contract or order. The case provides guidance to address this issue for the respective parts of the FAR addressing T&M and LH contracts or orders, such as FAR 8.404, 12.207, and 16.601.
The Government Accountability Office stated within Matter of Specialty Marine, Inc., B-293871, B-293871.2, 2004 Comp. Gen. Proc. Dec. P130, (June 17, 2004) that: “When a protester alleges that an order is outside the scope of the contract, we analyze the protest in essentially the same manner as those in which the protester argues that a contract modification is outside the scope of the underlying contract. The fundamental issue is whether issuance of the task or delivery order in effect circumvents the general statutory requirement under the Competition in Contracting Act (CICA) that agencies `obtain full and open competition through the use of competitive procedures' when procuring their requirements. See 10 U.S.C. 2304(a)(1)(A) (2000).
In determining whether a task or delivery order (or modification) is outside the scope of the underlying contract, and thus falls within CICA's competition requirement, our Office examines whether the order is materially different from the original contract. Evidence of a material difference is found by reviewing the circumstances attending the original procurement; any changes in the type of work, performance period, and costs between the contract as awarded and the order as issued; and whether the original solicitation effectively advised offerors of the potential for the type of orders issued. Overall, the inquiry is whether the order is one which potential offerors would have reasonably anticipated.”
The Councils propose the following changes:
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.
The change may have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act 5 U.S.C. 601,
The purpose of this case is to clarify the procedures necessary to raise the ceiling price of a time-and-materials (T&M) or labor-hour (LH) contract or order.
In finalizing FAR rule 2009-043 “Time-and-Materials and Labor-Hour Contracts for Commercial Items” it became apparent that the guidance in the FAR on raising the ceiling price for a T&M or LH contract or order was not clear or consistent throughout the FAR. This case was opened to clarify the process and necessary documentation when raising the ceiling price for these contracts or orders.
This rule deals with the administration of T&M and LH contracts and orders and most likely will not have a direct effect on contractors. In FY 2011, the Federal Government awarded 23,023 T&M and LH contracts and orders of which 6,315 went to small businesses. This rule is not likely to affect how many large and small businesses are awarded this type of contract.
This rule does not add any new information collection requirements.
The rule does not duplicate, overlap, or conflict with any other Federal rules.
No alternatives were determined that will accomplish the objectives of the rule.
The Regulatory Secretariat will be submitting a copy of the Initial Regulatory Flexibility Analysis (IRFA) to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the IRFA may be obtained from the Regulatory Secretariat. The Councils invite comments from small business concerns and other interested parties on the expected impact of this rule on small entities.
DoD, GSA, and NASA will also consider comments from small entities concerning the existing regulations in subparts affected by this rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (FAR Case 2011-025) in correspondence.
The proposed rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).
Government procurement.
Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 8, 12, 16, and 52 as follows:
1. The authority citation for 48 CFR parts 8, 12, 16, and 52 is revised to read as follows:
40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.
2. Amend section 8.404 by revising paragraph (h)(3)(iv) to read as follows:
(h) * * *
(3) * * *
(iv) Prior to an increase in the ceiling price of a time-and-materials or labor-hour order, the ordering activity shall—
(A) Conduct an analysis of pricing and other relevant factors to determine if the action is in the best interest of the Government and document the order file;
(B) Follow the procedures at 8.405-6 for a change that modifies the general scope of the order; and
(C) Comply with the requirements at 8.402(f) when modifying an order to add open market items.
3. Amend section 12.207 by revising paragraph (b)(1)(ii)(C) to read as follows:
(b)(1) * * *
(ii) * * *
(C) Prior to increasing the ceiling price of a time-and-materials or labor-hour contract or order, shall—
(
(
(
(
(
(
4. Amend section 16.504 by removing from paragraph (a)(4)(v) “(see 16.505(b)(6))” and adding “(see 16.505(b)(8))” in its place.
5. Amend section 16.505 by—
a. Removing from paragraph (b)(1)(iv)(E) “paragraph (b)(4)” and adding “paragraph (b)(6)” in its place;
b. Redesignating paragraphs (b)(4) through paragraphs (b)(6) as paragraphs (b)(6) through (b)(8), respectively; and
c. Adding new paragraphs (b)(4) and (b)(5).
The additions read as follows:
(b) * * *
(4) For additional requirements for cost reimbursement orders see 16.301-3.
(5) For additional requirements for time-and-materials or labor-hour orders, see 16.601(e).
6. Amend section 16.601 by—
a. Removing from paragraph (c)(2)(i) “(see 16.601(e)(1))” and adding “(see 16.601(f)(1))” in its place;
b. Revising paragraph (d) introductory text and paragraph (d)(2);
c. Redesignating paragraph (e) as paragraph (f); and
d. Adding a new paragraph (e),
The revisions and addition read as follows.
(d)
(2) The contract or order includes a ceiling price that the contractor exceeds at its own risk. Also see 12.207(b) for further limitations on use of time-and-materials or labor-hour contracts for acquisition of commercial items.
(e)
(1) Conduct an analysis of pricing and other relevant factors to determine if the action is in the best interest of the Government;
(2) Document the decision in the contract or order file; and
(3) When making a change that modifies the general scope of—
(i) A contract, follow the procedures at 6.303;
(ii) An order issued under the Federal Supply Schedules, follow the procedures at 8.405-6; or
(iii) An order issued under multiple award task and delivery order contracts, follow the procedures at 16.505(b)(2).
7. Amend section 52.216-29 by removing from the introductory paragraph “16.601(e)(1)” and adding “16.601(f)(1)” in its place.
8. Amend section 52.216-30 by removing from the introductory paragraph “16.601(e)(2)” and adding “16.601(f)(2)” in its place.
9. Amend section 52.216-31 by removing from the introductory paragraph “16.601(e)(3)” and adding “16.601(f)(3)” in its place.
Assistant Secretary for Policy, Management and Budget, Interior.
Proposed rule.
The Department of the Interior proposes to issue regulations guiding implementation of the Buy Indian Act, which provides the Bureau of Indian Affairs with authority to set aside procurement contracts for Indian-owned and controlled businesses. This rule supplements the Federal Acquisition Regulation (FAR) and the Department of the Interior Acquisition Regulations (DIAR).
Comments must be received on or before September 24, 2012. Tribal consultation meetings to discuss this rule will take place on Tuesday, August 14, 2012, from 8 a.m. to noon; Wednesday, August 15, 2012, from 3 p.m. to 6 p.m.; Tuesday, August 21, 2012, from 8 a.m. to noon; and Thursday, August 23, 2012, from 8 a.m. to noon.
You may submit comments, identified by the Number by any of the following methods:
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• See the
Jonodev Chaudhuri, Office of the Assistant Secretary—Indian Affairs, (202) 208-7163;
The Bureau of Indian Affairs has obtained services and supplies from Indian sources using the Buy Indian Program since 1965, based on policy
This proposal incorporates the Assistant Secretary—Indian Affairs decision to increase economic development and employment of Indian persons by reducing the percentage of Indian ownership of business enterprises from a mandatory 100 percent to minimum 51 percent.
In addition, the regulations respond to and incorporate the nuances of the Section 831 of the National Defense Authorization Act for Fiscal Year 1991 (10 U.S.C. 2301 note) that amended 25 U.S.C. 47 to allow Indian firms to participate in the Department of Defense's Mentor-Protégé Program and not lose their eligibility for contracts awarded under the authority of the Buy Indian Act. This proposed rule includes language stating that participation in the Mentor-Protégé program has no effect on eligibility for contracts awarded under the authority of the Buy Indian Act.
This proposed rule also includes revisions to address the input received as a result of earlier publications and three consultation hearings in Indian Country.
The Office of the Assistant Secretary—Indian Affairs will be hosting tribal consultation meetings addressing this rule at the following dates and locations:
Tribal leader letters announcing these consultation meetings were distributed on July 5, 2012, providing advance notice of these consultations.
The authority to issue regulations is vested in the Secretary of the Interior by 5 U.S.C. 301. The authorizing statute is section 23 of the Act of June 25, 1910 (25 U.S.C. 47, as amended).
This rule supplements the Federal Acquisition Regulation (FAR) and the Department of the Interior Acquisition Regulations (DIAR). For this reason the rule is issued by the Assistant Secretary for Policy, Management and Budget. This rule formalizes an administrative procedure for all Bureau of Indian Affairs acquisition activities and locations to ensure uniformity for eligible Indian Economic Enterprises that submit offers under solicitations set aside under the Act and this part.
This rule follows the numbering system established by the FAR and supplements the DIAR. Section 1401.303(a)(3) of 48 CFR authorizes each Interior bureau to codify regulations implementing the DIAR.
Where material in the FAR and/or DIAR do not require BIA implementing regulations, there will be no corresponding section number in the supplementary material.
When finalized, the rule will govern, and be incorporated into the Indian Affairs Acquisition Regulations (IAAR), which establishes uniform acquisition policies and procedures for BIA, and is part of the Indian Affairs Manual (IAM). Handbooks, Acquisition Guidance Releases and the BIA's Guidelines on the Charge Card Program supplement the IAAR provisions of the IAM.
The BIA has encouraged major initiatives for economic development and employment of Indian persons, such as reducing the required percentage of Indian ownership of Indian economic enterprises from 100 percent to 51 percent. In support of these initiatives, the previously proposed rules have been revised and are published here as a new proposed rule.
Section 831 of the National Defense Authorization Act for Fiscal Year 1991 (10 U.S.C. 2301 note) amended 25 U.S.C. 47 to allow Indian firms to participate in the Department of Defense's Mentor-Protégé Program and not lose their eligibility for contracts awarded under the authority of the Buy Indian Act. This rule includes language stating that participation in the Mentor-Protégé program has no effect on eligibility for contracts awarded under the authority of the Buy Indian Act.
This rule formalizes an administrative procedure for all Bureau acquisition activities/locations to ensure that the Bureau will apply the procedures uniformly for eligible Indian Economic Enterprises that submit offers under solicitations set aside under the Act and this part.
This rule has been in development for decades. BIA published proposed rules in the
Notification regarding a series of three public consultation sessions was published in the
Most recently, BIA circulated a draft rule and held a series of three tribal consultation sessions in 2010. The consultation sessions were conducted in Portland, Oregon, on April 26, 2010; in Rapid City, South Dakota, on April 28, 2010; and in Tulsa, Oklahoma, on April 29, 2010. BIA published notice of these consultations in the
In addition to changes addressing the following comments, we made several editorial changes to the text of the proposed rule to clarify our intent regarding specific provisions, including changes to subchapter A. A significant portion of BIA's acquisition regulation covered under subchapter A does not impact a contractor's ability to contract with the BIA and therefore does not require publication in 48 CFR part 14. These editorial changes are minor and do not affect the substance or intent of the rule.
The following is a summary of some of the main categories of comments and BIA's responses.
Corresponding with the change in Bureau policy from “100 percent ownership” to “a minimum of 51 percent ownership” of an Indian firm, the Bureau will not certify “Indian” ownership of a participating firm. Rather, an economic enterprise will now represent themselves in writing as an Indian economic enterprise in response to a specific Bureau set-aside. The contracting officer or an interested party, as defined in section 1480.201, may raise a protest to the representation declaration of an offeror. The contracting officer will handle the protest under proposed Subpart 1480.9 of the rule. The Bureau believes this approach will be more effective than a Bureau certification system to ensure the eligibility requirements of the Buy Indian Act.
In the event of a protest to the agency, award in the face of protest requires approval by an official other than the contracting officer. In the event of a GAO protest, approval is required by the head of the contracting activity.
Executive Order 12866 provides that the Office of Information and Regulatory Affairs (OIRA) will review all significant rules. The Office of Information and Regulatory Affairs has determined that this rule is not significant.
Executive Order 13563 reaffirms the principles of E.O. 12866 while calling for improvements in the nation's regulatory system to promote predictability, to reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory ends. The executive order directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. E.O. 13563 emphasizes further that regulations must be based on the best available science and that the rulemaking process must allow for public participation and an open exchange of ideas. We have developed this rule in a manner consistent with these requirements. This rule is also part of the Department's commitment under the Executive Order to reduce the number and burden of regulations.
The Department of the Interior certifies that this document will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act.
(a) This rule does not have an annual effect on the economy of $100 million or more. The annual value of contracts is less than $45 million.
(b) This rule will not cause any increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions. The rule will be applied on a national basis and has no effect on the dollar amount expended for acquisitions.
(c) This rule does not have significant adverse effects on competition,
This rule does not impose any unfunded mandate on State, local, or tribal governments or the private sector. The rule does not have a significant or unique effect on State, local or tribal governments or the private sector. The rule merely governs acquisitions from contractors.
In accordance with Executive Order 12630, the rule does not have any takings implications. The rule governs acquisitions from contractors.
In accordance with Executive Order 13132, the rule does not have any Federalism implications to warrant the preparation of a Federalism Assessment. The rule governs acquisitions from contractors and does not interfere with the administration of programs by State Governments.
In accordance with Executive Order 12988, the Office of the Solicitor has determined that this rule does not unduly burden the judicial system and meets the requirements of sections 3(a) and 3(b)(2) of the Order.
The BIA has held public meetings with the tribes as stated in the Background section of this preamble as well as the several previous publications of the proposed rule. This meets the intent of the Executive Order. The rule will more directly affect any contractors who may decide to use the Buy Indian Act for subcontracting and Indian economic enterprises.
This regulation requires offerors to state whether they meet the definition of an “Indian economic enterprise.” This statement is a simple representation that an offeror submits to support its claim for eligibility to participate in contract awards under the authority of the Buy Indian Act 25 U.S.C. 47, as amended. Because this statement is a simple certification or acknowledgment, it does not qualify as a collection of information under the Paperwork Reduction Act. See 5 CFR 1320.3(h).
This rule does not constitute a major Federal action significantly affecting the quality of the human environment. A detailed statement under the National Environmental Policy Act of 1969 is not required because there is nothing inherent in the rule that will significantly affect the quality of the human environment; the rule merely regulates the implementation of an acquisition authority.
This rule is not a significant energy action under the definition in Executive Order 13211. A statement of energy effects is not required.
We are required by Executive Orders 12866 (section 1 (b)(12)) and 12988 (section 3(b)(1)(B)) and by the Presidential Memorandum of June 1, 1998, to write all rules in plain language. This means that each rule we publish must:
(a) Be logically organized;
(b) Use the active voice to address readers directly;
(c) Use common, everyday words and clear language rather than jargon;
(d) Be divided into short sections and sentences; and
(e) Use lists and tables wherever possible.
If you feel that we have not met these requirements, send us comments by one of the methods listed in the
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Government procurement, Indian Economic Enterprises, Reporting and recordkeeping requirements.
For the reasons set out in the preamble, the Department of the Interior proposes to amend chapter 14 of title 48 of the Code of Federal Regulations as follows:
1. The authority for part 1401 continues to read as follows:
Sec. 205(c), 63 Stat. 390, 40 U.S.C. 486(c); and 5 U.S.C. 301.
2. Add section 1401.301-80 to read as follows:
BIA must use the negotiation authority of the Buy Indian Act, 25 U.S.C. 47 to give preference to Indians whenever using that authority is authorized and feasible. The Buy Indian Act requires that, so far as may be feasible, Indian labor must be employed, and purchases of the products of Indian industry may be made in open market at the discretion of the Secretary of the Interior. This requirement applies notwithstanding any other law and applies to all products of an industry, including printing.
3. The authority for part 1452 continues to read as follows:
Sec. 205(c), 63 Stat. 390, 40 U.S.C. 486(c); and 5 U.S.C. 301.
4. In subpart 1452.2, add the following sections to read as follows:
As prescribed in 1480.503(b)(1), and in lieu of the requirements of FAR 19.508, insert the following provision in each written solicitation of offers to
Under the Buy Indian Act, 25 U.S.C. 47, offers submitted in response to this solicitation are solicited only from Indian economic enterprises (Subpart 1480.8) that also must be small business concerns. The offeror must represent that they meet the definition of Indian economic enterprise at the time of submission of its offer to a specific solicitation as evidence that it is eligible to be considered for award. Any acquisition resulting from this solicitation will be from such a concern. Offers received from enterprises that are not Indian economic enterprises will not be considered and will be rejected.
As prescribed in 1480.504-1(b)(2), insert the following clause in solicitations and contracts involving Indian economic enterprise set-asides:
(a) Definitions as used in this clause.
(1) At the time an offer is made in response to a written solicitation;
(2) At the time of contract award; and,
(3) During the full term of the contract.
(b) General.
(1) Under the Buy Indian Act, offers are solicited only from Indian economic enterprises.
(2) BIA will reject all offers received from ineligible enterprises.
(3) Any award resulting from this solicitation will be made to an Indian economic enterprise, as defined in paragraph (a).
(c) Required Submissions. In response to this solicitation, an offeror must also provide the following:
(1) A description of the required percentage of the work/costs to be provided by the offeror over the contract term as required by section 1452.280-3, Subcontracting Limitations clause;
(2) A description of the source of human resources for the work to be performed by the offeror;
(3) A description of the method(s) of recruiting and training Indian employees, indicating the extent of soliciting employment of Indian persons, as required by DIAR 1452.226-70, Indian Preference, or DIAR 1452.226-71, Indian Preference Program, clause(s);
(4) A description of how subcontractors (if any) will be selected in compliance with the “Indian Preference” or “Indian Preference” clause(s);
(5) The names, addresses, and descriptions of work to be performed by Indian persons or economic enterprises being considered for subcontracts (if any) and the percentage of the total direct project work/costs they would be performing;
(6) Qualifications of the key personnel (if any) that will be assigned to the contract;
(7) A description of method(s) for compliance with any supplemental Tribal employment preference requirements, if contained in this solicitation; and
(d) Required Assurance. The contractor must provide written assurance to the Bureau that it will comply, or has, complied fully with the requirements of this clause. It must do this before the Bureau awards the Buy Indian contract, as well as, upon successful and timely completion of the contract, but before the Bureau Contracting Officer (CO) accepts the work or product.
(e) Non-responsiveness. Failure to provide the information required by paragraphs (c) and (d) of this clause may cause the Bureau to find an offer non-responsive and to reject it.
(f) Eligibility.
(1) Participation in the Mentor-Protégé Program established under section 831 of the National Defense Authorization Act for Fiscal Year 1991 (25 U.S.C. 47 note) does not render an Indian economic enterprise ineligible for contracts awarded under the Buy Indian Act.
(2) If a contractor no longer meets the definition of an Indian economic enterprise after award, the contractor must notify the CO in writing. The notification must include full disclosure of circumstances causing the contractor to lose eligibility status and a description of any actions that the contractor will take to regain eligibility. Failure to give the CO immediate written notification means that: (1) The economic enterprise may be declared ineligible for future contract awards under this part; and (2) The Bureau may consider termination for default if it is in the best interest of the government.
A contractor shall not subcontract to other than responsible Indian economic enterprises more than 50 percent of the work under a prime contract awarded under the Buy Indian Act. For this purpose, work to be performed does not include the provision of materials, supplies, or equipment.
As prescribed in 1480.602(b), insert the following clause in each written solicitation or contracts to provide supplies, services, or on-reservation construction:
(a) Definitions as used in this clause.
(1)
(2)
(3)
(b) Required Percentages of work by the concern. The contractor must comply with FAR 52.219-14 Limitations on Subcontracting clause.
(c) Indian Preference. Regardless of the contract type for services, supplies, or on-reservation construction, the contractor agrees to give preference to Indian organizations and Indian owned economic enterprises in awarding subcontracts under this contract in accordance with DIAR 1452.226-71, Indian Preference.
(d) Cooperation. The contractor must:
(1) Carry out the requirements of this clause to the fullest extent; and
(2) Cooperate in any study or survey that the CO, the Bureau of Indian Affairs, or its agents may conduct to verify the contractor's compliance with this clause.
(e) Incorporation in Subcontracts. The contractor must incorporate the substance of this clause, including this paragraph (e), in all subcontracts for supplies, services, and construction awarded under this contract.
As prescribed in 1480.801(a), insert the following provision in each written solicitation for supplies, services, or on-reservation construction:
The offeror represents as part of its offer that it [ ] does [ ] does not meet the definition of Indian economic enterprise as defined in 1480.201.
5. Add subchapter H, consiting of part 1480, to read as follows:
25 U.S.C. 47, as amended (36 Stat. 861), 41 U.S.C. 253(c)(5), and 5 U.S.C. 301.
This part prescribes policies and procedures for the procurement of supplies and services from Indian economic enterprises under the Buy Indian Act, 25 U.S.C. 47, and this part.
(a) This part supplements Federal Acquisition Regulation (FAR) and Department of the Interior Regulation (DIAR) requirements to satisfy the needs of the Bureau of Indian Affairs in implementing the Buy Indian Act.
(b) Regulations issued under this part will be codified in Department of the Interior (DOI) regulations at 48 CFR Chapter 14, Appendix A, Part 1480.
(c) This part is under the direct oversight and control of the Chief Financial Officer, BIA, Department of the Interior (hereinafter, “CFO”). The CFO is responsible for issuing and implementing this part.
(d) Acquisitions conducted under this part are subject to all applicable requirements of the FAR and DIAR, as well as internal policies, procedures or instructions issued by the Bureau of Indian Affairs. The provisions of the FAR takes precedence in all instances where there may be a conflict or discrepancy.
The following words and terms are used as defined below unless a different definition is prescribed for a particular subpart or portion of a subpart.
(1) Any business activity owned by an Indian or an Indian Tribe that is established for the purpose of profit provided that:
(i) Such Indian or Indian Tribe ownership shall constitute not less than 51 percent of the enterprise;
(ii) That the Indian or Indian Tribe shall receive a majority of the earnings from the contract; and
(iii) The management and daily business operations of an enterprise must be controlled by one or more individuals who are Indians.
(2) To ensure actual control over the enterprise, the individuals must possess requisite management or technical capabilities directly related to the primary industry in which the enterprise conducts business. The enterprise must meet these requirements for these time periods:
(i) At the time an offer is made in response to a written solicitation;
(ii) At the time of contract award; and
(iii) During the full term of the contract.
Except as provided in 1480.401(b), this part applies to all acquisitions, including simplified acquisitions, made by the BIA and by any other bureau or office of the Department of the Interior delegated the authority to make acquisitions under the Buy Indian Act and 1480.401(d).
(a) The Bureau must not use the authority of the Buy Indian Act and the procedures contained in this part to award intergovernmental contracts to tribal organizations to plan, operate or administer authorized Bureau programs (or parts thereof) that are within the scope and intent of the Indian Self-Determination and Education Assistance Act. The Bureau must use the Buy Indian Act solely to award procurement contracts to IEEs.
(b) The Bureau must not use the authority of this Act for off-reservation construction contracts, as defined in FAR 36.102 (48 CFR 36.02).
(a) The Bureau shall utilize the negotiation authority of the Buy Indian Act, 25 U.S.C. 47, to give preference to Indians whenever the use of that authority is authorized and practicable. The Buy Indian Act provides that, so far as may be practicable, Indian labor shall be employed, and purchases of the products (including, but not limited to printing, notwithstanding any other law) of Indian industry may be made in open market at the discretion of the Secretary of the Interior. Thus, the Bureau may use the Buy Indian Act to give preference to IEEs through set-asides when acquiring supplies, services, and on-reservation construction to meet Bureau needs and requirements. The Bureau must contract for on-reservation construction in accordance with FAR Part 36 (48 CFR part 36).
(b) The Bureau or any other bureau or office of the Department of the Interior delegated the authority to make acquisitions under the Buy Indian Act may not use the Buy Indian Act to give preference to IEEs through set-asides when acquiring construction services for off-reservation construction activities.
(c) The provisions of this section shall not apply to the awarding of contracts under the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b
(a) The Secretary has delegated authority under the Buy Indian Act to the Assistant Secretary—Indian Affairs. The Bureau exercises this authority in support of its mission and program activities and as a means of fostering Indian employment and economic development.
(b) The Secretary may delegate authority under the Buy Indian Act to a bureau or office within the Department of the Interior other than the Bureau of Indian Affairs only by a Secretarial Order issued in accordance with Part 012, Chapter 1 of the Departmental Manual (012 DM 1).
(c) The CFO as the head of the contracting activity, is responsible for
(a) The following officials may authorize a deviation for an Indian Affairs acquisition:
(b) Deviations may be authorized prior to issuing the solicitation when the Bureau makes the following determinations and the appropriate official takes the following actions:
(c) Deviations may be authorized after issuing solicitations when the Bureau makes the following determinations and the appropriate official takes the following actions:
(d) In response to a set-aside acquisition, when using competitive proposals, proposals may be rejected by a written determination by the CCO that a reasonable price cannot be negotiated.
All acquisitions made in accordance with this part, including simplified or commercial item acquisitions, must conform to all applicable requirements of the FAR and DIAR.
Acquisitions made under an authorized deviation from the Buy Indian Act regulation must be made in conformance with the order of precedence required by FAR 8.002 (48 CFR 8.002).
(a) Each acquisition of supplies, services, and on-reservation construction that is subject to commercial item or simplified acquisition procedures in accordance with FAR Part 12 or 13 (48 CFR part 12 or 13) and DIAR 1413 must be set aside exclusively for ISBEEs. The Bureau will use ISBEE commercial item(s) or simplified acquisition set-asides to accomplish this preference action.
(b) Each written solicitation of offers under an ISBEE commercial item or simplified acquisition set-aside must contain the provision at section 1452.280-1, NOTICE OF INDIAN SMALL BUSINESS ECONOMIC ENTERPRISE SET-ASIDE. If the solicitation is oral, information substantially identical to that contained in the provision must be given to potential offerors.
(c) If the CO proceeds with an ISBEE commercial item or simplified acquisition set-aside and receives an offer at a reasonable price from only one such responsible economic enterprise (see FAR 19.502-2 (48 CFR 19.502-2)), the CO must make an award to that enterprise.
(d) Commercial item or simplified acquisitions under this section must conform to the competition and price reasonableness documentation requirements of FAR 12.209 (48 CFR 12.209) for commercial item acquisitions and FAR 13.106 (48 CFR 13.106) for simplified acquisitions.
(e) Clauses and Provisions.
(1) Insert the provision at 1452.280-4, INDIAN ECONOMIC ENTERPRISE REPRESENTATION, in each solicitation of offers or requests for quotations that is set aside for IEEs.
(2) Insert the clause at 1452.280-3, SUBCONTRACTING LIMITATIONS, in purchase orders and contracts for services, supplies, or on-reservation construction and awarded to IEEs.
(3) Insert the clause at DIAR 1452.226-71, Indian Preference Program, in accordance with DIAR 1426.7003(b).
(a) Each proposed procurement for supplies or services that has an anticipated dollar value in excess of the simplified acquisition threshold amount in FAR Part 13.003 (48 CFR 13.003) must be set aside exclusively for IEEs, and referred to as an “Indian Economic Enterprise Set-aside,” when there is a reasonable expectation that offers will be received from two or more responsible, IEEs and award will be made at a reasonable price except when:
(1) The acquisition is for off-reservation construction, as described in 1480.401(b);
(2) A deviation has been obtained in accordance with 1480.402; or
(3) Use of other than full and open competition has been justified and approved in accordance with 1480.504-2.
(b) When acquiring services to be performed in whole or in part on Indian land, the CO must give written notice to the governing body or bodies of the applicable Indian tribe simultaneously with publication of the synopsis required by paragraph (c)(1) of this section. The notice must state the Bureau's intent to solicit services or supplies using an IEE set-aside and provide the tribe with the opportunity to contract for the program within 15 calendar days from the date of the synopsis publication in the GPE.
(1) If the tribe does not oppose the set-aside intention or advise the Bureau by the established deadline of its intent to contract, the Bureau will proceed with the solicitation in accordance with FAR 5.2 (48 CFR 5.2).
(2) If the tribe advises the Bureau by the established deadline of its intent to contract, it must adequately justify a deviation for work on or near its own Indian land through a tribal resolution in accordance with Public Law 93-638.
(c) When using an IEE set-aside in accordance with this section, the CO must do the following:
(1) Synopsize the acquisition in the Governmentwide point of entry (GPE) as required by FAR Subpart 5.2 (48 CFR subpart 5.2), and identify it as an IEE set-aside.
(2) Use the Class Justification for Use of Other Than Full and Open Competition (JOFOC) in Acquisition of Supplies and Services from Indian Industry to meet the requirements of FAR 6.303 (48 CFR 6.303).
(3) By separate memorandum to the file, document that the supplies or services to be acquired are available from two or more responsible and IEEs; the anticipated cost to the Bureau of the required supplies or services is determined to be reasonable; and the information in the “Class Justification for Use of Other Than Full and Open Competition in Acquisition of Supplies and Services from Indian Industry” is accurate and complete as it pertains to the proposed acquisition.
(4) Reject offers that fail to provide representation that they meet the definition of an IEE. The CO may also request the Office of the Inspector General (on Form DI-1902 as part of a normal pre-award audit) to:
(i) Assist in determining the eligibility of the low responsive and responsible offerors on Buy Indian Act awards, and
(ii) Determine whether the work will be performed by the labor force required under 1480.602.
(5) When using sealed bidding, determine that the price offered by the prospective contractor is considered to be reasonable and at a fair market price as required by FAR 14.408-2 (48 CFR 14.408-2) before awarding a contract.
(6) When using competitive proposals, solicit proposals in accordance with FAR Subpart 15.2 (48 CFR subpart 15.2) and select sources in accordance with FAR Subpart 15.3 (48 CFR subpart 15.3) and DIAR Subpart 1415.6.
(7) When using competitive proposals or when negotiating modifications that impact the cost of a contract, conduct proposal analyses, including cost or price analyses in accordance with FAR Subpart 15.4 (48 CFR subpart 15.4), negotiate profit or fee in accordance with the procedures in FAR Subpart 15.4 and DIAR Subpart 1415.9, and prepare a negotiation memorandum in accordance with FAR 15.406-3 (48 CFR 15.406-3) and DIAR 1415.808.
(8) When acquiring architect-engineer services, solicit proposals and evaluate potential contractors in accordance with FAR Part 36 (48 CFR part 36) and DIAR Subpart 1436.6.
(d) This paragraph applies to solicitations that are not restricted to participation of IEEs.
(1) If an interested IEE is identified after a market survey has been performed and a solicitation has been issued, but before the date established for receipt of offers, the contracting
(i) Will not give preference under the Buy Indian Act to the IEE, and
(ii) May extend the date for receipt of offers when practical.
(2) If more than one IEE comes forward subsequent to the solicitation, but prior to the date established for receipt of offers, the CO may cancel the solicitation and re-compete it as an IEE set-aside.
(e) When only one offer is received from a responsible IEE at a reasonable and fair market price in response to an acquisition set-aside under paragraph (a) of this subsection, the CO must:
(1) Make an award to that enterprise;
(2) Document the reason only one offer was considered; and
(3) Initiate action to increase competition in future solicitations.
(f) Provisions and Clauses.
(1) Insert the provision at 1452.280-4, INDIAN ECONOMIC ENTERPRISE REPRESENTATION, in accordance with 1480.801(a).
(2) Insert the clause at DIAR 1452.226-70, Indian Preference, in accordance with DIAR 1426.7003(a);
(3) Insert the clause at DIAR 1452.226-71, Indian Preference Program, in accordance with DIAR 1426.7003(b);
(4) Insert the clause at 1452.280-2, NOTICE OF INDIAN ECONOMIC ENTERPRISE SET-ASIDE, in accordance with 1480.504-1(b)(2).
(5) Insert the clause at 1452.280-3, SUBCONTRACTING LIMITATIONS, as prescribed in 1480.601(b);
(6) When applicable, Tribal employment preference requirements may be added to the requirements of the clause in accordance with DIAR 1426.7005.
(a) Other circumstances may exist where the use of an IEE set-aside in accordance with 1480.401(a) and FAR 6.302-5 (48 CFR 6.302-5) is not feasible. In such situations, the requirements of FAR Subpart 6.3 (48 CFR subpart 6.3) and DIAR Subpart 1406.3 apply in justifying the use of the appropriate authority for other than full and open competition.
(b) Except as provided in FAR 5.202 (48 CFR 5.202), all proposed acquisition actions must first be publicized in accordance with the requirements of FAR 5.2 (48 CFR 5.2) and DIAR 1405.2.
(c) Justifications for use of other than full and open competition in accordance with this section must be approved in accordance with 14-6. These approvals are required for a proposed contract, or for an out of scope modification to an existing contract.
Violation of the regulations in this part by an offeror or an awardee may be cause for debarment or suspension in accordance with FAR 9.406 and 9.407 (48 CFR 9.406 and 9.407). The Bureau must refer recommendations for debarment or suspension to the Director, Office of Acquisition and Property Management (PAM), Department of the Interior, in accordance with DIAR 1409.406 and 1409.407 through the Division of Acquisition and Property Management (central office) and concurred by the HCA.
(a) In contracts awarded under the Buy Indian Act and this part, the contractor must agree to perform the contract in accordance with FAR 52.219-14 (48 CFR 52.219-14), Limitations on Subcontracting.
(b) The CO must also insert the clause at 1452.280-3, SUBCONTRACTING LIMITATIONS, in all purchase orders and contracts for services, supplies, or on-reservation construction and awarded to IEEs pursuant to this part.
Solicitations requiring performance and payment bonds must conform to FAR Part 28 (48 CFR part 28) and authorize use of any of the types of security acceptable in accordance with FAR Subpart 28.2 (48 CFR subpart 28.2) or section 11 of Public Law 98-449, the Indian Financing Act Amendment of 1984. The CO may accept alternative forms of security in lieu of performance and payment bonds according to FAR 28.102 (48 CFR 28.102) and 25 U.S.C. 47a, if a determination is made that such forms of security provide the Government with adequate security for performance and payment.
The CO and the CO's representative (see DIAR 1401.670) must monitor performance and progress to ensure contractor compliance with Part 42 of the FAR (48 CFR part 42) regarding all contract requirements. The CO must ensure contractor compliance with the following provisions of this part:
(a) Qualification as an IEE as defined in 1480.201;
(b) Maintenance of the subcontracting limitations required by the clause at 1452.280-3 when acquiring services, supplies, and on-reservation construction; and
(c) Enforcement of Indian preference requirements contained in DIAR 1426.7004, as prescribed by 1480.601.
(a) The CO must insert the provision at 1452.280-4, INDIAN ECONOMIC ENTERPRISE REPRESENTATION, in all solicitations regardless of dollar value that are set aside for IEEs in accordance with this part.
(b) To be considered for an award under 1480.503 or 1480.504-1, an offeror must:
(1) Represent that it meets the definition of “Indian economic enterprise” in response to a specific solicitation set-aside in accordance with the Act and this part.
(c) The enterprise must meet the definition of “Indian economic enterprise”:
(1) At the time an offer is made in response to a solicitation;
(2) At the time of contract award; and,
(3) During the full term of the contract.
(d) If, after award, a contractor no longer meets the eligibility requirements in paragraph (b) of this section, the contractor must provide immediate, written notification to the CO. The notification must include:
(1) Full disclosure of circumstances causing the contractor to lose eligibility status; and
(2) A description of actions, if any, that must be taken to regain eligibility.
(e) Failure to provide immediate written notification required by paragraph (d) of this section means that:
(1) The economic enterprise may be declared ineligible for future contract awards under this part; and
(2) The Bureau may consider termination for default if it is determined to be in the best interest of the government.
(f) The CO will accept an offeror's representation in a specific bid or proposal that it is an IEE unless another interested party challenges the IEE representation or the CO has reason to question the representation. Challenges of and questions concerning a specific representation declaration must be referred to the CO or CCO in accordance with subpart 1480.9.
(g) Participation in the Mentor-Protégé Program established under section 831
(a) Bureau contracting offices must provide copies of the IEE representation to any interested parties upon written request.
(b) The submission of a Solicitation Mailing List Application by an enterprise does not remove the requirement for it to provide representation as an IEE also required by this part if it wishes to be considered as an offeror for a specific solicitation. COs may determine the validity of the contents of the applicant's representation.
(c) Any false or misleading information submitted by an enterprise when submitting an offer in consideration for an award set aside under the Buy Indian Act is a violation of the law punishable under 18 U.S.C. 1001. False claims submitted as part of contract performance are subject to the penalties enumerated in 31 U.S.C. 3729 to 3731 and 18 U.S.C. 287.
(a) Only IEEs may participate in acquisitions set aside in accordance with the Act and this part. Bureau procedure supports responsible IEEs and seeks to prevent circumvention or abuse of the Buy Indian Act.
(b) Eligibility is based on information furnished by the enterprise to a Bureau CO on the IEE representation provision at 1452.280-4 in response to a specific solicitation under the Buy Indian Act.
(c) The CO may ask the appropriate Regional Solicitor to review the enterprise's representation.
(d) The IEE representation does not relieve the CO of the obligation for determining contractor responsibility, as required by FAR Subpart 9.1.
(a) The CO can accept an offeror's written representation declaration of being an IEE (as defined in 1480.201) only when it is submitted with an offer in response to a solicitation under the Buy Indian Act. Another interested party may challenge the representation declaration status of an offeror or contractor by filing a written protest to the applicable CO in accordance with the procedures in 1480.902.
(b) After receipt of offers, the CO may question the eligibility declaration of any offeror in a specific offer by filing a formal objection with the CCO.
(a) An interested party must file any protests against the representation declaration of an offeror with the local CO.
(b) The protest must be in writing and must contain the basis for the protest with accurate, complete, specific and detailed evidence. The evidence must support the allegation that the offeror is either ineligible or fails to meet both the definitions of “Indian” and of “Indian economic enterprise” established in 1480.201. The CO will dismiss any protest that is deemed frivolous or that does not meet the conditions in this section.
(c) To be considered timely, a protest must be received by the CO not later than 10 days after the basis of protest is known or should have been known, whichever is earlier.
(1) A protest may be made orally if it is confirmed in writing within the 10-day period after the basis of protest is known or should have been known, whichever is earlier.
(2) A protest may be made in writing if it is delivered by hand, telefax, telegram, or letter postmarked within the 10-day period after the basis of protest is known or should have been known, whichever is earlier.
(3) A CO's objection is always considered timely, whether filed before or after award.
(d) Upon receiving a timely protest, the CO must:
(1) Notify the protestor of the date it was received, and that the representation declaration of the enterprise being challenged is under consideration by the Bureau; and
(2) Furnish to the economic enterprise (whose representation declaration is being challenged) a request to provide detailed information on its eligibility by certified mail, return receipt requested.
(e) Within 3 days after receiving a copy of the protest and the Bureau's request for detailed information, the challenged offeror must file with the CO a completed statement answering the allegations in the protest, and furnish evidence to support its position on representation. If the offeror does not submit the required material within the 3 days, or another period of time granted by the CO, the Bureau may assume that the offeror does not intend to challenge the protest and the Bureau must not award to the challenged offeror.
(f) Within 10 days after receiving a protest, the challenged offeror's response and other pertinent information, the CO must determine the representation declaration status of the challenged offeror and notify the protestor and the challenged offeror of the decision by certified mail, return receipt requested, and make known the option to appeal the determination to the PAM.
(g) If the declaration accompanying an offer is challenged and subsequently upheld by the PAM, the written notification of this Bureau action must state the reason(s). The PAM may review the economic enterprise for possible suspension or debarment recommendations.
(a) Award of a contract in the face of protest may be made on the basis of the CO's written determination that the challenged offeror's representation declaration is valid.
(1) This determination is final for the Bureau unless it is appealed to the PAM, and the CO is notified of the appeal before award.
(2) If an award was made before the time the CO received notice of appeal, the contract must be presumed to be valid.
(b) After receiving a protest involving an offeror being considered for award, the CO must not award the contract until the CO has determined the validity of the representation, or 10 days have expired since the CO received the protest, whichever occurs first. Award must be made when the CO determines in writing that an award must be made to protect the public interest, or the supplies and services are urgently required, or a prompt award will otherwise be advantageous to the Government.
(c) If a timely protest on representation declaration is filed with the CO and received before award in response to a specific offer and solicitation, the CO must notify eligible offerors within one day that the award will be withheld and a time extension for acceptance is requested.
(d) If a protest on representation declaration is filed with the CO and received after award in response to a specific offer and solicitation, the CO need not suspend contract performance or terminate the awarded contract unless the CO believes that an award may be invalidated and a delay would prejudice the Government's interest. However, if contract performance is to be suspended, a mutual no cost agreement will be sought.
If a CO receives an untimely filed protest of a representation declaration,
Fish and Wildlife Service, Interior.
Proposed rule; reopening of comment period.
We, the U.S. Fish and Wildlife Service, announce the reopening of the public comment period on the December 7, 2011, proposed designation of critical habitat for the Lost River sucker (
We will consider all comments received or postmarked on or before August 27, 2012. Comments submitted electronically using the Federal eRulemaking Portal (see
(1)
(2)
We request that you send comments only by the methods described above. We will post all comments on
Laurie R. Sada, Field Supervisor, U.S. Fish and Wildlife Service, Klamath Falls Fish and Wildlife Office, 1936 California Avenue, Klamath Falls, OR 97601, by telephone (541-885-8481), or by facsimile (541-885-7837). Persons who use a telecommunications device for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 800-877-8339.
We will accept written comments and information during this reopened comment period on our proposed designation of critical habitat for the Lost River sucker and shortnose sucker that was published in the
(1) The reasons why we should or should not designate habitat as “critical habitat” under section 4 of the Act (16 U.S.C. 1531
(2) Specific information on:
(a) The amount and distribution of Lost River sucker and shortnose sucker habitat;
(b) What areas that were occupied at the time of listing and contain physical and biological features essential to the conservation of the species should be included in the designation and why;
(c) Special management considerations or protection that may be needed for the physical and biological features essential to the conservation of the species in critical habitat areas we are proposing, including managing for the potential effects of climate change; and
(d) What areas not occupied at the time of listing meet our criteria for being essential for the conservation of the species and, therefore, should be included in the designation and why.
(3) Land use designations and current or planned activities in the subject areas and their possible impacts on proposed critical habitat.
(4) Information on the projected and reasonably likely impacts of climate change on the Lost River sucker and shortnose sucker, the features essential to their conservation, and the areas proposed as critical habitat.
(5) Whether any specific areas we are proposing for critical habitat designation should be considered for exclusion under section 4(b)(2) of the Act, and whether the benefits of potentially excluding any specific area outweigh the benefits of including that area under section 4(b)(2) of the Act.
(6) Any probable economic, national security, environmental, cultural, or other relevant impacts of designating as critical habitat any area that may be included in the final designation. In particular, we seek information on any impacts on small entities, and the benefits of including or excluding areas that exhibit these impacts.
(7) Whether we could improve or modify our approach to designating critical habitat in any way to provide for greater public participation and understanding, or to better accommodate public concerns and comments.
(8) The likelihood of adverse social reactions to the designation of critical habitat, as discussed in the draft economic analysis, and how the consequences of such reactions, if likely to occur, would relate to the conservation and regulatory benefits of the proposed critical habitat designation.
If you submitted comments or information on the proposed rule (76 FR 76337) during the initial comment period from December 7, 2011, to February 6, 2012, please do not resubmit them. We have incorporated them into the public record, and we will fully consider them in the preparation of our final determination. Our final determination concerning revised
You may submit your comments and materials concerning the proposed rule or DEA by one of the methods listed in the
If you submit a comment via
Comments and materials we receive, as well as supporting documentation we used in preparing the proposed rule and DEA, will be available for public inspection on
It is our intent to discuss only those topics directly relevant to the designation of critical habitat for the Lost River sucker and shortnose sucker in this document. For more information on the Lost River sucker and shortnose sucker or their habitat, refer to the final listing rule published in the
Lost River sucker and shortnose sucker are members of the fish family Catostomidae and are endemic to the upper Klamath River basin (National Research Council of the National Academies ((NRC) 2004, pp. 184, 189). Both species predominantly inhabit lake environments but also utilize riverine, marsh, and shoreline habitats for portions of their life history. Lost River sucker are distributed within Upper Klamath Lake and its tributaries (Klamath County, Oregon), Clear Lake Reservoir and its tributaries (Modoc County, California), Tule Lake (Siskiyou and Modoc Counties, California), Lost River (Klamath County, Oregon, and Modoc County, California), Link River (Klamath County, Oregon), and the Klamath River mainstem, including Keno, J.C. Boyle, Copco, and Iron Gate Reservoirs (Klamath County, Oregon, and Siskiyou County, California; Moyle 2002, p. 199; NRC 2004, pp. 190-192). The distribution of shortnose sucker overlaps with that of Lost River sucker, but shortnose sucker also occurs in Gerber Reservoir (Klamath County, Oregon) and upper Willow Creek (Modoc County, California, and Lake County, Oregon), a tributary to Clear Lake Reservoir (Buettner and Scoppettone 1991, p. 18; Moyle 2002, p. 203; NRC 2004, pp. 190-192).
On December 7, 2011, we published a proposed rule to designate critical habitat for the Lost River sucker and shortnose sucker (76 FR 76337). We proposed to designate approximately 146 miles (mi) (234 kilometers (km)) of streams and 117,848 acres (ac) (47,691 hectares) (ha) of lakes and reservoirs for Lost River sucker and approximately 128 mi (207 km) of streams and 123,590 ac (50,015 ha) of lakes and reservoirs for shortnose sucker in 2 units located in Klamath and Lake Counties, Oregon, and Modoc County, California, as critical habitat. That proposal was a reproposal of a proposed rule we published December 1, 1994 (59 FR 61744), and had a 60-day comment period, ending February 6, 2012. We will submit for publication in the
Section 3 of the Act defines critical habitat as the specific areas within the geographical area occupied by a species, at the time it is listed in accordance with the Act, on which are found those physical or biological features essential to the conservation of the species and that may require special management considerations or protection, and specific areas outside the geographical area occupied by a species at the time it is listed, upon a determination that such areas are essential for the conservation of the species. If the proposed rule is made final, section 7 of the Act will prohibit destruction or adverse modification of critical habitat by any activity funded, authorized, or carried out by any Federal agency. Federal agencies proposing actions affecting critical habitat must consult with us on the effects of their proposed actions, under section 7(a)(2) of the Act.
Section 4(b)(2) of the Act requires that we designate or revise critical habitat based upon the best scientific data available, after taking into consideration the economic impact, impact on national security, or any other relevant impact of specifying any particular area as critical habitat. We may exclude an area from critical habitat if we determine that the benefits of excluding the area outweigh the benefits of including the area as critical habitat, provided such exclusion will not result in the extinction of the species.
When considering the benefits of inclusion for an area, we consider the additional regulatory benefits that area would receive from the protection from adverse modification or destruction as a result of actions with a Federal nexus (activities conducted, funded, permitted, or authorized by Federal agencies), the educational benefits of mapping areas containing essential features that aid in the recovery of the listed species, and any benefits that may result from designation due to State or Federal laws that may apply to critical habitat.
When considering the benefits of exclusion, we consider, among other things, whether exclusion of a specific area is likely to result in conservation; the continuation, strengthening, or encouragement of partnerships; or implementation of a management plan. In the case of the Lost River sucker and shortnose sucker, the benefits of critical habitat include public awareness of the
We have not proposed to exclude any areas from critical habitat. However, the final decision on whether to exclude any areas will be based on the best scientific data available at the time of the final designation, including information obtained during the comment period and information about the economic impact of designation. Accordingly, we have prepared a draft economic analysis concerning the proposed critical habitat designation (DEA), which is available for review and comment (see
The purpose of the DEA is to identify and analyze the potential economic impacts associated with the proposed critical habitat designation for the Lost River sucker and shortnose sucker. The DEA separates conservation measures into two distinct categories according to “without critical habitat” and “with critical habitat” scenarios. The “without critical habitat” scenario represents the baseline for the analysis, considering protections otherwise afforded to the Lost River sucker and shortnose sucker (e.g., under the Federal listing and other Federal, State, and local regulations). The “with critical habitat” scenario describes the incremental impacts specifically due to designation of critical habitat for the species. In other words, these incremental conservation measures and associated economic impacts would not occur but for the designation. Conservation measures implemented under the baseline (without critical habitat) scenario are described qualitatively within the DEA, but economic impacts associated with these measures are not quantified. Economic impacts are only quantified for conservation measures implemented specifically due to the designation of critical habitat (i.e., incremental impacts). For a further description of the methodology of the analysis, see Chapter 2, “Framework for the Analysis,” of the DEA.
The DEA provides estimated costs of the foreseeable potential economic impacts of the proposed critical habitat designation for the Lost River sucker and shortnose sucker over the next 20 years, which was determined to be the appropriate period for analysis because limited planning information is available for most activities to forecast activity levels for projects beyond a 20-year timeframe. It identifies potential incremental costs as a result of the proposed critical habitat designation; these are those costs attributed to critical habitat over and above those baseline costs attributed to listing. The DEA quantifies economic impacts of Lost River sucker and shortnose sucker conservation efforts associated with the following categories: (1) Activities affecting water supply—these activities may include water management activities such as dam operation and hydropower production within the reservoirs comprising critical habitat, particularly the Klamath Project on Upper Klamath Lake; (2) activities affecting water quality—these activities may include agricultural activities, including livestock grazing, as well as in-water construction activities; and (3) activities affecting fish passage—these activities may include flood control or water diversions that may result in entrainment or lack of access to spawning habitat.
No significant economic impacts are likely to result from the designation of critical habitat. Incremental costs are limited to additional administrative effort to consider potential adverse modification of critical habitat as part of future section 7 consultations for the suckers. In total, incremental administrative efforts are estimated at $586,000, or $51,700 on an annualized basis (assuming a 7 percent discount rate).
As we stated earlier, we are soliciting data and comments from the public on the DEA, as well as all aspects of the proposed rule and our amended required determinations. We may revise the proposed rule or supporting documents to incorporate or address information we receive during the public comment period. In particular, we may exclude an area from critical habitat if we determine that the benefits of excluding the area outweigh the benefits of including the area, provided the exclusion will not result in the extinction of this species.
In our December 7, 2011, proposed rule (76 FR 76337), we indicated that we would defer our determination of compliance with several statutes and executive orders until the information concerning potential economic impacts of the designation and potential effects on landowners and stakeholders became available in the DEA. We have now made use of the DEA data to make these determinations. In this document, we affirm the information in our proposed rule concerning Executive Order (E.O.) 12866 (Regulatory Planning and Review), E.O. 12630 (Takings), E.O. 13132 (Federalism), E.O. 12988 (Civil Justice Reform), E.O. 13211 (Energy, Supply, Distribution, and Use), the Unfunded Mandates Reform Act (2 U.S.C. 1501
Under the Regulatory Flexibility Act (RFA; 5 U.S.C. 601
According to the Small Business Administration, small entities include small organizations such as independent nonprofit organizations; small governmental jurisdictions, including school boards and city and town governments that serve fewer than 50,000 residents; and small businesses (13 CFR 121.201). Small businesses include manufacturing and mining concerns with fewer than 500 employees, wholesale trade entities with fewer than 100 employees, retail
To determine if the proposed designation of critical habitat for the Lost River sucker and shortnose sucker would affect a substantial number of small entities, we considered the number of small entities affected within particular types of economic activities, such as water management, grazing, transportation, herbicide and pesticide application, forest management, or stream restoration activities. In order to determine whether it is appropriate for our agency to certify that this proposed rule would not have a significant economic impact on a substantial number of small entities, we considered each industry or category individually. In estimating the numbers of small entities potentially affected, we also considered whether their activities have any Federal involvement. Critical habitat designation will not affect activities that do not have any Federal involvement; designation of critical habitat only affects activities conducted, funded, permitted, or authorized by Federal agencies. In areas where the Lost River sucker and shortnose sucker is present, Federal agencies already are required to consult with us under section 7 of the Act on activities they fund, permit, or implement that may affect the species. If we finalize this proposed critical habitat designation, consultations to avoid the destruction or adverse modification of critical habitat would be incorporated into the existing consultation process.
In the DEA, we evaluated the potential economic effects on small entities resulting from implementation of conservation actions related to the proposed designation of critical habitat for the Lost River sucker and shortnose sucker. Only the impacts which may be associated with grazing activities are considered to be borne by small entities and are the focus of the draft economic analysis (Industrial Economics Incorporated (IEc) 2012, p. A-4). Across the study area, 125 businesses are engaged in the beef cattle ranching and farming industry. Of these, 121, or 97 percent, have annual revenues at or below the small business threshold of $750,000, and thus are considered small. A section 7 consultation on grazing activity may cover one or more grazing allotments, and a small entity may be permitted to graze on one or more of these allotments. Because the number of allotments and grazing permittees varies from consultation to consultation, the economic analysis made the simplifying assumption that 1 small entity is affected in each of the 20 allotments adjacent to proposed critical habitat. To estimate average annual revenues per grazing entity, the economic analysis relied on data from the National Agricultural Statistics Service, which provides information on the value of calf and cattle sales as well as the number of farms. Using these data, the economic analysis estimated a value of calf and cattle sales per farm for all the counties in the study area. The economic analysis then averaged this value across the counties to estimate annual revenues per grazing entity of $132,000. The economic analysis noted that this average is significantly below the threshold level defining a small entity. The economic analysis estimated total annualized impacts to the 20 entities that may incur administrative costs of approximately $24,600, or annualized impacts of $2,170. Assuming 20 affected small business entities and that each entity has annual revenues of $132,000, these annualized impacts per small entity are expected to comprise 0.08 percent of annual revenues. Please refer to the DEA of the proposed critical habitat designation for a more detailed discussion of potential economic impacts to small businesses (IEc 2012, pp. A-1-A-6).
Following our evaluation of potential effects to small business entities from this rulemaking, we do not believe that the 20 small business entities in the affected sector represent a substantial number. However, we will further evaluate the potential effects to these small businesses after we receive comments on the draft economic analysis and as we develop our final rulemaking.
In summary, we have considered whether the proposed designation would result in a significant economic impact on a substantial number of small entities. Information for this analysis was gathered from the Small Business Administration, stakeholders, and the Service. We have identified 20 small entities that may be impacted by the proposed critical habitat designation. However, the potential impacts on those entities are expected to comprise only 0.08 percent of their annual revenues. For the above reasons and based on currently available information, we certify that, if promulgated, the proposed critical habitat designation would not have a significant economic impact on a substantial number of small business entities. Therefore, an initial regulatory flexibility analysis is not required.
The primary authors of this notice are the staff members of the Klamath Falls Fish and Wildlife Office, Region 8, U.S. Fish and Wildlife Service.
The authority for this action is the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
Fish and Wildlife Service, Interior.
Notice of petition finding and initiation of status review.
We, the U.S. Fish and Wildlife Service (Service), announce a 90-day finding on a petition to list the Gila mayfly (
We request that we receive information on or before September 24, 2012. The deadline for submitting an electronic comment using the Federal eRulemaking Portal (see
You may submit information by one of the following methods:
(1)
(2)
We will post all information we receive on
Wally “J” Murphy, Field Supervisor, New Mexico Ecological Services Field Office, 2105 Osuna Road NE., Albuquerque, NM 87113; by telephone at 505-346-2525; or by facsimile at 505-3462542. If you use a telecommunications device for the deaf (TDD), please call the Federal Information Relay Service (FIRS) at 800-877-8339.
When we make a finding that a petition presents substantial information indicating that listing a species may be warranted, we are required to promptly review the status of the species (status review). For the status review to be complete and based on the best available scientific and commercial information, we request information on the Gila mayfly from governmental agencies, Native American Tribes, the scientific community, industry, and any other interested parties. We seek information on:
(1) The species' biology, range, and population trends, including:
(a) Habitat requirements for feeding, breeding, and sheltering;
(b) Genetics and taxonomy;
(c) Historical and current range, including distribution patterns;
(d) Historical and current population levels, and current and projected trends; and
(e) Past and ongoing conservation measures for the species, its habitat or both.
(2) The factors that are the basis for making a listing determination for a species under section 4(a) of the Act (16 U.S.C. 1531
(a) The present or threatened destruction, modification, or curtailment of its habitat or range;
(b) Overutilization for commercial, recreational, scientific, or educational purposes;
(c) Disease or predation;
(d) The inadequacy of existing regulatory mechanisms; or
(e) Other natural or manmade factors affecting its continued existence.
(3) Information regarding surveys for the Gila mayfly.
(4) Information regarding the effects of climate change on water temperature and water levels throughout the Gila mayfly's range.
If, after the status review, we determine that listing the Gila mayfly is warranted, we will propose critical habitat (see definition in section 3(5)(A) of the Act) under section 4 of the Act, to the maximum extent prudent and determinable at the time we propose to list the species. Therefore, we also request data and information on:
(1) What may constitute “physical or biological features essential to the conservation of the species,” within the geographical range currently occupied by the species;
(2) Where these features are currently found;
(3) Whether any of these features may require special management considerations or protection;
(4) Specific areas outside the geographical area occupied by the species that are “essential for the conservation of the species”; and
(5) What, if any, critical habitat you think we should propose for designation if the species is proposed for listing, and why such habitat meets the requirements of section 4 of the Act.
Please include sufficient information with your submission (such as scientific journal articles or other publications) to allow us to verify any scientific or commercial information you include.
Submissions merely stating support for or opposition to the action under consideration without providing supporting information, although noted, will not be considered in making a determination. Section 4(b)(1)(A) of the Act directs that determinations as to whether any species is an endangered or threatened species must be made “solely on the basis of the best scientific and commercial data available.”
You may submit your information concerning this status review by one of the methods listed in the
Information and supporting documentation that we received and used in preparing this finding is available for you to review at
Section 4(b)(3)(A) of the Act requires that we make a finding on whether a petition to list, delist, or reclassify a species presents substantial scientific or commercial information indicating that the petitioned action may be warranted. We are to base this finding on information provided in the petition, supporting information submitted with the petition, and information otherwise available in our files. To the maximum extent practicable, we are to make this finding within 90 days of our receipt of the petition and publish our notice of the finding promptly in the
Our standard for substantial scientific or commercial information within the Code of Federal Regulations (CFR) with regard to a 90-day petition finding is “that amount of information that would lead a reasonable person to believe that the measure proposed in the petition may be warranted” (50 CFR 424.14(b)). If we find that substantial scientific or commercial information was presented, we are required to promptly conduct a species status review, which we
The “substantial information” standard for a 90-day finding differs from the Act's “best scientific and commercial data” standard that applies to a status review to determine whether a petitioned action is warranted. A 90-day finding does not constitute a status review under the Act. In a 12-month finding, we will announce our determination as to whether a petitioned action is warranted after we have completed a thorough status review of the species, which is conducted following a substantial 90-day finding. Because the Act's standards for 90-day and status review conducted for a 12-month finding on a petition are different, as described above, a substantial 90-day finding does not mean that our status review and resulting determination will result in a warranted finding.
On September 27, 2010, we received a petition dated September 21, 2010, from the Xerces Society for Invertebrate Conservation, WildEarth Guardians, and Dr. William Patrick McCafferty requesting that the Gila mayfly be listed as endangered and that critical habitat be designated under the Act. The petition clearly identified itself as such and included the requisite identification information for the petitioners, required at 50 CFR 424.14(a). In a December 1, 2011, letter to the petitioners, we responded that we reviewed the information presented in the petition and determined that issuing an emergency regulation temporarily listing the species under section 4(b)(7) of the Act was not warranted. We also stated that due to court orders and judicially approved settlement agreements for other listing and critical habitat determinations under the Act that required nearly all of our listing and critical habitat funding for fiscal year 2011, we would not be able to further address the petition at that time but would complete the action when workload and funding allowed. This finding addresses the petition.
On June 25, 2007, we received a formal petition dated June 18, 2007, from Forest Guardians (now WildEarth Guardians), requesting that we: (1) Consider all full species in our Southwest Region ranked as G1 or G2 by the organization NatureServe, except those that are currently listed, proposed for listing, or candidates for listing; and (2) List each species as either endangered or threatened with critical habitat. The petitioned group of species included the Gila mayfly. The petition incorporated all analyses, references, and documentation provided by NatureServe in its online database at
The following information is from the 2010 petition and information readily available in our files.
Mayflies are elongate, soft-bodied insects in the order Ephemeroptera. The aquatic nymphs (larvae) have many of the same features as the terrestrial adults, differing mainly in the lack of wings and by the presence of gills on the abdomen (Edmunds and Waltz 1996, p. 127). Mayfly adults generally have two pairs of wings: somewhat triangular forewings and much smaller hind wings.
The Gila mayfly is a member of the family Oligoneuriidae, commonly known as the brush-legged mayflies. The presence of mid-dorsal abdominal tubercles (small projections on the mid-back) is unique to Gila mayfly nymphs and will readily distinguish this species from all other known nymphs in the genus
The Gila mayfly is the only mayfly species endemic to New Mexico, where it is known from two sites (an unnamed tributary and the East Fork of the Gila River), in the upper Gila River drainage (Koss and Edmunds 1970, p. 59; McCafferty
The petitioners claim that 2 adults and 10 nymphs were collected in 1969, but because no literature is cited to verify this claim, we are not sure that this information is reliable. We were unable to verify this information, and therefore, we cannot substantiate that the species was collected in 1969. We have no information in our files, nor was there any in the petition, of additional surveys being made until 1987. Between 1987 and 1999, 12 surveys were conducted at previously known Gila mayfly locations, but no Gila mayflies were found despite targeted collection of mayflies. Also, these 12 surveys were conducted during the summer months when nymphs could be found (New Mexico Environment Department (NMED) 2002, p. 7). Likewise, the petition states that extensive benthic macroinvertebrate (invertebrates living on the bottom of the stream that are large enough to see without the aid of a microscope) monitoring work in other portions of the watershed has not revealed this species, although we do not have information to verify this claim. According to the petition, the Gila mayfly is not known to have been observed or collected since 1969.
Gila mayfly habitat is largely unknown, but nymphs have been found clinging to sticks and other vegetation caught in crevices among rocks in rivers and streams (Koss and Edmunds 1970, p. 61). At the time of first collection, the East Fork of the Gila River was described as being warm, turbid, rapid, and 0.15 to 1.8 meters (0.5 to 2 feet) deep (Koss and Edmunds 1970, p. 61).
In general, mayfly eggs are deposited into water (Edmunds and Waltz 1996, p. 126). The time it takes for eggs to hatch varies between mayfly species, and it may range from several weeks to nearly a year (Edmunds and Waltz 1996, p. 126). Mayflies emerge from the eggs as aquatic nymphs, which is the stage at which they spend the majority of their life cycle. Some species of mayflies remain as nymphs for approximately 2
Commonly, mayfly nymphs are collectors or scrapers feeding on a variety of water particles and algae, as well as some large plants and animal material (Edmunds and Waltz 1996, p. 126). Mayfly feeding habits vary throughout their life cycle. Newly hatched nymphs feed primarily on fine particles of detritus (undissolved organic material), while larger individuals frequently feed on algae (Edmunds and Waltz 1996, p. 126). Adult mayflies have nonfunctioning mouthparts and do not feed (Edmunds and Waltz 1996, p. 127).
In conclusion, the current distribution, abundance, and status of the Gila mayfly are largely unknown. Given that the species has not been verified in the wild since 1967 despite multiple surveys, it is possible that the Gila mayfly may be extinct or that the survey efforts were not adequate to detect any remaining individuals. As part of this finding, we are requesting additional information on the species' status and distribution.
Section 4 of the Act (16 U.S.C. 1533) and its implementing regulations at 50 CFR part 424 set forth the procedures for adding a species to, or removing a species from, the Federal Lists of Endangered and Threatened Wildlife and Plants. A species may be determined to be an endangered or threatened species due to one or more of the five factors described in section 4(a)(1) of the Act:
(A) The present or threatened destruction, modification, or curtailment of its habitat or range;
(B) Overutilization for commercial, recreational, scientific, or educational purposes;
(C) Disease or predation;
(D) The inadequacy of existing regulatory mechanisms; or
(E) Other natural or manmade factors affecting its continued existence.
In considering what factors might constitute threats, we must look beyond the mere exposure of the species to the factor to determine whether the species responds to the factor in a way that causes actual impacts to the species. If there is exposure to a factor, but no response, or only a positive response, that factor is not a threat. If there is exposure and the species responds negatively, the factor may be a threat and we then attempt to determine how significant a threat it is. If the threat is significant, it may drive or contribute to the risk of extinction of the species such that the species may warrant listing as endangered or threatened as those terms are defined by the Act. This does not necessarily require empirical proof of a threat. The combination of exposure and some corroborating evidence of how the species is likely impacted could suffice. The mere identification of factors that could impact a species negatively may not be sufficient to compel a finding that listing may be warranted. The information shall contain evidence sufficient to suggest that these factors may be operative threats that act on the species to the point that the species may meet the definition of endangered or threatened under the Act.
In making this 90-day finding, we evaluated whether information regarding threats to the Gila mayfly, as presented in the petition and other information readily available in our files, is substantial, thereby indicating that the petitioned action may be warranted. Our evaluation of this information is presented below.
The petition presented information regarding the following factors as potential threats to the Gila mayfly: Impaired water quality and siltation from grazing and recreational activities, small population size, and climate change. We present a discussion of these factors.
Regarding factor A (the present or threatened destruction, modification, or curtailment of its habitat or range), the petition asserts that habitat alterations through impaired water quality and siltation from grazing and recreational activities are threats to the Gila mayfly. To support the petition's claim that impaired water quality may impact the species, they cite the Environmental Protection Agency's (EPA) water quality impairment report (EPA 2010, pp. 1-2), which states that aluminum levels are above the total maximum daily load (TMDL) designated for the East Fork Gila River, and cites the probable cause of this impairment as being from off-road vehicles and forestry practices. Further, the report states that the East Fork of the Gila River is unlikely to support a coldwater fishery due to these levels of aluminum (EPA 2010, p. 2). The petition states that aluminum is toxic to aquatic insects and cite several papers in support of this (Tabak and Gibbs 1991, pp. 157-166; Regerand
Regarding siltation, the petition cites a report by Jacobi (2000), which states that silt constituted nearly 75 percent of the substrate in known Gila mayfly locations. Because the Gila mayfly uses crevices and other small spaces in the substrate, siltation may result in the filling in of these crevices and, therefore, less habitat available. Increased siltation may be due to historical overgrazing and intense recreation. To support the petition's claim that grazing may affect the Gila mayfly, they cite several personal communications regarding the health of the riparian area along the East Fork of the Gila River, as well as a U.S. Forest Service report regarding the two grazing allotments in the area (U.S. Forest Service 2009, pp. 1-3). Also, the petition cites the New Mexico Environment Department's (NMED) TMDL designation for the East Fork of the Gila River, which discusses grazing as a source of impairment for the river (NMED 2002, p. 8). Information in our files supports the petition's claims that habitat destruction and modification may impact the species.
To support the petition's claim that recreation contributes to siltation in the East Fork of the Gila River, they cite several personal communications regarding the use of the Grapevine Campground, which is directly adjacent to the type locality of the Gila mayfly and where all but one specimen has been found. The petition states that recreation results in increased erosion and sedimentation from foot, bike, car, and off-highway vehicle traffic, as well as runoff of pollutants from roads and off-road vehicle trails, introduction of bacteria and excess nutrients from dog and horse waste, manipulation and alteration of streamflow by swimmers, and the trampling of streamside riparian habitat by campers, hikers, rafters, and fishermen. The petition suggests that siltation and other habitat impairments also create a barrier to Gila mayfly dispersal by limiting survival of nymphs that drift downstream.
After reviewing the petition, information presented by the petitioner, and information readily available in our files, we have determined that there is substantial information to indicate the Gila mayfly may warrant listing as a
Regarding factors B (overutilization for commercial, recreational, scientific, or educational purposes), C (disease or predation), and D (the inadequacy of existing regulatory mechanisms), the petition did not provide any information that these factors may threaten the Gila mayfly. Regarding factor E (other natural or manmade factors affecting its continued existence), the petition suggests that climate change and the Gila mayfly's small population size threaten its continued existence. We will further evaluate these factors, along with any other potential factors, during our status review and will report our findings in the subsequent 12-month finding.
Because habitat degradation, such as possible increased aluminum levels and documented substrate siltation and turbidity, may have occurred in the East Fork of the Gila River where the majority of individuals were once found, we find that the petition presents substantial information indicating that the petitioned action may be warranted. The petition states that aluminum is toxic to aquatic insects and cite several papers in support of this (Tabak and Gibbs 1991, pp. 157-166; Regerand
This finding was made primarily based on information provided under factor A, and we will evaluate all information under the five factors during the status review under section 4(b)(3)(B) of the Act. We will fully evaluate these potential threats during our status review, pursuant to the Act's requirement to review the best available scientific information when making our 12-month finding. Accordingly, we encourage the public to consider and submit information related to these and any other threats that may be operating on the Gila mayfly (see “Request for Information”).
A complete list of references cited is available on the Internet at
The primary authors of this notice are the staff members of the New Mexico Ecological Services Field Office.
The authority for this action is the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Proposed rule, extension of public comment period and correction.
The National Marine Fisheries Service (NMFS) is further extending the date by which public comments are due concerning proposed regulations to revise existing regulations governing the confidentiality of information submitted in compliance with any requirement or regulation under the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act or MSA). NMFS published the proposed rule on May 23, 2012 and announced that the public comment period would end on June 22, 2012. NMFS published a revision on June 13, 2012, extending the comment period to August 21, 2012. With this notice, NMFS is extending the comment period to October 21, 2012. Additionally, this action corrects Release of confidential information, in which the paragraphs were incorrectly numbered.
The deadline for receipt of comments on the proposed rule published on May 23, 2012 (77 FR 30486), and revised on June 13, 2012 (77 FR 35349), is extended to October 21, 2012.
You may submit comments on this document, identified by FDMS Docket Number NOAA-NMFS-2012-0030, by any of the following methods:
•
•
• Fax (301) 713-1875; Attn: Karl Moline
Karl Moline at 301-427-8225.
On May 23, 2012, NMFS published a proposed rule at 77 FR 30486 that would revise existing regulations on the handling of information required to be maintained as confidential under the Magnuson-Stevens Act. The purposes of the proposed rule is to make both substantive and non-substantive changes necessary to comply with the MSA as amended by the 2006 Magnuson-Stevens Fishery Conservation and Management Reauthorization Act (MSRA) and the 1996 Sustainable Fisheries Act (SFA). In addition, the rule proposes to address some significant issues that concern NMFS' application of the MSA confidentiality provision to requests for information.
NMFS received several requests from fishery management councils and representatives of fishing and environmental organizations to extend the comment period on the proposed rule in order to allow the councils and other organizations to review the proposed rule and solicit feedback from their members. NMFS published a revision on June 13, 2012 (77 FR 35349), extending the comment period to August 21, 2012.
NMFS has received requests to extend the comment period beyond August 21, 2012, in order to allow councils additional time to prepare comments. We have considered these requests and conclude that an additional 60-day extension is appropriate.
Paragraph designations errors appear in the proposed rule published on May 23, 2012 (77 FR 30486), beginning on page 30495, in the third column which will likely confuse the public if not corrected. Through this action, NMFS corrects and republishes § 600.425 as follows:
(a) NMFS will not disclose to the public any confidential information except when:
(1) Authorized by an FMP or regulations under the authority of the North Pacific Council to allow disclosure of observer information to the public of weekly summary bycatch information identified by vessel or for haul-specific bycatch information without vessel identification.
(2) Observer information is necessary in proceedings to adjudicate observer certifications.
(3) Confidential information is required to be submitted to the Secretary for any determination under a limited access program. This exception applies to confidential information that NMFS has used, or intends to use, for a regulatory determination under a limited access program. For the purposes of this exception:
(i)
(ii)
(4) Required to comply with a federal court order. For purposes of this exception:
(i)
(ii)
(A) It is issued under the authority of a Federal court;
(B) A judge or magistrate judge of that court signs it; and
(C) It commands NMFS to disclose confidential information as defined under § 600.10.
(5) Necessary for enforcement of the Magnuson-Stevens Act, or any other statute administered by NOAA; or when necessary for enforcement of any State living marine resource laws, if that State has a Joint Enforcement Agreement that is in effect.
(6) The Secretary has obtained written authorization from the person submitting such information to release it to persons for reasons not otherwise provided for in Magnuson-Stevens Act subsection 402(b) and such release does not violate other requirements of the Act. NMFS will apply this exception as follows:
(i) When a permit-holder is required to submit information in compliance with requirements of the Act, the permit-holder or designee may execute the written authorization for release of that information. Otherwise, the person who is required to submit the information and is identified in that information as the submitter may execute the written authorization for that information.
(ii) For observer information, a permit-holder may execute a written authorization for release of observed catch, bycatch, incidental take data, economic data, recorded biological sample data, and other information collected for scientific and management purposes by an observer while carried aboard the permit-holder's vessel.
(iii) A permit-holder or designee or other person described under paragraph (a)(6)(i) of this section must provide a written statement authorizing the release of the information and specifying the person(s) to whom the information should be released.
(iv) A permit-holder or designee or other person described under paragraph (a)(6)(i) of this section must prove identity by a statement of identity consistent with 28 U.S.C. 1746, which permits statements to be made under penalty of perjury as a substitute for notarization. The statement of identity must be in the following form:
(A) If executed outside the United States: “I declare (or certify, verify, or state) under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on (date). (Signature)”.
(B) If executed within the United States, its territories, possessions, or commonwealths: “I declare (or certify, verify, or state) under penalty of perjury that the foregoing is true and correct. Executed on (date). (Signature)”.
(v) The Secretary must determine that a release under paragraph (a)(6) of this section does not violate other requirements of the Magnuson-Stevens Act and other applicable laws.
(b) [Reserved]
5 U.S.C. 561 and 16 U.S.C. 1801
Animal and Plant Health Inspection Service, USDA.
Notice.
We are advising the public of our record of decision for the final supplemental environmental impact statement for the Gull Hazard Reduction Program at John F. Kennedy International Airport.
You may read the final supplemental environmental impact statement and the record of decision in our reading room. The reading room is located in room 1141 of the USDA South Building, 14th Street and Independence Avenue SW., Washington, DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure someone is there to help you, please call (202) 799-7039 before coming. The documents are also available on the Internet at
Mr. Martin Lowney, Wildlife Services, APHIS, 1930 Route 9, Castleton, NY 12033-9653; (518) 477-4837.
On April 3, 2006, the Animal and Plant Health Inspection Service (APHIS) published a notice in the
The supplemental EIS has been prepared in cooperation with the Department of Interior's Fish and Wildlife Service and National Park Service, the Federal Aviation Administration, the New York State Department of Environmental Conservation, the New York City Department of Parks and Recreation, the New York City Department of Environmental Protection, and the Port Authority of New York and New Jersey.
A notice of availability regarding the draft supplemental EIS was published by the Environmental Protection Agency (EPA) in the
The record of decision has been prepared in accordance with: (1) The National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321
Forest Service, USDA.
Notice of meeting.
Pursuant to the authorities in the Federal Advisory Committee Act (Pub. L. 92-463) and under the Secure Rural Schools and Community Self-Determination Act of 2000, as amended, (Pub. L. 110-343), the Boise, Payette, Salmon-Challis, Sawtooth, and Wallowa-Whitman National Forests' Southwest Idaho Resource Advisory Committee will conduct a business meeting. The meeting is open to the public.
Wednesday, August 29, 2012, beginning at 10:00 a.m.
Idaho Counties Risk Management Program Building, 3100 South Vista Avenue, Boise, Idaho.
Agenda topics will include review and approval of project proposals, and is an open public forum.
Kim Pierson, Designated Federal Official, at (208) 347-0301 or email
United States Commission on Civil Rights.
Notice of meeting.
Friday, August 3, 2012; 2:00 p.m. EDT.
Via Teleconference, Public Dial In: 1-877-681-3374, Conference ID # 4923945.
This meeting is open to the public, except where noted otherwise.
Approval of the topics for the 2013 Statutory Report and two Briefing Reports—a single vote on the following package:
(a) The topic of sexual assault in the military, as set forth in the concept paper prepared by Commissioner Kladney, for the 2013 Statutory Report; and
(b) The topic of EEOC's Conviction Records Policy, as set forth in the concept paper prepared by Commission Kirsanow, for a briefing report; and
(c) The topic of the civil rights of veterans, as set forth in the concept paper prepared by Chairman Castro, for a briefing report.
Lenore Ostrowsky, Acting Chief, Public Affairs Unit (202) 376-8591. TDD: (202) 376-8116.
Persons with a disability requiring special services, such as an interpreter for the hearing impaired, should contact Pamela Dunston at least seven days prior to the meeting at 202-376-8105. TDD: (202) 376-8116.
An application has been submitted to the Foreign-Trade Zones (FTZ) Board (the Board) by the Georgia Foreign-Trade Zone, Inc., grantee of FTZ 26, requesting authority to expand its service area under the alternative site framework (ASF) adopted by the Board (15 CFR 400.2(c)). The ASF is an option for grantees for the establishment or reorganization of general-purpose zones and can permit significantly greater flexibility in the designation of new “usage-driven” FTZ sites for operators/users located within a grantee's “service area” in the context of the Board's standard 2,000-acre activation limit for a general-purpose zone project. The application was submitted pursuant to the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the regulations of the Board (15 CFR part 400). It was formally filed on July 20, 2012.
FTZ 26 was approved by the Board on January 17, 1977 (Board Order 115, 42 FR 4186, 01/24/77) and reorganized under the ASF on November 26, 2010 (Board Order 1725, 75 FR 76953, 12/10/10).
The zone project currently has a service area that includes the Georgia counties of Haralson, Paulding, Polk, Floyd, Bartow, Chattooga, Gordon, Pickens, Gilmer, Walker, Whitfield, Murray, Forsyth, Dawson, Hall, Banks, Lumpkin, Fulton, DeKalb, Gwinnett, Cobb, Douglas, Clayton, Henry, Fayette, Rockdale, Cherokee, Carroll, Coweta, Heard, Troup, Meriwether, Pike, Spalding, Butts, Lamar, Upson, Jasper, Newton, Morgan, Greene, Walton, Oconee, Clarke, Barrow, Jackson, Bibb, Crawford, Jones, Monroe, Putnam, Richmond, Harris, Talbot, and Muscogee in their entirety and portions of White, Franklin, Peach, Houston, and Twiggs Counties, in and adjacent to the Atlanta Customs and Border Protection port of entry with the exception of Walker, Whitfield, and Murray Counties which are adjacent to the Chattanooga Customs and Border Protection port of entry, and Richmond County which is adjacent to the Columbia Customs and Border Protection port of entry. The applicant is requesting authority to expand the service area of the zone to include a portion of Columbia County, Georgia, as described in the application. If approved, the grantee would be able to serve sites throughout the expanded service area based on companies' needs for FTZ designation. The proposed expanded service area is adjacent to the Columbia, South Carolina Customs and Border Protection port of entry.
In accordance with the Board's regulations, Kathleen Boyce of the FTZ Staff is designated examiner to evaluate and analyze the facts and information presented in the application and case record and to report findings and recommendations to the Board.
Public comment is invited from interested parties. Submissions (original and 3 copies) shall be addressed to the Board's Executive Secretary at the address below. The closing period for their receipt is September 24, 2012. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period to October 9, 2012.
A copy of the application will be available for public inspection at the Office of the Executive Secretary, Foreign-Trade Zones Board, Room 2111, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230-0002, and in the “Reading Room” section of the Board's Web site, which is accessible via
Import Administration, International Trade Administration, Department of Commerce.
In response to a request from an interested party, the United States Steel Corporation, the Department of Commerce (the Department) initiated an administrative review of the antidumping duty order on seamless carbon and alloy steel standard, line, and pressure pipe from the People's Republic of China. The period of review is November 10, 2010, through October 31, 2011. Based on the timely withdrawal of the request for review submitted by United States Steel Corporation, we are now rescinding this administrative review.
Brandon Farlander or Charles Riggle, AD/CVD Operations, Office 4, Import Administration, International Trade Administration, U.S. Department of
On December 30, 2011, based on a timely request for review by the United States Steel Corporation, the Department published in the
On March 29, 2012, and amended on April 3, 2012, the United States Steel Corporation withdrew its request for an administrative review of the 32 companies.
Pursuant to 19 CFR 351.213(d)(1), the Department will rescind an administrative review if the party that requested the review withdraws its request within 90 days of the publication of the notice of initiation of the requested review, or withdraws at a later date if the Department exercises its discretion to extend the time limit for withdrawing the request. In this case, the United States Steel Corporation withdrew its request within the 90-day deadline and no other party requested an administrative review of the antidumping duty order. Therefore, we are rescinding the administrative review of seamless carbon and alloy steel standard, line, and pressure pipe from the People's Republic of China for the period November 1, 2010, through October 31, 2011.
The Department will instruct U.S. Customs and Border Protection (CBP) to assess antidumping duties on all appropriate entries. Antidumping duties shall be assessed at rates equal to the cash deposit or bonding rate of estimated antidumping duties required at the time of entry, or withdrawal from warehouse, for consumption, in accordance with 19 CFR 351.212(c)(1)(i). The Department intends to issue appropriate assessment instructions directly to CBP 15 days after publication of this notice.
This notice serves as a final reminder to importers for whom this review is being rescinded of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of the antidumping 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 APO in accordance with 19 CFR 351.305, 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.
This notice is issued and published in accordance with section 777(i)(1) of the Tariff Act of 1930, as amended, and 19 CFR 351.213(d)(4).
International Trade Administration, Department of Commerce.
Notice.
The U.S. Department of Commerce has extended the deadline by which it will accept nominations to serve on the Renewable Energy and Energy Efficiency Advisory Committee. Nominations submitted by 11:59 p.m. (EDT) on August 1, 2012 will be considered. Nominations submitted prior to this deadline extension will also be considered. Detailed information on nomination procedures, qualifications for membership, and on the composition and purpose of the Renewable Energy and Energy Efficiency Advisory Committee can be found in
Nominations may be emailed to Jennifer Derstine at
Jennifer Derstine by email at
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Nominations.
NMFS is soliciting nominations to the Advisory Committee to the U.S. Section to the International Commission for the Conservation of Atlantic Tunas (ICCAT) as established by the Atlantic Tunas Convention Act (ATCA). NMFS is also soliciting nominations for technical advisors to the Advisory Committee's species working groups.
Nominations must be received by October 1, 2012.
Nominations should be sent via email (
Rachel O'Malley, Office of International Affairs, 301-427-8373.
Section 971b of ATCA (16 U.S.C. 971 et seq.) requires that an advisory committee be established that shall be comprised of: (1) Not less than five nor more than 20 individuals appointed by the U.S. Commissioners to ICCAT who shall select such individuals from the various groups concerned with the fisheries covered by the ICCAT Convention; and (2) the chairs (or their designees) of the New England, Mid-Atlantic, South Atlantic, Caribbean, and Gulf Fishery Management Councils. Each member of the Advisory Committee appointed under paragraph (1) shall serve for a term of two years and be eligible for reappointment. All members of the Advisory Committee are appointed in their individual professional capacity and undergo a background screening. Any individual appointed to the Committee who is unable to attend all or part of an Advisory Committee meeting may not appoint another person to attend such meetings as his or her proxy. Members of the Advisory Committee shall receive no compensation for their services. The Secretary of Commerce and the Secretary of State may pay the necessary travel expenses of members of the Advisory Committee. There are currently 20 appointed Advisory Committee members. The terms of these members expire on December 31, 2012.
Section 971b(1) of ATCA specifies that the U.S. Commissioners may establish species working groups for the purpose of providing advice and recommendations to the U.S. Commissioners and to the Advisory Committee on matters relating to the conservation and management of any highly migratory species covered by the ICCAT Convention. Any species working group shall consist of no more than seven members of the Advisory Committee and no more than four technical advisors, as considered necessary by the Commissioners. Currently, there are five species working groups advising the Committee and the U.S. Commissioners: a Bluefin Tuna Working Group, a Swordfish Working Group, a Sharks Working Group, a Billfish Working Group, and a Bigeye Tuna, Albacore, Yellowfin, and Skipjack (BAYS) Tunas Working Group. Technical Advisors to the species working groups serve at the request of the Commissioners; therefore the Commissioners can choose to alter these appointments at any time. As with Committee Members, Technical Advisors may not be represented by a proxy during any official meetings of the Advisory Committee.
Nominations to the Advisory Committee or to a species working group should include a letter of interest and a resume or curriculum vitae. Self-nominations are acceptable. Letters of recommendation are useful but not required. When making a nomination, please specify which appointment (Advisory Committee member or technical advisor to a species working group) is being sought. Nominees may also indicate which of the species working groups is preferred, although placement on the requested group is not guaranteed.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of availability; request for comments.
The National Oceanic and Atmospheric Administration (NOAA) and the U.S. Department of the Interior, Fish and Wildlife Service, Washington Department of Ecology and Washington Department of Fish and Wildlife, Suquamish Tribe, Muckleshoot Indian Tribe, U.S. Army Corps of Engineers, and the U.S. Environmental Protection Agency are collectively referred to as the Trustee Council for this case. The Trustee Council is providing notice that the Supplement to the Draft Programmatic Restoration Plan and Programmatic Environmental Impact Statement (RP/PEIS) are being released for public comment. The Restoration Plan identifies a restoration approach to compensate for injuries to natural resources in the Lower Duwamish River. The Trustees seek damages from potentially responsible parties (PRPs) to restore, rehabilitate, replace or acquire the equivalent of natural resources and services injured by the release of hazardous substances in the Lower Duwamish River. This notice provides details on the availability of and opportunity to comment on the Supplement to the Draft Programmatic Restoration Plan and PEIS. Comments may be submitted in written form or verbally at a public meeting.
Written comments must be received by October 10, 2012.
Public meetings to discuss and comment on the Draft RP/PEIS will be held as follows:
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•
Written comments on the Supplement to the Draft RP/PEIS should be sent to Rebecca Hoff, NOAA DARC NW., 7600 Sand Point Way NE., Seattle, WA 98115. Comments may be
The Supplement to the Draft Restoration Plan and PEIS are available for viewing at the following locations:
A full electronic copy may be downloaded at:
Rebecca Hoff at (206) 526-6276 or email at
The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), the Oil Pollution Act (OPA) of 1990, the Clean Water Act (CWA), the National Oil and Hazardous Substances Pollution Contingency Plan (National Contingency Plan [NCP]), and other applicable federal and state laws and regulations provide a legal framework for addressing injuries to the nation's natural resources resulting from releases of hazardous substances and discharges of oil. The National Environmental Policy Act (NEPA) of 1960 requires an assessment of any federal action that may impact the environment, in this case development of a Restoration Plan.
Hazardous substance releases into the Lower Duwamish River (LDR) have resulted in the contamination of the sediments and injuries to natural resources. The Elliott Bay Trustee Council (Trustees) is developing the Lower Duwamish River Natural Resource Damage Assessment (LDR/NRDA) to determine the extent of injuries to natural resources resulting from these releases. Natural resources include fish, shellfish, wildlife, sediments, water quality, and the services they provide. Trustees are also determining how to restore injured natural resources and lost resource services. The Restoration Plan, which will guide decision-making regarding the implementation of LDR/NRDA restoration activities, is also a Programmatic Environmental Impact Statement (PEIS). The PEIS analyzes the environmental impacts of the alternatives that may be employed by the Trustees to restore, replace, rehabilitate, and/or acquire the equivalent of the injured natural resources and their services. The Trustees evaluated three alternatives—the No-Action Alternative, which is required to be included in the analysis; the Species-Specific Restoration Alternative and the Integrated Habitat Restoration Alternative. The Trustees' preferred alternative is Integrated Habitat Restoration, which is a comprehensive plan based on restoration of key habitats that, together, will benefit the range of different resources injured by releases of hazardous substances in the LDR. In addition, the Trustees have included a detailed description of the methodology considered for use in a settlement based approach to injury assessment for the Lower Duwamish River.
A previous draft RP/PEIS was made available for public review on May 22, 2009 (74 FR 25735, pages 25735-5736, EIS No. 20090171), with the comment period ending on July 28, 2009. In the current document, the Trustees added more detail about the injury assessment and restoration valuation methodology used in the LDR/NRDA, as requested in some of the comments received on the previous draft, and made some other more minor changes to address other comments.
The Trustee Council has opened an Administrative Record (Record). The Record includes documents that the Trustees relied upon during the development of the Draft Restoration Plan and Draft PEIS. The Record is on file at the offices of NOAA. The Record is also available at:
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; request for comments
The Regional Administrator, Southwest Region, NMFS, has made a preliminary determination that an application for an Exempted Fishing Permit (EFP) warrants further consideration. The application was submitted by members of the Pacific sardine fishing industry who request an exemption from seasonal closures of the directed fishery to conduct a survey designed to estimate the population size of Pacific sardine. NMFS requests public comment on the application.
Comments must be received by August 10, 2012.
You may submit comments on this notice identified by 0648-XC108 by any one of the following methods:
•
•
A copy of the application can viewed at the following Web site
On April 3, 2012, NMFS published a proposed rule to implement the harvest guideline (HG) and annual specifications for the 2012 Pacific sardine fishing season off the U.S. West Coast (77 FR 19991). As part of these management measures the Pacific Fishery Management Council recommended, and NMFS proposed, that 3,000 metric tons (mt) of the maximum harvest guideline (HG) be initially subtracted and set aside for potential industry-based research projects or EFPs. The 3,000 mt set-aside was intended to allow for potential research fishing in the second seasonal period (July 1—September 14, 2012) to occur if that period's directed fishery allocation is reached and directed fishing is closed.
An EFP would allow the fishing activities proposed by the applicants to occur when directed fishing is not allowed. At the April 2012 Council meeting, the Council recommended that NMFS issue an EFP for the total 3,000 mt of the 3,000 mt initially set aside. The applicants proposed the use of 3,000 mt to replicate summer surveys conducted under EFPs approved in 2009, 2010, and 2011.
One of the goals set forth in the EFP application is the development of an index of biomass for Pacific sardine, with the desire that this index be included in the subsequent Pacific sardine stock assessment. If NMFS does not issue this EFP, then the set-aside will be re-allocated to the third period's directed harvest allocation. Likewise,
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting.
The Pacific Fishery Management Council (Pacific Council) will hold a trawl catch share program gear workshop (workshop), which is open to the public.
The workshop will be held Wednesday, August 29, 2012 from 1 p.m. until business for the day is completed. The workshop will reconvene Thursday, August 30, 2012 from no earlier than 8 a.m. until 4 p.m. or business for the day has been completed.
The meeting will be held at the Sheraton Portland Airport in the Mount Saint Helens Room, 8235 NE Airport Way, Portland OR 97220, telephone: (503) 281-2500.
Mr. LB Boydstun, Fishery Advisor: (916) 844-4358 or the Pacific Council Office at (503) 820-2280.
The primary purpose of the workshop is to review the gear restrictions (including area of use) which apply under the recently-implemented Trawl Fishery Rationalization program, and discuss the need for such restrictions in the context of that program. The workshop will include scoping various gear restriction alternatives that were recommended by the Trawl Rationalization Regulatory Evaluation Committee at the November 2011 meeting of the Pacific Council. A workshop report will be prepared by Pacific Council staff for Pacific Council consideration at (or following) its November 2012 Pacific Council meeting in Costa Mesa, CA. No management actions will be decided in the workshop. The task will be to develop recommendations for consideration by the Pacific Council at its November meeting in Costa Mesa, CA.
Although non-emergency issues not contained in the meeting agenda may arise during the workshop, those issues may not be the subject of formal action during this meeting. Final workshop recommendations 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 intent to take final action to address the emergency.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Mr. Kris Kleinschmidt at (503) 820-2280 at least 5 days prior to the meeting date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting.
In preparation for the 2012 International Commission for the Conservation of Atlantic Tunas (ICCAT) meeting, the Advisory Committee to the U.S. Section to ICCAT is announcing the convening of its fall meeting.
The meeting will be held October 17-18, 2012. There will be an open session on Wednesday, October 17, 2012, from 9 a.m. through approximately 1:30 p.m. The remainder of the meeting will be closed to the public and is expected to end by 5 p.m. on October 18. Interested members of the public may present their views during the public comment session on October 17, 2012.
The meeting will be held at the DoubleTree/Hilton Hotel, 8727 Colesville Road, Silver Spring, MD 20910. Written comments should be sent via email (
Rachel O'Malley, Office of International Affairs, 301-427-8373.
The Advisory Committee to the U.S. Section to ICCAT will meet October 17-18, 2012, first in an open session to consider management- and research-related information on stock status of Atlantic highly migratory species and then in a closed session to discuss sensitive matters. There will be an opportunity for oral public comment during the October 17, 2012, open session. The open session will be from 9 a.m. through 1:30 p.m. The public comment portion of the meeting is scheduled to begin at approximately 1 p.m. but could begin earlier depending on the progress of discussions. Comments may also be submitted in writing for the Advisory Committee's consideration. Interested members of the public can submit comments by mail or email; use of email is encouraged. All written comments must be received by October 5, 2012 (see
NMFS expects members of the public to conduct themselves appropriately at the open session of the meeting. At the beginning of the public comment session, an explanation of the ground rules will be provided (e.g., alcohol in the meeting room is prohibited, speakers will be called to give their comments in the order in which they registered to speak, each speaker will have an equal amount of time to speak and speakers should not interrupt one another). The session will be structured so that all attending members of the public are able to comment, if they so choose, regardless of the degree of controversy of the subject(s). Those not respecting the ground rules will be asked to leave the meeting.
After the open session, the Advisory Committee will meet in closed session to discuss sensitive information relating to upcoming international negotiations regarding the conservation and management of Atlantic highly migratory species.
The meeting location is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Rachel O'Malley at (301) 427-8373 or
Consumer Product Safety Commission.
Notice.
The Consumer Product Safety Commission (CPSC or Commission) announces that it has submitted to the Office of Management and Budget (OMB) a proposed collection of information for review and clearance under the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). This collection of information relates to a form that will be used to measure child care centers' compliance with the recent CPSC safety standards for full-size and non-full-size cribs.
Fax written comments on the collection of information by August 27, 2012.
To ensure that comments on the information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB, Attn: CPSC Desk Officer, FAX: 202-395-6974, or emailed to
For information about the proposed collection of information call or write Mary James, Office of Information and Technology Services, Consumer Product Safety Commission, 4330 East West Highway, Bethesda, MD 20814; (301) 504-7213, or by email to:
In compliance with 44 U.S.C 3507, the CPSC has submitted a proposed collection of information to OMB for review and clearance of a form that CPSC staff intends to use when visiting child care centers to gauge compliance with the CPSC's crib safety standards. On December 28, 2010, we issued a final rule establishing safety standards for full-size and non-full-size baby cribs in response to the direction under section 104(b) of the Consumer Product Safety Improvement Act (CPSIA) (75 FR 81766). Section 104(c) of the CPSIA specifies that the crib standards apply to anyone who manufactures, distributes, or contracts to sell a crib; to child care facilities, and others holding themselves out to be knowledgeable about cribs; to anyone who leases, sublets, or otherwise places a crib in the stream of commerce; and to owners and operators of places of public accommodation affecting commerce.
The CPSC is seeking OMB approval of a “Verification of Compliance Form” that CPSC staff intends to use when visiting child care centers to measure compliance with the crib safety standards. CPSC investigators or designated state or local government officials will use the form, which will be filled out entirely at the site during the normal course of the visit. The Commission intends to use the information to measure compliance with the crib safety standards and to develop an enforcement strategy. We intend to begin with a pilot program in 2012, which would involve conducting visits to approximately 70 child care centers in seven states. Depending on the results of the pilot program, we would expand the program in 2013, although expansion of the program's size would depend upon the availability of CPSC resources.
In the
We estimate the burden of this collection of information as follows: The CPSC estimates that there may be approximately 70 inspections during the pilot program in 2012. Because the investigators will be talking to the child care facility staff at the time of the inspection and asking questions to help complete the form, CPSC staff estimates that the burden hours for child care facility staff to respond to the questions will be approximately a quarter of an hour, per inspection. Thus, the estimated total annual burden hours for respondents are approximately 17.5 hours (70 inspections × a quarter of an hour per inspection). CPSC staff estimates that the annualized cost to all respondents is approximately $383.43, based on an hourly wage of $21.91 per hour ($21.91 × 17.5). (Bureau of Labor Statistics (BLS), total compensation for all workers, sales and office for service-producing industries, Employer Costs for Employee Compensation Table 9, September 2011).
CPSC staff estimates that it will take an average of a quarter of an hour to review the information collected. The annual cost to the federal government of the collection of information in these regulations is estimated to be $704.26. This is based on an average wage rate of $28.13 (the equivalent of a GS-9 Step 5 employee). This represents 69.9 percent of total compensation (Bureau of Labor Statistics, September 2011, percentage
Corporation for National and Community Service.
Notice.
The Corporation for National and Community Service (CNCS) has submitted a public information collection request (ICR) entitled VISTA Training Evaluation for review and approval in accordance with the Paperwork Reduction Act of 1995, Public Law 104-13, (44 U.S.C. chapter 35). Copies of this ICR, with applicable supporting documentation, may be obtained by calling the Corporation for National and Community Service, Craig Kinnear, at (202) 606-6708 or email to
Comments may be submitted, identified by the title of the information collection activity, to the Office of Information and Regulatory Affairs, Attn: Ms. Sharon Mar, OMB Desk Officer for the Corporation for National and Community Service, by any of the following two methods within 30 days from the date of publication in the
(1)
(2)
The OMB is particularly interested in comments which:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of CNCS, 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;
• Propose ways to enhance the quality, utility, and clarity of the information to be collected; and
• Propose ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses.
A 60-day public comment Notice was published in the
Corporation for National and Community Service.
Notice.
The Corporation for National and Community Service (CNCS) has submitted a public information collection request (ICR) entitled National Evaluation of the Social Innovation Fund for review and approval in accordance with the Paperwork Reduction Act of 1995, Public Law 104-13, (44 U.S.C. Chapter 35). Copies of this ICR, with applicable supporting documentation, may be obtained by calling the Corporation for National and Community Service, Joscelyn Silsby, at (202) 606-3464 or email to
Comments may be submitted, identified by the title of the information collection activity, to the Office of Information and Regulatory Affairs, Attn: Ms. Sharon Mar, OMB Desk Officer for the Corporation for National and Community Service, by any of the following two methods within 30 days from the date of publication in the
(1)
(2)
The OMB is particularly interested in comments which:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of CNCS, 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
A 60-day public comment Notice was published in the
Corporation for National and Community Service.
Notice.
The Corporation for National and Community Service (CNCS) has submitted a public information collection request (ICR) entitled VISTA Progress Report Supplement for review and approval in accordance with the Paperwork Reduction Act of 1995, Public Law 104-13, (44 U.S.C. Chapter 35). Copies of this ICR, with applicable supporting documentation, may be obtained by calling the Corporation for National and Community Service, Kelly Daly, at (202) 606-6849 or email to
Comments may be submitted, identified by the title of the information collection activity, to the Office of Information and Regulatory Affairs, Attn: Ms. Sharon Mar, OMB Desk Officer for the Corporation for National and Community Service, by any of the following two methods within 30 days from the date of publication in the
(1)
(2)
The OMB is particularly interested in comments which:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of CNCS, 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;
• Propose ways to enhance the quality, utility, and clarity of the information to be collected; and
• Propose ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses.
A 60-day public comment Notice was published in the
Notice.
The Department of Defense has submitted to OMB for clearance, the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35).
Consideration will be given to all comments received by August 27, 2012.
Written comments and recommendations on the proposed information collection should be sent to Ms. Seehra at the Office of Management and Budget, Desk Officer for DoD, Room 10236, New Executive Office Building, Washington, DC 20503.
You may also submit comments, identified by docket number and title, by the following method:
•
Written requests for copies of the information collection proposal should be sent to Ms. Toppings at WHS/ESD Information Management Division, 4800 Mark Center Drive, East Tower, Suite 02G09, Alexandria, VA 22350-3100.
Defense Intelligence Agency, DoD.
Notice to alter a System of Records.
The Defense Intelligence Agency is proposing to alter a system in its existing inventory of records systems subject to the Privacy Act of 1974 (5 U.S.C. 552a), as amended. The blanket (k)(1) exemption applies to this systems of records to accurately describe the basis for exempting disclosure of classified information that is or may be contained in the records.
This proposed action will be effective further notice on August 27, 2012 unless comments are received which in a contrary determination.
You may submit comments, identified by docket number and title, by any of the following methods:
*
*
Ms. Theresa Lowery at Defense Intelligence Agency, DAN 1-C, 600 MacDill Blvd., Washington, DC 20340-0001 or by phone at (202) 231-1193.
The Defense Intelligence Agency system of records notices subject to the Privacy Act of 1974 (5 U.S.C. 552a), as amended, have been published in the
Delete entry and replace with “Defense Intelligence Agency, 200 MacDill Blvd., Washington, DC 20340-0001.”
Delete entry and replace with “Categories of records include identifying information such as name, Social Security Number (SSN), address, citizenship documentation, biometric data, passport number, vehicle identification number, and vehicle/vessel license data. Records relating to the management and coordination of DoD counterintelligence systems and activities. Records relating to analytical, operational, biographic, policy, management, training, administrative matters and operational support related to DoD counterintelligence, force protection, critical infrastructure protection, research and technology protection, threat analysis, counter-narcotics and risk assessments. Records relating to the architecture and operation of DoD counterintelligence information systems. Reports of investigation, collection, statements of individuals, affidavits, correspondence, and other documentation pertaining to investigative or analytical efforts by DoD and other U.S. government agencies to identify or counter foreign intelligence and terrorist threats to the DoD and the United States. The system of records includes ad hoc or temporary databases established to support particular investigations, task forces, or analytical projects.”
Delete entry and replace with “Public Affairs Officer, Office for Congressional and Public Affairs, Defense Intelligence Agency, 200 MacDill Blvd., Washington DC 20340-0001.”
Delete entry and replace with “Individuals seeking to determine whether information about themselves is contained in this system of records should address written inquiries to the DIA Freedom of Information Act Office (DAN-1A), Defense Intelligence Agency, 200 MacDill Blvd., Washington, DC 20340-0001.
Request should contain the individual's full name, current address, and telephone number.”
Delete entry and replace with “Individuals seeking access to information about themselves contained in this system of records should address written inquiries to the DIA Freedom of Information Act Office, Defense Intelligence Agency (DAN-1A), 200 MacDill Blvd., Washington, DC 20340-0001.
Request should contain the individual's full name, current address, and telephone number.”
Department of the Air Force, DoD.
Notice to alter a system of records.
The Department of the Air Force proposes to alter a system of records notice in its existing inventory of records systems subject to the Privacy Act of 1974 (5 U.S.C. 552a), as amended. The blanket (k)(1) exemption applies to this systems of records to accurately describe the basis for exempting disclosure of classified information that is or may be contained in the records.
This proposed action will be effective on August 27, 2012 unless comments are received which result in a contrary determination.
You may submit comments, identified by docket number and title, by any of the following methods:
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Mr. Charles J. Shedrick, Department of the Air Force Privacy Office, Air Force Privacy Act Office, Office of Warfighting Integration and Chief Information officer, Attn: SAF/CIO A6, 1800 Air Force Pentagon, Washington, DC 20330-1800, or by phone at (202) 404-6575.
The Department of the Air Force's notices for systems of records subject to the Privacy Act of 1974 (5 U.S.C. 552a), as amended, have been published in the
Request for Selective Reenlistment Bonus (SRB) and/or Advance Payment of SRB (June 11, 1997, 62 FR 31793).
Delete entry and replace with “F036 AFPC D”.
Delete entry and replace with “Selective Reenlistment Bonus and/or Advance Payment Request.”
Delete entry and replace with “Headquarters Air Force Personnel Center, 550 C Street West, Randolph Air Force Base, TX 78150-4712 and at Military Personnel Sections at Air Force Installations. Official mailing addresses are published as an appendix to the Air Force's compilation of system of records.”
Delete entry and replace with “Air Force active duty enlisted personnel.”
Delete entry and replace with “10 U.S.C. 8013, Secretary of Air Force; 37 U.S.C. 308, Special pay: Reenlistment bonus; Air Force Instruction 36-2606, Reenlistment in the United States Air Force; and E.O. 9397 (SSN), as amended.”
Delete entry and replace with “To manage advance payment of Selective
Delete entry and replace with “Maintained electronically or in visible file binders/cabinets.”
Delete entry and replace with “Retrieved by name and or SSN”.
Delete entry and replace with “Records are accessed by custodian of the record system and by person(s) responsible for servicing the record system in the performance of their official duties and who are properly screened and cleared for need-to-know. Records are stored electronically or in locked cabinets or rooms. Records are controlled by personnel screening visitor registers, computer system software, and Common Access Card (CAC) access, passwords, and encryption.”
Delete entry and replace with “Skills Management Branch, (HQ AFPC/DPSOA), Headquarters Air Force Personnel Center, 550 C Street West, Suite 10, Randolph Air Force Base, TX 78150-4712.”
Delete entry and replace with “Individuals seeking to determine whether information about themselves is contained in this system should address written inquiries to the Headquarters Air Force Personnel Center, 550 C Street West, Randolph Air Force Base, TX 78150-4712 and at Military Personnel Sections at Air Force Installations. Official mailing addresses are published as an appendix to the Air Force's compilation of system of records.
For verification purposes, individual should provide their full name, Social Security Number (SSN), any details which may assist in locating records, and their signature.
In addition, the requester must provide a notarized statement or an unsworn declaration made in accordance with 28 U.S.C. 1746, in the following format:
If executed outside the United States:
‘I declare (or certify, verify, or state) under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on (date). (Signature)'.
If executed within the United States, its territories, possessions, or commonwealths: ‘I declare (or certify, verify, or state) under penalty of perjury that the foregoing is true and correct. Executed on (date). (Signature)'.”
Delete entry and replace with “Individuals seeking access to information about themselves contained in this system should address written inquiries to the Headquarters Air Force Personnel Center, 550 C Street West, Randolph Air Force Base, TX 78150-4712 and at Military Personnel Sections at Air Force Installations. Official mailing addresses are published as an appendix to the Air Force's compilation of system of records
For verification purposes, individual should provide their full name, Social Security Number (SSN), any details which may assist in locating records, and their signature.
In addition, the requester must provide a notarized statement or an unsworn declaration made in accordance with 28 U.S.C. 1746, in the following format:
If executed outside the United States:
‘I declare (or certify, verify, or state) under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on (date). (Signature)'.
If executed within the United States, its territories, possessions, or commonwealths: ‘I declare (or certify, verify, or state) under penalty of perjury that the foregoing is true and correct. Executed on (date). (Signature)'.”
Delete entry and replace with “The Air Force rules for accessing records, and for contesting contents and appealing initial agency determinations are published in Air Force Instruction 33-332, Air Force Privacy Act Program; Member should refer to Air Force Instruction 36-2607, Applicants' Guide to the Air Force Board for Correction of Military Records (AFBCMR) for contesting contents and appealing initial agency under 32 CFR part 806b.”
Department of the Air Force, DoD.
Notice to alter a system of records.
The Department of the Air Force proposes to alter a system of records in its inventory of record systems subject to the Privacy Act of 1974 (5 U.S.C. 552a), as amended. The blanket (k)(1) exemption applies to this systems of records to accurately describe the basis for exempting disclosure of classified information that is or may be contained in the records.
The proposed action will be effective on August 27, 2012 unless comments are received which result in a contrary determination.
You may submit comments, identified by docket number and title, by any of the following methods:
*
*
Mr. Charles J. Shedrick, Department of the Air Force Privacy Office, Air Force Privacy Act Office, Office of Warfighting Integration and Chief Information officer, ATTN: SAF/CIO A6, 1800 Air Force Pentagon, Washington, DC 20330-1800, or by phone at (202) 404-6575.
The Department of the Air Force's notices for systems of records subject to the Privacy Act of 1974 (5 U.S.C. 552a), as amended, have been published in the
USAF Information Technology E-Learning System (December 8, 2008, 73 FR 74471).
Delete entry and replace with “F033 AFSPC C”.
Delete entry and replace with “AF e-Learning System.”
Delete entry and replace with “Sunguard; 20 Overland Street, Suite A, Boston, MA 02215-3339.”
Delete entry and replace with “Active duty Air Force military personnel, Air National Guard, Air Force Reserves, Air Force civilian personnel, and contractors.”
Delete entry and replace with “Individual's full name, address, telephone number, DoD ID Number, AF Portal ID, student registrations and history of learning assets (courses, test preparations, mentoring, books, skill briefs) accessed and completed and other related documents.”
Delete entry and replace with “10 U.S.C. 8013, Secretary of the Air Force; DoD 8570.01-M, Information Assurance Workforce Improvement Program; and Air Force Instruction 33-115, Volume 2, Licensing Network Users and Certifying Network.”
Delete entry and replace with “Provides interactive, self-paced, web-based training and reference material anytime, anywhere to user desktops to keep Air Force personnel skilled in the technology and knowledge they need to carry out their missions. It is used as a management tool in support of Air Force information technology training requirements.”
Delete entry and replace with “By individual's full name and/or DoD ID Number.”
Delete entry and replace with “Access to the system is restricted through the Air Force Portal reduced sign-on capability. AF e-Learning can only be accessed through the Air Force Portal. Air Force and contract personnel responsible for servicing the record system in performance of their official duties may only access the system by using a unique user name and password. The system is protected by audit logs, virus detection, intrusion detection, firewalls, and encryption of data in transmission. The data center where system area network resides has onsite personnel 24 hours daily; electronic and physical security, video surveillance, and badge-only access. Student data is encrypted from originating source to the system.”
Delete entry and replace with “Retain file for 10 years after individual completes or discontinues a training course, then destroy.”
Delete entry and replace with “Cyberspace Support Squadron, Training Flight (CYSS/DOT), Attn: Program Manager, Room 2100, 203 West Losey Street, Scott AFB, IL 62225”.
Delete entry and replace with “Individuals seeking to determine whether information about themselves is contained in this system should address written inquiries to the Program Manager, Cyberspace Support Squadron, Training Flight (CYSS/DOT), 203 West Losey Street, Scott AFB, IL 62225.
For verification purposes, individuals should provide their full name, any details which may assist in locating records, and their signature.
In addition, the requester must provide a notarized statement or an unsworn declaration made in accordance with 28 U.S.C. 1746, in the following format:
If executed outside the United States:
‘I declare (or certify, verify, or state) under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on (date). (Signature)'.
If executed within the United States, its territories, possessions, or commonwealths: ‘I declare (or certify, verify, or state) under penalty of perjury that the foregoing is true and correct. Executed on (date). (Signature)”.
Delete entry and replace with “Individuals seeking to access records about themselves contained in this system of records should address written inquiries to the Program Manager, Cyberspace Support Squadron, Training Flight (CYSS/DOT), 203 West Losey Street, Scott AFB, IL 62225.
For verification purposes, individuals should provide their full name, any details which may assist in locating records, and their signature.
In addition, the requester must provide a notarized statement or an unsworn declaration made in accordance with 28 U.S.C. 1746, in the following format:
If executed outside the United States:
‘I declare (or certify, verify, or state) under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on (date). (Signature)'.
If executed within the United States, its territories, possessions, or commonwealths: ‘I declare (or certify, verify, or state) under penalty of perjury that the foregoing is true and correct. Executed on (date). (Signature)'.”
Delete entry and replace with “Profile information residing in the Air Force Directory Services system.”
Delete entry and replace with “An exemption rule for this system has been promulgated in accordance with requirements of 5 U.S.C. 553(b)(1), (2), and (3), and published in 32 CFR 903.1. For additional information contact the system manager.”
The Talent Search program provides Federal financial assistance in
Interested persons are invited to submit comments on or before August 27, 2012.
Written comments regarding burden and/or the collection activity requirements should be electronically mailed to
Individuals who use a telecommunications device for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339.
Section 3506 of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35) requires that Federal agencies provide interested parties an early opportunity to comment on information collection requests. The Director, Information Collection Clearance Division, Privacy, Information and Records Management Services, Office of Management, publishes this notice containing proposed information collection requests at the beginning of the Departmental review of the information collection. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
Office of Elementary and Secondary Education, Department of Education.
Notice reopening the STEP Pilot Grant Competition for fiscal year (FY) 2012.
On May 29, 2012, we published in the
Applications Available: July 26, 2012.
Deadline for Transmittal of Applications: August 9, 2012.
Tara Ramsey, U.S. Department of Education, 400 Maryland Avenue SW. 3E309 Washington, 20202. Telephone: (202) 260-2063 or by email:
If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-800-877-8339.
Individuals with disabilities can obtain this document and a copy of the application package in an accessible format (e.g., braille, large print, audiotape, or compact disc) by contacting the program person listed in this section.
We are reopening this competition in order to allow applicants more time to prepare and submit their applications. Given the number of application requirements, the unique nature of this pilot competition, and the short deadline for applications (45 days), some applicants might not have had sufficient time to complete all requirements. At this time we have received a very limited number of applications. In addition, we understand that there was confusion in the field about the preliminary agreement requirement and the consortia requirements for this competition. Therefore, we are supplementing the “Frequently Asked Questions” document with additional questions and will re-post the document on the STEP Web site,
All eligible applicants are encouraged to apply. Eligible applicants that submitted their applications by the July 13, 2012, deadline may, but are not required to, resubmit their applications. We encourage all applicants to review carefully the “Frequently Asked Questions” document available on the program Web site at
All information in the May 29, 2012, notice inviting applications for this competition remains the same, except for the deadline date. Information about the STEP program and competition is available on the program Web site at
Applications for grants under the STEP Competition, CFDA number 84.415, must be submitted electronically using the Government-wide Grants.gov Apply site at www.Grants.gov. For information about how to submit your application electronically, please refer to
You may also access documents of the Department published in the
20 U.S.C. 7451(a)(4).
Office for Civil Rights, U.S. Department of Education.
Notice of an open meeting.
This notice sets forth the schedule and proposed agenda of an up-coming meeting of the Equity and Excellence Commission (Commission). The notice also describes the functions of the Commission. Notice of this meeting is required by section 10(a)(2) of the Federal Advisory Committee Act (FACA) and is intended to notify the public of their opportunity to attend.
August 9, 2012.
The Commission will meet in Washington, DC at the United States Department of Education at 400 Maryland Avenue SW., Washington, DC 20202, in Room 4W334.
Guy Johnson, Designated Federal Official, Equity and Excellence Commission, U.S. Department of Education, 400 Maryland Avenue SW., Washington, DC 20202. Email:
On August 9, 2012 from 11:00 a.m. to 3:00 p.m. Eastern Standard Time, the Equity and Excellence Commission will hold an open meeting in Washington, DC at the United States Department of Education at 400 Maryland Avenue SW., Washington, DC 20202, in Room 4W334.
The purpose of the Commission is to collect information, analyze issues, and obtain broad public input regarding how the Federal government can increase educational opportunity by improving school funding equity. The Commission will also make recommendations for restructuring school finance systems to achieve equity in the distribution of educational resources and further student performance, especially for the students at the lower end of the achievement gap. The Commission will examine the disparities in meaningful educational opportunities that give rise to the achievement gap, with a focus on systems of finance, and recommend appropriate ways in which Federal policies could address such disparities.
The agenda for the Commission's August 9, 2012 meeting will include review and deliberation of materials prepared by the writing teams for consideration in the draft report to the Secretary of the U.S. Department of Education (Secretary), summarizing the Commission's findings and recommendations for appropriate ways in which Federal policies can improve equity in school finance. The Commission is also expected to discuss the timing and content of future Commission meetings, as well what further materials, if any, will be produced. Due to time constraints, there will not be a public comment period. However, individuals wishing to provide written comments may send their comments to the Commission via email at
Individuals interested in attending the meeting must register in advance, as meeting room seating may be limited. Please contact Guy Johnson at (202) 453-6567 or by email at
Records are kept of all Commission proceedings and are available for public inspection at the Department of Education, 400 Maryland Avenue SW., Washington, DC 20202 between the hours of 9:00 a.m. to 5:00 p.m. Eastern Standard Time. You may contact Guy Johnson, Designated Federal Official, Equity and Excellence Commission, at
Bonneville Power Administration (BPA), Department of Energy (DOE).
Notice of availability of Administrator's Record of Decision (ROD).
This notice announces the availability of the BPA's ROD for entering into an Memorandum of Agreement (MOA) with the Kalispel Tribe for implementing fish and wildlife projects in and around Lake Pend Oreille and the Pend Oreille River in Pend Orielle County, Washington and Bonner Counties, Idaho. BPA has decided to enter into the MOA to pursue mutual goals with the Kalispel Tribe of protecting and recovering fish and wildlife affected by the Federal Columbia River Power System in the area. This ROD is tiered to the BPA's Fish and Wildlife Implementation Program Environmental Impact
Copies of the ROD may be obtained by calling BPA's toll-free document request line, 1-800-622-4520. The ROD is also available on our Web site,
Mickey Carter, Bonneville Power Administration—KEC-4, P.O. Box 3621, Portland, Oregon, 97208-3621; toll-free telephone number 1-800-622-4519; fax number 503-230-5699; or email
Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:
Comments Due: 5 p.m. ET 7/31/12.
Comments Due: 5 p.m. ET 7/30/12.
Comments Due: 5 p.m. ET 7/30/12.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
Comments Due: 5 p.m. ET 6/13/12.
Comments Due: 5 p.m. ET 7/30/12.
Any person desiring to protest in any the above proceedings must file in accordance with Rule 211 of the Commission's Regulations (18 CFR 385.211) on or before 5:00 p.m. Eastern time on the specified comment date.
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, and service can be found at:
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
This constitutes notice, in accordance with 18 CFR 385.2201(b), of the receipt of prohibited and exempt off-the-record communications.
Order No. 607 (64 FR 51222, September 22, 1999) requires Commission decisional employees, who make or receive a prohibited or exempt off-the-record communication relevant to the merits of a contested proceeding, to deliver to the Secretary of the Commission, a copy of the communication, if written, or a summary of the substance of any oral communication.
Prohibited communications are included in a public, non-decisional file associated with, but not a part of, the decisional record of the proceeding. Unless the Commission determines that the prohibited communication and any responses thereto should become a part of the decisional record, the prohibited off-the-record communication will not be considered by the Commission in reaching its decision. Parties to a proceeding may seek the opportunity to respond to any facts or contentions made in a prohibited off-the-record communication, and may request that the Commission place the prohibited communication and responses thereto in the decisional record. The Commission will grant such a request only when it determines that fairness so requires. Any person identified below as having made a prohibited off-the-record communication shall serve the document on all parties listed on the official service list for the applicable proceeding in accordance with Rule 2010, 18 CFR 385.2010.
Exempt off-the-record communications are included in the decisional record of the proceeding, unless the communication was with a cooperating agency as described by 40 CFR 1501.6, made under 18 CFR 385.2201(e) (1) (v).
The following is a list of off-the-record communications recently
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency is planning to submit an information collection request (ICR), “Valuing Improved Water Quality in the Chesapeake Bay Using Stated Preference Methods (New)” (EPA ICR No. 2456.01, OMB Control No. 2010-NEW) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act. On May 24, 2012 EPA solicited public comments for 60 days on the proposed ICR. Certain supporting documents were not available for public review in the docket during the first 30 days of the comment period, thus EPA is re-opening the comment period for an additional 30 days from the publication of this notice. Public comments are being solicited on specific aspects of the proposed information collection as described below. This is a request for approval of a new collection. An Agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
Comments must be submitted on or before August 27, 2012.
Submit your comments, referencing Docket ID No. EPA-HQ-OA-2012-0033 online using
EPA's policy is that all comments received will be included in the public docket without change including any personal information provided, unless the comment includes profanity, threats, information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute.
Dr. Nathalie Simon, National Center for Environmental Economics, Office of Policy, (1809T), Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460; telephone number: 202-566-2347; fax number: 202-566-2363; email address:
Supporting documents which explain in detail the information that the EPA will be collecting are available in the public docket for this ICR. The docket can be viewed online at www.regulations.gov or in person at the EPA Docket Center, EPA West, Room 3334, 1301 Constitution Ave. NW., Washington, DC. The telephone number for the Docket Center is 202-566-1744. For additional information about EPA's public docket, visit
Pursuant to section 3506(c)(2)(A) of the PRA, EPA is soliciting comments and information to enable it to: (i) 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; (ii) 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; (iii) enhance the quality, utility, and clarity of the information to be collected; and (iv) minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses. EPA will consider the comments received and amend the ICR as appropriate. The final ICR package
The Chesapeake Bay watershed encompasses 64,000 square miles in parts of six states and the District of Columbia. While efforts have been underway to restore the Bay for more than 25 years, and significant progress has been made over that period, the TMDLs are necessary to continue progress toward the goal of a healthy Bay. The watershed states of New York, Pennsylvania, Delaware, West Virginia, Virginia, and Maryland, as well as the District of Columbia, have developed Watershed Implementation Plans (WIPs) detailing the steps each will take to meet its obligations under the TMDLs. EPA has begun a new study to estimate costs of compliance with the TMDLs. A multitude of benefits may also be anticipated to arise from restoring the Chesapeake Bay. It is important to put cost estimates in perspective by estimating corresponding benefits.
EPA's National Center for Environmental Economics (NCEE) is undertaking a benefits analysis of improvements in Bay water quality under the TMDLs, as well as of ancillary benefits that might arise from terrestrial measures taken to improve water quality. As part of this analysis, NCEE plans to conduct a broad-based inquiry into benefits using a state-of-the-art stated preference survey. Benefits from the TMDLs for the Chesapeake will accrue to those who live on or near the Bay and its tributaries, as well as to those who live further away and may never visit the Bay but have a general concern for the environment. The latter category of benefits is typically called “non-use values” and estimating the monetary value can only be achieved through a stated preference survey.
In addition, a stated preference survey is able to estimate “use values,” those benefits that accrue to individuals who choose to live on or near the Bay or recreate in the watershed. Stated preference surveys allow the analyst to define a specific object of choice or suite of choices such that benefits are defined in as precise a manner as feasible. While use benefits of water quality improvements in the Chesapeake Bay watershed will also be estimated through other revealed preference methods, the stated preference survey allows for careful specification of the choice scenarios and will complement estimates found using other methods. Participation in the survey will be voluntary and the identity of the participants will be kept confidential.
Federal Election Commission.
Notice of filing dates for special election.
Michigan has scheduled elections on September 5, 2012, and November 6, 2012, to fill the U.S. House seat in the 11th Congressional District vacated by Representative Thaddeus McCotter.
Committees required to file reports in connection with the Special Primary Election on September 5, 2012, shall file a 12-day Pre-Primary Report. Committees required to file reports in connection with both the Special Primary and Special General Election on November 6, 2012, shall file a 12-day Pre-Primary Report, a 12-day Pre-General Report, and a 30-day Post-General Report.
Ms. Elizabeth S. Kurland, Information Division, 999 E Street NW., Washington, DC 20463; Telephone: (202) 694-1100; Toll Free (800) 424-9530.
All principal campaign committees of candidates who participate in the Michigan Special Primary and Special General Elections shall file a 12-day Pre-Primary Report on August 24, 2012; a 12-day Pre-General Report on October 25, 2012; and a 30-day Post-General Report on December 6, 2012. (See chart below for the closing date for each report).
All principal campaign committees of candidates participating only in the Special Primary Election shall file a 12-day Pre-Primary Report on August 24, 2012. (See chart below for the closing date for each report).
Note that these reports are in addition to the campaign committee's quarterly filing in October. (See chart below for the closing date for each report).
Political committees filing on a quarterly basis in 2012 are subject to special election reporting if they make previously undisclosed contributions or expenditures in connection with the Michigan Special Primary or Special General Election by the close of books for the applicable report(s). (See chart below for the closing date for each report).
Committees filing monthly that make contributions or expenditures in connection with the Michigan Special Primary or General Elections will continue to file according to the monthly reporting schedule.
Additional disclosure information in connection with the Michigan Special Election may be found on the FEC Web site at
Principal campaign committees, party committees and Leadership PACs that are otherwise required to file reports in connection with the special elections must simultaneously file FEC Form 3L if they receive two or more bundled contributions from lobbyists/registrants or lobbyist/registrant PACs that aggregate in excess of $16,700 during the special election reporting periods
On behalf of the Commission.
Federal Election Commission.
Tuesday July 31, 2012 At 10:00 a.m.
999 E Street NW., Washington, DC
This meeting will be closed to the public.
Compliance matters pursuant to 2 U.S.C. 437g.
Audits conducted pursuant to 2 U.S.C. 437g, 438(b), and Title 26, U.S.C.
Matters concerning participation in civil actions or proceedings or arbitration.
Internal personnel rules and procedures or matters affecting a particular employee.
Information the premature disclosure of which would be likely to have a considerable adverse effect on the implementation of a proposed Commission action.
Judith Ingram, Press Officer, Telephone: (202) 694-1220.
The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than August 10, 2012.
A. Federal Reserve Bank of Boston (Richard Walker, Community Affairs Officer) 600 Atlantic Avenue, Boston, Massachusetts 02210-2204:
1.
Board of Governors of the Federal Reserve System, July 23, 2012.
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The applications listed below, as well as other related filings required by the Board, are available for immediate inspection at the Federal Reserve Bank indicated. The applications will also be available for inspection at the offices of
Unless otherwise noted, comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors not later than August 20, 2012.
A. Federal Reserve Bank of St. Louis (Glenda Wilson, Community Affairs Officer) P.O. Box 442, St. Louis, Missouri 63166-2034:
1.
General Services Administration (GSA).
Notice.
This notice provides submitters notice pursuant to Executive Order 12600 that the GSA, Public Buildings Service, Office of Leasing has received several specific FOIA requests for certain GSA real property lease documents with private sector landlords. This notice describes typical data elements contained in these lease documents, and their exemption status under FOIA in response to these specific FOIA requests.
Comments must be received on or before August 27, 2012.
Submit comments identified by “Notice-PBS-2012-05”, by any of the following methods:
•
Submit comments via the Federal eRulemaking portal by searching for “Notice-PBS-2012-05”.” Select the link “Submit a Comment” that corresponds with “Notice-PBS-2012-05.” Follow the instructions provided at the “Submit a Comment” screen. Please include your name, company name (if any), and “Notice-PBS-2012-05” on your attached document.
•
•
John D. Thomas at (202) 501-2454.
GSA, the nation's largest public real estate organization, provides workspace for more than 1.2 million federal workers through its Public Buildings Service. Approximately half of the employees are housed in buildings owned by the federal government and half are located in over 8,100 separate leased properties (in over 8,500 leases), including buildings, land, antenna sites, etc. across the country. In order to respond to these specific FOIA requests, GSA has identified 48 data elements that may be found in the requested lease documents. Some of these data elements are exempt from disclosure pursuant to Exemption 4 of the Freedom of information Act (FOIA), 5 U.S.C. 552(b)(4).
The following table contains a description of these data fields and their exempt status:
Office of the Secretary, HHS.
In compliance with the requirement of section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995, the Office of the Secretary (OS), Department of Health and Human Services, is publishing the following summary of a proposed information collection request for public comment. Interested persons are invited to send comments regarding this burden estimate or any other aspect of this collection of information, including any of the following subjects: (1) The necessity and utility of the proposed information collection for the proper performance of the agency's functions; (2) the accuracy of the estimated burden; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) the use of automated collection techniques or other forms of information technology to minimize the information collection burden.
To obtain copies of the supporting statement and any related forms for the proposed paperwork collections referenced above, email your request, including your address, phone number, OMB number, and OS document identifier, to
Division of the National Toxicology Program (DNTP), National Institute of Environmental Health Sciences (NIEHS), National Institutes of Health (NIH), HHS.
Announcement of a Workshop; Call for Abstract Submissions.
The NTP Interagency Center for the Evaluation of Alternative Toxicological Methods (NICEATM) announces an “International Workshop on Alternative Methods for
The workshop is open to the public at no charge with attendance limited only by the available space; however, advance registration is required (see
The workshop is scheduled for September 19-21, 2012. Sessions will begin at 1:00 p.m. CDT on September 19 and 8:00 a.m. on September 20 and 21. Sessions will end at approximately 6:00 p.m. on September 19 and 20 and at 1:00 p.m. on September 21. The deadline for registration is September 7, 2012. Due to U.S. Department of Agriculture (USDA) security requirements, onsite registration at the workshop will not be available. The deadline for submission of poster abstracts is August 13, 2012.
The workshop will be held at the USDA Center for Veterinary Biologics at the National Centers for Animal Health, 1920 Dayton Avenue Ames, Iowa 50010. Individuals with disabilities who need accommodation to participate in this event should contact Ms. Debbie McCarley at voice telephone: 919-541-2384 or email:
Dr. William S. Stokes, Director, NICEATM, NIEHS, P.O. Box 12233, Mail Stop: K2-16, Research Triangle Park, NC, 27709, (telephone) 919-541-2384, (fax) 919-541-0947, (email)
Leptospirosis is an emerging and widespread bacterial zoonotic disease caused by spirochetes of the genus
Leptospirosis affects numerous animal species including livestock, pets, and wildlife. Vaccines have been developed for most susceptible livestock and domestic pet species and are widely used in the U.S. and other countries. Human
Regulatory authorities require potency testing prior to release of each production lot of
This workshop, the second in a series of specialized vaccine workshops, will review recent advances and innovations in science and technology that can be applied to the development of new methods and approaches for
NICEATM and ICCVAM are organizing the workshop in collaboration with partner organizations in the International Cooperation on Alternative Test Methods (ICATM): the European Union Reference Laboratory for Alternatives to Animal Testing (EURL ECVAM), the Japanese Center for the Validation of Alternative Methods, the Korean Center for the Validation of Alternative Methods, and Health Canada. Cosponsors include EURL ECVAM, the Animal Health Institute, the International Alliance for Biological Standardization, and the USDA Center for Veterinary Biologics.
Registration information, draft agenda, and additional meeting information are available on the NICEATM-ICCVAM Web site (
NICEATM and ICCVAM invite the submission of abstracts for scientific posters to be displayed during this workshop. Guidelines for the submission of abstracts are available at
ICCVAM is an interagency committee composed of representatives from 15 Federal regulatory and research agencies that require, use, generate, or disseminate toxicological and safety testing information. ICCVAM conducts technical evaluations of new, revised, and alternative safety testing methods and integrated testing strategies with regulatory applicability and promotes the scientific validation and regulatory acceptance of testing methods that more accurately assess the safety and hazards of chemicals and products and that reduce, refine, or replace animal use. The ICCVAM Authorization Act of 2000 (42 U.S.C. 285
Kulpa-Eddy J. 2012. Successful Development and Validation of an
USDA. 2009a. SAM 624: Supplemental Assay Method for
USDA. 2009b. SAM 625: Supplemental Assay Method for
USDA. 2009c. SAM 627: Supplemental Assay Method for
USDA. 2011. SAM 626: Supplemental Assay Method for
Stokes WS, Kulpa-Eddy J, McFarland R. 2011. The International Workshop on Alternative Methods to Reduce, Refine, and Replace the Use of Animals in Vaccine Potency and Safety Testing: introduction and summary. In: International Workshop on Alternative Methods to Reduce, Refine, and Replace the Use of Animals in Vaccine Potency and Safety Testing: State of the Science and Future Directions (Kulpa-Eddy J, McFarland R, Stokes WS, eds). Procedia Vaccinol 5: 1-15.
In compliance with the requirement of Section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 for opportunity for public comment on proposed data collection projects, the Centers for Disease Control and Prevention (CDC) will publish periodic summaries of proposed projects. To request more information on the proposed projects or to obtain a copy of the data collection plans and instruments, call 404-639-7570 and send comments to Kimberly S. Lane, CDC Reports Clearance Officer, 1600 Clifton Road, MS-D74, Atlanta, GA 30333 or send an email to
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Written comments should be received within 60 days of this notice.
National Healthcare Safety Network (NHSN) (OMB No. 0920-0666), exp. 01/31/2015—Revision—National Center for Emerging and Zoonotic Infectious Diseases (NCEZID), Centers for Disease Control and Prevention (CDC).
The National Healthcare Safety Network (NHSN) is a system designed to accumulate, exchange, and integrate relevant information and resources among private and public stakeholders to support local and national efforts to
This revision submission includes major revisions to the Patient Safety Component—Outpatient Dialysis Center Practices Survey (Form 57.104) in an effort to provide further clarification to those collecting the information. Additionally, some of the changes have been made to improve surveillance data available for the outpatient dialysis population. Due to the CMS End Stage Renal Disease (ESRD) Quality Improvement Program (QIP) reporting requirements, over 5,700 dialysis facilities have already enrolled or will enroll into NHSN to report data in 2012. Form 57.104 is completed by each facility upon enrollment into NHSN and then every January thereafter.
Furthermore, minor revisions have been made to 28 other forms within the package to clarify and/or update surveillance definitions. Six forms have been removed for the purposes of simplification from the Healthcare Personnel Safety Component of the package due to changes within NHSN reporting of healthcare personnel influenza vaccination. Old functionality of individual level vaccination reporting will be removed from NHSN. CMS Inpatient Quality Reporting (IQR) requirements designate that all acute care facilities will report healthcare personnel vaccination counts at the summary level for the 2012-2013 flu season.
The previously approved NSHN package included 54 individual collection forms; the current revision request removes six forms for a total of 48 forms. The reporting burden will decrease by 415,523 hours, for a total of 3,562,653 hours.
Healthcare institutions that participate in NHSN report their data to CDC using a web browser based technology for data entry and data management. Data are collected by trained surveillance personnel using written standardized protocols. Participating institutions must have a computer capable of supporting an Internet service provider (ISP) and access to an ISP. There is no cost to respondents other than their time.
Part C (Centers for Disease Control and Prevention) of the Statement of Organization, Functions, and Delegations of Authority of the Department of Health and Human Services (45 FR 67772-76, dated October 14, 1980, and corrected at 45 FR 69296, October 20, 1980, as amended most recently at 77 FR 27070-27071, dated May 8, 2012) is amended to reorganize the Human Capital and Resources Management Office, Office of the Chief Operating Officer, Centers for Disease Control and Prevention.
Section C-B, Organization and Functions, is hereby amended as follows:
Delete in its entirety the titles and functional statements for the Human Capital and Resources Management Office (CAJQ) and insert the following:
Human Capital and Resources Management Office (CAJ0). (1) Provides leadership, policy formation, oversight, guidance, service, and advisory support and assistance to the Centers for Disease Control and Prevention (CDC) and the Agency for Toxic Substances and Disease Registry (ATSDR); (2) collaborates as appropriate, with the CDC Office of the Director (OD), Centers/Institute/Offices (CI0s), domestic and international agencies and organizations; and provides a focus for short- and long-term planning within the Human Capital and Resource Management Office (HCRM0); (3) develops and administers human capital and human resource management policies; (4) serves as the business steward for all CDC developed human capital and human resources management systems and applications; (5) develops, maintains, and supports information systems to conduct personnel activities and provide timely information and analyses of personnel and staffing to management and employees; (6) conducts and coordinates human resources management for civil service and Commissioned Corps personnel; (7) manages the administration of fellowship programs; (8) conducts recruitment, special emphasis, staffing, position classification, position management, pay and leave administration, work-life programs, performance management, employee training and development, and employee and labor relations programs; (9) maintains personnel records and reports, and processes personnel actions and documents; (10) administers the federal life and health insurance programs; (11) administers employee recognition, suggestion, and incentive awards programs; (12) furnishes advice and assistance in the processing of workers compensation claims; (13) interprets standards of conduct regulations, reviewing financial disclosure reports, and offer ethics training and counseling services to CDC employees; (14) maintains liaison with the Department of Health and Human Services (HHS) and the Office of Personnel Management (OPM) on human resources management, policy, compliance and execution of the Human Capital Assessment and Accountability Framework (HCAAF); (15) conducts organizational assessments to determine compliance with human capital policies, guidance, regulatory and statutory requirements of federal human capital and resource management programs and initiatives; (16) plans, directs, and manages CDC-wide training programs, monitors compliance with mandatory training requirements, and maximizes economies of scale through systematic planning and valuation of agency-wide training initiatives to assist employees in achieving required competencies; (17) assists in the definition and analysis of training needs and develops and evaluates instructional products designed to meet those needs; (18) develops, designs, and implements a comprehensive leadership and career management program for all occupational series throughout CDC; (19) provides technical assistance in organizational development, career management, employee development, and training; (20) collaborates and works with partners, internally and externally, to develop workforce goals and a strategic vision for the public health workforce; and (21) provides support for succession planning, forecasting services, and environmental scanning to ascertain both current and future public health workforce needs.
Office of the Director (CAJQ1). (1) Provides leadership and overall direction for HCRMO; (2) develops goals and objectives, and provides leadership, policy formation, oversight, and guidance in program planning and development; (3) plans, coordinates, and develops strategic plans for HCRMO; (4) develops and administers human capital and human resource management policies and procedures; (5) coordinates all program reviews; (6) reviews, prepares, coordinates, and develops proposed legislation, Congressional testimony, and briefing materials; (7) establishes performance metrics and coordinates quarterly reviews to ascertain status on meeting of the metrics; (8) coordinates budget formulation, negotiation, and execution of financial resources; (9) identifies relevant scanning/benchmarking on workforce and career development processes, services and products; (10) provides leadership and guidance on new developments and national trends for public health workforce; (11) establishes and oversees policies governing human capital and human resources management, and works collaboratively within CDC and other components in planning, developing and implementing policies; (12) develops strategic plans for information technology and information systems required to support human capital and human resources management information requirements; (13) serves as
Ethics Program Activity (CAJQ12). (1) Provides leadership for the CDC Ethics program activity in accordance with conflict of interest statutes at Title 18 U.S.C. Chapter 11 and standards of conduct regulation at 5 CFR Part 2635; (2) serves as a liaison with the Office of Government Ethics (OGE) and HHS on ethics matters; (3) interprets standards of conduct regulations; (4) reviews financial disclosure reports for potential conflicts of interest; (5) provides continuing ethics training and counseling services; (6) counsels employees on a variety of ethics issues to ensure that CDC employees avoid situations that could violate ethics laws and undermine the public's trust in Government; and (7) reviews and approves outside activity, official duty, and award requests for employees.
Commissioned Corps Activity (CAJQ14). (1) Serves as the primary contact for CDC management and employees in obtaining the full range of personnel assistance and management services for Commissioned Corps personnel; (2) provides leadership, technical assistance, guidance, and consultation in benefits, entitlements, and obligations of the Commissioned Corps to commissioned officers; (3) plans, directs, and manages the Department of Defense's Defense Eligibility Enrollment Report System (DEERS) identification card program for all active duty officers, retirees, and eligible dependents; (4) implements and evaluates Commissioned Corps policies and systems such as salary/benefits, performance management, assignments, health benefits, training, travel, relocation, and retirement; (5) manages the CDC's Commissioned Corps promotion and awards programs; (6) maintains liaison and coordinates personnel services for Commissioned Corps personnel with the Office of Commissioned Corps Operations and the Office of Surgeon General; (7) coordinates the agency deployment status of commissioned officers assigned to CDC and manages the Emergency Operation Centers (EOC) Commissioned Corps deployment desk during activation of the CDC EOC; and (8) establishes and maintains personnel and payroll records and files.
Policy and Communications Activity (CAJQ15). (1) Provides leadership, oversight, guidance and support for policy and communication activities supporting HCRMO; (2) develops, administers and monitors the implementation of human capital and human resources management policies and operational procedures as directed by OPM, HHS, CDC or other pertinent federal agencies to ensure consistent application across CDC; (3) serves as the focal point for the analysis, development, technical review and clearance of controlled correspondence and non-scientific policy documents that require approval/signature from the HCRMO Director or other senior CDC leadership; (4) responds to and coordinates requests from the Office of the Director for issues management information to ensure efficient responses to the Director's priority issues; (5) provides and manages a wide range of communication services in support of HCRMO; (6) facilitates open and transparent employee communication; (7) develops and implements internal and external public relations strategies to communicate upward and outward to customers, partners, and other stakeholders; and (8) utilizes multiple channels and methods to communicate and disseminate HCRMO policies, announcements, procedures, information, and other relevant messages.
Operations Management Activity (CAJQ17). (1) Provides leadership, oversight, and guidance in the management and operations of HCRMO programs; (2) provides and oversees the delivery of HCRMO-wide administrative management and support services in the areas of fiscal management, personnel, travel, records management, internal controls, and other administrative services; (3) prepares annual budget formulation and budget justifications; (4) coordinates HCRMO requirements relating to contracts, grants, cooperative agreements, and reimbursable agreements; (5) develops and implements administrative policies, procedures, and operations, as appropriate, for HCRMO, and prepares special reports and studies, as required, in the administrative management areas; and (6) maintains liaison with related staff offices and other officials of CDC.
Strategic Programs Office (CAJOB). (1) Provides a broad array of strategic programs, workforce support, and development services; (2) develops and implements methodologies to measure, evaluate, and improve human capital results to ensure mission alignment; (3) assesses and evaluates the overall effectiveness and compliance of human resources programs and policies related to merit-based decision-making and compliance with laws and regulations; (4) provides targeted and strategic technical assistance in organizational development, career management, employee development, and training to CDC CIOs; (5) works with OPM, HHS, and CDC Governance Boards and agency managers to carry out human capital management planning and development activities; (6) establishes, coordinates, develops, and monitors implementation of human capital initiatives and the agency Strategic Human Capital Management Plan; (7) manages recruitment, outreach, and oversight of the Oak Ridge Institute for Science and Education (ORISE), Guest Researcher, Student Interns, and Fellowship programs to meet customer strategic human capital management needs; (8) provides recruitment, retention, consultation and support to customers, including strategies and resources available to effectively recruit, retain, and plan for the succession of employees; (9) facilitates the hiring of members from underrepresented groups, ensuring a more prepared, diverse, and sustainable workforce; (10) conducts organizational evaluations and audits to determine regulatory compliance and adherence to merit system principles utilizing the Human Capital Assessment and Accountability Framework (HCAAF); (11) serves as the liaison to HHS in the development, maintenance, and support of Department-wide human resource information systems and; applications; (12) serves as a business steward for all CDC developed human capital and human resources management systems and applications; (13) facilitates the administration, analysis, reporting and recommendations for improvement in regards to annual employee surveys; (14) supports reporting requirements with Office of Management and Budget (OMB) Annual Performance Report and Performance Plan; (15) provides business strategy, data analytics, and reporting services; (16) performs analysis, forecasting, and modeling to
CDC University Office (CAJQC). (1) Provides agency-wide leadership and guidance in all functional areas related to training and career development; (2) designs, develops, implements and evaluates a comprehensive strategic human resource leadership and career training and development program for all occupational series throughout CDC; (3) develops and implements training strategies and activities that contribute to the agency's mission, goals and objectives; (4) maximizes economies of scale through systematic planning, administration, delivery, and evaluation of agency-wide training initiatives to assist CDC employees in achieving required competencies; (5) development of retraining activities for CDC managers/employees affected by organizational changes (e.g. major reorganizations, outsourcing initiatives, etc.); (6) maintains employee training records; (7) develops and validates occupational and functional competencies and develops related training plans and career maps; (8) develops and administers professional development programs; (9) administers and monitors the Training and Learning Management System for compliance with the Government Employees Training Act; (10) conducts training needs assessment of employees, provides analysis and data to correlate individual training with strategic plans; (11) develops and maintains assessment tools to identify core competency requirements for each occupational series throughout the agency; (12) provides consultation, guidance, and technical assistance to managers and employees in organizational development, career management, employee development, and training; (13) develops and delivers education and training programs to meet the identified needs of the workforce; (14) promotes, develops, and implements training needs assessment methodology to establish priorities for training interventions; (15) collaborates, as appropriate, with the CDC/OD, CIOs, HHS, OPM and other domestic and international agencies and organizations; and (16) develops and implements policies related to employee training.
Career Development Activity (CAJQC2). (1) Designs, develops, implements and evaluates training activities to increase competency in the area of career development strategies; (2) maximizes economies of scale through systematic planning, administration, delivery, and evaluation of agency-wide training initiatives to assist CDC employees in achieving required competencies; (3) development of retraining activities for CDC managers/employees affected by organizational changes (e.g. major reorganizations, outsourcing initiatives, etc.); (4) maintains employee training records; (5) develops and validates occupational and functional competencies and develops related training plans and career maps; (6) develops and administers professional development programs to include mentoring and coaching for enhanced performance; (7) conducts training needs assessment of employees, provides analysis and data to correlate individual training with strategic plans; (8) develops and maintains assessment tools to identify core competency requirements for each occupational series throughout the agency; (9) provides consultation, guidance, and technical assistance to managers and employees in organizational development, career management, employee development, and training; (10) promotes, develops, and implements training needs assessment methodology to establish priorities for training interventions; (11) collaborates, as appropriate, with the CDC/OD, CIOs, HHS, OPM and other domestic and international agencies and organizations; and (12) implements procedural components in compliance to the long term education training policy.
Leadership Development Activity (CAJQC3). (1) Designs, develops, implements and evaluates a comprehensive leadership development curriculum for leaders at all levels throughout CDC; (2) develops and implements leadership training strategies and activities that contribute to the agency's mission, goals and objectives; (3) maximizes economies of scale through systematic planning, administration, delivery, and evaluation of agency-wide training initiatives to assist CDC employees in achieving required competencies; (4) maintains employee training records; (5) develops and administers professional development programs such as executive coaching; (6) provides consultation, guidance, and technical assistance to managers and employees around leadership training and development activities; (7) develops and delivers education and training programs to meet the identified needs of the workforce; (8) collaborates, as appropriate, with the CDC/OD, CIOs, HHS, OPM and other domestic and international agencies and organizations; and (9) implements procedural components in compliance to the mandatory supervisory training requirements policy.
Public Health Training Activity (CAJOC4). (1) Designs, develops, implements and evaluates a comprehensive public health training curriculum for employees engaged in public health activities throughout CDC; (2) develops and implements public health, science, research and medicine and preparedness and emergency response training strategies and activities that contribute to the agency's mission, goals and objectives; (3) maximizes economies of scale through systematic planning, administration, delivery, and evaluation of agency-wide training initiatives to assist CDC employees in achieving required competencies; (4) maintains employee training records; (5) provides consultation, guidance, and technical assistance to managers and employees associated within curriculum scope; (6) develops and delivers education and training programs to meet the identified needs of the workforce; and (7) collaborates, as appropriate, with the CDC/OD, CIOs, HHS, OPM and other domestic and international agencies and organizations.
Business and Technology Training Activity (CAJQC5). (1) Designs, develops, implements and evaluates a comprehensive business and technology training curriculum for employees throughout CDC; (2) develops and implements financial, acquisition and project management, communication and office skills and information technology training strategies and activities that contribute to the agency's mission, goals and objectives; (3) maximizes economies of scale through systematic planning, administration, delivery, and evaluation of agency-wide training initiatives to assist CDC employees in achieving required competencies; (4) maintains employee training records; (5) provides consultation, guidance, and technical assistance to managers and employees associated within curriculum scope; (6) develops and delivers education and training programs to meet the identified needs of the workforce; (7) collaborates, as appropriate, with the CDC/OD, CIOs, HHS, OPM and other domestic and international agencies and organizations.
Workforce Relations Office (CAJQD). (1) Provides leadership, technical assistance, guidance, and consultation on employee and labor relations,
Employee and Labor Relations Activity (CAJQD2). (1) Provides leadership, technical assistance, guidance, and consultation on employee and labor relations, employee services; (2) develops and administers labor-management and employee relations program including: disciplinary actions, grievances and appeals, labor negotiations, collective bargaining, management representation before third parties, and partnership activities; (3) serves as liaison with the Office of Safety Health and Environment and other CDC staff for personnel matters relating to substance abuse and other employee assistance programs; (4) coordinates and processes garnishment, child support, and other collection actions for CDC employees; (5) plans, directs, coordinates, and conducts contract negotiations on behalf of agency management with labor organizations holding exclusive recognition; (6) represents management in third party proceedings involving labor and employee relations issues; (7) serves as the authority to ensure validity, consistency, and legality of employee relations matters concerning grievances (both negotiated and agency procedures), disciplinary actions, adverse actions, and resultant third party hearings; (8) plans and coordinates all programmatic activities to include preparation of disciplinary and adverse action letters and all final agency decisions in grievances and appeals; (9) provides technical advice, consultation, and training on matters of employee conduct and performance; and (10) provides consultation, guidance, and technical advice to human resources specialists, managers, and employees on the development.
Employee Benefits, Worklife Programs and Payroll Activity (CAJQD3). (1) Provides consultation, guidance, and technical advice to human resources specialists, managers, and employees on the development, coordination and implementation of all Work-Life program initiatives; (2) provides personnel services relating to on-the-job injuries and exposures to infectious diseases; (3) provides human resources services and assistance on domestic and international employee benefits and leave administration; (4) serves as liaison between CDC and the HHS payroll office resolving discrepancies with pay and leave; (5) administers the leave donor program and processes time and attendance amendments; (6) administers the federal life and health insurance programs; (7) provides policy guidance and technical advice and assistance on retirement, the Thrift Savings Plan, health/life insurance, and savings bonds; and (8) furnishes advice and assistance in the processing of Office of Workers' Compensation Program claims and the Voluntary Leave Donation Program.
Performance Management, Strategic Rewards and Recognitions Activity (CAJQD4). (1) Facilitates the development and implementation of an Agency-wide strategic approach to monitoring, evaluating, aligning, and improving performance management policies and practices for all CDC performance management systems (Title 5, Title 42, SES, SBRS, and the COER); and (2) coordinates performance management, strategic rewards and recognition programs and systems.
Customer Service Help Desk Activity (CAJQD5). (1) Provides technical assistance, guidance, and consultation on employee and labor relations, employee services, pay, leave and benefits administration; staffing and recruitment, position classification; and (2) administers and maintains the customer service help desk.
Client Services Office (CAJQE). (1) Serves as the primary contact for CDC management and employees in obtaining the full range of personnel assistance and management services for civil service personnel; (2) provides leadership, technical assistance, guidance, and consultation in human resource utilization, position management, classification and pay administration, recruitment, staffing, placement, reorganizations, program evaluation, and personnel records and files management; (3) maintains liaison with HHS and OPM in the area of human resources management; (4) provides leadership in identifying the CIO recruiting needs, and assesses, analyzes, and assists CDC programs in developing and executing short- and long-range hiring plans to meet these needs; (5) provides guidance to CDC organizations in the development of staffing plans and job analyses,
Customer Staffing Activity 1 (CAJQE2). The Activity supports the Centers for Disease Control, Office of the Director, Business Services Offices, Staff Offices, Office of Public Health Preparedness and Response, Office of Surveillance, Epidemiology and Laboratory Services, Office of State, Tribal, Local and Territorial Support, by performing the following: (1) Provides leadership in identifying CIO recruiting needs, and assesses, analyzes, and assists CDC programs in developing and executing short- and long-range hiring plans to meet these needs; (2) provides guidance to CDC organizations in the development of staffing plans and job analyses; (3) processes personnel actions by issuing vacancy announcements, assisting in development of selection criteria, conducting examining under delegated examining authority, conducting candidate rating and ranking under CDC Merit Promotion Plan, making qualification determinations, determining pay, conducting reductions-in-force, effecting appointments and processing other actions; (4) plans, develops, implements, and evaluates systems to ensure consistently high quality human resources services; (5) establishes objectives, standards, and internal controls; (6) evaluates, analyzes, and makes recommendations to improve personnel authorities, policies, systems, operations, and procedures; and (7) provides consultation, guidance, and technical advice on recruitment and special emphasis policies, practices, and procedures, including search committees; strategizes on the best approach to recruitment at specific events, and designs and develops recruitment materials for events.
Customer Staffing Activity 2 (CAJQE3). The Activity supports the Office of Non-communicable Diseases, Injury and Environmental Health and Subordinate Centers, Agency for Toxic Substances and Disease Registry and National Institute for Occupational Safety and Health, by performing the following: (1) Provides leadership in identifying CIO recruiting needs, and assesses, analyzes, and assists CDC programs in developing and executing short- and long-range hiring plans to meet these needs; (2) provides guidance to CDC organizations in the development of staffing plans and job analyses; (3) processes personnel actions by issuing vacancy announcements, assisting in development of selection criteria, conducting examining under delegated examining authority, conducting candidate rating and ranking under CDC Merit Promotion Plan, making qualification determinations, determining pay, conducting reductions-in-force, effecting appointments and processing other actions; (4) plans, develops, implements, and evaluates systems to ensure consistently high quality human resources services; (5) establishes objectives, standards, and internal controls; (6) evaluates, analyzes, and makes recommendations to improve personnel authorities, policies, systems, operations, and procedures; and (7) provides consultation, guidance, and technical advice on recruitment and special emphasis policies, practices, and procedures, including search committees; strategizes on the best approach to recruitment at specific events, and designs and develops recruitment materials for events.
Customer Staffing Activity 3 (CAJQE4). The Activity supports the Center for Global Health, Office of Infectious Diseases and Subordinate Centers by performing the following: (1) Provides leadership in identifying CIO recruiting needs, and assesses, analyzes, and assists CDC programs in developing and executing short- and long-range hiring plans to meet these needs; (2) provides guidance to CDC organizations in the development of staffing plans and job analyses; (3) processes personnel actions by issuing vacancy announcements, assisting in development of selection criteria, conducting examining under delegated examining authority, conducting candidate rating and ranking under CDC Merit Promotion Plan, making qualification determinations, determining pay, conducting reductions-in-force, effecting appointments and processing other actions; (4) plans, develops, implements, and evaluates systems to ensure consistently high quality human resources services; (5) establishes objectives, standards, and internal controls; (6) evaluates, analyzes, and makes recommendations to improve personnel authorities, policies, systems, operations, and procedures; and (7) provides consultation, guidance, and technical advice on recruitment and special emphasis policies, practices, and procedures, including search committees; strategizes on the best approach to recruitment at specific events, and designs and develops recruitment materials for events.
Classification and Advisory Activity (CAJQE5). (1) Provides leadership, technical assistance, guidance, and consultation in human resource utilization, position management, classification and pay administration; (2) provides leadership in identifying CIO classification and position management needs; (3) provides guidance to CDC/ATSDR organizations in the development, evaluation/classification of position descriptions; (4) conducts position management
Technical Services Activity (CAJOE6). (1) Processes personnel actions by determining pay, conducting reductions-in-force, effecting appointments and processing other actions; (2) codes and finalizes all personnel actions in the automated personnel data system; personnel action processing, data quality control/assessment, and files/records management; (3) conducts new employee orientation; (4) establishes objectives, standards, and internal controls; (5) evaluates, analyzes, and makes recommendations to improve personnel authorities, policies, systems, operations, and procedures; (6) establishes and maintains personnel records, files, and controls; (7) establishes and maintains the official personnel files system and administers personnel records storage and disposal program; (8) collaborates with Personnel Security in initiating suitability background checks and fingerprints for all CDC personnel; and (9) responds to employment verification inquiries.
Customer Staffing Activity 4 (CAJQE7). The Activity supports the recruitment and staffing services for CDC's international workforce by performing the following: (1) Provides leadership in identifying the CDC international workforce recruiting needs, and assesses, analyzes, and assists programs in developing and executing short- and long-range hiring plans to meet these needs; (2) provides guidance to CDC in the development of staffing plans and job analyses; (3) processes personnel actions by issuing vacancy announcements, assisting in development of selection criteria, conducting examinations under delegated examining authority, conducting candidate rating and ranking under CDC Merit Promotion Plan, making qualification determinations, determining pay, conducting reductions-in-force, effecting appointments and processing other actions; (4) plans, develops, implements, and evaluates systems to ensure consistently high quality human resources services; (5) establishes objectives, standards, and internal controls; (6) evaluates, analyzes, and makes recommendations to improve personnel authorities, policies, systems, operations, and procedures; (7) provides consultation, guidance, and technical advice on recruitment and special emphasis policies, practices, and procedures, including search committees; strategizes on the best approach to recruitment at specific events, and designs and develops recruitment materials for events; (8) coordinates the provision of benefits, allowances, special pay requirements, labor and employee relations support services; (9) consults with the Department of State on utilization of authorities to hire locally employed staff and coordination of records management requirements.
Executive and Scientific Resources Office (CAJQG). (1) Provides leadership, technical assistance, guidance, and consultation in the administration of policies and procedures for appointment of individuals through the SBRS, SES, distinguished consultants, experts, consultants, and fellows under Title 42 appointment authorities; (2) provides advisory services, and technical assistance on pay and compensation guidelines in accordance with OPM rules and regulations, HHS and CDC established pay and compensation recommendation policies, and procedures; (3) provides expert human resources advisory services and technical assistance support to the CDC performance review boards and compensation committees; (4) reviews actions for statutory and regulatory compliance; (5) manages strategic recruitment, relocation, and retention incentives to facilitate attraction of a quality, diverse workforce to ensure accomplishment of the CDC mission; (6) provides performance management training for all SES and Title 42 executives with emphasis on performance systems, timelines, supervisory and employee responsibilities; (7) provides guidance on establishing performance plans, conducting mid-year reviews, and conducting final performance rating discussions and closing performance plans; (8) develops and maintains a standard Department-wide performance management system and forms for executives; (9) conducts reviews of SES performance plans and appraisals and provide feedback; (10) prepares and submits SES performance system certification request to OPM and OMB; (11) processes performance awards and performance-based pay adjustments; (12) provides advice, assistance, templates and training workshops on performance award and Presidential Rank Award requirements; (13) manages the HHS Executive Development Program, including developmental activities, rotational assignments, and the Candidate Development Program; advise on development of executive succession planning activities; and (14) provides program guidance, administration, and oversight of CDC immigration and visa programs.
Senior Executive Compensation and Performance Activity (CAJQG2). (1) Provides advisory services, and technical assistance on pay and compensation guidelines in accordance with OPM rules and regulations, HHS and CDC established pay and compensation recommendation policies, and procedures; (2) provides expert human resources advisory services and technical assistance support to the CDC performance review boards and compensation committees; (3) reviews actions for statutory and regulatory compliance; (4) manages strategic recruitment, relocation, and retention incentives to facilitate attraction of a quality, diverse workforce to ensure accomplishment of the CDC mission; (5) provides performance management training for all SES and Title 42 executives with emphasis on performance systems, timelines, supervisory and employee responsibilities; (6) provides guidance on establishing performance plans, conducting mid-year reviews, and conducting final performance rating discussions and closing performance plans; (7) develops and maintains a standard Department-wide performance management system and forms for executives; (8) conducts reviews of SES performance plans and appraisals and provides feedback; (9) prepares and submits SES performance system certification request to OPM and OMB; (10) processes performance awards and performance-based pay adjustments; (11) provides advice, assistance, templates and training workshops on performance award and Presidential Rank Award requirements; and (12) manages the HHS Executive Development Program, including developmental activities, rotational assignments, and the Candidate Development Program; advises on development of executive succession planning activities.
Title 42 and Immigration Activity (CAJQG3). (1) Provides leadership, technical assistance, guidance, and consultation in the administration of policies and procedures for appointment of individuals through the distinguished consultants, experts, consultants, and fellows under Title 42 appointment authorities; and (2) provides program guidance, administration, and oversight of CDC immigration and visa programs.
Part C (Centers for Disease Control and Prevention) of the Statement of Organization, Functions, and Delegations of Authority of the Department of Health and Human Services (45 FR 67772-76, dated October 14, 1980, and corrected at 45 FR 69296, October 20, 1980, as amended most recently at 77 FR 27070-27071, dated May 8, 2012) is amended to reflect the reorganization of the Procurement and Grants Office, Office of the Chief Operating Officer, Centers for Disease Control and Prevention.
Section C-B, Organization and Functions, is hereby amended as follows: Delete in its entirety the title and functional statements for the Procurements and Grants Office (CAJH) and insert the following:
Logistics Management Branch (CAJHW). (1) Develops and implements CDC-wide policies, procedures, and criteria necessary to comply with federal and departmental regulations governing personal property, transportation, shipping, and fleet management; (2) determines, recommends, and implements procedural changes needed to maintain effective management of CDC property including but not limited to: Inventory control; property records; receipt, delivery, tracking, shipping and return of CDC materiel; property reutilization and disposal; transportation of freight; and CDC's vehicle fleet; (3) provides audits, training and technical assistance to CDC Centers/Institute/Offices on property, transportation, shipping, and fleet management; (4) determines the requirement for and serves as the functional proponent for the design, test, and implementation of logistics management systems; (5) represents CDC on inter-and intra-departmental committees relevant to logistical functions; (6) serves as the CDC liaison to HHS and other federal agencies on logistical matters such as property, transportation and traffic management; and (7) establishes branch goals, objectives and priorities, and assures consistency and coordination with overall Procurement and Grants Office logistical goals and objectives.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Fax written comments on the collection of information by August 27, 2012.
To ensure that comments on the information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer, FAX: 202-395-7285, or emailed to
Juanmanuel Vilela, Office of Information Management, Food and Drug Administration, 1350 Piccard Dr., PI50-400B, Rockville, MD 20850, 301-796-7651,
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
On December 22, 2006, the President signed into law the Dietary Supplement and Nonprescription Drug Consumer Protection Act (Pub. L. 109-462, 120 Stat. 3469). This law amends the Federal Food, Drug, and Cosmetic Act (the FD&C Act) with respect to serious adverse event reporting for dietary supplements and nonprescription drugs marketed without an approved application.
Section 502(x) of the FD&C Act (21 U.S.C. 352(x)), which was added by Public Law 109-462, requires the label of a nonprescription drug product marketed without an approved application in the United States to include a domestic address or domestic telephone number through which a responsible person may receive a report of a serious adverse event associated with the product. The guidance document contains questions and answers relating to this labeling requirement and provides guidance to industry on the following topics: (1) The meaning of “domestic address” for purposes of the labeling requirements of section 502(x) of the FD&C Act; (2) FDA's recommendation for the use of an introductory statement before the domestic address or phone number that is required to appear on the product label under section 502(x) of the FD&C Act; and (3) FDA's intent regarding enforcing the labeling requirements of section 502(x) of the FD&C Act. Separate guidance, issued by the Center for Food Safety and Applied Nutrition on reporting for dietary supplements, is announced elsewhere in the
In the
FDA estimates the burden of this collection of information as follows:
As indicated in table 1 of this document, FDA estimates that approximately 200 manufacturers will revise approximately 100,000 labels to add a full domestic address and a domestic telephone number, and should they choose to adopt the guidance's recommendation, to add a statement identifying the purpose of the domestic address or telephone number. FDA believes that designing the label change should not take longer than 4 hours per label. Automated printing of the labels should only require a few seconds per label. This estimate accounts for the possibility that every manufacturer will make label revision, which is unlikely. Because the majority of over-the-counter drug product labels currently have a domestic telephone number that satisfies the requirement, we believe many manufacturers will opt not to adopt the guidance's recommendation to add a statement identifying the purpose of the address or telephone number, significantly reducing the number of total responses. However, assuming that all labels are revised, we estimate a one-time reporting burden for this information collection of 400,000 hours.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Fax written comments on the collection of information by August 27, 2012.
To ensure that comments on the information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer, FAX: 202-395-7285, or emailed to o
Domini Bean, Office of Information Management, Food and Drug Administration, 1350 Piccard Dr., PI50-400T, Rockville, MD 20850, 301-796-5733,
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
Under sections 201(s) and 409 of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 321(s) and 348), food irradiation is subject to regulation under the food additive premarket approval provisions of the FD&C Act. The regulations providing for uses of irradiation in the production, processing, and handling of food are found in part 179 (21 CFR part 179). To ensure safe use of a radiation source, § 179.21(b)(1) requires that the label of sources bear appropriate and accurate information identifying the source of radiation and the maximum (or minimum and maximum) energy of radiation emitted by X-ray tube sources. Section 179.21(b)(2) requires that the label or accompanying labeling bear adequate directions for installation and use and a statement supplied by FDA that indicates maximum dose of radiation allowed. Section 179.26(c) requires that the label or accompanying labeling bear a logo and a radiation disclosure statement. Section 179.25(e) requires that food processors who treat food with radiation make and retain, for 1 year past the expected shelf life of the products up to a maximum of 3 years, specified records relating to the
In the
FDA estimates the burden of this collection of information as follows:
FDA bases its estimate of burden for the recordkeeping provisions of § 179.25(e) on the Agency's experience regulating the safe use of radiation as a direct food additive. The number of firms who process food using irradiation is extremely limited. FDA estimates that there are 3 irradiation plants whose business is devoted primarily (i.e., approximately 100 percent) to irradiation of food and other agricultural products. Four other firms also irradiate small quantities of food. FDA estimates that this irradiation accounts for no more than 10 percent of the business for each of these firms. Therefore, the average estimated burden is based on 3 facilities devoting 100 percent of their business to food irradiation (3 × 300 hours = 900 hours for recordkeeping annually), and 4 facilities devoting 10 percent of their business to food irradiation (4 × 30 hours = 120 hours for recordkeeping annually).
No burden has been estimated for the labeling requirements in §§ 179.21(b)(1), 179.21(b)(2), and 179.26(c) because the information to be disclosed is information that has been supplied by FDA. Under 5 CFR 1320.3(c)(2), the public disclosure of information originally supplied by the Federal Government to the recipient for the purpose of disclosure to the public is not a collection of information.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing that a proposed collection of information has been submitted to the Office of Management and Budget (OMB) for review and clearance under the Paperwork Reduction Act of 1995.
Fax written comments on the collection of information by August 27, 2012.
To ensure that comments on the information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer, FAX: 202-395-7285, or emailed to
Daniel Gittleson, Office of Information Management, Food and Drug Administration, 1350 Piccard Dr., PI50-400B, Rockville, MD 20850, 301-796-5156,
In compliance with 44 U.S.C. 3507, FDA has submitted the following proposed collection of information to OMB for review and clearance.
Financial Disclosure by Clinical Investigators—(OMB Control Number 0910-0396)—Extension
Respondents to this collection are sponsors of marketing applications that contain clinical data from studies covered by the regulations. These sponsors represent pharmaceutical, biologic, and medical device firms. Respondents are also clinical investigators who provide financial information to the sponsors of marketing applications.
Under § 54.4(a) (21 CFR 54.4(a)), applicants submitting an application that relies on clinical studies must submit a complete list of clinical investigators who participated in a covered clinical study, and must either certify to the absence of certain financial arrangements with clinical investigators (Form FDA 3454) or, under § 54.4(a)(3), disclose to FDA the nature of those arrangements and the steps taken by the applicant or sponsor to minimize the potential for bias (Form FDA 3455).
Under § 54.6, the sponsors of covered studies must maintain complete records of compensation agreements with any compensation paid to nonemployee clinical investigators, including information showing any financial interests held by the clinical investigator, for a time period of 2 years after the date of approval of the applications. Sponsors of covered studies maintain many records with
Under § 54.4(b), clinical investigators supply to the sponsor of a covered study financial information sufficient to allow the sponsor to submit complete and accurate certification or disclosure statements. Clinical investigators are accustomed to supplying such information when applying for research grants. Also, most people know the financial holdings of their immediate family and records of such interests are generally accessible because they are needed for preparing tax records. For these reasons, FDA estimates that it will take clinical investigators 15 minutes to submit such records to the sponsor.
Subsequent to publication of the 60-day notice, FDA reestimated the information collection. Upon additional inspection of the data, FDA has updated the estimated recordkeeping burden hours to more accurately reflect the burden.
In the
FDA estimates the burden of this collection of information as follows:
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing 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 September 24, 2012.
Submit electronic comments on the collection of information to
Juanmanuel Vilela, Office of Information Management, Food and Drug Administration, 1350 Piccard Dr., PI50-400B, Rockville, MD 20850, 301-796-7651,
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.
On July 9, 2012, the Generic Drug User Fee Act (GDUFA) (Pub. L. 112-144, Title 111) was signed into law by the President. GDUFA, designed to speed the delivery of safe and effective generic drugs to the public and reduce costs to industry, requires that generic drug manufacturers pay user fees to finance critical and measurable program enhancements. The user fees required by GDUFA are as follows: A one-time fee for original abbreviated new drug applications (ANDAs) pending on October 1, 2012 (also known as backlog applications); fees for type II active pharmaceutical ingredient (API) and final dosage form (FDF) facilities; fees for new ANDAs and prior approval supplements (PASs); and a one-time fee for drug master files (DMFs).
The purpose of this notice is to solicit feedback on the collection of information in an electronic form used to calculate and pay generic drug user fees. Proposed Form FDA 3794, the Generic Drug User Fee Cover Sheet, requests the minimum necessary information to determine if a person has satisfied all relevant user fee obligations. The proposed form is modeled on other FDA user fee cover sheets, including Form FDA 3397, the Prescription Drug User Fee Act Cover Sheet. The information collected would be used by the FDA to initiate the administrative screening of generic drug submissions and DMFs, support the inspection of generic drug facilities, and otherwise support the generic drug program. A copy of the proposed form will be available in the docket for this notice.
Respondents to this proposed collection of information would be potential or actual generic application holders and/or related manufacturers (manufacturers of FDF and/or APIs). Companies with multiple applications will submit a cover sheet for each application and facility. Based on FDA's database of application holders and related manufacturers, we estimate that 500 companies would submit a total of 3,850 coversheets annually to pay for application and facility user fees. FDA estimates that the 3,850 annual cover sheet responses would break down as follows:
FDA estimates the burden of this collection of information as follows:
The backlog fee is a one-time fee. The Agency expects the majority of these fees to be received in the first year only. The estimated reporting burden for the backlog fee is shown in table 2 of this document.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration's (FDA) Office of Orphan Products Development is announcing the following workshop: FDA Pediatric Medical Devices Workshop. This meeting is intended to focus on challenges in pediatric device development—namely, business planning and funding concerns; and how sponsors can most effectively interact with the FDA. The goal of this meeting is to engage and educate pediatric innovators and device industry sponsors.
This educational meeting will consist of live presentations provided by FDA experts from various Centers and Offices, as well as from outside experts. The interactive meeting will also include a “mock” FDA pre-submission meeting for a “mock” pediatric medical device, to illustrate how such encounters may transpire. In addition, attendees will have an opportunity during lunch to engage with Pediatric Device Consortia Grant Program leaders. The meeting will be recorded for subsequent posting on the FDA Web site.
If you need sign language interpretation during this meeting, please contact Linda Ulrich at:
The FDA Pediatric Medical Devices Workshop is supported by FDA's Office of Orphan Product Development and will include participants from the FDA's Center for Devices and Radiologic Health.
(FDA has verified the Web site addresses throughout this document, but we are not responsible for any subsequent changes to the Web sites after this document publishes in the
Indian Health Service, Department of Health and Human Services.
Notice, with a 45-day comment period.
This Notice sets forth the Indian Health Service policy for conferring with urban Indian organizations and invites comments within 45 days. In March 2010, the Indian Health Care Improvement Act was reauthorized and amended as part of the Patient Protection and Affordable Care Act, Public Law 111-148, as amended by the Health Care and Education Reconciliation Act (together, the Affordable Care Act), Public Law 111-152. One of the changes made to the IHCIA was to create a new requirement that the IHS “confer” with UIOs, to the maximum extent practicable, in carrying out the Act as defined by the Indian Health Care Improvement Reauthorization and Extension Act, as enacted and amended by the Affordable Care Act.
We will consider all comments received by September 10, 2012.
Submit comments by email to
Ms. Phyllis Wolfe, Director, Office of Urban Indian Health Programs, Indian Health Service, 801 Thompson Avenue, Suite 200, Rockville, Maryland 20852. Telephone 301/443-4680 (This is not a toll free number).
A.
This Notice establishes the IHS policy and procedures for conferring with urban Indian organizations (UIOs). The IHS will use this conferring policy to ensure that the health care needs of the urban Indian population are considered at the local, Area, and national levels, when implementing and carrying out the Indian Health Care Improvement Act (IHCIA).
B.
C.
D.
(1) Indian Health Care Improvement Act, 25 U.S.C. 1660d(b). “The Secretary shall ensure that the Service confers, to the maximum extent practicable, with urban Indian organizations in carrying out this [Act].”
(2) Indian Health Care Improvement Act, 25 U.S.C. 1602(5). “Congress declares * * * that all actions under this [Act] shall be carried out with * * * conference with urban Indian organizations, to implement this [Act]. * * *”
(3) Indian Health Care Improvement Act, 25 U.S.C. 1631(f). “The Secretary shall * * * confer with urban Indian organizations, in developing innovative approaches to address all or part of the total unmet need for construction of health facilities. * * *”
(4) Indian Health Care Improvement Act, 25 U.S.C. 1665k(a)(2)(A)(vii). “Funding provided pursuant to [25 U.S.C. 1665k “fetal alcohol spectrum disorders programs”] shall be used * * * to develop and implement * * * in conferring with urban Indian organizations, culturally sensitive assessment and diagnostic tools including * * * multidisciplinary fetal alcohol spectrum disorder clinics for use in Indian communities and urban centers.”
E.
(1) Indian Health Care Improvement Reauthorization and Extension Act, as enacted and amended by the Patient Protection and Affordable Care Act, Public Law 111-148, § 10221, 124 Stat. 119, 935 (2010).
(2) Indian Health Care Improvement Act, 25 U.S.C. 1601-1683, as amended, including, §§ 1602(1), 1603(29), 1651, 1653(a).
(3) Office of Management and Budget Circular A-19.
F.
(1)
a. leads to mutual understanding and comprehension, and
b. emphasizes trust, respect, and shared responsibility.
(2)
(3)
(4)
(5)
A. To formalize the IHS approach to conferring with UIOs to ensure that urban Indian health priorities and goals are considered.
B. To establish a minimum set of requirements and expectations with respect to conferring for the three levels of IHS management: Headquarters, Area Offices, and Service Units.
C. To identify “critical events or issues” arising in implementing or carrying out the IHCIA for which conferring with UIOs will be required for the three levels of IHS management: Headquarters, Area Offices, and Service Units.
D. To identify “critical events or issues” arising in implementing or carrying out the IHCIA where partnerships and the inclusion of UIOs would complement consultation with Indian Tribes.
E. To require conferring with UIOs on proposed, new, and existing health policies and programs that qualify as “critical events or issues” arising in implementing or carrying out the IHCIA.
F. To promote and develop innovative methods of involving UIOs in IHS policy development and in the decision-making processes of the IHS.
G. To coordinate with the HHS Divisions or Regional Offices; State Agencies; to assist UIOs in communicating their priorities.
H. To charge and hold responsible all levels of management within the IHS for the implementation of this policy.
A.
The IHS has the responsibility to engage in an open and free exchange of information and opinions with UIOs that leads to mutual understanding and comprehension; and emphasizes trust, respect, and shared responsibility whenever a “critical event or issue,” as defined in this policy, arises in implementing or carrying out the IHCIA. When necessary, it is within the discretion of the Director, IHS, to make the final determination as to whether or not a specific event or issue qualifies as a “critical event or issue,” as defined in this policy.
The Director, OUIHP, is responsible for monitoring compliance with this policy, including submissions to the OUIHP conferring email address:
All IHS Headquarters Office Directors will provide leadership to identify potential “critical events or issues” arising in implementing or carrying out the IHCIA for which conferring with UIOs will be recommended to the Director, OUIHP, and assist the OUIHP in completion of the annual IHS Confer with UIOs Report, when necessary.
B.
C.
A.
(1) If a potential “critical event or issue” is identified by a UIO, written correspondence must be submitted to the Director, OUIHP, (with a copy to the appropriate Area Director) describing the event or issue, the affected UIO(s), and the proposed conferring activity. The Director, OUIHP, shall acknowledge receipt of the request within 15 business days. IHS will consider whether or not to confer with affected/potentially affected UIOs in response to this request.
(2) The Director, OUIHP, shall determine whether or not a specific event or issue arising in implementing or carrying out the IHCIA qualifies as a “critical event or issue,” as defined in this policy. The Director, OUIHP, shall provide an official response indicating the reason(s) why conferring will or will not be conducted. If the Director, OUIHP, determines that a “critical event or issue” has arisen in implementing or carrying out the IHCIA, the Director, OUIHP, shall, in the official response, identify the conferring activity that has been selected and the timeline for the activity. In addition, if the Director, OUIHP, determines that a “critical event or issue” has arisen in implementing or carrying out the IHCIA, the IHS will issue notices to all affected/potentially affected UIOs through correspondence such as a “Dear Urban Indian Health Organization Director Letter” and broadcast emails, as well as through a FRN, if applicable. Communication will identify the “critical events or issues” to be discussed, as well as the mechanism for conferring. When necessary, it is within the discretion of the Director, IHS, to make the final determination as to whether or not a specific event or issue qualifies as a “critical event or issue,” as defined in this policy.
B.
(1) the nature of the “critical event or issue,”
(2) the number of potentially affected UIOs, and
(3) the most cost effective and efficient conferring mechanism, based on the nature of the “critical event or issue” and the number of potentially affected UIOs.
C.
(1) Mailings
(2) Teleconferences
(3) Regular or special program level conferring sessions
(4) Annual meetings, such as the annual Spring Urban Indian Health Leadership Conference
(5) Opportunities for comment, including submissions to
(6) Face-to-face meetings, including meetings conducted at the Area Office level or at the national-level Indian health system meetings that include the IHS, Tribes, and UIO(s).
D.
E.
F.
(1) The report shall address: Development of the urban Indian health program budget; development and implementation of urban Indian health program regulations and policies; and public health or environmental health critical events impacting UIOs.
(2) The report shall include a description of the “critical event or issue(s)” that was the subject of conferring, a description of the process that was used, a discussion of the recommendations that resulted from the conferring meeting(s), a list of any follow-up action items, a timeline for addressing these items, and a discussion of the level of satisfaction with the conferring process.
G.
(1) The intent of this policy is to promote mutual understanding and comprehension, and to emphasize trust, respect, and shared responsibility between the IHS and UIOs.
(2) However, the IHS and UIOs may not always agree. Where such disagreement occurs, nothing in this policy creates a right of action against the IHS or the HHS for failure to comply with this policy.
The Federal Advisory Committee Act (FACA) may apply to conferring activities. The FACA is implicated when an Agency establishes, manages, or controls a group that includes one or more participants who are not Federal employees for the purpose of obtaining the group's advice or recommendations on Agency issues or policies. The FACA imposes several procedural requirements on Federal Agencies that convene advisory committees. Although FACA may not apply to groups consisting solely of Tribal leaders serving on the group in their official
Nothing in this policy waives the Government's deliberative process privilege. Examples of the government's deliberative process privilege are as follows:
(1) When the Secretary, HHS, is specifically requested by a member or members of Congress to respond to or report on proposed legislation, the development of such responses and of related policy is a part of the Executive Branch's deliberative process privilege and should remain confidential.
(2) In specified instances, when Congress requires the HHS to work with UIOs on the development of recommendations that may require legislation, such as reports, recommendations, or other products that are developed independent of a Department position, the development of which is governed by Office of Management and Budget Circular A-19.
Pursuant to section 10(a) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of a conference call/Webinar meeting of the Interagency Autism Coordinating Committee (IACC).
The IACC Full Committee will be having an open meeting conference call/Webinar on Friday, July 27, 2012. The committee will discuss and vote on the establishment of subcommittees, as well as discuss future IACC activities and public comments that were received at the July 10, 2012 IACC meeting. The meeting will be accessible by Webinar and conference call.
The meeting will be open to the public and accessible via Webinar and conference call. Members of the public who participate using the conference call phone number will be able to listen to the meeting but will not be heard. If you experience any technical problems with the conference call, please-email
If you experience any technical problems with the Web presentation tool, please contact GoToWebinar at (800) 263-6317. To access the Web presentation tool on the Internet the following computer capabilities are required: (A) Internet Explorer 5.0 or later, Netscape Navigator 6.0 or later or Mozilla Firefox 1.0 or later; (B) Windows® 2000, XP Home, XP Pro, 2003 Server or Vista; (C) Stable 56k, cable modem, ISDN, DSL or better Internet connection; (D) Minimum of Pentium 400 with 256 MB of RAM (Recommended); (E) Java Virtual Machine enabled (Recommended).
Individuals who participate by using this electronic service and who need special assistance such as captioning or other reasonable accommodations should submit a request to the Contact Person listed on this notice at least 1 day prior to the meeting.
This meeting is being published less than 15 days prior to the meeting due to the urgent need of the committee to discuss committee structure, upcoming activities and emerging issues in the autism community.
Schedule subject to change.
Information about the IACC and a registration link for this meeting are available on the Web site:
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 meetings.
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 materials, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
Office of the Assistant Secretary for Public and Indian Housing and Office of the Assistant Secretary for Housing—Federal Housing Commissioner, HUD.
Notice.
On March 8, 2012, HUD announced through notice in the
To assure a timely response, please electronically direct requests for further information to this email address:
RAD, authorized by the Consolidated and Further Continuing Appropriations Act, 2012 (Pub. L. 112-55, signed November 18, 2011) (2012 Appropriations Act) allows for the conversion of assistance under the public housing, Rent Supplement (Rent Supp), Rental Assistance (RAP), and Moderate Rehabilitation (Mod Rehab) programs (collectively, “covered programs”) to long-term, renewable assistance under Section 8. As provided in the
The First Component is effective July 26, 2012. The initial application period
The Second Component was effective on March 8, 2012, in Program Notice PIH 2012-18 published on the RAD Web site (
Because the provisions covered by these waivers and alternative requirements do not affect the application process, the later effective date of the first component waivers and alternative requirements does not have any impact on the initial application period, which, as noted above, opens on September 24, 2012.
The following highlights key changes made to the Program Notice, PIH 2012-18, issued on March 8, 2012:
1. Project-Based Vouchers: Applicable to both public housing and Mod Rehab properties converting assistance to PBVs:
• Provides new language prohibiting any involuntary displacement in properties using PBVs for income-mixing purposes.
• Clarifies that in excess of 50% of the units in a project can be project-based if the units qualify for exemption as elderly, disabled, scattered site, or receiving supportive services. Further clarifies that services do not have to be provided directly by the PHA or owner.
• Grandfathers current residents from any requirement to receive supportive services in a property converting assistance to PBVs.
• Removes the proposed requirement that PBVs be subject to Uniform Physical Inspections Standards; rather such properties will continue to be subject to Housing Quality Standards (HQS).
• Provides a waiver of deconcentration requirements for all conversions to PBVs.
2. Choice-Mobility Option: For residents of both public housing and Mod Rehab properties for which assistance will be converted to Project Based Rental Assistance (PBRA):
• Provides new incentives to voucher agencies to encourage the provision of Choice-Mobility turnover vouchers to agencies without access to vouchers.
• Reduces the Choice-Mobility turnover cap from 20% to 15% at a particular project (i.e., PHAs or owners of Mod Rehab properties converting assistance could limit the percentage of households indicating a desire to move with the assistance of a Choice-Mobility voucher to no more than 15% of the total number of units in a project on an annual basis).
• Prioritizes the award of Choice-Mobility “good-cause” exemptions as needed to PHAs so that the first priority is given to small public housing-only PHAs, the second priority to other public housing-only PHAs, and the third priority to combined agencies that dedicate more than one-third of their total annual voucher turnover to homeless or veterans.
• Allows PHAs to apply for and potentially be awarded more than one project with a good-cause exemption from the Choice-Mobility requirement.
2. Allows small PHAs (defined as owning/managing a portfolio of public housing that is less than 250 units) to claim all projects as priority projects in the competition.
3. Expands the descriptions of required resident notifications, protections, rights, self-sufficiency services, and waiting list procedures.
4. Modifies the required Financing Plan benchmarks and processing requirements to be more compatible with a wide variety of sources of financing, including FHA insurance and Low Income Housing Tax Credits.
5. Eliminates the need to seek HUD approval of a change in project configuration prior to submission of a RAD application.
6. Increases the amount of pre-development funds that can be spent on a proposed public housing conversion from $50,000 to $100,000.
7. Provides a cap of 1,200 on the number of public housing mixed-finance units that could convert assistance under RAD; current and future Choice Neighborhoods Implementation Grant awardees seeking to convert assistance under RAD would not be subject to this cap. Specifies the eligibility for projects developed with HOPE VI grants is limited to those with a Date of Full Availability (DOFA) prior to October 1, 2002.
8. Modifies the application ranking factor for capital needs so that the point scale accounts for a broader range of capital needs that are proposed to be undertaken.
9. Allows Mod Rehab owners to designate a priority project application.
10. Provides expanded detail on the transfer of HAP contracts to other projects.
1. Allows, for prospective conversions of assistance for Rent Supp and RAP, an owner to secure another agency to administer the PBVs in the event that that the local agency does not consent to administering such assistance.
2. Provides additional instruction on the inclusion of unassisted units in the event of a preservation-eligible mortgage prepayment that triggers provision of Enhanced Vouchers.
3. Clarifies that Rent Supp or RAP contract units occupied during the 24 months prior to contract termination may be included in a RAD conversion of assistance.
4. Creates a process for allocating limited TPV resources to projects with Rent Supp or RAP contracts with expiration dates after September 30, 2013 when an owner requests to prepay the mortgage.
5. Reserves the right for HUD to review and apply deconcentration requirements when a proposed conversion of assistance under RAD would result in an increase in the number of units that could-potentially receive project-based rental assistance than would be the case in a standard (non-RAD) project-basing of assistance.
6. Enhances tenant consultation requirements by including a requirement for notification of legitimate tenant organizations.
7. Clarifies requirements for 12-month notification of opt-out for Mod Rehab projects.
8. Establishes a new centralized submission processing system to allow for ease of administration.
1. Updates various deadlines and implementation schedules, including the deadline for receipt of applications under the Initial Application Period under the first or competitive component of RAD.
2. Clarifies that the related contractual documents, including the Use Agreement and Housing Assistance Payments (HAP) contracts will be posted for comment following publication of the Final Notice.
The Final Program Notice for RAD, PIH-2012-32, can be found at
A Finding of No Significant Impact with respect to the environment was made in connection with the Program Notice issued on March 8, 2012, and in accordance with HUD regulations in 24 CFR part 50 that implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The Finding remains applicable to the Final Program Notice and is available for public inspection during regular business hours in the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500. Due to security measures at the HUD Headquarters building, please schedule an appointment to review the Finding by calling the Regulations Division at 202-402-3055 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number via TTY by calling the Federal Relay Service at 800-877-8339.
The RAD statute provides that waivers and alternative requirements authorized under the first component shall be published by notice in the
The list of waivers and alternative requirements, as described above, follows:
A PHA may expend up to $100,000 in public housing program funds in related pre-development conversion costs per project. A PHA may utilize other non-federal funds to support predevelopment costs. Predevelopment assistance may be used to pay for materials and services related to proposed development and may also be used for preliminary development work. Public housing program funds spent prior to the effective date of the HAP are subject to public housing procurement rules.
In the case of a PHA that is converting all units under ACC, there is no restriction on the amount of public housing funds that may be contributed to the converting project(s) at the point of conversion, i.e., the PHA may convey all program funds to the project undergoing conversion. In the case where the PHA will continue to maintain other units in its inventory under public housing ACC, a contribution to the converting project of Operating Funds that exceeds the average amount the project has held in Operating Reserves over the past three years will trigger a subsidy layering review under 24 CFR 4.13. Similarly, any contribution of Capital Funds, including RHF funds, will trigger a subsidy layering review.
Following execution of the HAP, a PHA may not contribute public housing program funds to the covered project unless such funding has been identified in the approved Financing Plan.
1. A description of the units to be converted, including the number of units, the bedroom distribution of units, and the type of units (e.g., family, elderly/disabled, or elderly-only);
2. Any change in the number of units that is proposed as part of the conversion, including de minimis unit reductions and unit reductions that are exempt from the de minimis cap;
3. Any change in the bedroom distribution of units that is proposed as part of the conversion;
4. Any changes in the policies that govern eligibility, admission, selection, and occupancy of units at the project after it has been converted. This includes any waiting list preferences that will be adopted for the converted project; and
5. If there will be a transfer of assistance at the time of conversion, the significant amendment must include the location (including census tract) of any converted units that will be transferred off-site, as well as the information described above for the units that will be transferred. In addition, if
Families living in units subject to a proposed RAD conversion must be given the option to receive supportive services. If supportive services are declined by the household, the unit shall remain under the HAP contract, the household shall not be terminated from the PBV program, and the decision to decline an offer to receive supportive services shall not represent a ground for lease termination. Once the initial household residing in the excepted unit under RAD vacates such unit, all PBV program requirements related to the required receipt of supportive services shall apply.
i. A reasonable period of time, but not to exceed 30 days:
• If the health or safety of other tenants, PHA employees, or persons residing in the immediate vicinity of the premises is threatened; or
• In the event of any drug-related or violent criminal activity or any felony conviction;
ii. 14 days in the case of nonpayment of rent; and
iii. 30 days in any other case, except that if a State or local law provides for a shorter period of time, such shorter period shall apply.
i. In addition to reasons that require an opportunity for an informal hearing given in 24 CFR 982.555(a)(1)(i)-(vi), an opportunity for an informal hearing must be given to residents for any dispute that a resident may have with respect to contract administrator or owner action in accordance with the individual's lease or RAD PBV requirements that adversely affect the resident's rights, obligations, welfare, or status.
• For any hearing required under 24 CFR 982.555(a)(1)(i)-(vi), the contract administrator will perform the hearing, as is the current standard in the program.
• For any additional hearings required under RAD, the PHA (as owner) will perform the hearing.
ii. An informal hearing will not be required for class grievances or to disputes between residents not involving the owner or contract administrator. This hearing requirement shall not apply to and is not intended as a forum for initiating or negotiating policy changes between a group or groups of residents and the PHA (as owner) or contract administrator.
iii. The PHA (as owner) give residents notice of their ability to request an informal hearing as outlined in 24 CFR 982.555(c)(1) for informal hearings that will address circumstances that fall outside of the scope of 24 CFR 982.555(a)(1)(i)-(vi).
iv. The PHA (as owner) provide opportunity for an informal hearing before an eviction.
A PHA may consider contacting every applicant on the public housing waiting list via direct mailing; advertising the availability of housing to the population that is less
After the initial waiting list has been established, the PHA shall administer its waiting list for the converted project in accordance with 24 CFR 983.251(c).
i. Residents be provided with notice of the specific grounds of the proposed owner adverse action, as well as their right to an informal hearing with the PHA (as owner);
ii. Residents will have an opportunity for an informal hearing with an impartial member of PHA's staff within a reasonable period of time;
iii. Residents will have the opportunity to be represented by another person of their choice, to ask questions of witnesses, have others make statements at the hearing, and to examine any regulations and any evidence relied upon by the owner as the basis for the adverse action. With reasonable notice to the owner, prior to hearing and at the residents' own cost, resident may copy any documents or records related to the proposed adverse action; and
iv. PHAs (as owners) provide the resident with a written decision within a reasonable period of time stating the grounds for the adverse action, and the evidence the owner relied on as the basis for the adverse action.
The PHA will be bound by decisions from these hearings, except if the:
i. Hearing concerns a matter that exceeds the authority of the impartial party conducting the hearing.
ii. Decision is contrary to HUD regulations or requirements, or otherwise contrary to federal, State, or local law.
If the PHA (as owner) determines that it is not bound by a hearing decision, the PHA must promptly notify the resident of this determination, and of the reasons for the determination.
• Priority points for new HCV FSS coordinator positions in an upcoming FSS competition and
• The bonus points provided under the Section Eight Management Assessment Program (SEMAP) for deconcentration.
Households living in units subject to a proposed RAD conversion must be given the option to receive supportive services. If supportive services are declined by the household, the unit shall remain under the HAP contract, the household shall not be terminated from the PBV program, and the decision to decline an offer to receive supportive services shall not represent a ground for lease termination. Once the initial household residing in the excepted unit under RAD vacates such unit, all PBV program requirements related to the required receipt of supportive services shall apply.
• Priority points for new HCV FSS coordinator positions in an upcoming FSS competition and
• The bonus points provided under the Section Eight Management Assessment Program (SEMAP) for deconcentration.
Households living in units subject to a proposed RAD conversion must be given the option to receive supportive services. If supportive services are declined by the household, the unit shall remain under the HAP contract, the household shall not be terminated from the PBV program, and the decision to decline an offer to receive supportive services shall not represent a ground for lease termination. Once the initial household residing in the excepted unit under RAD vacates such unit, all PBV program requirements related to the required receipt of supportive services shall apply.
Office of the Secretary, Interior.
Notice of meeting.
The Office of the Secretary is announcing that the Secretarial Commission on Indian Trust Administration and Reform (the Commission) will hold a public Webinar meeting on August 13, 2012. The Commission has gathered valuable information to begin work on various subcommittees to explore the definitions and foundation of the trust
The Commission's Webinar meeting will begin at 2 p.m. and end at 4 p.m. Eastern Time on August 13, 2012. Attendance is open to the public, but limited space is available. Members of the public who wish to attend must RSVP by August 10, 2012, by registering at
The Designated Federal Official, Lizzie Marsters, Chief of Staff to the Deputy Secretary, Department of the Interior, 1849 C Street NW., Room 6119, Washington, DC 20240; or email to
As part of President Obama's commitment to fulfilling this nation's trust responsibilities to Native Americans, the Secretary of the Interior (Secretary) appointed five members to serve on the Secretarial Commission on Indian Trust Administration and Reform, established under Secretarial Order No. 3292, dated December 8, 2009. The Commission will play a key role in the Department's ongoing efforts to empower Indian nations and strengthen nation-to-nation relationships.
The Commission will complete a comprehensive evaluation of the Department's management and administration of the trust assets within a two-year period and offer recommendations to the Secretary on how to improve in the future. The Commission will:
(1) Conduct a comprehensive evaluation of the Department's management and administration of the trust administration system;
(2) Review the Department's provision of services to trust beneficiaries;
(3) Review input from the public, interested parties, and trust beneficiaries, which should involve conducting a number of regional listening sessions;
(4) Consider the nature and scope of necessary audits of the Department's trust administration system;
(5) Recommend options to the Secretary for improving the Department's management and administration of the trust administration system based on information obtained from the Commission's activities, including whether any legislative or regulatory changes are necessary to permanently implement any suggested improvements; and
(6) Consider the provisions of the American Indian Trust Fund Management Reform Act of 1994 providing for the termination of the Office of the Special Trustee for American Indians, and make recommendations to the Secretary regarding termination.
The following items will be on the agenda:
Written comments may be sent to the Designated Federal Official listed in the
U.S. Geological Survey (USGS), Interior.
Notice of an extension of an Information Collection (1028-0089), Mineral Resources Program's (MRP) Mineral Resource External Research Program (MRERP).
To comply with the Paperwork Reduction Act of 1995 (PRA), we are notifying the public that we have submitted to the Office of Management and Budget (OMB) an information collection request (ICR) for renewal of the currently approved paperwork requirements for the Mineral Resources Program's (MRP) Mineral Resource External Research Program (MRERP). This notice provides the public and other Federal agencies an opportunity to comment on the paperwork burden of these project narrative and report requirements. This collection is scheduled to expire on August 31, 2012.
You must submit comments on or before August 27, 2012.
Please submit comments on this information collection directly to the Office of Management and Budget (OMB) Office of Information and Regulatory Affairs, Attention: Desk Officer for the Department of Interior via email [
Please also submit a copy of your comments to the USGS Information Collection Clearance Officer, 12201 Sunrise Valley Drive, Mail Stop 807, Reston, VA 20192 (mail); 703-648-7199 (fax); or
To request additional information about this ICR, contact Jeff L. Doebrich by mail at U.S. Geological Survey, 913 National Center, Sunrise Valley Drive, Reston, VA 20192 or by telephone at 703-648-6103.
We will protect information from respondents considered proprietary under the Freedom of Information Act (5 U.S.C. 552) and implementing regulations (43 CFR Part 2), and under regulations at 30 CFR 250.197, “Data and information to be made available to the public or for limited inspection.” Responses are voluntary. No questions of a “sensitive” nature are asked. We intend to release the project abstracts and primary investigators for awarded/funded projects only.
We again invite comments concerning this information collection on: (1) Whether or not the collection of information is necessary, including whether or not the information will have practical utility; (2) the accuracy of our estimate of the burden for this 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.
Please note that the comments submitted in response to this notice are a matter of public record. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment, including your personal identifying information, may be made publicly available at any time. While you can ask OMB in your comment to withhold your personal identifying information from public review, we cannot guarantee that it will be done.
On the basis of the record
Pursuant to section 207.18 of the Commission's rules, the Commission also gives notice of the commencement of the final phase of its investigations. The Commission will issue a final phase notice of scheduling, which will be published in the
On June 5, 2012, a petition was filed with the Commission and Commerce by CP Kelco U.S., Atlanta, GA, alleging that an industry in the United States is materially injured or threatened with material injury by reason of LTFV
Notice of the institution of the Commission's investigations and of a public conference to be held in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the
The Commission transmitted its determinations in these investigations to the Secretary of Commerce on July 20, 2012. The views of the Commission are contained in USITC Publication 4342 (July 2012), entitled
By order of the Commission.
U.S. International Trade Commission.
Notice.
Notice is hereby given that the U.S. International Trade Commission has determined to affirm, on modified grounds, the remand initial determination (“remand ID”) issued by the presiding administrative law judge (“ALJ”) on May 21, 2012, finding no violation of section 337 of the Tariff Act of 1930 (19 U.S.C. 1337), as amended, (“section 337”) in the above-captioned investigation. The investigation is thus terminated with a finding of no violation of section 337.
Amanda S. Pitcher, Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436, telephone (202) 708-2532. Copies of non-confidential documents filed in connection with this investigation are or will be available for inspection during official business hours (8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436, telephone (202) 205-2737. General information concerning the Commission may also be obtained by accessing its Internet server at
This investigation was instituted on February 23, 2010, based upon a complaint filed on behalf of Eastman Kodak Company of Rochester, New York (“Kodak”) on January 14, 2010, and supplemented on February 4, 2010. 75
On January 24, 2011, then-Chief Judge Luckern issued a final Initial Determination (“final ID”) finding no violation of section 337. On March 25, 2011, the Commission determined to review the final ID in its entirety. 76 FR 17,965 (March 31, 2011). On June 30, 2011, the Commission issued a notice that determined to affirm in part, reverse in part, and remand in part, the final ID. The Commission remanded the investigation in order for the ALJ to consider (1) infringement under the Commission's construction of the “still processor” limitation; (2) infringement under the Commission's construction of the “motion processor” limitation; (3) whether Kodak waived the argument that the iPhone 3GS and iPhone 4 in their non-flash-photography mode practice the “initiating capture” limitation under the doctrine of equivalents and if not, whether the iPhone 3GS and iPhone 4 practice this limitation under the doctrine of equivalents; and (4) validity in light of the Commission's claim constructions, including further analysis of the pertinence of the
On May 21, 2012, Judge Pender issued the remand ID finding no violation of section 337. In particular, he found claim 15 to be obvious in view of Japanese Patent Application Laid-Open Disclosure No. H5-122574 (“Mori”) and U.S. Patent No. 5,493,335 to Parulski (“Parulski '335”). He found the claim to be infringed by the accused RIM products and by the Apple iPhone 3G, but not the iPhone 3GS and iPhone 4. Kodak and the Commission investigative attorney (“IA”) petitioned for review of,
Having reviewed the record of this investigation, including the parties' petitions for review and responses thereto, as well as the parties' submissions to the ALJ, both before and after remand, and the transcripts of the hearing conducted by the ALJ, the Commission has determined to review the ALJ's remand ID in part. The Commission has determined to review the ALJ's finding of infringement of the '218 patent by the accused RIM products and the iPhone 3G, and his finding of invalidity based on the Mori and Parulski '335 combination. The Commission affirms the remaining findings of the ALJ. On review, the Commission has determined to (1) find that the accused RIM products and the Apple iPhone 3G infringe claim 15; and (2) affirm the ALJ's invalidity findings
The Commission's determination and reasons in support thereof will be further detailed in the Commission's forthcoming opinion.
The authority for the Commission's determination is contained in section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and in sections 210.42-46 of the Commission's Rules of Practice and Procedure (19 CFR 210.42-46).
By order of the Commission.
Notice is hereby given that on July, 13, 2012, a proposed Consent Decree in
This action pertains to the “Malone Services Company” Superfund Site in Texas City, Texas. The Consent Decree requires a group of 27 companies to clean up the Site and pay EPA $900,000 towards past and future costs. The cleanup will cost $56.4 million according to an estimate by the United States Environmental Protection Agency (EPA). Seventy-six entities, including the United States and the Texas Commission on Environmental Quality (TCEQ), are resolving their liability in the Consent Decree by paying cash to the group of 27 companies that will carry out the cleanup. The United States, which shipped 1.62% of the waste, will pay $1,490,029. TCEQ, which shipped 0.00545% of the waste, will contribute $6,766. EPA previously completed four rounds of administrative settlements with approximately 230 “de minimis” generators of waste.
The settlement also addresses natural resources damages. Under the Consent Decree, the federal and state natural resource trustees for the Site will receive a total of $3,109,000 to implement environmental restoration projects. (This amount also covers some assessment, planning, and oversight costs.) The trustees are the National Oceanic and Atmospheric Administration, the U.S. Department of the Interior represented by the U.S. Fish and Wildlife Service, TCEQ, the Texas Parks and Wildlife Department, and the Texas General Land Office.
For a period of thirty (30) days from the date of this publication the Department of Justice will receive comments relating to the Consent Decree. Comments should be addressed to the Principal Deputy Assistant Attorney General, Environment and Natural Resources Division, and either emailed to
During the public comment period, the Consent Decree may be examined on the following Department of Justice Web site:
Notice is hereby given that on July 2, 2012, a proposed Consent Decree in the case of
The Department of Justice will receive, for a period of thirty (30) days from the date of this publication, comments relating to the Consent Decree. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and either emailed to
During the public comment period, the Consent Decree may also be examined at the following Department of Justice Web site:
Notice is hereby given that a proposed Consent Decree in
The proposed Consent Decree would resolve certain claims under Sections 301, 309 and 402 of the Clean Water Act, 33 U.S.C. 1251, et seq., against the City of Chattanooga (“City” or “Chattanooga”), through the performance of injunctive measures, the payment of a civil penalty, and the performance of Supplemental Environmental Projects (“SEPs”). The United States and the State of Tennessee allege that the City is liable as a person who has discharged a pollutant from a point source to navigable waters of the United States without a permit and, in some cases, in excess of permit limitations.
The proposed Consent Decree would resolve the liability of Chattanooga for the violations alleged in the complaint filed in this matter. To resolve these claims, Chattanooga would perform the injunctive measures as described in the proposed Consent Decree. More specifically, the proposed consent decree will require Chattanooga to comprehensively assess and rehabilitate its entire sewer collection system to eliminate overflows of untreated raw sewage. Chattanooga will perform rehabilitation projects to address known problems within the collection system; implement programs to ensure proper management, operation and maintenance of its sewer systems; and install additional controls on the Chattanooga Creek combined sewer outfalls to ensure compliance with water quality standards.
In addition, Chattanooga would pay a civil penalty of $476,400. The penalty will be split evenly between the United States and the State. The City will pay $238,200 to the United States Treasury. At the direction of the state, the other half of the civil penalty will be paid by Chattanooga through the performance of green infrastructure demonstration projects. In addition, Chattanooga has agreed to perform a stream restoration supplemental environmental project at a cost of $800,000.
The Department of Justice will receive comments relating to the proposed Consent Decree for a period of thirty (30) days from the date of this publication. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and either emailed to
The proposed Consent Decree may be examined at the Region 4 Office of the Environmental Protection Agency, Atlanta Federal Center, 61 Forsyth Street SW., Atlanta GA 30303. During the public comment period, the decree may also be examined on the following Department of Justice Web site,
In accordance with 28 CFR 50.7, 38 FR 19029, notice is hereby given that on July 2, 2012, a Consent Decree was lodged with the United States District Court for the District of Massachusetts in
For a period of thirty (30) days from the date of this publication, the United States Department of Justice will receive comments relating to the proposed Consent Decree. Comments should be addressed to the Assistant Attorney General for the Environment and Natural Resources Division, and should either be emailed to
During the public comment period, the proposed Consent Decree may be examined at the office of the United States Attorney, Suite 9200, 1 Courthouse Way, Boston, Massachusetts 02110, and at the Region I office of the Environmental Protection Agency, One Congress Street, Suite 1100, Boston, Massachusetts 02114. The proposed Consent Decree may also be obtained at the following Department of Justice Web site:
Pursuant to Title 21 Code of Federal Regulations 1301.34 (a), this is notice that on May 30, 2012, Cody Laboratories Inc., 601 Yellowstone Avenue, Cody, Wyoming 82414-9321, made application by renewal to the Drug Enforcement Administration (DEA) for registration as an importer of the following basic classes of controlled substances:
The company plans to import narcotic raw materials for manufacturing and further distribution to its customers. The company is registered with DEA as a manufacturer of several controlled substances that are manufactured from opium, poppy straw, and poppy straw concentrate.
The company plans to import an intermediate form of Tapentadol (9780) to bulk manufacture Tapentadol for distribution to its customers.
Comments and requests for hearings on applications to import narcotic raw material are not appropriate. 72 FR 3417 (2007).
Any bulk manufacturer who is presently, or is applying to be, registered with DEA to manufacture such basic class of controlled substance listed in schedule II, which fall under the authority of section 1002(a)(2)(B) of the Act [21 U.S.C. 952(a)(2)(B)] may, in the circumstances set forth in 21 U.S.C. 958(i), file comments or objections to the issuance of the proposed registration and may, at the same time, file a written request for a hearing on such application pursuant to 21 CFR 1301.43 and in such form as prescribed by 21 CFR 1316.47.
Any such written comments or objections should be addressed, in quintuplicate, to the Drug Enforcement Administration, Office of Diversion Control, Federal Register Representative (ODL), 8701 Morrissette Drive, Springfield, Virginia 22152; and must be filed no later than August 27, 2012.
As noted in a previous notice published in the
Pursuant to Title 21 Code of Federal Regulations 1301.34(a), this is notice that on May 31, 2012, Akorn, Inc., 1222 W. Grand Avenue, Decatur, Illinois 62522, made application by renewal to the Drug Enforcement Administration (DEA) for registration as an importer of Remifentanil (9739), a basic class of controlled substance listed in schedule II.
The company plans to import Remifentanil in bulk for use in dosage-form manufacturing.
Any bulk manufacturer who is presently, or is applying to be, registered with DEA to manufacture such basic classes of controlled substances listed in schedules I or II, which fall under the authority of section 1002(a)(2)(B) of the Act [21 U.S.C. 952(a)(2)(B)] may, in the circumstances set forth in 21 U.S.C. 958(i), file comments or objections to the issuance of the proposed registration and may, at the same time, file a written request for a hearing on such application pursuant to 21 CFR 1301.43 and in such form as prescribed by 21 CFR 1316.47.
Any such written comments or objections should be addressed, in quintuplicate, to the Drug Enforcement Administration, Office of Diversion Control, Federal Register Representative (ODL), 8701 Morrissette Drive, Springfield, Virginia 22152; and must be filed no later than August 27, 2012.
This procedure is to be conducted simultaneously with, and independent of, the procedures described in 21 CFR 1301.34(b), (c), (d), (e), and (f). As noted in a previous notice published in the
Pursuant to Title 21 Code of Federal Regulations 1301.34(a), this is notice that on June 8, 2012, Boehringer Ingelheim Chemicals, Inc., 2820 N. Normandy Drive, Petersburg, Virginia 23805, made application by renewal to the Drug Enforcement Administration (DEA) for registration as an importer of Phenylacetone (8501), a basic class of controlled substance listed in schedule II.
The company plans to import the listed controlled substance to bulk manufacture amphetamine.
Any bulk manufacturer who is presently, or is applying to be, registered with DEA to manufacture such basic class of controlled substance listed in schedule II, which falls under the authority of section 1002(a)(2)(B) of the Act (21 U.S.C. 952(a)(2)(B)) may, in the circumstances set forth in 21 U.S.C. 958(i), file comments or objections to the issuance of the proposed registration and may, at the same time, file a written request for a hearing on such application pursuant to 21 CFR 1301.43 and in such form as prescribed by 21 CFR 1316.47.
Any such written comments or objections should be addressed, in quintuplicate, to the Drug Enforcement
This procedure is to be conducted simultaneously with, and independent of, the procedures described in 21 CFR 1301.34(b), (c), (d), (e), and (f). As noted in a previous notice published in the
By Notice dated May 15, 2012, and published in the
The company plans to import these controlled substances for the manufacture of reference standards.
No comments or objections have been received. DEA has considered the factors in 21 U.S.C. 823(a) and 952(a) and determined that the registration of Alltech Associates, Inc. to import the basic classes of controlled substances is consistent with the public interest and with United States obligations under international treaties, conventions, or protocols in effect on May 1, 1971. DEA has investigated Alltech Associates, Inc. to ensure that the company's registration is consistent with the public interest.
The investigation has included inspection and testing of the company's physical security systems, verification of the company's compliance with state and local laws, and a review of the company's background and history. Therefore, pursuant to 21 U.S.C. 952(a) and 958(a), and in accordance with 21 CFR 1301.34, the above named company is granted registration as an importer of the basic classes of controlled substances listed.
By Notice dated May 15, 2012, and published in the
The company plans to import the Opium (9600) and Poppy Straw Concentrate (9670) to manufacture other controlled substances. The company plans to import Tapentadol (9780) in the intermediate form for the bulk manufacture of Tapentadol, which it will distribute to its customers. The company plans to import the Phenylacetone (8501) in bulk for the manufacture of a controlled substance.
Comments and requests for hearings on applications to import narcotic raw material are not appropriate. 72 FR 3417 (2007).
DEA has considered the factors in 21 U.S.C. 823(a) and 952(a), and determined that the registration of Noramco Inc. to import the basic classes of controlled substances is consistent with the public interest, and with United States obligations under international treaties, conventions, or protocols in effect on May 1, 1971, at this time. DEA has investigated Noramco, Inc. to ensure that the company's registration is consistent with the public interest. The investigation has included inspection and testing of the company's physical security systems, verification of the company's compliance with state and local laws, and a review of the company's background and history. Therefore, pursuant to 21 U.S.C. 952(a) and 958(a), and in accordance with 21 CFR 1301.34, the above named company is granted registration as an importer of the basic classes of controlled substances listed.
Pursuant to § 1301.33(a), Title 21 of the Code of Federal Regulations (CFR), this is notice that on March 26, 2012, Nektar Therapeutics, 1112 Church Street, Huntsville, Alabama 35801, made application by letter to the Drug Enforcement Administration (DEA) to be registered as a bulk manufacturer of Fentanyl (9801), a basic class of controlled substance listed in schedule II.
The company plans to manufacture the listed controlled substance in support of product development.
Any other such applicant, and any person who is presently registered with DEA to manufacture such substances, may file comments or objections to the issuance of the proposed registration pursuant to 21 CFR 1301.33(a).
Any such written comments or objections should be addressed, in quintuplicate, to the Drug Enforcement Administration, Office of Diversion Control,
Pursuant to § 1301.33(a), Title 21 of the Code of Federal Regulations (CFR), this is notice that on May 4, 2012, Cambrex Charles City, Inc., 1205 11th Street, Charles City, Iowa 50616, made application by renewal to the Drug Enforcement Administration (DEA) to be registered as a bulk manufacturer of the following basic classes of controlled substances:
The company plans to manufacture the listed controlled substances in bulk for sale to its customers, for dosage form development, for clinical trials, and for use in stability qualification studies.
Any other such applicant, and any person who is presently registered with DEA to manufacture such substances, may file comments or objections to the issuance of the proposed registration pursuant to 21 CFR 1301.33(a).
Any such written comments or objections should be addressed, in quintuplicate, to the Drug Enforcement Administration, Office of Diversion Control, Federal Register Representative (ODL), 8701 Morrissette Drive, Springfield, Virginia 22152; and must be filed no later than September 24, 2012.
Pursuant to § 1301.33(a), Title 21 of the Code of Federal Regulations (CFR), this is notice that on June 8, 2012, Boehringer Ingelheim Chemicals Inc., 2820 N. Normandy Drive, Petersburg, Virginia 23805-9372, made application by renewal to the Drug Enforcement Administration (DEA) to be registered as a bulk manufacturer of the following basic classes of controlled substances:
The company plans to manufacture the listed controlled substances in bulk for sale to its customers for formulation into finished pharmaceuticals. In reference to Methadone Intermediate (9254) the company plans to produce Methadone HCL active pharmaceutical ingredients (APIs) for sale to its customers.
Any other such applicant, and any person who is presently registered with DEA to manufacture such substances, may file comments or objections to the issuance of the proposed registration pursuant to 21 CFR 1301.33(a).
Any such written comments or objections should be addressed, in quintuplicate, to the Drug Enforcement Administration, Office of Diversion Control,
By Notice dated April 17, 2012 and published in the
The company plans to manufacture the listed controlled substances in bulk for sale to its customers.
No comments or objections have been received. DEA has considered the factors in 21 U.S.C. 823(a), and determined that the registration of Cambrex Charles City, Inc. to manufacture the listed basic classes of controlled substances is consistent with the public interest at this time. DEA has investigated Cambrex Charles City, Inc. to ensure that the company's registration is consistent with the public interest. The investigation has included inspection and testing of the company's physical security systems, verification of the company's compliance with state and local laws, and a review of the company's background and history.
Therefore, pursuant to 21 U.S.C. 823(a), and in accordance with 21 CFR 1301.33, the above named company is granted registration as a bulk manufacturer of the basic classes of controlled substances listed.
By Notice dated April 17, 2012, and published in the
The company plans to manufacture the listed controlled substances in bulk for conversion and sale to dosage form manufacturers.
No comments or objections have been received. DEA has considered the factors in 21 U.S.C. 823(a) and determined that the registration of Rhodes Technologies to manufacture the listed basic classes of controlled substances is consistent with the public interest at this time. DEA has investigated Rhodes Technologies to ensure that the company's registration is consistent with the public interest. The investigation has included inspection and testing of the company's physical security systems, verification of the company's compliance with state and local laws, and a review of the company's background and history.
Therefore, pursuant to 21 U.S.C. 823(a), and in accordance with 21 CFR 1301.33, the above named company is granted registration as a bulk manufacturer of the basic classes of controlled substances listed.
National Institute of Corrections, U.S. Department of Justice.
Solicitation for a Cooperative Agreement.
The National Institute of Corrections (NIC) is soliciting proposals from organizations, groups, or individuals to enter into a cooperative agreement in a twelve (12) month project period for the development of a Corrections Learning Professional Competency Model. This project will identify the workplace learning competencies needed by correctional learning/training professionals at different organizational levels. It will define the competency, identify the relevant knowledge needed for its development, describe behaviors that are reflective of the competency, identify the skills required to use and develop the competency and suggest training strategies appropriate to the competency. The competency model will provide the foundation and focus, in conjunction with the NIC Learning and Performance White Paper (to be completed October, 2012), and the knowledge, skills, behaviors, responsibilities, and tasks needed for the future development and delivery of corrections learning work within the NIC Academy and the field of corrections. It will also provide a model for learning professionals in the field of corrections.
Applications must be received by 4:00 p.m. on Thursday, August 9, 2012.
Applicants will be encouraged to submit their proposals electronically via
All technical or programmatic questions concerning this announcement should be directed to Bernie Iszler, Correctional Program Specialist, National Institute of Corrections. She can be reached by calling 303-338-6618 or by email at
As NIC envisions its work with corrections learning professionals in this century, we foresee multiple challenges that need to be addressed and explored including: A shift in roles from training director to learning and performance manager, from trainer to learning facilitator, a shift from only classroom content delivery to delivery in electronic platforms including synchronous and asynchronous sessions, a shift from training as an event to learning as a process including the creation of learning opportunities on a continuum from readiness preparation to on-demand just-in-time availability to coaching in the workplace. These shifts call for the development of a new competency model that places the learning professional in a position to enhance the performance of their agency. (reference: ASTD Competency Study: Mapping the Future)
All final documents and other media submitted for posting on the NIC Web site must meet the federal government's requirement for accessibility (508 PDF or HTML file). The awardee must provide descriptive text interpreting all graphics, photos, graphs, and/or multimedia to be included with or distributed alongside the materials and must provide transcripts for all applicable audio/visual works.
Applications may be submitted in hard copy, or electronically via
Public Law 93-415.
Are all of the seven project tasks adequately discussed? Is there a clear statement of how each task will be accomplished, to include: Major sub-tasks, the strategies to be employed, required staffing, and other required resources? Are there any innovative approaches, techniques, or design aspects proposed that will enhance the project?
Does the proposed project staff possess the skills, knowledge, and expertise necessary to complete the tasks listed under the scope of work? Does the applicant organization, group, or individual have the organizational capacity to achieve all seven project tasks? Are the proposed project management and staffing plans realistic and sufficient to complete the project within the project time frame?
Does the applicant identify reasonable objectives, milestones, and measures to track progress? If consultants and/or partnerships are proposed, is there a reasonable justification for their inclusion in the project, and a clear structure to insure effective coordination? Is the proposed budget realistic, provide sufficient cost detail/narrative, and represent good value relative to the anticipated results?
NIC will NOT award a cooperative agreement to an applicant who does not have a Dun and Bradstreet Database Universal Number (DUNS) and is not registered in the Central Contractor Registry (CCR).
A DUNS number can be received at no cost by calling the dedicated toll-free DUNS number request line at 1-800-333-0505 (if you are a sole proprietor, you would dial 1-866-705-5711 and select option 1).
Registration in the CRR can be done online at the CCR Web site:
Executive Order 12372: This project is not subject to the provisions of Executive Order 12372.
The Marine Mammal Commission will meet in open session on Tuesday, 7 August 2012, from 9:00 a.m. to 5:00 p.m.
Clark Conference Room, Northeast Fisheries Science Center, 166 Water Street, Woods Hole, Massachusetts 02543, telephone (508) 495-2000.
The Commission expects that all portions of the meeting will be open to the public. It will allow public participation as time permits and as determined to be desirable by the Chairman. Should it be determined that it is appropriate to close a portion of the meeting to the public, any such closure will be carried out in accordance with applicable regulations (50 CFR 560.5 and 560.6).
Seating for members of the public may be limited. The Commission therefore asks that those intending to attend the meeting advise it in advance by sending an email to the Commission at
The Commission plans to meet with regional management and scientific officials in each of the National Marine Fisheries Service's six regions to identify the most pressing marine mammal research and management needs. The Commission will use these meetings to develop a set of national priorities for guiding federal conservation efforts for marine mammals. Members of the public are invited to attend these meetings and to provide comments concerning priority issues. Those unable to attend any of the meetings may submit comments in writing. Written comments should be sent to Timothy J. Ragen, Executive Director, Marine Mammal Commission, 4340 East-West Highway, Room 700, Bethesda, Maryland 20814.
The first meeting will be held in the National Marine Fisheries Service's Northeast Region at the Northeast Fisheries Science Center. Notices of other meetings will be published in the
Timothy J. Ragen, Executive Director, Marine Mammal Commission, 4340 East-West Highway, Room 700, Bethesda, MD 20814; (301) 504-0087; email:
National Aeronautics and Space Administration.
Notice of intent to grant exclusive license.
This notice is issued in accordance with 35 U.S.C. 209(e) and 37 CFR 404.7(a)(1)(i). NASA hereby gives notice of its intent to grant an exclusive, license in the United States to practice the invention described and claimed in U.S. Patent Application No. 6,452,510; NASA Case No. KSC-12168 entitled “Personal Cabin Pressure Monitor and Warning System,” to Aviation Technology, Inc., having its principal place of business at 288 Dolphin Cove Court, Del Mar, CA 92014. The patent rights in this invention have been assigned to the United States of America as represented by the Administrator of the National Aeronautics and Space Administration. The prospective exclusive license will comply with the terms and conditions of 35 U.S.C. 209 and 37 CFR 404.7.
The prospective exclusive license may be granted unless, within fifteen (15) days from the date of this published notice, NASA receives written objections including evidence and argument that establish that the grant of the license would not be consistent with the requirements of 35 U.S.C. 209 and 37 CFR 404.7. Competing applications completed and received by NASA within fifteen (15) days of the date of this published notice will also be treated as objections to the grant of the contemplated exclusive license. Objections submitted in response to this notice will not be made available to the public for inspection and, to the extent permitted by law, will not be released under the Freedom of Information Act, 5 U.S.C. 552.
Objections relating to the prospective license may be submitted to Patent Counsel, Office of the Chief Counsel, Mail Code CC-A, NASA John F. Kennedy Space Center, Kennedy Space Center, FL 32899. Telephone: 321-867-7214; Facsimile: 321-867-1817.
Randall M. Heald, Patent Counsel, Office of the Chief Counsel, Mail Code CC-A, NASA John F. Kennedy Space Center, Kennedy Space Center, FL 32899. Telephone: 321-867-7214; Facsimile: 321-867-1817. Information about other NASA inventions available for licensing can be found online at
National Aeronautics and Space Administration.
Notice of intent to grant partially exclusive license.
This notice is issued in accordance with 35 U.S.C. 209(e) and 37 CFR 404.7(a)(1)(i). NASA hereby gives notice of its intent to grant a partially exclusive license in the United States to practice the inventions described and claimed in U.S. Patent Application No. 11/671,089 entitled “Wireless Sensing System Using Open-Circuit, Electrically-Conductive Spiral-Trace Sensor,” to Caplan Taylor Enterprises LLC having its principal place of business in Newport News, Virginia. The license may be limited to one or more fields of use. The patent rights in these inventions have been assigned to the United States of America as represented by the Administrator of the National Aeronautics and Space Administration. The prospective partially exclusive license will comply with the terms and conditions of 35 U.S.C. 209 and 37 CFR 404.7.
The prospective partially exclusive license may be granted unless, within fifteen (15) days from the date of this published notice, NASA receives written objections including evidence and argument that establish that the grant of the license would not be consistent with the requirements of 35 U.S.C. 209 and 37 CFR 404.7. Competing applications completed and received by NASA within fifteen (15) days of the date of this published notice will also be treated as objections to the grant of the contemplated partially exclusive license.
Objections submitted in response to this notice will not be made available to the public for inspection and, to the extent permitted by law, will not be released under the Freedom of Information Act, 5 U.S.C. 552.
Objections relating to the prospective license may be submitted to Patent Counsel, Office of Chief Counsel, NASA Langley Research Center, MS 30, Hampton, VA 23681; (757) 864-3230 (phone), (757) 864-9190 (fax).
Robin W. Edwards, Patent Counsel, Office of Chief Counsel, NASA Langley Research Center, MS 30, Hampton, VA 23681; (757) 864-3230; Fax: (757) 864-9190. Information about other NASA
National Aeronautics and Space Administration.
Notice of intent to grant partially exclusive license
This notice is issued in accordance with 35 U.S.C. 209(e) and 37 CFR 404.7(a)(1)(i). NASA hereby gives notice of its intent to grant a partially exclusive license in the United States to practice the invention described and claimed in U.S. Patent Nos. 7,295,884 entitled, “System and Method of Designing a Load Bearing Layer of an Inflatable Vessel,” to OxyHeal Medical Systems, Inc., having its principal place of business at 3224 Hoover Ave. National City, CA 91950. The patent rights in these inventions have been assigned to the United States of America as represented by the Administrator of the National Aeronautics and Space Administration. The prospective partially exclusive license will comply with the terms and conditions of 35 U.S.C. 209 and 37 CFR 404.7.
The prospective partially exclusive license may be granted unless, within fifteen (15) days from the date of this published notice, NASA receives written objections including evidence and argument that establish that the grant of the license would not be consistent with the requirements of 35 U.S.C. 209 and 37 CFR 404.7. Competing applications completed and received by NASA within fifteen (15) days of the date of this published notice will also be treated as objections to the grant of the contemplated partially exclusive license.
Objections submitted in response to this notice will not be made available to the public for inspection and, to the extent permitted by law, will not be released under the Freedom of Information Act, 5 U.S.C. 552.
Objections relating to the prospective license may be submitted to Patent Counsel, Office of the Chief Counsel, NASA Johnson Space Center, 2101 NASA Parkway, Houston, TX 77058, Mail Code AL; Phone (281) 483-3021; Fax (281) 483-6936.
Ted Ro, Intellectual Property Attorney, Office of Chief Counsel, NASA Johnson Space Center, 2101 NASA Parkway, Houston, TX 77058, Mail Code AL; Phone (281)244-7148; Fax (281) 483-6936. Information about other NASA inventions available for licensing can be found online at
Postal Regulatory Commission.
Notice.
The Commission is noticing a recently-filed Postal Service request concerning a change in the termination date of Express Mail & Priority Mail Contract 7. This notice addresses procedural steps associated with the filing.
Submit comments electronically via the Commission's Filing Online system at
Stephen L. Sharfman, General Counsel at 202-789-6820.
On July 19, 2012, the Postal Service filed notice that it has agreed to an amendment to the existing Express Mail & Priority Mail Contract 7 subject to this docket.
• Attachment A—a redacted copy of the amendment to the existing Express Mail & Priority Mail Contract 7;
• Attachment B—a certified statement required by 39 CFR 3015.5(c)(2); and
• Attachment C—an application for non-public treatment of materials to maintain redacted portions of the contract amendment and related financial information under seal.
The amendment extends the contract's termination date to the effective date of the Postal Service's annual change in prices of general applicability for Priority Mail and Express Mail scheduled for January 2013.
The Postal Service filed much of the supporting materials, including the related contract, under seal.
Interested persons may submit comments on whether the changes presented in the Postal Service's Notice are consistent with the policies of 39 U.S.C. 3632, 3633, or 3642, 39 CFR 3015.5, and 39 CFR part 3020, subpart B. Comments are due no later than July 27, 2012. The public portions of these filings can be accessed via the Commission's Web site (
The Commission appoints Katalin K. Clendenin to serve as Public Representative in this docket.
1. The Commission shall review the Notice of United States Postal Service of Change in Termination Date Pursuant to Amendment to Express Mail & Priority Mail Contract 7, filed on July 19, 2012 in Docket No. CP2009-43.
2. Pursuant to 39 U.S.C. 505, Katalin K. Clendenin is appointed to serve as an officer of the Commission (Public Representative) to represent the
3. Comments by interested persons in these proceedings are due no later than July 27, 2012.
4. The Secretary shall arrange for publication of this order in the
By the Commission.
Postal Service
Notice.
The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule's Competitive Products List.
Elizabeth A. Reed, 202-268-3179.
The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on July 19, 2012, it filed with the Postal Regulatory Commission a
Securities and Exchange Commission (“Commission”).
Notice of an application for an order under section 12(d)(1)(J) of the Investment Company Act of 1940 (the “Act”) for an exemption from sections 12(d)(1)(A) and (B) of the Act, under sections 6(c) and 17(b) of the Act for an exemption from sections 17(a)(1) and (2) of the Act, and under section 6(c) of the Act for an exemption from rule 12d1-2(a) under the Act.
The requested order would (a) permit certain registered management investment companies to acquire shares of certain registered open-end management investment companies that are outside the same group of investment companies as the acquiring investment companies, and (b) permit funds of funds relying on rule 12d1-2 under the Act to invest in certain financial instruments.
Credit Suisse Asset Management, LLC (the “Adviser”), Credit Suisse Commodity Return Strategy Fund (“CS Commodity Fund”), Credit Suisse Opportunity Funds (“CS Opportunity Funds”), Credit Suisse Trust (“CS Trust”) and Credit Suisse Securities (USA) LLC (the “Distributor”).
The application was filed on September 30, 2011, and amended on June 26, 2012. Applicants have agreed to file an amendment during the notice period, the substance of which is reflected in this notice.
An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on August 14, 2012, and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary.
Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. Applicants: c/o Ms. Joanne Doldo, Credit Suisse Asset Management, LLC, One Madison Avenue, New York, NY 10010.
Jean E. Minarick, Senior Counsel, at (202) 551-6811, or Daniele Marchesani, Branch Chief, at (202) 551-6821 (Division of Investment Management, Office of Investment Company Regulation).
The following is a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or an applicant using the Company name box, at
1. The CS Commodity Fund and the CS Opportunity Funds are organized as Delaware statutory trusts and the CS Trust is organized as a Massachusetts business trust (each such entities a “Trust,” and collectively, the “Trusts.”). Each Trust is an open-end management investment company registered under the Act. Each Trust other than the CS Commodity Fund is comprised of separate series that pursue distinct investment objectives and strategies. The CS Commodity Fund does not offer separate series. The Adviser, a Delaware limited liability company, is registered as an investment adviser under the Investment Advisers Act of 1940 (“Advisers Act”) and serves as investment adviser to each Underlying Fund (as defined below).
2. Applicants request an exemption to permit registered management investment companies that operate as a “fund of funds” and that are not part of the same “group of investment companies,” within the meaning of section 12(d)(1)(G)(ii) of the Act, as the Trusts (“Unrelated Funds of Funds”) to acquire shares of the CS Commodity Fund or the series of the other Trusts that do not operate as “funds of funds” (“Underlying Funds”)
3. An Underlying Fund may invest up to 25% of its assets in a wholly-owned and controlled subsidiary of the Underlying Fund, organized under the laws of the Cayman Islands or another non-U.S. jurisdiction (a “Cayman Sub”) in order to invest in commodity-related instruments and certain other instruments. The Adviser will serve as the investment adviser to both such Underlying Fund and Cayman Sub. The Cayman Sub is created for the purpose of assuring that the Underlying Fund continues to qualify as a regulated investment company for U.S. federal income tax purposes.
4. Each Unrelated Fund of Funds will be advised by an investment adviser, within the meaning of section 2(a)(20)(A) of the Act, that is registered as an investment adviser under the Advisers Act (an “Unrelated Fund of Funds Adviser”). An Unrelated Fund of Funds or its Unrelated Fund of Funds Adviser may contract with an investment adviser that meets the definition of section 2(a)(20)(B) of the Act (an “Unrelated Fund of Funds Subadviser”). Applicants state that Unrelated Funds of Funds will be interested in using the Underlying Funds as part of their overall investment strategy.
5. Applicants also request an exemption to the extent necessary to permit any existing or future funds that operate as “funds of funds” and that are part of the same “group of investment companies,” within the meaning of section 12(d)(1)(G)(ii) of the Act, as the Trusts (“Related Funds of Funds”) and which invest in Underlying Funds in reliance on section 12(d)(1)(G) of the Act, and which are also eligible to invest in securities (as defined in section 2(a)(36) of the Act) in reliance on rule 12d1-2 under the Act, to also invest, consistent with its investment objective, policies, strategies and limitations, in financial instruments that may not be securities within the meaning of section 2(a)(36) of the Act (“Other Investments”).
6. Consistent with its fiduciary obligations under the Act, each Related Fund of Fund's board of trustees will review the advisory fees charged by the Related Fund of Fund's investment adviser to ensure that they are based on services provided that are in addition to, rather than duplicative of, services provided pursuant to the advisory agreement of any investment company in which the Related Fund of Funds may invest.
1. Section 12(d)(1)(A) of the Act, in relevant part, prohibits a registered investment company from acquiring shares of an investment company if the securities represent more than 3% of the total outstanding voting stock of the acquired company, more than 5% of the total assets of the acquiring company, or, together with the securities of any other investment companies, more than 10% of the total assets of the acquiring company. Section 12(d)(1)(B) of the Act prohibits a registered open-end investment company, its principal underwriter, and any broker or dealer from selling the investment company's shares to another investment company if the sale will cause the acquiring company to own more than 3% of the acquired company's voting stock, or if the sale will cause more than 10% of the acquired company's voting stock to be owned by investment companies generally.
2. Section 12(d)(1)(J) of the Act provides that the Commission may exempt any person, security, or transaction, or any class or classes of persons, securities or transactions, from any provision of section 12(d)(1) if the exemption is consistent with the public interest and the protection of investors. Applicants seek an exemption under section 12(d)(1)(J) of the Act to permit Unrelated Funds of Funds to acquire shares of the Underlying Funds in excess of the limits in section 12(d)(1)(A), and an Underlying Fund, any principal underwriter for an Underlying Fund, and any Broker to sell shares of an Underlying Fund to an Unrelated Fund of Funds in excess of the limits in section 12(d)(1)(B) of the Act.
3. Applicants state that the terms and conditions of the proposed arrangement will adequately address the policy concerns underlying sections 12(d)(1)(A) and (B), which include concerns about undue influence by a fund of funds over underlying funds, excessive layering of fees, and overly complex fund structures. Accordingly, applicants believe that the requested exemption is consistent with the public interest and the protection of investors.
4. Applicants believe that neither an Unrelated Fund of Funds nor an Unrelated Fund of Funds Affiliate would be able to exert undue influence over the Underlying Funds.
5. Applicants do not believe that the proposed arrangement will involve excessive layering of fees. The board of directors or trustees of each Unrelated Fund of Funds, including a majority of the directors or trustees who are not “interested persons” (within the meaning of section 2(a)(19) of the Act) (“Independent Trustees”), will find that the advisory fees charged under such advisory contract are based on services provided that will be in addition to, rather than duplicative of, the services provided under the advisory contract(s) of any Underlying Fund in which the Unrelated Fund of Funds may invest. In addition, an Unrelated Fund of Funds Adviser will waive fees otherwise payable to it by the Unrelated Fund of Funds in an amount at least equal to any compensation (including fees received pursuant to any plan adopted by an Underlying Fund (or its respective Master Fund) under rule 12b-1 under the Act) received from an Underlying Fund by the Unrelated Fund of Funds Adviser or an affiliated person of the Unrelated Fund of Funds Adviser, other than any advisory fees paid to the Unrelated Fund of Funds Adviser or its affiliated person, by an Underlying Fund (or its respective Master Fund or Cayman Sub), in connection with the investment by the Unrelated Fund of Funds in the Underlying Fund. Applicants also state that with respect to registered separate accounts that invest in an Unrelated Fund of Funds, no sales load will be charged at the Unrelated Fund of Funds level or at the Underlying Fund level.
6. Applicants submit that the proposed arrangement will not create an overly complex fund structure. Applicants note that no Underlying Fund will acquire securities of any investment company or company relying on section 3(c)(1) or 3(c)(7) of the Act in excess of the limits contained in section 12(d)(1)(A) of the Act, except in certain circumstances identified in condition 12 below. Applicants also represent that to ensure that Unrelated Funds of Funds comply with the terms and conditions of the requested exemption from section 12(d)(1)(A) of the Act, an Unrelated Fund of Funds must enter into a participation agreement between the relevant Trust, on behalf of the relevant Underlying Fund, and the Unrelated Fund of Funds (“Participation Agreement”) before investing in an Underlying Fund in excess of the limits in section 12(d)(1)(A). The Participation Agreement will require the Unrelated Fund of Funds to adhere to the terms and conditions of the requested order. The Participation Agreement will include an acknowledgment from the Unrelated Fund of Funds that it may rely on the requested order only to invest in the Underlying Funds and not in any other registered investment company.
7. Applicants state that investments by an Underlying Fund in a Cayman Sub also do not raise concerns about undue influence, layering of fees and complex structures. Applicants represent that: (a) The Underlying Fund will be the sole and legal beneficial owner of its Cayman Sub, which addresses concerns regarding pyramiding of voting control as a means of undue influence; (b) the Adviser and/or the Sub-Adviser will manage the investments of both the Underlying Fund and its Cayman Sub, which addresses concerns over undue influence by the Adviser; and (c) there will be no inappropriate layering of fees and expenses as a result of an Underlying Fund investing in a Cayman Sub. Applicants, further represent that the financial statements of the Cayman Sub will be consolidated with those of the Underlying Fund (or its respective Master Fund), if permitted by the applicable accounting standards. In addition, in assessing compliance with the asset coverage requirements under section 18(f) of the Act, an Underlying Fund (or its respective Master Fund) will deem the assets, liabilities and indebtedness of a Cayman Sub in which the Underlying Fund (or its respective Master Fund) invests as its own. Finally, the expenses of the Cayman Sub will be included in the total annual fund operating expenses in the prospectus of the Underlying Fund.
1. Section 17(a) of the Act generally prohibits sales or purchases of securities between a registered investment company and any affiliated person of the company. Section 2(a)(3) of the Act defines an “affiliated person” of another
2. Applicants seek relief from section 17(a) to permit an Underlying Fund that is an affiliated person of an Unrelated Fund of Funds because the Unrelated Fund of Funds holds 5% or more of the Underlying Fund's shares to sell its shares to and redeem its shares from an Unrelated Fund of Funds. Applicants state that any proposed transactions directly between an Underlying Fund and an Unrelated Fund of Funds will be consistent with the policies of each Underlying Fund and Unrelated Fund of Funds. The Participation Agreement will require any Unrelated Fund of Funds that purchases shares from an Underlying Fund to represent that the purchase of shares from the Underlying Fund by an Unrelated Fund of Funds will be accomplished in compliance with the investment restrictions of the Unrelated Fund of Funds and will be consistent with the investment policies set forth in the Unrelated Fund of Funds' registration statement.
3. Section 17(b) of the Act authorizes the Commission to grant an order permitting a transaction otherwise prohibited by section 17(a) if it finds that (i) the terms of the proposed transaction are fair and reasonable and do not involve overreaching on the part of any person concerned; (ii) the proposed transaction is consistent with the policies of each registered investment company involved; and (iii) the proposed transaction is consistent with the general purposes of the Act. Section 6(c) of the Act permits the Commission to exempt any person or transactions from any provision of the Act if such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act.
4. Applicants submit that the proposed transactions satisfy the standards for relief under sections 17(b) and 6(c) of the Act.
1. Section 12(d)(1)(G) of the Act provides that section 12(d)(1) will not apply to securities of an acquired company purchased by an acquiring company if: (i) The acquiring company and acquired company are part of the same group of investment companies; (ii) the acquiring company holds only securities of acquired companies that are part of the same group of investment companies, government securities, and short-term paper; (iii) the aggregate sales loads and distribution-related fees of the acquiring company and the acquired company are not excessive under rules adopted pursuant to section 22(b) or section 22(c) of the Act by a securities association registered under section 15A of the Exchange Act or by the Commission; and (iv) the acquired company has a policy that prohibits it from acquiring securities of registered open-end management investment companies or registered unit investment trusts in reliance on section 12(d)(1)(F) or (G) of the Act.
2. Rule 12d1-2 under the Act permits a registered open-end investment company or a registered unit investment trust that relies on section 12(d)(1)(G) of the Act to acquire, in addition to securities issued by another registered investment company in the same group of investment companies, government securities, and short-term paper: (1) Securities issued by an investment company that is not in the same group of investment companies, when the acquisition is in reliance on section 12(d)(1)(A) or 12(d)(1)(F) of the Act; (2) securities (other than securities issued by an investment company); and (3) securities issued by a money market fund, when the investment is in reliance on rule 12d1-1 under the Act. For the purposes of rule 12d1-2, “securities” means any security as defined in section 2(a)(36) of the Act.
3. Applicants state that the proposed arrangement would comply with the provisions of rule 12d1-2 under the Act, but for the fact that the Related Funds of Funds may invest a portion of their assets in Other Investments. Applicants request an order under section 6(c) of the Act for an exemption from rule 12d1-2(a) to allow the Related Funds of Funds to invest in Other Investments. Applicants assert that permitting the Related Funds of Funds to invest in Other Investments as described in the application would not raise any of the concerns that the requirements of section 12(d)(1) were designed to address.
Applicants agree that any order granting the requested relief will be subject to the following conditions:
1. The members of an Unrelated Fund of Funds Advisory Group will not control (individually or in the aggregate) an Underlying Fund (or its respective Master Fund) within the meaning of section 2(a)(9) of the Act. The members of an Unrelated Fund of Funds Subadvisory Group will not control (individually or in the aggregate) an Underlying Fund (or its respective Master Fund) within the meaning of section 2(a)(9) of the Act. If, as a result of a decrease in the outstanding voting securities of an Underlying Fund, the Unrelated Fund of Funds Advisory Group or the Unrelated Fund of Funds Subadvisory Group, each in the aggregate, becomes a holder of more than 25 percent of the outstanding voting securities of an Underlying Fund, it (except for any member of the Unrelated Fund of Funds Advisory Group or Unrelated Fund of Funds Subadvisory Group that is a separate account funding variable insurance contracts) will vote its shares of the Underlying Fund in the same proportion as the vote of all other holders of the Underlying Fund's shares. This condition does not apply to the Unrelated Fund of Funds Subadvisory Group with respect to an Underlying Fund (or its respective Master Fund) for which the Unrelated Fund of Funds Subadviser or a person controlling, controlled by, or under common control with the Unrelated Fund of Funds Subadviser acts as the investment adviser within the meaning of section 2(a)(20)(A) of the Act. A registered separate account funding variable insurance contracts will seek voting instructions from its contract holders and will vote its shares in accordance with the instructions received and will vote those shares for which no instructions were received in the same proportion as the shares for which instructions were received. An unregistered separate account funding variable insurance contracts will either (a) vote its shares of the Underlying Fund in the same proportion as the vote
2. No Unrelated Fund of Funds or Unrelated Fund of Funds Affiliate will cause any existing or potential investment by the Unrelated Fund of Funds in shares of an Underlying Fund to influence the terms of any services or transactions between the Unrelated Fund of Funds or an Unrelated Fund of Funds Affiliate and the Underlying Fund (or its respective Master Fund or Cayman Sub) or an Underlying Fund Affiliate.
3. The board of directors or trustees of an Unrelated Fund of Funds, including a majority of the Independent Trustees, will adopt procedures reasonably designed to ensure that the Unrelated Fund of Funds Adviser and any Unrelated Fund of Funds Subadviser(s) are conducting the investment program of the Unrelated Fund of Funds without taking into account any consideration received by the Unrelated Fund of Funds or an Unrelated Fund of Funds Affiliate from an Underlying Fund (or its respective Master Fund or Cayman Sub) or an Underlying Fund Affiliate in connection with any services or transactions.
4. Once an investment by an Unrelated Fund of Funds in the securities of an Underlying Fund exceeds the limit in section 12(d)(1)(A)(i) of the Act, the Board of Trustees (the “Board”) of the Underlying Fund (or its respective Master Fund), including a majority of the Independent Trustees, will determine that any consideration paid by the Underlying Fund (or its respective Master Fund or Cayman Sub) to the Unrelated Fund of Funds or an Unrelated Fund of Funds Affiliate in connection with any services or transactions: (a) Is fair and reasonable in relation to the nature and quality of the services and benefits received by the Underlying Fund (or its respective Master Fund or Cayman Sub); (b) is within the range of consideration that the Underlying Fund (or its respective Master Fund or Cayman Sub) would be required to pay to another unaffiliated entity in connection with the same services or transactions; and (c) does not involve overreaching on the part of any person concerned. This condition does not apply with respect to any services or transactions between an Underlying Fund (or its respective Master Fund or Cayman Sub) and its investment adviser(s) or any person controlling, controlled by, or under common control with such investment adviser(s).
5. No Unrelated Fund of Funds or Unrelated Fund of Funds Affiliate (except to the extent it is acting in its capacity as an investment adviser to an Underlying Fund (or its respective Master Fund or Cayman Sub)) will cause an Underlying Fund (or its respective Master Fund or Cayman Sub) to purchase a security in any Affiliated Underwriting.
6. The Board of an Underlying Fund (or of its respective Master Fund), including a majority of the Independent Trustees, will adopt procedures reasonably designed to monitor any purchases of securities by the Underlying Fund (or its respective Master Fund or Cayman Sub) in an Affiliated Underwriting once an investment by an Unrelated Fund of Funds in the securities of the Underlying Fund exceeds the limit of section 12(d)(1)(A)(i) of the Act, including any purchases made directly from an Underwriting Affiliate. The Board of the Underlying Fund (or its respective Master Fund) will review these purchases periodically, but no less frequently than annually, to determine whether the purchases were influenced by the investment by the Unrelated Fund of Funds in shares of the Underlying Fund. The Board of the Underlying Fund (or its respective Master Fund) shall consider, among other things, (a) whether the purchases were consistent with the investment objectives and policies of the Underlying Fund (or its respective Master Fund or Cayman Sub); (b) how the performance of securities purchased in an Affiliated Underwriting compares to the performance of comparable securities purchased during a comparable period of time in underwritings other than Affiliated Underwritings or to a benchmark such as a comparable market index; and (c) whether the amount of securities purchased by the Underlying Fund (or its respective Master Fund or Cayman Sub) in Affiliated Underwritings and the amount purchased directly from an Underwriting Affiliate have changed significantly from prior years. The Board of the Underlying Fund shall take any appropriate actions based on its review, including, if appropriate, the institution of procedures designed to ensure that purchases of securities in Affiliated Underwritings are in the best interest of shareholders.
7. Each Underlying Fund (or its respective Master Fund) shall maintain and preserve permanently in an easily accessible place a written copy of the procedures described in the preceding condition, and any modifications to such procedures, and shall maintain and preserve for a period of not less than six years from the end of the fiscal year in which any purchase in an Affiliated Underwriting occurred, the first two years in an easily accessible place, a written record of each purchase of securities in Affiliated Underwritings once an investment by an Unrelated Fund of Funds in the securities of an Underlying Fund exceeds the limit in section 12(d)(1)(A)(i) of the Act, setting forth from whom the securities were acquired, the identity of the underwriting syndicate's members, the terms of the purchase, and the information or materials upon which the Board's determinations were made.
8. Before investing in shares of an Underlying Fund in excess of the limits in section 12(d)(1)(A), each Unrelated Fund of Funds and Underlying Fund will execute a Participation Agreement stating, without limitation, that their boards of directors or trustees and their investment advisers understand the terms and conditions of the order and agree to fulfill their responsibilities under the order. At the time of its investment in shares of an Underlying Fund in excess of the limit in section 12(d)(1)(A)(i), an Unrelated Fund of Funds will notify the Underlying Fund of the investment. At such time, the Unrelated Fund of Funds will also transmit to the Underlying Fund a list of the names of each Unrelated Fund of Funds Affiliate and Underwriting Affiliate. The Unrelated Fund of Funds will notify the Underlying Fund of any changes to the list of the names as soon as reasonably practicable after a change occurs. The Underlying Fund and the Unrelated Fund of Funds will maintain and preserve a copy of the order, the Participation Agreement, and the list with any updated information for the duration of the investment and for a period of not less than six years thereafter, the first two years in an easily accessible place.
9. Prior to approving any advisory contract under section 15 of the Act, the board of directors or trustees of each Unrelated Fund of Funds, including a majority of the Independent Trustees, will find that the advisory fees charged under such advisory contracts are based on services provided that will be in addition to, rather than duplicative of, the services provided under the advisory contract(s) of any Underlying Fund (or its respective Master Fund) in which the Unrelated Fund of Funds may invest. These findings and their basis will be recorded fully in the
10. An Unrelated Fund of Funds Adviser will waive fees otherwise payable to it by the Unrelated Fund of Funds in an amount at least equal to any compensation (including fees received pursuant to any plan adopted by an Underlying Fund (or its respective Master Fund) under rule 12b-1 under the Act) received from an Underlying Fund (or its respective Master Fund or Cayman Sub) by the Unrelated Fund of Funds Adviser, or an affiliated person of the Unrelated Fund of Funds Adviser, other than any advisory fees paid to the Unrelated Fund of Funds Adviser or its affiliated person by the Underlying Fund (or its respective Master Fund or Cayman Sub), in connection with the investment by the Unrelated Fund of Funds in the Underlying Fund. Any Unrelated Fund of Funds Subadviser will waive fees otherwise payable to the Unrelated Fund of Funds Subadviser, directly or indirectly, by the Unrelated Fund of Funds in an amount at least equal to any compensation received from any Underlying Fund (or its respective Master Fund or Cayman Sub) by the Unrelated Fund of Funds Subadviser, or an affiliated person of the Unrelated Fund of Funds Subadviser, other than any advisory fees paid to the Unrelated Fund of Funds Subadviser or its affiliated person by the Underlying Fund (or its respective Master Fund or Cayman Sub), in connection with the investment by the Unrelated Fund of Funds in the Underlying Fund made at the direction of the Unrelated Fund of Funds Subadviser. In the event that the Unrelated Fund of Funds Subadviser waives fees, the benefit of the waiver will be passed through to the Unrelated Fund of Funds.
11. With respect to registered separate accounts that invest in an Unrelated Fund of Funds, no sales load will be charged at the Unrelated Fund of Funds level or at the Underlying Fund level. Other sales charges and service fees, as defined in NASD Conduct Rule 2830, if any, will only be charged at the Unrelated Fund of Funds level or at the Underlying Fund level, not both. With respect to other investments in an Unrelated Fund of Funds, any sales charges and/or service fees charged with respect to shares of the Unrelated Fund of Funds will not exceed the limits applicable to a fund of funds as set forth in NASD Conduct Rule 2830.
12. No Underlying Fund (or its respective Master Fund) will acquire securities of any other investment company or company relying on section 3(c)(1) or 3(c)(7) of the Act in excess of the limits contained in section 12(d)(1)(A) of the Act, except to the extent that such Underlying Fund (or its respective Master Fund): (a) Acquires such securities in compliance with section 12(d)(1)(E) of the Act; (b) receives securities of another investment company as a dividend or as a result of a plan of reorganization of a company (other than a plan devised for the purpose of evading section 12(d)(1) of the Act); (c) acquires (or is deemed to have acquired) securities of another investment company pursuant to exemptive relief from the Commission permitting such Underlying Fund (or its respective Master Fund) to: (i) Acquire securities of one or more investment companies for short-term cash management purposes, or (ii) engage in interfund borrowing and lending transactions; or (d) invests in a Cayman Sub that is a wholly-owned and controlled subsidiary of the Underlying Fund (or its respective Master Fund) as described in the Application. Further, no Cayman Sub will acquire securities of any other investment company or company relying on section 3(c)(1) or 3(c)(7) of the Act other than money market funds that comply with Rule 2a-7 for short-term cash management purposes.
Applicants agree that any order granting the requested relief will be subject to the following condition:
13. The Applicants will comply with all provisions of rule 12d1-2 under the Act, except for paragraph (a)(2) to the extent that it restricts any Related Fund of Funds from investing in Other Investments as described in the application.
For the Commission, by the Division of Investment Management, pursuant to delegated authority.
Securities and Exchange Commission (“Commission”).
Notice of an application for an order under sections 6(b) and 6(e) of the Investment Company Act of 1940 (the “Act”) granting an exemption from all provisions of the Act, except sections 9, 17, 30 and 36 through 53, and the rules and regulations under the Act (the “Rules and Regulations”). With respect to sections 17(a), (d), (f), (g), and (j) of the Act, sections 30(a), (b), (e), and (h) of the Act and the Rules and Regulations and rule 38a-1 under the Act, applicants request a limited exemption as set forth in the application.
Applicants request an order to exempt certain limited liability companies formed for the benefit of eligible employees of Latham & Watkins LLP and its affiliates from certain provisions of the Act. Each limited liability company will be an “employees' securities company” within the meaning of section 2(a)(13) of the Act.
P.E. Partners III, LLC, VP Fund Investments 2004, LLC, VP Fund Investments 2006, LLC, VP Fund Investments 2008, LLC (collectively, the “Existing Funds”), and Latham & Watkins LLP (“L&W”).
The application was filed on March 24, 2000 and amended on December 29, 2000, January 30, 2004, October 19, 2004, February 19, 2009, January 31, 2012 and July 11, 2012.
An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on August 15, 2012 and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary.
Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. Applicants, 355 South Grand Avenue, Los Angeles, CA 90071.
Marilyn Mann, Special Counsel, at (202) 551-6813 or Mary Kay Frech, Branch Chief, at (202) 551-6821 (Division of Investment Management, Office of Investment Company Regulation).
The following is a summary of the application. The complete application
1. L&W, a Delaware limited liability partnership, together with its affiliated law partnerships, is an international law firm. Entities controlling, controlled by, or under common control with L&W, including any related law partnerships affiliated with L&W, are the “L&W Entities.”
2. The Existing Funds are Delaware limited liability companies formed pursuant to limited liability company agreements. The applicants may in the future offer additional pooled investment vehicles substantially similar in all material respects (other than form of organization, investment objective and strategy, and other differences described in the application) to the same class of investors as those investing in the Existing Funds (the “Subsequent Funds” and, together with the Existing Funds, the “Investment Funds”). The applicants anticipate that each Subsequent Fund also will be structured as a limited liability company, although a Subsequent Fund could be structured as a domestic or offshore general partnership, limited partnership or corporation. The operating agreements of the Investment Funds are the “Investment Fund Agreements.” An Investment Fund may include a single vehicle designed to issue interests in series. Each Investment Fund will be an employees' securities company within the meaning of section 2(a)(13) of the Act.
3. Each Existing Fund has been established to enable Eligible Investors to participate in certain investment opportunities that come to the attention of L&W, the L&W Entities or the Managing Members of the Existing Fund. These opportunities may include investments in operating businesses, separate accounts with registered or unregistered investment advisers, investments in pooled investment vehicles such as registered investment companies, investment companies exempt from registration under the Act, commodity pools, and other securities investments (each particular investment being referred to herein as an “Investment”). Applicants submit that a substantial community of interest exists among L&W, the L&W Entities and the Members of each existing Investment Fund, given the purposes and operations of the Investment Funds and the nature of the Eligible Investors participating in the Investment Funds. L&W will “control” each Investment Fund within the meaning of section 2(a)(9) of the Act.
4. Interests in an Investment Fund (“Interests”) will be offered and sold in reliance upon the exemption from registration under section 4(2) of the Securities Act of 1933 (the “Securities Act”) or pursuant to Regulation D under the Securities Act. Interests in any Investment Fund (other than short-term paper) will be offered only to L&W, L&W Entities, or Eligible Investors. Eligible Investors include persons who meet the following criteria: (a) Current or former partners of, or lawyers employed by, or key administrative employees of, L&W or an L&W Entity (“Eligible Employees”), the immediate family members of Eligible Employees, which are parents, children, spouses of children, spouses, and siblings, including step or adoptive relationships (“Immediate Family Members”), and trusts or other entities or arrangements the sole beneficiaries of which consist of Eligible Employees or their Immediate Family Members, or the settlors and the trustees of which consist of Eligible Employees or Eligible Employees together with Immediate Family Members (“Eligible Trusts”); and (b) who are “accredited investors” as that term is defined in Regulation D under the Securities Act, or, in the case of Eligible Trusts, a trust, entity or arrangement for which an Eligible Employee is a settlor and principal investment decision-maker.
5. An Investment Fund will be managed by its Managing Members. The Managing Members of an Investment Fund will consist of two or more current or former partners of L&W or an L&W Entity, each of whom is a member (“Member”) of the Investment Fund and serves as a managing member or member of the management committee of the Investment Fund (the “Managing Members”). The Managing Members will register as investment advisers under the Investment Advisers Act of 1940 (the “Advisers Act”) if such registration is required under the Advisers Act and the rules under the Advisers Act.
6. Each Investment Fund will have an administrator (the “Administrator”). The Administrator may be an employee of L&W or an L&W Entity, or the Managing Members may determine to engage a third party to act as Administrator for the Investment Fund. The Administrator will not recommend Investments or exercise investment discretion. The only functions of the Administrator will be ministerial.
7. The specific investment objectives and strategies for an Investment Fund will be set forth in an informative memorandum relating to the Interests being offered, and in the relevant Investment Fund Agreement, and each Eligible Investor will receive a copy of the informative memorandum and Investment Fund Agreement before making an investment in the Investment Fund. The terms of an Investment Fund will be disclosed to each Eligible Investor at the time the investor is invited to participate in the Investment Fund.
8. The value of the Members' capital accounts will be determined at such times as the Managing Members deem appropriate or necessary; however, such valuation will be done at least annually at the Investment Fund's fiscal year-end. The Managing Members will value the assets held in a Member's capital account at the current market price (closing price) in the case of marketable securities. All other securities or assets will be valued at fair value.
9. Each Investment Fund will generally bear its own expenses. L&W or any L&W Entity, as applicable, may be reimbursed by an Investment Fund for reasonable and necessary out-of-pocket costs directly associated with the organization and operation of the Investment Fund, including administrative and overhead expenses. An Investment Fund may pay L&W or an L&W Entity, as applicable, for the time spent by Managing Members in discharging their duties, as managers of the Investment Fund, at rates not more than the rates charged to clients of L&W or any L&W Entity for services of such partners, and L&W or such L&W Entity will be reimbursed for a portion of the
10. Within 120 days after the end of its fiscal year, or as soon as practicable thereafter, each Investment Fund will send its Members an annual report regarding its operations. The annual report of the Investment Fund will contain financial statements audited by an independent accounting firm. For purposes of this requirement, “audit” has the meaning defined in rule 1-02(d) of Regulation S-X. The Investment Fund will maintain a file containing any financial statements and other information received from the issuers of the Investments held by the Investment Fund, and will make such file available for inspection by its Members in accordance with its Investment Fund Agreement. Each Investment Fund, within 90 days or as soon as practicable after the end of each tax year of the Investment Fund, will transmit a report to each Member setting out information with respect to that Member's distributive share of income, gains, losses, credits and other items for federal income tax purposes, resulting from the operation of the Investment Fund during that year.
11. Members will not be entitled to redeem their Interests in an Investment Fund. A Member will be permitted to transfer his or her Interest only with the express consent of the Managing Members, which may be withheld in the discretion of the Managing Members, and then only to L&W, an L&W Entity or an Eligible Investor. A Member will not be subject to removal except for good cause as determined by the Managing Members, or if the Managing Members, in their discretion, deem such withdrawal to be in the best interest of the Investment Fund. The Interests of a Member who is no longer eligible to own interests in an employees' securities company as defined in section 2(a)(13) of the Act will be repurchased, subject to the minimum payment provisions described below. The Managing Members do not currently intend to require any Member to withdraw.
12. Each Member will commit to contribute a fixed amount of capital as part of the capital of an Investment Fund (“Capital Commitment”). To provide flexibility in connection with an Investment Fund's obligation to contribute capital to fund an Investment, and the associated obligation of the Members to make capital contributions with respect to their Capital Commitments, an Investment Fund Agreement may provide that the Investment Fund may engage in borrowings in connection with such funding of Investments. All borrowings by an Investment Fund with respect to the funding of Investments will be non-recourse to the Members, but may be secured by a pledge of the Members' respective capital accounts and unfunded Capital Commitments. The Investment Funds will not borrow from any person if the borrowing would cause any person not named in section 2(a)(13) of the Act to own any outstanding securities of the Investment Fund (other than short-term paper). If L&W or an L&W Entity makes a loan to an Investment Fund, it (as lender) will be entitled to receive interest, provided that the rate will be no less favorable to the Investment Fund than the rate that could be obtained on an arm's length basis. An Investment Fund will not lend any funds to L&W or an L&W Entity. If L&W or an L&W Entity extends a loan to an Eligible Investor in respect of any Investment Fund, the loan will be made at an interest rate no less favorable than that which could be obtained on an arm's length basis. Loans will not be extended or arranged if otherwise prohibited by law, including the Sarbanes-Oxley Act of 2002.
13. An Investment Fund will not acquire any security issued by a registered investment company if immediately after the acquisition, the Investment Fund would own more than 3% of the total outstanding voting stock of the registered investment company.
1. Section 6(b) of the Act provides, in part, that the Commission will exempt employees' securities companies from the provisions of the Act to the extent that the exemption is consistent with the protection of investors. Section 6(b) provides that the Commission will consider, in determining the provisions of the Act from which the company should be exempt, the company's form of organization and capital structure, the persons owning and controlling its securities, the price of the company's securities and the amount of any sales load, the disposition of the proceeds of any sales of the company's securities, how the company's funds are invested, and the relationship between the company and the issuers of the securities in which it invests. Section 2(a)(13) defines an employees' securities company as any investment company all of whose securities (other than short-term paper) are beneficially owned (a) by current or former employees, or persons on retainer, of one or more affiliated employers, (b) by immediate family members of such persons, or (c) by such employer or employers together with any of the persons in (a) or (b).
2. Section 7 of the Act generally prohibits investment companies that are not registered under section 8 of the Act from selling or redeeming their securities. Section 6(e) of the Act provides that, in connection with any order exempting an investment company from any provision of section 7, certain provisions of the Act, as specified by the Commission, will be applicable to the company and other persons dealing with the company as though the company were registered under the Act. Applicants request an order under sections 6(b) and 6(e) of the Act exempting applicants from all provisions of the Act, except sections 9, 17, 30, 36 through 53, and the Rules and Regulations. With respect to sections 17(a), (d), (f), (g) and (j) and 30(a), (b), (e) and (h) of the Act and the Rules and
3. Section 17(a) of the Act generally prohibits any affiliated person of a registered investment company, or any affiliated person of an affiliated person, acting as principal, from knowingly selling or purchasing any security or other property to or from the company. Applicants request an exemption from section 17(a) to permit an Investment Fund: to invest in or participate as a selling security-holder in a principal transaction with one or more affiliated persons (as defined in section 2(a)(3) of the Act) of an Investment Fund (“First-Tier Affiliates”) and affiliated persons of such First-Tier Affiliates (“Second-Tier Affiliates,” and together with First-Tier Affiliates, “Affiliates”).
4. Applicants submit that the exemptions sought from section 17(a) are consistent with the purposes of the Act and the protection of investors. Applicants state that the Members will be informed in an Investment Fund's offering materials of the possible extent of the dealings by such Investment Fund and any portfolio company with L&W, any L&W Entity or any affiliated person thereof. Applicants also state that, as experienced professionals acting on behalf of financial services businesses, the Members will be able to evaluate the risks associated with such dealings. Applicants assert that the community of interest among the Managing Members, the Members, L&W and the L&W Entities will serve to reduce the risk of abuse in transactions involving an Investment Fund and L&W, any L&W Entity or any affiliated person thereof.
5. Section 17(d) of the Act and rule 17d-1 under the Act prohibit any affiliated person of a registered investment company, or any affiliated person of such person, acting as principal, from participating in any joint arrangement with the registered investment company unless authorized by the Commission. Applicants request an exemption from section 17(d) and rule 17d-1 to the extent necessary to permit an Investment Fund to engage in transactions in which an Affiliate participates as a joint or a joint and several participant with such Investment Fund.
6. Joint transactions in which an Investment Fund could participate might include the following: (a) A joint investment by one or more Investment Funds in a security in which L&W or an L&W Entity, or another Investment Fund, is a joint participant or plans to become a participant; (b) a joint investment by one or more Investment Funds in another Investment Fund; and (c) a joint investment by one or more Investment Funds in a security in which an Affiliate is an investor or plans to become an investor, including situations in which an Affiliate has a partnership or other interest in, or compensation arrangements with, such issuer, sponsor or offeror.
7. Applicants assert that compliance with section 17(d) and rule 17d-1 would cause an Investment Fund to forego investment opportunities simply because a Member, L&W, an L&W Entity or other affiliated persons of the Investment Fund, L&W or the L&W Entities also had or contemplated making a similar investment. In addition, because attractive investment opportunities of the types considered by an Investment Fund often require that each participant make available funds in an amount that may be substantially greater than that available to the investor alone, there may be certain attractive opportunities of which an Investment Fund may be unable to take advantage except as a co-participant with other persons, including Affiliates. Applicants believe that the flexibility to structure co- and joint investments in the manner described above will not involve abuses of the type section 17(d) and rule 17d-1 were designed to prevent. Applicants acknowledge that any transactions subject to section 17(d) and rule 17d-1 for which exemptive relief has not been requested in the application would require specific approval by the Commission.
8. Section 17(f) of the Act designates the entities that may act as investment company custodians, and rule 17f-2 under the Act allows an investment company to act as self-custodian. Applicants request an exemption to permit the following exceptions from the requirements of rule 17f-2: (i) Compliance with paragraph (b) of the rule may be achieved through safekeeping in the locked files of L&W or an L&W Entity; (ii) for the purposes of the rule, (A) employees of L&W or an L&W Entity will be deemed employees of the Investment Funds, (B) the Administrator and the Managing Members of an Investment Fund will be deemed to be the officers of the Investment Funds (except that an Administrator that is an unaffiliated third party will not be considered an officer of the Investment Funds), and (C) the Managing Members of an Investment Fund will be deemed to be the board of directors of the Investment Fund; and (iii) instead of the verification procedure under paragraph (f) of the rule, verification will be effected quarterly by two persons who are either Managing Members or employees of L&W or an L&W Entity, each of whom shall have sufficient knowledge, sophistication and experience in business matters to perform such examination. Applicants expect that many of the Investment Funds' Investments will be evidenced only by partnership agreements or similar documents. Such instruments are most suitably kept in the files of the Investment Funds, where they can be referred to as necessary. Applicants will comply with all other provisions of rule 17f-2.
9. Section 17(g) and rule 17g-1 generally require the bonding of officers and employees of a registered investment company who have access to its securities or funds. Rule 17g-1 requires that a majority of directors who are not interested persons of a registered investment company (“disinterested directors”) take certain actions and give certain approvals relating to fidelity bonding. Applicants request an exemption from the requirement, contained in rule 17g-1, that a majority of the “directors” of the Investment Funds who are not “interested persons” of the respective Investment Funds (as defined in the Act) take certain actions and make certain approvals concerning bonding and request instead that such actions and approvals be taken by the Managing Members, regardless of whether any of them is deemed to be an interested person of the Investment Funds. Each Managing Member will be an interested person of the Investment Funds.
10. The Investment Funds request an exemption from the requirements of rule 17g-1(g) and (h) relating to the filing of copies of fidelity bonds and related information with the Commission and relating to the provisions of notices to the board of directors. Applicants also request an exemption from the requirements of rule 17g-1(j)(3) that the Investment Funds have a majority of disinterested directors, that those disinterested directors select and nominate any other disinterested directors, and that any legal counsel for those disinterested directors be independent legal counsel. Applicants believe that the filing requirements of rule 17g-1 are burdensome and unnecessary as applied to the Investment Funds. The Managing Members will maintain the materials otherwise required to be filed with the Commission by rule 17g-1(g) and the applicants agree that all such material will be subject to examination by the Commission and its staff. The Managing Members will designate a person to maintain the records otherwise required to be filed with the Commission under
11. Applicants request an exemption from the requirements, contained in section 17(j) of the Act and rule 17j-1 under the Act, that every registered investment company adopt a written code of ethics and every “access person” of such registered investment company report to the investment company with respect to transactions in any security in which such access person has, or by reason of the transaction acquires, any direct or indirect beneficial ownership in the security. Applicants request an exemption from the requirements in rule 17j-1, with the exception of rule 17j-1(b), because they are burdensome and unnecessary as applied to the Investment Funds and because the exemption is consistent with the policy of the Act. Requiring the Investment Funds to adopt a written code of ethics and requiring access persons to report each of their securities transactions would be time-consuming and expensive and would serve little purpose in light of, among other things, the community of interest among the Members of the Investment Fund and the Managing Members by virtue of their common association with L&W or an L&W Entity. Accordingly, the requested exemption is consistent with the purposes of the Act because the dangers against which section 17(j) and rule 17j-1 are intended to guard are not present in the case of the Investment Funds.
12. Applicants request an exemption from the requirements in sections 30(a), 30(b), and 30(e) of the Act, and the Rules and Regulations under those sections, that registered investment companies prepare and file with the Commission and mail to their shareholders certain periodic reports and financial statements. Applicants contend that the forms prescribed by the Commission for periodic reports have little relevance to the Investment Funds and would entail administrative and legal costs that outweigh any benefit to the Members. Applicants request exemptive relief to the extent necessary to permit the Investment Funds to report annually to their Members. Applicants also request an exemption from section 30(h) of the Act to the extent necessary to exempt the Administrator, the Managing Members, any 10 percent shareholder, and any other person who may be deemed to be an officer, director, member of an advisory board, or otherwise subject to section 30(h), from filing Forms 3, 4 and 5 under section 16 of the Securities Exchange Act of 1934 (“Exchange Act”) with respect to their ownership of Interests in the Investment Funds. Applicants assert that, because there is no trading market for Interests and the transfer of Interests is severely restricted, these filings are unnecessary for the protection of investors and burdensome to those required to make them.
13. Rule 38a-1 requires investment companies to adopt, implement and periodically review written policies reasonably designed to prevent violation of the federal securities laws and to appoint a chief compliance officer. Each Investment Fund will comply with rule 38a-1(a), (c) and (d), except that (i) the Managing Members of each Investment Fund will fulfill the responsibilities assigned to the board of directors under the rule, and (ii) because all Managing Members would be considered interested persons of the Investment Funds, approval by a majority of the disinterested board members required by rule 38a-1 will not be obtained. In addition, the Investment Funds will comply with the requirement in rule 38a-1(a)(4)(iv) that the chief compliance officer meet with the disinterested directors by having the chief compliance officer meet with the Managing Members.
The applicants agree that any order granting the requested relief will be subject to the following conditions:
1. Each proposed transaction, to which an Investment Fund is a party, otherwise prohibited by section 17(a) or section 17(d) and rule 17d-1 (the “Section 17 Transactions”) will be effected only if the Managing Members determine that: (a) The terms of the Section 17 Transaction, including the consideration to be paid or received, are fair and reasonable to Members of the Investment Fund and do not involve overreaching of the Investment Fund or its Members on the part of any person concerned; and (b) the Section 17 Transaction is consistent with the interests of the Members of the Investment Fund, the Investment Fund's organizational documents and the Investment Fund's reports to its Members.
In addition, the Administrator will record and preserve a description of such Section 17 Transactions, the findings of the Managing Members, the information or materials upon which their findings are based and the basis therefor. All such records will be maintained for the life of the Investment Fund and at least six years thereafter, and will be subject to examination by the Commission and its staff. All such records will be maintained in an easily accessible place for at least the first two years.
2. If purchases or sales are made by an Investment Fund from or to an entity affiliated with the Investment Fund by reason of a Managing Member (a) serving as an officer, director, general partner or investment adviser of the entity, or (b) having a 5% or more investment in the entity, such individual will not participate in the Investment Fund's determination of whether or not to effect the purchase or sale.
3. The Managing Members will adopt, and periodically review and update, procedures designed to ensure that reasonable inquiry is made, prior to the consummation of any Section 17 Transaction, with respect to the possible involvement in the transaction of any affiliated person or promoter of or principal underwriter for the Investment Fund, or any affiliated person of such a person, promoter, or principal underwriter.
4. The Managing Members will not purchase for an Investment Fund any Investment in which a Co-Investor, as defined below, has or proposes to acquire the same class of securities of the same issuer, where the investment involves a joint enterprise or other joint arrangement within the meaning of rule 17d-1 in which the Investment Fund and the Co-Investor are participants, unless any such Co-Investor, prior to disposing of all or part of its investment: (a) Gives the Investment Fund holding such investment sufficient, but not less than one day's notice of its intent to dispose of its investment, and (b) refrains from disposing of its investment unless the Investment Fund holding such investment has the opportunity to dispose of its investment prior to or concurrently with, on the same terms as, and on a
The restrictions contained in this condition, however, shall not be deemed to limit or prevent the disposition of an investment by a Co-Investor: (a) To its direct or indirect wholly-owned subsidiary, to any company (a “Parent”) of which the Co-Investor is a direct or indirect wholly-owned subsidiary, or to a direct or indirect wholly-owned subsidiary of its Parent; (b) to immediate family members of the Co-Investor or a trust established for the benefit of any such family member; (c) when the investment is comprised of securities that are listed on a national securities exchange registered under section 6 of the Exchange Act; (d) when the investment is comprised of securities that are NMS stocks pursuant to section 11A(a)(2) of the Exchange Act and rule 600(a) of Regulation NMS thereunder; (e) when the investment is comprised of securities that are listed on or traded on any foreign securities exchange or board of trade that satisfies regulatory requirements under the law of the jurisdiction in which such foreign securities exchange or board of trade is organized similar to those that apply to a national securities exchange or a national market system of securities; or (f) when the investment is comprised of securities that are government securities as defined in section 2(a)(16) of the Act.
5. An Investment Fund will send, within 120 days after the end of its fiscal year, or as soon as practicable thereafter, to each Member who had an interest in the Investment Fund at any time during the fiscal year then ended, reports and information regarding the Investments, including financial statements for such Investment Fund audited by an independent accounting firm. The Managing Members will make a valuation or have a valuation made of all of the assets of an Investment Fund as of each fiscal year end. In addition, within 90 days after the end of each tax year of the Investment Fund or as soon as practicable thereafter, the Investment Fund shall send a report to each person who was a Member at any time during the fiscal year then ended, setting forth such tax information as shall be necessary for the preparation by the Member of his or her federal and state income tax returns and a report of the investment activities of the Investment Fund during such year.
6. An Investment Fund will maintain and preserve, for the life of the Investment Fund and at least six years thereafter, such accounts, books, and other documents as constitute the record forming the basis for the audited financial statements and annual reports of the Investment Fund to be provided to its Members, and agrees that all such records will be subject to examination by the Commission and its staff. All such records will be maintained in an easily accessible place for at least the first two years.
For the Commission, by the Division of Investment Management, pursuant to delegated authority.
Title VII of the Dodd Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”)
In June 2011, the Securities and Exchange Commission (“Commission”) granted a temporary conditional exemption from section 6(l) of the Exchange Act to certain persons.
Subsequent to the Commission's publication of the Effective Date Relief in June 2011, the Commission adopted, jointly with the Commodity Futures Trading Commission (“CFTC”), rules further defining the term eligible contract participant, which will be effective July 23, 2012.
On July 13, 2012, in response to the request for comment in the Implementation Policy Statement, the Financial Services Roundtable (“Roundtable”) submitted a comment
In support of its request for an extension of section 6(l) relief, the Roundtable stated that the extension is necessary in order to give the industry more time to “review the requirements and implement the systems necessary to conform to the newly finalized definition of [eligible contract participant].”
In light of the concerns expressed by the commenter, the Commission finds that it is necessary or appropriate in the public interest, and is consistent with the protection of investors, to extend the section 6(l) relief provided in the Effective Date Relief for the limited time requested, that is, until the effective date of the Product Definitions Adopting Release. Specifically, pursuant to the Commission's authority under Section 36 of the Exchange Act,
By the Commission.
On May 22, 2012, NYSE Arca, Inc. (“NYSE Arca” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
Section 19(b)(2) of the Act
The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposal. Pursuant to NYSE Arca Equities Rule 7.31(h)(4), a Passive Liquidity (“PL”) Order is an order to buy or sell a stated amount of a security at a specified, undisplayed price. The PL Select Order would be a subset of the PL Order that would not interact with certain contra-side interest, specifically, any incoming order that: (i) Has an immediate-or-cancel (“IOC”) time in force condition, (ii) is an ISO, or (iii) is larger than the size of the PL Select Order.
Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to amend its Fees Schedule. The text of the proposed rule change is available on the Exchange's Web site (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend its Customer Large Trade Discount (the “Discount”), which is intended to cap fees on large customer trades. Currently, regular customer transaction fees are charged up to the first 10,000 VIX options contracts in a customer order. The Exchange proposes to amend the Discount to state that for any executing Trading Permit Holder (“TPH”) whose affiliate
The purpose of the Amendment is to incentivize the creation and issuance of securities that are based on or track the performance of VIX futures.
The proposed change is to take effect on August 1, 2012.
The Exchange believes the proposed rule change is consistent with 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.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)
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 paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On May 23, 2012, the Chicago Board Options Exchange, Incorporated (“Exchange” or “CBOE”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
CBOE proposes to list and trade SPBAS options that reflect the difference between the Special Opening Quotation (“SOQ”) of the S&P 500 Index
At expiration, SPBAS options will settle against the following index calculation: SPBAS = MAX (100 + (SOQ of S&P 500)—(Closing Value of S&P 500), 0). In other words, SPBAS is the greater of (1) the SOQ of a.m.-settled S&P 500 Index (“SPX”) options minus the closing value of SPX plus 100 and (2) zero. The Exchange notes that this formulation ensures that the settlement value for SPBAS options can never be less than zero.
Because SPBAS options settle to the difference between the SOQ of the S&P 500 Index and the closing level of the S&P 500 Index on the third Friday of each month, an intraday value for SPBAS options will not be disseminated. Rather, prior to the open on all trading days other than the last trading day (typically the third Friday of the month), CBOE will disseminate a single value of 100 for SPBAS options through the Options Price Reporting Authority (“OPRA”), the Consolidated Tape Association (“CTA”) tape and/or the Market Data Index (“MDI”) feed. After the close of trading on the last trading day, CBOE will disseminate the exercise settlement value (calculated as described above) for the expiring contract.
SPBAS options will be quoted in points and fractions and one point will equal $100. The contract multiplier will be $100. The minimum tick size for series trading below $3 will be 0.05 ($5.00) and above $3 will be 0.10 ($10.00). The Exchange also proposes to list series at $1 or greater where the strike price is $200 or less and $5 or greater where the strike price is greater than $200.
Initially, the Exchange proposes to list in-, at- and out-of-the-money strike prices (where the “at-the-money” strike price is 100) and may open for trading up to twelve near term expiration months.
The Exchange states that it currently intends to trade SPBAS options electronically on the Hybrid Platform with a Designated Market Maker appointed to the class. Prior to the product launch, the Exchange represents that it will issue a circular announcing the specific trading platform and other relevant trading information concerning SPBAS options.
The proposed options will expire on the Saturday following the third Friday of the expiring month and be cash-settled, P.M.-settled, and European-style. The trading hours for SPBAS options will be from 8:30 a.m. (Chicago time) to 3:15 p.m. (Chicago time), except that trading in expiring SPBAS options will close at 3:00 p.m. (Chicago time) on
Exercise will result in delivery of cash on the business day following expiration. The exercise-settlement amount will be equal to the difference between the exercise-settlement value and the exercise price of the option, multiplied by the contract multiplier ($100). SPBAS options will be p.m.-settled. The Exchange notes that it is proposing p.m.-settlement for SPBAS options because the exercise settlement value is based on the difference between the SOQ of the S&P 500 Index on the third Friday of the month and the closing value of the S&P 500 Index on the third Friday of the month. Since one of the values needed to determine the exercise settlement value for SPBAS options will not be determined until the close of trading on the third Friday of the month, the Exchange asserts that SPBAS options necessarily must be p.m.-settled.
If the exercise settlement value is not available or the normal settlement procedure cannot be utilized due to a trading disruption or other unusual circumstance, the settlement value will be determined in accordance with the rules and bylaws of the OCC.
CBOE has represented that it will use the same surveillance procedures currently utilized for each of the Exchange's other index options to monitor trading in SPBAS options. The Exchange further represents that these surveillance procedures shall be adequate to monitor trading in options on these option products. For surveillance purposes, the Exchange has represented that it will have access to information regarding trading activity in the pertinent underlying securities (
The Exchange does not propose to establish any position or exercise limits for SPBAS options.
Except as modified herein, the rules in Chapters I through XIX, XXIV, XXIVA, and XXIVB will equally apply to SPBAS options.
SPBAS options will be margined as “broad-based index” options, and under CBOE rules, especially Rule 12.3(c)(5)(A), the margin requirement for a short put or call shall be 100% of the current market value of the contract plus up to 15% of the aggregate contract value. Additional margin may be required pursuant to Exchange Rule 12.10.
CBOE proposes to designate SPBAS options as eligible for trading as Flexible Exchange Options as provided for in Chapters XXIVA (Flexible Exchange Options) and XXIVB (FLEX Hybrid Trading System).
CBOE represents that it has analyzed its capacity and believes that the Exchange and OPRA have the necessary systems capacity to handle the additional traffic associated with the listing of new series that will result from the introduction of SPBAS options.
In addition to proposing to introduce SPBAS options, CBOE proposes to correct an erroneous cross-reference in Rule 24.9.01(d) that was unintentionally created. In SR-CBOE-2006-41, among other things, obsolete Interpretations and Policies to Rule 24.9 were deleted and renumbering changes were made.
The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.
The Commission notes that the Exchange has stated that SPBAS options are designed to enable investors to gain exposure to or hedge the basis risk between SPX options traded on CBOE and p.m.-settled S&P 500 Index (“SPXPM”) options traded on C2 Options Exchange. As such, the Commission believes that CBOE's proposal gives options investors the ability to make an additional investment choice in a manner consistent with the requirements of Section 6(b)(5) of the Act.
The Commission believes that permitting $1.00 strike price intervals if the strike price is equal to or less than $200 will provide investors with added flexibility in the trading of these options and will further the public interest by allowing investors to establish positions that are better tailored to meet their investment objectives. As CBOE explained, because the underlying interest for SPBAS options reflects the difference between the opening and closing values of the S&P 500 on the last trading day for SPBAS options, the exercise settlement value will generally be limited to a relatively narrow band of possible values. Specifically, the Exchange asserts that this difference has typically stayed within a ten-index-point range.
The Commission notes that the Exchange proposes to apply its existing index rules regarding the listing of new series and additional series to SPBAS options. Specifically, exercise prices will be required to be reasonably related to the value of the underlying index and generally must be within 30% of the current index value. The Exchange has clarified that for purposes of SPBAS options, “current index value” will be 100 because that is the single value that will be disseminated for SPBAS options during the life of an option, as discussed further below. Given the design of this product, the Commission believes that this is appropriate and consistent with the Act.
The Commission notes that an intraday value for SPBAS options will not be disseminated and that, prior to the open on all trading days other than the last trading day, CBOE will disseminate a single value of 100 for SPBAS options through OPRA, the CTA and/or the MDI feed. The Commission notes further that, after the close of trading on the last trading day, CBOE will disseminate the exercise settlement value for the expiring SPBAS contract. The value of the index may vary from 100 only on the last trading day and would remain 100 on all other trading days. Moreover, because the closing value of the S&P 500 on the last trading day is a necessary component of the SBPAS option settlement value calculation, that value cannot be calculated until the end of the day on the last trading day.
The Exchange has also proposed that SPBAS options be p.m.-settled. As discussed above, the Exchange asserts that p.m.-settlement is necessary because the closing settlement value of the S&P 500 on the third Friday of the month (a necessary component of the SPBAS option settlement value) cannot be determined until the close of trading. The Commission believes that the historic concerns regarding p.m.-settlement should not be raised by the introduction of SPBAS options.
The Exchange has proposed not to impose position or exercise limits on SPBAS options on the basis that SPBAS options should be treated similarly to SPX and SPXPM options, which are not subject to position or exercise limits. The Commission notes that the SPBAS exercise settlement value is based on the difference between the opening and closing values of the S&P 500 Index on expiration Fridays, and that SPX and SPXPM are based on the S&P 500 Index opening and closing values, respectively. Furthermore, as noted above, SPBAS options could be used to gain exposure to or hedge the basis risk between SPX and SPXPM options. As such, the Commission believes that CBOE's proposal not to apply position or exercise limits to SPBAS options is appropriate and consistent with the Act.
CBOE also proposes to margin SPBAS options as broad-based index options. The Commission believes that CBOE's proposed rules relating to margin requirements are appropriate. The Commission also believes that CBOE's proposal to allow SPBAS options to be eligible for trading as FLEX options is consistent with the Act. The Commission previously approved rules relating to the listing and trading of FLEX options on CBOE, which give investors and other market participants the ability to individually tailor, within specified limits, certain terms of those options.
The Commission notes that CBOE has represented that it has an adequate surveillance program to monitor trading of SPBAS options and intends to apply its existing surveillance program for index options to support the trading of these options. Further, CBOE is a member of the ISG and can obtain trading activity in information in the underlying securities (
In approving the proposed listing and trading of SPBAS options, the Commission has also relied upon CBOE's representation that it has the necessary systems capacity to support the new options series that will result from this proposal.
Lastly, the Commission believes that CBOE's proposal to update CBOE Rule 24.9.01(d) with the correct cross-reference to Interpretation and Policy .04 to Rule 24.9 is consistent with 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 (“Act”),
The Exchange proposes to amend Chapter XV, Section 2 entitled “BX Options Market—Fees and Rebates” to amend a Customer fee for routing options to The NASDAQ Options Market (“NOM”).
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
The Exchange recently filed a proposal to adopt fees for routing contracts to markets other the BX Options market.
The Exchange inadvertently noted that the NOM Customer routing fee is $0.11 per contract. NOM assesses a Customer Fee to Remove Liquidity in Penny Pilot Options of $0.45 per contract.
BX currently recoups clearing and transaction charges incurred by the Exchange as well as certain other costs incurred by the Exchange when routing to away markets, such as administrative and technical costs associated with operating the order router, membership fees at away markets, and technical costs associated with routing.
BX believes that the proposed rule changes are consistent with the provisions of Section 6 of the Act,
The amended NOM Customer routing fee is reasonable because it seeks to recoup costs that are incurred by the Exchange when routing Customer orders to NOM on behalf of members. Each destination market's transaction charge varies and there is a standard clearing charge for each transaction incurred by the Exchange along with other administrative and technical costs
The Exchange also believes that the amended NOM Customer routing fee is equitable and not unfairly discriminatory because it would be uniformly applied to all market participant Customer orders that are routed to NOM to cover the cost to route the order. The Exchange applied a similar methodology in calculating the routing fees for each market participant by adding not more than a $0.11 per contract fee to the away market's remove fee to determine BX routing fees.
BX 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 addition, a BX Participant may designate an order as not available for routing to avoid routing fees.
No written comments were either solicited or received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”)
FINRA is proposing to amend FINRA Rule 6730(e) to expressly exclude from the Trade Reporting and Compliance Engine (“TRACE”) trade reporting requirements transfers of TRACE-Eligible Securities for the sole purpose of creating or redeeming instruments such as exchange-traded funds (“ETFs”).
The text of the proposed rule change is available on FINRA's Web site at
In its filing with the Commission, FINRA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
Under the Rule 6700 Series (the TRACE rules), members are required to report transactions in debt securities that are TRACE-Eligible Securities as defined in Rule 6710(a) to FINRA unless they fall within an express exception listed in Rule 6730(e). Certain transactions and transfers are not reported to FINRA (
FINRA proposes to amend Rule 6730(e) to provide that transfers of TRACE-Eligible Securities for the sole purpose of creating or redeeming an instrument that evidences ownership or otherwise tracks the underlying securities transferred, such as an ETF, shall be excluded expressly from the TRACE reporting requirements. The proposed amendment to Rule 6730(e) is similar to an exclusion for such
For example, a member broker-dealer that is an “authorized participant” of an ETF on behalf of a customer transfers TRACE-Eligible Securities to an ETF and in return receives ETF creation units. Under the proposed rule change, the transfers of the TRACE-Eligible Securities from the broker-dealer to the ETF would not be reported to TRACE.
In contrast, FINRA notes that purchases and sales of TRACE-Eligible Securities that are to be transferred for the purposes of creating or redeeming instruments such as ETFs (or a creation unit thereof) and subsequent purchases and sales of the ETF or a similar instrument in the secondary market are not subject to an exclusion. Such purchases and sales involving TRACE-Eligible Securities must be reported to FINRA in accordance with the Rule 6700 Series. Additionally, purchases and sales of the underlying TRACE-Eligible Securities in order to track the performance of an instrument such as an ETF, without actually creating the instrument, are reportable events and must be reported to TRACE.
As noted in Item 2 of this filing, FINRA has filed the proposed rule change for immediate effectiveness. The implementation date will be 30 days after the date of the filing.
FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,
FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor 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) 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 necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule 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 Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to adopt BYX Rule 3.23 “Telemarketing”, to its rulebook to codify provisions that are substantially similar to Federal Trade Commission (“FTC”) rules that prohibit deceptive and other abusive telemarketing acts or practices.
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to add Rule 3.23, “Telemarketing”, to its rulebook to codify provisions that are substantially similar to FTC rules that prohibit deceptive and other abusive telemarketing acts or practices. Rule 3.23 will require Members to, among other things, maintain do-not-call lists, limit the hours of telephone solicitations, and not use deceptive and abusive acts and practices in connection with telemarketing. The Commission directed BYX to enact these telemarketing rules in accordance with the Telemarketing Consumer Fraud and Abuse Prevention Act of 1994 (“Prevention Act”).
In 1997, the Commission determined that telemarketing rules promulgated and expected to be promulgated by self-regulatory organizations, together with the other rules of the self- regulatory organizations, the federal securities laws and the Commission's rules thereunder, satisfied the requirements of the Prevention Act because, at the time, the applicable provisions of those laws and rules were substantially similar to the FTC's telemarketing rules.
As mentioned above, the Prevention Act requires the Commission to promulgate, or direct any national securities exchange or registered securities association to promulgate, rules substantially similar to the FTC rules to prohibit deceptive and other abusive telemarketing acts or practices.
The proposed rule change, as directed by the Commission staff, adopts provisions in Rule 3.23 that are substantially similar to the FTC's current rules that prohibit deceptive and other abusive telemarketing acts or practices as described below.
The proposed rule change codifies the telemarketing restrictions in Rule 3.23(a) to provide that no Member or
(1) Any person's residence at any time other than between 8 a.m. and 9 p.m. local time at the called person's locations;
(2) Any person that previously has stated that he or she does not wish to receive any outbound telephone calls made by or on behalf of the Member; or
(3) Any person who has registered his or her telephone number on the FTC's national do-not-call registry.
The proposed rule change is substantially similar to the FTC's provisions regarding abusive telemarketing acts or practices.
The proposed rule change codifies in Rule 3.23(b) that no Member or associated person of a Member shall make an outbound telephone call to any person without disclosing truthfully, promptly and in a clear and conspicuous manner to the called person the following information: (i) The identity of the caller and the Member; (ii) the telephone number or address at which the caller may be contacted; and (iii) that the purpose of the call is to solicit the purchase of securities or related services. The proposed rule change also provides that the telephone number that a caller provides to a person as the number at which the caller may be contacted may not be a 900 number or any other number for which charges exceed local or long-distance transmission charges.
The proposed rule change adds Rule 3.23(c) to provide that the prohibition in paragraph (a)(1)
(1) The Member has received that person's express prior written consent;
(2) The Member has an established business relationship
(3) The person is a broker or dealer.
The proposed rule change adds Rule 3.23(d) to provide that each Member must make and maintain a centralized list of persons who have informed the Member or any of its associated persons that they do not wish to receive outbound telephone calls. The proposed term “outbound telephone call” is defined substantially similar to the FTC's definition of that term.
Proposed Rule 3.23(d)(2) adopts procedures that Members must institute to comply with Rule 3.23(a) and (b) prior to engaging in telemarketing. These procedures must meet the following minimum standards:
(1) Member must have a written policy for maintaining their firm-specific do-not-call lists.
(2) Personnel engaged in any aspect of telemarketing must be informed and trained in the existence and use of the Member's firm-specific do-not-call list.
(3) If a Member receives a request from a person not to receive calls from that Member, the Member must record the request and place the person's name, if provided, and telephone number on its firm-specific do-not-call list at the time the request is made.
(4) Members or associated persons of Members making an outbound telephone call must make the caller disclosures set forth in Rule 3.23(b).
(5) In the absence of a specific request by the person to the contrary, a person's do- not-call request will apply to the Member making the call, and will not apply to affiliated entities unless the consumer reasonably would expect them to be included given the identification of the call and the product being advertised.
(6) A Member making outbound telephone calls must maintain a record of a person's request not to receive further calls.
Inclusion of this requirement to adopt these procedures will not create any new obligations on Members, as they are already subject to identical provisions under Federal Communications Commission (“FCC”) telemarketing regulations.
Proposed Rule 3.23(e) provides for certain exceptions to the telemarketing restriction set forth in proposed Rule 3.23(a)(3), which prohibits outbound telephone calls to persons on the FTC's national do-not-call registry. First, proposed Rule 3.23(e)(1) provides that a Member or associated person of a Member making outbound telephone calls will not be liable for violating proposed Rule 3.23(a)(3) if:
(1) The Member has an established business relationship with the called person; however, a person's request to be placed on the Member's firm-specific do-not- call list terminates the established business relationship exception to the national do-not-call registry provision for that Member even if the person continues to do business with the Member;
(2) The Member has obtained the person's prior express written consent, which must be clearly evidenced by a signed, written agreement (which may be obtained electronically under the E-Sign Act
(3) The Member or associated person of a Member making the call has a personal relationship
The proposed rule change is substantially similar to the FTC's provision regarding an exception to the prohibition on making outbound telephone calls to persons on the FTC's do-not- call registry.
Second, proposed Rule 3.23(e)(2) provides that a Member or associated person of a Member making outbound telephone calls will not be liable for violating proposed Rule 3.23(a)(3) if the Member or associated person of a Member demonstrates that the violation is the result of an error and that as part of the Member's routine business practice:
(1) The Member has established and implemented written procedures to comply with Rule 3.23(a) and (b);
(2) The Member has trained its personnel, and any entity assisting in its compliance, in the procedures established pursuant to the preceding clause;
(3) The Member has maintained and recorded a list of telephone numbers that it may not contact in compliance with Rule 3.23(d); and
(4) The Member uses a process to prevent outbound telephone calls to any telephone number on the Member's firm-specific do-not-call list or the national do-not-call registry, employing a version of the national do-not-call registry obtained from the FTC no more than 31 days prior to the date any call is made, and maintains records documenting this process.
The proposed rule change is substantially similar to the FTC's safe harbor to the prohibition on making outbound telephone calls to persons on a firm-specific do-not-call list or on the FTC's national do-not-call registry.
Proposed Rule 3.23(f) clarifies that the provisions set forth in Rule 3.23 are applicable to Members and associated persons of Members making outbound telephone calls to wireless telephone numbers.
Proposed Rule 3.23(g) states that if a Member uses another entity to perform telemarketing services on its behalf, the Member remains responsible for ensuring compliance with Rule 3.23. The proposed rule change also provides that an entity or person to which a Member outsources its telemarketing services must be appropriately registered or licensed, where required.
Proposed Rule 3.23(h) provides that, for any telemarketing transaction, no Member or associated person of a Member may submit billing information
If the telemarketing transaction involves pre-acquired account information
(1) Obtain from the customer, at a minimum, the last four digits of the account number to be charged;
(2) Obtain from the customer an express agreement to be charged and to be charged using the identified account number; and
(3) Make and maintain an audio recording of the entire telemarketing transaction.
For any other telemarketing transaction involving preacquired account information, the Member or associated person of a Member must:
(1) Identify the account to be charged with sufficient specificity for the customer to understand what account will be charged; and
(2) Obtain from the customer an express agreement to be charged and to be charged using the identified account number.
The proposed rule change is substantially similar to the FTC's provision regarding the submission of billing information.
Proposed Rule 3.23(i) provides that Members that engage in telemarketing must transmit caller identification information
Proposed Rule 3.23(j) prohibits a Member or associated person of a Member from disclosing or receiving, for consideration, unencrypted consumer account numbers for use in telemarketing. The proposed rule change is substantially similar to the FTC's provision regarding unencrypted consumer account numbers.
Proposed Rule 3.23(k) prohibits a Member or associated person of a Member from abandoning
(1) To employ technology that ensures abandonment of no more than three percent of all calls answered by a person, measured over the duration of a single calling campaign, if less than 30 days, or separately over each successive 30-day period or portion thereof that the campaign continues;
(2) For each outbound telephone call placed, to allow the telephone to ring for at least 15 seconds or four rings before disconnecting an unanswered call;
(3) Whenever a Member or associated person of a Member is not available to speak with the person answering the outbound telephone call within two seconds after the person's completed greeting, promptly to play a prerecorded message stating the name and telephone number of the Member or associated person of a Member on whose behalf the call was placed; and
(4) To maintain records documenting compliance with the “safe harbor.”
The proposed rule change is substantially similar to the FTC's provisions regarding abandoned calls.
Proposed Rule 3.23(l) prohibits a Member or associated person of a Member from initiating any outbound telephone call that delivers a prerecorded message without a person's express written agreement
Proposed Rule 3.23(m) prohibits credit card laundering, the practice of depositing into the credit card system
(1) Presenting to or depositing into the credit card system for payment, a credit card sales draft
(2) Employing, soliciting, or otherwise causing a merchant,
(3) Obtaining access to the credit card system through the use of a business relationship or an affiliation with a merchant, when such access is not authorized by the merchant agreement
The proposed rule change is substantially similar to the FTC's provision regarding credit card laundering.
Proposed Rule 3.23(n) adopts the following definitions, which are substantially similar to the FTC's definitions of these terms: “acquirer,” “billing information,” “caller identification service,” “cardholder,” “charitable contribution,” “credit,” “credit card,” “credit card sales draft,” “credit card system,” “customer,” “donor,” “established business relationship,” “free-to-pay conversion,” “merchant,” “merchant agreement,” “outbound telephone call,” “person,” “pre-acquired account information,” “telemarketer,” and “telemarketing.”
Proposed Rule 3.23, Interpretation and Policy .01
The Exchange will announce the implementation date of the proposed rule change in a Regulatory Notice to be published no later than 90 days following the effective date. The implementation date will be no later than 180 days following the effective date.
The Exchange believes that the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
The Exchange does not believe that the proposed rule change imposes any burden on competition.
The Exchange has neither solicited nor received written comments on the proposed rule change.
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) of the Act
For the foregoing reasons, this rule filing qualifies as a “non-controversial” rule change under Rule 19b-4(f)(6), which renders the proposed rule change effective upon filing with the Commission. The Exchange has requested that the Commission waive the 30-day operative delay period after which a proposed rule change under Rule 19b-4(f)(6) becomes effective. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because such waiver will afford Exchange members the benefit of the proposal—the prohibition of deceptive and other abusive telemarketing acts or practices—without unnecessary delay. Such waiver will also allow the Exchange to comply with the Commission's directive and implement uniform telemarketing rules across self-regulatory organizations, creating consistency among these rules for investors, as soon as possible. For these reasons, the Commission designates the proposed rule change as operative under upon filing.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposal is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to adopt BATS Rule 3.23 “Telemarketing”, to its rulebook to codify provisions that are substantially similar to Federal Trade Commission (“FTC”) rules that prohibit deceptive and other abusive telemarketing acts or practices.
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to add Rule 3.23, “Telemarketing”, to its rulebook to codify provisions that are substantially similar to FTC rules that prohibit deceptive and other abusive telemarketing acts or practices. Rule 3.23 will require Members to, among other things, maintain do-not-call lists, limit the hours of telephone solicitations, and not use deceptive and abusive acts and practices in connection with telemarketing. The Commission directed BATS to enact these telemarketing rules in accordance with the Telemarketing Consumer Fraud and Abuse Prevention Act of 1994 (“Prevention Act”).
In 1997, the Commission determined that telemarketing rules promulgated and expected to be promulgated by self-regulatory organizations, together with the other rules of the self-regulatory organizations, the federal securities laws and the Commission's rules thereunder, satisfied the requirements of the Prevention Act because, at the time, the applicable provisions of those laws and rules were substantially similar to the FTC's telemarketing rules.
As mentioned above, the Prevention Act requires the Commission to promulgate, or direct any national securities exchange or registered
The proposed rule change, as directed by the Commission staff, adopts provisions in Rule 3.23 that are substantially similar to the FTC's current rules that prohibit deceptive and other abusive telemarketing acts or practices as described below.
The proposed rule change codifies the telemarketing restrictions in Rule 3.23(a) to provide that no Member or associated person of a Member
(1) Any person's residence at any time other than between 8 a.m. and 9 p.m. local time at the called person's locations;
(2) Any person that previously has stated that he or she does not wish to receive any outbound telephone calls made by or on behalf of the Member; or
(3) Any person who has registered his or her telephone number on the FTC's national do-not-call registry.
The proposed rule change is substantially similar to the FTC's provisions regarding abusive telemarketing acts or practices.
The proposed rule change codifies in Rule 3.23(b) that no Member or associated person of a Member shall make an outbound telephone call to any person without disclosing truthfully, promptly and in a clear and conspicuous manner to the called person the following information: (i) The identity of the caller and the Member; (ii) the telephone number or address at which the caller may be contacted; and (iii) that the purpose of the call is to solicit the purchase of securities or related services. The proposed rule change also provides that the telephone number that a caller provides to a person as the number at which the caller may be contacted may not be a 900 number or any other number for which charges exceed local or long-distance transmission charges.
The proposed rule change adds Rule 3.23(c) to provide that the prohibition in paragraph (a)(1)
(1) The Member has received that person's express prior written consent;
(2) The Member has an established business relationship
(3) The person is a broker or dealer.
The proposed rule change adds Rule 3.23(d) to provide that each Member must make and maintain a centralized list of persons who have informed the Member or any of its associated persons that they do not wish to receive outbound telephone calls. The proposed term “outbound telephone call” is defined substantially similar to the FTC's definition of that term.
Proposed Rule 3.23(d)(2) adopts procedures that Members must institute to comply with Rule 3.23(a) and (b) prior to engaging in telemarketing. These procedures must meet the following minimum standards:
(1) Member must have a written policy for maintaining their firm-specific do-not-call lists.
(2) Personnel engaged in any aspect of telemarketing must be informed and trained in the existence and use of the Member's firm-specific do-not-call list.
(3) If a Member receives a request from a person not to receive calls from that Member, the Member must record the request and place the person's name, if provided, and telephone number on
(4) Members or associated persons of Members making an outbound telephone call must make the caller disclosures set forth in Rule 3.23(b).
(5) In the absence of a specific request by the person to the contrary, a person's do-not-call request will apply to the Member making the call, and will not apply to affiliated entities unless the consumer reasonably would expect them to be included given the identification of the call and the product being advertised.
(6) A Member making outbound telephone calls must maintain a record of a person's request not to receive further calls.
Inclusion of this requirement to adopt these procedures will not create any new obligations on Members, as they are already subject to identical provisions under Federal Communications Commission (“FCC”) telemarketing regulations.
Proposed Rule 3.23(e) provides for certain exceptions to the telemarketing restriction set forth in proposed Rule 3.23(a)(3), which prohibits outbound telephone calls to persons on the FTC's national do-not-call registry. First, proposed Rule 3.23(e)(1) provides that a Member or associated person of a Member making outbound telephone calls will not be liable for violating proposed Rule 3.23(a)(3) if:
(1) The Member has an established business relationship with the called person; however, a person's request to be placed on the Member's firm-specific do-not-call list terminates the established business relationship exception to the national do-not-call registry provision for that Member even if the person continues to do business with the Member;
(2) the Member has obtained the person's prior express written consent, which must be clearly evidenced by a signed, written agreement (which may be obtained electronically under the E-Sign Act
(3) the Member or associated person of a Member making the call has a personal relationship
The proposed rule change is substantially similar to the FTC's provision regarding an exception to the prohibition on making outbound telephone calls to persons on the FTC's do-not-call registry.
Second, proposed Rule 3.23(e)(2) provides that a Member or associated person of a Member making outbound telephone calls will not be liable for violating proposed Rule 3.23(a)(3) if the Member or associated person of a Member demonstrates that the violation is the result of an error and that as part of the Member's routine business practice:
(1) The Member has established and implemented written procedures to comply with Rule 3.23(a) and (b);
(2) The Member has trained its personnel, and any entity assisting in its compliance, in the procedures established pursuant to the preceding clause;
(3) The Member has maintained and recorded a list of telephone numbers that it may not contact in compliance with Rule 3.23(d); and
(4) The Member uses a process to prevent outbound telephone calls to any telephone number on the Member's firm-specific do-not-call list or the national do-not-call registry, employing a version of the national do-not-call registry obtained from the FTC no more than 31 days prior to the date any call is made, and maintains records documenting this process.
The proposed rule change is substantially similar to the FTC's safe harbor to the prohibition on making outbound telephone calls to persons on a firm-specific do-not-call list or on the FTC's national do-not-call registry.
Proposed Rule 3.23(f) clarifies that the provisions set forth in Rule 3.23 are applicable to Members and associated persons of Members making outbound telephone calls to wireless telephone numbers.
Proposed Rule 3.23(g) states that if a Member uses another entity to perform telemarketing services on its behalf, the Member remains responsible for ensuring compliance with Rule 3.23. The proposed rule change also provides that an entity or person to which a Member outsources its telemarketing services must be appropriately registered or licensed, where required.
Proposed Rule 3.23(h) provides that, for any telemarketing transaction, no Member or associated person of a Member may submit billing information
If the telemarketing transaction involves pre-acquired account information
(1) Obtain from the customer, at a minimum, the last four digits of the account number to be charged;
(2) Obtain from the customer an express agreement to be charged and to be charged using the identified account number; and
(3) Make and maintain an audio recording of the entire telemarketing transaction.
For any other telemarketing transaction involving preacquired account information, the Member or associated person of a Member must:
(1) Identify the account to be charged with sufficient specificity for the customer to understand what account will be charged; and
(2) Obtain from the customer an express agreement to be charged and to be charged using the identified account number.
The proposed rule change is substantially similar to the FTC's provision regarding the submission of billing information.
Proposed Rule 3.23(i) provides that Members that engage in telemarketing must transmit caller identification information
Proposed Rule 3.23(j) prohibits a Member or associated person of a Member from disclosing or receiving, for consideration, unencrypted consumer account numbers for use in telemarketing. The proposed rule change is substantially similar to the FTC's provision regarding unencrypted consumer account numbers.
Proposed Rule 3.23(k) prohibits a Member or associated person of a Member from abandoning
(1) To employ technology that ensures abandonment of no more than three percent of all calls answered by a person, measured over the duration of a single calling campaign, if less than 30 days, or separately over each successive 30-day period or portion thereof that the campaign continues;
(2) For each outbound telephone call placed, to allow the telephone to ring for at least 15 seconds or four rings before disconnecting an unanswered call;
(3) Whenever a Member or associated person of a Member is not available to speak with the person answering the outbound telephone call within two seconds after the person's completed greeting, promptly to play a prerecorded message stating the name and telephone number of the Member or associated person of a Member on whose behalf the call was placed; and
(4) To maintain records documenting compliance with the “safe harbor.”
The proposed rule change is substantially similar to the FTC's provisions regarding abandoned calls.
Proposed Rule 3.23(l) prohibits a Member or associated person of a Member from initiating any outbound telephone call that delivers a prerecorded message without a person's express written agreement
Proposed Rule 3.23(m) prohibits credit card laundering, the practice of depositing into the credit card system
(1) Presenting to or depositing into the credit card system for payment, a credit card sales draft
(2) Employing, soliciting, or otherwise causing a merchant,
(3) Obtaining access to the credit card system through the use of a business relationship or an affiliation with a merchant, when such access is not authorized by the merchant agreement
The proposed rule change is substantially similar to the FTC's provision regarding credit card laundering.
Proposed Rule 3.23(n) adopts the following definitions, which are substantially similar to the FTC's definitions of these terms: “acquirer,” “billing information,” “caller identification service,” “cardholder,” “charitable contribution,” “credit,” “credit card,” “credit card sales draft,” “credit card system,” “customer,” “donor,” “established business relationship,” “free-to-pay conversion,” “merchant,” “merchant agreement,” “outbound telephone call,” “person,” “pre-acquired account information,” “telemarketer,” and “telemarketing.”
Proposed Rule 3.23, Interpretation and Policy .01
The Exchange will announce the implementation date of the proposed rule change in a Regulatory Notice to be published no later than 90 days following the effective date. The implementation date will be no later than 180 days following the effective date.
The Exchange believes that the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.
The Exchange does not believe that the proposed rule change imposes any burden on competition.
The Exchange has neither solicited nor received written comments on the proposed rule change.
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) of the Act
For the foregoing reasons, this rule filing qualifies as a “non-controversial” rule change under Rule 19b-4(f)(6), which renders the proposed rule change effective upon filing with the Commission. The Exchange has requested that the Commission waive the 30-day operative delay period after which a proposed rule change under Rule 19b-4(f)(6) becomes effective. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because such waiver will afford Exchange members the benefit of the proposal—the prohibition of deceptive and other abusive telemarketing acts or practices—without unnecessary delay. Such waiver will also allow the Exchange to comply with the Commission's directive and implement uniform telemarketing rules across self-regulatory organizations, creating consistency among these rules for investors, as soon as possible. For these reasons, the Commission designates the proposed rule change as operative under upon filing.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposal is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
CBOE proposes to amend Interpretation and Policy .07 to Rule 4.11 (Position Limits) to increase the position and exercise limits for options on the iShares MSCI Emerging Markets Index Fund (“EEM”) to 500,000 contracts. The text of the rule proposal is available on the Exchange's Web site (
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Exchange began trading options on the iShares MSCI Emerging Markets Index Fund (“EEM”) on March 9, 2006. Position limits for exchange-traded fund (“ETFs”) options, such as EEM options, are determined pursuant to Rule 4.11 and vary according to the number of outstanding share [sic] and past six-month trading volume of the underlying stock or ETF. The largest in capitalization and most frequently traded stocks and ETFs have an option position limit of 250,000 contracts (with adjustments for splits, re-capitalizations, etc.) on the same side of the market; smaller capitalization stocks and ETFs have position limits of 200,000, 75,000, 50,000 or 25,000 contracts (with adjustments for splits, re-capitalizations, etc.) on the same side of the market. The current position limit for EEM options is 250,000 contracts. The purpose of the proposed rule change is to amend CBOE Rule 4.11, Interpretation and Policy .07 to increase the position and exercise limits for EEM options to 500,000 contracts.
There is precedent for establishing position limits for options on actively-traded ETFs and these position limit levels are set forth in Interpretation and Policy .07 to Rule 4.11.
In support of this proposed rule change, the Exchange has collected trading statistics comparing EEM to IWM and SPY. As shown in the following table, the average daily volume in 2011 for EEM was 65 million shares compared to 64.1 million shares for IWM and 213 million shares for SPY. The total shares outstanding for EEM are 922.9 million compared to 192.6 million shares for IWM and 716.1 million shares for SPY. Further, the fund market cap for EEM is $41.1 billion compared to $15.5 billion for IWM and $98.3 billion for SPY.
The Exchange believes that increasing position limits for EEM options will lead to a more liquid and competitive market environment for EEM options that will benefit customers interested in this product.
Under the Exchange's proposal, the options reporting requirement for EEM options would continue unabated. Thus, the Exchange would still require that each Trading Permit Holder (“TPH”) or TPH organization that maintains a position in EEM options on the same side of the market, for its own account or for the account of a customer, report certain information to the Exchange. This information would include, but would not be limited to, the option position, whether such position is hedged and, if so, a description of the hedge, and the collateral used to carry the position, if applicable. Exchange market-makers (including Designated Primary Market-Makers) would continue to be exempt from this reporting requirement, as market-maker information can be accessed through the Exchange's market surveillance systems. In addition, the general reporting requirement for customer accounts that maintain an aggregate position of 200 or more option contracts would remain at this level for EEM options.
As the anniversary of listed options trading approaches its fortieth year, the Exchange believes that the existing surveillance procedures and reporting requirements at CBOE, other options exchanges, and at the several clearing firms are capable of properly identifying unusual and/or illegal trading activity. In addition, routine oversight inspections of the Exchange's regulatory programs by the Commission have not uncovered any material inconsistencies or shortcomings in the manner in which the Exchange's market surveillance is conducted. These procedures utilize daily monitoring of market movements via automated surveillance techniques to identify unusual activity in both options and underlying stocks.
Furthermore, large stock holdings must be disclosed to the Commission by way of Schedules 13D or 13G.
The Exchange believes that the current financial requirements imposed by the Exchange and by the Commission adequately address concerns that a TPH or its customer may try to maintain an inordinately large un-hedged position in an option, particularly on EEM. Current margin and risk-based haircut methodologies serve to limit the size of positions maintained by any one account by increasing the margin and/or capital that a TPH must maintain for a large position held by itself or by its customer.
The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder, including the requirements of Section 6(b) of the Act.
CBOE 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.
No written comments were solicited or received with respect to the proposed rule change.
Within 45 days of the date of publication of this notice in the
(A) By order approve or disapprove 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 Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Notice of request for public comments.
The Department of State is seeking Office of Management and Budget (OMB) approval for the information collection described below. The purpose of this notice is to allow 60 days for public comment in the
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The Department will accept comments from the public up to 60 days from July 26, 2012.
You may submit comments by any of the following methods:
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You must include the DS form number (if applicable), information collection title, and 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 information collection and supporting documents, to Michelle Hale, ECA/P/V, SA-5, C2 Floor, Department of State, Washington, DC 20522-0582, who may be reached on 202-632-6312 or at
We are soliciting public comments to permit the Department to:
• Evaluate whether the proposed information collection is necessary for the proper performance of our functions.
• Evaluate the accuracy of our estimate of the burden of the 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 technology.
This request for a new information collection will allow ECA/P/V to conduct a descriptive survey of the exchange participants who went on the Hubert H. Humphrey Fellowship Program between 1979 and 2009. Collecting this data will help ECA/P/V examine what Fellows have been doing post-program, and their roles in critical areas of change at work, and in their fields of study, and how the program affected their work. Data collections efforts will be conducted via electronic survey.
All data will be collected electronically via SurveyGizmo, an on-line surveying tool.
Office of the Secretary, Department of Transportation (DOT).
Notice of Performance Review Board (PRB) appointments.
DOT publishes the names of the persons selected to serve on the various Departmental PRBs as required by 5 U.S.C. 4314(c)(4).
Nancy A. Mowry, Director, Departmental Office of Human Resource Management, (202) 366-4088.
The persons named below have been selected to serve on one or more Departmental PRBs.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of final disposition.
FMCSA announces its decision to exempt 23 individuals from its rule prohibiting persons with insulin-treated diabetes mellitus (ITDM) from operating commercial motor vehicles (CMVs) in interstate commerce. The exemptions will enable these individuals to operate CMVs in interstate commerce.
The exemptions are effective July 26, 2012. The exemptions expire on July 28, 2014.
Elaine M. Papp, Chief, Medical Programs Division, (202) 366-4001,
You may see all the comments online through the Federal Document Management System (FDMS) at:
On June 6, 2012, FMCSA published a notice of receipt of Federal diabetes exemption applications from 23 individuals and requested comments from the public (77 FR 33551). The public comment period closed on July 6, 2012, and no comments were received.
FMCSA has evaluated the eligibility of the 23 applicants and determined that granting the exemptions to these individuals would achieve a level of safety equivalent to or greater than the level that would be achieved by complying with the current regulation 49 CFR 391.41(b)(3).
The Agency established the current requirement for diabetes in 1970 because several risk studies indicated that drivers with diabetes had a higher rate of crash involvement than the general population. The diabetes rule provides that “A person is physically qualified to drive a commercial motor vehicle if that person has no established medical history or clinical diagnosis of diabetes mellitus currently requiring insulin for control” (49 CFR 391.41(b)(3)).
FMCSA established its diabetes exemption program, based on the Agency's July 2000 study entitled “A Report to Congress on the Feasibility of a Program to Qualify Individuals with Insulin-Treated Diabetes Mellitus to Operate in Interstate Commerce as Directed by the Transportation Act for the 21st Century.” The report concluded that a safe and practicable protocol to allow some drivers with ITDM to operate CMVs is feasible. The September 3, 2003 (68 FR 52441),
These 23 applicants have had ITDM over a range of 1 to 40 years. These applicants report no severe hypoglycemic reactions resulting in loss of consciousness or seizure, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning symptoms, in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the past 5 years. In each case, an endocrinologist verified that the driver has demonstrated a willingness to properly monitor and manage his/her diabetes mellitus, received education related to diabetes management, and is on a stable insulin regimen. These drivers report no other disqualifying conditions, including diabetes-related complications. Each meets the vision requirement at 49 CFR 391.41(b)(10).
The qualifications and medical condition of each applicant were stated and discussed in detail in the June 6, 2012,
FMCSA did not receive any comments in this proceeding.
Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption from the diabetes requirement in 49 CFR 391.41(b)(3) if the exemption is likely to achieve an equivalent or greater level of safety than would be achieved without the exemption. The exemption allows the applicants to operate CMVs in interstate commerce.
To evaluate the effect of these exemptions on safety, FMCSA considered medical reports about the applicants' ITDM and vision, and reviewed the treating endocrinologists' medical opinion related to the ability of the driver to safely operate a CMV while using insulin.
Consequently, FMCSA finds that in each case exempting these applicants from the diabetes requirement in 49 CFR 391.41(b)(3) is likely to achieve a level of safety equal to that existing without the exemption.
The terms and conditions of the exemption will be provided to the applicants in the exemption document
Based upon its evaluation of the 23 exemption applications, FMCSA exempts, Larry J. Anderson (MN), Kevin J. Blue (IL), Wade D. Calvin (WA), Carl A. Candelaria (NM), Owen R. Dossett (MS), David K. Dylak (IL), Jennifer A. Ferguson (SC), Michael E. Fritz (MN), Jason W. Griffith (KS), Lee A. Haerterich (WI), Eric W. Holland (CO), Richard P. Holmen (MN), Edward Jones (NJ), Paul A. Lacina (ND), Robert L. Lawson (SC), Richard N. Listro (FL), Bradley J. Moore (MO), Jeremy T. Newton (MO), Ross W. Petermann (MN), James W. Pickard, Jr. (CO), Robert G. Shane (NY), Randall J. Tatum (MA), and Curtis J. Young (FL) from the ITDM requirement in 49 CFR 391.41(b)(3), subject to the conditions listed under “Conditions and Requirements” above.
In accordance with 49 U.S.C. 31136(e) and 31315 each exemption will be valid for two years unless revoked earlier by FMCSA. The exemption will be revoked if the following occurs: (1) The person fails to comply with the terms and conditions of the 1/exemption; (2) the exemption has resulted in a lower level of safety than was maintained before it was granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315. If the exemption is still effective at the end of the 2-year period, the person may apply to FMCSA for a renewal under procedures in effect at that time.
Federal Railroad Administration (FRA), United States Department of Transportation (DOT).
Notice of Availability.
FRA is issuing this notice to advise the public that a Supplemental Draft Environmental Impact Statement (EIS) has been prepared for the Fresno to Bakersfield Section of the California High-Speed Train (HST) Project (Project). FRA is the lead Federal agency and the California High-Speed Rail Authority (Authority) is the lead state agency for the environmental review process. The Supplemental Draft EIS was prepared by FRA and the Authority to meet the federal requirements of the National Environmental Policy Act (NEPA) and to serve as the Authority's Revised Draft Environmental Impact Report (EIR) in compliance with the state law requirements of the California Environmental Quality Act (CEQA). The U.S. Army Corps of Engineers (USACE) is a Cooperating Agency for the Supplemental Draft EIS.
Written comments on the Supplemental Draft EIS for the Fresno to Bakersfield Section should be provided to the Authority at the address listed below on or before September 20, 2012. Public hearings are scheduled on August 27, August 28, and August 29, 2012, at the times and dates listed in the Addresses Section below in Fresno, Hanford, and Bakersfield, CA.
Written comments on the Supplemental Draft EIS should be sent to the California High-Speed Rail Authority, EIR/EIS Comments, 770 L Street, Suite 800, Sacramento, CA 95814, or may be submitted online at
• Fresno, CA, Wednesday, August 29, 2012, 3:00 to 8:00 p.m., Fresno Convention Center, Exhibit Hall III, 848 M Street, Fresno, CA;
• Hanford, CA, Tuesday, August 28, 2012, 3:00 to 8:00 p.m., Hanford Fraternal Hall, 1015 N. 10th Avenue, Hanford, CA; and
• Bakersfield, CA, Monday, August 27, 2012, 3:00 to 8:00 p.m., Beale Memorial Library, 701 Truxton Avenue, Bakersfield, CA.
Mr. David Valenstein, Chief, Environment and Systems Planning Division, Office of Railroad Policy and Development, Federal Railroad Administration, U.S. Department of Transportation, 1200 New Jersey Avenue SE., MS-20, Washington, DC 20590 (telephone: 202-493-6368).
The proposed California HST system would provide intercity, high-speed passenger rail service on more than 800 miles of tracks throughout California, connecting the major population centers of Sacramento, the San Francisco Bay Area, the Central Valley, Los Angeles, the Inland Empire, Orange County, and San Diego. It will use state-of-the-art, electrically powered, high-speed, steel-wheel-on-steel-rail technology, including contemporary safety, signaling, and automated train-control systems, with trains capable of operating up to 220 miles per hour (mph) over a fully graded-separated, dedicated double track alignment. The HST System is comprised of multiple sections, one of which is the Fresno to Bakersfield Section analyzed in the Supplemental Draft EIS.
This project-level EIS tiers off of the Statewide Program EIR/EIS published by the Authority and the FRA in 2005 and builds off of subsequent decisions. The Fresno to Bakersfield Section is comprised of a 114-mile dedicated, double-track high-speed passenger rail corridor between Fresno and Bakersfield, CA. The Project includes proposed stations in downtown Fresno and Bakersfield, and a possible Kings/Tulare Regional Station in the vicinity of Hanford, CA. A heavy maintenance facility for assembly, testing, and commissioning of trains, train inspection and service, and train overhaul may be constructed in the Fresno to Bakersfield Section.
In August 2011, FRA issued a Draft EIS and circulated the document for a 60-day public and agency review and comment period. The Draft EIS analyzed a no action alternative and various action alternatives for the construction and operation of the California HST Project Fresno to Bakersfield Section, including alignment alternatives and station locations. FRA and Authority held three public hearings on the Draft
Based on substantive comments received during the public and agency review of the Draft EIS, the Authority and FRA decided to reintroduce alignment alternatives west of Hanford. In response to concerns raised by stakeholders in metropolitan Bakersfield, the Authority and FRA also decided to evaluate another alternative in Bakersfield (Bakersfield Hybrid Alternative) in an effort to minimize impacts to residential and community facilities. The Authority and FRA determined that the introduction of these new alternatives and other refinements being considered for existing Fresno to Bakersfield route alternatives required preparation of a Supplemental Draft EIS under NEPA and a Revised Draft EIS under CEQA.
Consistent with the provisions of NEPA Section 102(2)(c) (42 U.S.C. 4321
Copies of the Supplemental Draft EIS are available online at FRA's Web site:
• Fresno County Public Library, Central Branch, Central Reference Department, 2420 Mariposa Street, Fresno, CA;
• Fresno County Public Library, Clovis Regional Library, 1155 Fifth Street, Clovis, CA;
• Fresno County Public Library, Laton Branch, 6313 DeWoody Street, Laton, CA;
• Kern County Library, Beale Memorial Library, 701 Truxtun Avenue, Bakersfield, CA;
• Kern County Library, Corcoran Branch, 1001 Chittenden Avenue, Corcoran, CA;
• Kern County Library, Delano Branch, 925 10th Avenue, Delano, CA;
• Kern County Library, Shafter Branch, 236 James Street, Shafter, CA;
• Kern County Library, Wasco Branch, 1102 7th Street, Wasco, CA;
• Kings County Library, Hanford Branch (Main Library), 401 N. Douty Street, Hanford, CA;
• Kings County Library, Lemoore Branch, 457 C Street, Lemoore, CA;
• Tulare County Library, Visalia Branch (Main Library), 200 West Oak Avenue, Visalia, CA; and
• Tulare Public Library, 475 North M Street, Tulare, CA.
Federal Transit Administration, U.S. Department of Transportation.
Supplemental Notice of Intent to Prepare an Environmental Impact Statement.
On January 3, 2011, the Federal Transit Administration (FTA), as the lead federal agency, and the Chicago Transit Authority (CTA) published a Notice of Intent (NOI) to prepare an Environmental Impact Statement (EIS) for the North Red and Purple Line Modernization (RPM) Project in Cook County, Illinois. The purpose of this supplemental NOI is to inform interested parties that the EIS will no longer be a Tier 1 EIS as originally proposed. The methodology and format will now be a standard project-level EIS. All other aspects (Location, Purpose and Need, Alternatives, Scoping, and Possible Effects) of the original NOI remain unchanged. Activities conducted to date pursuant to the original NOI will not be impacted or reexamined. The proposed project, described more completely in the January 3, 2011 NOI, would bring the North Red and Purple lines up to a state of good repair from the track structure immediately north of Belmont Station in Chicago to the Linden terminal in Wilmette, Illinois. Materials describing the project purpose and need and the alternatives proposed for analysis are available on the CTA Web site
Questions regarding this updated notice or the project may be sent to Mr. Steve Hands, Strategic Planning and Policy, Chicago Transit Authority, 567 W Lake Street, Chicago, IL 60661, or via email at
Mr. Reginald Arkell, Community Planner, Federal Transit Administration, Region V, 200 West Adams Street, Suite 320, Chicago, IL 60606, phone 312-886-3704, email
Office of Foreign Assets Control, Treasury.
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). Currently, the Office of Foreign Assets Control (“OFAC”) within the Department of the Treasury is soliciting comments concerning OFAC's information collection requirements contained within OFAC's Reporting, Procedures and Penalties Regulations set forth at 31 CFR part 501.
Written comments must be submitted on or before September 24, 2012 to be assured of consideration.
You may submit comments by any of the following methods:
Follow the instructions on the Web site for submitting comments.
Assistant Director for Sanctions Compliance & Evaluation, tel.: 202/622-2490, Assistant Director for Licensing, tel.: 202/622-2480, Assistant Director for Policy, tel.: 202/622-4855, Office of Foreign Assets Control, or Chief Counsel (Foreign Assets Control), tel.: 202/622-2410, Office of the General Counsel, Department of the Treasury (not toll free numbers).
The likely respondents and record-keepers affected by the information collections contained in part 501 are financial institutions, business organizations, individuals, and legal representatives. The estimated total annual reporting and/or recordkeeping burden is approximately 47,780 hours. The estimated annual burden per respondent/record-keeper varies from 30 minutes to 10 hours, depending on individual circumstances, with an estimated average of 1.25 hours. The estimated number of respondents and/or record-keepers is 38,224. The estimated annual frequency of responses: 1-12.
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 Office of Management and Budget (“OMB”) control number.
Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval. All comments will become a matter of public record. Comments are invited on: (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information has practical utility; (b) the accuracy of the agency's estimate of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology; and (e) estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.
Fish and Wildlife Service, Interior.
Proposed rule.
We, the U.S. Fish and Wildlife Service, propose to list the diamond darter (
We will consider comments received or postmarked on or before September 24, 2012. Comments submitted electronically using the Federal eRulemaking Portal (see
You may submit comments by one of the following methods:
(1)
(2)
We request that you send comments only by the methods described above. We will post all comments on
The coordinates or plot points or both from which the maps are generated are included in the administrative record for this critical habitat designation and are available at (
Deborah Carter, Field Supervisor, U.S. Fish and Wildlife Service, West Virginia Field Office, 694 Beverly Pike, Elkins, WV 26241, by telephone (304) 636-6586 or by facsimile (304) 636-7824. Persons who use a telecommunications device for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 800-877-8339.
We have made the following finding related to these criteria:
• Diamond darter is endangered by water quality degradation; habitat loss; inadequate existing regulatory mechanisms; a small population size that makes the species vulnerable to the effects of the spread of an invasive alga (
• Critical habitat designation would not be expected to increase threats to the species, and we have sufficient scientific information on the diamond darter to determine the areas essential to, and essential for, its conservation. Accordingly, we have determined the designation of critical habitat is both prudent and determinable.
• In total, we propose to designate approximately 197.1 river kilometers (122.5 miles) as critical habitat. The proposed critical habitat is located in Kanawha and Clay Counties, West Virginia, and Edmonson, Hart, and Green Counties, Kentucky.
• Based on our interpretation of directly regulated entities under the Regulatory Flexibility Act and relevant case law, this designation of critical habitat will only directly regulate Federal agencies, which are not by definition small business entities. However, though not necessarily required by the Regulatory Flexibility Act, in our draft economic analysis for this proposal, we will consider and evaluate the potential effects to third parties that may be involved with consultations with Federal action agencies related to this action.
We intend that any final action resulting from this proposed rule will be based on the best scientific and commercial data available and be as accurate and as effective as possible. Therefore, we request comments or information from the public, other concerned governmental agencies, Native American tribes, the scientific community, industry, or any other interested parties concerning this
(1) Biological, commercial trade, or other relevant data concerning any threats (or lack thereof) to this species and regulations that may be addressing those threats.
(2) Additional information concerning the historical and current status, range, distribution, and population size of this species, including the locations of any additional populations of this species.
(3) The factors that are the basis for making a listing determination for a species under section 4(a) of the Act, which are:
(a) The present or threatened destruction, modification, or curtailment of its habitat or range;
(b) Overutilization for commercial, recreational, scientific, or educational purposes;
(c) Disease or predation;
(d) The inadequacy of existing regulatory mechanisms; or
(e) Other natural or manmade factors affecting its continued existence.
(4) Any information on the biological or ecological requirements of the species and ongoing conservation measures for the species and its habitat.
(5) Current or planned activities in the areas occupied by the species and possible impacts of these activities on this species.
(6) The reasons why we should or should not designate habitat as “critical habitat” under section 4 of the Act (16 U.S.C. 1531
(7) Specific information on:
(a) The amount and distribution of diamond darter habitat;
(b) What areas, that were occupied at the time of listing (or are currently occupied) and that contain features essential to the conservation of the species, should be included in the designation and why;
(c) Special management considerations or protection that may be needed in critical habitat areas we are proposing, including managing for the potential effects of climate change; and
(d) What areas not occupied at the time of listing are essential for the conservation of the species and why.
(8) Land use designations and current or planned activities in the subject areas and their possible impacts on proposed critical habitat.
(9) Information on the projected and reasonably likely impacts of climate change on the diamond darter and proposed critical habitat.
(10) Any probable economic, national security, or other relevant impacts of designating any area that may be included in the final designation; in particular, any impacts on small entities or families, and the benefits of including or excluding areas that exhibit these impacts.
(11) Whether any specific areas we are proposing for critical habitat designation should be considered for exclusion under section 4(b)(2) of the Act, and whether the benefits of potentially excluding any specific area outweigh the benefits of including that area under section 4(b)(2) of the Act.
(12) Whether we could improve or modify our approach to designating critical habitat in any way to provide for greater public participation and understanding, or to better accommodate public concerns and comments.
Please note that submissions merely stating support for or opposition to the action under consideration without providing supporting information, although noted, will not be considered in making a determination, as section 4(b)(1)(A) of the Act directs that determinations as to whether any species is a threatened or endangered species must be made solely on the basis of the best scientific and commercial data available, and section 4(b)(2) directs that critical habitat designations be made based on the best scientific data available and after consideration of economic, national security, and other relevant impacts.
You may submit your comments and materials concerning this proposed rule by one of the methods listed in the
If you submit information via
Comments and materials we receive, as well as supporting documentation we used in preparing this proposed rule, will be available for public inspection on
The diamond darter was first identified as a candidate for protection under the Act in the November 9, 2009,
It is our intent to discuss below only those topics directly relevant to the proposed listing of the diamond darter as endangered in this section of the proposed rule. A summary of topics relevant to this proposed rule is provided below. Additional information on this species may be found in the Candidate Notice of Review, which was published October 26, 2011 (76 FR 66370).
The diamond darter (
The diamond darter is overall translucent and is a silvery white on the under side of the body and head and has four wide, olive-brown saddles on the back and upper side (Welsh
Documented standard lengths measured from the tip of the snout to the beginning of the tail fin range from 73 to 77.3 millimeters (mm) (2.9 to 3.0 inches [in]) (Welsh and Wood 2008, pp. 64-66).
Characteristics that distinguish the diamond darter from the related crystal darter (
Previously,
When the diamond darter was first collected from the Elk River, West Virginia, in 1980, the specimen was identified and reported as the crystal darter (
In order to explore this possibility, Wood and Raley (2000) evaluated the genetic variation of five crystal darter populations by sequencing a specific gene referred to as the cytochrome b gene. Individuals were evaluated from populations in the Pearl River in Louisiana, the Cahaba River in Alabama, the Saline River in Arkansas, the Zumbro River in Minnesota, and the Elk River in West Virginia. This analysis was conducted on these crystal darter specimens, as well as individuals from eight other darter species (Wood and Raley 2000, p. 20). This study found that there was an 11.2 to 11.8 percent difference between the cytochrome b sequence of the Elk River crystal darter population and all other crystal darter populations evaluated (Wood and Raley 2000, p. 24). This was one of the highest differences in cytochrome b ever reported for a fish species (Wood and Raley 2000, p. 24), and was more typical of differences between species or genera rather than subspecies (Wood and Raley 2000, p. 24).
Because differentiation observed at a single gene region is generally not considered sufficient evidence to establish taxonomic status, additional genetic and physical analyses were initiated by Morrison
Welsh and Wood (2008) conducted additional morphological comparisons between
We carefully reviewed the available taxonomic information summarized above and conclude that the species is a valid taxon based upon considerations of genetic and morphological characteristics.
Due to its rarity, little research exists on the natural history of this species (Osier 2005, p. 10). However, in some cases, potential characteristics can be inferred from the information available on the closely related crystal darter, as noted below.
The diamond darter is a species that inhabits medium to large, warmwater streams with moderate current and clean sand and gravel substrates (Simon and Wallus 2006, p. 52). In the Elk River, the diamond darter has been collected from riffles and pools where swift currents result in clean swept, predominately sand and gravel substrates that lack silty depositions (Osier 2005, p. 11).
Diamond darters are more often collected at dusk or during the night and are likely crepuscular (more active at dusk and dawn) (Welsh 2008, p. 10). They may stay partially buried in the sand during the day and then come out to feed during the night (Welsh 2009c, p. 1). Adult diamond darters are benthic invertivores, feeding primarily on stream bottom-dwelling invertebrates (NatureServe 2008, p. 8). They may use an ambush foraging tactic by burying in the sand and darting out at prey (Robinson 1992 and Hatch 1997 in Osier 2005, pp. 12-13; NatureServe 2008, p. 1). The large teeth seen in juvenile diamond darters hatched in captivity suggest that young diamond darters may feed on other smaller fish larvae (Ruble
Very little information is available on the reproductive biology and early life history of the diamond darter (Welsh
If the diamond darter's reproductive behavior is similar to crystal darters in the wild, then females may be capable of multiple spawning events and producing multiple clutches of eggs in one season (George
Life expectancy of diamond darters is unknown in the wild. Diamond darters have been maintained in captivity for 2 years. During that time, it is suspected that one adult female died due to senescence (old age). Because she was brought into captivity as an adult (approximately 2 years old) it is suspected that she was 4 years or older at death (Ruble 2011b, p. 1). Life expectancy for the crystal darter has been reported to range from 2 to 4 years (Osier 2005, pp. 10-11), although some authors have suggested the potential to live up to 7 years (Simon and Wallus 2006, p. 52). In Arkansas, sexual maturity for the crystal darter may occur during the first year, with the first spawning event occurring the season after hatching. However, in the Ohio River Basin this may not occur until age 3 (George
As shown in Table 1 below, historical records of the species indicate that the diamond darter was distributed throughout the Ohio River Basin and that the range included the Muskingum River in Ohio; the Ohio River in Ohio, Kentucky and Indiana; the Green River in Kentucky; and the Cumberland River Drainage in Kentucky and Tennessee. There is some difference of opinion as to how common the species was during the early portions of the 1900s. Trautman (1981, p. 645) suggests that it is quite probable that before 1900 the species was well distributed in the lower reaches of the southern Ohio tributaries and the Ohio River. However in 1892, Woolman (in Cicerello 2003, p. 6) noted that the species was likely neither widely distributed, nor common anywhere in Kentucky.
The species is currently known to exist only within the lower Elk River in Kanawha and Clay Counties, West Virginia, and is considered extirpated from the remainder of the Ohio River Basin (Cicerello 2003, p. 3; Welsh and Wood 2008, pp. 62, 68). The species was first collected from the Elk River in November 1980, when one individual was collected during boat electroshocking surveys conducted near Mink Shoals in Kanawha County (Cincotta and Hoeft 1987, p. 133). This collection marked the rediscovery of the species in the Ohio River Basin, where it formerly had been considered extirpated from all states in which it had previously been recorded (Cincotta and Hoeft 1987, pp. 133-134). The species has not been collected since 1899 in Ohio, 1929 in Kentucky, and 1939 in Tennessee (Grandmaison
Trautman (1981, p. 645) suggests that increased silt load and subsequent smothering of suitable habitats likely caused the extirpation of the species from the State of Ohio by 1925 and that “the habitat of few other Ohio fishes seemed so vulnerable to annihilation” (Trautman 1981, p. 646). In addition, researchers at the Ohio State University have conducted extensive sampling in the Ohio River and its tributaries, starting with Ed Wickliff in the 1920s and continuing through the present (Kibbey 2008, p. 1; Ohio State University 2008, p. 1). Despite semiannual survey efforts in likely diamond darter habitats, such as the riffles below Devola Dam on the Muskingum River, no additional diamond darters have been located
The species is also considered extirpated from Kentucky (Burr and Warren 1986, p. 285; Evans 2008b, p. 1). Kentucky has been fairly well surveyed by numerous researchers without resulting in any recent collections of the species (Evans 2008, p. 1). All historical Green River sites have been repeatedly but unsuccessfully sampled for the diamond darter (Cicerello 2003, p. 6). Both the Kentucky State Nature Preserves Commission (KSNPC) and Southern Illinois University have conducted surveys targeting the species throughout the upper portion of the Green River Basin (Cicerello 2003, p. 6). Most recently in 2007, the Kentucky Department of Fish and Wildlife Resources, the Missouri Department of Conservation, and KSNPC sampled below Lock and Dam 5 and 6 on the Green River, as well as in river reaches downstream of the dams using a Hertzog trawl (Evans 2008a, p. 1). The Kentucky Department of Fish and Wildlife Resources has also done some site monitoring in the Green River at three sites below Green River dam and has not collected the species.
The diamond darter has not been documented to occur in Tennessee since 1939, and all previous records of the species within the State were from the Cumberland River Drainage (Etnier and Starnes 1993, p. 443). Starting in the 1950s, dams were installed on the mainstem Cumberland River that impounded much of its entire length from Barkley Dam in Kentucky to Cumberland Falls near the headwaters (Tennessee Wildlife Resources Agency (TWRA) 2005, p. 14). This dramatically altered most of the riverine habitat qualities that made the river suitable for the diamond darter and likely resulted in the extirpation of the species (Etnier and Starnes, 1993, p. 443; TWRA 2005, p. 14; Saylor, 2009, p. 1). Cold water discharges from many of these dams have changed the natural temperature regimes so that the river no longer functions as a warmwater fishery (TWRA 2005, p. 14; Fiss 2009, p. 1).
In addition, when the Cumberland River impoundments were being constructed, a fish barrier was installed near the mouth of the Roaring River in order to keep species that might frequent the impoundments, such as carp, from moving into the Roaring River, thus impeding any connectivity between the two systems (Fiss 2009, p. 1). Surveys in the Roaring River between 1972 and 1986 noted a loss of silt-intolerant fish species and increased disturbance from activities such as gravel dredging, highway construction, and poor agricultural practices that were degrading habitat quality in the stream. Although these surveys included the reach of river where
Surveys conducted in 1939 in the Big South Fork Cumberland River near where
Currently, the Cumberland River watershed is subject to threats to water quality from inadequate pasture and grazing management practices, forest clearing, heavy navigation and recreational use, active mining, historical mining and acid mine drainage issues, oil and gas drilling, lack of riparian buffers, and poor stormwater and wastewater management (TWRA 2005, pp. 135-136). Despite these threats, the Cumberland aquatic region still contains some of the most diverse populations of fish, mussel, and crayfish species in North America (TWRA 2005, p. 14), and some ichthyologists have suggested that there is a “remote possibility” that the diamond darter may still exist in the cleaner large tributaries of the Cumberland or the lower Tennessee rivers (Etnier and Starnes 1993, p. 444). Therefore, some targeted sampling may be warranted (Fiss 2009, p. 1). The TWRA has conducted 111 fish survey samples from 1996 to 2007 throughout the Cumberland River system, although the gear used during some of these surveys was not targeted towards capturing the diamond darter (Fiss 2009, p. 1),, and has no recent records of recent diamond darter captures (Kirk 2009, p. 1). Despite extensive sampling in the Duck River, as well as the Blood and Big Sandy Rivers, there are no current or historical records of the diamond darter in those rivers either (Saylor 2009, p. 1).
Although there is currently not sufficient information available to develop an overall population estimate for the species, the results of numerous survey efforts confirm that the species is extremely rare. Fish surveys have been conducted in the Elk River in 1936, 1971, 1973, 1978 to 1983, 1986, 1991, 1993, 1995, 1996, and every year since 1999 (Welsh
Welsh
Section 4 of the Act (16 U.S.C. 1533), and its implementing regulations at 50 CFR part 424, set forth the procedures for adding species to the Federal Lists of Endangered and Threatened Wildlife and Plants. Under section 4(a)(1) of the Act, we may list a species based on any of the following five factors: (A) The present or threatened destruction, modification, or curtailment of its habitat or range; (B) overutilization for commercial, recreational, scientific, or educational purposes; (C) disease or predation; (D) the inadequacy of existing regulatory mechanisms; and (E) other natural or manmade factors affecting its continued existence. Listing actions may be warranted based on any of the above threat factors, singly or in combination. Each of these factors is discussed below.
As indicated by the continued persistence of the diamond darter, the Elk River in West Virginia currently provides overall high-quality aquatic habitat. The Elk River is one of the most ecologically diverse rivers in the State (Green 1999, p. 2) supporting over 100 species of fish and 30 species of mussels, including 5 federally listed mussel species (Welsh 2009a, p. 1). The river, including those portions that are within the range of the diamond darter, is listed as a “high quality stream” by the West Virginia Division of Natural Resources (WVDNR 2001, pp. 1, 2, 5). Streams in this category are defined as having “significant or irreplaceable fish, wildlife, and recreational resources” (WVDNR 2001, p. iii). In an evaluation of the watershed, the West Virginia Department of Environmental Protection (WVDEP) noted that all four sampling sites within the mainstem of the Elk River scored well for benthic macroinvertebrates on the West Virginia Stream Condition Index, with results of 77 or higher out of a potential 100 points (WVDEP 1997, p. 41).
Criteria for placement on the high-quality streams list are based solely on the quality of fisheries populations and the utilization of those populations by the public and do not include water quality or threats to the watershed (WVDNR 2001, p. 36; Brown 2009, p. 1). Despite the high quality of the fishery populations, there are continuing and pervasive threats within the watershed. In fact, the WVDEP evaluation also noted that because larger rivers offer a wider variety of microhabitats, the high benthic macroinvertebrate scores may mask some degradation in water quality (WVDEP 1997, p. 41). Noted threats to the watershed include coal mining, oil and gas development, sedimentation and erosion, timber harvesting, water quality degradation, and poor wastewater treatment (WVDEP 1997, p. 15; Strager 2008, pp. 1-39; WVDEP 2008b, pp. 1-2).
Many sources have recognized that
Coal mining occurs throughout the entire Elk River watershed. Most of the active mining occurs in the half of the watershed south of the Elk River (see Unit 1 Map below), which flows east to west (Strager 2008, p. 17). The most recent summarized data, as of January 2008, indicates more than 5,260 hectares (ha) (13,000 acres [ac]) of actively mined areas including 91 surface mine permits, 79 underground mine permits, 1,351 ha (3,339 ac) of valley fills, 582 km (362 mi) of haul roads, 385 km (239 mi) of mine drainage structures, 473 National Pollutant Discharge Elimination System (NPDES) discharge points associated with mines, and 3 mining related dams (Strager 2008, pp. 19-21). There are also 615 ha (1,519 ac) of abandoned mine lands and 155 mine permit sites that have forfeited their bonds and have not adequately remediated the sites (Strager 2008, p. 18). Approximately 47 percent of the entire Elk River watershed is within the area that the U.S. Environmental Protection Agency has identified as potentially being subject to mountain top removal mining activities (Strager 2008, p. 17).
Coal mining can contribute significant amounts of sediment to streams and degrade their water quality. Impacts to instream water quality (chemistry) occur through inputs of dissolved metals and other solids that elevate stream conductivity, increase sulfate levels, alter stream pH, or a combination of these (Curtis 1973, pp. 153-155; Pond 2004, pp. 6-7, 38-41; Hartman
Mining-associated water quality impacts have been noted in the Elk River. For example, in the Jacks Run watershed, a tributary to the Elk River, one third of the entire watershed had been subject to mining-related land use changes that cleared previously existing vegetation. In a sampling site downstream of mining, the WVDEP documented embedded substrates with dark silt, most likely from manganese precipitate or coal fines, and benthic scores that indicated severe impairment (WVDEP 1997, p. 60). Another Elk River tributary, Blue Creek, had low pH levels associated with contour mining and acid drainage and three sample sites had pH values of 4.2 or less (WVDEP 1997, p. 47; WVDEP 2008b, p. 6). At pH levels of 5.0 or less, most fish eggs cannot hatch (USEPA 2009, p. 2).
Sampling sites below a large mining reclamation site in the Buffalo Creek
A U.S. Geological Survey (USGS) study of the Kanawha River Basin, which includes the Elk River, found that streams draining basins that have been mined since 1980 showed increased dissolved sulfate, decreased median bed-sediment particle size, and impaired benthic invertebrate communities when compared to streams not mined since 1980. Stream-bottom sedimentation in mined basins was also greater than in undisturbed basins (USGS 2000, p. 1). In streams that drained areas where large quantities of coal had been mined, the benthic invertebrate community was impaired in comparison to rural parts of the study area where little or no coal had been mined since 1980 (USGS 2000, p. 7). That report notes that benthic invertebrates are good indicators of overall stream water quality and that an impaired invertebrate community indicates that stream chemistry or physical habitat, or both, are impaired, causing a disruption in the aquatic food web (USGS 2000, p. 8).
In another study that specifically evaluated fish data, the Index of Biotic Integrity (IBI) scores at sites downstream of valley fills were significantly reduced by an average of 10 points when compared to unmined sites, indicating that fish communities were degraded below mined areas (Fulk
In addition to chronic sediment releases and water quality effects from coal mine areas, the potential exists for failure of large-scale mine waste (coal slurry) impoundment structures contained by dams constructed of earth, mining refuse, and various other materials, which could release massive quantities of mine wastes that could cover the stream bottoms. There are currently two coal slurry impoundments within the Elk River watershed. These impoundments have a capacity of 6,258,023 and 1,415,842 cubic meters (m
There is also a potential for abandoned underground mines to fill with water and “blow out” causing large discharges of sediment and contaminated water. Similar events have happened in nearby areas, including one in Kanawha County, West Virginia, in April 2009 that discharged “hundreds of thousands of gallons of water” onto a nearby highway, and caused a “massive earth and rock slide” (Marks 2009, p. 1). A second situation occurred in March 2009 in Kentucky where water from the mine portal was discharged into a nearby creek at an estimated rate of 37,854 liters (l) (10,000 gallons [ga]) a minute (Associated Press 2009, p. 1). In addition to the increased levels of sediment and potential smothering of stream habitats, discharges from abandoned mine sites often have elevated levels of metals and low pH (Stoertz
The Elk River watershed is also one of the more densely drilled areas of the State, with over 5,800 oil or gas wells in the watershed as of the most recent data in January 2011 (WVDEP 2011a, p. 1). The lower section of the Elk River, which currently contains the diamond darter, has the highest concentration of both active and total wells in the watershed, with over 2,320 active wells and 285 abandoned wells (WVDEP 2011a, p. 1).
Although limited data are available to quantify potential impacts, development of oil and gas resources can increase sedimentation rates in the stream and degrade habitat and water quality in a manner similar to that described for coal mining. Oil and gas wells can specifically cause elevated chloride levels through discharge of brine and runoff from materials used at the site, and the erosion of roads associated with these wells can contribute large amounts of sediment to the streams (WVDEP 1997, p. 54). For example, WVDEP sampling sites within Summers Fork, a tributary to the Elk River with a “high density of oil and gas wells,” had elevated chloride and conductivity levels as well as impaired benthic invertebrate scores despite “good benthic substrate” (WVDEP 1997, p. 52). Within the Buffalo Creek watershed, another Elk River tributary, the impaired benthic invertebrate scores at sample sites were attributed to oil compressor stations next to the creek, pipes running along the bank parallel to the stream, and associated evidence of past stream channelization (WVDEP 1997, p. 55).
High levels of siltation have been noted in the impaired sections of the Elk River (USEPA 2001b, pp. 3-6). Oil and gas access roads have been identified as a source that contributes “high” levels of sediment to the Elk River (USEPA
Shale gas development is an emerging issue in the area. Although this is currently not the most productive area of the State, the entire current range of the diamond darter is underlain by the Marcellus and Utica Shale formation and potentially could be affected by well drilling and development (National Energy Technology Laboratory (NETL) 2010 pp. 6-10). The pace of drilling for Marcellus Shale gas wells is expected to increase substantially in the future, growing to about 700 additional wells per year in West Virginia starting in 2012 (NETL 2010, p. 27). This is consistent with what has been reported in the area around the Elk River. In March 2011, there were 15 Marcellus Shale gas wells reported within Kanawha County (West Virginia Geological and Economic Survey (WVGES) 2011, p. 1). As of January 2012, there were 188 completed Marcellus Shale gas wells within Kanawha County and an additional 27 wells that had been permitted (WVGES 2012, p. 1). Data specific to the Elk River watershed are not available for previous years, but there are currently at least 100 completed and 21 additional permitted Marcellus Shale gas wells within the watershed (WVGES 2012, p 1).
Marcellus Shale gas wells require the use of different techniques than previously used for most gas well development in the area. When compared to more traditional methods, Marcellus Shale wells usually require more land disturbance, and more water and chemicals for operations. In addition to the size and length of any required access roads, between 0.8 and 2.0 ha (2 and 5 ac) are generally disturbed per well (Hazen and Sawyer 2009, p. 7). Each well also requires about 500 to 800 truck trips to the site (Hazen and Sawyer 2009, p. 7). Construction of these wells in close proximity to the Elk River and its tributaries could increase the amount of siltation in the area due to erosion from the disturbed area, road usage, and construction.
Shale gas wells typically employ a technique called hydrofracking which involves pumping a specially blended liquid mix of water and chemicals down a well, into a geologic formation. The pumping occurs under high pressure, causing the formation to crack open and form passages through which gas can flow into the well. During the drilling process, each well may utilize between 7 and 15 million liters (2 and 4 million ga) of water (Higginbotham
In addition to water withdrawals, there is a potential for spills and discharges from oil and gas wells, particularly Marcellus Shale drilling operations. Pipelines and ponds being used to handle brine and wastewaters from fracking operations can rupture, fail, or overflow and discharge into nearby streams and waterways. In Pennsylvania, accidental discharges of brine water from a well site have killed fish, invertebrates, and amphibians up to 0.4 mi (0.64 km) downstream of the discharge, even though the company immediately took measures to control and respond to the spill (PADEP 2009, pp. 4-22). In 2011, the WVDEP cited a company for a spill at a well site in Elkview, West Virginia. Up to 50 barrels of oil leaked from a faulty line on the oil well site. The spill entered a tributary of Indian Creek, traveled into Indian Creek and then flowed into the Elk River (Charleston Gazette 2011, p. 1). This spill occurred within the reach of the Elk River known to be occupied by the diamond darter, and therefore could have affected the species and its habitat.
Excess siltation has been specifically noted as a threat to the Elk River system. Portions of the lower Elk River were previously listed as impaired due to elevated levels of iron and aluminum (USEPA 2001b, p. 1-1; Strager 2008, p. 36; WVDEP 2008a, p. 18; WVDEP 2008b, p. 1). The WVDEP has since revised those water quality criteria in order to address bioavailability of those metals, and established maximum amounts of these pollutants allowed to enter the waterbody (known as Total Maximum Daily Loads [TMDL]) (WVDEP 2010, p. 26; WVDEP 2008a, p. A-2). The WVDEP identified that impairment due to metals usually indicates excess sediment conditions (WVDEP 2008b, p. 5), and identified coal mining, oil and gas development, timber harvesting, all-terrain vehicle usage, and stream bank erosion as sources of increased sedimentation within the Elk River watershed (USEPA 2001b, pp. 1-1, 3-4 and 6; WVDEP 2008b, p. 1). Within two subwatersheds that make up approximately 11 percent of the total Elk River watershed area, the WVDEP identified 433 km (269 miles) of unimproved dirt roads and 76 km (47 mi) of severely eroding stream banks (WVDEP 2008b, p. 5). There was also an estimated 1,328 ha (3,283 ac) of lands being actively timbered in those two watersheds in 2004 (WVDEP 2008b, p. 6). Although data on timber harvesting for the entire Elk River watershed are not available, it is likely that these types of activities are common because there are 11 known sawmills within the watershed, and forested land is the predominant land-use category in the area (Strager 2008, pp. 13, 29).
Siltation has long been recognized as a pollutant that alters aquatic habitats by reducing light penetration, changing heat radiation, increasing turbidity, and covering the stream bottom (Ellis 1936 in Grandmaison
Many researchers have noted that
One common source of chemical water quality impairments is untreated or poorly treated wastewater (sewage). Municipal wastewater treatment has improved dramatically since passage of the 1972 amendments to the Federal Water Pollution Control Act (which was amended to become the Clean Water Act in 1977), but some wastewater treatment plants, especially smaller plants, continue to experience maintenance and operation problems that lead to discharge of poorly treated sewage into streams and rivers (OEPA 2004 in Service 2008, p. 23). According to the data available in 2008, there were a total of 30 sewage treatment plants within the Elk River watershed (Strager 2008, p. 30).
Untreated domestic sewage (straight piping) and poorly operating septic systems are still problems within the Elk River watershed (WVDEP 1997, p. 54; WVDEP 2008b, p. 3). Untreated or poorly treated sewage contributes a variety of chemical contaminants to a stream including ammonia, pathogenic bacteria, nutrients (e.g., phosphorous and nitrogen), and organic matter that can increase biochemical oxygen demand (BOD) (Chu-Fa Tsai 1973, pp. 282-292; Cooper 1993, p. 405). The BOD is a measure of the oxygen consumed through aerobic respiration of micro-organisms that break down organic matter in the sewage waste. Excessive BOD and nutrients in streams can lead to low dissolved oxygen (DO) levels in interstitial areas of the substrate where a high level of decomposition and, consequently, oxygen depletion takes place (Whitman and Clark 1982, p. 653). Low interstitial DO has the potential to be particularly detrimental to fish such as the diamond darter which live on and under the bottom substrates of streams and lay eggs in interstitial areas (Whitman and Clark 1982, p. 653). Adequate oxygen is an important aspect of egg development, and reduced oxygen levels can lead to increased egg mortality, reduced hatching success, and delayed hatching (Keckeis
Elevated nutrients in substrates can also make these habitats unsuitable for fish spawning, breeding, or foraging and reduce aquatic insect diversity which may impact availability of prey and ultimately fish growth (Chu-Fa Tsai 1973, pp. 282-292; Wynes and Wissing 1981, pp. 259-267). Darters are noted to be “highly sensitive” to nutrient increases associated with sewage discharges, and studies have demonstrated that the abundance and distribution of darter species decreases downstream of these effluents (Katz and Gaufin 1953, p. 156; Wynes and Wissing 1981, p. 259). Elevated levels of fecal coliform signal the presence of improperly treated wastes (WVDEP 2008a, p. 7) that can cause the types of spawning, breeding, and foraging problems discussed above.
The reach of the Elk River from the mouth to River Mile 102.5, which includes the area supporting the diamond darter, is currently on the State's CWA section 303(d) list of impaired waters due to violations of fecal coliform levels (WVDEP 2008a, p. 18; WVDEP 2010, p. 26). There have been noticeable increases in fecal coliform near population centers adjacent to the Elk River, including the cities of Charleston, Elkview, Frametown, Gassaway, Sutton, and Clay (WVDEP 2008b, p. 8). Elk River tributaries near Clendenin also show evidence of organic enrichment and elevated levels of fecal coliform (WVDEP 1997, p. 48). The WVDEP notes that failing or nonexistent septic systems are prevalent throughout the lower Elk River watershed (WVDEP 2008b, p. 1). In order to address water quality problems, the WVDEP conducted a more detailed analysis of two major tributary watersheds to the lower Elk River. They found that all residences in these watersheds were “unsewered” (WVDEP 2008b, p. 7). The Kanawha County Health Department Sanitarians estimate that the probable failure rate for these types of systems is between 25 and 30 percent, and monitoring suggests it may be as high as 70 percent (WVDEP 2008b, p. 7).
In another study, it was noted that straight pipe and grey water discharges are often found in residences within the Elk River watershed because the extra grey water would overburden septic systems. These untreated wastes are discharged directly into streams. This grey water can contain many household cleaning and disinfectant products that can harm stream biota (WVDEP 1997, p. 54). Finally, there is the potential for inadvertent spills and discharges of sewage waste. In 2010, a section of stream bank along the Elk River near Clendenin failed and fell into the river, damaging a sewerline when it fell. The line then discharged raw sewage into the river (Marks 2010, p. 1). The diamond darter is known to occur in the Elk River near Clendenin; therefore, this discharge could have likely affected the species.
One of the reasons the diamond darter may have been able to persist in the Elk River is because the river remains largely unimpounded. Although there is one dam on the Elk River near Sutton, approximately 161 km (100 mi) of the river downstream of the dam retains natural, free-flowing riffle and pool characteristics, including the portion that supports the diamond darter (Strager 2008, p. 5; Service 2008). All the other rivers with documented historical diamond darter occurrences are now either partially or completely impounded. There are 4 dams on the Green River, 8 dams on the Cumberland River, and 11 locks and dams on the
These impoundments have permanently altered habitat suitability in the affected reaches and fragmented stream habitats, blocking fish immigration and emigration between the river systems, and preventing recolonization (Grandmaison
There is the potential for direct disturbance, alteration, and fill of diamond darter habitat in the Elk River. Since 2009, there have been at least three proposed projects that had the potential to directly disturb habitat in the Elk River in reaches that are known to support the species. Plans for these projects have not yet been finalized. Project types have included bridges and waterline crossings. Direct disturbances to the habitat containing the diamond darter could kill or injure adult individuals, young, or eggs. Waterline construction that involves direct trenching through the diamond darter's habitat could destabilize the substrates, leading to increased sedimentation or erosion. Placement of fill in the river could result in the overall reduction of habitat that could support the species, and could alter flows and substrate conditions, making the area less suitable for the species (Welsh 2009d, p. 1).
In addition, the expansion of gas development in the basin will likely lead to additional requests for new or upgraded gas transmission lines across the river. Pipeline stream crossings can affect fish habitat; food availability; and fish behavior, health, reproduction, and survival. The most immediate effect of instream construction is the creation of short-term pulses of highly turbid water and total suspended solids (TSS) downstream of construction (Levesque and Dube 2007, pp. 399-400). Although these pulses are usually of relatively short duration and there is typically a rapid return to background conditions after activities cease, instream construction has been shown to have considerable effects on stream substrates and benthic invertebrate communities that persist after construction has been completed (Levesque and Dube 2007, p. 396-397). Commonly documented effects include substrate compaction, as well as silt deposition within the direct impact area and downstream that fills interstitial spaces and reduces water flow through the substrate, increasing substrate embeddedness and reducing habitat quality (Reid and Anderson 1999, p. 243; Levesque and Dube 2007, pp. 396-397; Penkal and Phillips 2011, pp. 6-7). Construction also directly alters stream channels, beds, and banks resulting in changes in cover, channel morphology, and sediment transport dynamics. Stream bank alterations can lead to increased water velocities, stream degradation, and stream channel migrations. Removal of vegetation from the banks can change temperature regimes, and increase sediment and nutrient loads (Penkal and Phillips 2011, pp. 6-7).
These instream changes not only directly affect the suitability of fish habitat, they also affect the availability and quality of fish forage by altering the composition and reducing the density of benthic invertebrate communities within and downstream of the construction area (Reid and Anderson 1999, pp. 235, 244; Levesque and Dube 2007, pp. 396-399; Penkal and Phillips 2011, pp. 6-7). Various studies have documented adverse effects to the benthic community that have been apparent for between 6 months and 4 years post-construction (Reid and Anderson 1999, pp. 235, 244; Levesque and Dube 2007, pp. 399-400). Stream crossings have also been shown to affect fish physiology, survival, growth, and reproductive success (Levesque and Dube 2007, p. 399). Studies have found decreased abundance of fish downstream of crossings, as well as signs of physiological stress such as increased oxygen consumption and loss of equilibrium in remaining fish downstream of crossings (Reid and Anderson 1999, pp. 244-245; Levesque and Dube 2007, pp. 399-401). Increased sediment deposition and substrate compaction from pipeline crossing construction can degrade spawning habitat, result in the production of fewer and smaller fish eggs, impair egg and larvae development, limit food availability for young-of-the-year fish, and increase stress and reduce disease resistance of fish (Reid and Anderson 1999, pp. 244-245; Levesque and Dube 2007, pp. 401-402).
The duration and severity of these effects depends on factors such as the duration of disturbance, the length of stream segment directly impacted by construction, and whether there are repeated disturbances (Yount and Niemi 1990, p. 557). Most studies documented recovery of the affected stream reach within 1 to 3 years after construction (Yount and Niemi 1990, pp. 557-558, 562; Reid and Anderson 1999, p. 247). However, caution should be used when interpreting results of short-term studies. Yount and Niemi (1990, p. 558) cite an example of one study that made a preliminary determination of stream recovery within 1 year, but when the site was reexamined 6 years later, fish biomass, fish populations, macroinvertebrate densities, and species composition were still changing. It was suspected that shifts in sediment and nutrient inputs to the site as a result of construction in and around the stream contributed to the long-term lack of recovery. In another study, alterations in channel morphology, such as increased channel width and reduced water depth, were evident 2 to 4 years post-construction at sites that lacked an intact forest canopy (Reid and Anderson 1999, p. 243).
There is also the potential for cumulative effects. While a single crossing may have only short-term or minor effects, multiple crossings or multiple sources of disturbance and sedimentation in a watershed can have cumulative effects on fish survival and reproduction that exceed the recovery capacity of the river, resulting in permanent detrimental effects (Levesque and Dube 2007, pp. 406-407). Whether or how quickly a stream population recovers depends on factors such as the life-history characteristics of the species, and the availability of
In summary, there are significant threats to the diamond darter from the present and threatened destruction, modification, or curtailment of its habitat. Threats include discharges from activities such as coal mining and oil and gas development, sedimentation from a variety of sources, pollutants originating from inadequate wastewater treatment, habitat changes caused by impoundments, and direct habitat disturbance. These threats are ongoing, severe, and occur throughout the species' entire range. We have no information indicating that these threats are likely to be appreciably reduced in the future, and in the case of gas development, we expect this threat to increase over the next several years as shale gas development continues to intensify.
Due to the small size and limited distribution of the only remaining population, the diamond darter is potentially vulnerable to overutilization. Particular care must be used to ensure that collection for scientific purposes does not become a long-term or substantial threat. It is possible that previous scientific studies may have impacted the population. Of the fewer than 50 individuals captured to date, 14 either died as a result of the capture or were sacrificed for use in scientific studies. Nineteen were removed from the system and were used for the establishment of a captive breeding program. Two have died in captivity. It should be noted that there were valid scientific purposes for most of these collections. In order to verify the identification and permanently document the first record of the species in West Virginia, the specimen captured in 1980 was preserved as a voucher specimen consistent with general scientific protocols of the time. Subsequent surveys in the 1990s were conducted for the specific purpose of collecting additional specimens to be used in the genetic and morphological analyses required to determine the taxonomic and conservation status of the species. The extent and scope of these studies were determined and reviewed by a variety of entities including the WVDNR, the Service, USGS, university scientists, and professional ichthyologists (Tolin 1995, p. 1; Wood and Raley 2000, pp. 20-26; Lemarie 2004, pp. 1-57; Welsh and Wood 2008, pp. 62-68).
In addition, when these collections were initiated, insufficient data were available to establish the overall imperiled and unique status of the species. Because these studies are now complete, there should be limited need to sacrifice additional individuals for scientific analysis. The captive breeding program was established after a review of the conservation status of the species identified that there were imminent threats to the last remaining population, and species experts identified the need to establish a captive “ark” population in order to avert extinction in the event of a spill or continued chronic threats to the species. The establishment of this program should contribute to the overall conservation of the species and may lead to the eventual augmentation of populations. However, caution must still be used to ensure that any additional collections do not affect the status of wild populations.
It is possible that future surveys conducted within the range of the species could inadvertently result in mortality of additional individuals. For example, during some types of inventory work, fish captured are preserved in the field and brought back to the lab for identification. Young-of-the-year diamond darters are not easily distinguished from other species, and their presence within these samples may not be realized until after the samples are processed. This was the case during studies recently conducted by a local university (Cincotta 2009a, p. 1). Future surveys should be designed with protocols in place to minimize the risk that diamond darters will be inadvertently taken during nontarget studies. The WVDNR currently issues collecting permits for all surveys and scientific collections conducted within the State and incorporates appropriate conditions into any permits issued for studies that will occur within the potential range of the species. This limits the overall potential for overutilization for scientific purposes.
Although the species has no present commercial value, it is possible that live specimens may be collected for the aquarium trade (Walsh
As a result, we find that overutilization for commercial, recreational, scientific, or educational purposes is not an imminent threat to the diamond darter at this time. For a species with a limited range and population size, there is the potential that overutilization for scientific purposes could have an effect on the viability of the species. However, there is limited need for additional research that would require the sacrifice of individuals. Based on our review of the best available scientific and commercial information, overutilization is not currently or likely to become a significant threat to the species in the future.
There is no specific information available to suggest that disease or predation present an unusual threat to diamond darters. Although some natural predation by fish and wildlife may occur, darters usually constitute only an almost incidental component in the diet of predators (Page 1983, p. 172). This incidental predation is not considered to currently pose a significant threat to the species.
Commonly reported parasites and diseases of darters, in general, include black-spot disease, flukes, nematodes, leeches, spiny-headed worms, and copepods (Page 1983, p. 173). None of the best available information regarding diamond darters captured to date, or reports on the related crystal darter, note any incidences of these types of issues. As a result, we find that disease or predation does not currently pose a threat to the species, and we found no available information that indicates disease or predation is currently or likely to become a threat to the diamond darter in the future.
There are few existing Federal or State regulatory mechanisms that specifically protect the diamond darter or its aquatic habitat where it currently occurs. The diamond darter and its habitats are afforded some protection from water quality and habitat degradation under the Clean Water Act of 1977 (33 U.S.C. 1251
Although water quality has generally improved since 1977 when the Clean Water Act (33 U.S.C. 1251
Nonpoint-source pollution, originating from many sources at different locations, is considered to be a continuing threat to diamond darter habitats. Current laws do not adequately protect diamond darter and its habitats from nonpoint-source pollution, because there is limited compliance with existing laws to prevent sediment entering waterways. For example, forestry operations do not have permitting requirements under the Clean Water Act because there is a silvicultural exemption as long as best management practices (BMPs) are used to help control nonpoint-source pollution (Ryder and Edwards 2006, p. 272). The West Virginia Logging Sediment Control Act was developed to protect aquatic resources, such as the diamond darter's habitat, in response to the requirements of the Clean Water Act and mandates the use of BMPS in order to reduce the amount of sediment from logging operations that enters nearby waterways (West Virginia Division of Forestry (WVDOF) undated, p. 1). Without properly installed BMPs, logging operations can increase sediment loading into streams (WVDEP 2011b, p. 35).
A survey of randomly selected logging operations throughout West Virginia estimated that overall compliance with these BMPs averaged 74 percent, and compliance with specific categories of BMPs varied from 81 percent compliance with BMPs related to construction of haul roads, to only 55 percent compliance with BMPs related to the establishment and protection of streamside management zones (Wang
West Virginia State laws regarding oil and gas drilling, including recently enacted changes to West Virginia State Code § 22-6A, are generally designed to protect fresh water resources like the diamond darter's habitat, but the laws do not contain specific provisions requiring an analysis of project impacts to fish and wildlife resources. They also do not contain or provide any formal mechanism requiring coordination with, or input from, the Service or the WVDNR regarding the presence of federally threatened, endangered, or candidate species, or other rare and sensitive species. Thus, although the State Code is designed to protect fresh water resources and the environment, compliance with this existing oil and gas development regulatory mechanism is insufficient to protect the diamond darter or its habitat.
West Virginia State Code § 20-2-50 prohibits taking fish species for scientific purposes without a permit. The WVDNR currently issues collecting permits for surveys conducted within the State and incorporates appropriate conditions into any permits issued for studies that will occur within the potential range of the species. While this should limit the number of individuals impacted by survey and research efforts, this requirement does not provide any protection to the species' habitat.
The diamond darter is indirectly provided some protection from Federal actions and activities through the Federal Endangered Species Act because the Elk River also supports five federally endangered mussel species. The reach of the Elk River currently known to support the diamond darter also supports the pink mucket (
In summary, degradation of habitat for the diamond darter is ongoing despite existing regulatory mechanisms. These regulatory measures have been insufficient to significantly reduce or remove the threats to the diamond darter.
The presence of
While didymo was previously thought to be restricted to cold water streams, it is now known to occur in a wider range of temperatures, and it has been documented in waters that were up as high as 27 °C (80 °F) (Spaulding and Elwell 2007, pp. 8, 10, 16). It can also occur in a wide range of hydraulic conditions including slow-moving, shallow areas, and areas with high depths and velocities (Spaulding and Elwell 2007, pp. 16-17). Didymo can be spread large distances either through the water column or when items such as fishing equipment, boots, neoprene waders, and boats are moved between affected and unaffected sites (Spaulding and Elwell 2007, pp. 19-20). For example, in New Zealand, didymo spread to two sites over 100 km (62.1 mi) and 450 km (279.6 mi) away from the location of the first documented bloom within 1 year (Kilroy and Unwin 2011, p. 254).
Although it has not been documented to occur in the lower Elk River where the diamond darter occurs, in 2008 the WVDNR documented the presence of didymo in the upper Elk River, above Sutton Dam near Webster Springs, which is over 120 km (74.5 mi) upstream from known diamond darter locations (WVDNR 2008, p. 1). Anglers have also reported seeing heavy algal mats, assumed to be didymo, in the upstream reach of the river (WVDNR 2008, p. 1). Therefore, there is potential that the species could spread downstream to within the current range of the diamond darter in the future. If it does spread into the diamond darter habitat, it could degrade habitat quality and pose a significant threat to the species.
The one existing diamond darter population is small in size and range, and it is geographically isolated from other areas that previously supported the species. The diamond darter's distribution is restricted to a short stream reach, and its small population size makes it extremely susceptible to extirpation from a single catastrophic event (such as a toxic chemical spill or storm event that destroys its habitat). Therefore, reducing the potential ability to recover from the cumulative effects of smaller chronic impacts to the population and habitat such as progressive degradation from runoff (nonpoint source pollutants), and direct disturbances.
Species that are restricted in range and population size are more likely to suffer loss of genetic diversity due to genetic drift, potentially increasing their susceptibility to inbreeding depression, and reducing the fitness of individuals (Soule 1980, pp. 157-158; Hunter 2002, pp. 97-101; Allendorf and Luikart 2007, pp. 117-146). Similarly, the random loss of adaptive genes through genetic drift may limit the ability of diamond darters to respond to changes in their environment such as climate change, or the catastrophic events and chronic impacts described above (Noss and Cooperrider 1994, p. 61). Small population sizes and inhibited gene flow between populations may increase the likelihood of local extirpation (Gilpin and Soulé 1986, pp. 32-34). The long-term viability of a species is founded on the conservation of numerous local populations throughout its geographic range (Harris 1984, pp. 93-104). These separate populations are essential for the species to recover and adapt to environmental change (Harris 1984, pp. 93-104; Noss and Cooperrider 1994, pp. 264-297). The current population of the diamond darter is restricted to one section of one stream. This population is isolated from other suitable and historical habitats by dams that are barriers to fish movement. The level of isolation and restricted range seen in this species makes natural repopulation of historical habitats or other new areas following previous localized extirpations virtually impossible without human intervention.
Climate change has the potential to increase the vulnerability of the diamond darter to random catastrophic events and to compound the effects of restricted genetic variation and isolation. Current climate change predictions for the central Appalachians indicate that aquatic habitats will be subject to increased temperatures and increased drought stress, especially during the summer and early fall (Buzby and Perry 2000, p. 1774; Byers and Norris 2011, p. 20). There will likely be an increase in the variability of stream flow, and the frequency of extreme events such as drought, severe storms, and flooding is likely to increase statewide (Buzby and Perry 2000, p. 1774; Byers and Norris 2011, p. 20). While the currently available information on the effects of climate change is not precise enough to predict the extent to which climate change will degrade diamond darter habitat, species with limited ranges that are faced with either natural or anthropomorphic barriers to movement, such as the dams that fragmented and isolated the historical diamond darter habitat, have been found to be especially vulnerable to the effects of climate change (Byers and Norris 2011, p. 18). Thus, the small population size and distribution of the diamond darter makes the species particularly susceptible to risks from catastrophic events, loss of genetic variation, and climate change.
In summary, because the diamond darter has a limited geographic range and small population size, it is subject to several other ongoing, natural and manmade threats. These threats include the spread of
We have carefully assessed the best scientific and commercial information
The species could potentially be vulnerable to overutilization for scientific purposes (Factor B), but the significance of this threat is adequately regulated through the State's administration of scientific collecting permits. There are no known threats to the diamond darter from disease or predation (Factor C). Existing Federal and State regulatory mechanisms such as the Clean Water Act, Surface Mining Control and Reclamation Act, and the West Virginia Sediment Logging Control Act do not provide adequate protections for the diamond darter or its aquatic habitat (Factor D). The small size and restricted range of the remaining diamond darter population makes it particularly susceptible to the spread of didymo and effects of genetic inbreeding, and extirpation from spills and other catastrophic events (Factor E). In addition to the individual threats discussed under Factors A and E, each of which is sufficient to warrant the species' listing, the cumulative effect of Factors A, D, and E is such that the magnitude and imminence of threats to the diamond darter are significant throughout its entire current range.
The Act defines an endangered species as any species that is “in danger of extinction throughout all or a significant portion of its range” and a threatened species as any species “that is likely to become endangered throughout all or a significant portion of its range within the foreseeable future.” We find that the diamond darter, which consists of only one population (occurrence), is presently in danger of extinction throughout its entire range, due to the immediacy, severity, and scope of the threats described above. Because the species is currently limited to one small, isolated population in an aquatic environment that is currently facing numerous, severe, and ongoing water quality threats which are likely to increase over time, we find that the diamond darter does not meet the definition of a threatened species. Therefore, on the basis of the best available scientific and commercial information, we propose listing the diamond darter as endangered in accordance with sections 3(6) and 4(a)(1) of the Act.
Under the Act and our implementing regulations, a species may warrant listing if it is threatened or endangered throughout all or a significant portion of its range. The diamond darter proposed for listing in this rule is highly restricted in its range and the threats to the survival of the species are not restricted to any particular significant portion of that range. Therefore, we assessed the status of the species throughout its entire range. Accordingly, our assessment and proposed determination apply to the species throughout its entire range.
Conservation measures provided to species listed as endangered or threatened under the Act include recognition, recovery actions, requirements for Federal protection, and prohibitions against certain practices. Recognition of the species through its listing results in public awareness and conservation by Federal, State, Tribal, and local agencies, private organizations, and individuals. The Act encourages cooperation with the States and requires that recovery actions be carried out for all listed species. The protection measures required of Federal agencies and the prohibitions against certain activities are discussed in Effects of Critical Habitat Designation and are further discussed, in part, below.
The primary purpose of the Act is the conservation of endangered and threatened species and the ecosystems upon which they depend. The ultimate goal of such conservation efforts is the recovery of these listed species, such that they no longer need the protective measures of the Act. Subsection 4(f) of the Act requires the Service to develop and implement recovery plans for the conservation of endangered and threatened species, unless we find that such a plan will not promote the conservation of the species. The recovery planning process involves the identification of actions that are necessary to halt or reverse the species' decline by addressing the threats to its survival and recovery. The goal of this process is to restore listed species to a point where they are secure, self-sustaining, and functioning components of their ecosystems.
Recovery planning includes the development of a recovery outline shortly after a species is listed, and preparation of a draft and final recovery plan. The recovery outline guides the immediate implementation of urgent recovery actions and describes the process to be used to develop a recovery plan. Revisions of the plan may be done to address continuing or new threats to the species, as new substantive information becomes available. The recovery plan identifies site-specific management actions that will achieve recovery of the species, measurable criteria that set a trigger for review of the five factors that control whether a species remains endangered or may be downlisted or delisted, and methods for monitoring recovery progress. Recovery plans also establish a framework for agencies to coordinate their recovery efforts and provide estimates of the cost of implementing recovery tasks. Recovery teams (comprising species experts, Federal and State agencies, nongovernmental organizations, and stakeholders) are often established to develop recovery plans. When completed, the recovery outline, draft recovery plan, and the final recovery plan will be available on our Web site (
Implementation of recovery actions generally requires the participation of a broad range of partners, including other Federal agencies, states, tribes, nongovernmental organizations, businesses, and private landowners. Examples of recovery actions include habitat restoration (e.g., restoration of native vegetation), research, captive propagation and reintroduction, and outreach and education. The recovery of many listed species cannot be accomplished solely on Federal lands because their range may occur primarily or solely on non-Federal lands. To achieve recovery of these species requires cooperative conservation efforts on private, State, and Tribal lands.
If this species is listed, funding for recovery actions will be available from a variety of sources, including Federal budgets, state programs, and cost share grants for non-Federal landowners, the academic community, and nongovernmental organizations. In addition, pursuant to section 6 of the Act, the States of West Virginia, Kentucky, Tennessee, and Ohio would be eligible for Federal funds to implement management actions that promote the protection or recovery of
Although the diamond darter is only proposed for listing under the Act at this time, please inform us of your interest in participating in recovery efforts for this species. Additionally, we invite you to submit any new information on this species whenever it becomes available and any information you may have for recovery planning purposes (see
Section 7(a) of the Act requires Federal agencies to evaluate their actions with respect to any species that is proposed or listed as endangered or threatened and with respect to its critical habitat, if any is designated. Regulations implementing this interagency cooperation provision of the Act are codified at 50 CFR part 402. Section 7(a)(4) of the Act requires Federal agencies to confer with the Service on any action that is likely to jeopardize the continued existence of a species proposed for listing or result in destruction or adverse modification of proposed critical habitat. If a species is listed, section 7(a)(2) of the Act requires Federal agencies to ensure that activities they authorize, fund, or carry out are not likely to jeopardize the continued existence of the species or destroy or adversely modify its critical habitat. If a Federal action may affect a listed species or its critical habitat, the responsible Federal agency must enter into formal consultation with the Service.
Federal agency actions within the species' habitat that may require conference or consultation or both as described in the preceding paragraph include the issuance of section 404 Clean Water Act permits by the Army Corps of Engineers; construction and management of gas pipeline and power line rights-of-way or hydropower facilities by the Federal Energy Regulatory Commission; construction and maintenance of roads, highways, and bridges by the Federal Highway Administration; pesticide regulation by the U.S. Environmental Protection Agency; and issuance of coal mining permits by the Office of Surface Mining.
The Act and its implementing regulations set forth a series of general prohibitions and exceptions that apply to all endangered wildlife. The prohibitions of section 9(a)(2) of the Act, codified at 50 CFR 17.21 for endangered wildlife, in part, make it illegal for any person subject to the jurisdiction of the United States to take (includes harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect; or to attempt any of these), import, export, ship in interstate commerce in the course of commercial activity, or sell or offer for sale in interstate or foreign commerce any listed species. Under the Lacey Act (18 U.S.C. 42-43; 16 U.S.C. 3371-3378), it is also illegal to possess, sell, deliver, carry, transport, or ship any such wildlife that has been taken illegally. Certain exceptions apply to agents of the Service and state conservation agencies.
We may issue permits to carry out otherwise prohibited activities involving endangered and threatened wildlife species under certain circumstances. Regulations governing permits are codified at 50 CFR 17.22 for endangered species, and at 17.32 for threatened species. With regard to endangered wildlife, a permit must be issued for the following purposes: for scientific purposes, to enhance the propagation or survival of the species, and for incidental take in connection with otherwise lawful activities.
It is our policy, as published in the
(1) Unauthorized collecting, handling, possessing, selling, delivering, carrying, or transporting of the species, including import or export across State lines and international boundaries, except for properly documented antique specimens at least 100 years old, as defined by section 10(h)(1) of the Act.
(2) Violation of any permit that results in harm or death to any individuals of this species or that results in degradation of its habitat to an extent that essential behaviors such as breeding, feeding and sheltering are impaired.
(3) Unlawful destruction or alteration of diamond darter habitats (e.g., unpermitted instream dredging, impoundment, water diversion or withdrawal, channelization, discharge of fill material) that impairs essential behaviors such as breeding, feeding, or sheltering, or results in killing or injuring a diamond darter.
(4) Unauthorized discharges or dumping of toxic chemicals or other pollutants into waters supporting the diamond darter that kills or injures individuals, or otherwise impairs essential life-sustaining behaviors such as breeding, feeding, or finding shelter.
Other activities not identified above will be reviewed on a case-by-case basis to determine if a violation of section 9 of the Act may be likely to result from such activity should we list the diamond darter as endangered. Compliance with a State permit, or lack of need for a State permit, does not necessarily provide coverage against violations of section 9 of the Act, particularly if the State review has not yet included protections to ensure that adverse effects to federally listed species are avoided. The Service does not consider the description of future and ongoing activities provided above to be exhaustive; we provide them simply as information to the public.
Questions regarding whether specific activities would constitute a violation of section 9 of the Act should be directed to the West Virginia Field Office (see
It is our intent to discuss below only those topics directly relevant to the designation of critical habitat for the diamond darter in this section of the proposed rule.
Critical habitat is defined in section 3 of the Act as:
(1) The specific areas within the geographical area occupied by the species, at the time it is listed in accordance with the Act, on which are found those physical or biological features;
(a) Essential to the conservation of the species;
(b) Which may require special management considerations or protection; and
(2) Specific areas outside the geographical area occupied by the species at the time it is listed, upon a determination that such areas are essential for the conservation of the species.
Conservation, as defined under section 3 of the Act, means to use and the use of all methods and procedures
Critical habitat receives protection under section 7 of the Act through the requirement that Federal agencies ensure, in consultation with the Service, that any action they authorize, fund, or carry out is not likely to result in the destruction or adverse modification of critical habitat. The designation of critical habitat does not affect land ownership or establish a refuge, wilderness, reserve, preserve, or other conservation area. Such designation does not allow the government or public to access private lands. Such designation does not require implementation of restoration, recovery, or enhancement measures by non-Federal landowners. Where a landowner requests Federal agency funding or authorization for an action that may affect a listed species or critical habitat, the consultation requirements of section 7(a)(2) of the Act would apply, but even in the event of a destruction or adverse modification finding, the obligation of the Federal action agency and the landowner is not to restore or recover the species, but to implement reasonable and prudent alternatives to avoid destruction or adverse modification of critical habitat.
Under the first prong of the Act's definition of critical habitat, areas within the geographical area occupied by the species at the time it was listed are included in a critical habitat designation if they contain physical or biological features (1) which are essential to the conservation of the species, and (2) which may require special management considerations or protection. For these areas, critical habitat designations identify, to the extent known using the best scientific and commercial data available, those physical or biological features that are essential to the conservation of the species (such as space, food, cover, and protected habitat). In identifying those physical and biological features within an area, we focus on the principal biological or physical constituent elements (primary constituent elements such as roost sites, nesting grounds, seasonal wetlands, water quality, tide, soil type) that are essential to the conservation of the species. Primary constituent elements are those specific elements of physical or biological features that provide for a species' life-history processes, and are essential to the conservation of the species.
Under the second prong of the Act's definition of critical habitat, we can designate critical habitat in areas outside the geographical area occupied by the species at the time it is listed, upon a determination that such areas are essential for the conservation of the species. For example, an area currently occupied by the species but that was not occupied at the time of listing may be essential to the conservation of the species and may be included in the critical habitat designation. We designate critical habitat in areas outside the geographical area occupied by a species only when a designation limited to its range would be inadequate to ensure the conservation of the species.
Section 4 of the Act requires that we designate critical habitat on the basis of the best scientific data available. Further, our Policy on Information Standards Under the Endangered Species Act (published in the
When we are determining which areas should be designated as critical habitat, our primary source of information is generally the information developed during the listing process for the species. Additional information sources may include the recovery plan for the species, articles in peer-reviewed journals, conservation plans developed by States and counties, scientific status surveys and studies, biological assessments, other unpublished materials, or experts' opinions or personal knowledge.
Habitat is dynamic, and species may move from one area to another over time. Climate change will be a particular challenge for biodiversity because the interaction of additional stressors associated with climate change and current stressors may push species beyond their ability to survive (Lovejoy 2005, pp. 325-326). The synergistic implications of climate change and habitat fragmentation are the most threatening facet of climate change for biodiversity (Hannah and Lovejoy 2003, p. 4). In particular, we recognize that climate change may cause changes in the arrangement of occupied habitat and stream reaches. Current climate change predictions for the central Appalachians indicate that aquatic habitats will be subject to increased temperatures and increased drought stress, especially during the summer and early fall. There will likely be an increase in the variability of stream flow, and the frequency of extreme events, such as drought, severe storms, and flooding, is likely to increase statewide (Buzby and Perry 2000, p. 1774; Byers and Norris 2011, p. 20). Species with limited ranges and that are faced with either natural or anthropomorphic barriers to movement, such as the dams that fragment and isolate diamond darter habitat, have been found to be especially vulnerable to the effects of climate change (Byers and Norris 2011, p. 18).
Precise estimates of the location and magnitude of impacts from global climate change and increasing temperatures cannot be made from the currently available information. Nor are we currently aware of any climate change information specific to the habitat of the diamond darter that would indicate what areas may become important to the species in the future. However, among the most powerful strategies for the long-term conservation of biodiversity is establishment of networks of intact habitats and conservation areas that represent a full range of ecosystems, and include multiple, robust examples of each type. The principles of resiliency and redundancy are at the core of many conservation planning efforts, and are increasingly important as the stresses of climate change erode existing habitats (Byers and Norris 2011, p. 24). Therefore, we have attempted to incorporate these principles into our proposed determination of critical habitat by delineating two units that are representative of the range of habitats currently and previously occupied by the species.
We recognize that critical habitat designated at a particular point in time may not include all of the habitat areas that we may later determine are necessary for the recovery of the species. For these reasons, a critical habitat designation does not signal that
Section 4(a)(3) of the Act, as amended, and implementing regulations (50 CFR 424.12), require that, to the maximum extent prudent and determinable, the Secretary designate critical habitat at the time the species is determined to be endangered or threatened. Our regulations (50 CFR 424.12(a)(1)) state that the designation of critical habitat is not prudent when one or both of the following situations exist: (1) The species is threatened by taking or other human activity, and identification of critical habitat can be expected to increase the degree of threat to the species; or (2) such designation of critical habitat would not be beneficial to the species.
There is no documentation of commercial or private collection of the diamond darter. Although that activity is identified as a possible but unlikely threat to the species, the significance of collection to the viability of the species' populations is not known. In the absence of a finding that the designation of critical habitat would increase threats to a species, if there are any benefits to a critical habitat designation, then a prudent finding is warranted. The potential benefits include: (1) Triggering consultation under section 7 of the Act, in new areas for actions in which there may be a Federal nexus where it would not otherwise occur because, for example, it is or has become unoccupied or the occupancy is in question; (2) focusing conservation activities on the most essential features and areas; (3) providing educational benefits to State or county governments or private entities; and (4) preventing people from causing inadvertent harm to the species.
The primary regulatory effect of critical habitat is the section 7(a)(2) requirement that Federal agencies refrain from taking any action that destroys or adversely modifies critical habitat. At this time, the diamond darter occurs on State and private lands along the Elk River in West Virginia. Lands proposed for designation as critical habitat would be subject to Federal actions that trigger section 7 consultation requirements. These include land management planning and Federal agency actions. There may also be educational or outreach benefits to the designation of critical habitat. These benefits include the notification of lessees and the general public of the importance of protecting the habitats of both of these rare species.
In the case of the diamond darter, these aspects of critical habitat designation would potentially benefit the conservation of the species. Therefore, if the threat of commercial or private collection exists for the species, it is outweighed by the conservation benefits derived from the designation of critical habitat. We therefore find that designation of critical habitat is prudent for the diamond darter.
Having determined that designation is prudent, under section 4(a)(3) of the Act we must find whether critical habitat for the eight species is determinable. Our regulations at 50 CFR 424.12(a)(2) state that critical habitat is not determinable when one or both of the following situations exist:
(i) Information sufficient to perform required analyses of the impacts of the designation is lacking, or
(ii) The biological needs of the species are not sufficiently well known to permit identification of an area as critical habitat.
When critical habitat is not determinable, the Act allows the Service an additional year to publish a critical habitat designation (16 U.S.C. 1533(b)(6)(C)(ii)).
We reviewed the available information pertaining to the biological needs of the species and habitat characteristics where these species are located. This and other information represent the best scientific data available and led us to conclude that the designation of critical habitat is determinable for diamond darter.
In accordance with section 3(5)(A)(i) and 4(b)(2) of the Act and regulations at 50 CFR 424.12, in determining which areas within the geographical area occupied by the species at the time of listing to designate as critical habitat, we consider the physical or biological features that are essential to the conservation of the species and which may require special management considerations or protection (50 CFR 424.12(b)). These include, but are not limited to:
(1) Space for individual and population growth and for normal behavior;
(2) Food, water, air, light, minerals, or other nutritional or physiological requirements;
(3) Cover or shelter;
(4) Sites for breeding, reproduction, or rearing (or development) of offspring; and
(5) Habitats that are protected from disturbance or are representative of the historical, geographical, and ecological distributions of a species.
We derive the specific physical or biological features required for the diamond darter from studies of this species' habitat, ecology, and life history as described below. Because diamond darters are so rare, there is very little information available with which to quantitatively define the optimal or range of suitable conditions for a specific biological or physical feature needed by the species. However, the available, species-specific information, in combination with information from the closely related crystal darter and other similar darter species, provides sufficient information to qualitatively discuss the physical and biological features needed to support the species. Based on this review, we have determined that the following physical and biological features are essential for the diamond darter:
The diamond darter inhabits moderate to large, warmwater streams with clean sand and gravel substrates (Simon and Wallus 2006, p. 52). Moderate to large warmwater streams are defined as fourth to eighth order streams with a drainage area exceeding 518 km
Siltation (excess sediments suspended or deposited in a stream) has been shown to negatively impact fish growth, survival, and reproduction (Berkman and Rabeni 1987, p. 285). Both the diamond darter and the crystal darter are noted to be particularly susceptible to the effects of siltation and may have been extirpated from historical habitats due to excessive siltation (Grandmaison
Fragmentation and destruction of habitat has reduced the current range of the diamond darter to only one stream and has isolated the last remaining population, reducing the currently available space for rearing and reproduction. Small, isolated populations may have reduced adaptive capability and an increased likelihood of extinction (Gilpin and Soulé 1986, pp. 32-34; Noss and Cooperrider 1994, p. 61). Continuity of water flow and connectivity between remaining suitable habitats is essential in preventing further fragmentation of the species' habitat and population. Free movement of water within the stream allows darters to move between available habitats. This is necessary to provide sufficient space for the population to grow and to promote genetic flow throughout the population. Continuity of habitat helps to maintain space for spawning, foraging, and resting sites, and also permits improvement in water quality and water quantity by allowing unobstructed water flow throughout the connected habitats. Thus, free movement of water that provides connectivity between habitats is necessary to support diamond darter populations.
There is little information available on the amount of space needed by either the diamond darter or the crystal darter for population growth and normal behavior. Many individuals of other darter species that use similar habitat types have been found to remain in one habitat area during short-term mark and recapture studies. However upstream and downstream movements of other darters between riffles and between riffles and pools have been documented. Within-year movements typically ranged from 36 to 420 meters (118.1 to 1,378.0 ft), and movements of up to 4.8 km (3.0 mi) have been documented (May 1969, pp. 86-87, 91; Freeman 1995, p. 363; Roberts and Angermeier 2007, pp. 422, 424-427).
In addition, a number of researchers have suggested that
Based on the biological information and needs discussed above, we identify riffle-pool complexes in moderate to large-sized (fourth to eighth order), warmwater streams that are geomorphically stable with moderate current, clean sand and gravel substrates, and low levels of siltation to be physical or biological features essential to the conservation of the diamond darter.
Feeding habits of the diamond darter in the wild are not known. However, it is expected that, similar to the crystal darter, adult diamond darters are benthic invertivores (NatureServe 2008, p. 8). Crystal darters eat midge and caddisfly larvae, and water mites in lesser quantities (Osier 2005, p. 13). Juvenile and young crystal darters feed on immature stages of aquatic insects such as mayflies, craneflies, blackflies, caddisflies, and midges (Simon and Wallus 2006, pp. 56-57). Diamond darters kept in captivity were fed and survived on live blackworms, daphnia, and dragonfly larvae, frozen bloodworms, and adult brine shrimp (Ruble
Researchers were unable to confirm this hypothesis due to poor survivorship of the diamond darter larvae and lack of available smaller fish larvae to provide as a potential food source (Ruble
Like most other darters, the diamond darter depends on clean water and perennial stream flows to successfully complete its life cycle (Page 1983, pp. 160-170). Sufficient water quality and quantity is required to support normal reproduction, growth, and survival. Because so few diamond darters have been captured, there are insufficient data available to quantitatively define the standards for water quantity or quality that are suitable to support the species. However, some data are available from areas that are known to support the diamond darter or the closely related crystal darter that provide examples of suitable conditions.
Water quantity, including depth and current velocity, are known to be important habitat characteristics that determine whether an area is suitable to support a specific species of fish (Osier 2005, p. 3). Sites where
Water quality is also important to the persistence of the diamond darter. Specific water quality requirements (such as temperature, dissolved oxygen, pH, and conductivity) for the species have not been determined, but existing data provide some examples of conditions where
Good water quality that is not degraded by inorganic or organic pollutants, low dissolved oxygen, or excessive conductivity is an important habitat component for the diamond darter.
As described in the Summary of Factors Affecting the Species section above, impoundment of many rivers that historically supported the diamond darter has altered the quantity and flow of water in those rivers. This has reduced or eliminated riffle habitats, reduced current velocities, and increased the amount of fine particles in the substrate (Rinne
Based on the biological information and needs discussed above, we identify perennial streams containing riffle-pool transition areas with moderate velocities, seasonally moderated temperatures, and good water quality with healthy populations of benthic invertebrates and fish larvae for prey items and loose, sandy substrates to be physical or biological features essential to the conservation for the diamond darter.
Diamond darters and crystal darters typically have been captured in riffle-pool transition areas with predominately (greater than 20 percent each) sand and gravel substrates (Osier 2005, pp. 51-52). Diamond darters will bury in these types of substrates for cover and shelter. Individuals observed in captivity were frequently seen either completely buried in the sand during the day or partially buried with only the head (eyes and top of the snout) out of the sand. However, individuals were often on top of the sand at night time (Welsh 2009c, p. 1). Burying occurred by the individual rising slightly up above the substrate and then plunging headfirst into the sand and using its tail motion to burrow (Welsh 2009c, p. 1). This type of burying behavior has also been reported in the crystal darter (Osier 2005, p. 11; NatureServe 2008, p. 1). Heavily embedded substrates may impede this behavior. Embeddedness is the degree that cobble or gravel substrates are impacted by being surrounded or covered by fine silty materials (Shipman 2000, p. 12). Embedded substrates are not easily dislodged, and would therefore be difficult for the diamond darter to burrow into for cover. Heavily embedded substrates can be the result of human activities increasing the amount of siltation occurring in the stream (Shipman 2000, p. 12). While diamond darter capture sites in the Elk River have had a sparse (25-50 percent) to low (less than 25 percent) degree of embeddedness, these sites were less embedded than other surrounding areas (Shipman 2000, p. 12; Welsh
Variability in the substrate and available habitat is also an important sheltering requirement for the diamond darter. Darters may shift to different habitat types due to changing environmental conditions such as high water or warm temperatures (Osier 2005, p. 7). Deeper or sheltered habitats may provide refuge during warm weather and it has been suggested that
Based on the biological information and needs discussed above, we identify riffle-pool transition areas with relatively sand and gravel substrates, as well as access to a variety of other substrate and habitat types, including pool habitats, to be physical or biological cover and shelter features essential to the conservation for the diamond darter.
Very little information is available on reproductive biology and early life history of the diamond darter (Welsh
Spawning began when water temperatures were consistently above 15 °C and ceased when temperatures reached 22 °C (Ruble 2011b, p. 2). Females showed signs of being gravid from late March to May (Ruble
Because no young have been successfully maintained in captivity and no studies of wild populations are available, we are not able to quantify the range of water quality conditions needed for successful reproduction. Factors that can impair egg viability include high temperatures, low oxygen levels, siltation, and other water quality conditions (Ruble 2011, p. 2). Inadequate water flow through the substrate or low oxygen levels within the substrate can lead to poor egg development or poor larval condition (Ruble 2011, p. 2).
There is also some information available on reproduction of the crystal darter (Welsh
Based on the biological information and needs discussed above, we identify streams with naturally fluctuating and seasonally moderated water temperatures, high dissolved oxygen levels, and clean, relatively silt-free sand and gravel substrates to be physical or biological breeding, reproduction, or rearing of offspring features essential to the conservation for the diamond darter.
As described above, clean, stable substrates, good water quality, and healthy benthic invertebrate populations are habitat features essential to the diamond darter. Direct disturbance, alteration, or fill of instream habitat can degrade these essential features. Disturbance, alteration, and instream fill can kill or injure adult fish, young, or eggs; destabilize the substrates leading to increased sedimentation or erosion; and reduce the amount of available food and habitat to support fish populations. These impacts make the area less suitable for the fish such as the diamond darter (Reid and Anderson 1999, pp. 235-245; Levesque and Dube 2007, pp. 396-402; Welsh 2009d, p. 1; Penkal and Phillips 2011, pp. 6-7). Direct disturbance and instream construction can also increase substrate compaction and silt deposition within the direct impact area and downstream, reducing water flow through the substrate, and increasing substrate embeddedness (Reid and Anderson 1999, p. 243; Levesque and Dube 2007, pp. 396-397; Penkal and Phillips 2011, pp. 6-7). This can impede the normal burrowing behavior of the diamond darter required for successful foraging and shelter, degrade spawning habitat, result in the production of fewer and smaller eggs, and impair egg and larvae development (Reid and Anderson 1999, pp. 244-245; Levesque and Dube 2007, pp. 401-402). Intact riparian vegetation is also an important component of aquatic habitats that support the diamond darter. Darters are particularly susceptible to impacts associated with disturbance to riparian vegetation such as increased sedimentation and alteration of instream habitat characteristics (Jones
All current and historical capture locations of the diamond darter are from moderate to large, fourth to eighth order, warmwater streams within the Ohio River Watershed (Welsh 2008, p. 3;
Based on the biological information and needs discussed above, we identify stable, undisturbed stream beds and banks, and ability for populations to be distributed in multiple moderate-to-large (fourth to eighth order) streams throughout the Ohio River watershed to be physical or biological features protected from disturbance or are representative of the historical, geographical, and ecological distributions that are essential to the conservation for the diamond darter.
Under the Act and its implementing regulations, we are required to identify the physical or biological features essential to the conservation of the diamond darter in areas occupied at the time of listing, focusing on the features' primary constituent elements. Primary constituent elements are those specific elements of physical or biological features that provide for a species' life-history processes and are essential to the conservation of the species.
Based on our current knowledge of the physical or biological features and habitat characteristics required to sustain the species' life-history processes, we determine that the primary constituent elements specific to the diamond darter are:
(1) Primary Constituent Element 1—A series of connected riffle-pool complexes with moderate velocities in moderate to large-sized (fourth to eighth order), geomorphically stable streams within the Ohio River watershed.
(2) Primary Constituent Element 2—Stable, undisturbed bottom substrates composed of relatively silt-free, unembedded sand and gravel.
(3) Primary Constituent Element 3—An instream flow regime (magnitude, frequency, duration, and seasonality of discharge over time) that is relatively unimpeded by impoundment or diversions such that there is minimal departure from a natural hydrograph.
(4) Primary Constituent Element 4—Adequate water quality characterized by seasonally moderated temperatures, high dissolved oxygen levels, and moderate pH, and low levels of pollutants and siltation. Adequate water quality is defined as the quality necessary for normal behavior, growth, and viability of all life stages of the diamond darter.
(5) Primary Constituent Element 5—A prey base of other fish larvae and benthic invertebrates including midge, caddisfly, and mayfly larvae.
With this proposed designation of critical habitat, we intend to identify the physical or biological features essential to the conservation of the species, through the identification of the primary constituent elements sufficient to support the life-history processes of the species.
When designating critical habitat, we assess whether the specific areas within the geographical area occupied by the species at the time of listing contain features which are essential to the conservation of the species and which may require special management considerations or protection. The area we are proposing for designation as currently occupied critical habitat for the diamond darter is not under special management or protection provided by a legally operative management plan or agreement specific to conservation of the diamond darter and has not been designated as critical habitat for other species under the Act. This unit will require some level of management to address the current and future threats to the physical and biological features (PBFs) of the species. Various activities in or adjacent to the critical habitat unit described in this proposed rule may affect one or more of the primary constituent elements (PCEs) and may require special management considerations or protection. Some of these activities include, but are not limited to, those discussed in the “Summary of Factors Affecting the Species,” above. Other activities that may affect PCEs in the proposed critical habitat unit include those listed in the “Available Conservation Measures” section and include resource extraction (coal mining, timber harvests, natural gas and oil development activities); construction and maintenance projects; stream bottom disturbance from sewer, gas, and water lines; lack of adequate riparian buffers; and other sources of nonpoint-source pollution.
Management activities that could ameliorate these threats include, but are not limited to: use of BMPs designed to reduce sedimentation, erosion, and stream bank destruction; development of alternatives that avoid and minimize streambed disturbances; implementation of regulations that control the amount and quality of point-source discharges; and reduction of other watershed and floodplain disturbances that release sediments or other pollutants. Special management consideration or protection may be required to eliminate, or to reduce to negligible levels, the threats affecting the physical or biological features of each unit. Additional discussion of threats facing individual units is provided in the individual unit descriptions below.
As required by section 4(b)(2)(A) of the Act, we use the best scientific data available to designate critical habitat. We review available information pertaining to the habitat requirements of the species. In accordance with the Act and its implementing regulation at 50 CFR 424.12(e), we consider whether designating additional areas, outside those currently occupied as well as those occupied at the time of listing, are necessary to ensure the conservation of the species. We are proposing to designate as critical habitat all habitat that is currently occupied by the species; that is, the lower Elk River. This one river reach constitutes the entire current range of the species. We are also proposing to designate a specific area that is not currently occupied by the diamond darter but was historically occupied, because we have determined this area (i.e., the Green River) is essential for the conservation of the diamond darter and designating only occupied habitat is not sufficient to conserve this species.
For our evaluation of potential critical habitat, we reviewed available literature, reports, and field notes prepared by biologists, as well as historical and current survey results. We also spoke to fisheries experts and conservation professionals that are familiar with darters or the current status of aquatic systems within the current and historical range of the species.
In order to identify currently occupied habitats, we delineated known capture sites and reviewed habitat assessments and mapping efforts that have been conducted on the Elk River. Known occurrences of the diamond darter are extremely localized, and the species can be difficult to locate. Because it is reasonably likely that this rare and cryptic species is present in suitable habitats outside the immediate locations of the known captures, we considered the entire reach between the uppermost and lowermost locations as occupied habitat. We also included some areas of the mainstem Elk River that have not been specifically surveyed for diamond darters but have been determined to have suitable habitat for the species based on diamond darter species-specific habitat assessments (Osier 2005, pp. ii-50). These areas are contiguous with known capture sites, have similar habitat characteristics, have no barriers to dispersal, and are within general darter dispersal capabilities. In addition, river habitats are highly dependent upon upstream and downstream habitat conditions for their maintenance, so these contiguous areas upstream and downstream are critical to maintaining habitat conditions of known capture sites.
Areas of the Elk River downstream of the proposed unit near the confluence with the Kanawha River that do not currently provide the PCEs required to support the species, and no longer have suitable habitat characteristics because they are affected by impoundment or routine navigation dredging, were not included. The downstream reach of the Elk River to the confluence with the Kanawha River is affected by impoundment from the Winfield Lock and Dam on the Kanawha River. It is also routinely dredged for commercial navigation by the ACOE.
The portion of the Elk River upstream of the proposed unit may provide suitable habitat for the diamond darter, but we have no records of diamond darters being captured in this reach or diamond darter species-specific habitat assessments like there have been in the lower Elk River. The upper Elk River reach does contain the favorable general habitat characteristics of riffle-pool complexes with sand and gravel substrates, and there are no barriers to upstream fish movement (Service 2008, entire). However, only limited survey efforts and no diamond darter species-specific habitat assessments have been conducted that would allow us to further refine our assessment of whether this area contains any of the PCEs necessary to support the species. Additional survey efforts are being planned that may further define whether the upstream area is occupied by the diamond darter or which, if any, PCEs are present that may require special management considerations. As a result, we are not proposing to designate additional critical habitat upstream of King Shoals.
We have not included Elk River tributaries as part of the proposed designation because we have no records of the diamond darter occurring in those locations, and there have been no species-specific habitat assessments in the tributaries documenting that these areas are suitable to support the species.
We then considered whether occupied habitat was adequate for the conservation of the species. Currently occupied habitats of the diamond darter are highly localized and isolated, and are restricted to one reach of the Elk River. The range has been severely curtailed, and population size is small. Small isolated aquatic populations are subject to chance catastrophic events and to changes in human activities and land use practices that may result in their elimination. Threats to the diamond darter are imminent and are present throughout the entire range of the species. As described under Factor E, these threats are compounded by its limited distribution and isolation making the species extremely vulnerable to extinction; therefore, it is unlikely that currently occupied habitat is adequate for its conservation (Soule 1980, pp. 157-158; Noss and Cooperrider 1994, p. 61; Hunter 2002, pp. 97-101; Allendorf and Luikart 2007, pp. 117-146). Larger, more dispersed populations can reduce the threat of extinction due to habitat fragmentation and isolation (Harris 1984, pp. 93-104; Noss and Cooperrider 1994, pp. 264-297; Warren
In order to identify areas of unoccupied habitat that should be designated as critical habitat, we focused on rivers that had historical records confirmed to be diamond darter through the examination of available museum specimens. For rivers that had more than one historical capture, approximate capture locations were mapped so that the minimal, previously occupied extent could be established. We then identified areas of contiguous habitat that still contained the habitat characteristics sufficient to support the life history of the species. Areas that no longer provided suitable habitat were impounded, or did not contain a series of connected riffle-pool complexes were eliminated from consideration. We then applied the following criteria to identify the unoccupied, potential critical habitat: (1) The reach supports fish species with habitat preferences similar to the diamond darter such as the shoal chub (
We delineated the upstream and downstream boundaries of the proposed unit on the Green River based on the following information. The Green River immediately downstream of Green River Lake (River Mile 308.8 to 294.8) is excluded from the proposed critical habitat unit due to artificially variable flow, temperature, and dissolved oxygen conditions resulting from periodic discharges from Green River Dam. Fish community data collected between Greensburg and Green River Dam indicate a general trend of increasing species richness and abundance from Tebb's Bend (approximately 2.7 km [1.7 mi] below the dam) downstream to Roachville Ford (approximately 22.7 km [14.1 mi] below the dam). Also, some relatively intolerant benthic fish species present at Roachville Ford and other sites downstream within the Bioreserve are absent at Tebb's Bend, including mountain madtom (
Downstream of Cave Island, the Green River becomes affected by impoundment from the ACOE Lock and Dam #6. The lock and dam was constructed in 1906 and was disabled in 1950. Although the lock has been disabled and is becoming unstable, the dam still partially impedes water flow resulting in a system with slower, warmer water and a loss of riffle and shoal habitat types (Grubbs and Taylor 2004, p. 26; Olson 2006, pp. 295-297). The delineation between the portions of the river affected by Lock and Dam #6 and those that retain free-flowing characteristics occurs distinctly at Cave Island (Grubbs and Taylor 2004, pp. 19-26). There is a marked decrease in benthic macroinvertebrates that are intolerant of siltation below this point, which is attributable to slower current velocities and a lack of shallow riffles and associated course sediments (Grubbs and Taylor 2004, p. 26). For these reasons, Cave Island was selected as the downstream limit of the critical habitat designation in this unit.
Once we determined that the areas of Elk and Green Rivers met our criteria, we then used ArcGIS software and the National Hydrography Dataset (NHD) to delineate the specific river reach being proposed for diamond darter critical habitat. Areas proposed for diamond darter critical habitat include only Elk and Green River mainstem stream channels within the ordinary high-water line. We have not included Elk or Green River tributaries as part of the proposed designation because we have no records of the diamond darter occurring in those locations. We set the upstream and downstream limits of each critical habitat unit by identifying landmarks (islands, confluences, roadways, crossings, dams) that clearly delineated each river reach. Stream confluences are often used to delineate the boundaries of a unit for an aquatic species because the confluence of a tributary typically marks a significant change in the size or habitat characteristics of the stream. Stream confluences are logical and recognizable termini. When a named tributary was not available, or if another landmark provided a more recognizable boundary, another landmark was used. In the unit descriptions, distances between the upstream or downstream extent of a stream segment are given in kilometers (km) rounded to one decimal point and equivalent miles (mi). Distances for the Elk River were measured by tracing the course of the stream as depicted by the NHD. Distances for the Green River were measured using river miles as designated by the Kentucky Division of Water which were generated using the NHD.
When determining proposed critical habitat boundaries, we made every effort to avoid including developed areas such as lands covered by buildings, pavement, and other structures because such lands lack physical or biological features essential for the conservation of diamond darter. The scale of the maps we prepared under the parameters for publication within the Code of Federal Regulations may not reflect the exclusion of such developed lands. Any such lands inadvertently left inside critical habitat boundaries shown on the maps of this proposed rule have been excluded by text in the proposed rule and are not proposed for designation as critical habitat. Therefore, if the critical habitat is finalized as proposed, a Federal action involving these lands would not trigger section 7 consultation with respect to critical habitat and the requirement of no adverse modification, unless the specific action would affect the physical or biological features in the adjacent critical habitat. The designation of critical habitat does not imply that lands or streams outside of critical habitat do not play an important role in the conservation of the diamond darter.
We are proposing for designation of critical habitat lands and waters that we have determined are occupied at the time of listing and contain sufficient elements of physical or biological features to support life-history processes essential tor the conservation of the species and that may require special management considerations. This area of the Elk River in West Virginia is identified as Unit 1. We are also proposing to designate lands and waters outside of the geographical area occupied at the time of listing that we have determined are essential for the conservation of the diamond darter. This area of the Green River in Kentucky is identified as Unit 2. The two proposed units contain sufficient (more than one, but not all) elements of physical and biological features (PBFs) present to support diamond darter life-history processes, but may require special management considerations or protection to achieve the presence of all the identified PBFs.
The critical habitat designation is defined by the map or maps, as modified by any accompanying regulatory text, presented at the end of this document in the rule portion. We include more detailed information on the boundaries of the critical habitat designation in the preamble of this document. We will make the coordinates or plot points or both on which each map is based available to the public on
We are proposing two units as critical habitat for the diamond darter. The critical habitat areas we describe below constitute our current best assessment of areas that meet the definition of critical habitat for the diamond darter. The areas we propose as critical habitat are: (1) The lower Elk River; and (2) the Green River. Table 2 shows the occupancy of the units and ownership of the proposed designated areas for the diamond darter.
We present brief descriptions of each unit and reasons why each unit meets the definition of critical habitat below. The critical habitat units include the stream channels of the rivers within the ordinary high-water line. As defined in 33 CFR 329.11, the ordinary high-water line on nontidal rivers is the line on the shore established by the fluctuations of water and indicated by physical characteristics such as a clear, natural water line impressed on the bank; changes in the character of soil; destruction of terrestrial vegetation; the presence of litter and debris; or other appropriate means that consider the characteristics of the surrounding areas. In West Virginia, the State owns the bed and banks of streams between the ordinary low-water marks, and is vested with a public easement between the ordinary low-water and high-water marks (George 1998, p. 461). The water is also under State jurisdiction (WVSC § 22-26-3). In Kentucky, landowners own the land under streams (
Unit 1 represents the habitat supporting the only remaining occupied diamond darter population. This population could provide a source to repopulate other areas within the diamond darter's historical range. Unit 1 includes 45.0 km (28.0 mi) of the Elk River from the confluence with King Shoals Run near Wallback Wildlife Management Area downstream to the confluence with an unnamed tributary entering the Elk River on the right descending bank adjacent to Knollwood Drive in Charleston, West Virginia. As described above, all of the habitat within this unit is under public control or ownership (see Table 1 above). The State of West Virginia owns or has a public easement on the streambed and banks of the Elk River up to the ordinary high-water mark (George 1998, p. 461). The water is also publically owned. The majority of lands adjacent to this unit are privately owned. There are two areas of public land within the watershed: The 3,996-ha (9,874-ac) Morris Creek Wildlife Management Area, which is leased and managed by the WVDNR (2007, p. 9), and Coonskin Park, an approximately 405-ha (1,000-ac) park owned by Kanawha County (Kanawha County Parks and Recreation 2008, p. 1).
Live diamond darters have been documented at four sites within this unit, including at sites near Clendenin, Mink Shoals, Reamer Hill, and between Broad Run and Burke Branch. This unit contains space for individual and population growth and for normal behavior; food, water, air, light, minerals, or other nutritional or physiological requirements; cover or shelter; and sites for breeding, reproduction, or rearing (or development) of offspring, and is essential to the conservation of the species. Diamond darter habitat assessments have documented that this reach of the Elk River contains 28 riffle-pool transition areas with moderate currents and sand and gravel substrates that are suitable for the diamond darter (PCEs 1 and 2) (Osier 2005, p. 34). There is connectivity between these habitats to provide access to various spawning, foraging, and resting sites and promote gene flow (PCE 1). This reach of the Elk River also has a natural flow regime that is relatively unimpeded by impoundment (PCE 3), and has healthy benthic macroinvertebrate populations (PCE 5) (WVDEP 1997, pp. 20-89). However, water quality within this unit is impaired due to high levels of fecal coliform bacteria and iron (PCE 4) (WVDEP 2010, p. 16).
Within this unit, the diamond darter and its habitat may require special management considerations or protection to address threats from resource extraction (coal mining, timber harvests, natural gas and oil development activities); impoundment; water diversion or withdrawals; construction and maintenance projects; stream bottom disturbance from sewer, gas, and water line crossings; lack of adequate riparian buffers; sewage discharges, and nonpoint-source pollution. Special management to address water quality degradation is particularly important since prolonged water quality impairments can also affect the availability of relatively silt-free sand and gravel substrates (PCE 2) and healthy populations of fish larvae and benthic invertebrates that provide a prey base for the diamond darter (PCE 5).
Unit 2 represents the best remaining historically occupied habitat for future diamond darter reintroductions that will improve the species' redundancy, resiliency, and representation essential for its conservation. Unit 2 includes 152.1 km (94.5 mi) of the Green River from Roachville Ford near Greensburg (River Mile 294.8) downstream to the end of Cave Island in Mammoth Cave National Park (NP) (River Mile 200.3). Approximately 16.3 km (10.1 mi) of this unit is publically owned (see Table 1 above) and is contained within the 20,750-ha (51,274.1-ac) Mammoth Cave NP. The remainder of the unit, 135.8 km (84.4 mi), is privately owned. With the exception of the lands owned by Mammoth Cave NP, the lands within the Green River watershed are also privately owned. Through the U.S. Department of Agriculture's (USDA) Conservation Reserve Program (CRP) and other conservation programs, the Nature Conservancy owns or has easements on approximately 794.4 ha (1,962.9 ac) within the watershed, either adjacent to or in close proximity to the river. In addition, Western Kentucky University owns or manages 1,300 ac (526.1 ha) along the Green River in Hart County as part of the Upper Green River Biological Preserve (Western Kentucky University 2012, p. 1). In Kentucky, landowners own the land under streams (e.g., the stream channel or bottom) in the designated units, but the water is under State jurisdiction.
This unit is within the historical range of the species, but is not currently considered occupied. Between 1890 and 1929, diamond darters were recorded from three locations within this unit: Adjacent to Cave Island in Edmonson
The Green River is a seventh-order warmwater stream with a total drainage area of 23,879.7 km
The entire reach of the Green River within this unit is designated by Kentucky as both Outstanding State Resource Waters and Exceptional Waters. Outstanding State Resource Waters are those surface waters designated by the Energy and Environment Cabinet as containing federally threatened and endangered species. Exceptional Waters are waterbodies whose quality exceeds that necessary to support propagation of fish, shellfish, wildlife, and recreation. These waters support excellent fish and macroinvertebrate communities (KYEEC 2012, p. 1). The entire reach of the river within Mammoth Cave NP, including the 16.3 km (10.1 mi) that are proposed as critical habitat, is also designated as a Kentucky Wild River. These rivers have exceptional quality and aesthetic character and are designated by the State General Assembly in recognition of their unspoiled character, outstanding water quality, and natural characteristics (KYEEC 2012, p. 1). Each Wild River is actually a linear corridor encompassing all visible land on each side of the river up to a distance of 609.6 m (2,000 ft). In order to protect their features and quality, land-use changes are regulated by a permit system, and certain highly destructive land-use changes, such as strip mining and clear-cutting, are prohibited within corridor boundaries (KYEEC 2012, p.1).
As described in the
The reach of the Green River being proposed as critical habitat is the focus of many ongoing conservation efforts. The Nature Conservancy has designated this area as the Green River Bioreserve (Thomas
Land use within this watershed is primarily agricultural or forested. There is also some oil and gas development within the watershed. Management may be needed to address resource extraction (timber harvests, natural gas and oil development activities); water discharges or withdrawals; construction and maintenance projects; stream bottom disturbance from sewer, gas, and water line crossings; lack of adequate riparian buffers; sedimentation, sewage discharges, and nonpoint-source pollution.
Section 7(a)(2) of the Act requires Federal agencies, including the Service, to ensure that any action they fund, authorize, or carry out is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of designated critical habitat of such species. In addition, section 7(a)(4) of the Act requires Federal agencies to confer with the Service on any agency action that is likely to jeopardize the continued existence of any species proposed to be listed under the Act or result in the destruction or adverse modification of proposed critical habitat.
Decisions by the 5th and 9th Circuit Courts of Appeals have invalidated our regulatory definition of “destruction or adverse modification” (50 CFR 402.02) (see
If a Federal action may affect a listed species or its critical habitat, the responsible Federal agency (action agency) must enter into consultation with us. Examples of actions that are subject to the section 7 consultation process are actions on state, tribal, local, or private lands that require a Federal permit (such as a permit from the ACOE under section 404 of the Clean Water Act (33 U.S.C. 1251
As a result of section 7 consultation, we document compliance with the requirements of section 7(a)(2) through our issuance of:
(1) A concurrence letter for Federal actions that may affect, but are not
(2) A biological opinion for Federal actions that may affect and are likely to adversely affect, listed species or critical habitat.
When we issue a biological opinion concluding that a project is likely to jeopardize the continued existence of a listed species and/or destroy or adversely modify critical habitat, we provide reasonable and prudent alternatives to the project, if any are identifiable, that would avoid the likelihood of jeopardy and/or destruction or adverse modification of critical habitat. We define “reasonable and prudent alternatives” (at 50 CFR 402.02) as alternative actions identified during consultation that:
(1) Can be implemented in a manner consistent with the intended purpose of the action;
(2) Can be implemented consistent with the scope of the Federal agency's legal authority and jurisdiction;
(3) Are economically and technologically feasible; and
(4) Would, in the Director's opinion, avoid the likelihood of jeopardizing the continued existence of the listed species and/or avoid the likelihood of destroying or adversely modifying critical habitat.
Reasonable and prudent alternatives can vary from slight project modifications to extensive redesign or relocation of the project. Costs associated with implementing a reasonable and prudent alternative are similarly variable.
Regulations at 50 CFR 402.16 require Federal agencies to reinitiate consultation on previously reviewed actions in instances where we have listed a new species or subsequently designated critical habitat that may be affected and the Federal agency has retained discretionary involvement or control over the action (or the agency's discretionary involvement or control is authorized by law). Consequently, Federal agencies sometimes may need to request reinitiation of consultation with us on actions for which formal consultation has been completed, if those actions with discretionary involvement or control may affect subsequently listed species or designated critical habitat.
The key factor related to the adverse modification determination is whether, with implementation of the proposed Federal action, the affected critical habitat would continue to serve its intended conservation role for the species. Activities that may destroy or adversely modify critical habitat are those that alter the physical or biological features to an extent that appreciably reduces the conservation value of critical habitat for the diamond darter. As discussed above, the role of critical habitat is to support life-history needs of the species and provide for the conservation of the species.
Section 4(b)(8) of the Act requires us to briefly evaluate and describe, in any proposed or final regulation that designates critical habitat, activities involving a Federal action that may destroy or adversely modify such habitat, or that may be affected by such designation.
Activities that may affect critical habitat, when carried out, funded, or authorized by a Federal agency, should result in consultation for the diamond darter. These activities include, but are not limited to:
(1) Actions that would alter the geomorphology of stream habitats. Such activities could include, but are not limited to, instream excavation or dredging, impoundment, channelization, removal of riparian vegetation, road and bridge construction, discharge of mine waste or spoil, and other discharges of fill materials. These activities could cause aggradation or degradation of the channel bed elevation or significant bank erosion, result in entrainment or burial of these fishes, and cause other direct or cumulative adverse effects to the species.
(2) Actions that would significantly alter the existing flow regime or water quantity. Such activities could include, but are not limited to, impoundment, water diversion, water withdrawal, and hydropower generation. These activities could eliminate or reduce the habitat necessary for growth and reproduction of the diamond darter.
(3) Actions that would significantly alter water chemistry or water quality (for example, dissolved oxygen, temperature, pH, contaminants, and excess nutrients). Such activities could include, but are not limited to, hydropower discharges or the release of chemicals, biological pollutants, or toxic effluents into surface water or connected groundwater at a point source or by dispersed release (nonpoint source). These activities could alter water conditions beyond the tolerances of these fish and result in direct or cumulative adverse effects to the species.
(4) Actions that would significantly alter stream bed material composition and quality by increasing sediment deposition or embeddedness. Such activities could include, but are not limited to, certain construction projects, oil and gas development, mining, timber harvest, and other watershed and floodplain disturbances if they release sediments or nutrients into the water. These activities could eliminate or reduce habitats necessary for the growth and reproduction of these fish by causing excessive sedimentation or nutrification.
The Sikes Act Improvement Act of 1997 (Sikes Act) (16 U.S.C. 670a) required each military installation that includes land and water suitable for the conservation and management of natural resources to complete an integrated natural resources management plan (INRMP) by November 17, 2001. An INRMP integrates implementation of the military mission of the installation with stewardship of the natural resources found on the base. Each INRMP includes:
(1) An assessment of the ecological needs on the installation, including the need to provide for the conservation of listed species;
(2) A statement of goals and priorities;
(3) A detailed description of management actions to be implemented to provide for these ecological needs; and
(4) A monitoring and adaptive management plan.
Among other things, each INRMP must, to the extent appropriate and applicable, provide for fish and wildlife management; fish and wildlife habitat enhancement or modification; wetland protection, enhancement, and restoration where necessary to support fish and wildlife; and enforcement of applicable natural resource laws.
The National Defense Authorization Act for Fiscal Year 2004 (Pub. L. 108-136) amended the Act to limit areas eligible for designation as critical habitat. Specifically, section 4(a)(3)(B)(i) of the Act (16 U.S.C. 1533(a)(3)(B)(i)) now provides: “The Secretary [of the Interior (Secretary)] shall not designate as critical habitat any lands or other geographical areas owned or controlled by the Department of Defense, or designated for its use, that are subject to an integrated natural resources management plan prepared under section 101 of the Sikes Act (16 U.S.C. 670a), if the Secretary determines in writing that such plan provides a benefit to the species for which critical habitat is proposed for designation.”
There are no Department of Defense (DOD) lands with a completed INRMP
Section 4(b)(2) of the Act states that the Secretary shall designate and make revisions to critical habitat on the basis of the best available scientific data after taking into consideration the economic impact, national security impact, and any other relevant impact of specifying any particular area as critical habitat. The Secretary may exclude an area from critical habitat if he determines that the benefits of such exclusion outweigh the benefits of specifying such area as part of the critical habitat, unless he determines, based on the best scientific data available, that the failure to designate such area as critical habitat will result in the extinction of the species. In making that determination, the statute on its face, as well as the legislative history, are clear that the Secretary has broad discretion regarding which factor(s) to use and how much weight to give to any factor.
Under section 4(b)(2) of the Act, we may exclude an area from designated critical habitat based on economic impacts, impacts on national security, or any other relevant impacts. In considering whether to exclude a particular area from the designation, we identify the benefits of including the area in the designation, identify the benefits of excluding the area from the designation, and evaluate whether the benefits of exclusion outweigh the benefits of inclusion. If the analysis indicates that the benefits of exclusion outweigh the benefits of inclusion, the Secretary may exercise his discretion to exclude the area only if such exclusion would not result in the extinction of the species.
Under section 4(b)(2) of the Act, we consider the economic impacts of specifying any particular area as critical habitat. In order to consider economic impacts, we are preparing an analysis of the economic impacts of the proposed critical habitat designation and related factors.
We will announce the availability of the draft economic analysis as soon as it is completed, at which time we will seek public review and comment. At that time, copies of the draft economic analysis will be available for downloading from the Internet at
Under section 4(b)(2) of the Act, we consider whether there are lands owned or managed by the DOD where a national security impact might exist. In preparing this proposal, we have determined that the lands within the proposed designation of critical habitat for the diamond darter are not owned or managed by the DOD, and therefore, we anticipate no impact to national security.
Under section 4(b)(2) of the Act, we consider any other relevant impacts, in addition to economic impacts and impacts on national security. We consider a number of factors including whether landowners have developed any conservation plans or other management plans for the area, or whether there are conservation partnerships that would be encouraged by designation of, or exclusion of lands from, critical habitat. In addition, we look at any tribal issues, and consider the government-to-government relationship of the United States with tribal entities. We also consider any social impacts that might occur because of the designation.
In preparing this proposed rule, we have determined that there are currently no conservation plans or other management plans for the species, and the proposed designation does not include any tribal lands or trust resources. We anticipate no impact to tribal lands, partnerships, or management plans from this proposed critical habitat designation.
Notwithstanding these decisions, as stated under “Public Comments” above, we are seeking specific comments on whether any areas we are proposing for designation should be excluded under section 4(b)(2) of the Act.
In accordance with our joint policy on peer review published in the
We will consider all comments and information received during this comment period on this proposed rule during our preparation of a final determination. Accordingly, the final decision may differ from this proposal.
Section 4(b)(5) of the Act provides for one or more public hearings on this proposal, if requested. Requests must be received within 45 days after the date of publication of this proposed rule in the
Executive Order 12866 provides that the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget will review all significant rules. The Office of Information and Regulatory Affairs has determined that this rule is not significant.
Executive Order 13563 reaffirms the principles of E.O. 12866 while calling for improvements in the nation's regulatory system to promote predictability, to reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory ends. The executive order directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. E.O. 13563 emphasizes further that regulations must be based on the best available science and that the rulemaking process must allow for public participation and an open exchange of ideas. We have developed this rule in a manner consistent with these requirements.
Under the Regulatory Flexibility Act (RFA; 5 U.S.C. 601
According to the Small Business Administration, small entities include small organizations such as independent nonprofit organizations; small governmental jurisdictions, including school boards and city and town governments that serve fewer than 50,000 residents; and small businesses (13 CFR 121.201). Small businesses include such businesses as manufacturing and mining concerns with fewer than 500 employees, wholesale trade entities with fewer than 100 employees, retail and service businesses with less than $5 million in annual sales, general and heavy construction businesses with less than $27.5 million in annual business, special trade contractors doing less than $11.5 million in annual business, and forestry and logging operations with fewer than 500 employees and annual business less than $7 million. To determine whether small entities may be affected, we will consider the types of activities that might trigger regulatory impacts under this designation as well as types of project modifications that may result. In general, the term “significant economic impact” is meant to apply to a typical small business firm's business operations.
Importantly, the incremental impacts of a rule must be both significant and substantial to prevent certification of the rule under the RFA and to require the preparation of an initial regulatory flexibility analysis. If a substantial number of small entities are affected by the proposed critical habitat designation, but the per-entity economic impact is not significant, the Service may certify. Likewise, if the per-entity economic impact is likely to be significant, but the number of affected entities is not substantial, the Service may also certify.
Under the RFA, as amended, and following recent court decisions, Federal agencies are only required to evaluate the potential incremental impacts of rulemaking on those entities directly regulated by the rulemaking itself, and not the potential impacts to indirectly affected entities. The regulatory mechanism through which critical habitat protections are realized is section 7 of the Act, which requires Federal agencies, in consultation with the Service, to ensure that any action authorized, funded, or carried by the Agency is not likely to adversely modify critical habitat. Therefore, only Federal action agencies are directly subject to the specific regulatory requirement (avoiding destruction and adverse modification) imposed by critical habitat designation. Under these circumstances, it is our position that only Federal action agencies will be directly regulated by this designation. Therefore, because Federal agencies are not small entities, the Service may certify that the proposed critical habitat rule will not have a significant economic impact on a substantial number of small entities.
We acknowledge, however, that in some cases, third-party proponents of the action subject to permitting or funding may participate in a section 7 consultation, and thus may be indirectly affected. We believe it is good policy to assess these impacts if we have sufficient data before us to complete the necessary analysis, whether or not this analysis is strictly required by the RFA. While this regulation does not directly regulate these entities, in our draft economic analysis we will conduct a brief evaluation of the potential number of third parties participating in consultations on an annual basis in order to ensure a more complete examination of the incremental effects of this proposed rule in the context of the RFA.
In conclusion, we believe that, based on our interpretation of directly regulated entities under the RFA and relevant case law, this designation of critical habitat will only directly regulate Federal agencies, which are not by definition small business entities. And as such, we certify that, if promulgated, this designation of critical habitat would not have a significant economic impact on a substantial number of small business entities. Therefore, an initial regulatory flexibility analysis is not required. However, though not necessarily required by the RFA, in our draft economic analysis for this proposal, we will consider and evaluate the potential effects to third parties that may be involved with consultations with Federal action agencies related to this action.
Executive Order 13211 (Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use) requires agencies to prepare Statements of Energy Effects when undertaking certain actions. We do not expect the designation of this proposed critical habitat to significantly affect energy supplies, distribution, or use.
Natural gas and oil exploration and development activities occur or could potentially occur in both of the proposed critical habitat units for the diamond darter. Both of the proposed units already support other federally endangered species, and the Service is already actively engaged in discussions with many gas companies to develop measures to avoid impacts to these habitats. Oil and gas exploration and development within the Green River unit is expected to be limited. There are at least six existing gas pipelines crossing the Elk River within the proposed unit, and others may be proposed in the future. Development and compliance with voluntary BMPs and avoidance measures such as the use of directional drilling or rerouting proposed transmission lines would be expected to minimize impacts of natural gas and oil exploration and development in the areas of proposed critical habitat. These types of measures are already being implemented by some oil and gas companies or other industries in the proposed units or in other areas.
Coal mining occurs or could potentially occur in the Elk River proposed critical habitat unit for the diamond darter. Incidental take for listed species associated with surface coal mining activities is currently covered under a programmatic, nonjeopardy biological opinion between the Office of Surface Mining and the Service completed in 1996 (Service 1996, entire). The biological opinion covers existing, proposed, and future endangered and threatened species that may be affected by the implementation and administration of surface coal mining programs under the Surface Mining Control and Reclamation Act of 1977. Through its analysis, the Service concluded that the proposed action
Therefore, we do not believe this action is a significant energy action, and no Statement of Energy Effects is required. However, we will further evaluate this issue as we conduct our economic analysis, and review and revise this assessment as warranted.
In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501
(1) This rule will not produce a Federal mandate. In general, a Federal mandate is a provision in legislation, statute, or regulation that would impose an enforceable duty upon state, local, or tribal governments, or the private sector, and includes both “Federal intergovernmental mandates” and “Federal private sector mandates.” These terms are defined in 2 U.S.C. 658(5)-(7). “Federal intergovernmental mandate” includes a regulation that “would impose an enforceable duty upon state, local, or tribal governments” with two exceptions. It excludes “a condition of Federal assistance.” It also excludes “a duty arising from participation in a voluntary Federal program,” unless the regulation “relates to a then-existing Federal program under which $500,000,000 or more is provided annually to state, local, and tribal governments under entitlement authority,” if the provision would “increase the stringency of conditions of assistance” or “place caps upon, or otherwise decrease, the Federal Government's responsibility to provide funding,” and the state, local, or tribal governments “lack authority” to adjust accordingly. At the time of enactment, these entitlement programs were: Medicaid; Aid to Families with Dependent Children work programs; Child Nutrition; Food Stamps; Social Services Block Grants; Vocational Rehabilitation State Grants; Foster Care, Adoption Assistance, and Independent Living; Family Support Welfare Services; and Child Support Enforcement. “Federal private sector mandate” includes a regulation that “would impose an enforceable duty upon the private sector, except (i) a condition of Federal assistance or (ii) a duty arising from participation in a voluntary Federal program.”
The designation of critical habitat does not impose a legally binding duty on non-Federal Government entities or private parties. Under the Act, the only regulatory effect is that Federal agencies must ensure that their actions do not destroy or adversely modify critical habitat under section 7. While non-Federal entities that receive Federal funding, assistance, or permits, or that otherwise require approval or authorization from a Federal agency for an action, may be indirectly impacted by the designation of critical habitat, the legally binding duty to avoid destruction or adverse modification of critical habitat rests squarely on the Federal agency. Furthermore, to the extent that non-Federal entities are indirectly impacted because they receive Federal assistance or participate in a voluntary Federal aid program, the Unfunded Mandates Reform Act would not apply, nor would critical habitat shift the costs of the large entitlement programs listed above onto state governments.
(2) We do not believe that this rule will significantly or uniquely affect small governments. The diamond darter only occurs in navigable waters within West Virginia in which the river bottom is owned by the State of West Virginia. The adjacent upland properties are owned by private entities. Within Kentucky, the lands being proposed for critical habitat are mostly owned by private landowners; a small portion is owned by Mammoth Cave National Park. None of these government entities fit the definition of “small governmental jurisdiction.” Small governments will be affected only to the extent that any programs having Federal funds, permits, or other authorized activities must ensure that their actions will not adversely affect the critical habitat. As such, a Small Government Agency Plan is not required. We will, however, further evaluate this issue as we conduct our economic analysis and revise this assessment if appropriate.
In accordance with Executive Order 12630 (Government Actions and Interference with Constitutionally Protected Private Property Rights), we have analyzed the potential takings implications of designating critical habitat for the diamond darter in a takings implications assessment. Critical habitat designation does not affect landowner actions that do not require Federal funding or permits, nor does it preclude development of habitat conservation programs or issuance of incidental take permits to permit actions that do not require Federal funding or permits to go forward. The takings implications assessment concludes that this designation of critical habitat for the diamond darter does not pose significant takings implications for lands within or affected by the designation.
In accordance with Executive Order 13132 (Federalism), the rule does not have significant Federalism effects. A Federalism assessment is not required. In keeping with Department of the Interior and Department of Commerce policy, we requested information from, and coordinated development of this proposed critical habitat designation with, appropriate State resource agencies in West Virginia and Kentucky. The designation of critical habitat in areas currently occupied by this fish may impose nominal additional regulatory restrictions to those currently in place for other listed species and, therefore, may have little incremental impact on state and local governments and their activities. The designation may have some benefit to these governments because the areas that contain the physical or biological features essential to the conservation of the species are more clearly defined, and the elements of the features of the habitat necessary to the conservation of the species are specifically identified. This information does not alter where and what federally sponsored activities may occur. However, it may assist local governments in long-range planning (rather than having them wait for case-by-case section 7 consultations to occur).
Where state and local governments require approval or authorization from a Federal agency for actions that may affect critical habitat, consultation under section 7(a)(2) would be required. While non-Federal entities that receive Federal funding, assistance, or permits, or that otherwise require approval or authorization from a Federal agency for an action, may be indirectly impacted by the designation of critical habitat, the legally binding duty to avoid destruction or adverse modification of critical habitat rests squarely on the Federal agency.
In accordance with Executive Order (Order) 12988 (Civil Justice Reform), the Office of the Solicitor has determined that the rule does not unduly burden the judicial system and that it meets the requirements of sections 3(a) and 3(b)(2) of the Order. We have proposed designating critical habitat in accordance with the provisions of the Act. This proposed rule uses standard
This rule does not contain any new collections of information that require approval by OMB under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
We have determined that environmental assessments and environmental impact statements, as defined under the authority of the National Environmental Policy Act (NEPA; 42 U.S.C. 4321
It is our position that, outside the jurisdiction of the U.S. Court of Appeals for the Tenth Circuit, we do not need to prepare environmental analyses pursuant to NEPA (42 U.S.C. 4321
We are required by Executive Orders 12866 and 12988 and by the Presidential Memorandum of June 1, 1998, to write all rules in plain language. This means that each rule we publish must:
(1) Be logically organized;
(2) Use the active voice to address readers directly;
(3) Use clear language rather than jargon;
(4) Be divided into short sections and sentences; and
(5) Use lists and tables wherever possible.
If you feel that we have not met these requirements, send us comments by one of the methods listed in the
In accordance with the Presidential Memorandum of April 29, 1994 (Government-to-Government Relations with Native American Tribal Governments; 59 FR 22951), Executive Order 13175 (Consultation and Coordination With Indian Tribal Governments), and the Department of the Interior's manual at 512 DM 2, we readily acknowledge our responsibility to communicate meaningfully with recognized Federal Tribes on a government-to-government basis. In accordance with Secretarial Order 3206 of June 5, 1997 (American Indian Tribal Rights, Federal-Tribal Trust Responsibilities, and the Endangered Species Act), we readily acknowledge our responsibilities to work directly with tribes in developing programs for healthy ecosystems, to acknowledge that tribal lands are not subject to the same controls as Federal public lands, to remain sensitive to Indian culture, and to make information available to tribes.
We determined that there are no tribal lands that were occupied by the diamond darter at the time of this proposal that contain the features essential for conservation of the species, and no tribal lands unoccupied by the diamond darter that are essential for the conservation of the species. Therefore, we are not proposing to designate critical habitat for the diamond darter on tribal lands.
A complete list of references cited in this rulemaking is available on the Internet at
The primary authors of this package are the staff members of the West Virginia Field Office.
Endangered and threatened species, Exports, Imports, Reporting and recordkeeping requirements, Transportation.
Accordingly, we propose to amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as set forth below:
1. The authority citation for part 17 continues to read as follows:
16 U.S.C. 1361-1407; 16 U.S.C. 1531-1544; 16 U.S.C. 4201-4245; Pub. L. 99-625, 100 Stat. 3500; unless otherwise noted.
2. In § 17.11(h) add the following to the List of Endangered and Threatened in alphabetical order under FISHES:
(h) * * *
3. In § 17.95, amend paragraph (e) by adding an entry for “Diamond Darter (
(e)
(1) Critical habitat units are depicted for Kanawha and Clay Counties, West Virginia, and Edmonson, Hart, and Green Counties, Kentucky, on the maps below.
(2) Within these areas, the primary constituent elements of the physical or biological features essential to the conservation of diamond darter consist of five components:
(i) A series of connected riffle-pool complexes with moderate velocities in moderate to large-sized (fourth to eighth order), geomorphically stable streams within the Ohio River watershed.
(ii) Stable, undisturbed, bottom substrates composed of relatively silt-free, unembedded sand and gravel.
(iii) An instream flow regime (magnitude, frequency, duration, and seasonality of discharge over time) that is relatively unimpeded by impoundment or diversions such that there is minimal departure from a natural hydrograph.
(iv) Adequate water quality characterized by seasonally moderated temperatures, high dissolved oxygen levels, and moderate pH, and low levels of pollutants and siltation. Adequate water quality is defined as the quality necessary for normal behavior, growth, and viability of all life stages of the diamond darter.
(v) A prey base of other fish larvae and benthic invertebrates including midge, caddisfly and mayfly larvae.
(3) Critical habitat does not include manmade structures (such as buildings, aqueducts, runways, roads, and other paved areas) and the land on which they are located existing within the legal boundaries on the effective date of this rule.
(4)
(5)
(6) Unit 1: Lower Elk River, Kanawha and Clay Counties, West Virginia.
(i) Unit 1 includes 45.0 km (28.0 mi) of the Elk River from the confluence with King Shoals Run near Wallback Wildlife Management Area downstream to the confluence with an unnamed tributary entering the Elk River on the right descending bank adjacent to Knollwood Drive in Charleston, West Virginia.
(ii)
(7) Unit 2: Green River, Edmonson, Hart, and Green Counties, Kentucky.
(i) Unit 2 includes 152.1 km (94.5 mi) of the Green River from Roachville Ford near Greensburg (River Mile 294.8) downstream to the downstream end of Cave Island in Mammoth Cave National Park (River Mile 200.3).
(ii)
Office of National Marine Sanctuaries (ONMS), National Ocean Service (NOS), National Oceanic and Atmospheric Administration (NOAA), Department of Commerce (DOC).
Final rule.
The National Oceanic and Atmospheric Administration (NOAA) is adding five additional discrete geographical areas to the sanctuary and changing the name of the Fagatele Bay National Marine Sanctuary (FBNMS or sanctuary) to the National Marine Sanctuary of American Samoa (NMSAS). NOAA also is amending existing sanctuary regulations and applying these regulations to activities in the sanctuary.
Copies of the final environmental impact statement (FEIS) described in this rule and the record of decision (ROD) as well as the final management plan are available upon request to Fagatele Bay National Marine Sanctuary, P.O. Box 4318, Pago Pago, American Samoa 96799, Attn: Gene Brighouse, Superintendent. The FEIS and final management plan can also be viewed on the Web and downloaded at
Gene Brighouse, Superintendent, Fagatele Bay National Marine Sanctuary, at (684) 633-5155 ext 264.
Fagatele Bay National Marine Sanctuary was designated in 1986 in response to a proposal from the American Samoa Government to the (then) National Marine Sanctuary Program. The existing Fagatele Bay National Marine Sanctuary protects 163 acres (0.25 square miles) of bay area off the southwest coast of Tutuila Island, American Samoa. It nestles in an eroded volcanic crater. Fagatele Bay provides a home to a wide variety of animals and plants that thrive in the protected waters of the bay. It contains many of the species native to this part of the Indo-Pacific biogeographic region. Turtles, whales, sharks and the giant clam all find refuge in this protected area.
With this rulemaking, NOAA is re-naming the sanctuary “National Marine Sanctuary of American Samoa” (NMSAS) and expanding it to contain five additional discrete units: Fagalua/Fogama'a (described as Larsen Bay in the proposed rule), Swains Island, Ta'u, Aunu'u and Muliāva (Rose Atoll). For more information on the sanctuary, visit:
The National Marine Sanctuaries Act (NMSA) requires NOAA to periodically review and evaluate the progress in implementing the management plan and goals for each national marine sanctuary. NOAA must revise management plans and regulations as necessary to fulfill the purposes and policies of the NMSA (16 U.S.C. 1434(e)) to ensure that national marine sanctuaries continue to best conserve, protect, and enhance their nationally significant living and cultural resources. NOAA puts special emphasis on the effectiveness of site-specific techniques and strategies. The FBNMS management plan was published in 1986 and has not been updated since. On a global scale, the past 25 years have been a period of tremendous advancement in marine discovery and exploration, marine conservation science, and ecosystem-based management. New tools and techniques allow for improved management and conservation, which are needed to slow the long-term decline of coral reefs throughout the world. Recent archipelago-wide marine research efforts have led to comprehensive integrated ecosystem assessments of American Samoa's coral reefs. These studies have provided information on the relative biological value of different reefs across the territory, a critical step in determining where to focus marine resource protection efforts.
The environment within American Samoa has also changed over the past 25 years. The sudden growth of the commercial longline fishery in 2001; mass coral bleaching events in 1994, 2002, and 2003; and nonpoint source pollution from land-use practices are recent management concerns that may affect the health and resilience of American Samoa's marine ecosystems. The U.S. Coral Reef Task Force has established the conservation objective to protect “a minimum of 20% of each coral reef and associated habitat type” as no-take areas. The American Samoa Governor, like his predecessor in 2000, has committed to reaching this goal in American Samoa by setting aside 20% of the coral reef habitat within the territory for long-term protection.
Finally, Presidential Proclamation 8337 issued by President George W. Bush in 2009 states that, “[t]he Secretary of Commerce shall initiate the process to add the marine areas of the [Rose Atoll Marine National] monument to the Fagatele Bay National Marine Sanctuary in accordance with the National Marine Sanctuaries Act (16 U.S.C. 1431
NOAA conducted a public scoping period in February and March of 2009 (74 FR 5641) to identify issues and gauge interest within American Samoa for possible sanctuary expansion and designation of additional sanctuary units. Scoping revealed some support for the protection of additional areas throughout the archipelago, as well as some opposition to additional sites. Specific comments received during this process are included in the final environmental impact statement (FEIS) and yielded a list of four sites for consideration. Three additional sites were included for consideration based on a specific request of the Jennings family (Swains Island), input from the Secretary of Samoan Affairs (Ta'u Island), and Presidential Proclamation 8337 (Rose Atoll, also called Muliāva in Samoan). Two additional sites were included for consideration based on preliminary biogeographic information analyzed by sanctuary staff (Fagalua/Fogama'a and Aunu'u).
After a list of nine potential sites was developed, the Sanctuary Advisory Council (SAC) established a Site Selection Working Group consisting of members of the SAC and of the public, assisted by sanctuary staff. The Working Group utilized criteria set forth in the
During public scoping, some expressed concern over the expansion of FBNMS into a complex of units across the territory. The primary concerns reflected in the public comments were: (1) The Territory already has a process for establishing marine protected areas (MPAs); and (2) a federal presence would not allow for community-driven marine resource management. As a result of these concerns and NOAA's intention to respect the Samoan culture, NOAA chose each of the proposed units carefully taking into consideration the wishes of the communities as well as the criteria from the NMSA for designating a new national marine sanctuary and the results of a Biogeographic Assessment of the American Samoa Archipelago. After determining which units would be considered for inclusion, NOAA held multiple meetings with each of the communities associated with the units to foster consensus and collaboration with regard to how the unit would be managed. The development of location-specific regulations occurred through a collaborative process during community meetings between NOAA and village representatives. Issues addressed during the meetings included potential gear restrictions, fishing restrictions, and co-management of the sanctuary unit.
In October 2011, NOAA published a proposed rule (76 FR 65566), draft environmental impact statement and draft management plan and requested public comment on this proposal until January 6, 2012. Due to public requests as well as a request from the American Samoa delegate to the U.S. Congress to extend the public comment period, NOAA published an extension in the
Section 304(a)(4) of the NMSA requires that the terms of designation for national marine sanctuaries include: (1) The geographic area included within the sanctuary; (2) the characteristics of the area that give it conservation, recreational, ecological, historical, research, educational, or aesthetic value; and (3) the types of activities subject to regulation by NOAA to protect these characteristics. Section 304(a)(4) also specifies that the terms of designation may be modified only by the same procedures by which the original designation was made.
To implement this action, NOAA is making changes to the FBNMS terms of designation, which were previously published in the
1. Modify the name of the sanctuary to “National Marine Sanctuary of American Samoa.”
2. Modify Article 2 “Description of the Area” by describing the five additional areas.
3. Modify Article 3 “Special Characteristics of the Area” by adding additional areas of near-shore, mid-shore, deep reef, a seamount, open pelagic waters and other habitats and areas of cultural significance; and revise the description of the value of the sanctuary.
4. Modify Article 4 “Scope of Regulations” by updating Section 1 to expand the goal of the sanctuary to ensure the protection and preservation of the coral ecosystem; and revise Section 1 to include operating a vessel, moving, removing, or tampering with any sign or other sanctuary property, and introducing a non-native species in order to provide authority for sanctuary regulations.
5. Modify Article 4 “Scope of Regulations” by updating Section 2 to align the text more closely with the National Marine Sanctuaries Act.
6. Modify Article 5 “Relation to Other Regulatory Programs” by updating Section 1 to reflect a more coordinated and collaborative approach to enforcement between NOAA and the Territory of American Samoa.
7. Correct a few typographical errors throughout the terms of designation.
8. Delete Article 7 “Funding” because this language is not necessary to control the Joint Enforcement Agreements (JEA), as there is language in the JEA about how priorities are set and communicated among the enforcement partners.
The revised terms of designation will read as follows (new text in quotes and deleted text in brackets and italics):
Under the authority of the National Marine Sanctuaries Act, 16 U.S.C. 1434 [
The designation of the [
[
[
The Sanctuary contains a unique and vast array of tropical marine organisms, including corals and a diverse tropical reef ecosystem with endangered and threatened species, such as the hawksbill and green sea turtles, and marine mammals like the Pacific bottlenose dolphin. “The Sanctuary also contains areas such as near-shore, mid-shore, deep reef, seamount, open pelagic waters and other habitats and areas of historical and cultural significance.”
The area provides exceptional [
a. Taking or otherwise damaging natural resources.
b. Discharging or depositing any substance.
c. Disturbing the benthic community.
d. Removing or otherwise harming cultural or historical resources.
“e. Operating a vessel.”
“f. Moving, removing, or tampering with any sign or other Sanctuary property.”
“g. Introducing or otherwise releasing an introduced species.”
(1) No alteration or modification of any Sanctuary regulation shall become effective without the written concurrence of both the Territory and NOAA; and
“(2)” [
(b) Where the Territory shall propose any alteration or modification of the regulations described in Article 4, such alteration or modification shall be submitted to NOAA for agreement and simultaneous proposal in the
[
“(c)” [
[
[
The amended regulations add the following five units to the sanctuary: (1) Fagalua/Fogama'a (described as Larsen Bay in the proposed rule), (2) Aunu'u
All six units have intrinsic value that merits their inclusion in the National Marine Sanctuary System. Please refer to the FBNMS Web site and the final environmental impact statement supporting this rulemaking for more information and a map depicting the location of these areas.
The Fagatele Bay and Fagalua/Fogama'a units are the only bays in the territory formed by collapsed craters—a unique geological and habitat feature. In addition, similarities in the fish and coral population between these two sites make them useful replicates of one another for research purposes. Preserving Fagalua/Fogama'a as a complement to Fagatele Bay provides additional security for the habitats and species that occur in both bays. When they are protected in only a single location, rare and unique habitats and species are more vulnerable to natural disasters or human disturbance. Furthermore, protecting organisms in Fagalua/Fogama'a would both increase the genetic diversity of species in different microhabitats within Fagalua/Fogama'a and increase the abundance of local populations, resulting in increased overall resilience of the coral reef ecosystems. In addition, the prehistoric village site adjacent to the Fagatele Bay unit may offer important archeological insights into interactions between humans and the marine environment.
The Aunu'u Island unit bears cultural resource significance due to a 19th century whaling vessel lost there. It also has a unique and vibrant patch reef system, and a coral shelf that provides a continuous habitat extending down to mesophotic reefs. The Aunu'u Island unit will be divided into two zones: A Multiple Use Zone (Zone A), where fishing would be allowed, and a Research Zone (Zone B), where all consumptive uses except trolling and surface fishing would be prohibited to provide a control area as a mechanism for research activities.
The Ta'u unit includes a unique fish community, as well as some extraordinarily large
The Swains Island unit is the northern-most emergent reef in the Territory, is isolated from the rest of the archipelago, and is comprised of unique fish and coral communities.
The Muliāva unit (Rose Atoll) is the easternmost emergent reef in the Territory, includes the Vailulu'u Seamount, and is a potentially key source of coral and fish larvae for Tutuila, the Manu'a islands, and Independent Samoa. Muliāva is also the only site with extensive pelagic habitat. In addition, the inclusion of the Vailulu'u Seamount in the Muliāva unit will provide sanctuary management, which highlights both its physical importance as the only hydrothermally active seamount in the U.S. EEZ around the American Samoa archipelago and its biological importance due to multiple diverse and unusual faunal communities. The Muliava unit's seaward boundary is contiguous with the Rose Atoll National Marine Monument, except that it includes the Vailulu'u Seamount.
As a result of the proposed incorporation of five additional units across the archipelago, the current sanctuary name, Fagatele Bay National Marine Sanctuary, would no longer be appropriate. Therefore, NOAA is changing the name of the sanctuary to the National Marine Sanctuary of American Samoa (NMSAS).
Existing regulations for the sanctuary (15 CFR part 922, subpart J) are revised as described below and will apply to activities in all units described above, except as noted below.
In order to clarify the sanctuary-wide regulations described below, the following new terms are added to the definitions section: Clean, fishing, harmful matter, introduced species, live rock, and stowed and not available for immediate use.
The following activities are prohibited in all areas and units of the sanctuary:
• Discharging any material or other matter within the sanctuary. There are two exceptions to this prohibition. First, an exception is made for clean vessel deck wash down, clean vessel engine cooling water, clean vessel generator cooling water, clean bilge water, anchor wash, or vessel engine or generator exhaust. Second, in the Muliāva unit only, vessels conducting scientific exploration and research for either the Secretary of Commerce or Interior would be allowed to discharge treated effluent outside of 12 nm from the Rose Atoll National Wildlife Refuge from a Type I, II, or III U.S. Coast Guard-approved Marine Sanitation Device due to the impracticability of holding waste until the vessel is out of the sanctuary in such a large protected area. Other vessels conducting research or scientific exploration also would be allowed to discharge treated effluent consistent with these limitations if authorized by a permit.
• Using or discharging explosives or weapons of any description.
• Discharging any material from outside of sanctuary waters that enters the sanctuary and injures a sanctuary resource, both from land- and sea-based sources.
• Exceeding three knots within 200 feet of a dive flag.
• Disturbing the benthic community by dredging, filling, dynamiting, or otherwise altering the seabed.
• Damaging, removing or displacing any signs, notices, or placards, or stakes, posts, or other boundary markers related to the sanctuary.
• Failing to clearly display the blue-and-white International Code flag alpha “A” or the standard red-and-white U.S. “diver down” flag when operating a vessel while divers or snorkelers are in the water.
• Removing, damaging, or tampering with any historical or cultural resource.
• Taking any marine mammal, sea turtle, or seabird in the sanctuary, except as authorized by other statutes. (This activity is already prohibited in territorial waters under ASCA 24.0934-0935 and in federal waters under the Endangered Species Act and Marine Mammal Protection Act.)
• Anchoring, and the requirement to use a mooring buoy where available.
• Introducing or releasing introduced species from within or into sanctuary waters.
• Abandoning any structure, material, or other matter on or in the submerged lands of the sanctuary.
• Deserting a vessel aground, at anchor, or adrift in the sanctuary.
• Leaving harmful matter aboard an abandoned or deserted vessel in the sanctuary.
Section 304(a)(5) of the NMSA requires that NOAA consult with the appropriate Federal fishery management council on any action proposing to regulate fishing in federal waters, from 3 miles to 200 miles offshore. NOAA is not promulgating any fishing regulations in federal waters at this time. All areas of the sanctuary are in territorial waters except the Muliāva unit, which contains federal waters. With the exception of the Rose Atoll National Wildlife Refuge, NOAA has the primary responsibility within the Monument regarding the management of the marine areas with respect to fishery-related activities. Fishing regulations for that area as well as the rest of the Pacific Monuments are being developed by the Western Pacific Fishery Management Council and NOAA's National Marine Fisheries Service, in accordance with the respective Presidential Proclamations from 2009. Therefore, the following fishery-related activities are prohibited in all areas of the sanctuary except the Muliāva unit:
• Possessing or using:
○ Poisons, electrical charges, explosives, or similar environmentally destructive methods of fishing or harvesting. This activity is already prohibited in territorial waters under ASCA 24.0911-0915 and in federal waters under 50 CFR 665.104(c) and 665.127(b).
○ Any type of fixed net, including seine and trammel nets, or drift gill nets (the use of cast or throw nets is not prohibited).
○ The use of SCUBA gear in conjunction with the use of spearguns, including Hawaiian slings, pole spears, arbalettes, pneumatic and spring-loaded spearguns, bows and arrows, and bang sticks.
○ Disturbing the benthic community by bottom trawling.
• The take of the following categories of organisms:
○ Live coral and wild rock (take is already prohibited in territorial waters less than 60 feet deep under ASCA 24.0927(a) and in federal waters under 50 CFR 665.125(c)).
○ Other bottom formations, including precious corals and crustose coralline algae (take of precious corals is already prohibited in territorial waters less than 60 feet deep under ASCA 24.0927(a)).
○ Giant clams [
In addition to the sanctuary-wide prohibited activities described above, this rule promulgates unit-specific regulations for two (Fagatele Bay, and Aunu'u Island) of the six units that are proposed to be included as part of the NMSAS. The unit-specific regulations are of two types: (1) Allowable or restricted gear, and (2) allowable or restricted fishing practices. In the Fagatele Bay unit, all fishing is prohibited, effectively making that area a no-take zone. There are no site-specific restrictions for the Ta'u Island, Swains Island, and Fagalua/Fogama'a units because NOAA determined that the sanctuary-wide regulations that apply to these areas would be sufficient to meet the goals and objectives of the sanctuary. There are no site-specific fishing restrictions for the Muliāva unit at this time, as ONMS is awaiting Council/NMFS action regarding fishing regulations in that area.
The regulations for the Fagatele Bay unit prohibit all take of sanctuary resources. While the FBNMS condition report (2007) rates most resources in good condition, a reduction in numbers and size of large predatory fish (e.g., Maori wrasse
The Aunu'u Island unit is divided into two zones, Zone A and Zone B.
Zone A is the Multiple Use Zone, in which fishing will be allowed provided that vessel operators make their presence known to the sanctuary or its designate in the village of Aunu'u prior to entering the sanctuary to conduct extractive activities. Zone A will provide protection of the resources within this area, and will allow for a better understanding of current use levels of the area.
Zone B is the Research Zone, where surface fishing for pelagic species, including fishing by trolling, is allowed. The ONMS may issue permits for research activities that are otherwise prohibited by sanctuary regulations provided the applications comply with ONMS permitting procedures and criteria. In Zone B, all extractive activities of bottom-dwelling species, including trawling, are prohibited to provide a control area as a mechanism for research activities.
Due to the potential impact of vessel effluent discharges on resources of the Rose Atoll Marine National Monument, and to be consistent with the requirements of Proclamation 8337, NOAA has determined that only vessels that are engaged in scientific exploration or research activities on behalf of either the Department of Commerce or the Department of the Interior should be allowed to discharge treated effluent from a Coast Guard-approved Type I, II, or III Marine Sanitation Device (MSD). Such a discharge should only occur if the relevant agency determines that exiting the Muliāva unit to discharge would be impracticable under existing circumstances. Other vessels engaged in scientific exploration or research activities may be permitted to discharge on a case-by-case basis, which will be determined by following the permit process in 15 CFR 922.48 and 922.107 and in consultation with the Intergovernmental Governing Committee, which is comprised of ONMS, NMFS, U.S. Fish and Wildlife Service, and Government of American Samoa. Furthermore, no discharge would be allowed by any vessel within 12 nautical miles of the Rose Atoll National Wildlife Refuge.
The regulations will be enforced by NOAA and other authorized agencies (i.e., the U.S. Coast Guard, U.S. Department of the Interior, and America Samoan Department of Marine and Wildlife Resources) in a coordinated and comprehensive way. Enforcement actions for an infraction will be prosecuted under the appropriate statutes or regulations governing that infraction. The prohibition against catching or harvesting marine organisms includes a rebuttable presumption that any marine organism or part thereof found in the possession of a person
The newly added areas of the sanctuary will provide researchers a valuable opportunity to discern between human-induced and natural changes in the Samoan archipelago. Researchers will be required to obtain permits to conduct activities related to research that would otherwise be prohibited by the regulations.
NOAA's sanctuary-wide regulations and the site-specific regulations for the NMSAS (15 CFR part 922) allow the ONMS Director to issue permits to conduct activities that would otherwise be prohibited by the regulations. The authority to issue permits for activities in NMSAS is delegated to the Superintendent. Requirements for filing permit applications are specified in 15 CFR 922.104 of the ONMS regulations. Criteria for reviewing permit applications are also contained in the ONMS regulations at 15 CFR 922.104. In most sanctuaries, permits may be issued for activities related to scientific research, education, and management, among other categories of activities.
In complement to the existing regulations, which allow the Director to issue sanctuary permits for research, education, and salvage activities, NOAA is adding a category of sanctuary permit for management activities. Such a management category will allow otherwise prohibited activities that would assist in managing the sanctuary, either by NOAA or third parties. This will provide protection for the sanctuary's physical, biological, and historical resources by ensuring that no activity may cause long-term or irreparable harm to the resources of the sanctuary.
In addition, NOAA is deleting a redundant portion of the regulatory text pertaining to the conditions that the ONMS Director may place on a permit. Section 922.106(e) of the FBNMS regulations states that the ONMS Director may issue a permit subject to conditions “as he or she deems necessary.” The remainder of the paragraph describes a few of the conditions that the ONMS Director may include for permit issuance. However, these conditions are included in the phrase “as he or she deems necessary,” so removing the text does not result in any substantive change in the intent of the regulation. This is simply a technical change.
Presidential Proclamation 8337 (January 12, 2009; 74 FR 1577) states, “The prohibitions required by this proclamation shall not restrict scientific exploration or research activities by or for the Secretaries, and nothing in this proclamation shall be construed to require a permit or other authorization from the other Secretary for their respective scientific activities.” In order to be consistent with this requirement and in exercising NOAA's discretion under the NMSA, the Departments of Commerce and the Interior would not need a permit to conduct of scientific activities within the Muliāva unit.
Finally, NOAA currently is examining the permitting requirements now in place at all national marine sanctuaries, with the focus on the way that similar requirements might be harmonized. Future changes to these requirements could ultimately affect the permit regulations for NMSAS. Any changes to the permit requirement promulgated here would only occur subsequent to separate notice and comment.
The regulations at 15 CFR 922.103 and 922.104 have also been updated to reflect the change of the local agency from the Economic and Development Planning Office (EDPO) to the American Samoa Department of Commerce (ASDOC). EDPO was the name of the local agency 25 years ago when the FBNMS was designated, but the agency has been renamed to ASDOC. This change is purely technical.
In the proposed rule (76 FR 65566), NOAA proposed to change the name of Fagatele Bay National Marine Sanctuary to American Samoa National Marine Sanctuary. This change was necessary due to the addition of five discrete units, which are separate from Fagatele Bay proper. During public comment, it was suggested that the name “American Samoa National Marine Sanctuary” implied that the new boundaries of the sanctuary encompassed the entire archipelago. In order to better reflect the new design of the sanctuary, NOAA will instead re-name the sanctuary as “National Marine Sanctuary of American Samoa”.
During public comment, members of the public mentioned that a prohibition on taking crown-of-thorn starfish was unnecessary because these species were not targeted by any fishery be it traditional, recreational or commercial. More importantly, in the event of a crown-of-thorn starfish outbreak, which can have a high impact on coral reef ecosystems, it may be advantageous to allow take of this species as local residents try and mitigate the outbreak by removing those starfish. NOAA believes that for the reasons listed above, the prohibition on the take of crown-of-thorn starfish is unnecessary at this time and decided to remove it from the sanctuary regulations.
In addition, some comments indicated that live shells and marine plants are occasionally gathered for sustenance or cultural reasons and that since the impact on the ecosystem from such occasional gathering is minimal, it should be allowed. NOAA determined that the impact of very limited take of live shells and marine plants for those reasons would not have a negative impact on the coral reef ecosystem at this time, and therefore decided to remove that prohibition from the regulations. If it becomes apparent through monitoring that such take is having a negative impact on the resources of the sanctuary, NOAA may decide to alter the regulations in the future.
The boundaries at Swains Island Unit were altered to exclude two channels that provide access to the island. The family who owns the island (the Jennings family) requested this boundary change to give them the flexibility to dredge the access channels at a future time for the purpose of health and human safety, and bringing development and tourism to the island. The rest of the sanctuary, apart from the two access channels, continues to circumvent the island to a distance of three nautical miles.
In the proposed rule (76 FR 65566), NOAA proposed to prohibit all fishing other than sustenance fishing in the Swains Island Unit. After considering the public comments, NOAA determined that a prohibition on fishing
In the proposed rule (76 FR 65566), NOAA proposed to prohibit all fishing other than hook-and-line fishing. NOAA received public comments indicating that many members of the community use other forms of harvesting such as cast nets, spearfishing, and other non-destructive methods for sustenance and cultural purposes. At this time, NOAA believes that the fishing pressure of such existing methods is acceptable in the context of the resource protection mandate under the NMSA and therefore it is not prohibiting fishing using those forms of harvesting.
In the proposed rule (76 FR 65566), NOAA proposed to prohibit all forms of fishing in Zone B of the Aunu'u Unit in order to create an area devoted to scientific research on coral reef ecosystems. Many commenters pointed out that the area where Zone B is located was a highly sought-after area for recreational fishing of pelagic species, including for recreational fishing tournaments which bring in tourism benefits to the American Samoa economy. NOAA's main goal for Zone B is to remove human impacts to the coral reef and its associated species for the purpose of research. Since surface fishing (including trolling) is not believed to have a strong impact on the coral reef and bottom-dwelling species of interest to NOAA, NOAA decided to allow such fishing in Zone B. The depth of the area, the absence of spawning aggregation, and the absence of major topographic or oceanographic features indicate that there is likely to be enough vertical zoning that would allow for surface fishing to occur without having major impacts to the bottom reef ecosystem. The intensity level of such fishing is unlikely to be significant, considering the small number of tournaments a year and low fishing pressure from the local population. The tournaments, while asserting small fishing pressure, provide valued tourism-based economic opportunities for the people of American Samoa. Although a complete fishing prohibition would have been preferable for scientific research purposes alone, NOAA believes that allowing surface fishing is a more appropriate management scheme in Zone B to prevent inhibiting the small tourism benefits that fishing tournaments bring to American Samoa. Fishing for bottom-dwelling species, including trawling, is prohibited.
In the proposed rule (76 FR 65566), NOAA proposed to allow treated discharges from vessels equipped with a Coast Guard-approved Type I, II, or III marine sanitation device (MSD) in the Muliāva Unit. However, NOAA received input indicating that in order to remain consistent with Presidential Proclamation 8337, which established the Rose Atoll Marine National Monument, NOAA should limit discharges to vessels conducting scientific exploration and research in locations where a discharge would not injure a Monument resource. The Proclamation states that prohibitions within the Monument shall not restrict scientific exploration and research activities conducted by the Department of Commerce or Department of the Interior. Due to the potential impact of vessel discharges on Monument resources, NOAA has determined that only vessels that are engaged in scientific exploration or research activities on behalf of either the Department of Commerce or the Department of the Interior should be allowed to discharge treated effluent from a Type I, II, or III MSD. A discharge should only occur if the relevant agency determines that exiting the Muliāva unit to discharge would be impracticable under existing circumstances. Other vessels engaged in scientific exploration or research activities may be permitted to discharge on a case-by-case basis, which will be determined by following the permit process in 15 CFR 922.48 and 922.107 and in consultation with the U.S. Fish and Wildlife Service. No discharge would be allowed by any vessel within 12 nautical miles of the Rose Atoll National Wildlife Refuge.
This section contains NOAA's responses to the substantive comments received on the draft Environmental Impact Statement (EIS) and proposed rule. NOAA has summarized the comments according to the content of the statement or question put forward in the letters, emails, and written and oral testimony at the public hearings on this action. Many commenters submitted similar questions or statements that could be addressed by one response. NOAA also made a number of changes in the Final Management Plan and Final EIS in response to public comments, not summarized in this section, which were recommended technical updates or corrections to the documents. The original comments remain available for review on
While many of the following comments in this section capture opposition to various aspects of the proposed action submitted during the public comment period, a number of comments provided support for the process, as well as agreed with the overall approach taken by NOAA. Some commenters specifically offered support for this action, (including the Governor of American Samoa, the director of the American Samoa Department of Marine and Wildlife Resources (DMWR), the Secretary of Samoan Affairs, the manager of the American Samoa Coastal Management Program, representatives of the coral reef advisory group (CRAG) including the directors of the American Samoa EPA (AS-EPA) and American Samoa Department of Commerce (ASDOC) and the President of the American Samoa Community College (ASCC), marine scientists who have worked many years in American Samoa, as well as dozens of members of the public. During the public comment period, meetings between NOAA and village councils and Matai addressed misunderstandings and concerns expressed in numerous public comments, ultimately leading to general support for the proposed regulations and additional sanctuary units.
Reasons provided for this support include (1) the preservation of marine resources for future generations, (2) the ecological value of Fagalua/Fogama'a, (3) the need of sanctuary protection for the giant corals off of Ta'u, (4) the importance of marine protected areas to maintain healthy fish populations and improve local fisheries by allowing conservation of larger individuals, (5) the socio-economic benefits that the activities of the management plan will bring to the Samoan people by creating jobs, providing funding, supporting tourism, respecting the culture, and securing the future, (6) the value of research, educational activities and outreach to support ocean literacy, enriched students and teachers, and promote reef health, and (7) the
NOAA disagrees that these areas are not in need of protection. The effects of fishing are evident when compared to unpopulated reefs of the region (see Section 3.1.2.4 of the FEIS). While reefs are resilient to natural stressors including tsunamis and crown-of-thorns starfish outbreaks, reefs already stressed by human activity, including siltation, eutrophication, polluted runoff, and increased temperatures and acidification from climate change are less likely or take much longer to recover. Providing additional protection and management for a few high-value sites distributed across the archipelago as protection against these types of catastrophes can increase overall resilience for the reefs in American Samoa, and protect these resources for future generations.
Sanctuaries are required “to facilitate to the extent compatible with the primary objective of resource protection, all public and private uses of the resources of these marine areas not prohibited pursuant to other authorities “(NMSA § 301-(b)(6)).” While the action includes one no-take zone (Fagatele Bay), there are numerous measures aimed at improving ecosystem health of all of the units while fostering public support, which is critical to achieve the goals of the expanded sanctuary. NOAA proposes prohibiting destructive gears and fishing practices, which will protect habitat and subsequently improve the overall ecosystem, while allowing traditional and other non-destructive fishing at all of the other units. The multiple use zone at Aunu'u is an innovative technique suggested by the community that would incorporate traditional management intended to foster community stewardship while providing for compatible uses. If successful, NOAA could consider its use at other units and in other sanctuaries. Other commenters felt that education was a better approach than asserting federal control through regulations and fines to promote reef health. The sanctuary agrees with the value of education, but believes that education and outreach combined with a variety of management techniques, including enforcement of regulations, is the best approach.
Finally, some commenters feel that the action provides no real protection at places where activity is low or other management agencies have regimes in place to protect resources (see the response to comment heading
Specific rationale for incorporating each of the units is provided in Section 2.1.2.3
While fostering cooperation with other agencies is important, the focus of this action must be for the benefit of the American Samoan people, who have managed their ocean resources for 3,000 years. Commenters noted the traditional land management regime, adequate existing management and regulations, village enforcement, a preference to work with local agencies, and a history of failed support from the federal government. These concerns are understandable, given a lack of knowledge from some community members regarding NOAA, although, as this action shows, NOAA has made community engagement the cornerstone of its management plan, fostering traditional Samoan stewardship through education and outreach (
NOAA's sanctuary management plan proposes numerous activities that DMWR and other resource agencies are not engaged in. Some major examples include inventorying, assessing and providing federal protection for maritime heritage resources, and providing state-of-the-art education facilities and technologies including the Sanctuary Visitor Center of American Samoa, “Science on a Sphere,”® and the OceansLive ONMS telepresence initiative. The management plan also identifies a number of opportunities for collaboration. The management plan includes
The Sanctuary Advisory Council has 13 voting members, with nine of these positions non-governmental members representing research, education, fishing, ocean recreation, tourism, business, as well as three community-at-large seats. The four voting government members are representatives of four territorial agencies, including the ASDOC, DMWR, ASCC, and AS-EPA. This venue, which provides regular input on sanctuary management, serves as a conduit to address the community and partner agency issues and opportunities.
There was an objection to the designation of a sanctuary unit along Ta'u's west coast that encompasses the giant corals, believing that expansion of the National Park of American Samoa at Ta'u would be more parsimonious and effective due to its existing presence and relationship with the community. NOAA believes that the marine resources at this location have global significance and require immediate and comprehensive protection and management provided by this action and the implementation of the management plan. The objection to expansion at this location has been documented in the final EIS, and rationale for the proposed designation has been provided.
Sanctuary accomplishments are also reflected in the 2007 Condition Report which measures water, habitat, living resources, and maritime archaeological resources of the sanctuary. See:
Enforcement at Fagatele Bay is not inadequate. Although for most of the sanctuary's history, NOAA did not have an on-island enforcement agent, NOAA OLE compensated for this by developing a Joint Enforcement Agreement (JEA) with DMWR. This JEA provides training and authorizes DMWR enforcement personnel to enforce both federal laws and regulations. The JEA specifically identifies at-sea activities to “monitor and investigate illegal takes and other violations involving all marine life within the Fagatele Bay National Marine Sanctuary”. Over the past six years, there has been a single complaint about illegal fishing in the sanctuary, and NOAA OLE and DMWR partners responded to the complaint and identified the violators. As of 2012, NOAA has one special agent and one enforcement officer stationed in American Samoa. While the draft Management Plan did not provide a description of the current enforcement activities or the mechanisms that would be used for the proposed units, the final document includes a full description of sanctuary enforcement capabilities and the Joint Enforcement Agreement is in the Resource Protection and Enforcement Action Plan, as well as in Sections 3.1.5.2 and 3.2.1.3.
Contrary to comments received, the site selection process and boundary designation employed scientific rationale, socioeconomic information, and community engagement. The biogeographic assessment provides scientific basis for designating units (see table 1-3 in the final MP/EIS). The rationale for the rejection or inclusion of proposed sites is provided in Sections 2.1.1 and 2.1.2.3, respectively, of the EIS. Public scoping and community meetings allowed for incorporation of community desires and the public review process has provided additional information to further identify and incorporate culturally important factors into the action, such as subsistence fishing grounds. Additional scientific rationale is discussed next under comment heading
Commenters argued that scientific design principles, including MARXAN, the
Presidential Proclamation 8337 (74 FR 1577) directed the Secretary of Commerce to “initiate the process to add the marine areas of the [Rose Atoll Marine National] monument to the Fagatele Bay National Marine Sanctuary.” Sanctuary designation fulfills the directive of the proclamation. In addition, Rose Atoll is considered one of the world's most pristine atolls, home to endangered turtles, birds and marine mammals, and meets the criteria of “special national significance.” Designation will allow for appropriation of funding for research, conservation, and education. Rose Atoll is currently a monument; however, regulations have yet to be codified in the CFR. Adding the unit to the sanctuary system would change this. Vailulu'u seamount is the only active hydrothermal marine habitat in American Samoa, and its unique ecosystem warrants protection, while inclusion imposes little to no economic impact, as it lies within the Large Vessel Prohibited Area and no fishing regulations are being proposed for the area by this action. Value will be added to the seamount in terms of education, research, and fostering a sense of stewardship.
Commenters argued that the action will not protect coral reefs, as most units allow fishing. The proposed action includes one no-take zone at Fagatele Bay. The determination for fishing regulations was balanced by the needs for protection and the needs and support of the community, without which no-take areas are likely unenforceable. The term MPA is not synonymous with no-take. All units have regulations aimed at ecosystem protection. In addition, sanctuary designation will provide opportunities to increase monitoring that will allow for determinations as to the effectiveness of the proposed regulations.
One comment suggested extending the sanctuary to include the bank at Steps Point that is common to both Fagatele and Fagalua/Fogama'a. The proposed action does not change the boundary of the Fagalua/Fogama'a unit to incorporate this bank. The bank extends well offshore, which would be a significant change from the draft document that would require additional public comment. In addition, the paper cited in the comment as rationale to include this bank does not include compelling information for inclusion at this time. NOAA will review additional scientific and socio-economic information of this area and may consider this recommendation in the future.
Upon the establishment of the research zone, NOAA will apply the activities in the sanctuary-wide Marine Conservation Science Action Plan to the area over the next 5 years. These include, among other things: Developing monitoring program protocols, assessing baseline conditions, conducting shallow-water reef habitat monitoring, and mapping and characterizing deepwater habitat.
There are few published reports on human uses in the area and a lack of available site-specific fishing data to conduct a conclusive analysis of the impacts of these fishing restrictions. The EIS relied on a few directed interviews and a socio-economic study that designated most of the area as zero to low effort for fishing, with an estimated annual economic value of $11,517 for subsistence and artisanal fishing for all of Aunu'u. Based on these sources, the draft EIS concluded that fishing restrictions within the research zone would have a less than significant impact to sustenance, sport, and small-scale commercial fisheries. Upon reviewing initial public comments, NOAA conducted additional discussions with DMWR, the Aunu'u community, and representatives of the sportfishing sector during the public comment period. These led to changes in the proposed action to mitigate potential impacts to these stakeholders (i.e., trolling and surface fishing will be allowed within the Aunu'u Research Zone, with catch data being shared by fishers with DMWR and the sanctuary). The allowance to target some coastal pelagic species, including rainbow runner, dog-tooth tuna and giant trevally, minimizes significant economic impacts to tourism, as well as safety issues and increased operating costs to recreational and subsistence fishers while maintaining a high level of protection for the resident species within the zone.
Through the Cultural Heritage and Community Engagement and Marine Conservation Science Action Plans, NOAA will engage with the Aunu'u community with regards to both the Multiple-Use Zone and the Research Zone. The results of research conducted in the research zone can be shared directly with the village of Aunu'u.
The safety of fisherman is of great importance to NOAA, and it is important to note that this action will not substantially displace fishermen, requiring them to fish farther offshore in unfamiliar waters. The final proposal includes only one complete no-take area, at Fagatele Bay. Regulations for the Research Zone at the Aunu'u unit have been amended for the final action to allow trolling and surface fishing. Thus, the proposed action closes 8% of the nearshore banks from the few bottomfishers that occasionally operate in these waters.
In light of concerns raised for both subsistence and small-scale commercial fishers, the proposed action has been modified with regards to numerous fishing restrictions. This includes removing the prohibition on the take of live shells, allowing for trolling and surface fishing in the Aunu'u research zone, removing the sustenance-only fishing requirement for Swains, and removing unit-specific gear restrictions (hook-and-line only) at Fagalua/Fogama'a. No proposed regulation prohibits fishers from selling legally caught catch.
The original purpose to protect live shells was due to concern for the shell trade, but as there is no trade at this time, the regulation and the issue will be monitored by sanctuary staff as part of education and outreach efforts. The rationale for allowing trolling and surface fishing at the Aunu'u research zone was presented in the comment heading rationale for
NOAA removed the restriction on taking fish out of the Swains Island unit after being informed that it is a cultural tradition to share fish caught in these waters with family and friends on Tutuila and the Manu'a islands. The low level of fishing, relatively high biomass of large reef species at Swain's, and large pelagic zone provided a basis to drop the restriction. The isolation of the area from larval recruits remains an issue of concern that NOAA will address through research and monitoring.
After community consultations with the Vaitogi, Futiga and Ili'ili villages during the public comment period, it was determined that the communities were against the restriction for only hook-and-line fishing in Fagalua/Fogama'a, and pressed for the allowance of non-destructive traditional fishing methods, including fishing for octopus, spear fishing without scuba, and gleaning (
While NOAA has reduced the number of fishing-specific regulations in the proposed action, NOAA remains confident that the various action plans and enforcement of the remaining regulations will allow for achievement of the sanctuary's revised goals and objectives.
The management plan identifies numerous research areas important to pursue in order to fulfill the goals and objectives of the sanctuary. Monitoring land-based sources of pollution is included under Strategy RP&E-5, and is specifically related to water quality. The issue is described as a specific resource threat noting the need for collaboration with territorial and federal partners on water quality monitoring at all sanctuary units. Analysis of impacts to land-based discharges is discussed in Section 5.5.2. As the sanctuary regulations follow AS-EPA regulations, if violations occur in sanctuary waters, collaboration between NOAA and AS-EPA would be a first step. In regards to management initiatives, NOAA looks forward to working with the AS-EPA, NPS and other partners to address land-based sources of pollution and their impact on water quality. Activities within the Marine Conservation Science Action Plan include developing a Sanctuary Science Plan (MCS-1.2) and conducting socioeconomic studies on local resource use, management and traditional knowledge (MCS-2.5) capture other suggestions provided by the public. To address questions about the management and protection of cultural resources, a new activity
As to the purchase of a research vessel, as part of the development of a science and management program, NOAA developed a thorough Small Boat Requirements Study (FY2006-FY2015) and a draft Mission Requirements for a New Vessel. Analyses provided within these plans, based on expected requirements, demonstrate the need for a vessel in the 85-100 foot range, based upon distance to potential sanctuary units, possible sea states, time-on-station, and operational capabilities. The potential cost of the vessel is based upon new construction of a vessel specifically designed to meet mission requirements and the needs of our partners (as opposed to trying to find a vessel on GSA and retrofitting it to try and make it viable to serve these needs).
Land access to sanctuary units is a sensitive issue in American Samoa because of the land tenure system. The MP/EIS does not provide an analysis of land use, including sanctuary access, as the NMSA does not include jurisdiction or management over the land. Due to the nature of the resources protected, the sanctuary mandate also does not require immediate analysis of land access to sanctuaries, as access to sanctuary units can be by sea. However, NOAA will further consider access issues once it has made a decision on which, if any, additional areas are to be incorporated within the sanctuary. The CH&CE Action Plan is set up to provide for culturally appropriate discussion on this topic at the appropriate time.
The current visitor's center plans are quite far along, and the National Park of American Samoa is already moving forward with its visitor's center. Due to the imminent completion of NOAA's visitor's center and the scheduling of the Park's visitors center, it is not possible to combine the existing and currently planned centers. However, NOAA is open to investigating future opportunities to improve the efficiency of the center's operations.
NOAA is not planning to provide funding to villages as part of the proposed project. In terms of scholarships, Section 1.2.3 describes available local and national opportunities both established and supported by NOAA and ASDOC. NOAA has added to Strategy OL-4 an activity describing plans to continue these opportunities. NOAA also provides national scholarships to qualified students (see “Student Opportunities” of
Informative brochures describing sanctuary resources have been translated into Samoan. The need for further dissemination of literature in Samoan and distribution of these materials to reach communities without internet access is recognized. To improve communication, the Ocean Literacy Action Plan's Activity OL-2.1 includes plans to conduct sanctuary outreach through television, radio and print media, as well as to develop a regular press release provided in English and Samoan to raise sanctuary awareness among media, decision makers and the public. NOAA acknowledges the importance of providing information in the Samoan language and sanctuary staff have and will continue to provide education and outreach information in Samoan and English when feasible.
The American Samoa Environmental Protection Agency highlighted a critical concern for resource protection. While regulations in the territory are quite comprehensive, there is a lack of political and public will to enforce most environmental regulations. While sanctuary education and outreach materials are designed to help users understand regulations, the power of sanctuary regulations is held in the ability to prosecute offenders with a suite of fines and other penalties that offers a strong deterrent to potential violators. The penalty of $140,000 is a maximum monetary penalty for any violation as specified in the NMSA. The actual penalties levied for NMSA violations vary based upon the severity of the incident and other case-specific factors. NOAA's Office of the General Counsel Enforcement Section has established a penalty policy that that provides guidance for the assessment of civil administrative penalties and permit sanctions under the statutes and regulations enforced by NOAA. The penalty policy is publicly available and can be accessed through this link:
NOAA believes in the value of providing protection and associated enforcement efforts in remote areas, such as those at Swains Island and Muliāva, as has been demonstrated at Papahanaumokuakea and the other remote and large Pacific Marine National Monuments.
NOAA's plan addresses funding and staffing for all proposed activities. The estimated annual costs of implementing NOAA's plan are provided in Table 4-1. This table does not reflect funding for implementing the Joint Enforcement Agreement between NOAA Office of Law Enforcement and DMWR as this is
While NOAA conducted at least 26 community meetings between February 2009 and April 2011 related to the Management Plan Review ONMS, many of the public remain uninformed. Representative Eni Faleomavaega, aware of these concerns, held a town hall meeting on January 11, 2012 in Utulei that drew more than 100 people. Representative Faleomavaega outlined public concerns raised at this meeting in a letter to Dr. Jane Lubchenco on March 6, 2012, summarized in the comment above. NOAA made a great effort to address misunderstandings and public concerns with the villages during the extended public comment period (January 6-March 9, 2012), holding an additional six meetings, in which the Office of Samoan Affairs played a significant role in arranging and assisting in those meetings. As of the end of the public comment period, villages of Aunu'u, Vaitogi, Ili'ili, Futiga, and the Manu'a Islands had provided public comment in support of inclusion of the proposed site associated with their village. Extensive details of these community interactions are provided in Section 2.1.2.5 of the Management Plan. Concerns of the communities were considered very seriously by NOAA as is evident from numerous changes in the proposed action, outlined in the executive summary and Section 2.3 of the final Management Plan.
Specific examples of traditional governance, including Customary Marine Tenure, are incorporated in both the final rule and the management plan. The management plan includes Activity CH&CE-2.4 involving communities in sanctuary stewardship via interpretive enforcement, as a means to achieve compliance with regulations through stakeholder trust and buy-in. A regulation for the multiple use zone at the Aunu'u Island unit requires notification to a village representative/sanctuary designee by anyone accessing and harvesting marine resources, as is customary under Customary Marine Tenure in Samoa.
NOAA has also received official letters from the former and current Secretaries of Samoan Affairs, commending the overall review process with regards to gathering public input and following Samoan protocols. In the more recent letter, Lefiti Pese stated “* * * you have clearly followed our traditional protocols and successfully incorporated Fa'asamoa into your process.” As the arbiter of culturally correct processes in American Samoa, OSA, under the leadership of two different Secretaries, clearly supports NOAA's efforts to incorporate fa'a-Samoa.
Regarding NOAA implementing
NOAA also participated in three interagency meetings (11 August 2009, 13 August 2009, 5 April 2010) with the director of the DMWR, discussing among other issues, site expansion at Aunu'u, Larsen, Ta'u, Swains and Rose. Emphasis was placed on interagency collaboration, particularly at Aunu'u. In addition to these meetings, sanctuary staff offered the director and staff of DMWR the opportunity to participate in village meetings (described under Process—Community Involvement). NOAA also conducted interagency meetings with the USFWS regarding Rose Atoll and the NPAS regarding the
While the Partnerships and Interagency Cooperation Action Plan describes strategies to facilitate cooperation and coordination of management activities, it is premature to provide detailed analysis or prescriptions of how NOAA will implement future collaborations with other federal agencies. Agreements formalizing future collaborations must be agreed upon mutually by NOAA and partner agencies. It would not be appropriate at this time for NOAA to provide any details regarding exactly how future collaborations will be implemented. Nevertheless, NOAA has a well-established history of collaboration with federal, state and territorial agencies, including DOI agencies, across its national marine sanctuaries. In addition, sanctuary and park staff have a well-established history of collaborative efforts in terms of research and education.
The National Marine Sanctuaries Act, first passed by Congress in 1972 and reauthorized by Congress six times (most recently in 2000), provides NOAA with the authority to designate marine areas as national marine sanctuaries and to issue regulations regarding the management of national marine sanctuaries. NOAA's authority is consistent with the limitations set forth in the Ratification Act of 1929, 48 U.S.C. 1661, because that statute applies only to the then-“existing laws of the United States relative to public lands.” The National Marine Sanctuaries Act is a conservation law, not a public lands law. This is demonstrated by the fact that the Act relates to marine areas, not lands, and also by its codification in Title 16 (Conservation) of the U.S. Code rather than Title 43 (Public Lands).
Additionally, the National Marine Sanctuaries Act was not law at the time of the passage of the Ratification Act, and therefore is outside the scope of that statute. As a result, NOAA's proposal is also consistent with the reservation of rights set forth in ASCA 24.0304(d). Importantly, nothing in the proposal affects American Samoa's right to self-governance, DMWR's authority to manage marine resources in the Territory, or the ownership rights of American Samoans with respect to their lands.
With regard to EO 13132, NOAA consulted and coordinated extensively with the American Samoa government, including the Governor's office, ASDOC, DMWR, AS-EPA, and the Office of Samoan Affairs (see Section 2.1.2.4). NOAA also met with Matai and local representatives and held several public meetings. Furthermore, the proposed regulations will not preempt American Samoa law, but will simply complement existing Territory authorities. Consequently, NOAA has satisfied any obligations it may have under EO 13132. A consistency determination was provided by the American Samoa Coastal Management Program, which maintains responsibility for issuing Land Use Permits, and through the Project Notification and Review System (PNRS) Board, includes consistency with the Department of Marine and Wildlife Resources. In addition, since the onset of this management plan review, ONMS has worked with the Governor of American Samoa and, through the Office of Samoa Affairs, the villages adjacent to the current and proposed new sanctuary units.
Information relied upon is cited in FEIS (Chapter 3, Affected Environment). The analysis in the FEIS was limited by the availability of relevant data. Much of the data that were available (number of registered fishing vessels, number of recreational fishermen, etc.) were often obtained through interviews with agency employees and stakeholder groups. Nearshore fishing effort was obtained through recently published DMWR and NOAA Fisheries documents and relevant peer-reviewed literature.
No economic analysis was conducted for the American Samoa federally-permitted longline fishery or other potential commercial fisheries within the boundaries of the Monument. This action is separate from the Proclamation 8337, which prohibits commercial fishing within the Rose Atoll Marine National Monument. The current action proposes no fishing regulations within the Muliāva unit or in any federal waters. Fishing regulations that implement the requirements of the Proclamation will be undertaken by separate action, which will allow the opportunity for public comment at a later date.
NOAA believes that adverse impacts related to fishing will be modest. NOAA went to great effort to minimize impacts to subsistence, artisanal, and recreational fishing that do not damage sanctuary resources. Allowances for non-destructive, traditional fishing methods have been made at all units except for Fagatele Bay, where the community endorsed a no-take zone. Trolling and surface fishing is now allowed at the Aunu'u Research zone so that local harvest and the burgeoning tourism-related recreational and charter fishing businesses are not impacted by this action, while still maintaining appropriate resource protection and monitoring measures. Prohibitions on the use of destructive gears, the take of corals and other bottom formations, and giant clams are warranted to protect the coral reef habitat for long-term sustainability, while posing minimal socioeconomic impacts. Because of these changes to the proposed action, many concerns previously raised in regard to fishery-related impacts are no longer relevant. The estimated total annual revenue loss from fishing regulations established in this rule is $11,572. This figure is likely high, as it was predicated on restrictions set forth in the proposed rule. As discussed above, changes made from the proposed rule have eased restrictions, making actual losses lower.
Indeed, these modest impacts are more than offset by socioeconomic benefits to American Samoa, achieved through the implementation of the management plan and the hiring of additional staff discussed in the EIS. While these benefits will be realized in American Samoa, the EIS does not dismiss negative impacts from the regulations due to benefits of the implementation of the management plan, as impacts and benefits may not affect the same people. Nevertheless, the FEIS does determine that the total socioeconomic effect is beneficial to the whole of American Samoa.
Consistent with this statutory mandate, NOAA seeks to complement existing efforts protecting these marine resources. This goal is underscored by the collaborative efforts that have been undertaken throughout the 25-year history of the Fagatele Bay sanctuary.
1. The DMWR has participated in sanctuary-sponsored research projects,
2. DMWR conducts monthly enforcement activities in Fagatele Bay through a Joint Enforcement Agreement between DMWR and NOAA OLE. The conditions of this agreement are expected to be reviewed in light of the expanded sanctuary,
3. The DMWR has collaborated with the Sanctuary to support an annual boating safety refresher course,
4. The Sanctuary collaborated with the AS-EPA to develop water quality monitoring protocols in Fagatele Bay,
5. The National Park of American Samoa, the American Samoa Community College, DMWR, and other local agencies and organizations have collaborated with the sanctuary on research on humpback whales, outreach and education activities,
6. The development and maintenance of the Fagatele Bay Trail that connect Fagatele to Fagalua/Fogama'a Bay was a significant collaboration with local agencies and the people of Taputimu, Futiga and Vaitogi villages that makes Fagatele Bay accessible to the public and to island visitors,
7. The Sanctuary Advisory Council (SAC) consists of 13 voting members, who represent four territorial government agencies (DMWR, ASCC, AS-EPA, and ASDOC) as well as nine non-government positions from the community. The SAC meets regularly to provide advice and recommendations to the sanctuary superintendent on protection and management of the sanctuary.
Section 301(b) of the National Marine Sanctuaries Act (NMSA) (16 U.S.C. 1431) provides authority for comprehensive and coordinated conservation and management of national marine sanctuaries in coordination with other resource management authorities. Section 304(a)(4) of the NMSA (16 U.S.C. 1434) requires that the procedures specified in Section 304 for designating a national marine sanctuary be followed for modifying any term of designation. This action is revising the terms of designation (e.g., scope of regulations) for the FBNMS, which would be retitled the NMSAS. In accordance with Section 304, the appropriate documents are being submitted to the specified Congressional committees. NOAA is also required to comply with Section 304(a)(5) of the NMSA, which requires that NOAA consult with the appropriate Federal fishery management council on any action proposing to regulate fishing in federal waters. As stated in the preamble above, NOAA is not promulgating any fishing regulations in federal waters at this time.
In accordance with Section 304(a)(2) of the NMSA (16 U.S.C. 1434(a)(2)), and the provisions of the National Environmental Policy Act (NEPA) (42 U.S.C. 4321-4370), a FEIS has been prepared for this action. The FEIS contains a statement of the purpose and need for the project, description of proposed alternatives including the no-action alternative, description of the affected environment, and evaluation and comparison of environmental consequences including cumulative impacts. Copies of the FEIS are available upon request at the address and Web site listed in the
This rule has been determined to be not significant within the meaning of E.O. 12866.
There are no federalism implications as that term is used in E.O. 13132. The changes will not preempt State law, but will simply complement existing Territory authorities. In keeping with the intent of the Order, NOAA consulted with a number of entities within the region, including the American Samoa Government and the Western Pacific Regional Fishery Management Council.
In accordance with the Regulatory Flexibility Act, 5 U.S.C. 601
This rule contains a collection-of-information requirement subject to the Paperwork Reduction Act (PRA), which has been approved by the Office of Management and Budget (OMB) under control number 0648-0141. The public reporting burden for national marine sanctuary permits is estimated to average 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.
Nationwide, NOAA issues approximately 200 national marine sanctuary permits each year. Of this amount, FBNMS averages 1 to 2 permit requests per year, although no permits are currently active for activities within the FBNMS. Even though this proposed rule may result in a few additional permit applications, due to the additional units and an overall larger area under management, this rule would not appreciably change the average annual number of respondents or the reporting burden for this information requirement. Therefore, NOAA has determined that the proposed regulations do not necessitate a modification to its information collection approval by the Office of Management and Budget under the Paperwork Reduction Act.
No comments were received on the collection-for-information requirement promulgated in the permitting section of the sanctuary regulations. 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 PRA, unless that collection of information displays a currently valid OMB Control Number.
A complete list of all references cited herein is available upon request (see
Administrative practice and procedure, Coastal zone, Education, Environmental protection, Marine resources, Natural resources, Penalties, Recreation and recreation areas, Reporting and recordkeeping requirements, Research.
Accordingly, for the reasons set forth above, 15 CFR part 922 is amended as follows:
16 U.S.C. 1431
The provisions of this subpart J apply only to the waters of the United States and the Territory of American Samoa that are located within the boundary of the National Marine Sanctuary of American Samoa (Sanctuary). Neither the provisions of this subpart J nor any permit issued under its authority shall be construed to relieve a person from any other requirements imposed by statute or regulation of the Territory of American Samoa or of the United States. In addition, no statute or regulation of the Territory of American Samoa shall
The Sanctuary is comprised of six distinct units, forming a network of marine protected areas around the islands of the Territory of American Samoa. Tables containing the exact coordinates of each point described below can be found in Appendix to Subpart J—National Marine Sanctuary of American Samoa Boundary Coordinates.
(a)
(b)
(c)
(1)
(2)
(d)
(e)
(f)
In addition to those definitions found at § 922.3, the following definitions apply to this subpart:
(a) The following activities are prohibited and thus are unlawful for any person to conduct or to cause to be conducted within the Sanctuary:
(1) Introducing or releasing introduced species from within or into the sanctuary.
(2) Anchoring a vessel.
(3) Deserting a vessel aground, adrift, or at anchor.
(4) Leaving harmful matter on an abandoned or deserted vessel or structure.
(5) Operating a vessel at a speed exceeding three knots when closer than 200 feet (60.96 meters) of another vessel displaying a dive flag.
(6) Operating a vessel in a manner which causes the vessel to strike or otherwise cause damage to Sanctuary resources.
(7) Diving, snorkeling, or conducting diving or snorkeling operations from a vessel not in compliance with applicable U.S. Coast Guard navigation rules governing the display of lights and signals, and not flying in a conspicuous manner the international code flag alpha “A” or the standard red-and-white U.S. “diver down” flag.
(8) Discharging, or depositing from within or into the Sanctuary, any material or other matter, except clean vessel deck wash down, clean vessel engine cooling water, clean vessel generator cooling water, clean bilge water, anchor wash, or vessel engine or generator exhaust.
(9) Discharging or depositing from beyond the boundary of the Sanctuary any material or other matter that subsequently enters the Sanctuary and injures a Sanctuary resource or quality, except those listed in paragraph (a)(8) of this section and § 922.105(c).
(10) Sand mining, dredging, filling, dynamiting, or otherwise disturbing or altering the seabed.
(11) Removing, damaging, or tampering with any historical or cultural resource.
(12) Taking any marine mammal, sea turtle, or seabird within or above the Sanctuary, except as authorized by the Marine Mammal Protection Act, as amended, (MMPA), 16 U.S.C. 1361
(13) Using or discharging explosives or weapons of any description. Distress signaling devices, necessary and proper for safe vessel operation, and knives generally used by fishermen and swimmers shall not be considered weapons for purposes of this section.
(14) Marking, defacing, or damaging in any way, or displacing or removing or tampering with any signs, notices, or placards, whether temporary or permanent, or with any monuments, stakes, posts, or other boundary markers related to the Sanctuary.
(15) Abandoning a structure, material, or other matter on or in the submerged lands of the Sanctuary.
(b) The prohibitions in paragraphs (a)(1) through (15) of this section, § 922.104, and § 922.105 do not apply to any activity necessary for national defense.
(c) The prohibitions in paragraphs (a)(2) through (15) of this section, § 922.104, and § 922.105 do not apply to any activity necessary to respond to an emergency threatening life, property, or the environment.
(d) The prohibitions in paragraphs (a)(2) through (15) of this section, § 922.104, and § 922.105 do not apply to any activity necessary for valid law enforcement purposes in the Sanctuary.
(e) The prohibitions in paragraphs (a)(2) through (15) of this section, § 922.104, and § 922.105 do not apply to any activity conducted under and in accordance with the scope, purpose, terms, and conditions of a National Marine Sanctuary permit issued pursuant to 15 CFR 922.48 and 922.107.
(a) The following activities are prohibited and thus are unlawful for any person to conduct or to cause to be conducted within any unit of the Sanctuary except the Muliāva Unit:
(1) Gathering, taking, breaking, cutting, damaging, destroying, or possessing any giant clam [
(2) Possessing or using poisons, electrical charges, explosives, or similar environmentally destructive methods of fishing or harvesting.
(3) Possessing or using spearguns, including such devices known as Hawaiian slings, pole spears, arbalettes, pneumatic and spring-loaded spearguns, bows and arrows, bang sticks, or any similar taking device while utilizing SCUBA equipment.
(4) Possessing or using a seine, trammel, drift gill net, or any type of fixed net.
(5) Disturbing the benthic community by bottom trawling.
(b) There shall be a rebuttable presumption that any items listed in paragraph (a) of this section found in the possession of a person within the Sanctuary have been used, collected, or removed within or from the Sanctuary.
In addition to the prohibitions set forth in § 922.103 and § 922.104, the following regulations apply to activities conducted within specified Sanctuary units described in the appendix to this subpart.
(a) The following activities are prohibited in the Fagatele Bay Unit:
(1) Harvesting, catching, removing, taking, injuring, destroying, collecting, moving, possessing or causing the loss of any Sanctuary resource, including but not limited to fishing, or attempting any of these activities.
(2) Possessing fishing gear unless such gear is stowed and not available for immediate use.
(b) The following activities are prohibited in the Aunu'u Unit:
(1) In Zone A: Fishing from a vessel without providing notification to the Sanctuary Superintendent or his/her designee in the village of Aunu'u prior to each fishing trip.
(2) In Zone B:
(i) Fishing for bottom-dwelling species or otherwise harvesting, catching, removing, taking, injuring, destroying, collecting, moving, or causing the loss of any bottom-dwelling species, or attempting any of these activities. Surface fishing for pelagic species, including trolling, is allowed.
(ii) Disturbing the benthic community.
(iii) Possessing any Sanctuary resource, except legally harvested fish on board a vessel.
(c) In the Muliāva Unit:
(1) The prohibitions in paragraphs (a)(2) through (7) and (a)(9) through (15) of § 922.103 do not apply to scientific exploration or research activities conducted by or for the Department of Commerce or the Department of the Interior.
(2) Notwithstanding the prohibition in § 922.103(a)(8), the following vessels may discharge treated waste from a U.S. Coast Guard approved Type I, II, or III Marine Sanitation device 12 nautical miles seaward of the Rose Atoll National Wildlife Refuge:
(i) Vessels engaged in scientific exploration or research activities conducted by or for the Department of Commerce or the Department of the Interior; or
(ii) All other vessels engaged in scientific exploration or research activities, if authorized under a permit issued in consultation with the U.S. Fish and Wildlife Service and in accordance with § 922.48 and § 922.107.
The National Oceanic and Atmospheric Administration (NOAA) has primary responsibility for the management of the Sanctuary pursuant to the Act. The American Samoa Department of Commerce (ASDOC) will assist NOAA in the administration of the Sanctuary, and act as the lead territorial agency, in conformance with the terms of designation, these regulations, and the terms and provisions of any grant or cooperative agreement.
(a) Any person in possession of a valid permit issued by the Director, in consultation with the ASDOC, in accordance with this section and § 922.48, may conduct an activity otherwise prohibited by § 922.103, § 922.104, and § 922.105 in the Sanctuary if such activity is judged not to cause long-term or irreparable harm to the resources of the Sanctuary, and is:
(1) Related to research involving Sanctuary resources designed to enhance understanding of the Sanctuary environment or to improve resource management decisionmaking;
(2) Intended to further the educational value of the Sanctuary and thereby enhance understanding of the Sanctuary environmental or improve resource management decisionmaking;
(3) Intended to further the management of the Sanctuary; or
(4) For salvage or recovery operations.
(b) Permit applications shall be addressed to the Director, Office National Marine Sanctuaries; ATTN: Sanctuary Superintendent, American Samoa National Marine Sanctuary, P.O. Box 4318, Pago Pago, AS 96799.
(c) In considering whether to grant a permit, the Director shall evaluate such matters as:
(1) The general professional and financial responsibility of the applicant;
(2) The appropriateness of the methods being proposed for the purpose(s) of the activity;
(3) The extent to which the conduct of any permitted activity may diminish or enhance the value of the Sanctuary as a source of recreation, education, or scientific information; and
(4) The end value of the activity.
(d) In addition to meeting the criteria in this section and § 922.48, the applicant also must demonstrate to the Director that:
(1) The activity shall be conducted with adequate safeguards for the environment; and
(2) The environment shall be returned to, or will regenerate to, the condition which existed before the activity occurred.
(e) The Director may, at his or her discretion, grant a permit which has been applied for pursuant to this section, in whole or in part, and subject the permit to such condition(s) as he or she deems necessary.
[Coordinates listed in this Appendix are unprojected (Geographic) and based on the North American Datum of 1983.]
No coordinates are needed in addition to those described in § 922.101(a).
No coordinates are needed in addition to those described in § 922.101(b).
The Aunu'u Unit is comprised of two adjacent zones, described in § 922.101(c), for which the point coordinates are provided in following tables 1 and 2.
The Swains Island Unit boundary is defined by the coordinates provided in Table 3 and the textual description in § 922.101(d).
The Muliāva Unit boundary is defined by the coordinates provided in Table 4 and the textual description in § 922.101(e).
The Ta'u Unit boundary is defined by the coordinates provided in Table 5 and the textual description in § 922.101(f).
Commodity Futures Trading Commission (“Commission”).
Proposed rule; withdrawal.
On July 19, 2010, the Commission published for public comment a Notice of Proposed Rulemaking that proposed to collect certain account ownership and control information for all trading accounts active on U.S. futures exchanges and other reporting entities (“OCR NPRM”). After considering all comments received in response to the OCR NPRM, the Commission is withdrawing the OCR NPRM and instead pursuing the collection of account ownership and control information through a separate proposed rulemaking published today elsewhere in the notice section of the
Effective July 26, 2012, the proposed rule published July 19, 2010, at 75 FR 41775, is withdrawn.
Sebastian Pujol Schott, Associate Director, at 202-418-5641 or
On July 19, 2010, the Commission published the OCR NPRM,
The Commission received eight comment letters from fourteen interested parties in response to the OCR NPRM and the public roundtable.
In light of the comments received and the Commission's intention to collect trading account ownership and control information through a separate proposed rulemaking, the Commission has determined to withdraw the OCR NPRM. Concurrent with this withdrawal, the Commission is publishing elsewhere in this issue of the
Commodity Futures Trading Commission.
Notice of proposed rulemaking (“Notice”).
The Commodity Futures Trading Commission (“Commission” or “CFTC”) is proposing new rules and related forms to enhance its identification of futures and swap market participants. The proposed rules would leverage the Commission's existing position and transaction reporting programs by requiring the electronic submission of trader identification and market participant data on amended Forms 102 and 40, and on new Form 71. The proposed rules also incorporate a revised approach to the Commission's previous initiative to collect ownership and control information, through a dedicated ownership and control report (“OCR”), for trading accounts active on reporting markets that are designated contract markets or swap execution facilities. The Commission welcomes public comment on all aspects of its proposal.
Comments must be received on or before September 24, 2012.
You may submit comments, identified by RIN number 3038-AD31, by any of the following methods:
•
•
•
•
Please submit your comments using only one method.
All comments must be submitted in English, or if not, accompanied by an English translation. Comments will be posted as received to
The CFTC reserves the right, but shall have no obligation, to review, pre-screen, filter, redact, refuse, or remove any or all of your submission from
Sebastian Pujol Schott, Associate Director, Division of Market Oversight (“DMO”), at 202-418-5641 or
The CFTC's large trader reporting rules (also referred to herein as the “reporting rules”) are contained in parts 15 through 21 of the Commission's regulations.
The proposed amendments to the reporting rules and forms would achieve three primary purposes. First, they would broaden the utility of existing Form 102 through a new, expanded Form 102 (“New Form 102”), partitioned into three sections: section 102A for the identification of position-based special accounts (“102A,” “Form 102A,” or “New Form 102A”); section 102B—the former OCR component—for the collection of ownership and control information from clearing members on volume threshold accounts associated with DCMs or SEFs (“102B,” “Form 102B,” or “New Form 102B”);
The proposed rules would enhance the Commission's existing trade practice and market surveillance programs for futures and options on futures, and facilitate surveillance programs for swaps, by expanding the information presently collected on existing Forms 102 and 40, and introducing a new information collection for omnibus volume threshold accounts in New Form 71. The rules would also help implement the 102S and 40S filing requirements recently adopted in connection with the Commission's part 20 rules addressing large trader reporting for physical commodity swaps (discussed below).
The proposed rules respond, in part, to the increased dispersion and opacity of trading in U.S. futures markets as they continue to transition from localized, open-outcry venues to global electronic platforms. While electronic trading has conferred important informational benefits upon regulators, the concomitant increases in trading volumes, products offered, and trader dispersion have created equally important regulatory challenges. Effective market surveillance now requires automated analysis and pattern and anomaly detection involving millions of daily trade records
Commission staff utilizes two distinct data platforms to conduct market surveillance: the Trade Surveillance System (“TSS”) and the Integrated Surveillance System (“ISS”). Broadly speaking, TSS captures transaction-level details of trade data, while ISS facilitates the storage, analysis, and mining of large trader data from a position perspective. One important component of TSS is the Trade Capture Report (“TCR”). Trade Capture Reports contain trade and related order data for every matched trade facilitated by an exchange, whether executed via open-outcry, electronically, or non-competitively. Among the data included in the TCR are trade date, product, contract month, trade time, price, quantity, trade type (
Effective market surveillance requires that surveillance data sets received by the Commission be sufficiently comprehensive and contain sufficient identified reference points to uncover relationships where none appear to exist and to analyze information based on flexible criteria. The collection of additional trader identification and market participant data on the forms proposed in this Notice would help the Commission to better satisfy these data requirements. For example, elements of the proposed data collection would enable the Commission to link ISS data (which includes large traders' names, but not their trading account numbers) to TSS data (which includes trading account numbers but not names).
The information proposed to be collected would also help the Commission to better identify and categorize individual trading accounts and market participants that triggered position or volume-based reporting thresholds. For example, New Form 102A would, among other changes, require reporting firms to identify the constituent trading accounts of each reported special account. In this manner, New Form 102A would ensure a new level of interoperability between the Commission's large trader data and its trade data, and would permit Commission surveillance staff to quickly reconstruct trading for any special account. New Form 102B would, for the first time, require identification of trading accounts based solely on their gross trading volume. This new information collection would enhance the Commission's trade practice surveillance program by revealing connections of ownership or control between trading accounts that otherwise appear unrelated in the TCR. More generally, it would facilitate Commission efforts to deter and detect attempted market disruptions that may occur even in the absence of large open positions. Finally, the automated collection of such information via electronic forms, rather than through ad-hoc, manual processes, would permit both the Commission and market participants to administer the reporting programs and related work more efficiently and effectively. Additional information on the forms addressed by this Notice is provided below.
The Commission's existing reporting rules, and those proposed herein, are primarily implemented and/or proposed by the Commission pursuant to the authority of sections 4a, 4c(b), 4g, and 4i of the Act.
In addition to the CEA sections described above, on July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”).
As part of the Commission's rulemaking program implementing the Dodd-Frank Act,
Existing § 17.00, in part 17 of the Commission's regulations, forms the basis of the Commission's large trader reporting program.
For each special account identified by an FCM, clearing member, or foreign broker and reported to the Commission in a § 17.00 position report, existing § 17.01
As noted above, Form 102 identifies and provides information with respect to special accounts carried by FCMs, clearing members, and foreign brokers. The form provides the Commission with contact information for the trader(s) who owns and/or controls trading in each special account included in the daily § 17.00 position reports. The Form 102 questions, as currently detailed in § 17.01(a) through (f),
Based on the Commission's experience in receiving, processing, and reviewing Form 102 submissions, and as discussed below in the context of the rules proposed herein, the Commission
For each trader holding or controlling a reportable position (generally, persons identified on Form 102), § 18.04 requires that, after a special call of the Commission, such trader file with the Commission a “Statement of Reporting Trader” on existing Form 40 at such time and place as directed in the call.
As with existing § 17.01 and Form 102, existing § 18.04 also specifically identifies the data fields required in a Form 40 filing. Generally, § 18.04 and Form 40 require every reporting trader to provide or indicate the following: Name and address; principal business and occupation; type of trader; registration status with the Commission; name and address of other persons whose trading the trader controls; name, address, and phone number for each controller of the reporting trader's trading; name and location of other reporting firms through which the reporting trader has accounts; name and locations of persons guaranteeing the trading accounts of the reporting trader or persons having a 10 percent or greater financial interest in the reporting trader or its accounts; other identification information regarding accounts which the reporting trader guarantees or in which the reporting trader has a financial interest of 10 percent or more; and whether the reporting trader has certain relationships with or owners that are foreign governments.
Individuals completing existing Form 40 must also provide or indicate the following, as applicable: A business telephone number; employer and job title; description of trading activity related to physical activity in or commercial use of a commodity; name and address of any organization of which the reporting trader participates in the management, if such organization holds a trading account; the name and address of a partner and/or joint tenant on the account; and the name and address of the partner and/or joint tenant that places orders.
Corporations and other non-individuals/non-partnerships/non-joint tenants completing existing Form 40 must also provide or indicate the following, as applicable: A U.S. entity indication, and if not a U.S. entity, an indication of where organized; names and locations of parent firms and their respective U.S. entity indication; names and locations of all subsidiary firms that trade in commodity futures and options and their respective U.S. entity indication; name and address of person(s) controlling trading, by commodity and transaction type; contact information for a contact person regarding trading; and description of trading activity related to physical activity in, or the commercial use of, a commodity.
As with Form 102, and based on the Commission's experience in calling for, receiving, processing, and reviewing Form 40 submissions, the Commission has determined that the existing Form 40 questions could benefit from revisions designed to: (1) Provide more meaningful information to the Commission and (2) clarify for reporting traders the specific information required to be provided on Form 40. In addition, the Commission is also proposing, as discussed below, that the New Form 40 submission process be modernized to facilitate Web-based electronic form submission and achieve the efficiencies (for both the Commission and market participants) associated with using a single Web-based submission format.
As noted above, the Commission recently adopted rules pertaining to swaps large trader reporting as new part 20 of the Commission's regulations.
Specifically, pursuant to § 20.5(a), 102S filings must be filed by a part 20 reporting entity (a clearing firm or a swap dealer) for each reportable counterparty consolidated account and “shall consist of the name, address, and contact information of the counterparty and a brief description of the nature of such person's paired swaps and swaptions market activity.”
Building on the approach of this Notice to modernizing Form 102 and Form 40 submissions, the rules proposed herein would also provide for the electronic submission of both 102S and 40S filings. In order to provide clarity for market participants submitting these filings, the proposed rules also include provisions indicating the specific information required to be provided in each of these filings. In addition, the information requested in proposed Form 102S reflects considerations developed in the Swaps Large Trader Guidebook for compliance with part 20.
In addition to existing trader and account identification filings summarized above, the Commission recently proposed to collect ownership
In the OCR Advanced Notice, the Commission sought public comment on the concept of an OCR submitted periodically to the Commission by DCMs and other trading-venue reporting entities.
After carefully considering comments received in response to the OCR Advanced Notice, the Commission published its OCR NPRM, which was substantively similar to the Advanced Notice. Like the Advanced Notice, the OCR NPRM also provided for the collection of information through an OCR submitted to the Commission by trading-venue reporting entities.
The OCR NPRM sought public comment and provided for a 60-day comment period. Commission staff also led a public roundtable to facilitate in-person discussion between Commission staff and interested parties.
A number of commenters found merit in the proposed OCR. For example, IntercontinentalExchange, ICE Futures Europe, and ICE Futures U.S. collectively stated that they “recognize[d] the value in collecting information regarding the identity of the owners and controllers of accounts that actively trade on reporting entities, and therefore suppor[t] the Commission's initiative to collect certain OCR information.”
Commenters also suggested possible modifications to the OCR as described in the OCR NPRM. Commenters recommended that the Commission utilize an updated and automated Form
Concurrent with the publication of this Notice, the Commission is issuing a separate notice that serves to formally withdraw the OCR NPRM and to alert the public to the rulemaking proposed herein.
As noted above, this proposed rulemaking addresses three forms—New Form 102, New Form 71, and New Form 40. New Form 102 is proposed as a multi-function form, since the requirement to submit New Form 102 can arise from one of three separate triggers. The data required to be submitted on a New Form 102 is determined by the underlying triggering mechanism. A discussion of the three New Form 102 triggering mechanisms, the related sections of the form, and the information required to be provided in each section, follows. New Form 71 is proposed as a tool to be used, at the Commission's discretion, to learn more about certain volume threshold accounts identified as omnibus accounts on New Form 102B. New Form 40 would continue to serve its traditional purpose as a tool to be used, at the Commission's discretion, to learn more about traders and market participants identified on New Form 102, as well as on New Form 71. New Form 71 and New Form 40 are also described in detail below.
New Form 102A is the section of New Form 102 that would serve a function most analogous to existing Form 102. New Form 102A requires an FCM, clearing member, or foreign broker to identify and report its special accounts. As discussed above, a special account is defined in existing § 15.00(r), and means any commodity futures or option account in which there is a reportable position.
As compared to existing Form 102, the data fields in 102A would include new ownership and control information fields (or, in the case of special accounts that are omnibus accounts, omnibus account originator information fields) for position-based special accounts. Form 102A, as proposed, would also require reporting firms that are clearing members to identify the trading accounts that comprise a position-based special account and to provide ownership and control information, as well as TCR trading account numbers, for those trading accounts.
The Commission notes that the requirement in 102A to identify a trading account number for trading
Notwithstanding these limitations, under this proposed rulemaking non-clearing entities would continue to be required to submit a 102A for their customers/sub-accounts that, if carried directly with a clearing member, would otherwise be required to be reported as a position-based special account. Existing Form 102 requires the reporting of such special accounts, and New Form 102A would not change that requirement.
Form 102A would also require reporting firms to indicate whether a special account reported based on ownership or control of a reportable position is a house or customer account of the reporting firm. This indicator would allow the Commission to perform certain financial risk surveillance functions in a more automated and efficient manner by quickly identifying house positions that potentially create risk for the reporting firm. Form 102A also requires that reporting firms indicate whether any trading account identified on 102A has been granted direct market access (“DMA”) to the trade matching system of the relevant reporting market. The proposed definition of “DMA” appears in section IX below. Finally, 102A requires any reporting firm that indicates on 102A that it is a foreign broker to identify its U.S. FCM.
Pursuant to the proposed regulatory revisions discussed below, this rulemaking would require 102A submissions no later than the submission of the corresponding § 17.00(a) position report for a special account. That is, the 102A for any particular special account would be due at the same time as the special account's reportable position is first sent to the Commission. The proposed rule text also includes an “on-call” provision, which would require a 102A to be submitted on such other date as directed by special call of the Commission.
The proposed rules provide that if any change causes the information filed on a 102A for a special account to no longer be accurate, that an updated 102A shall be filed with the Commission no later than 9:00 a.m. eastern time on the business day after such change occurs, or on such other date as directed by special call of the Commission (“change updates”).
In addition to change updates, proposed § 17.02(b) requires that, starting on a date specified by the Commission or its designee and at the end of each six month increment thereafter (or such later date specified by the Commission or its designee), each FCM, clearing member, or foreign broker resubmit every 102A that it has submitted to the Commission for each of its special accounts (“refresh updates”). As with the 102B, discussed below, the goal of the refresh update provision is to establish discreet points in time where all 102A data is considered accurate and reliable. The Commission is proposing the refresh update provision in an effort to maintain accurate 102A data, and to avoid the data drift which is often associated with long-term data collection efforts.
Both the change update and refresh update provisions of § 17.02(b) include the following sunset provision: an FCM, clearing member, or foreign broker may stop providing change updates or refresh updates for a Form 102A that it has submitted to the Commission for any special account upon notifying the Commission that the account in question is no longer reportable as a special account.
New Form 102B of New Form 102 provides a new volume-based reporting structure not found in existing 102. As background, the Commission received several comments in response to the OCR NPRM that suggested the Commission should only require the reporting of those trading accounts whose trading activity exceeded a volume threshold, thereby limiting the total number of reportable accounts, reducing reporting costs, and preventing the reporting of non-significant accounts. The Commission considered the comments it received regarding the establishment of volume thresholds for the OCR, and has modified its approach accordingly in this Notice. While existing Form 102 reporting requirements arise when an account (or collection of related accounts) has a reportable position, 102B reporting is triggered when an individual trading account meets a specified trading volume level in an individual product and, as a result, becomes a “volume threshold account.” Volume threshold accounts, as defined below in proposed § 15.00(y), are trading accounts that execute, or receive via allocation or give-up, reportable trading volume on or subject to the rules of a reporting market, that is a DCM or an SEF.
As a threshold question, 102B requires that clearing members provide, in response to question 2, the trading account number of any trading account that meets the criteria for a volume threshold account; any related short code(s) for such account; and the name of the reporting market (i.e., the DCM or SEF) at which the volume threshold account had reportable trading volume. These data points are necessary to report and identify volume threshold accounts in TCRs received from DCMs or similar transaction-based reports that may be received by the Commission from SEFs, and to link the volume threshold account to transaction records in the Commission's surveillance databases.
Second, and as with 102A, 102B requires that clearing members indicate, in response to question 3, whether the volume threshold account has been granted DMA to the trade matching system of the relevant reporting market.
Third, 102B requires that clearing members provide, in response to question 4, the volume threshold account's associated special account number, if applicable. In the case of DCMs, this information will permit the Commission to more effectively and efficiently connect position data received via the large trader reporting system and trade data received via the TCR.
Fourth, 102B requires that clearing members indicate, in response to question 5, whether the volume threshold account is an omnibus account, or used to execute trades for an omnibus account. If the account is an omnibus account or used to execute trades for an omnibus account, question 5 requires clearing members to indicate whether the account is a house or customer omnibus account, and to provide information sufficient to uniquely identify and contact the originator of the account (
Fifth, 102B requires clearing members to provide information, in response to question 6, sufficient to uniquely identify and contact each owner of a volume threshold account that is not an omnibus account (
Finally, the Commission requests that clearing members provide information, in response to question 7, sufficient to uniquely identify and contact each volume threshold account controller of an account that is not an omnibus account. Pursuant to proposed § 15.00(dd), a volume threshold account controller must be a natural person. The requested information includes the account controller's name, address, phone number and job title, together with the name of the controller's employer and other identifying information.
The Commission requests public comment regarding the suitability of Form 102B to volume threshold accounts associated with SEFs. The Commission also requests comment regarding how Form 102B should be amended, if at all, to heighten its suitability with respect to SEFs.
In order to identify its volume threshold accounts and make a timely submission of 102B, a clearing firm must tabulate the gross trading activity of each account on its books. Once a volume threshold account is identified, proposed § 17.02(c) requires that the clearing firm submit 102B to the Commission no later than 9:00 a.m. eastern time on the business day following the day on which the account in question became a volume threshold account.
Once a clearing firm has identified a volume threshold account on 102B, that clearing firm has an ongoing responsibility (under § 17.02(c)) to ensure the information reported on 102B remains accurate. If the clearing firm becomes aware of any changes that cause the information reported on 102B to no longer be accurate, then an updated 102B must be filed no later than 9:00 a.m. on the business day after the clearing firm becomes aware of such change (“change updates”).
In addition to change updates, proposed § 17.02(c) requires that, starting on a date specified by the Commission or its designee and at the end of each six month increment thereafter (or such later date specified by the Commission or its designee), each clearing member shall resubmit every Form 102B that it has submitted to the Commission for each of its volume threshold accounts (“refresh updates”). As with Form 102A, the Commission is proposing the refresh update provision in § 17.02(c) in an effort to maintain accurate 102B data and avoid the data drift which is often associated with long-term data collection efforts. The goal of the refresh update provision is to establish discrete points in time where all 102B data is considered accurate and reliable.
Both the change update and refresh update provisions of § 17.02(c) include the following sunset provision: If, during the course of a six-month period, the subject volume threshold account executes no trades in any product on the reporting market at which the volume threshold account reached the reportable trading volume level, then the relevant clearing firm is no longer required to provide either change updates or refresh updates following the end of this six-month period.
Section 102S of New Form 102 is proposed to formalize and facilitate the electronic submission of 102S filings as required in 17 CFR 20.5(a). As noted above, pursuant to § 20.5(a), 102S filings must be filed by a part 20 reporting entity (a clearing firm or a swap dealer) for each reportable counterparty consolidated account when such account first becomes reportable, and “shall consist of the name, address, and contact information of the counterparty and a brief description of the nature of such person's paired swaps and swaptions market activity.”
The timing for submitting 102S filings would continue to be subject to existing § 20.5(a)(3).
Section 20.5(a)(4) of the proposed rules provide that, if any change causes the information filed on a 102S for a consolidated account to no longer be accurate, an updated 102S shall be filed with the Commission no later than 9:00 a.m. eastern time on the business day after such change occurs, or on such other date as directed by special call of the Commission (“change updates”).
In addition to change updates, proposed § 20.5(a)(5) requires that, starting on a date specified by the Commission or its designee and at the end of each six month increment thereafter (or such later date specified by the Commission or its designee), each clearing member or swap dealer resubmit every 102S that it has submitted to the Commission for each of its consolidated accounts (“refresh updates”). As with the 102A and 102B, discussed above, the goal of the refresh update provision is to establish discrete points in time where all 102S data is considered accurate and reliable. The Commission is proposing the refresh update provision in an effort to maintain accurate 102S data, and to avoid the data drift which is often associated with long-term data collection efforts.
Both the change update and refresh update provisions of § 20.5(a) include the following sunset provision: A clearing member or swap dealer may stop providing change updates or refresh updates for a Form 102S that it has submitted to the Commission for any consolidated account upon notifying the Commission that the account in question is no longer reportable as a consolidated account.
Proposed, New Form 71 (“Identification of Omnibus Accounts and Sub-Accounts”) would be sent to omnibus account originating firms, at the discretion of Commission staff, in the event that a volume threshold account is identified as a customer omnibus account on Form 102B. The relevant account number and reporting market listed on the 102B will be provided on Form 71. Recipients of a Form 71 would be required to provide information regarding any account to which the customer omnibus account allocated trades that resulted in reportable trading volume for the account receiving such allocations (a “reportable sub-account”) on a specified trading date.
If a reportable sub-account identified on Form 71 is not an omnibus sub-account, then the originating firm will be required to identify the owner(s) and controller(s) of the non-omnibus reportable sub-account. A New Form 40 will be sent at the discretion of Commission staff to such owner(s) and controller(s). Form 71 will therefore enable the Commission to collect the same level of information regarding owners and controllers (via a subsequent New Form 40) that the Commission would collect with respect to a non-omnibus volume threshold account identified on 102B. The key data points proposed to be collected in Form 71 are summarized below.
As a threshold question, section A of Form 71 requires the originator of an omnibus volume threshold account or a reportable sub-account to confirm certain identifying information regarding the originator. Such information would have been reported to the Commission by an omnibus account carrying firm on Form 102B or on a preceding Form 71 (
Second, section B of Form 71 requires the originator to provide certain information regarding the allocation of trades from a specified account number, and on a specified date and reporting market, to another account (called a “recipient account”). Specifically, the originator is required to indicate whether: (1) It allocated trades from the specified account number on the specified date and reporting market that resulted in reportable trading volume for a recipient account; (2) it allocated trades from the specified account number on the specified date and reporting market, but the allocations did not sum to reportable trading volume for a recipient account on such date; or (3) it did not allocate any trades from the specified account number on the specified date and reporting market.
If condition (1) is met, the originator is required to indicate in section B whether the reportable sub-account is an omnibus reportable sub-account. If so, the originator is required to indicate whether the omnibus reportable sub-account is a house or customer omnibus account, and to provide information sufficient to identify and contact the originator of the sub-account (
If the reportable sub-account is not an omnibus sub-account, the originator is required to provide information sufficient to identify and contact the owner(s) and controller(s) of such non-omnibus reportable sub-account (
The Commission requests public comment regarding the suitability of Form 71 to omnibus volume threshold accounts and omnibus reportable sub-accounts associated with SEFs. The Commission also requests comment regarding how Form 71 should be amended, if at all, to heighten its utility with respect to SEFs.
This Notice proposes a revised Form 40 that would be required to be completed, on special call of the Commission, by individuals, persons, and other entities identified on any of 102A, 102B, 102S, and Form 71. As proposed herein, New Form 40, still referred to as the “Statement of Reporting Trader,” would continue to serve the function traditionally met by existing Form 40 by providing the Commission with basic contact and trading activity information about those persons and entities identified in the Commission's New Form 102 program. New Form 40 would also be the vehicle through which market participants subject to 17 CFR 20.5(b) submit their 40S filings. As part of its implementation plan related to this proposal, and described in more detail below, the Commission is proposing to develop a Web-based portal through which market participates would complete, submit, and (when necessary) update their New Form 40—thereby curing much of the inefficiency, inaccuracy, and uncertainty associated with the current paper or facsimile based submission process.
Specifically, as proposed herein, New Form 40 (whether completed as a New Form 40 or as a 40S filing) would be required to be completed on call, as directed by Commission staff. Because the proposal anticipates a Web-based portal and user profile system, those entities required to complete a New Form 40 would also be under a continuing obligation, per direction in the special call, to update and maintain the accuracy of their profile information by periodically visiting the online New Form 40 portal to review, verify, and/or update their information.
Generally, New Form 40 would request basic information regarding the reporting trader; contact information for the individual(s) responsible for the reporting trader's trading activities, risk management operations, and the information on the New Form 40; if applicable, omnibus account information, foreign government affiliation information, and an indication regarding the reporting trader's status as a domestic or non-domestic entity; information regarding the reporting entity's ownership structure in connection with its parents and subsidiaries; information regarding the reporting trader's control relationships with other entities; information regarding other relationships with persons that influence or exercise authority over the trading of the reporting trader; an indication regarding swap dealer status and major swap participant status; and various indications regarding the nature of the reporting trader's derivatives trading activity. The form includes definitions of certain terms, including parent, subsidiary, and control, to be used for the purpose of completing New Form 40. The Commission specifically requests comment on the appropriateness of these definitions and whether the definitions should be changed in any way.
New Form 40 would also require reporting traders who engage in commodity index trading (“CIT”), as defined in the new form, to identify themselves to the Commission. New Form 40 defines CIT as: (a) an investment strategy that consists of investing in an instrument (e.g., a commodity index fund, exchange-traded fund for commodities, or exchange-traded note for commodities) that enters into one or more derivative contracts to track the performance of a published index that is based on the price of one or more commodities, or commodities in combination with other securities; or (b) an investment strategy that consists of entering into one or more derivative contracts to track the performance of a published index that is based on the price of one or more commodities, or commodities in combination with other securities.
An example of CIT described in clause (a) is the strategy of purchasing shares in an exchange-traded fund (ETF) that purchases futures contracts based on the amount of funds contributed by investors. It is typical for an ETF for commodities to track the performance of a widely cited commodity benchmark. An example of CIT described in clause (b) is the strategy of an investor entering into a total-return swap with a counterparty. The counterparty would agree to pay the investor the total return on (e.g.) a commodity index, and would hedge the swap by buying futures contracts. Reporting traders engaged in CIT as defined in (b) are required to indicate whether they are, in the aggregate, pursuing long exposure or short exposure with respect to the relevant commodities or commodity groups listed on the Form (see question 14ii(a) in New Form 40).
The Commission requests public comment regarding the definition of CIT in New Form 40. The Commission also requests comment on whether the definition captures all forms of CIT present in the market, or if not, how the definition should be modified. Finally, the Commission requests comment regarding question 14ii(a) in New Form 40, and whether it will adequately capture reporting traders' exposure in the commodities in which they engage in CIT.
During the comment period, the Commission anticipates that its data and technology staff will work with market participants and potential reporting entities to address potential information technology standards to be associated with the proposed rules. The Commission encourages interested parties to share information directly or through any industry working groups wishing to provide technical input pertaining to relevant data fields, formats, and submission requirements. The Commission may receive information through comment letters submitted according to the instructions above or through on-the-record meetings with industry participants, including staff-led public roundtables.
Specifically, the Commission anticipates creating a secure internet portal with the proposed electronic New Form 102, New Form 40, and New Form
It is envisioned that once the rule is effective and all technology at the CFTC is in place, the following capabilities will be available:
FCMs (including clearing members), foreign brokers, or swap dealers that trigger a position or volume based reporting obligation will generate the appropriate 102A, 102B, or 102S standard file and send it to the Commission via secure file transfer protocol (“FTP”). The Commission will provide the necessary FTP IP address, login, and password and will coordinate with the reporting entity to set up the secure FTP protocol handlers. Additionally, the Commission may provide file converters (such as CSV-to-XML) to simplify the data standard compliance requirements for the industry. Alternatively, the 102A, 102B and 102S data may be submitted through an electronic version of the form which would be available on the Commission's secure Web site portal.
New accounts identified on the New Form 102 by the reporting entity will be evaluated by Commission staff to determine next step actions (
Depending on the information provided in the Form 71, additional reportable sub-accounts named in the form may be asked to complete a New Form 40 or Form 71 using the same process described above.
Finally, the Commission proposes that any final rules resulting from this Notice include separate “effective” and “compliance” dates. The effective date of any final rule would begin 60 days after such rule's publication in the
To implement the new and amended forms described above, the Commission proposes to revise parts 15, 17, 18, and 20 of its regulations as follows.
Existing part 15 enumerates certain defined terms and other provisions applicable to parts 15 through 19 and 21 of the Commission's regulations. The Commission proposes to amend part 15 to effectuate the enhanced market participant and account identification regime proposed in this Notice, including new Forms 102B and 71. Specifically, the Commission proposes to do the following: Codify twelve new defined terms in § 15.00; update the list of “persons required to report” in § 15.01 to include persons identified on New Forms 102B and 71; revise § 15.04 to provide the “reportable trading volume level” for volume threshold accounts and other new account types; and make conforming changes in §§ 15.00(q) and 15.02.
New Forms 102 and 71 would require the identification of a number of account types not currently addressed in the Commission's regulations. Accordingly, the Commission proposes to introduce the following new defined terms in § 15.00:
• § 15.00(w).
• § 15.00(x).
• § 15.00(y).
• § 15.00(z).
• § 15.00(aa).
• § 15.00(bb).
Volume threshold accounts, omnibus volume threshold accounts, omnibus reportable sub-accounts, and reportable sub-accounts all reflect accounts that execute (or receives via allocation or give-up) “reportable trading volume.” Accordingly, the Commission proposes
Notably, § 15.04 addresses trading volume, not open positions, and would require that purchases and sales by a trading account be summed to determine whether such account has reached the reportable trading volume. Section 15.04 also stipulates that reportable trading volume should encompass all instruments that the reporting market designates with the same product identifier. In this regard, the Commission observes that if a reporting market utilizes the same identifier to designate both the open-outcry and electronically-traded variants of a product, then a clearing firm reporting on Form 102B should sum a trading account's activity in both the open-outcry and electronic venues to determine whether such trading account has reached the reportable trading volume. Similarly, if a reporting market uses the same identifier to designate the futures, options and swaps variants of a product, then a trading account's activity in futures, options and swaps in such product should be summed to determine whether the trading account has reached the reportable trading volume. Conversely, if a reporting market utilizes different product identifiers in these circumstances, then a clearing firm reporting on Form 102B should not sum a trading account's activity across venues or across futures, options and swaps. The Commission anticipates that its proposed approach, which relies on reporting markets' existing product identification practices, would be less burdensome than an approach which requires aggregation of the same product when traded under different identifiers. The Commission specifically requests public comment on its proposed account-type definitions in § 15.00, and on its definition of reportable trading volume in § 15.04.
The Commission also proposes to add “control” to the list of defined terms in § 15.00.
The Commission also proposes to separately define the concept of control in the context of trading accounts, volume threshold accounts, and reportable sub-accounts. For these accounts, “control” may only be exercised by natural persons. Accordingly, the proposed definitions in § 15.00(cc), 15.00(dd), and 15.00(ee) define trading account controllers, volume threshold account controllers, and reportable sub-account controllers, respectively, as “a natural person who by power of attorney or otherwise actually directs the trading of a [trading account, volume threshold account, or reportable sub-account].” Each account type may have more than one controller. The proposed definitions in § 15.00(cc), 15.00(dd), and 15.00(ee) would be relevant to the submission of New Forms 102A (trading accounts), 102B (volume threshold accounts), and 71 (reportable sub-accounts), respectively.
Finally, the Commission proposes to define direct market access (“DMA”) in a new § 15.00(v). The Commission proposes to define DMA as “a connection method that enables a market participant to transmit orders to a DCM's electronic trade matching system without re-entry by another person or entity, or similar access to the trade execution platform of a SEF.” Pursuant to the proposed definition, such access could be provided directly by a DCM or SEF, or by a 3rd-party platform.
The introduction of new account and controller types in New Forms 102A, 102B, and 71 would result in a corresponding expansion in the categories of persons required to provide New Form 40 reports. Accordingly, the Commission proposes to amend § 15.01(c), which currently requires Form 40 reports only from persons who hold or control reportable positions.
Other proposed amendments to part 15 include: A revision to the definition of “reporting market” in existing § 15.00(q) to replace the provision's cross-reference to § 1a(29) of the Act with a cross-reference to § 1a(40); a further revision to existing § 15.00(q) to remove the provision's reference to derivatives transaction execution facilities (“DTEFs”); and the amendment of existing § 15.02, which contains a list of the forms contained in parts 15 through 19, and 21.
The Commission is proposing a number of substantive, conforming and administrative amendments to §§ 17.01, 17.02, and 17.03 of part 17,
Existing § 17.01
First, the Commission proposes to codify a new § 17.01(a) that would require reporting entities to identify special accounts on New Form 102A (“§ 17.01(a) reports”), and would also refer reporting entities directly to the new form for the required data points. Second, the Commission proposes to introduce a new § 17.01(b) that would subject volume threshold accounts to an account identification regime comparable to the position-based regime already existing for special accounts.
The fourth substantive amendment proposed for § 17.01 would codify a new § 17.01(d). Proposed § 17.01(d) would require reporting markets that list exclusively self-cleared contracts to file § 17.01(a) and § 17.01(b) reports as if they were clearing members. Proposed § 17.01(d) reflects the requirements of existing § 17.01(g)
Section 17.02(b)
First, as explained above, the Commission proposes to strike existing § 17.02(b)(1) and to shift its special call requirements to proposed § 17.01(e). Second, the Commission proposes to strike existing § 17.02(b)(2) and to replace its Form 102 submission requirements with a new § 17.02(b)(1)-(4) to address the form and manner of New Form 102A filings for special accounts. Proposed § 17.02(b)(1) would direct reporting entities to the Commission's Web site (
To address New Form 102B filings for volume threshold accounts, the Commission proposes to codify a new § 17.02(c). Proposed § 17.02(c) would follow a structure similar to that of proposed § 17.02(b), with § 17.02(c)(1) directing reporting entities to
Finally, the Commission also proposes to codify a new § 17.03(e) that would provide the Director of ODT with delegated authority to make special calls to solicit information from omnibus volume threshold account originators and omnibus reportable sub-account originators on New Form 71. The Commission also proposes to codify (a) a new § 17.03(f) that would provide the Director of DMO with delegated authority to determine the date on which each FCM, clearing member, or foreign broker shall update or otherwise resubmit every Form 102 that it has submitted to the Commission for each of its special accounts and (b) a new § 17.03(g) that would provide the Director of DMO with delegated authority to determine the date on which each clearing member shall update or otherwise resubmit every Form 102 that it has submitted to the Commission for each of its volume threshold accounts.
The Commission is proposing a number of conforming and administrative amendments to part 17. First, the Commission proposes to revise § 17.00(g)(2)(iii), which defines the “account number” field for position reports.
Second, the Commission proposes to revise existing § 17.03(a), which grants the Director of DMO the authority to determine whether FCMs, clearing
Third, the Commission proposes to revise existing § 17.03(b), which grants the Director of DMO the authority to approve the late submission of position reports and Form 102.
Fourth, the Commission proposes to revise existing § 17.03(c), which grants the Director of DMO the authority to permit reporting entities filing Form 102 to authenticate it through a means other than signing the form.
Finally, the Commission proposes to revise existing § 17.03(d), which grants the Director of DMO the authority to approve a format and coding structure other than that set forth in § 17.00(g).
Existing § 18.04 (the “Statement of Reporting Trader”) requires every trader who holds or controls a reportable position to file a Form 40 upon special call by the Commission or its designee and to provide on Form 40 information required by existing § 18.04(a) thorugh (c).
First, and consistent with its approach to New Form 102, the Commission proposes to transition existing § 18.04(a) through (c)'s detailed form content requirements from the regulatory text to New Form 40. Second, the Commission proposes to codify a new § 18.04(a) that, as with existing § 18.04, would require every trader who holds or controls a reportable position to file a New Form 40 upon special call by the Commission or its designee. Finally, to accommodate volume threshold accounts and reportable sub-accounts identified on New Forms 102 and 71, the Commission proposes to codify a new § 18.04(b) that would require volume threshold account controllers, persons who own a volume threshold account, reportable sub-account controllers, and persons who own a reportable sub-account to file New Form 40 upon special call by the Commission or its designee.
Existing § 18.05 requires traders who hold or control reportable positions to maintain books and records regarding all positions and transactions in the commodity in which they have reportable positions.
As with Forms 102 and 40, the Commission proposes to transfer the list of data points required in Form 102S data point from the relevant regulatory text (
The Commission requests public comment on the proposed forms and regulations described in this Notice, and welcomes specific alternatives to the regulatory text proposed to be implemented and the data points proposed to be collected herein. In addition to this general request for comments, the Commission specifically requests public comment on the questions below.
1. With respect to DCMs, the Commission requests public comment regarding the RTVL proposed in § 15.04, which is: 50 or more contracts, during a single trading day, on a single reporting market that is a board of trade designated as a contract market under § 5 of the Act or a swap execution facility registered under § 5h of the Act, in all instruments that such reporting market designates with the same product identifier (including purchases and sales, and inclusive of all expiration months). If the RTVL or parameters proposed in § 15.04 (
2. The Commission requests public comment as to whether it should retain § 20.5(a)(3) as the timing requirement for submitting initial 102S filings on New Form 102.
3. The Commission requests public comment on the proposed change and refresh updates for 102A, 102B, and 102S filings, including comments with respect to the timing, frequency, and contents of such updates.
4. The Commission requests public comment as to the appropriateness of the definitions of “parent” and “subsidiary” in New Form 40, and whether these definitions should be changed in any way.
5. The Commission requests public comment regarding the definition of “commodity index trading” (CIT) in New Form 40. The Commission also requests comment on whether the
6. The Commission requests public comment on the schedule and procedures proposed in section V above for the effective date and compliance date of any final rule resulting from this Notice.
a. With respect to trading accounts associated with a DCM or a SEF that is not yet registered on the effective date or the compliance date proposed in section V, should the effective date or the compliance date for the reporting of such trading accounts be delayed for a certain period? If so, how long should the effective date or compliance date be delayed?
7. The Commission requests public comment on whether it should codify a definition of “trading account” in § 15.00 of the Commission's regulations. “Trading accounts” refers to accounts identified by a reporting market in daily transaction-level TCRs submitted to the Commission pursuant to § 16.02 or any similar reports received from a SEF.
8. The Commission requests public comment on its proposal to require that reporting firms that are clearing members identify, on Form 102A, the trading accounts that comprise a special account, and provide ownership and control information and TCR trading account numbers for such trading accounts. The Commission also requests public comment on the three factors offered in this Notice to determine whether a trading account comprises part of a special account.
9. The Commission requests public comment on whether “trading account(s) that comprise a special account” should be a defined term in § 15.00 of the Commission's regulations, and how such definition should differ from the three factors discussed in this preamble, if at all.
10. The Commission intends that the definition of “volume threshold account” captures all possible categories of accounts with reportable trading volume, including give-ups and other instances in which trades do not `execute' on a DCM or SEF (e.g., block trades). The Commission requests public comment regarding whether the proposed definition of “volume threshold account” achieves this purpose, and if not, how the definition should be revised.
11. The definition of “omnibus reportable sub-account” captures “any trading sub-account, which sub-account
12. With respect to SEFs, the Commission requests public comment regarding whether proposed § 15.04 contains the appropriate parameters for defining a RTVL for volume threshold accounts associated with a SEF (
13. The Commission requests public comment regarding proposed §§ 17.01(b), 17.01(d), and 17.02(c)(2)-(4), which place certain 102B reporting obligations on clearing members. Do the proposed regulations require any revision to adequately address 102B filings with respect to volume threshold accounts associated with SEFs? If so, how should proposed §§ 17.01(b), 17.01(d), and 17.02(c)(2)-(4) be amended? Should other reporting entities be considered, and if so, which ones?
14. The Commission requests public comment regarding whether the proposed constructs of “trading account,” “volume threshold account,” “omnibus volume threshold account,” and “omnibus reportable sub-account” are as applicable to SEFs as they are to trading on DCMs.
b. If these constructs are not applicable, then the Commission requests specific comments on the differences between trading practices and/or account structures at DCMs versus SEFs that would preclude their use with respect to SEFs. The Commission also requests specific comments on how these constructs should be amended or substituted so that they are usable with SEFs. For example, in the context of SEFs, should the construct of volume threshold accounts be modified to refer to reportable trading volume associated with a particular legal entity identifier, rather than reportable trading volume associated with a particular trading account?
15. The Commission requests public comments on any defined terms or other provisions of the proposed rules that would require revision to accommodate the identification and reporting of volume threshold accounts, omnibus volume threshold accounts, and omnibus reportable sub-accounts associated with SEFs.
a. For example, the Commission requests public comment regarding
16. The Commission requests public comment as to whether Form 102S should require the reporting of trading accounts that comprise a consolidated account in the same manner that proposed 102A requires the reporting of trading accounts that comprise a special account. If not, why not? The Commission also requests public comment regarding: (1) Whether the three factors used to determine whether a trading account comprises a special account are equally applicable to consolidated accounts; (2) whether “trading account(s) that comprise a consolidated account” should be a defined term in the Commission's regulations; and (3) the appropriate definition of “trading account(s) that comprise a consolidated account.”
17. The Commission requests public comment as to whether New Forms 102 (including, in particular, Form 102S), 71, or 40 should be provided to swap data repositories (“SDR”) registered pursuant to part 49 of the Commission's regulations to assist such SDRs in fulfilling any swaps data aggregation responsibilities assigned by the Commission. If not, then the Commission requests specific public comment regarding any reasons why the forms should not be provided to SDRs.
a. If new Forms 102, 71, or 40 are provided to SDRs, should they be provided directly by reporting entities or by the Commission? The Commission specifically requests public comment regarding any reasons why the forms should not be provided to SDRs directly by reporting entities.
b. The Commission requests public comment regarding any additional considerations relevant to the provision of New Forms 102, 71, or 40 to SDRs directly by reporting entities, including:
i. the time, manner and format of submission to SDRs, including any necessary divergence from the time, manner, and format proposed herein for submission of the forms to the Commission;
ii. additional data points that should be contained in the forms to heighten their utility in any data aggregation performed by SDRs; and
iii. appropriate limitations on SDRs' use of any information received in Forms 102, 71, or 40, other than for data aggregation purposes specified by the Commission.
Section 15(a)
The Commission requests comment on the costs and benefits associated with the Notice. As discussed below, the Commission has identified certain costs and benefits associated with the Notice and requests comment on all aspects of its proposed consideration of costs and benefits, including identification and assessment of any costs and benefits not discussed herein. In addition, the Commission requests that commenters provide data and any other information or statistics that the commenters relied on to reach any conclusions on the Commission's proposed consideration of costs and benefits.
The Commission notes that the cost estimates provided herein for New Forms 102A, 102B, 102S, 71, and 40 reflect estimates of: (i) The costs associated with the reporting and identification of special and consolidated accounts for positions reported under parts 17 and 20, respectively, of the Commission's regulations; and (ii) the costs associated with the reporting and identification of volume threshold accounts associated with DCMs and SEFs. Cost estimates for these forms are based on extrapolations from current forms and reports received from FCMs, IBs, and foreign brokers; reporting entities pursuant to part 20; and DCMs pursuant to § 16.02.
The Commission understands that the costs and benefits of the proposed reporting regime for trading accounts, volume threshold accounts, omnibus volume threshold accounts, and omnibus reportable sub-accounts associated with SEFs may differ, possibly substantially, from the reporting regime for such accounts associated with DCMs. The Commission therefore requests specific quantitative estimates on the costs and benefits of Form 102B and 71 filings for volume threshold accounts, omnibus volume threshold accounts, omnibus reportable sub-accounts, and market participants associated with SEFs.
More generally, the Commission has requested public comment, in section VII above, regarding the applicability of volume threshold accounts, omnibus volume threshold accounts, and omnibus reportable sub-accounts to SEFs. The Commission has also requested comment on the appropriate design of a reportable trading volume level for volume threshold accounts associated with SEFs, and on the appropriate reporting entities for volume threshold accounts associated with SEFs.
Finally, the Commission requests comment, including specific quantitative estimates, on the costs and benefits of associated with the identification of trading accounts associated with consolidated accounts.
Pursuant to the authority of sections 4a, 4c(b), 4g, 4i, and 4t of the CEA, the Commission is proposing these revisions and updates to its large trader reporting rules and forms.
The existing rules and forms, described more fully above,
As described in the preamble above, the Commission is proposing amendments to the existing reporting rules and forms as they pertain to reportable positions in Commission regulated contracts. In addition, the Commission is proposing to expand the reporting rules and forms so that they may also be used to identify traders and trading accounts exceeding a volume-based reporting threshold, regardless of the resulting positions (
The Commission's consideration of costs and benefits begins with certain general considerations applicable to all forms, followed by specific discussions of the costs and benefits of: (1) New Form 102A, (2) New Form 102B, (3) 102S filings, (4) New Form 71, (5) New Form 40, and (6) 40S filings.
As a general matter, the Commission considers the incremental costs and benefits of the proposed regulations and forms, those costs that are above the baseline that is the Commission's existing regulations. As described in detail above, the proposed rule and form amendments would broaden the utility of existing forms.
The Commission proposes that the costs the Notice would impose on market participants will vary depending on various factors, including the size and/or experience of the market participant; the scope (whether measured by position or volume) of the market participant's trading activity; and the number of distinct customer or proprietary special accounts, volume threshold accounts, and other account types required to be reported by each market participant. Given the range of factors relative to the potential costs of the proposed rules, reporting parties may face costs associated with one, more than one, or, in some instances, all of the revised rules and forms. For purposes of the Paperwork Reduction Act, the Commission has estimated the number of hours the average market participant would spend in connection with the information collection required by the Notice.
The
In anticipation of a wide range of technological capabilities among reporting entities (again, varying based on the relative size and experience of a given reporting entity), the Commission is proposing an implementation program that would permit multiple submission methods for each form. By allowing reporting entities to select the submission method most suited to their existing capabilities and business model, reporting entities will be able to mitigate their own reporting costs.
While the Commission expects that an entity with a relatively larger number of reporting obligations (whether for the reportable accounts of its customers, or its own reportable accounts), would incur larger total costs in complying with the proposed reporting rules and submitting the related forms than a smaller firm, the Commission anticipates that these larger absolute costs will be mitigated by lower unit costs, and the marginal expense of reporting each additional reportable account would likely diminish once the entity established its data collection and reporting infrastructure. For high-volume reporting entities, the Commission is proposing an implementation program, to be conducted in conjunction with input from commenters, which will permit electronic submission of the forms to the Commission via a defined data submission standard. This transition from manual to automated form submission should reduce costs for high-volume reporters on a per-account basis.
In addition to evaluating these proposed rules based on the Commission's experience and expertise in the derivatives markets, this Notice took into account comment letters by industry participants received in response to the OCR NPRM.
Our sample of 12 firms represents approximately 16 percent of the approximately 70 FCMs that execute and clear customer accounts. These firms handle in excess of $83.8 billion of customer funds, or approximately 62 percent of customers' segregated funds (as of July 31, 2010, according to monthly financial reports filed with the Commission). We found that the median firm would face total costs of roughly $18.8 million per firm, including implementation costs of roughly $13.4 million, and ongoing costs of $2.6 million annually. On a per account basis, the median cost would be $623 per account.
In comparison, FIA estimated that its alternative would result in significant first year cost savings, with additional, incremental savings following initial implementation. Accordingly, and in order to realize potential cost savings identified by FIA, the Commission has incorporated elements of the FIA's alternative approach into this proposal. For example, this proposal incorporates FIA suggestions regarding setting a threshold for determining when a volume threshold account is reportable and integrating OCR reporting into the existing Form 102 process. As noted in the FIA letter, and as substantiated by a sample of their members, by incorporating these elements into this proposal, the Commission anticipates that the relative cost impact of these proposed rules should be significantly mitigated as compared to the relative cost impact of the proposal in the OCR NPRM.
As stated above, the Commission anticipates potential additional cost savings (as compared to both the existing reporting program, as well as the OCR NRPM) will come through the proposed automated submission of Forms 102, 40, and 71;
The Commission proposes that infrastructure requirements for the revised Forms 40 and 102 and the additional Form 71 could be significant,
New Form 102A is directly analogous to the existing Form 102 currently in use, identifying owners and controllers of special accounts with reportable positions (the other sections of the New Form 102 extend the Form to new categories of reportable traders). The requirement to submit a 102A remains the same as that for the current Form 102: a special account can be a position at a reporting entity that is under common control, common ownership, or some combination of common control and common ownership. Because reportable special accounts would not be materially different under the proposed forms and regulations from special accounts as they now exist, the Commission believes the incremental cost of reporting due to account status should be minimal. However, by re-emphasizing that entities must separately identify special accounts under common ownership and those under common control, the Commission may observe an increase in the number of special accounts to be identified at any given reporting entity.
Although the definition of a special account will not change, the level of requested information per account will increase. Proposed Form 102A requests (as applicable) information not currently collected, such as owner and controller NFA ID, LEI, trading account numbers for trading accounts comprising the special account, and DMA status. The commission expects that (as noted by comment letters on the OCR NPRM) the majority of these data points already reside with reporting entities. Depending on the availability of this information, costs may be higher or lower than the estimated average burden of 102A submission.
As noted above, the Commission anticipates that reporting for New Form 102, including Form 102A, will be made primarily through XML data submissions. Form 102A reporting will be triggered once an account becomes a special account (an account “event”) and updates will be required on at least a semi-annual basis. Standards for the data submission will be flexible, developed in conjunction with market participants' and potential reporting entities' input, and will take into consideration the diversity of reporting entities' systems. Should this Notice lead to a final rule, the Commission will endeavor to provide flexibility in the required information technology systems and to avoid undue burdens for reporting entities, including those with relatively large or relatively small numbers of special accounts.
As with costs associated with Form 102A, the reporting benefit is mainly coincident with the benefits of the current reporting regime. However, additions to the form have been made to strengthen the robustness of the Commission's regulatory surveillance capabilities. By collecting information like the trading account numbers comprising a special account, the Commission will be able to compare intra-day account activity with position data held over longer periods of time. This will enable further market transparency and enhanced market review over both macro and micro scales. Micro-structure analysis, the economic analysis of account activity on a highly disaggregated level (such as via individual transactions), was shown to be uniquely helpful in event studies such as the Flash Crash of 2010.
System robustness is also strengthened with the regular update schedule required for all special accounts. Updates provide additional data verification, improving the accuracy of account information on a standard, and sufficiently frequent, schedule. As discussed, automated submission should mean that regular updates come at relatively minimal cost to those reporting.
As noted above, the Commission has attempted to mitigate the cost to the ultimate reporting entities that provide OCR data for trading accounts (as compared to the proposal in the OCR NPRM), while retaining similar reporting benefits. One significant revision relevant to Form 102B is the introduction of a minimum reporting threshold of 50 contracts in a given product, for any given trading day on any given reporting market that is a DCM or a SEF, as the trigger for required reporting (as compared to no minimum threshold in the OCR NPRM). The Commission believes that this approach would provide sufficient data coverage and benefits, but at a noticeably reduced cost (again, as compared the proposal in the OCR NPRM). In this regard, the FIA comment letter in response to the OCR NPRM noted that:
Most FCMs found that adopting a volume threshold of 250 contracts per week would decrease significantly the costs of implementing the alternative, by reducing the amount of data required to be processed and the associated cost of transmitting large amounts of data to the exchanges and the Commission. The average estimated cost of populating the OCR database using a volume threshold of 250 contracts per week is $1,783,750. In contrast, the estimated total cost for initially populating the OCR file based on a volume threshold that includes all accounts (referred to in our survey as option 1) is $2,134,375.
Even with this revision, proposed Form 102B does cover a market category not covered under the existing reporting program and so should be considered as an additional cost on any baseline. As with Form 102A, since reporting entities will likely have existing data feed capabilities, a subset of reporting firms will likely not require significant infrastructure development. In particular, the Commission notes that Form 102B reporting firms are limited to clearing member firms, typically among the more technologically-sophisticated participants in the derivatives industry. As with Form 102A, low-volume reporters may choose to submit forms semi-manually through a web-based portal, which will reduce start-up costs but increase costs of individual submissions. Also, as discussed below, the incremental number of additional accounts due to volume reporting may be large. This may translate to significant costs for those who choose a manual submission method. The Commission specifically requests comment on the expected costs related to upgrading or obtaining systems to implement and comply with the reporting requirement under the 102B aspect of the proposal in this Notice.
The addition of volume threshold accounts to the reporting structure will provide much needed information about a rapidly growing market segment, that of high volume but low end-of-day position traders. Many of these participants enter and exit a given
In addition to increasing the set of reporting entities on an absolute level, 102B reporting is likely to increase the types of market participants identified to the Commission. For example, it is expected that volume threshold accounts would identify trade ownership and control for market participants such as high-frequency traders (HFTs) and other algorithmic systems; in highly-liquid markets, participants of this type can make up a meaningful percentage of market activity. However, due to the current structure of the reporting system, many participants in these categories do not qualify as reportable special accounts. The 102B would expand the Commission's reporting program to include participant groups of this nature, and would also expand the reporting program to include trading accounts associated with SEFs.
Because the concept behind Form 71 is being introduced for the first time in this Notice, all costs associated with Form 71 reporting are incremental. The form identifies the ownership and control structure of omnibus accounts, from the level of originator to that of sub-account owners and controllers, for volume threshold accounts that are omnibus accounts. The Commission plans to provide a web-based portal for submission and, potentially, an XML submission standard like New Form 102.
Because the structure of omnibus accounts is currently not known by the Commission, it cannot accurately quantify how many additional reports will be necessary due to the introduction of Form 71. However, the Commission has attempted to mitigate the cost of reporting, especially for larger institutions that may have a greater number of relevant accounts. Many of the data fields in Form 71 will be auto-populated with data provided to the Commission on an associated Form 102B or Form 71. This auto-population will be included in the web-based system for the benefit of the reporting party, and is intended to help mitigate, as much as possible, the submission burden. The Commission specifically requests comment on the expected costs related to upgrading or obtaining systems to implement and comply with the reporting requirement under the Form 71 aspect of the proposal in this Notice.
Form 71 provides further granularity regarding the ownership hierarchy of omnibus accounts that are volume threshold accounts. Broad collection of omnibus account information can be used to aggregate and analyze all trading by an individual or trading entity, whether through a single account or through a number of accounts held with one or more intermediaries. In the absence of Form 71 information in connection with omnibus volume threshold accounts, the Commission would lose meaningful ownership and control information (and, therefore, usefulness of the 102B reports), including the structure of and dependence on intermediaries within a given market.
The increased relative cost of the 102S filings required in this proposal, as compared to existing 102S filing requirements, should be minimal. This proposal does not amend or change the subset of traders for which swap dealers and clearing members will be required to submit 102S filings. However, by updating existing Form 102 to include 102S filings and by creating a new submission framework for New Form 102, entities submitting 102S filings may encounter costs similar to those encountered by entities filing New Form 102 for other purposes (whether under 102A or 102B). The Commission anticipates that many 102S filing entities will also be submitting New Form 102 in connection with their futures trading business. In addition, the Commission is proposing to work with potential filing entities during the comment period in order to achieve a 102S filing submission process that leverages as much as possible off of the existing infrastructure and practice at reporting entities, including the resources that will be used for analogous futures filings. The Commission specifically requests comment on the expected costs related to upgrading or obtaining systems to implement and comply with the reporting requirement under the 102S aspect of the proposal in this Notice.
Form 102S, like 102B, is designed to expand the set of reporting entities beyond those of the current Form 102. The identification of accounts via 102S will provide trader information for participants in swaps. For the purposes of tracking aggregated position exposure in a product or commodity, or market activity of a specific trader, swap reporting significantly extends the Commission's market surveillance capabilities. The inclusion of swap activity aligns with the recently finalized rules on real-time public and regulatory reporting of swap trades, and provides further transparency in what are currently often opaque and/or over-the-counter markets. As further changes arise in the commodity swap market, such as the introduction of SEFs, special account identification will allow universal market monitoring of activity across traditional futures exchanges and SEFs. This can provide quantifications of the balance of activity in a given product across different execution platforms and changes in this balance over time. In addition, disruptive market activity transferred across multiple trading facilities could now be more easily, and more quickly, identified with the information requested in 102S filings.
The proposed changes to Form 40 extend the level of information collected about account ownership and the business practices of reporting traders. Given the new subsections of New Form 102 (
Through the expansion of Form 40, the Commission will have more detailed data on reporting traders, including information regarding reporting trader's control relationships with other entities and other relationships with persons that influence or exercise authority over the trading of a reporting trader. This data set will include an expansion of the list of business purposes for futures and swaps activity and requests for detailed information about the business sector and physical commodity market participation of a given trader. Responses to these questions can provide a broader view concerning relationships and relative interest in related markets by business sector, and overlaps in activity across different product groups. It can also provide the Commission a check, or confirmation, to assess whether market activity matches the self-reported trading goals of a reporting trader.
The increased relative cost of the 40S filings in this proposal, as compared to existing 40S filing requirements, should be minimal. This proposal does not amend or change the subset of traders who will be required to submit 40S filings, and the existing 40S filings must be completed using existing Form 40. By updating existing Form 40 questions and providing for web-based form submission, the Commission does not anticipate any significant increase or change in costs related to the 40S filing provisions of this Notice. The Commission specifically requests comment on the expected costs related to implementing and complying with the reporting requirement under the 40S filing aspect of the proposal in this Notice.
Similar to the New Form 40 benefits discussion above, 40S filings under this proposal would provide the Commission with a broader view (as compared to existing Form 40 and 40S filings) concerning relative interest in related markets by business sector, and overlaps in activity across different product groups. It can also provide the agency a means to check that observed market activity matches the self-reported trading goals of the entity.
Although potentially costly, the Commission proposes that the data collection under these rules and forms are necessary to assist the Commission in protecting market participants and the public by, inter alia: identifying as many accounts as feasible that are under common ownership or control; identifying trading accounts whose owners or controllers are also included in the Commission's large trader reporting program or that demonstrate independently significant trading activity; and identifying the entities or persons which the Commission should contact if additional information is required, including the owner and controller, and related contact persons, for reported accounts and traders.
The Commission proposes that revised Form 102 will protect market participants and the public by expanding data collection in three major areas: (1) By providing additional information regarding special accounts reported on 102A, including the trading accounts that comprise a special account; (2) by increasing the number of identified futures, options, and swaps accounts through the new volume threshold trigger in 102B; and (3) by identifying ownership and control information for a new market sector, that of swaps.
The proposed rule will protect market participants and the public by permitting the Commission to integrate transactions (and associated trading accounts) identified on daily trade capture reports with special accounts holding reportable positions; identifying traders of all sizes whose open interest does not reach reportable levels, but whose intra-day trading reaches significant levels and may adversely affect markets during concentrated periods of intra-day trading; reducing the time-consuming process of requesting and awaiting information from outside the Commission to identify the entity associated with a given trading account number on a trade capture report and aggregating all identified entities that relate to a common owner; linking traders' intra-day transactions with their end-of-day special account positions; calculating how different categories of traders contribute to market-wide open interest; and categorizing market participants based on their actual trading behavior on a contract-by-contract basis, supplementing the self-reported classifications on Form 40.
The proposed forms will be submitted in either an XML-based data feed or via a web-based submission. This modifies the process of form submission from the current manual systems at both the Commission and reporting entities. As compared to manual entry, automated systems should decrease the possibility of transcription error or errors in cross identification and reduce labor costs, aiding the accuracy and efficiency of agency market monitoring and enforcement.
Additional identifiers, such as those requested in New Form 102, will also allow for data integrity checks within and between the Commission's databases. For example, requests for NFA and LEI numbers provide independently assigned identifiers for ownership hierarchy verification. Also, New Form 40 information will be a direct check on much of the ownership and control information provided on New Form 102. In sum, the proposed rules would greatly increase the ability of the Commission to carry out its regulatory function and its protection of the public in an efficient manner. By leveraging available technology, these revisions should ultimately mitigate the long term cost to market participants of providing the requested information.
Collecting ownership and control information for the identified market participants allows the Commission to aggregate positions for a specific underlying trader across multiple products and markets and to identify aggregate activity levels. This identification provides additional market transparency for regulators and a clearer quantification of risk within and across firms, aiding the surveillance and monitoring functions of the Commission. Thus, while done at a cost, as described above, it aids in monitoring, over longer periods of time, risk exposure by institution, market class, or asset class. The proposed forms also allow for easy identification of the individual, or individuals, to be contacted if additional transaction information is needed for further review. As noted in a comment letter from the Petroleum Marketers Association of America (PMAA) on the OCR NRPM, “Efficient integration of large trader and trade register data from DCMs, ECMS, and [other markets] will improve market transparency and ensure that no one trader, investment fund or other entity controls a large
Under the proposed rules, strengthened ties between end-of-day position and trade execution account registers received by the Commission can allow for a more accurate and timely accounting of market position by account. In addition, the increased depth of trader information allows for more robust research and analytics, encompassing a much greater segment of market volume traded on exchange platforms. The additional information could also aid in anticipating and/or monitoring market disruptions that can come at high costs to the investing and general public.
The Commission does not anticipate that the proposed rules will have an impact on price discovery in markets regulated by the Commission.
The expansion of both requested information and reportable accounts in the proposed forms requires firms to collect more information on each threshold account for appropriate risk monitoring. While the technology and personnel required for this collection will come at some cost to both market participants and the Commission, as described above, this collection of information is of benefit not just for regulatory oversight but for effective internal risk management at the level of the firm. Identification of account control and related contact information can provide timely responses to market disruptive events from multiple parties. It can also allow for prophylactic classification of market categories which could provide unique risks to market systems.
One specific area for which enhanced monitoring may be of benefit is that of direct market access (DMA). Briefly, DMA allows a trading entity to submit orders directly to an exchange matching engine. It is anticipated that this decreased distance between trade entry and ultimate execution on the exchange may carry additional transaction risk. A recent IOSCO report
Form 40 now contains the relevant North American Industry Classification System (NAICS) categories to aid in business sector identification. The form includes two other selection lists: (1) Commodity groups and individual commodities (a classification defined by the CFTC) and (2) trading purposes that further detail the business practices of a reporting firm. These identifications can aid in analytical studies (developing categories of trading activity beyond those currently used by the agency), in cross-validation of trading intent, and in analysis of risk exposure across business sectors.
In addition, and as discussed throughout this document, the move to electronic submission of the forms addressed by these proposed rules will increase efficiencies for both market participants and the Commission. Specifically, data will be more reliable, will be received and reviewed faster, and will be capable of being updated faster than in the current paper based submission process. By embracing available technology to carry out its surveillance and market monitoring functions in this manner, market participants and the public will benefit from a more efficient and effective Commission.
The Commission specifically requests comment on its cost and benefit considerations of the proposed rules, as discussed above, and the proposed rule's impact (or the relative impact of any alternative rules) on: (1) The protection of market participants and the public; (2) the efficiency, competitiveness, and financial integrity of the futures markets; (3) the market's price discovery functions; (4) sound risk management practices; and (5) other public interest considerations.
The Regulatory Flexibility Act (“RFA”) requires that agencies consider whether the rules they propose will have a significant economic impact on a substantial number of small entities and, if so, provide a regulatory flexibility analysis regarding the impact.
The rules proposed in this Notice would require FCMs, clearing members, foreign brokers, swap dealers and other reporting traders (including natural persons) to complete New Forms 102 or 71, and to submit them to the Commission as specified in the proposes rules or upon special call by the Commission. The Commission has previously determined that FCMs, clearing members, foreign brokers, swap dealers, and natural persons are not small entities for purposes of the RFA.
The proposed rules would also require certain reporting traders to complete and submit New Form 40
The Commission believes that, due to the limited number of institutions likely to receive a New Form 40 request in any given year, as well as the limited nature of the New Form 40 reporting burden, the rules proposed in this Notice with respect to New Form 40 would not have a significant economic impact on a substantial number of small entities. New Form 40 would not be required on a routine and ongoing basis, but rather would be sent by the Commission on a discretionary basis in response to the reporting of an account that reaches a minimum position or volume threshold. As summarized above, in 2010 the Commission made Form 40 requests to only 25% of all reporting traders that could potentially be small entities; furthermore, some of these reporting traders were not in fact small entities. As a result, New Form 40 would be expected to affect only a small subset of the entities that may be small entities under the RFA. In addition, New Form 40 is not lengthy or complex, and would require reporting traders to provide only limited information to the Commission. The Commission estimates that a reporting trader would require only 3 hours to complete a New Form 40.
The rules proposed in this Notice regarding revised § 18.05 would also impose books and records obligations upon a new category of market participants—specifically, certain owners (but not controllers) of a volume threshold account or a reportable sub-account. Such owners may be small entities under the RFA. The Commission does not believe that the obligation to maintain books and records under revised § 18.05 would impose significant costs on the additional small entities subject to the recordkeeping requirements of such section. The Commission expects that such account owners may largely rely on the books and records that they maintain in the ordinary course of business to fulfill the requirements of revised § 18.05. The Commission also expects that a portion of the account owners subject to revised § 18.05 are subject to the position-based recordkeeping requirements of current § 18.05,
Accordingly, for the reasons set forth above, the Chairman, on behalf of the Commission, hereby certifies pursuant to 5 U.S.C. 605(b) that the rules proposed in this Notice would not have a significant economic impact on a substantial number of small entities. The Commission invites public comment on this determination.
The Paperwork Reduction Act (“PRA”)
The proposed rulemaking would create new information collection requirements via proposed §§ 17.01, 18.04, 18.05, and 20.5. Currently, OMB control number 3038-0009 covers, among other things, the collection requirements arising from existing §§ 17.01, 18.04, and 18.05.
Proposed § 17.01 would result in the collection of information regarding the following types of accounts: (a) Special accounts (as defined in existing § 15.00(r));
1. Pursuant to proposed § 17.01(a), FCMs, clearing members, and foreign brokers would identify new special accounts to the Commission on New Form 102A;
2. Pursuant to proposed § 17.01(b), clearing members would identify volume threshold accounts to the Commission on New Form 102B;
3. Pursuant to proposed § 17.01(c), omnibus volume threshold account originators and omnibus reportable sub-account originators would identify reportable sub-accounts to the Commission on New Form 71 when requested via a special call by the Commission or its designee.
Additional reporting requirements would arise from proposed § 18.04, which would result in the collection of information from and regarding traders who own, hold, or control reportable positions; volume threshold account controllers; persons who own volume threshold accounts; reportable sub-account controllers; and persons who own reportable sub-accounts. Specifically, proposed § 18.04 would provide for the filing of New Form 40, as follows:
1. Pursuant to proposed § 18.04(a), a trader who owns, holds, or controls a reportable position would file New Form 40, when requested via a special call by the Commission or its designee; and
2. Pursuant to proposed § 18.04(b), a volume threshold account controller, person who owns a volume threshold account, reportable sub-account controller, and person who owns a reportable sub-account would file New Form 40 when requested via a special call by the Commission or its designee.
Reporting requirements would also arise from proposed § 20.5(a), which would require all reporting entities to submit 102S filings for swap counterparty or customer consolidated accounts with reportable positions.
In addition to the reporting requirements summarized above, proposed § 18.05 would impose recordkeeping requirements for: (1) Traders who own, hold, or control a reportable futures or option position; (2) volume threshold account controllers; (3) persons who own volume threshold accounts; (4) reportable sub-account controllers; and (5) persons who own reportable sub-accounts. These provisions extend the recordkeeping requirements of current § 18.05, which are applicable to traders who hold or control reportable positions in futures contracts, to owners and controllers of accounts with reportable trading volume.
Set forth below is the estimated total annual industry cost for affected participants to (i) complete Forms 102A and 102S and any resulting Form 40s, (ii) complete Forms 102B and 71 for volume threshold accounts associated with DCMs and SEFs and any resulting Form 40s, and (iii) comply with the books and records obligations arising from proposed § 18.05:
Total reporting and recordkeeping costs for the proposed rules reflect the sum of estimated burdens, multiplied by the wage rate provided below, for: (1) New Form 102A; (2) New Form 102B; (3) New Form 71; (4) New Form 40 (pursuant to 18.04(a));
All burden estimates assume that information required by each form is generally available within the reporting entity; however, in preparing its estimates, the Commission did make an effort to account for the added burden associated with assembling data distributed among multiple systems and/or databases within a reporting entity.
A recent assessment of Commission data collection efforts demonstrated that the Commission receives Form 102 submissions from approximately 250 reporting entities annually. The Commission anticipates that it would receive New Form 102A submissions from a similar number of reporting entities. Assuming all New Form 102A reporting entities utilize Method 1, the Commission estimates that the total annual industry burden for New Form 102A would equal 26,500 hours. Using an estimated wage rate of $78.61 per hour,
A recent assessment of Commission data collection efforts demonstrated that the Commission receives approximately 4,700 Form 102 records annually. However, by reiterating that Commission regulations require reporting firms to separately aggregate positions by common ownership and by common control for the purpose of identifying and reporting special accounts, the Commission may observe an increase in the number of 102A filings. The Commission anticipates that the number of annual New Form 102A records may increase by 75% to 8,225.
The Commission understands that providing filing options to the industry should lower costs relative to failing to provide such options. Because of this, estimated total costs to the industry for 102A filings should be lower than any cost associated with mandating either Method 1 or Method 2. Given the cost estimates for the two individual
Because New Form 102B provides a new volume-based reporting structure not found in existing Form 102, the Commission is unable to refer to historical reporting statistics. Instead, the Commission estimated the number of New Form 102B reporting entities by estimating the number of clearing members associated with trading accounts that the Commission projects will qualify as volume threshold accounts. For volume threshold accounts associated with DCMs, the Commission anticipates that it would receive New Form 102B submissions from approximately 100 reporting entities annually. For volume threshold accounts associated with SEFs, the Commission anticipates that it would receive New Form 102B submissions from approximately 75 reporting entities annually. Assuming that all Form 102B reporting entities for volume threshold accounts associated with DCMs utilize Method 1, the Commission estimates that the total annual industry burden for the reporting of such accounts on New Form 102B would equal 10,600 hours.
Because New Form 102B provides a new volume-based reporting structure not found in existing Form 102, the Commission is unable to refer to historical reporting statistics to directly estimate the number of New Form 102B records it might receive. Instead, the Commission estimated the number of distinct volume threshold accounts across a sample of several contract markets, and then extrapolated the total number of volume threshold accounts across all markets. For volume threshold accounts associated with DCMs, the Commission anticipates that it would receive approximately 126,000 New Form 102B records annually. For volume threshold accounts associated with SEFs, the Commission anticipates that it would receive approximately 62,015 New Form 102B records annually. Assuming each New Form 102B record for a volume threshold account associated with a DCM is provided via Method 2, the Commission estimates that the total annual industry burden for the reporting of such accounts on New Form 102B would equal 1,386,000 hours. Assuming each New Form 102B record for a volume threshold account associated with a SEF is provided via Method 2, the Commission estimates that the total annual industry burden for the reporting of such accounts on New Form 102B would equal 682,165 hours. Using an estimated wage rate of $78.61 per hour, annual costs for DCM-related 102B filings made pursuant to Method 2 are estimated at $ 108,953,460,
The Commission understands that providing filing options to the industry should lower costs relative to failing to provide such options. Because of this, estimated total costs to the industry for 102B filings should be lower than any cost associated with mandating either Method 1 or Method 2. Given the cost estimates for the two individual methods discussed above, the Commission anticipates DCM and SEF-related 102B filing costs to be no more than approximately $1,458,216 (Method 1), the lower of the two estimated filing
The number of New Form 71 filings per year would vary according to the number of special calls for the form made by the Commission. In order to estimate the annual number of New Form 71 filings (
The number of New Form 40 filings arising from New Form 102A filings would vary according to the number of special calls made by the Commission. An analysis of the Commission's existing Form 40 practices demonstrates that the Commission makes approximately 3,000 special calls annually. However, as explained above, the Commission is reiterating that its regulations require reporting firms to separately aggregate positions by common ownership and by common control for the purpose of identifying and reporting special accounts. The Commission anticipates that the number of special calls made annually as a result of New Form 102A filings may increase by 75 percent. The Commission estimates that New Form 40 would result in annual filings from 5,250 reporting entities.
The Commission estimates that each filing estimated above would require 3 hours to complete,
The number of New Form 40 filings arising from volume threshold accounts and reportable sub-accounts would vary according to the number of special calls made by the Commission. An analysis of the Commission's existing Form 40 practices demonstrates that the Commission makes approximately 3,000 special calls annually; however, such calls were made to special account owners and controllers identified via existing DCM-related Form 102. The Commission estimates there could be a much greater number of New Form 102B and New Form 71 filings. As a result, the Commission estimates that the number of potential New Form 40 reporting entities (arising from New Form 102B and New Form 71 filings) would increase as well. The Commission anticipates that it would
The 102S filing requirements in existing § 20.5
Based on a recent assessment of expected 102S filings, the Commission anticipates that it would receive approximately 500 102S records annually. Assuming each of the estimated 500 102S records are provided via Method 2, the Commission estimates that the total annual industry burden for 102S filings would equal 5,000 hours. Using an estimated wage rate of $78.61 per hour, annual costs for 102S filings made pursuant to Method 2 are estimated at $393,050.
The Commission understands that providing options to the industry should lower costs relative to failing to provide these options. Because of this, estimated total costs to the industry for 102S filing should be lower than any cost associated with mandating either Method 1 or Method 2. Given the cost estimates for the two individual
b.
As discussed above, the Commission proposes to expand § 18.05
The Commission invites the public and other federal agencies to comment on any aspect of the reporting and recordkeeping burdens discussed above. Pursuant to 44 U.S.C. 3506(c)(2)(B), the Commission solicits comments in order to: (i) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information would have practical utility; (ii) evaluate the accuracy of the Commission's estimate of the burden of the proposed collection of information; (iii) determine whether there are ways to enhance the quality, utility, and clarity of the information to be collected; and (iv) mitigate the burden of the collection of information on those who are required to respond, including through the use of automated collection techniques or other forms of information technology.
Comments may be submitted directly to the Office of Information and Regulatory Affairs, by fax at (202) 395-6566 or by email at
Brokers, Commodity futures, Reporting and recordkeeping requirements.
Brokers, Commodity futures, Reporting and recordkeeping requirements.
Commodity futures, Reporting and recordkeeping requirements.
Physical commodity swaps, Swap dealers, Reporting and recordkeeping requirements.
In consideration of the foregoing and pursuant to the authority contained in the Act, as indicated herein, the Commission hereby proposes to amend chapter I of title 17 of the Code of Federal Regulations as follows:
1. The authority citation for part 15 continues to read as follows:
7 U.S.C. 2, 5, 6a, 6c, 6f, 6g, 6i, 6k, 6m, 6n, 7, 7a, 9, 12a, 19, and 21, as amended by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, 124 Stat. 1376 (2010).
2. In § 15.00, revise paragraph (q) and add paragraphs (t) through (ee) to read as follows:
(q)
(t)
(u)
(v)
(w)
(x)
(y)
(z)
(aa)
(bb)
(cc)
(dd)
(ee)
3. Revise § 15.01 (c) to read as follows:
(c) As specified in part 18 of this chapter:
(1) Traders who own, hold, or control reportable positions;
(2) Volume threshold account controllers;
(3) Persons who own volume threshold accounts;
(4) Reportable sub-account controllers; and
(5) Persons who own reportable sub-accounts.
4. Revise § 15.02 to read as follows:
Forms on which to report may be obtained from any office of the Commission or via the Internet (
5. Add § 15.04 to read as follows:
The volume quantity for the purpose of reports filed under parts 17 and 18 of this chapter is trading volume of 50 or more contracts, during a single trading day, on a single reporting market that is a board of trade designated as a contract market under section 5 of the Act or a swap execution facility registered under section 5h of the Act, in all instruments that such reporting market designates with the same product identifier (including purchases and sales, and inclusive of all expiration months).
6. The authority citation for part 17 is revised to read as follows:
7 U.S.C. 2, 6a, 6c, 6d, 6f, 6g, 6i, 6t, 7, 7a, and 12a, as amended by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, 124 Stat. 1376 (2010).
7. Revise § 17.00(g)(2)(iii) to read as follows:
(g) * * *
(2) * * *
(iii) Account Number. A unique identifier assigned by the reporting firm to each special account. The field is zero
8. Revise § 17.01 to read as follows:
(a)
(b)
(c)
(d)
(e)
9. In § 17.02, revise the introductory text and paragraph (b) and add paragraph (c) to read as follows:
Unless otherwise instructed by the Commission or its designee, the reports required to be filed by reporting markets, futures commission merchants, clearing members, and foreign brokers under §§ 17.00 and 17.01 shall be filed as specified in paragraphs (a), (b), and (c) of this section.
(b)
(1)
(2)
(3)
(4)
(c)
(1)
(2)
(3)
(4)
10. Revise section 17.03 to read as follows:
The Commission hereby delegates, until the Commission orders otherwise, the authority set forth in the paragraphs below to either the Director of the Office of Data and Technology or the Director of the Division of Market Oversight, as indicated below, to be exercised by such Director or by such other employee or employees of such Director as designated from time to time by such Director. The Director of the Office of Data and Technology or the Director of the Division of Market Oversight may submit to the Commission for its consideration any matter which has been delegated to such Director in this paragraph. Nothing in this paragraph prohibits the Commission, at its election, from exercising the authority delegated in this paragraph.
(a) Pursuant to § 17.00(a) and (h), the authority shall be designated to the Director of the Office of Data and Technology to determine whether futures commission merchants, clearing members and foreign brokers can report the information required under § 17.00(a) and (h) on series `01 forms or using some other format upon a determination that such person is unable to report the information using the format, coding structure or electronic data transmission procedures otherwise required.
(b) Pursuant to § 17.02, the authority shall be designated to the Director of the Office of Data and Technology to instruct or approve the time at which the information required under §§ 17.00 and 17.01(a) and (b) must be submitted by futures commission merchants, clearing members and foreign brokers provided that such persons are unable to meet the requirements set forth in § 17.02.
(c) Pursuant to § 17.01, the authority shall be designated to the Director of the Office of Data and Technology to determine whether to permit an authorized representative of a firm filing the Form 102 or person filing the Form 71 to use a means of authenticating the report other than by signing the Form 102 or Form 71 and, if so, to determine the alternative means of authentication that shall be used.
(d) Pursuant to § 17.00(a), the authority shall be designated to the Director of the Office of Data and Technology to approve a format and coding structure other than that set forth in § 17.00(g).
(e) Pursuant to § 17.01(c), the authority shall be designated to the Director of the Office of Data and Technology to make special calls on omnibus volume threshold account originators and omnibus reportable sub-account originators for information as set forth in § 17.01(c).
(f) Pursuant to § 17.02(b)(4), the authority shall be designated to the Director of the Division of Market Oversight to determine the date on which each futures commission merchant, clearing member, or foreign broker shall update or otherwise resubmit every Form 102 that it has submitted to the Commission for each of its special accounts.
(g) Pursuant to § 17.02(c)(4), the authority shall be designated to the Director of the Division of Market Oversight to determine the date on which each clearing member shall update or otherwise resubmit every Form 102 that it has submitted to the Commission for each of its volume threshold accounts.
11. The authority citation for part 18 is revised to read as follows:
7 U.S.C. 2, 4, 5, 6a, 6c, 6f, 6g, 6i, 6k, 6m, 6n, 6t, 12a, and 19, as amended by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, 124 Stat. 1376 (2010).
12. Revise § 18.04 to read as follows:
(a) Every trader who owns, holds, or controls a reportable futures and option position shall after a special call upon such trader by the Commission or its designee file with the Commission a “Statement of Reporting Trader” on the Form 40, to be completed in accordance with the instructions thereto, at such time and place as directed in the call.
(b) Every volume threshold account controller, person who owns a volume threshold account, reportable sub-account controller, and person who owns a reportable sub-account shall after a special call upon such person by the Commission or its designee file with the Commission a “Statement of Reporting Trader” on the Form 40, to be completed in accordance with the instructions thereto, at such time and place as directed in the call.
13. In § 18.05 revise paragraph (a) introductory text and paragraphs (b) and (c), to read as follows:
(a) Every volume threshold account controller, person who owns a volume threshold account, reportable sub-account controller, person who owns a reportable sub-account, and trader who owns, holds, or controls a reportable futures or option position, shall keep books and records showing all details concerning all positions and transaction in the commodity:
(b) Every such volume threshold account controller, person who owns a volume threshold account, reportable sub-account controller, person who owns a reportable sub-account, and trader who owns, holds, or controls a reportable futures or option position shall also keep books and records showing all details concerning all positions and transactions in the cash commodity, its products and byproducts, and all commercial activities that it hedges in the futures or option contract in which it is reportable.
(c) Every volume threshold account controller, person who owns a volume threshold account, reportable sub-account controller, person who owns a reportable sub-account, and trader who owns, holds, or controls a reportable futures or option position shall upon request furnish to the Commission any pertinent information concerning such positions, transactions, or activities in a form acceptable to the Commission.
14. The authority citation for part 20 continues to read as follows:
7 U.S.C. 1a, 2, 5, 6, 6a, 6c, 6f, 6g, 6t, 12a, 19, as amended by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, 124 Stat. 1376 (2010).
15. In § 20.5, revise paragraphs (a)(1) and (2) and add paragraphs (a)(4) and (5) to read as follows:
(a) * * *
(1) When a counterparty consolidated account first becomes reportable, the reporting entity shall submit a 102S filing, as set forth in Appendix A to part 17, in accordance with the form instructions and as specified in this section, including § 20.5.
(2) A reporting entity may submit a 102S filing only once for each counterparty, even if such persons at various times have multiple reportable positions in the same or different paired swaps or swaptions.
(4)
(5)
The following Annex will not appear in the Code of Federal Regulations.
Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Summary presentation of final and interim rules.
This document summarizes the Federal Acquisition Regulation (FAR) rules agreed to by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) in this Federal Acquisition Circular (FAC) 2005-60. A companion document, the
For effective dates and comment dates see separate documents, which follow.
The analyst whose name appears in the table below in relation to each FAR case. Please cite FAC 2005-60 and the specific FAR case numbers. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755.
Summaries for each FAR rule follow. For the actual revisions and/or amendments made by these FAR cases, refer to the specific item numbers and subjects set forth in the documents following these item summaries. FAC 2005-60 amends the FAR as specified below:
The interim rule published in the
The interim rule required contractors to report executive compensation and first-tier subcontract awards on contracts expected to be $25,000 or more. This information is available to the public.
The final rule removes the exception for inserting the clause in classified solicitations and contracts, or solicitations or contracts with individuals. Classified information is not required to be disclosed. The clause is not prescribed for contracts unless they are required to be reported in the Federal Procurement Data System (FPDS). The final rule clarifies the responsibility of contracting officers to correct data originating from FPDS found by the contractor to be in error when the contractor completes the subcontract report. The definition of first-tier subcontractor is revised to allow contractors greater flexibility to determine their first-tier subcontractors. The rule also clarifies that a contractor must enter Transparency Act data when registering in the Central Contractor Registration (CCR) database and the contractor is required to report its executive compensation in CCR as a part of its annual registration requirement in CCR.
This final rule amends the FAR with regard to payments under time-and-materials and labor-hour contracts. First, the rule harmonizes payment provisions under commercial time-and-materials and labor-hour contracts and non-commercial time-and-materials and labor-hour contracts, largely by having commercial time-and-materials and labor-hour contracts adopt the payment provisions of non-commercial time-and-materials and labor-hour contracts. Second, the rule harmonizes conflicting provisions of the “Allowable Cost and Payment” and “Payments Under Time-and-Materials” and “Labor-Hour Contracts” clauses, which are both prescribed under non-commercial time-and-materials contracts and labor-hour contracts, by using the same periods for invoicing, and submission of the completion voucher as those set forth in the “Allowable Cost and Payment” clause. This harmonization will serve to benefit small businesses under time-and-materials and labor-hour contracts by permitting bi-weekly rather than monthly invoicing, and providing contracting officers with the discretion to authorize even more frequent payments.
This interim rule amends the FAR to implement section 825 of the Ike Skelton National Defense Authorization Act for Fiscal Year 2011 (Pub. L. 111-383) and section 813 of the National Defense Authorization Act for Fiscal Year 2012 (Pub. L. 112-81). These statutes extend the sunset date for protests against awards of task or delivery orders to September 30, 2016. There is no effect on Government automated systems.
This final rule amends the FAR to add the United States Defense Advanced Research Projects Agency (DARPA) to the list of agencies that have entered into an agreement with the State of New Mexico. The agreement eliminates the
DoD, GSA, and NASA published a proposed rule in the
Editorial changes are made at FAR 1.105-2, 16.301-3, 22.1801, 22.1802, 52.212-5, 52.215-20, 52.222-54, and 52.223-2.
Federal Acquisition Circular (FAC) 2005-60 is issued under the authority of the Secretary of Defense, the Administrator of General Services, and the Administrator for the National Aeronautics and Space Administration.
Unless otherwise specified, all Federal Acquisition Regulation (FAR) and other directive material contained in FAC 2005-60 is effective July 26, 2012, except for Item I, II, and IV which are effective August 27, 2012.
Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Final rule.
DoD, GSA, and NASA are adopting as final, with changes, the interim rule amending the Federal Acquisition Regulation (FAR) to implement a section of the Federal Funding Accountability and Transparency Act of 2006 as amended by a section of the Government Funding Transparency Act of 2008, which requires the Office of Management and Budget (OMB) to establish a free, public Web site containing full disclosure of all Federal contract award information. This rule requires contractors to report executive compensation, and first-tier subcontractor awards on contracts of $25,000 or more.
Contracting officers shall modify, on a bilateral basis, in accordance with FAR 1.108(d)(3), existing contracts that include the FAR clause implemented in the interim rule dated July 2010, to require contactors to comply with the requirements of this final rule FAR clause, if the contractor will be required to provide another annual report. If the contracting officer is unable to negotiate this modification, the contracting officer shall obtain approval at least one level above the contracting officer to negotiate an alternate resolution.
Mr. William Clark, Procurement Analyst, at 202-219-1813 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-60, FAR Case 2008-039.
On September 26, 2006, the Federal Funding Accountability and Transparency Act (hereafter referred to as the Transparency Act) (Pub. L. 109-282, 31 U.S.C. 6101 note), was enacted to reduce “wasteful and unnecessary spending,” by requiring that OMB establish a free, public Web site containing full disclosure of all Federal award information, for awards of $25,000 or more. The Transparency Act required, by January 1, 2009, reporting on subcontract awards by Federal Government contractors and subcontractors. The Transparency Act's initial phase was conducted as a Pilot Program (Pilot), to test the collection and accessibility of the subcontract data. In order to implement the Pilot, a proposed rule was published in the
A final rule implementing the Pilot was published in the
On June 30, 2008, section 6202 of Public Law 110-252 amended the Transparency Act to require the Director of OMB to include an additional
DoD, GSA, and NASA published in the
DoD, GSA, and NASA published an interim rule for public comment in the
• Subcontract reporting would apply only to first-tier subcontracts.
• The rule would phase-in the reporting of subcontracts of $25,000 or more—
○ Until September 30, 2010, any newly awarded subcontract must be reported if the prime contract award amount was $20 million or more;
○ From October 1, 2010, until February 28, 2011, any newly awarded subcontract must be reported if the prime contract award amount was $550,000 or more; and
○ Starting March 1, 2011, any newly awarded subcontract must be reported if the prime contract award amount was $25,000 or more.
• By the end of the month following the month of award of a contract, and annually thereafter, the contractor shall report the names and total compensation of each of the five most highly compensated executives for the contractor's preceding completed fiscal year.
• Unless otherwise directed by the contracting officer, by the end of the month following the month of award of a first-tier subcontract, and annually thereafter, the contractor shall report the names and total compensation of each of the five most highly compensated executives for the first-tier subcontractor's preceding completed fiscal year.
• There would be a $300,000 gross income exception for prime contractors and subcontractors.
• Data quality requirements would apply to agencies and contractors.
The interim rule required contractors to report subcontracts of $25,000 or more, and any modifications made to those subcontracts which changed previously reported data. The reporting requirements of the Transparency Act are sweeping in their breadth, and are intended to empower the American taxpayer with information that may be used to demand greater fiscal discipline from both executive and legislative branches of Government. The Transparency Act reporting requirements apply to all businesses, regardless of business size or ownership.
Contractors provide these subcontract reports to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) at
Contracting officers will be required to modify existing contracts to cover future orders—see the Applicability section above.
DoD, GSA, and NASA published an interim rule for public comment in the
• Conflicts with the Federal Acquisition Streamlining Act of 1994 (Pub. L. 103-355);
• Should not apply to privately held contracts; and
• Is not supported by any evidence of a meaningful nexus between the amount a contractor pays in executive compensation and the likelihood the procuring agency is paying fair and reasonable prices for that contractor's goods and services.
A respondent indicated that FAR 52.204-10, Reporting Executive Compensation and First-Tier Subcontract Awards, is not an applicable commercial item clause as shown in FAR 52.301.
Pursuant to the requirements of 41 U.S.C 1906 (formerly 41 U.S.C. 430), the FAR Council has determined that it is not in the best interest of the Federal Government to exempt commercial item contracts from coverage under this rule, given that the Transparency Act was enacted to reduce “wasteful and unnecessary spending”. Further, pursuant to the requirements of 41 U.S.C. 1907 (formerly 41 U.S.C. 431(a), and (b)), and 41 U.S.C. 104 (formerly 41 U.S.C. 431(c)) OFPP has determined that it is not in the best interest of the Government to exempt COTS items contracts from coverage under this rule (see 75 FR 39414). The Act required that OMB establish a free, public, Web site containing full disclosure of all Federal contract award information. Therefore, contracts for commercial items and COTS items must be reported.
FAR 52.204-10 is included in 52.212-5, Contract Terms and Conditions Required to Implement Statute or Executive Orders—Commercial Items, which is prescribed at 12.301(a)(4).
Other respondents questioned what can be done if a foreign contractor refuses to sign a modification to incorporate the required clause or foreign subcontractor refuses to comply. In the event that a contractor refuses to accept such a modification, will the contractor be ineligible for award of any work that uses Federal funds?
In the event that a contractor, foreign or otherwise, refuses to accept such a modification, and the contracting officer is unable to negotiate this modification, the contracting officer shall obtain approval at least one level above the contracting officer to negotiate an alternate resolution, as stated in the Applicability section of the preamble.
This FAR rule revises 2.101, subpart 4.14, 52.204-7 and 52.204-10 for Transparency Act reporting requirements. A summary of the FAR changes are as follows:
○ Clarifies that prime contractors must enter Transparency Act data when registering in CCR.
○ Revises 4.1401 of the rule for consistency with the statute which exempts “classified information,” not “classified contracts”. The Councils have deleted the exception for “individuals”, which is not used in the statute for contracts. These changes are required to ensure consistency with the implementation of the statute. The paragraph regarding the phase-in schedule was deleted since all phase-in dates have passed, and this final rule is after that period.
○ Revises 4.1402(b) to clarify the responsibility for correcting any pre-populated data in FSRS.
○ Revises 4.1403 to remove the exception for inserting the clause in classified solicitations and contracts, or solicitations or contracts with individuals. However, the Councils added that the clause is not prescribed for contracts that are not required to be reported in the FPDS.
○ Revises FAR 52.204-7, Central Contractor Registration, to conform to the change at FAR 2.101.
○ Revises the definition of “first-tier subcontract” to allow contractors greater flexibility to determine their first-tier subcontractors.
○ Adds a definition of “month of award”.
○ Adds a paragraph to remind contractors that nothing in this clause requires the disclosure of classified information.
○ Moves text previously at FAR 52.204-10(c)(2) to FAR 52.204-10(d)(1) to ensure the prime contractor's reporting requirements of its executive compensation are discussed in the
○ Clarifies the 80 percent and $25 million language now at FAR 52.204-10(d)(1)(i) and (d)(3)(i) by adding wording derived from the statute: “and other forms of Federal financial assistance.”
○ Adds FAR 52.204-10(e) to state that the contractor shall not split or break down first-tier subcontract awards to a value less than $25,000 to avoid the first-tier subcontract reporting requirements.
○ Adds FAR 52.204-10(f), to state that the contractor is required to report information on a first-tier subcontract when the subcontract is awarded. However, continued reporting on the same subcontract is not required unless one of the reported data elements changes during the performance of the subcontract. The Contractor is not required to make further reports after the first-tier subcontract expires. FAR 52.204-10(f) requirements replace and clarify a parenthetical requirement in the interim rule at FAR 52.204-10(c)(1) for the contractor to report on any modification to the first-tier subcontract that changed previously reported data.
○ Relocates text previously at paragraph 52.204-10(d) to paragraph 52.204-10(g).
○ Deletes reference to a phase-in schedule previously at 52.204-10(e), since the phase-in schedule has been completed.
○ Adds a paragraph (h) to clarify responsibility for correcting incorrect data.
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is a significant regulatory action and, therefore, was subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.
DoD, GSA, and NASA prepared a Final Regulatory Flexibility Analysis (FRFA) consistent with 5 U.S.C. 604,
The Transparency Act was enacted to reduce “wasteful and unnecessary spending” by requiring that OMB establish a free, public, online database containing full disclosure of all Federal contract award information. The objective of the rule is to empower the American taxpayer with information that may be used to demand greater fiscal discipline from both executive and legislative branches of Government. According to the sponsors of the Transparency Act, the new database will deter “wasteful and unnecessary” spending, since Government officials will be less likely to earmark funds for special projects if they know the public could identify how much money was awarded to which organizations, and for what purposes.
Comments were received that indicated the rule would impact small businesses. The comments covered a number of issues including: The rule disproportionately damages the competitive position of small and medium-sized contractors, and the increased general, administrative, overhead costs could make it difficult for smaller businesses to vie for Government contracts. Other issues are cited in this preamble.
The responses in the preamble point out a number of aspects of the rule that may lessen the impact of the rule on small businesses, including: The lessons learned from issuance of FAR case 2006-029, familiarization from the Recovery Act reporting rule, the exceptions in the rule that exclude some contractors, the revisions to the rule listed in section III. of this preamble, and pre-population of data in FSRS from other Government systems.
The rule applies to all contracts and subcontracts, of $25,000 or more. The clause does not require the disclosure of classified information. The rule requires contractors to report first-tier subcontract award information and annually report the contractor's and first-tier subcontractors' five most highly compensated executives for the contractor and subcontractor's preceding completed fiscal year. To arrive at an estimate of the number of small businesses to which the rule would apply, the Councils queried the FDPS for FY 10 contract award information. DoD, NASA and GSA believe 233,623 is a reasonable estimate of the total number of small businesses, both as prime and first-tier subcontractors to whom the rule will apply.
The rule applies to all, regardless of business size or ownership. The professional skills necessary for the preparation of the report would probably be a company officer or division manager or a company subcontract administrator.
DoD, NASA and GSA considered a number of alternatives that may have lessened the impact on small businesses, but the alternatives would have prevented the full disclosure of all Federal award information for awards of $25,000 or more, as required by the Transparency Act. One alternative of excluding small businesses entirely from the rule would not be feasible, given the objectives of the rule.
Interested parties may obtain a copy of the FRFA from the Regulatory Secretariat. The Regulatory Secretariat has submitted a copy of the FRFA to the Chief Counsel for Advocacy of the Small Business Administration.
The Paperwork Reduction Act (44 U.S.C. chapter 35) applies because this final rule contains information collection requirements. OMB has cleared this information collection requirement under OMB Control Number 9000-0177, titled: Reporting Executive Compensation and First-tier Subcontract Awards in the amount of 75,117 burden hours. Comments on the interim rule as well as the information collection requirement were received and considered in the revisions to both the rule and the collection. DoD, GSA, and NASA published in the
Government procurement.
Accordingly, the interim rule amending 48 CFR parts 4, 12, 42, and 52, which was published in the
40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.
(b) * * *
(2) * * *
(1) The contractor has entered all mandatory information, including the DUNS number or the DUNS+4 number, as well as data required by the Federal Funding Accountability and Transparency Act of 2006 (see subpart 4.14), into the CCR database; and
(a) This subpart applies to all contracts with a value of $25,000 or more. Nothing in this subpart requires the disclosure of classified information.
(b) Reporting of subcontract information will be limited to the first-tier subcontractor.
The revised text reads as follows:
(b) When contracting officers report the contract action to the Federal Procurement Data System (FPDS) in accordance with FAR subpart 4.6, certain data will then pre-populate from FPDS, to assist contractors in completing and submitting their reports. If data originating from FPDS is found by the contractor to be in error when the contractor completes the subcontract report, the contractor should notify the Government contracting officer, who is responsible for correcting the data in FPDS. Contracts reported using the generic DUNS number allowed at FAR 4.605(b)(2) will interfere with the contractor's ability to comply with this reporting requirement, because the data will not pre-populate from FPDS.
(a) The contracting officer shall insert the clause at 52.204-10, Reporting Executive Compensation and First-Tier Subcontract Awards, in all solicitations and contracts of $25,000 or more.
(b) The clause is not prescribed for contracts that are not required to be reported in the Federal Procurement Data System (FPDS) (see subpart 4.6).
(a)
(1) The Contractor has entered all mandatory information, including the DUNS number or the DUNS+4 number, as well as data required by the Federal Funding Accountability and Transparency Act of 2006 (see subpart 4.14), into the CCR database; and
As prescribed in 4.1403(a), insert the following clause:
(a)
(1)
(2)
(3)
(4)
(5)
(6) Other compensation, if the aggregate value of all such other compensation (
(b) Section 2(d)(2) of the Federal Funding Accountability and Transparency Act of 2006 (Pub. L. 109-282), as amended by section 6202 of the Government Funding Transparency Act of 2008 (Pub. L. 110-252), requires the Contractor to report information on subcontract awards. The law requires all reported information be made public, therefore, the Contractor is responsible for notifying its subcontractors that the required information will be made public.
(c) Nothing in this clause requires the disclosure of classified information.
(d)(1)
(i) In the Contractor's preceding fiscal year, the Contractor received—
(A) 80 percent or more of its annual gross revenues from Federal contracts (and subcontracts), loans, grants (and subgrants), cooperative agreements, and other forms of Federal financial assistance; and
(B) $25,000,000 or more in annual gross revenues from Federal contracts (and subcontracts), loans, grants (and subgrants), cooperative agreements, and other forms of Federal financial assistance; and
(ii) The public does not have access to information about the compensation of the executives through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986. (To determine if the public has access to the compensation information, see the U.S. Security and Exchange Commission total compensation filings at
(2)
(i) Unique identifier (DUNS Number) for the subcontractor receiving the award and for the subcontractor's parent company, if the subcontractor has a parent company.
(ii) Name of the subcontractor.
(iii) Amount of the subcontract award.
(iv) Date of the subcontract award.
(v) A description of the products or services (including construction) being provided under the subcontract, including the overall purpose and expected outcomes or results of the subcontract.
(vi) Subcontract number (the subcontract number assigned by the Contractor).
(vii) Subcontractor's physical address including street address, city, state, and country. Also include the nine-digit zip code and congressional district.
(viii) Subcontractor's primary performance location including street address, city, state, and country. Also include the nine-digit zip code and congressional district.
(ix) The prime contract number, and order number if applicable.
(x) Awarding agency name and code.
(xi) Funding agency name and code.
(xii) Government contracting office code.
(xiii) Treasury account symbol (TAS) as reported in FPDS.
(xiv) The applicable North American Industry Classification System code (NAICS).
(3)
(i) In the subcontractor's preceding fiscal year, the subcontractor received—
(A) 80 percent or more of its annual gross revenues from Federal contracts (and subcontracts), loans, grants (and subgrants), cooperative agreements, and other forms of Federal financial assistance; and
(B) $25,000,000 or more in annual gross revenues from Federal contracts (and subcontracts), loans, grants (and subgrants), cooperative agreements, and other forms of Federal financial assistance; and
(ii) The public does not have access to information about the compensation of the executives through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986. (To determine if the public has access to the compensation information, see the U.S. Security and Exchange Commission total compensation filings at
(e) The Contractor shall not split or break down first-tier subcontract awards to a value less than $25,000 to avoid the reporting requirements in paragraph (d).
(f) The Contractor is required to report information on a first-tier subcontract covered by paragraph (d) when the subcontract is awarded. Continued reporting on the same subcontract is not required unless one of the reported data elements changes during the performance of the subcontract. The Contractor is not required to make further reports after the first-tier subcontract expires.
(g)(1) If the Contractor in the previous tax year had gross income, from all sources, under $300,000, the Contractor is exempt from the requirement to report subcontractor awards.
(2) If a subcontractor in the previous tax year had gross income from all sources under $300,000, the Contractor does not need to report awards for that subcontractor.
(h) The FSRS database at
(b) * * *
(4) 52.204-10, Reporting Executive Compensation and First-Tier Subcontract Awards (Aug 2012) (Pub. L. 109-282) (31 U.S.C. 6101 note).
The revised and added text reads as follows:
(b) * * *
(1) * * *
(i) 52.204-10, Reporting Executive Compensation and First-Tier Subcontract Awards (Aug 2012) (Pub. L. 109-282) (31 U.S.C. 6101 note) (Applies to contracts valued at $25,000 or more).
Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Final rule.
DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to make necessary revisions to accommodate the authorization to use time-and-materials and labor-hour contract payment requirements.
Mr. Edward N. Chambers, Procurement Analyst, at 202-501-3221 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-60, FAR Case 2011-003.
DoD, GSA, and NASA published a proposed rule in the
(1) FAR Case 2003-027, Additional Commercial Contract Types (71 FR 74667 dated December 12, 2006), implemented section 1432 of the National Defense Authorization Act for Fiscal Year 2004 (Pub. L. 108-136). Title XIV of the Act, referred to as the Services Acquisition Reform Act of 2003 (SARA), amended section 8002(d) of the Federal Acquisition Streamlining Act of 1994 (FASA) (Pub. L. 103-355, 41 U.S.C. 3307) to expressly authorize the use of time-and-materials and labor-hour contracts for commercial services under specified conditions.
(2) FAR Case 2004-015, Payments Under Time-and-Materials and Labor-Hour Contracts (71 FR 74656 dated December 12, 2006), revised and clarified policies related to the award and administration of noncommercial time-and-materials and labor-hour contracts and the policies regarding payments made under those contracts.
The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (the Councils) reviewed the comments in the development of the final rule. A discussion of the comments and the changes made to the rule as a result of those comments are provided as follows:
The proposed rule sought to harmonize the provisions for invoicing and submission of the final invoice between FAR clauses 52.216-7, Allowable Cost and Payment, and 52.232-7, Payments under Time-and Materials and Labor-Hour Contracts, when a time-and-materials contract is being used. Currently, under a time-and-materials contract, FAR clause 52.232-7 provides for monthly invoicing and submission of the completion voucher no later than one year from the date of work completion. These provisions are in conflict with the corresponding provisions of FAR clause 52.216-7, which is invoked under a time-and-materials contract. FAR clause 52.216-7 provides for invoicing on a bi-weekly basis for large businesses, and more frequent invoicing for small businesses, and the submission of the completion voucher no later than 120 days after completion of work.
Consequently, the final rule amends the basic FAR clause 52.232-7 to reflect the provisions for invoicing and submission of the completion voucher at FAR clause 52.216-7. This final rule deletes Alternate I along with its prescription for use at FAR 32.111(a)(7)(i).
Alternate I of FAR 52.232-7 provided for the addition of paragraph (j) in labor-hour contracts which deleted the terms of the basic clause governing the reimbursement of furnished materials. Alternate I, paragraph (j), is superfluous and is deleted since the terms of the basic clause governing the reimbursement of furnished materials are in effect self-deleting.
Three respondents submitted comments in response to the proposed rule. A discussion of these comments and the changes made to the rule as a result of these comments are provided as follows:
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.
The Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration certify that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601,
The final rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).
Government procurement.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 16, 32, and 52 as follows:
40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.
(a)(1) The contracting officer shall insert the clause at 52.216-7, Allowable Cost and Payment, in solicitations and contracts when a cost-reimbursement contract or a time-and-materials contract (other than a contract for a commercial item) is contemplated. If the contract is a time-and-materials contract, the clause at 52.216-7 applies in conjunction with the clause at 52.232-7, but only to the portion of the contract that provides for reimbursement of materials (as defined in the clause at 52.232-7) at actual cost. Further, the clause at 52.216-7 does not apply to labor-hour contracts.
(3) If the contract is with an educational institution, the contracting officer shall use the clause at 52.216-7 with its Alternate II.
(4) If the contract is with a State or local government, the contracting officer shall use the clause at 52.216-7 with its Alternate III.
(5) If the contract is with a nonprofit organization other than an educational institution, a State or local government, or a nonprofit organization exempted under OMB Circular No. A-122, the contracting officer shall use the clause at 52.216-7 with its Alternate IV.
(a) * * *
(7) The clause at 52.232-7, Payments under Time-and-Materials and Labor-Hour Contracts, in solicitations and contracts when a time-and-materials or labor-hour contract is contemplated. If the contracting officer determines that it is necessary to withhold payment to protect the Government's interests, paragraph (a)(7) of the clause permits the contracting officer to unilaterally issue a modification requiring the contractor to withhold 5 percent of amounts due, up to a maximum of $50,000 under the contract. The contracting officer shall ensure that the modification specifies the percentage and total amount of the withheld payment. Normally, there should be no need to withhold payment for a contractor with a record of timely submittal of the release discharging the Government from all liabilities, obligations, and claims, as required by paragraph (g) of the clause.
The revised and added text reads as follows:
(i)
(ii) * * *
(A) If the Contractor furnishes materials that meet the definition of a commercial item at 2.101, the price to be paid for such materials shall not exceed the Contractor's established catalog or market price, adjusted to reflect the—
(m)
(a)(1) The Government will make payments to the Contractor when requested as work progresses, but not more often than once every two weeks, in amounts determined to be allowable by the Contracting Officer in accordance with FAR subpart 31.3 in effect on the date of this contract and the terms of this contract. The Contractor may submit to an authorized representative of the Contracting Officer, in such form and reasonable detail as the representative may require, an invoice or voucher supported by a statement of the claimed allowable cost for performing this contract.
(a)(1) The Government will make payments to the Contractor when requested as work progresses, but not more often than once every two weeks, in amounts determined to be allowable by the Contracting Officer in accordance with FAR subpart 31.6 in effect on the date of this contract and the terms of this contract. The Contractor may submit to an authorized representative of the Contracting Officer, in such form and reasonable detail as the representative may require, an invoice or voucher supported by a statement of the claimed allowable cost for performing this contract.
(a)(1) The Government will make payments to the Contractor when requested as work progresses, but not more often than once every two weeks, in amounts determined to be allowable by the Contracting Officer in
The revised text reads as follows:
(a) * * *
(5) Vouchers may be submitted not more than once every two weeks, to the Contracting Officer or authorized representative. A small business concern may receive more frequent payments than every two weeks. The Contractor shall substantiate vouchers (including any subcontractor hours reimbursed at the hourly rate in the schedule) by evidence of actual payment and by—
Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Interim rule.
DoD, GSA, and NASA are issuing an interim rule amending the Federal Acquisition Regulation (FAR) to implement sections of the Ike Skelton National Defense Authorization Act for Fiscal Year 2011, and the National Defense Authorization Act for Fiscal Year 2012. These statutes extend the sunset date for protests against the award of task or delivery orders from May 27, 2011, to September 30, 2016.
Submit comments identified by FAC 2005-60, FAR Case 2012-007, by any of the following methods:
•
•
•
Ms. Deborah Lague, Procurement Analyst, at 202-694-8149 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-60, FAR Case 2012-012.
DoD, GSA, and NASA published an interim rule in the
Subsequent to the publication of the interim rule under FAR Case 2011-015, section 813 of the NDAA for FY 2012 (Pub. L. 112-81, enacted December 31, 2011) made comparable changes to Title 41 to extend the sunset date for protests against the award of task and delivery orders from May 27, 2011, to September 30, 2016. In order to accomplish the statutory changes for both Title 10 and Title 41, FAR Case 2011-015 is not being issued as a final rule and is instead being renumbered and incorporated into this second interim rule, FAR Case 2012-007.
FAR 16.505(a)(10)(ii) is amended to extend, for Title 41 agencies, the authority to protest the placement of task and delivery orders valued in excess of $10 million from May 27, 2011, to September 30, 2016.
One public comment was received for FAR Case 2011-015. The public comment and response are provided as follows:
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.
The change may have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act 5 U.S.C. 601,
The objective of this rule is to implement section 825 of the NDAA for FY 2011, which extended the sunset date for Title 10 agencies and section 813 of the NDAA for FY 2012, which extended the sunset date for Title 41 agencies.
The authority to file protests against the award of task or delivery orders is relatively new, and there is little data available, as such protests may be filed with the agency or Government Accountability Office (GAO). GAO has exclusive jurisdiction of a protest of an order valued in excess of $10 million. Data on agency-level protests is not compiled outside the agency concerned; therefore estimates are based on the total number of protests filed at the GAO in FYs 2009, 2010 and 2011. The data was extracted from GAO's report to the Congress for those fiscal years.
Offerors can protest to the agency or to the GAO. Assuming that one-half of all protests are filed with the GAO and the other half are filed with the agency, then the average number of protests filed per fiscal year would be 6,700 (see below):
Protests may be filed against the award of contracts as well as certain task or delivery orders. There are few prohibitions on the grounds for protests against the award of a contract. However, protests against the award of a task or delivery order are limited to (a) a protest on the grounds that the order increases the scope, period, or maximum value of the contract; or (b) a protest of an order valued in excess of $10 million. Therefore, it is reasonable to assume that less than 50 percent of the total number of protests filed is against the award of a task or delivery order. A generous estimate is approximately one-fourth, or 1,117. Likewise, only a percentage of the protests against the award of a task or delivery order are made by small businesses. Even if we assume that percentage to be one-half, then the number of protests filed by small businesses against the award of a task or delivery order is estimated to be 559.
The number 17 represents the number of small business task or delivery order protests sustained in a fiscal year. This number is representative of protests against awards by all Government agencies.
There is no requirement for small entities to submit any information under this provision. Therefore, no professional skills are necessary on the part of small entities for compliance, and the cost to small entities associated with this provision is $0.
The Regulatory Secretariat will be submitting a copy of the Initial Regulatory Flexibility Analysis (IRFA) to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the IRFA may be obtained from the Regulatory Secretariat. DoD, GSA, and NASA invite comments from small business concerns and other interested parties on the expected impact of this rule on small entities.
DoD, GSA, and NASA will also consider comments from small entities concerning the existing regulations in subparts affected by this rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (FAC 2005-60, FAR Case 2012-007) in correspondence.
The interim rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).
A determination has been made under the authority of the Secretary of Defense (DoD), the Administrator of General Services (GSA), and the Administrator of the National Aeronautics and Space Administration (NASA) that urgent and compelling reasons exist to promulgate this interim rule without prior opportunity for public comment. This action is necessary because statutory authority for Title 41 offerors to file certain bid protests lapsed May 27, 2011, but was reinstated in the National Defense Authorization Act for Fiscal Year 2012, effective December 31, 2011. Similar authority for Title 10 offerors was extended by a January 7, 2011, statute, and has already been implemented in the FAR. If this rule is not published on an interim basis, offerors could be misinformed about their legal right to file certain protests. Disappointed Title 41 offerors would be unclear on whether to file bid protests of civilian agency task and delivery order awards at either the GAO or the Court of Federal Claims. This interim rule clarifies that GAO has exclusive jurisdiction of a protest of an order valued in excess of $10 million. However, pursuant to 41 U.S.C. 1707 and FAR 1.501-3(b), DoD, GSA, and NASA will consider public comments received in response to this interim rule in the formation of the final rule.
Government procurement.
Therefore, DoD, GSA, and NASA amend 48 CFR part 16 as follows:
40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.
(a) * * *
(10) * * *
(ii) The authority to protest the placement of an order under (a)(10)(i)(B) of this section expires on September 30, 2016 (10 U.S.C. 2304a(d), 10 U.S.C. 2304c(e), 41 U.S.C. 4103(d), and 41 U.S.C. 4106(f)).
Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Final rule.
DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to add the United States Defense Advanced Research Projects Agency (DARPA) to the list of agencies that have entered into separate tax agreements with the State of New Mexico (NM). The DARPA-NM tax agreement eliminates the double taxation of Government cost-reimbursement contracts when DARPA contractors and their subcontractors purchase tangible personal property to be used in performing services in whole or in part in the State of New Mexico, and for which title to such property will pass to the United States upon delivery of the property to the contractor and its subcontractors by the vendor.
Mr. Edward N. Chambers, Procurement Analyst, at 202-501-3221 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-60, FAR Case 2012-019.
On August 18, 2011, DARPA and the Taxation and Revenue Department of the State of New Mexico entered into the DARPA-NM tax agreement to eliminate the double taxation of Government cost-reimbursement contracts when DARPA contractors and their subcontractors purchase tangible personal property to be used in performing services in whole or in part in the State of New Mexico and for which title to such property will pass to the United States upon delivery of the property to the contractor and its subcontractors by the vendor.
The FAR is amended to add the United States Defense Advanced Research Projects Agency to the list of participating agencies under FAR 29.401-4(c). DARPA joins the list of other agencies with existing tax agreements with the State of New Mexico.
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.
“Publication of proposed regulations”, 41 U.S.C. 1707, is the statute which applies to the publication of the Federal Acquisition Regulation. Paragraph (a)(1) of the statute requires that a procurement policy, regulation, procedure or form (including an amendment or modification thereof) must be published for public comment if it relates to the expenditure of appropriated funds, and has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure or form, or has a significant cost or administrative impact on contractors or offerors. This final rule is not required to be published for public comment, because it recognizes actions taken by DARPA that do not have a significant effect on contractors or offerors.
The Regulatory Flexibility Act does not apply to this rule because this final rule does not constitute a significant FAR revision, and 41 U.S.C. 1707 does not require publication for public comment.
The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).
Government procurement.
Therefore, DoD, GSA, and NASA amend 48 CFR part 29 as follows:
40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.
Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Final rule.
DoD, GSA, and NASA are issuing a final rule amending the Federal Acquisition Regulation (FAR) to remove any reference to Federal Information Processing Standard (FIPS) 161 and codify requirements for standards already in use.
Ms. Deborah Lague, Procurement Analyst, at 202-694-8149 for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite FAC 2005-60, FAR Case 2011-022.
DoD, GSA, and NASA published a proposed rule in the
There were no public comments received in response to the proposed rule; therefore, this rule is published as a final rule.
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.
The Department of Defense, General Services Administration, and National Aeronautics and Space Administration certify that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601,
The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).
Government procurement.
Therefore, DoD, GSA, and NASA amend 48 CFR part 53 as follows:
40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.
(a) The forms prescribed by this part may be computer generated—without exception approval (see 53.103), provided—
(1) There is no change to the name, content, or sequence of the data elements, and the form carries the Standard or Optional Form number and edition date (see 53.111); or
(2) The form is in an electronic format covered by the American National Standards Institute (ANSI) X12 Standards published by the Accredited Standards Committee X12 on Electronic Data Interchange or a format that can be translated into one of those standards.
(b) The standards listed in paragraph (a)(2) of this section may also be used for submission of data set forth in other parts for which specific forms have not been prescribed.
Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Final rule.
This document makes amendments to the Federal Acquisition Regulation (FAR) in order to make editorial changes.
The Regulatory Secretariat, 1275 First Street NE., 7th Floor, Washington, DC 20417, 202-501-4755, for information pertaining to status or publication schedules. Please cite FAC 2005-60, Technical Amendments.
In order to update certain elements in 48 CFR parts 1, 16, 22, and 52, this document makes editorial changes to the FAR.
Government procurement.
Therefore, DoD, GSA, and NASA amend 48 CFR parts 1, 16, 22, and 52 as set forth below:
40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.
(c) * * *
(3) * * *
(i) Part would be “FAR part 9” outside the FAR and “part 9” within the FAR.
(ii) Subpart would be “FAR subpart 9.1” outside the FAR and “subpart 9.1” within the FAR.
The revisions read as follows:
(b) * * *
(4)
(b) Information about this requirement and these products is available at
Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Small Entity Compliance Guide.
This document is issued under the joint authority of DOD, GSA, and NASA. This
July 26, 2012.
For clarification of content, contact the analyst whose name appears in the table below. Please cite FAC 2005-60 and the FAR case number. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755.
Summaries for each FAR rule follow. For the actual revisions and/or amendments made by these FAR cases, refer to the specific item numbers and subject set forth in the documents following these item summaries. FAC 2005-60 amends the FAR as specified below:
The interim rule published in the
The interim rule required contractors to report executive compensation and first-tier subcontract awards on contracts expected to be $25,000 or more. This information is available to the public.
The final rule removes the exception for inserting the clause in classified solicitations and contracts, or solicitations or contracts with individuals. Classified information is not required to be disclosed. The clause is not prescribed for contracts unless they are required to be reported in the Federal Procurement Data System (FPDS). The final rule clarifies the responsibility of contracting officers to correct data originating from FPDS found by the contractor to be in error when the contractor completes the subcontract report. The definition of first-tier subcontractor is revised to allow contractors greater flexibility to determine their first-tier subcontractors. The rule also clarifies that a contractor must enter Transparency Act data when registering in the Central Contractor Registration (CCR) database and the contractor is required to report its executive compensation in CCR as a part of its annual registration requirement in CCR.
This final rule amends the FAR with regard to payments under time-and-materials and labor-hour contracts. First, the rule harmonizes payment provisions under commercial time-and-materials and labor-hour contracts and non-commercial time-and-materials and labor-hour contracts, largely by having commercial time-and-materials and labor-hour contracts adopt the payment provisions of non-commercial time-and-materials and labor-hour contracts. Second, the rule harmonizes conflicting provisions of the “Allowable Cost and Payment” and “Payments Under Time-and-Materials” and “Labor-Hour Contracts” clauses, which are both prescribed under non-commercial time-and-materials contracts and labor-hour contracts, by using the same periods for invoicing, and submission of the completion voucher as those set forth in the “Allowable Cost and Payment” clause. This harmonization will serve to benefit small businesses under time-and-materials and labor-hour contracts by permitting bi-weekly rather than monthly invoicing, and providing contracting officers with the discretion to authorize even more frequent payments.
This interim rule amends the FAR to implement section 825 of the Ike Skelton National Defense Authorization Act for Fiscal Year 2011 (Pub. L. 111-383) and section 813 of the National Defense Authorization Act for Fiscal Year 2012 (Pub. L. 112-81). These statutes extend the sunset date for protests against awards of task or delivery orders to September 30, 2016. There is no effect on Government automated systems.
This final rule amends the FAR to add the United States Defense Advanced Research Projects Agency (DARPA) to the list of agencies that have entered into an agreement with the State of New Mexico. The agreement eliminates the double taxation of Government cost-reimbursement contracts when contractors and their subcontractors purchase tangible personal property to be used in performing services in whole or in part in the State of New Mexico, and for which title to such property will pass to the United States upon delivery of the property to the contractor and its subcontractors by the vendor. Small businesses benefit from this agreement because they will no longer have the administrative effort and cost associated with collecting this tax.
DoD, GSA, and NASA published a proposed rule in the
Editorial changes are made at FAR 1.105-2, 16.301-3, 22.1801, 22.1802, 52.212-5, 52.215-20, 52.222-54, and 52.223-2.
On October 30, 2007, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, issued an Order to Show Cause to Grider Drug #1, the holder of DEA Certificate of Registration No. AG3498347, and Grider Drug #2, the holder of DEA Certificate of Registration No. AG9715751, (hereinafter, Respondent or Respondents), of Russell Springs, Kentucky.
Subsequently, on June 22, 2010, the Government raised additional allegations that Respondents were dispensing prescriptions to six persons engaged in doctor-shopping and that “Respondents knew or should have known that the above dispensed controlled substances were likely to be diverted or used for other than legitimate medical purposes” and that they “failed to fulfill their corresponding responsibility for the proper dispensing of controlled substances.” GX 21, at 1-3. Based on the allegations that this conduct had continued through early May 2010, I concluded that there was a “substantial likelihood” that it would continue.
Following service of the initial Show Cause Order, Respondents requested a hearing on the allegations and the matter was placed on the docket of the Agency's Office of Administrative Law Judges (ALJ) and assigned to an ALJ, who proceeded to conduct pre-hearing procedures. On June 6, 2008, the ALJ granted Respondents' motion to stay the proceedings pending the conclusion of a state-court criminal case against their owner Leon Grider, which was scheduled to conclude on October 10, 2008, noting that “the parties believe that the presentation of evidence in the above-captioned matter will be facilitated.” Order Granting Stay of Proceedings, at 1. However, nine months later, after further delays in the state proceeding, the ALJ terminated the stay, and finally, in August 2009, the ALJ commenced the hearing.
The proceeding also included an interlocutory appeal to this Office by Respondents of the ALJ's denial of their motion to stay the proceeding while they sought the return of numerous documents which were seized by the Kentucky Bureau of Investigation and the Medicaid Fraud Unit of the Kentucky's Attorney General's Office pursuant to a state criminal search warrant.
Giving new force to Justice Douglas's dissenting opinion in
After the hearing, both parties submitted briefs containing their proposed findings of fact, legal conclusions and argument.
With respect to factors two (Respondents' experience in dispensing controlled substances) and four (Respondents' compliance with applicable laws related to controlled substances), the ALJ found,
The ALJ further found that Respondents had violated their corresponding responsibility under 21 CFR 1306.04(a) by dispensing to the six persons (as alleged in the Immediate Suspension Order) controlled-substance prescriptions which lacked a legitimate medical purpose and that Respondents' pharmacists ignored various red flags indicative that the patients were engaged in drug abuse or diversion.
Next, the ALJ rejected various allegations of violations that were based on data from the State of Kentucky's Prescription Monitoring Program (KASPER) on the ground that the Government had not obtained a court order as required by state law to render these reports and the underlying data contained in them admissible in this proceeding. ALJ at 91. However, the ALJ found that Respondents had violated federal regulations by dispensing schedule II controlled substances without retaining the hard copy of the prescription, as well as by dispensing prescriptions “that were never called-in or authorized by the prescribing physicians.”
As for factor five—such other conduct which may threaten public health and safety—the ALJ found that Respondents' pharmacists had improperly billed Medicaid for medications (including controlled substances) by billing for one medication while actually dispensing another and that this conduct circumvented “the prescription check and balance such Medicaid reporting creates.” ALJ at 94. In addition, the ALJ found that Leon Grider had “inaccurately” labeled prescription bottles as well as placed false prescription labels on bottles he provided to a confidential informant.
Based on her findings under factors two, four, and five, the ALJ thus concluded that the Government had satisfied its
Respondents filed exceptions to the ALJ's decision.
Having considered the entire record, I adopt the ALJ's conclusions of law with respect to factors two and four, as well as her ultimate conclusion that Respondents have committed acts which render their registrations inconsistent with the public interest.
Respondent Grider Drug #1 is the holder of DEA Certificate of Registration AG3498347, under which it was authorized to handle controlled substances at the registered location of 539 Main St., Russell Springs, Kentucky. GX 1. While this registration was due to expire on September 30, 2005, on August 23, 2005, Respondent filed a renewal application. GX 2. According to an affidavit of an official in charge of the DEA Registration Unit, upon filing this application, Respondent was authorized to continue dispensing controlled substances until the issuance of the immediate suspension order on June 22, 2010.
Respondent Grider Drug #2 formerly held DEA Certificate of Registration AG9715751, which authorized it to handle controlled substances at the registered location of 124 Dowell Rd., Russell Springs, Kentucky. GX 3. The expiration date of this registration was September 30, 2008, and Respondent did not file a renewal application until September 25, 2008. GX 4. According to an affidavit of the official in charge of the DEA Registration Unit, upon filing this application, Respondent was authorized to continue dispensing controlled substances until the issuance of the immediate suspension order on June 22, 2010. However, while the official's affidavit states that this was timely renewal application,
The record contains evidence that Leon Grider, who is the pharmacist-in-charge at Grider Drug #1, owns both pharmacies. However, there is also some evidence that other Grider family members own shares in the pharmacies.
In the initial Show Cause Order, the Government raised a plethora of allegations. ALJ Ex. 1. These allegations included,
(1) Grider #1 and #2 had refilled schedule II controlled substances seventeen and eight times respectively, in violation of 21 CFR 1306.12;
(2) Grider #1 and # 2 had refilled prescriptions for schedule III-V controlled substances without the prescribing physician's authorization fifty-seven and seventeen times respectively, in violation of 21 CFR 1306.21(a);
(3) Grider #1 and #2 filled prescriptions bearing invalid or expired DEA registration numbers 186 and 161 times respectively, in violation of 21 CFR 1306.05;
(4) Grider #1 refilled prescriptions for schedule III and IV controlled substances more than six months after the date of the original prescription, in violation of 21 CFR 1306.22(a);
(5) Grider #1 and Grider #2 engaged in the unauthorized transfer of prescriptions and prescription refills from Grider Drug Key Village 289 and 40 times respectively, in violation of 21 CFR 1306.25(a);
(6) data from the Kentucky All-Schedule Prescriptions Electronic Reporting System (hereinafter, KASPER) show that Grider #1 had filled schedule III-V prescriptions for which it could not produce the actual prescription in nine instances, in violation of 21 CFR 1306.21(a);
(7) Grider #1 and #2 failed to take and maintain a biennial inventory, as required by 21 CFR 1304.11(c);
(8) “[a]n accountability audit of 50 controlled substances covering [the] period of May 31, 2003 to August 19, 2004, revealed a shortage of 22,219 dosage units of controlled substances” at Grider #1 and 105,913 dosage units at Grider #2;
(9) Grider Drug #1 “filled four controlled-substance prescriptions which incorrectly listed Grider Drug #2 as the `issuing physician' and that Grider #2 filled several schedule II controlled-substance prescriptions which listed itself as the physician, in violation of 21 CFR 1306.05(a); and
(10) Grider Drug #1 and Grider Drug #2 engaged in 133 unauthorized
With respect to most of these allegations, a principal component of the Government's proof was reports and/or data contained in reports which were obtained by law enforcement personnel from the State of Kentucky's KASPER system. Notwithstanding Respondents' repeated objection to the use of this data on various grounds, the ALJ relied on it to make numerous findings regarding the allegations that Respondents had filled prescriptions under expired, invalid, or surrendered DEA numbers, that Respondents listed themselves as the prescribing physician in numerous instances, that Respondents refilled schedule II controlled substance prescriptions, that Respondent dispensed prescriptions without retaining a hard copy of them, and that Respondents dispensed refills of prescriptions for schedule III-V drugs which were not authorized. ALJ at 49-54. However, in her conclusions of law, the ALJ noted that Respondents also challenged the admissibility of the KASPER reports, and held that under Kentucky law, a court order is required for the reports and the data contained therein to be admissible in this proceeding. ALJ at 91 & n.46 (citing Ky. Rev. Stat. § 218A.202(8);
In its post-hearing brief, the Government argued that in several previous proceedings, the Agency's final orders had relied on KASPER data in making various findings. Gov. Br., at 101.
Under Kentucky law, KASPER data may only be disclosed “to persons and entities authorized to receive that data under this section. Disclosure to any other person or entity, including disclosure in the context of a civil action where the disclosure is sought either for the purpose of discovery or for evidence, is prohibited unless specifically authorized by this section.” Ky. Rev. Stat. § 218A.202(6). The statute authorizes disclosure of KASPER data to eight categories of persons or entities, including: (1) “[a] designated representative of a board responsible for the licensure, regulation, or discipline of practitioners, pharmacists, or other person authorized to prescribe, administer, or dispense controlled substances and who is involved in a bona fide specific investigation involving a designated person”; and (2) a certified peace officer of a State, “or a federal peace officer whose duty is to enforce the laws of this Commonwealth, of another state, or of the United States relating to drugs and who is engaged in a bona fide specific investigation involving a designated person.”
However, “[a]uthorized users must apply for an account” and provide appropriate proof of their identity and credentials. RX 42, at 20. Most significantly, applicants must also execute an account use agreement pursuant to which they agree that access to KASPER “is granted only with the authority and rights allowed under KRS 218A.202,” as well as “to use the reports only in manners set forth under KRS 218A.202.” RX 52, at 1.
The KASPER statute further provides that “[a] person who receives data or any report of the system from the cabinet shall not provide it to any other person or entity except by order of a court of competent jurisdiction and only to a person or entity authorized to receive the data or the report under this section, except” when done pursuant to three exceptions, none of which apply here. KRS § 218A.202(8). While one of these exceptions provides that “[t]he Department for Medicaid Services may submit the data as evidence in an administrative hearing held in accordance with KRS Chapter 13B,” an Opinion of the Kentucky Attorney General explains that:
The fact that the General Assembly deemed it necessary to make a special exception for Medicaid hearings indicates that administrative hearings, in general, were not contemplated as a permissible forum for disclosure of KASPER data. We must therefore conclude that data from the KASPER system cannot, without a court order, be used as either documentary or testimonial evidence in an administrative hearing before the Board of Medical Licensure. Any drug transactions at issue in the hearing must be proved from other sources.
More recently, the Supreme Court of Kentucky has held that the KASPER statute creates an evidentiary privilege, which fosters important objectives, even if it is not absolute.
Here, while there is no argument that DEA Investigators were authorized to obtain KASPER data to pursue their investigation, they agreed, as a condition of obtaining this data, to use the reports only in the manners permitted under Kentucky law. However, as explained above, with the exception of a state Medicaid proceeding, Kentucky law does not authorize disclosure of this information in an administrative proceeding without a court order. Because DEA Investigators did not obtain a court order authorizing the use of the KASPER data in this proceeding and agreed to use the reports and data only as authorized by Kentucky law, the reports and data contained therein were not admissible.
Accordingly, the ALJ should not have made any findings based on them. However, where DEA Investigators merely used the KASPER reports and data as an investigative tool to facilitate the search for other evidence which establishes violations on the part of Respondents, that other evidence is admissible. Accordingly, I turn to whether the various allegations set forth above are supported by substantial evidence.
The Controlled Substances Act explicitly prohibits the refilling of a schedule II controlled substance.
The Government's Exhibit with respect to Grider #2's refilling of schedule II drugs contained thirteen prescriptions (two of which were actually for Lortab, a schedule III drug, and Xanax, a schedule IV drug).
However, another document in this exhibit is a copy of a label for a hydrocodone prescription. GX 15, at 4. Consistent with the annotation on this document, the DI testified that during a 2004 search of Respondents, Investigators did not find either a hard copy (
The DI also testified to a split distribution of a prescription for 15 Duragesic patches, noting that ten of the patches had been dispensed initially and the remaining five had been dispensed eight days later and that this was “an instance where it seems the pharmacy didn't have enough in stock.” Tr. 426. However, once again, this allegation was based on inadmissible KASPER data and no other evidence establishes that the prescription was dispensed in this manner.
As noted above, the Government alleged that both Respondents dispensed numerous unauthorized refills of schedule III through V controlled substances. However, the documentary evidence with respect to Grider #1 included only four prescriptions (two for hydrocodone combination drugs, and two for Ambien (zolpidem)); with respect to Grider #2, the evidence included only six prescriptions (three for Xanax, one for diazepam, and two for Lorcet (hydrocodone)).
As for the prescriptions contained in GX 14 (Grider #1), once again the DI relied on the KASPER data in concluding that Grider #1 had dispensed unauthorized refills. GX 14, at 1-2. As for the Grider #2 prescriptions, the first prescription found in GX 16 (a Xanax prescription to BP, which authorized no refills) was the subject of the DI's concern because while both the prescription and the label were dated June 5, 2003, KASPER data indicated that it was filled eighteen days later. GX 16, at 1-2. However, there is no contention that the KASPER data shows that the prescription was filled on both dates, and thus, even if this data was admissible, it would not establish that this was an unauthorized refill as there is otherwise no indication that this prescription was filled more than once.
The DI further asserted that per KASPER records, a June 18, 2003 prescription for Xanax issued to JB, which authorized no refills, was filled on both June 18 and June 19, 2003.
Also included in this exhibit were two prescriptions for 30 Lorcet (TID, a 10-day supply), with no refills, which were dated December 24, 2002, and January 3, 2003, as well as labels indicating that the prescriptions were filled on December 31, 2002 and January 6, 2003. GX 16, at 7-8. Next to the signed prescription which is dated January 3, 2003, is the handwritten notation: “Script filled 1-6-2003, just one (1) day after refilling script above!”
However, the evidence also shows that on June 6, 2007, Dr. CS issued a prescription for 91 Lortab 7.5/500 to BW, with no refills, with instructions to take a decreasing dose of the medicine at two-week intervals and then stop. GX 30, at 1. The evidence further shows
Dr. CS testified that in 2006, she instituted a policy that her staff was not authorized to call in refills because she had received two phone calls from pharmacies that patients were “masquerading as [her] office staff, trying to obtain * * * Lortab.” Tr. 3031-32. Dr. CS further testified that on June 6, 2007, BW had wanted to get off of Lortab and that the prescription she wrote was to taper BW off of the drug. Tr. 3050-52, 3056.
According to the evidence, another doctor had run a KASPER on BW and upon noticing that she was getting Lortab refills, contacted Dr. CS regarding the refills. GX 30, at 2. On November 9, 2007, Dr. CS's Office Manager (LBB) then called Grider #1 and spoke with Leon Grider regarding the refills and documented this conversation in BW's medical record. Tr. 3040, 3054-55. According to the note:
He [Leon Grider] stated that the DEA has the original prescription and he would contact them to fax it to us. He also stated that Richard Potters filled the original prescription and it showed 0 refills. He said someone from our office must have called in refills. The last one filled was on 10/18/07. I informed him that we do not call in controlled's-which is stated in our policy. We also discussed that controlled's prescribed from our office are not to be refilled earlier than one day.—lbb
While Faller's felony conviction does not render him incompetent to testify, there is ample reason to reject nearly all (if not all) of his testimony as incredible. According to Faller, his legal troubles which led to the federal convictions began back in 1993, when he had “blown the whistle” on his boss, who was purportedly stealing from various people to fund the PKK, a terrorist organization, and that his boss was doing this “on behalf of the United States Government.”
Faller also alleged that upon moving to Russell Springs in April 2001 to run a call center, he developed new legal troubles because both the Police Chief and the Commonwealth Attorney “wanted me out because we were knocking down * * * drug problems” by “start[ing] mandatory drug testing for all the employees.”
Faller further testified he had filed a lawsuit alleging public corruption against the Police Chief, the State Police Detective who investigated the Respondents, and other officials of Russell Springs, and “got the grand jury fired up,” but that the grand jury “actually had convicted drug dealers on” it and that “[i]t was incredible what they did to tamper with” it.
Faller asserted the existence of still other conspiratorial acts on the part of various governmental entities. These included the Kentucky Attorney General, who “somehow managed to get the Department of Defense * * * to ask Express Scripts to cut off Grider Drug and all insurance carriers,” Tr. 5456; that during the 2007 search, KBI Agent Dudinsky had planted drugs in Leon Grider's office, which Faller purportedly based on a videotape he viewed but which was not presented at the hearing,
It is further noted that much of Faller's testimony, which went on for nearly three days, was plainly irrelevant, and even when he testified regarding one of the Government's allegations, it was typically clear that he lacked personal knowledge of the allegation.
While the note recorded by Dr. CS's Office Manager is hearsay, I conclude that it is sufficiently reliable to constitute substantial evidence. Leon Grider's statements establish that he did in fact refill Dr. CS's prescription and constitute an admission. While that statement was made to Dr. CS's Office Manager, it was recorded in the patient's medical record, a source of evidence which the Supreme Court has long recognized as inherently reliable.
Noting the above statement, Government Counsel then asked the supervisory DI: “With regard to this particular paragraph, during the course of your investigation did you come across a physician by the name of Robert Shipp.” Tr. 436. The DI answered “[y]es,” and then explained that “[i]n July of 2004, Dr. Shipp surrendered his DEA registration to us as a result of an investigation that we conducted of his medical clinic in Columbia, Kentucky, which is about a 30 minute drive from Russell Springs.”
When the Government moved for the admission of the KASPER report (GX 18), the Respondent objected to the admission of this exhibit both because it was a KASPER report and on grounds of relevancy. Tr. 440. However, the ALJ admitted the exhibit. Even if this evidence was relevant to prove the allegation (which does not appear to have been made in either the Show Cause Order or the Government's various pre-hearing statements), here again, the Government's proof of the dispensings was based solely on an inadmissible KASPER report. The allegation is therefore not supported by substantial evidence.
Next, the Government alleged that Respondent filled numerous prescriptions that bore invalid or expired DEA numbers. While the Government submitted copies of various prescriptions which Respondent filled,
There is, however, evidence that Respondents violated DEA regulations because, in some instances, the labels they affixed to prescriptions contained the wrong physician's name.
In support of this allegation, the DI asserted that on four occasions between January 2003 and August 2004, Grider filled schedule III and IV controlled substance prescriptions that had been issued more than six months earlier. GX 9, at 14. With respect to Grider #1, the Government's proof was limited to the bare assertion by the DI that he had “reviewed prescriptions seized from Grider #1, and compared and contrasted these prescriptions with prescription logs, transfer records, and KASPER reports.”
The Government did submit an exhibit which purports to show that Grider Key Village engaged in the same practice. GX 24. Although this allegation is properly considered given the common ownership of the three pharmacies, the documentary evidence, which includes four prescriptions and four labels for refills, does not support the allegation as the dates of the refills are all well within six months of the date of the original prescriptions.
In his affidavit, the supervisory DI stated that his review of Grider #1's “prescription logs, transfer records, and KASPER reports” showed that there were 289 “instances of unauthorized transfer of controlled substances [sic] prescriptions and/or prescription refills from Grider Drug-Key Village to Grider Drug #1,” and 453 “instances of unauthorized transfer of controlled substances [sic] prescriptions and/or prescription refills from Grider Drug #2 to Grider Drug #1.” GX 9, at 14. The supervisory DI further testified that during the August 2004 search of the pharmacies, one of his investigators relayed information to him regarding the existence of logbooks listing prescriptions which were transferred between the pharmacies. Tr. 695-96. The supervisory DI testified that “[t]here were two logs,” which were provided to DEA by either Mr. Grider or another employee, and which bore on their cover, the titles of either “Grider-Key Village transfers or Grider Drug #2 transfers.”
The DI further testified that the logs contained “the date and the prescription that was being or had been courtesy filled.”
The DI then added that this was not permitted under the law because while “you can transfer a prescription from one pharmacy to the other * * * once you transfer that prescription, you can't transfer that prescription back.”
On its face, proof of this allegation requires KASPER data for which the Government did not obtain the required court order. Accordingly, the allegation is not supported by substantial evidence.
As evidence of this violation, the Government submitted the DI's affidavit. GX 9. Therein, the DI stated that he “developed further information
However, less than a month after executing his affidavit, the DI testified that he had done an audit of the three pharmacies' handling of certain drugs. Tr. 606-13. Contradicting the statement in his affidavit, the DI testified that in performing the audit, he had used Grider #1's and Grider #2's biennial inventories of May 31, 2003 as the initial inventories, and that there was no biennial inventory for Grider Drug—Key Village, “because it wasn't required for them at that time.” Tr. 609. Given the DI's testimony at the hearing, this allegation is not supported by substantial evidence.
The Government further alleged that it had performed an audit of 50 controlled substances for the period May 31, 2003 through August 19, 2004 and that the audit “revealed a shortage of 22,219 dosage units of controlled substances” at Grider Drug #1 and “105,913 dosage units of controlled substances” at Grider Drug #2. ALJ Ex. 1, at 2-3. The evidence shows that this audit was done by a DI
The Government did not, however, introduce this audit into evidence. Rather, it relied on a separate audit of three drugs (Xanax, alprazolam (the generic for Xanax), and methadone) which was done by the supervisory DI. GX 11. According to the DI, this audit found numerous shortages and overages, some of which would be significant if the audit was accurate.
Respondents put on extensive evidence challenging the DEA audits. More specifically, the evidence shows that shortly after DEA executed the August 19, 2004 search warrant, Respondents hired an entity (McDonald Group) to conduct inventories at each store on August 28, 2004. Tr. 1987-88. Respondents also hired Stivers and Associates, an accounting firm, to review the DEA audit results. Tr. 1980. David W. Hicks, CPA, who has been Stiver's Auditing Director for the past twelve years and has nearly twenty years of professional auditing experience, RX 101, at 1-2, conducted what he termed a “consultation examination” of Respondents.
In its report, Stivers detailed the procedures it used in conducting its examination.
To determine the amount of drugs Respondents could account for (Total Accounted For), Stivers used the inventories conducted on August 28, 2004 by the McDonald Group.
As for Respondents' dispensings, Stivers tabulated the quantities for each drug “for each location from the PC V computer software system Narcotic and Controlled Substance Drug Sales Report,” obtaining monthly reports for the audit period for each of the fifty drugs that were initially audited by DEA. RX 101, at 63. Stivers totaled the monthly quantities for each drug to determine the total number of dosage units sold during the audit period.
While Stivers' results demonstrate that both DEA audits were flawed (largely because the DIs used KASPER data to determine the amounts of the dispensings), they provide little comfort to Respondent because they point to massive accountability problems at each of the pharmacies. For example, at Grider #1, Stivers found that the pharmacy had the following shortages (by number of dosage units): (1) Alprazolam, 2,316; (2) Ambien, 170; (3) diazepam, 6,372; (4) Duragesic, 462; (5) Endocet, 214; (6) hydrocodone, 28,097; (7) lorazepam, 2,191; (8) Lorcet, 500; (9) Lortab, 375; (10) Valium, 40; and (11) Vicodin, 200.
At Grider #2, Stivers found that the pharmacy had the following shortages: (1) Ambien, 428; (2) Duragesic, 290; (3) hydrocodone, 8,135; (4) lorazepam, 1,253; (5) methadone, 3,207; (6) oxycodone, 1,240; (7) OxyContin,
Moreover, even after Stivers took the figures for all three pharmacies (including Grider Key Village) to determine the combined shortages and overages, there were still substantial shortages and overages of various drugs (all figures in d.u.). The combined shortages included: (1) Alprazolam, 1,496; (2) diazepam, 7,329; (3) Duragesic, 605; (4) hydrocodone, 35,418; (5) lorazepam, 4,928; (6) OxyContin, 16,998; (7) phentermine, 2,791; and (8) Stagesic, 717.
Regarding the results of his examination, Mr. Hicks testified that when all the drugs for the three stores were added up, Respondents only failed to account for an overage of 644 pills.
This conclusion is properly characterized as “fuzzy math,” as contrary to Mr. Hicks' understanding, the various controlled substances which a DEA registrant handles are not fungible. Rather, pursuant to the CSA and DEA regulations, a registrant which dispenses is required to maintain “a complete and accurate record
In support of this allegation, the Government offered the testimony and affidavit of the supervisory DI.
In support of this allegation (which was raised in the Government's pre-hearing statement), the supervisory DI stated in his affidavit that the Louisville District Office “Diversion Unit completed a * * * review of prescriptions seized on August 18, 2004 from Grider Drug #2,” and that “the review of these prescriptions revealed * * * [t]welve (12) instances of filling prescriptions issued by a Mid-Level Practitioner licensed in Tennessee, who is not authorized to prescribe controlled substances in Kentucky in violation of 21 U.S.C. 829(b) and 21 U.S.C. 842(a)(1) and [KRS § ] 314.011(8) and [§ ] 314.042.” GX 9, at 16. Yet, when asked at the hearing to “elaborate further” on this assertion, the supervisory DI testified that “[i]n conducting my review of the KASPER reports and of course running the DEA numbers through our system and trying to identify the prescribers, I came upon the fact that—I identified 12 prescriptions that were being filled for a nurse practitioner out of Tennessee.” Tr. 200-01;
The Government offered no further evidence establishing the identity of the prescriber and his/her licensing status. Nor, notwithstanding the DI's statement in his affidavit that he had reviewed the prescriptions, did the Government introduce into evidence the prescriptions, the pharmacy's dispensing log, or copies of the labels for the dispensed prescriptions. Indeed, given the DI's testimony at the hearing, it is unclear whether the DI based this allegation on anything other than the KASPER data. I therefore conclude that this allegation is not supported by substantial evidence.
The Government put forward evidence that numerous break-ins and thefts had occurred at the Respondents and that several of them were not reported to DEA as required by federal regulations. According to the supervisory DI, he received information from Narcotics Detective with the Kentucky State Police (Scott Hammond) and the Police Chief of Russell Springs (Joe Michael Irvin), who alleged that Leon Grider was trading controlled substances for sex and “hiding * * * the distribution[s] by reporting theft and losses for the pharmacy.” Tr. 160. In addition to the theft and loss reports which he obtained from the Police Chief and the State Pharmacy Board, the DI also obtained from the Russell Springs Police Department a chronology of the various break-ins which had occurred at Respondents.
The Government introduced into evidence an exhibit which contains sixteen police reports
With respect to the latter contention, James Faller testified that he had been called by one Bobby Bunch, who “said that he had burglarized Grider drugs” and that when he was caught by the police, he had “a whole lot more [pills] than what were turned into evidence,” Tr. 5086, and that Bunch ” had agreed to testify about what had happened to him,” but was murdered and no one has been charged with the crime because “[i]t was another one of these whitewashing grand juries.”
Another of Faller's incoherent tales was that Leon Grider had received a call from a prisoner Brian Lawless (which Grider purportedly had on tape, but which was not produced at the hearing), who, according to Faller, had written a letter to the Commonwealth Attorney stating “that Leon had left money for him that was paying him to break into these stores,” and that this letter was used to get Leon Grider indicted. Tr. 5085-86. According to Faller, Lawless had stated that he wrote the letter because the Chief “told [him] he was going to kill [his] little brother if I didn't write them.”
In the initial Order to Show Cause, the Government alleged that in August 2005, Leon Grider had been indicted in both the Russell County and Adair County Circuit Courts on state felony charges of trafficking in controlled substances. ALJ Ex. 1, at 4. The Show Cause Order further alleged that Leon Grider had also been indicted in Russell County on charges of bribing a witness.
As part of its case-in-chief, the Government called Detective Hammond who testified regarding the decision to initiate undercover operations and the undertaking of the operations in the investigation of Respondents. The ALJ found Detective Hammond's testimony credible.
In an attempt to impeach Detective Hammond's credibility, Mr. Faller asserted that Hammond had threatened to have LW's children murdered, that he had gotten her thrown out of her apartment, that PG (LW's former boyfriend) had told him that he had things he wanted to share but “was afraid for his life,” and that Hammond had “start[ed] harassing me [Faller] and running witnesses off the road.” Tr. 5098.
LW testified, however, that Detective Hammond had never threatened her. Tr. 5935. Moreover, while LW testified that Detective Hammond had moved her to a safe house, he had done so at her request.
Respondents introduced into evidence a transcription of an unsworn interview Faller conducted of PG, during which Faller made numerous suggestive statements to PG regarding the conduct of Hammond and Irvin.
Leon's got enough money. If we done something like this to him, it wouldn't be no problem for him to have us took care of. And the statement was made to me not to worry about Leon, that we'd be more or less—I think their words were, they could help us or they could hurt us, make our life easier or make our life hell, and, more or less to watch what's I'm doing. And their exact words were, that they could take us out and nobody would ever find us was their exact words.
RX 25, at 32. Faller then asked, “In other words, they'd kill you,” to which PG said, “uh-huh.”
Putting aside the ambiguity of PG's statement as to whether his life was threatened by either Hammond or Irvin, because both Detective Hammond and LW were placed under oath and were subject to cross-examination and the ALJ found them to be credible, I reject the unsworn hearsay statement of PG as inherently unreliable.
It is further noted that Respondents did not take exception to the ALJ's finding that Detective Hammond's testimony was credible.
According to the Detective, sometime in May or June 2003, SD, a female in her early to mid-twenties,
SD agreed to attempt a controlled drug buy which both the Detective and
Either the next day or the day after, the Detective and the Chief went to PL's residence and asked to speak with her.
During her interview, PL admitted that Leon Grider had brought her both Xanax and hydrocodone, for which she did not have a prescription.
PL agreed to act as a cooperating witness, and was approved by the Detective's supervisors; her background check did not reveal any felonies.
Leon Grider did not say anything and went back behind the counter and filled PL's methadone prescription.
In either late November or early December 2003, the Detective received a phone call from SD, who stated that she had been at “the Manor,” a Government housing project in Russell Springs and had seen Leon Grider there.
Upon receiving this information, the Detective interviewed LW, who initially denied that she received controlled substances from Leon Grider.
While during the interview, LW agreed to perform undercover transactions for the Detective, sometime in December 2003, she then told Leon Grider about her having been contacted by the Detective, that the police knew what was going on, and that she was “scared to death.”
The Detective developed additional information showing that on six occasions beginning on December 19, 2003 and ending on January 14, 2004, Leon Grider wired a total of $2800 to PG through Western Union offices in Bowling Green and Somerset, Kentucky.
On some date not specified in the record, LW agreed again to work as a cooperating witness and was signed up to do so.
On June 4, 2004, LW performed undercover transactions in both the morning and either the afternoon or evening.
As for the second set of transactions, LW and PG lived together in a trailer in Adair County, the county next to Russell County.
Upon his arrival, Leon Grider gave LW 60 alprazolam in an envelope and 100 dosage units of methadone, which were in a sealed “distributor's bottle.”
On April 24, 2005, a further undercover transaction occurred. On some date not clear on the record, LW and PG contacted the Detective and indicated that they could still obtain controlled substances from Leon Grider. Tr. 1507. The Detective (along with the Police Chief) met with LW and PG, who offered to call Leon Grider and seek more drugs from him; LW and PG stated that they believed that he would give them Duragesic (fentanyl) patches.
On the date of the transaction, LW and PG were searched and recorders were placed on them.
The Detective used a scanner to listen to the conversation between Leon Grider, LW, and PG, during which LW asked if she could get Duragesic patches from Leon Grider.
Leon Grider returned to Grider #1.
Upon arriving, Leon Grider entered the store and PG went in and met him.
LW testified that while she initially had legitimate prescriptions for both Lortab and Xanax, she had heard from acquaintances that Leon Grider would provide extra pills and that she noticed that she would get extra pills in her prescriptions Tr. 5911, 5915. Eventually, LW started asking Leon Grider “if there was any way possible” he could “double” her prescriptions; Grider did so.
Leon Grider also told LW that some of the commercial bottles that were labeled for hydrocodone actually had pinto beans in them and were marked with either a red line or a red X.
LW testified that sometime probably in 2004,
The next day, LW called Leon and told him that she was “starting to detox really bad” and asked “if there was any way possible [she] could get that bottle back.”
Anna Mae Grider also testified regarding this incident. At the hearing, Mrs. Grider asserted that the bottle contained pinto beans, Tr. 4802, and that Leon had given it to LW, who “was in there begging for pills,”
LW further testified that neither Detective Hammond nor Chief Irvin threatened her or threatened to take her children away from her. Tr. 5935. She also testified that neither Detective Hammond nor Chief Irvin had ever engaged in inappropriate conduct towards her.
LW also acknowledged that she had become addicted to drugs and that she was paid $150 to $300 for each undercover transaction.
However, LW's testimony was corroborated in large part by Detective Hammond and her testimony was internally consistent. Moreover, having personally observed LW's testimony, the ALJ's finding is entitled to deference.
Regarding her decision to leave Russell County upon being approached by Detective Hammond and Chief Irvin, LW testified that Leon Grider gave her $1000 and three 500-count bottles of hydrocodone and told her that she “needed to leave town” and “to let them slack off of me for a while.”
LW testified that in 2004, she had asked for and received a bottle of 100 methadone from Leon Grider without having a prescription.
As for the 98 OxyContin tablets, LW testified that she obtained this drug from Leon Grider before she agreed to work as a confidential informant and that she needed the drug for her addiction because she was concerned about the number of Lortab tablets she was taking and the effect of the Tylenol (acetaminophen, which is combined with hydrocodone in Lortab) on her liver.
It is further acknowledged that Respondents submitted several affidavits of an individual who maintained that he is a Forensic Audio and Video Examiner, which were prepared for other litigation between Leon Grider and the Commonwealth and Chief Irvin. Therein, the affiant asserts that various tapes were either copies, have erasures, or were edited. RX 28. While in an affidavit (dated October 2, 2007), Respondent's Expert made reference to tapes which appear to be of the various undercover transactions engaged in by LW, even here, the affidavits fall short of establishing that any of the original tapes were altered.
Most significantly, the Government did not introduce the tapes into evidence. Nor was the Government required to as the testimony of Detective Hammond and LW, which the ALJ found to be credible, is substantial evidence that Leon Grider distributed controlled substances to LW, even though she did not have a prescription for the drugs. I thus reject Respondent's suggestion that because Detective Hammond did not actually view Leon Grider distribute the drugs to LW, the Government was required to produce the tapes.
I further reject the ALJ's finding that “[t]he record casts serious doubts as to the reliability of any audio or video tapes made related to this proceeding,” ALJ at 56 n.22, as unsupported by substantial evidence. Given that neither party introduced the tapes into evidence and the ALJ observed both Detective Hammond and LW testify and found them to be credible, this finding is both incorrect and unnecessary.
In addition to the incidents involving PL and LW, the record contains substantial evidence that Leon Grider distributed controlled substances to BL without a prescription. More specifically, JD, who is BL's daughter, testified that her mother sold Suboxone (buprenorphine and naxalone) and Klonopin (clonazepam), which she obtained through prescriptions, the majority of which she filled at Grider #1.
JD also testified that on March 15, 2006, she had spoken with Chief Irvin regarding her mother's “slurring speech, stumbling, drunken behavior, [and] drug behavior.”
On March 18, BL called the dispatch center and the call was patched through to Chief Irvin, who was then at home. Tr. 3203. The call was recorded and played into the record; in addition, a copy of the recording was submitted into evidence.
During the call, BL complained that her daughter had seen Irvin “the other day about Leon.”
When BL maintained that Grider had not been giving out pills, Irvin responded: “Well, can you explain to me why that there are bottles with your name on them, with your name on them, that are exactly duplicated, that's a violation of the law?”
Respondents introduced into evidence an affidavit of BL (dated April 17, 2006) which she provided in a civil action brought by Leon Grider and others against Irvin and others. RX 106. Therein, BL stated that she “had a valid prescription for [c]lonazepam which [she] had filed [sic] at Grider Drug” and that she had “asked the pharmacist to provide [her with] two (2) bottles so that [she] could legally carry and possess this medication” when she was not home as she “did not want to carry an entire, full bottle” on her person.
Respondents also introduced into evidence various pharmacy records including a Narcotic and Controlled Drug Sales Report (compiled from the Grider #1 pc V Pharmacy System software) listing BL's prescriptions from December 2005 through July 1, 2010, as well as copies of her prescriptions.
Having reviewed the relevant evidence (including having listened to the recording of BL's phone conversation with Chief Irvin), I find that BL's statement in her affidavit was false. I further conclude that substantial evidence supports a finding that Leon Grider distributed Suboxone to BL on or about January 30, 2006, at which time she did not have a prescription for the drug.
Respondents also waged an extensive assault on Chief Irvin's credibility. In her opinion, however, the ALJ cited Chief Irvin's testimony as support for her finding that BL obtained controlled substance from Leon Grider without a prescription.
The ALJ nonetheless made several findings regarding Irvin which can only be described as gratuitous. For example, she found that “Anna Mae Grider provided uncontested testimony concerning” a traffic stop that Irvin made of a Grider employee (ML), which Grider alleged was done to harass ML. ALJ at 58 (FoF 227). Anna Mae Grider, however, had no firsthand knowledge of this incident and the only other evidence supporting it is an unsworn letter by ML. Thus, even if this finding would tend to show bias on the part of Chief Irvin, it is not supported by substantial evidence.
Next, the ALJ also found that “[t]he record contains evidence of other complaints being made against Irvin” and “Mrs. Grider believes Det. Hammond and Chief Irvin `have it out' for the Griders.”
This proceeding is neither an internal affairs review board nor an investigating grand jury such as the one which Mr. Faller got “fired up.” Rather, the ALJ's sole function is to make findings that are relevant and material to the allegations raised by the Government. The ALJ's findings numbers 229 and 232 are not probative of any material issue in the case.
The ALJ made a further finding based on Anna Mae Grider's testimony that following a burglary at one of the Respondents, Chief Irvin retrieved a surveillance tape at the store and that “faces were seen on the tape,” but that Irvin took the tape and when Mrs. Grider went to the police station to view the tape, it had been erased.
As explained above, during the course of the proceeding, the Government issued a second Show Cause Order which also immediately suspended Respondents' registrations. ALJ Ex. 21. The Order raised additional allegations that Respondents were filling controlled substance prescriptions for six patients (TA, RB, JB, JR, SR, CR), who were obtaining the prescriptions from multiple doctors, and that in doing so, Respondents were violating their corresponding responsibility because they “knew or should have known that the * * * dispensed controlled substances were likely to be diverted or used for other than legitimate medical purposes.”
As proof of the allegation, the Government submitted exhibits showing Respondents' dispensings of controlled substances to each of these patients, which were prepared by Detective Hammond.
The Government also elicited the testimony of Donald Sullivan, Ph.D.,
To refute the Government's contentions, Respondents called Eric Grider, the son of Leon Grider and pharmacist in charge of Grider #2, as well as Tonya Moses, a pharmacist and employee of Respondents who worked at each of the stores. In addition, Respondents called each of the six patients who were accused of doctor-shopping to testify, as well as several of the practitioners who prescribed to them. Additionally, Respondents introduced various documents.
The ALJ found that Dr. Sullivan credibly testified as an expert witness in the areas of the standards of pharmacy practice and the standards for dispensing controlled substances. ALJ at 25;
Dr. Sullivan testified that the concept of “corresponding responsibility” means that the pharmacist and the physician “have a shared responsibility to make sure that each prescription is for a legitimate medical purpose.” Tr. 3403, 3418. According to Dr. Sullivan, pharmacists are taught to question prescriptions that they may find are unlawful or suspicious. Dr. Sullivan identified the following examples of “red flags” which should lead a pharmacist to question the legitimacy of a prescription: (1) When a patient is obtaining controlled substances from multiple doctors, (2) when patients are being prescribed duplicate controlled substances that treat the same indications, (3) when patients seek early refills, (4) when patients obtain prescriptions for large quantities and large doses, and (5) when patients travel long distances from where they live to either the prescriber or the pharmacy.
Dr. Sullivan further testified as to the obligation of a pharmacist under Kentucky law to review a patient's profile and conduct a drug utilization review (DUR) prior to dispensing a prescription. Tr. 3410. As he explained in his report:
Kentucky and federal law states that, prior to dispensing every prescription, the pharmacist shall review the patient profile (prospective drug utilization review or DUR) for the following:
(a) Over-utilization or under-utilization,
(b) Therapeutic duplication,
(c) Drug-disease state contraindications,
(d) Drug-drug interactions,
(e) Incorrect drug dose or duration of treatment,
(f) Drug-allergy interaction,
(g) Abuse/misuse,
(h) Inappropriate duration of treatment,
(i) Documented food/nutritional supplements-drug interactions.
Regarding the statement in his report that it was “clear that the pharmacists at the Grider Drugs did not do prospective DUR,” GX 66, at 2; Dr. Sullivan explained that this is a legal requirement, which is “very easy” to comply with, as it can be done “[j]ust by pulling up the patient profile and looking at it.” Tr. 3413. Dr. Sullivan also testified that even though a pharmacist does not have access to a patient's medical file, the pharmacist should not simply defer to the prescribing physician and fill the prescription because the corresponding responsibility requires that the prescription be issued for a legitimate medical purpose.
Dr. Sullivan testified that when confronted with these “red flags,” a pharmacist can take a number of steps in response, including having an extensive conversation with the patient, calling the physician, or refusing to fill the prescription.
With respect to his review of patient profiles for the six patients identified in the Suspension Order, Dr. Sullivan opined that “these patients all exhibited multiple instances of” several of the red flags he identified. Govt. Exh. 66, at 3. Dr. Sullivan further opined that any “reasonable and prudent pharmacist would have caught this behavior and refused to dispense controlled substances to these patients. These are all textbook examples of drug abuse and/or drug diversion. Any reasonable and prudent pharmacist would quickly recognize this based on their education, training, and experience.”
TA (GX 52) is a woman in her early to mid-thirties. Between June 19, 2009 and April 29, 2010, TA obtained thirty-four prescriptions for federally-controlled substances such as Duragesic (fentanyl, a schedule II drug); Endocet (oxycodone, a schedule II drug); hydrocodone with acetaminophen (schedule III); alprazolam and clorazepate (both schedule IV drugs); as well as eight prescriptions for carisoprodol, which at the time was scheduled only under Kentucky law but which has since been placed in schedule IV of the Controlled Substances Act. GX 52, Tab C;
TA's prescriptions were written by twelve different prescribers. GX 52, at Tab C. The prescribers included two pain clinic doctors (Dr. H and Dr. P); three dentists practicing at a clinic named Associates in Dentistry (Dr. C, Dr. S, and Dr. M); another dentist (Dr. G); two oral surgeons who did not practice together (Dr. A and Dr. H); a psychiatrist (Dr. M); and his nurse practitioner (NP W). Tr. 3844-47, 4435.
While the prescriptions written by the various dentists who treated TA were typically only for a few days' supply of hydrocodone, throughout this period TA was also receiving prescriptions from pain management doctors for thirty-day supplies of both schedule II and III drugs such as Duragesic (fentanyl), Endocet (oxycodone), and hydrocodone/apap. GX 52, at Tab C. For example, on June 19, 2009, TA received prescriptions from Dr. H for 10 Duragesic patches and 90 tablets of hydrocodone 10/500, both being a thirty-day supply.
On September 4, TA obtained another prescription for 100 hydrocodone 10mg, a twenty-five day supply from Dr. H (her pain doctor), followed by a prescription on September 16 for twenty hydrocodone 10mg from Dr. H (the oral surgeon), which she refilled on September 18; followed by a September 24 prescription for 120 Endocet, a thirty-day supply, from Dr. P, her new pain doctor.
On November 18, Dr. P issued TA another prescription for 120 (thirty-day supply) Endocet; TA then obtained ten hydrocodone from Dr. G on November 30, twelve hydrocodone from Dr. M on December 3, and twenty hydrocodone from Dr. A on December 10.
Over the course of time, TA had all of her teeth extracted; she also testified that she was never told that any of the extractions were unnecessary. Tr. 3912, 3926, 3969. Dr. G, one of the dentists who treated TA on various occasions in 2006 (when he extracted two of her teeth) and 2009, testified at the hearing that he had reviewed her chart and that she had “bad teeth. They weren't in great shape and she needed extractions.”
Following this incident, Dr. G saw TA several more times. At the first of these visits, TA wanted another tooth extracted; however, because Dr. G “thought that it would be a difficult extraction,” he referred her to an oral surgeon.
In his report, Detective Hammond noted that TA engaged in a pattern of going to a dentist to have a procedure performed and then going to another dentist or oral surgeon to complain about the procedure that was done and to seek hydrocodone. GX 52, at Tab B, at 3. During his interview with Dr. A, one of the oral surgeons who treated TA, Dr. A noted that during her last visit (January 26, 2010), TA had complained about a procedure performed by another practice, Dental Associates, and had asked him to look at it.
Dr. G acknowledged that it would be the “norm” for a patient whose teeth have deteriorated to the point of requiring a total extraction to have pain. Tr. 4459. However, when questioned as to whether he would have prescribed hydrocodone 5/500 to TA (as he did on August 24, 2009) if he had known that she had received 100 hydrocodone 10/500 from Dr. H (her first pain doctor) on August 15th, Dr. G stated that “he wouldn't have prescribed that with knowledge of the previous prescription” because the earlier prescription was “twice as strong as what [he] prescribes for four days.”
Dr. G reiterated that he did not receive a phone call from Grider #1 regarding any of the prescriptions that TA was receiving from other practitioners.
In her testimony, TA denied ever having sold prescriptions. Tr. 3901. However, on May 11, 2010, Detective Hammond went to Dr. P's clinic and interviewed him regarding TA; he also reviewed the medical record which Dr. P maintained on her and observed that Dr. P had performed several urine drug screens on her. GX 52, at Tab B, at 2-3. While the report for TA's March 10, 2010 urinalysis noted that she had listed that she was taking Percocet, hydrocodone, Soma, and Xanax, the results came back negative for benzodiazepines, opiates, and oxycodone.
TA testified that she was unsure whether the dentists knew about the controlled substance prescriptions from Dr. H or Dr. P.
Tonya Moses, a pharmacist and former employee of Respondents, also testified for Respondent. Ms. Moses acknowledged that Grider #1 had filled prescriptions for TA for a lesser strength of hydrocodone from a dentist (Lortab 5) which overlapped with prescriptions for Lortab 10 from a pain management doctor.
Respondents also called Dr. M, a family practitioner with thirty years of medical practice, whose wife's sister is married to Eric Grider, and who is a partner with Leon Grider in the medical office building where he maintains his office and Grider #2 is located.
Dr. Sullivan noted the multiple instances in which Grider Drug #1 filled hydrocodone and/or oxycodone prescriptions issued by different doctors days before the date on which an earlier prescription for either of these drugs would have been totally consumed. Tr. 3416-17; Govt. Exh. 66, at 3-4. As Dr. Sullivan wrote in his report: “[t]his pattern of filling hydrocodone and oxycodone prescriptions early when the patient still had medication left from a previous prescription occurred a total [of] 11 times during a ten-month period.”
Notably, Leon Grider, who was the pharmacist at Grider #1, did not testify in the proceeding.
RB (GX 53) is forty-year old female. Between December 2007 and April 2010, RB filled approximately 200 prescriptions which were written by two doctors (Dr. L & Dr. P) for such controlled substances as hydrocodone/apap tablets, alprazolam, and various narcotic cough syrups including Polytussin, Vicotuss, Z Hist, Tussionex, and Z Tuss.
RB also repeatedly obtained hydrocodone tablets throughout this period while she was receiving the narcotic cough suppressants.
Likewise, on January 7, 2008, RB filled at Grider #2 a prescription from Dr. L for another 60 tablets (again a thirty-day supply) of Lorcet.
As another example, on March 18, 2009, RB filled at Grider #2 a prescription issued by Dr. L for thirty tablets (a thirty-day supply) of Lorcet.
In addition, even putting aside that RB was obtaining prescriptions from both doctors, the evidence shows that on multiple occasions, RB obtained early fills (or refills) of her prescriptions. For example, on July 21, 2008, RB filled at Grider #2 a prescription issued by Dr. L for a twelve-day supply of Tussionex, yet only four days later, she again obtained at Grider #2, an additional twelve-day supply of Tussionex.
Moreover, on both April 28 and May 22, 2009, RB filled at Grider #2 prescriptions issued by Dr. L, each being for thirty tablets of Lorcet (a thirty-day supply).
Also, on July 15, 2009, RB filled at Grider #2 a prescription for 60 tablets of Lorcet (this also being a thirty-day supply).
As for the Xanax (alprazolam), on July 23, 2009, RB filled at Grider #2 a thirty-day supply.
On April 7, 2010, Detective Hammond interviewed Dr. L. GX 53, Tab B. Dr. L stated that he did not know that RB was also seeing Dr. P during the same period she was seeing him.
On April 9, 2010, Detective Hammond interviewed Dr. P, who likewise stated that he was unaware that RB was also seeing Dr. L at the same time she was seeing him.
However, even if RB has a legitimate reason to take pain medicine for her back, Dr. P's statement does not explain why she was obtaining narcotics from Dr. L as well. Nor does Dr. P's statement establish that RB had a medical condition which warranted the prescribing of narcotic cough syrups, or the alprazolam. Thus, this letter does not refute the Government contention that RB was engaged in doctor-shopping and that Respondents violated their corresponding responsibility under federal law in filling her prescriptions.
Upon reviewing the spreadsheet of RB's prescriptions, Eric Grider testified that he did not find RB's controlled substance prescriptions unusual, given the limited number of days' supply provided by each prescription. Tr. 3607-08. Regarding RB's numerous prescriptions for narcotic cough medicines, Grider asserted that these drugs could be used on both a short and long term basis, and gave as an example of the latter, COPD or chronic coronary disease with a cough.
Eric Grider further testified that, notwithstanding that RB was being prescribed narcotic cough syrups by two different doctors, he did not see any potential for abuse or misuse of the medications.
As for RB's having filled the prescriptions at several different pharmacies, Eric Grider acknowledged that this was “sometimes” indicative of doctor-shopping.
Dr. Sullivan concluded that RB's behavior “clearly indicates this patient was abusing and or diverting this medication.” GX 66, at 4. Dr. Sullivan opined that this abuse and or diversion “should definitely have been caught by the pharmacist.”
JB is a female in her mid-fifties. GX 54, Tab A. Between September 2, 2009 and May 4, 2010, JB filled fifty-seven controlled substance prescriptions; fifty of the prescriptions were filled at Grider #2, with the remaining seven being filled at the Russell Springs Pharmacy.
The evidence shows that Grider #2 repeatedly filled prescriptions presented by JB for alprazolam and Valium which were issued by two different doctors. Specifically, on September 17, 2009, Grider #2 filled a prescription issued by Dr. B for 90 alprazolam .5mg (a thirty-day supply), and yet on September 24, Grider #2 filled a prescription issued by Dr. E for 60 Valium 10mg (a twenty-day supply).
With respect to these prescriptions, Dr. Sullivan explained that alprazolam and diazepam are controlled substances in the same therapeutic class of benzodiazepines. Continuing, Dr. Sullivan explained that:
[t]he two drugs, diazepam 10mg and alprazolam 0.5mg are used for the same indication. I cannot think of any clinical reason why a patient would be using these two drugs at the same time for a period of seven months. Any reasonable and prudent pharmacist would not have filled prescriptions for these two medications to be taken at the same time. This is an obvious sign of either prescription drug abuse and/or diversion.
With respect to JB, the evidence also shows that throughout most of the period in question, she was simultaneously receiving prescriptions for hydrocodone from both Dr. E and Dr. J. GX 54, at Tab C. However, while JB filled Dr. E's prescriptions at Grider #2, she filled Dr. J's prescriptions at the Russell Springs Pharmacy.
Respondents called JB to testify. Tr. 5072. However, after some preliminary questions, JB informed the tribunal that she was under indictment for prescription fraud and that she was invoking her Fifth Amendment privilege.
Eric Grider, pharmacist at Grider Drug #2, also testified regarding JB's prescriptions. Grider, who offered the remarkable testimony that he did know of any doctor-shopping having occurred in Russell County,
As for the prescriptions that Grider #2 filled, Mr. Grider maintained that he had talked with the patient and that “the rest of them [we]re legitimate prescriptions for her symptoms.”
JR is a male in his late fifties. GX 55, Tab A. Between November 2, 2009 and April 29, 2010, JR filled thirty-four prescriptions for narcotics including hydrocodone, OxyContin, and Tussionex, which were issued by five different doctors; all but one of the prescriptions were filled at Grider #1.
JR testified that he had several bulging or ruptured disks in his back and that he had been on disability for a long time and been receiving painkillers for fifteen years.
On February 19, 2010, Grider #1 dispensed to JR 60 tablets of OxyContin 20mg (a thirty-day supply) based on a prescription issued by Dr. K.
Moreover, on March 8 (just five days later), Grider #1 dispensed to JR another 60 tablets of OxyContin 20mg (a thirty-day supply) which was prescribed by Dr. B, and on March 19, it dispensed to JR 60 tablets of OxyContin 30mg (a thirty-day supply), as well as 30 tablets of hydrocodone 10/500, both of which were prescribed by Dr. K.
Ms. Moses filled several of JR's prescriptions at Grider #1; she also reviewed Grider #1's records and prepared notes regarding several of the dispensings. On November 23, 2009, she had filled a prescription for twenty tablets of hydrocodone 10mg which was issued by Dr. K. Ms. Moses documented on the prescription that JR had filled a prescription for Lortab 7.5mg on November 2, to be taken one tablet, twice a day. Dr. K's prescription was for one tablet every six hours. Ms. Moses justified filling the hydrocodone 10mg prescription because JR had seen a surgeon, the strength of the drug was higher, and the dosing interval had increased. Tr. 4164-65.
Ms. Moses became aware of the Lortab 7.5mg prescription from the pharmacy technician who had run the Lortab 10mg prescription through the computer. Ms. Moses did not call either physician.
According to Ms. Moses, a similar scenario arose with the prescription of December 3, 2009, because she knew JR was a cancer patient and had undergone a colon re-section.
Ms. Moses also testified regarding a January 21, 2010 prescription issued to JR by his oncologist Dr. N.
Ms. Moses offered a similar explanation as to why Grider #1 filled a March 8, 2010 prescription for OxyContin 20mg. Tr. 4169. Ms. Moses testified that she recognized that JR had received an earlier prescription for OxyContin 20mg on February 19, and that she told JR that she could not fill the prescription until March 17.
Respondents' counsel also asked Ms. Moses about the March 26, 2010 OxyContin prescription for a thirty-day supply which was filled by Leon Grider.
Next, Respondents' counsel asked Ms. Moses about the May 5, 2010 refill request it received from Dr. W, JR's primary physician. This form, which was faxed into Grider #1, stated “needs all meds called in (including cough syrup)” and listed numerous medications; however, various controlled drugs including Lortab and OxyContin were crossed out and the document also bore the notation “No controlled drugs except Ativan.” RX 120B, at 80.
According to Ms. Moses, a staff member at Dr. W's office “wrote down all of [JR's] medications, including OxyContin 20mg, which Dr. W does not prescribe for him. Therefore, Dr. W was aware of JR's taking this for pain control from another physician.”
JR testified that he told Dr. K and Dr. N about the prescriptions he was receiving from Dr. W for his chronic back pain. Tr. 4246, 4256. However, during an interview Detective Hammond conducted with Dr. K on May 4, 2010, Dr. K stated that “he had given him [JR] multiple prescriptions while treating him but had he known he was getting controlled substances from other doctors he would not have prescribed him anything other than right after surgery and he wouldn't have prescribed him as much.” GX 55, Tab B, at 1. Dr. K further told the Detective that JR “did not tell him what he was getting from other doctors” and that while “[h]e assumed Dr. W, his family physician, had given him something for pain * * * he did not know it was an ongoing situation. Also, he did not know [JR] was going to a pain clinic.”
On the same date, Detective Hammond interviewed Dr. W, JR's primary care physician who had referred him to Dr. K.
Detective Hammond also interviewed Dr. B, who runs a pain management clinic at a hospital in Danville, Kentucky.
In his report, Detective Hammond also noted various notations in the patient filed maintained by Dr. W. These included a report that on October 29, 2009, JR called and requested a refill of Lortab, which Dr. W apparently rejected as he noted in the chart: “Hell no! not due.”
In his report, Detective Hammond then noted that while he was at Dr. B's clinic, he was approached by a nurse (JB), who told him that “she had received a call from a Russell Co. phone number, in which the caller said [JR] was diverting his pain pills to her grandson in exchange for him mowing his yard” and that “her grandson is addicted to pain pills.”
Accordingly, I find that while JR had a serious medical condition which warranted the prescribing of controlled substances, there is also substantial evidence that he engaged in the diversion of controlled substances.
With respect to JR's OxyContin and hydrocodone prescriptions, Dr. Sullivan noted that that while “on rare occasions, cancer patients will use a second narcotic like hydrocodone for break-through pain on an `as needed basis' for a short-term period[,] [t]he same doctor would write prescriptions for both.” GX 66, at 6. However, Dr. Sullivan then noted that JR “was receiving prescriptions from both Dr. [K] and Dr. [B] for both drugs at the same time. He also received Tussionex (hydrocodone) prescriptions from Dr. [W] as well during this period.”
Dr. Sullivan further noted “[o]f the thirty three controlled substance prescriptions filled” by Grider #1, “at least eleven times the pharmacy filled the medication too early.”
CR is a male in his late fifties. CR testified that in July of 1996, he was involved in an incident in which another person beat his back with a two-by-four and broke two of his ribs; CR was treated in the emergency room and prescribed Lorcet. Tr. 4030-31. Thereafter, Dr. P, CR's family doctor, treated his back injury, and prescribed controlled substances to him.
CR testified that Dr. P referred him to Dr. C for potential surgery and pain management.
The Government submitted a spreadsheet showing CR's controlled substance prescriptions between November 16, 2007 and April 2, 2010. GX 56, Tab C. The spreadsheet shows that during this period, CR filled approximately 170 controlled substance prescriptions,
Moreover, CR was simultaneously obtaining prescriptions for narcotics from both Drs. P and C. Typically, CR would receive a prescription for 120 tablets of Vicodin 5 (hydrocodone 5/500mg) for a thirty-day supply from Dr. C, each of which he filled at Grider #1.
Notably, while CR testified that Dr. P knew he was also seeing Dr. C, CR testified that he did not tell Dr. P that he was also getting controlled substances from Dr. C and Dr. P did not ask him if he was. Tr. 4028-29. Moreover, on April 9, 2010, the Detective, who had reviewed the medical record maintained by Dr. P on CR, interviewed Dr. P and asked him whether he would have prescribed controlled substances to CR if he had known that CR was getting the same or similar drugs from Dr. P. GX 56, Tab B, at 2. Dr. P answered “no.”
The Detective also interviewed Dr. C, who said that he had asked CR if he was obtaining controlled substances from any other doctors and that CR said “he was not.” GX 56, Tab B, at 1.
I never had any reason to. I didn't know if he knew or—I mean I just figured everybody knowed [sic]. I thought they could pull these KASPERS I think they call it and find out anything so I didn't think there was anything wrong. I thought you could go from little drug to just a tiny bit stronger. Because Lortab 75's ain't enough to—nothing to even touch what pain I have most days.
Respondents did not call either Dr. P or Dr. C to testify. Instead, they called a Nurse Practitioner C-R,
NP C-R did not remember CR or any facts surrounding her treatment and prescribing to him. Tr. 4360-63, 4367. However, upon being shown the evidence that CR had filled the prescription for 120 tablets only six days earlier, NP C-R testified that given the close proximity of the two prescriptions, she would have expected the pharmacist to call her to verify the authenticity of the second prescription.
Ms. Tanya Moses, Respondent's witness, also testified regarding these two prescriptions. Similar to the testimony of NP C-R, Ms. Moses testified that if NP C-R's prescription had been presented to her, she would have called the physician to let him/her know of the overlapping prescription.
Dr. Sullivan further noted that on multiple occasions, Respondents had filled prescriptions for both hydrocodone tablets and narcotic cough suppressants, which contain hydrocodone. GX 66, at 7. Most significantly, in his report, Dr. Sullivan opined that “[a] reasonable and prudent pharmacist would have not allowed a patient to take these medications at the same time and noticed this as a potential indication of prescription drug abuse and/or drug diversion.”
In addition to the narcotic prescriptions, the evidence shows that CR received 64 alprazolam prescriptions and refills that were authorized by Dr. P, each of which was for a thirty-day supply, for a total of 1,920 days' supply of the drug during a period of thirty months.
For example, on November 23, 2007, Grider #2 filled a thirty-day supply; it also refilled the prescription on December 18 and on January 31, 2008.
The evidence shows numerous other instances in which Respondents filled or refilled the alprazolam prescriptions within days of having filled or refilled an earlier prescription. For example, on April 24, 2008, Grider #2 dispensed a refill, and yet, just six days later on April 30, it dispensed a new prescription.
Likewise, on May 24, 2008, Grider #1 dispensed a further refill, and yet, on May 27, Grider #2 also dispensed a refill.
As other examples, Grider #1 filled or refilled thirty-day alprazolam prescriptions on December 29, 2008, as well as on January 16 and 27, February 14 and 23, and March 12, 2009.
Regarding the alprazolam prescriptions, CR offered two explanations, neither of which is credible. First, when questioned about the alprazolam prescriptions he filled on January 31, as well as on February 1, 2008, CR claimed that he got the extra alprazolam because he “was going out of town for a couple or three weeks.” Tr. 4013. Yet earlier in his testimony, CR stated that the earliest he ever got a refill was three to four days early; he also testified that he did not regularly go out of town.
Next, when asked about the alprazolam prescriptions he filled on March 21, 27, and 31, 2008, CR testified that Dr. P had written him another prescription because “I was going through some bad things,” and that while he was “not sure,” Dr. P did so instead of writing a prescription for two
Yet the alprazolam prescriptions (including those in which Dr. P purportedly doubled his dosing) all gave the same dosing instruction of “one tab at bedtime.” RX 120, Tab C. Moreover, one would expect that if a doctor was actually doubling a patient's frequency of dosing, the prescription would reflect this as is required by federal regulations.
When asked how he had found out about the Pain Center of Broward, CR claimed that he had woken up at about four in the morning because he “couldn't breathe” and had his roommates take him to the emergency room, where he asked the doctor where he could get “a family doctor” because he “was having trouble with [his] back.”
At another point in his testimony, CR was asked by the Government if he “ever g[a]ve his pills away to anybody else?”
In short, much of CR's testimony was transparently disingenuous.
Eric Grider, the pharmacist in charge at Grider #2, recalled that CR was seeing Dr. P for some back problems, but did not recall the nature of those back problems. Tr. 3744-45. Moreover, Eric Grider admitted that he did not talk to Dr. P about CR,
Eric Grider further asserted that Grider #2 would not have known about the controlled-substance prescriptions CR filled at other pharmacies (including at Grider #1) because CR was “a cash-paying patient.”
In addition, on direct examination, Eric Grider asserted that the prescriptions which CR filled at Grider #2 would not, by themselves, raise a red flag or lead him to conclude that CR was a problem patient.
Eric Grider then conceded that CR appeared to be a doctor-shopper who engaged in conduct that fit Grider's definition of a problem patient.
Dr. Sullivan noted that there were “multiple instances where” CR filled the alprazolam prescriptions “early at both pharmacies.” GX 66, at 7. Indeed, after listing four instances of dispensings made by Respondent which ranged from fifteen to “twenty-nine days too early,” Dr. Sullivan observed that “[t]his pattern of filling alprazolam too early for this patient occurred on at least ten other occasions.”
SR is a woman in her mid-fifties. GX 57, at Tab A. SR testified that she has Type 2 diabetes, that she had neuropathy in her feet, bad arthritis in her shoulders, hands, back, and knees, and anxiety; she also testified that she had to have a tooth extracted and developed a dry socket following this procedure. Tr. 4694-95.
According to the spreadsheet of her prescriptions, between October 3, 2009 and April 23, 2010, SR filled twenty-four controlled substance prescriptions at Grider #2. GX 57, at Tab C. The prescriptions included sixteen for hydrocodone/apap, one for Endocet (oxycodone), and seven for clonazepam.
SR denied that she was a doctor shopper, stating that Dr. Z was her psychiatrist and treating her for anxiety. Tr. 4697, 4711. She also stated that Dr. H was an orthopedic surgeon who had performed surgery on her shoulder in March 2010,
The evidence shows that on October 5, 2009, SR received 42 hydrocodone 5/500, a fourteen-day supply, from Dr. S (her then family practitioner); that on October 13, 2009, SR received twelve hydrocodone 7.5/650 (this being a three-day supply), from Dr. M, a dentist;
However, SR's dental records include a list of medications she was taking as of October 8, 2009, the date on which she had a tooth extracted; this list is also repeated on the first page of the chart which is an undated form which includes the type of information which a patient would typically complete on the initial visit (such as Identifying Information, Dental Insurance, Medical History, Acknowledgement of Receipt of Notice of Privacy Practices, and Consent).
RS initially testified that she had just forgotten to list hydrocodone because she has “trouble with [her] memory.” Tr. 4716. However, she later denied having written the list of drugs which appears on the first page of the form,
In addition, the evidence shows that on March 8, 2010, Dr. S (her family doctor) prescribed 90 tablets of hydrocodone 5/500 (a thirty-day supply) and that after this, Dr. H (her orthopedic surgeon) prescribed her thirty tablets of hydrocodone 7.5/500 on March 10, 18, 24, and April 1; most of the prescriptions had dosing instructions of one tablet every six hours, thus providing a week's supply. GX 57, Tab C. In addition, on April 8, Dr. W (who replaced Dr. S as her family doctor but was in the same office) prescribed her 90 more hydrocodone 5/500 (also a thirty-day supply) and on April 23, Dr. H issued her a prescription for another 30 tablets of hydrocodone 7.5/500.
On May 7, 2010, Detective Hammond interviewed Dr. H, who acknowledged that he was treating SR for a shoulder injury. GX 57, Tab B, at 1. Dr. H stated that he may have given SR the Endocet prescription “after surgery or told her to double up on the hydrocodone if he had known she was still receiving them from Dr. S.”
Detective Hammond also interviewed Dr. M, who had performed the extraction.
Detective Hammond interviewed Dr. S, her former family physician. Dr. S stated that SR had entered into a contract under which she was not permitted to receive controlled substances from another physician without his prior authorization.
Finally, on May 19, 2010, Detective Hammond met with Dr. W.
As noted above, all of SR's prescriptions were filled at Grider #2, where Eric Grider was the pharmacist charge. In her decision, the ALJ made the following finding: “Mr. Eric Grider believes, for it is his practice, that he would have told SR not to take the hydrocodone prescribed to her by Dr. S while she takes the stronger hydrocodone prescribed to her by Dr. M. However, he could not specifically recall doing so in this instance, and he does not make notes regarding such counseling because he usually does not have time.” ALJ at 44 (citing Tr. 3717-18, 3734-38). However, SR testified that no one at Grider Drugs counseled her about her prescriptions. Tr. 4701-02, 4719. SR also testified that she was never questioned by a pharmacist at Grider Drug #2 about the prescriptions she received from Drs. S, M, or any other practitioners.
Eric Grider acknowledged that he had an obligation to counsel the patient, given the therapeutic duplication noted in these prescriptions.
Grider also testified that he did not find the quantity of hydrocodone he dispensed to SR to be unusual, given the limited number of days' dosage represented by each prescription.
Dr. Sullivan observed that sixteen of SR's prescriptions were for hydrocodone, and ten of these were filled too early because the patient should still have had medication left from a previous prescription. GX 66, at 7.
With respect to the six patients discussed above, Dr. Sullivan concluded that “the evidence presented * * * is overwhelming and shows a pattern of dispensing controlled substances significantly early to patients who [were] either abusing controlled substances themselves or [were] diverting prescription drugs for illegal purposes. There are dozens of instances of this occurring in these six patients.” GX 66, at 8. The pharmacist should have caught this during the process of conducting prospective [drug utilization reviews] before filling these prescriptions.”
Dr. Sullivan thus concluded that any “reasonable and prudent pharmacist would have * * * refused to dispense controlled substances to all six of these individuals.”
In any event, even after
Nor is
It is further noted that although Dr. Sullivan's testimony and report were largely based on generally accepted standards of pharmacy practice, he did review the Kentucky Board of Pharmacy's rule on Drug Utilization Review. Tr. 3410-14; GX 66, at 2. With the possible exception of the issue of whether under Kentucky law, a pharmacy technician (rather than a licensed pharmacist or pharmacy intern) can lawfully contact a prescribing physician to question the legitimacy of a prescription, regarding which Dr. Sullivan testified that “[t]echnicians should not be making those phone calls, judgment or discussions with physicians, even if it's not that way in Kentucky law,” Tr. 3463-64, no other evidence was put forward showing that the duties of a pharmacist to which he testified would prohibit conduct permitted under state law. Thus, I find that his testimony regarding a pharmacist's obligations to be generally reliable and probative of whether Respondents (and their pharmacists) violated their corresponding responsibility under federal law.
The Government also alleged that Respondents violated Kentucky law by failing to file KASPER reports. Gov. Post-Hrng Br. at 12, 88. In support of this allegation, the Government introduced into evidence a letter (dated May 13, 2005) from Dave Sallengs, a Registered Pharmacist and Pharmacist Investigator who is the manager of the Drug Enforcement Professional Practices Branch of the Kentucky Cabinet for Health and Family Services Office of the Inspector General, to Grider #2. GX 28; Tr. 2302-03. Therein, Mr. Sallengs noted that the KASPER records show that Grider #2 had not reported any prescriptions for the periods of February 18 through 27, 2003; July 4 through August 4, 2003; and February 1, 2005 to the date of the letter. GX 28. In addition, the Government noted that the KASPER data reported by Respondents contained numerous inaccuracies (such as the double reporting of prescriptions) or the misreporting (or non-reporting) of various prescriber's DEA registration numbers.
Mr. Sallengs, who was called as a witness by Respondents, equivocated as to whether this letter established a serious breach of state law by Grider #2. Tr. 2394-95. More specifically, Mr. Sallengs testified that while “it's serious from the standpoint that state law says you have to report, and it has to be within certain days, but in our dealings with it, we understand that a lot of times * * * the pharmacy might not even be aware of this until they get this letter.”
Moreover, Mr. Sallengs expressed the view that where multiple entries under the same prescription number were reported within a few days of each other, it was likely a result “of a glitch or a technical error, [an] insurance billing issue, or something like that.”
On cross-examination, Mr. Sallengs acknowledged that the May 13 letter set forth violations of state law which are a Class A misdemeanor under Kentucky law.
While not alleged in the Order to Show Cause, the Government provided notice in its initial and supplemental pre-hearing statements that it intended to elicit the testimony of an Agent of the Medicaid Fraud Division of the Kentucky Attorney General's Office. More specifically, the Government provided notice that the Agent “will speak of the recent indictment of Eric Grider, the son of Leon Grider, on six counts related to devising schemes to defraud the Kentucky Medical Assistance Program (KMAP).” Gov. Supplemental Pre-Hearing Statement at 5-6.
At the hearing, there ensued nearly three days of testimony by the Agent regarding her investigation of Respondents' billing practices, the execution of a search warrant and the seizure of Respondents' records by state officials, and the subsequent indictment of Eric Grider on six state counts of having submitted fraudulent claims to the KMAP “for prescriptions not dispensed as billed,” GX 43.
Section 304(a) of the Controlled Substances Act provides that “[a] registration * * * to * * * dispense a controlled substance * * * may be suspended or revoked by the Attorney General upon a finding that the registrant * * * has committed such acts as would render [its] registration under section 823 of this title inconsistent with the public interest as determined under such section.” 21 U.S.C. 824(a)(4).
(1) The recommendation of the appropriate State licensing board or professional disciplinary authority.
(2) The applicant's experience in dispensing * * * controlled substances.
(3) The applicant's conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.
(4) Compliance with applicable State, Federal, or local laws relating to controlled substances.
(5) Such other conduct which may threaten the public health and safety.
“[T]hese factors are * * * considered in the disjunctive.”
The Government has the burden of proving by a preponderance of the evidence that a Respondent has committed acts which render its registration inconsistent with the public interest. 21 CFR 1301.44(d) & (e). However, where the Government has made out a
“Moreover, because `past performance is the best predictor of future performance,'
Having considered all of the factors, I conclude that the evidence pertinent to factors two and four makes out a
It is likewise noted that there is no evidence in the record that either Leon or Eric Grider (or either of the Respondents) has been convicted of any offenses under Federal or state laws related to the distribution or dispensing of controlled substances. 21 U.S.C. 823(f)(3). However, there are multiple reasons why even serious misconduct may not be the subject of a criminal prosecution and thus, “the absence of such a conviction is of considerably less consequence in the public interest inquiry.”
Accordingly, that both Respondents may still hold Kentucky pharmacy licenses and Leon and Eric Grider may still hold their pharmacist licenses is not dispositive. So too, that neither the Respondents, nor either Leon or Eric Grider, have been convicted of an offense related to controlled substances, is not dispositive.
While many of the allegations are not proved by substantial evidence because the Government relied on inadmissible KASPER reports and data (or failed to put forward anything other than conclusory evidence), the record nonetheless establishes numerous violations on the part of each Respondent. More specifically, substantial evidence supports a finding that Leon Grider violated the CSA by distributing controlled substances to several persons who did not have prescriptions for the drugs and that both Respondents (and their pharmacists) violated their corresponding responsibility under 21 CFR 1306.04(a) by dispensing controlled substances to several individuals who were clearly engaged in drug-seeking behavior. In addition, the record shows that Respondents could not account for massive quantities of various controlled substances they handled and thus violated their obligations under 21 U.S.C. 827(a) to maintain complete and accurate records of the controlled substances they purchased, distributed, or dispensed. Finally, there is also substantial evidence establishing that Respondents dispensed controlled substances but could not produce either the original prescription or documentation that a prescription was called in, that it filled (or refilled) prescriptions which were not authorized by the prescriber, and that it failed to report several theft incidents to DEA.
Under the CSA, “[p]ersons registered by the Attorney General * * * to manufacture, distribute or dispense controlled substances * * * are authorized to possess, manufacture, distribute, or dispense such substances * * *
The CSA further provides that “[e]xcept when dispensed directly by a practitioner, other than a pharmacist, to an ultimate user, no controlled substance in schedule III or IV, which is a prescription drug as determined under the Federal Food, Drug, and Cosmetic Act, may be dispensed without a written or oral prescription in conformity with * * * 21 U.S.C. 353(b).” 21 U.S.C. 829(b);
As found above, on October 21, 2003, PL, who was cooperating with law enforcement, went to Grider #1 and presented a methadone prescription to Leon Grider; PL also told Grider that she needed some Zs, a street term for Xanax. Tr. 1420-21. However, PL did not have a prescription for Xanax.
The evidence further shows that Leon Grider unlawfully distributed controlled substances to LW on multiple occasions. On February 24, 2004, Leon Grider gave LW forty tablets of both hydrocodone and alprazolam when LW, accompanied by her boyfriend, went to Grider #1 and told Leon Grider that they were going to court but were short on their pills and were concerned that they would be subjected to a pill count. Tr. 1495-96. LW did not have a prescription for the drugs.
On June 4, 2004, LW obtained drugs from Leon Grider without a prescription on two occasions. First, in the morning, LW went to Grider #1 and obtained both Lortab (hydrocodone) and Xanax. As LW testified, she just went in and asked Leon Grider for some pills which he gave her loose in a brown bag. Tr. 6033. Given that placing loose pills in a bag is not how a prescription is dispensed in the usual course of professional pharmacy practice,
Later that day, LW called Leon Grider asked him to bring her some methadone. Tr. 1500. Grider agreed to do so and delivered both methadone, which was in a sealed distributor's bottle and another 60 alprazolam (Xanax), which were in an envelope, to LW at her residence.
On April 24, 2005, LW participated in a further undercover operation. On this occasion, LW (accompanied by PG) met with Leon Grider at a graveyard and asked him for some Duragesic patches. Tr. 1507-08; GX 27. Leon Grider agreed, and later that day, he met PG at a local supermarket, where he gave PG nineteen or twenty Duragesic patches and 88 Xanax pills.
In addition to the three undercover operations in which she participated, LW credibly testified regarding other instances in which she obtained controlled substances from Leon Grider. More specifically, LW testified that when she was initially confronted by Detective Hammond, Leon Grider gave her $1,000 and three 500-count bottles of hydrocodone and told her that she “needed to leave town” to let the authorities “slack off of [her] for a while.” Tr. 5396, 5941-42. It does not matter whether this conduct constituted bribing a witness under Kentucky law. Rather, what matters is that this is another example of Leon Grider's distributing controlled substances to LW when she did not have a prescription authorizing the dispensing. Thus, substantial evidence supports the conclusion that Leon Grider unlawfully distributed 1,500 hydrocodone tablets to LW.
LW also testified regarding an incident in which Leon Grider had given her a 500-count bottle at the Key Village store only to have his wife (Anna Mae) walk in on the deal. Tr. 5930-32. While Anna Mae testified in the hearing that she took the bottle from LW and that the pills were actually pinto beans,
LW further testified that she had also received 98 OxyContin tablets as well some Suboxone, also without a prescription, and that Leon Grider would create false prescription labels to provide cover for LW if she was caught by the police. Tr. 5946, 6095-96, 6125. Thus, substantial evidence supports the conclusion that Leon Grider distributed both OxyContin and Suboxone to LW in violation of the CSA.
In addition, substantial evidence supports the conclusion that Leon Grider unlawfully distributed Suboxone to BL when she did not have a prescription for the drug. With respect to this allegation, the evidence included a contemporaneous recording of a phone conversation between BL and Chief Irvin in which BL acknowledged that Leon Grider had given her the Suboxone when she was in the hospital and did not have a prescription for the drug, photos of the vials (and their labels) which Leon Grider used to distribute the drug that was delivered, and the testimony of BL's daughter. In addition, while Respondent produced a copy of a sales report listing BL's prescriptions, and this report shows drugs that had previously been prescribed to her, no refills were authorized under the previous prescription and Respondents did not produce a copy of any prescription corresponding to the prescription listed on the vials. I therefore hold that substantial evidence supports the conclusion that Leon Grider distributed Suboxone to BL in violation of the CSA.
I further hold that Leon Grider's conduct in unlawfully distributing controlled substances to PL, LW, and BL, is egregious, and is sufficient, by itself, to support the conclusion that Respondents have committed acts which render their registrations “inconsistent with the public interest.” 21 U.S.C. 824(a)(4). Thus, this conduct provides reason alone to revoke each Respondent's registration and to deny their applications to renew their registrations.
Under a longstanding DEA regulation, a prescription for a controlled substance is unlawful unless it has been “issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.” 21 CFR 1306.04(a). This regulation further provides that while “[t]he responsibility for the proper prescribing and dispensing of controlled substances is upon the prescribing practitioner, * * * a
DEA has consistently interpreted this provision “as prohibiting a pharmacist from filling a prescription for a controlled substance when he either ‘knows or has reason to know that the prescription was not written for a legitimate medical purpose.’ ”
As the Government's Expert explained, pharmacists are required under Kentucky law to perform a prospective drug utilization review (DUR) prior to dispensing every prescription.
(a) Known allergies;
(b) Rationale for use;
(c) Proper dose, route of administration, and directions;
(d) Synergism with currently employed modalities;
(e) Interaction or adverse reaction with applicable:
1. Drugs;
2. Foods; or
3. Known disease states
(f) Proper utilization for optimum therapeutic outcomes; and
(g) Clinical misuse or abuse.
The Government's Expert further identified various “red flags” that pharmacists are trained to be aware of to identify suspicious and unlawful prescriptions. These include: (1) When a patient is obtaining controlled substances from multiple doctors, (2) when patients are being prescribed duplicate controlled substance medications that treat the same indications, (3) when patients seek early refills, (4) when patients are obtaining prescriptions for large quantities and large doses, and (5) when patients travel long distances from where they live to either the prescriber or the pharmacy.
While Dr. Sullivan explained that when confronted with a red flag, there are several steps a pharmacist can take including talking to the patient, calling the physician, or refusing to fill the prescription, he further opined that each of the six patients whose prescription profiles were entered into the record were “textbook examples” of persons engaged in “drug abuse and/or drug diversion.” GX 66, at 8. According to Dr. Sullivan, each patient “exhibited multiple instances of” such red flags as obtaining controlled substances from multiple doctors, obtaining duplicate controlled substances to treat the same indication, and seeking early refills,
For example, TA, who filled all but three of her prescriptions at either Grider #1 or Grider #2, obtained prescriptions from twelve different prescribers including dentists, oral surgeons, pain clinic doctors, a psychiatrist, and a nurse practitioner. The record is replete with instances in which even though TA had recently received controlled substances (and more specifically schedule II (fentanyl and Endocet) and III narcotics (hydrocodone), which provided lengthy supplies (25 to 30 day supplies), TA obtained more prescriptions for the same or a similar drug which Respondents filled notwithstanding that she should have had ample medication left from her previous prescription. This pattern occurred over and over.
Tonya Moses, a pharmacist and former employee of Respondents who also testified on their behalf, acknowledged that Grider #1 had filled hydrocodone prescriptions from a dentist which overlapped with even stronger hydrocodone prescriptions TA received from a pain management doctor. Ms. Moses further admitted that these prescriptions were not justified and involved therapeutic duplication and that it was “incumbent upon a pharmacist to verify with the doctor if he sees multiple physicians prescribing, basically, the same medication.”
Dr. Sullivan further noted that in addition to such narcotics as hydrocodone and Endocet, TA was also obtaining alprazolam and carisoprodol, “which are known to be heavily abused.” GX 66, at 4. Accordingly, I agree with Dr. Sullivan's conclusion that “any reasonable and prudent pharmacist would have determined that [TA] was either abusing and/or diverting these controlled substances.”
With respect to RB, the evidence shows that in a twenty-eight month period, she filled 172 controlled substance prescriptions at Respondents, with all but seven being filled at Grider #1. RB's prescriptions were written by two doctors, and were for hydrocodone tablets, alprazolam, and various narcotic cough syrups.
Regarding the latter medications, the Government's Expert gave unrefuted testimony that these drugs are intended for short-term relief of cough and that clinical guidelines were changed in 2006 (before any of the prescriptions at issue were dispensed) to “strongly discourage the use of any type of cough
In other instances, Respondent filled prescriptions for hydrocodone tablets issued by one doctor, even though RB should still have had a large amount of hydrocodone tablets from a thirty-day prescription she had recently filled which was issued by another doctor. Finally, the evidence also shows that RB obtained early fills or refills of prescriptions for hydrocodone tablets, narcotic cough syrups, and alprazolam, even when the prescriptions had been written (or authorized pursuant to an earlier prescription issued) by a single doctor. Indeed, many of the dispensings were more than five days early, and some were as much as nine to twelve days early.
RB testified that no one at Grider Drugs had ever talked to her about her medications or questioned her about her prescriptions. Tr. 4676, 4688-89. Moreover, while Eric Grider, the pharmacist in charge at Grider #2, where RB filled most of her prescriptions, testified that narcotic cough syrups could be prescribed on a long-term basis for COPD or chronic coronary disease with a cough, he subsequently admitted that he did not know whether RB had either condition and had never asked her doctors if she had either condition.
While Grider also asserted that because RB did not have insurance, he had no way of knowing whether she was filling prescriptions at other non-Grider stores, Tr. 3602, I note that Grider did not even check to see what prescriptions RB filled at the other Grider stores.
Dr. Sullivan concluded that RB's behavior clearly indicated that she was either abusing and/or diverting controlled substances and that this “should definitely have been caught by the pharmacist.” GX 66, at 4. He further noted that RB was obtaining duplicate therapy
As to JB, the evidence shows that during an eight-month period, Grider #2 repeatedly filled prescriptions for alprazolam and diazepam, which are both benzodiazepines, which she obtained from two doctors. The evidence further shows that Grider #2 frequently did this within days of having filled a previous prescription, and that it even filled (or refilled) prescriptions JB presented for both drugs on the same day. Moreover, during the eight-month period covered by JB's prescription profile, Grider #2 dispensed eight alprazolam prescriptions, each for a thirty-day supply, as well as nine diazepam prescriptions, each being for a twenty-day supply, and thus provided 420-days' supply of these drugs during the period.
Regarding JB, Eric Grider offered the self-serving testimony that JB's prescriptions did not raise a red flag and that they were not a large number given the number of days' supply they provided. Tr. 3613, 3615. However, Grider offered no further explanation as to why it was appropriate to dispense 420-days' worth of alprazolam and diazepam during the eight-month period when these drugs are prescribed for the same indication.
Moreover, Dr. Sullivan observed he could not “think of any clinical reason why a patient would be using these two drugs at the same time for a period of seven months” and that “[a]ny reasonable and prudent pharmacy would not have filled prescriptions for these two medications to be taken at the same time.” GX 66, at 5. Dr. Sullivan further explained that “[t]his is an obvious sign of either prescription drug abuse and/or diversion.”
As for JR, it is undisputed that JR had been taking painkillers for a back injury for a lengthy period of time and that he had been recently diagnosed with colon cancer and had undergone various procedures, including a colon re-section, and was undergoing chemotherapy. However, while these were undoubtedly serious medical conditions which could cause pain and warrant the prescribing of controlled substances, Respondent Grider #1 filled prescriptions JR was simultaneously obtaining from multiple doctors for narcotics including OxyContin and hydrocodone.
It is acknowledged that Ms. Moses offered credible evidence explaining why several of the short-term prescriptions were filled, as well as why two of the OxyContin prescriptions had been filled early. Moreover, even assuming (as Ms. Moses testified) that the refill request form which Dr. W's office faxed into Grider #1 establishes that Dr. W was aware that JR was taking OxyContin for pain control, it does not explain why Respondents also filled prescriptions for both OxyContin and hydrocodone which JR was obtaining from Drs. K (his surgeon) and B (a pain management specialist) at the same time he was also obtaining hydrocodone from Dr. W.
With respect to JR's OxyContin and hydrocodone prescriptions, Dr. Sullivan noted that while “on rare occasions, cancer patients will use a second narcotic like hydrocodone for break-through pain on an `as needed basis' for a short-term period[,] [t]he same doctor would write prescriptions for both.” GX 66, at 6. As Dr. Sullivan then explained, “[t]his is a major red flag that the patient was receiving hydrocodone prescriptions from three different doctors and OxyContin from two different doctors at the same time. Any reasonable and prudent pharmacist would have caught this and not filled these prescriptions.”
Dr. Sullivan thus concluded that the “duplicate therapy with both hydrocodone and oxycodone (OxyContin) from more than one prescriber is a clear indication of drug abuse and/or diversion and any reasonable and prudent pharmacist would have detected this.”
The evidence with respect to CR shows that between November 2007 and early April 2010, he filled at Respondents approximately 163 prescriptions for such drugs as Demerol, hydrocodone/apap tablets, various narcotic cough syrups, and alprazolam. While CR asserted that he had a back injury, the evidence shows, throughout the period, that while he received prescriptions from Dr. C for 120 tablets of Vicodin 5/500mg (a thirty-day supply), which he filled at Grider #1, he also filled an additional 49 prescriptions for twenty tablets of hydrocodone 7.5/650, which he obtained from Dr. P. Notably, CR filled all but two of Dr. P's hydrocodone prescriptions at Grider #2. In addition, on multiple occasions, CR filled prescriptions for both hydrocodone tablets and narcotic cough suppressants.
In addition, CR obtained 64 alprazolam prescriptions and refills, each being authorized by Dr. P and providing a thirty-day supply. All but seven of these were filled at Respondents, and while CR eventually started filling some of the alprazolam prescriptions at another pharmacy, he did not do so until late April 2009. The evidence further shows that on numerous occasions, Respondents filled or refilled an alprazolam prescription within days of having filled or refilled a prescription for the drug. As found above, CR obtained a total of 1,920 days' supply of alprazolam in a period lasting approximately 900 days.
CR admitted that he did not tell Dr. P that he was also getting controlled substances from Dr. C, and claimed that Dr. P did not ask him. Tr. 4029. Moreover, CR admitted that he never told Dr. C that he was also receiving controlled substances from Dr. P.
Eric Grider admitted that he did not talk to Dr. P about CR. Moreover, he then offered the self-serving testimony that because CR was a cash-paying patient, he was unaware that CR was filling prescriptions at other pharmacies; indeed, Grider raised the ostrich defense, claiming that he “had no reason to” even check to see if CR was filling prescriptions at Grider #1.
Most remarkably, Grider offered the patently disingenuous testimony that he was unaware of unauthorized refills which occurred at Grider #2, notwithstanding that on February 1, 2008, it filled a new alprazolam prescription even though it had refilled a prescription for the drug the day before. GX 56, Tab C, at 2. Moreover, on April 30, 2008, Grider #2 dispensed a new alprazolam prescription even though it had dispensed a refill of a previous alprazolam prescription six days earlier, and on April 28, Grider #1 also filled an alprazolam prescription for CR.
As Dr. Sullivan noted, “in multiple instances,” CR filled alprazolam prescriptions “early at both pharmacies,” and did so approximately fourteen times, with some of the refills occurring as much as “twenty-nine days too early.” GX 66, at 7. As Dr. Sullivan further explained, “a reasonable and prudent pharmacist would never have filled these alprazolam prescriptions as early as the Grider pharmacies did. This shows a pattern of either abuse and/or drug diversion.”
With respect to SR, the evidence shows that during a period of less than seven months, she filled twenty-four controlled substance prescriptions at Grider #2 for hydrocodone, oxycodone, and clonazepam. Five of the hydrocodone prescriptions and one oxycodone prescription were issued by Dr. H, an orthopedic surgeon; eight were issued by Dr. S, a family practitioner; one by NP H, who was in the same practice as Dr. S, and one by Dr. M, who was a dentist. More specifically, on October 5, SR filled a prescription issued by Dr. S for 42 hydrocodone 5/500, this being a fourteen-day supply; on October 13, she filled a prescription from Dr. M for twelve hydrocodone 7.5/650, this being a three-day supply; and on October 21, she filled a prescription issued by NP H for another 42 hydrocodone, also a fourteen-day supply.
Other evidence shows that on October 8, 2009, SR had a tooth extracted and that she was prescribed the hydrocodone for post-operative pain. However, SR's dental records contained no indication that she had reported her use of hydrocodone to Dr. M.
SR's prescriptions in March and April 2010 provide more convincing evidence that she was engaged in doctor-shopping. Specifically, on March 8, 2010, Dr. S (her family doctor) prescribed 90 tablets of hydrocodone 5/500, a thirty-day supply, and on April 8, Dr. W (who replaced Dr. S as her family doctor but was in the same office) prescribed her another 90 tablets. Moreover, on March 10, 18, and 27, as well as April 1 and 23, SR filled prescriptions issued by Dr. H, each being for thirty tablets of hydrocodone 7.5/500.
Detective Hammond interviewed Drs. H, M, S, and W, each of whom told Hammond that they would not have prescribed controlled substances to SR if he/she had been aware that SR was obtaining controlled substances from another physician. Drs. S and W further told Hammond that SR was subject to a pain management contract pursuant to which SR could not obtain controlled substances from another physician without prior authorization. In addition, Dr. H stated that if he had known that SR was receiving controlled substances from Dr. S, he would have contacted Dr. S to ensure that they were not issuing overlapping prescriptions.
By contrast, SR, who testified that she had undergone surgeries on both her elbow and shoulder, testified that she told the admitting nurse prior to a surgery performed by Dr. H that she was taking hydrocodone fives, thus suggesting that Dr. H knew that she was obtaining controlled substances from
In any event, I conclude that it is not necessary to resolve this dispute because Eric Grider acknowledged that SR's prescriptions involved therapeutic duplication and he did not recall having called either Dr. H or Dr. W. Indeed, Grider denied having any obligation to call SR's prescribers, asserting that such contact was “a courtesy” and that he fulfilled his obligation if he counseled a patient as to the appropriate manner in which to take the drugs. However, SR testified that she was neither questioned by anyone at Grider #2 about her prescriptions nor counseled as to how to take the medications.
As Dr. Sullivan testified, when confronted with evidence of red flags, there are several things a pharmacist can do, including having an extensive conversation with the patient, calling the physician, or refusing to fill the prescription.
I further hold that Respondents' dispensing violations are egregious and provide further support for the conclusion that each has committed acts which render its registration “inconsistent with the public interest” and thus support the revocation of its registration.
Respondents also contend that because Dr. Sullivan based his conclusions “by looking only at the prescription patterns” of the patients and testified that he was generally unaware of their medical conditions, this does not constitute substantial evidence of doctor-shopping.
As found above, DEA Investigators performed two audits of Respondents' handling of controlled substances. However, the Government conceded that the first audit was flawed because it included both purchases and distributions which occurred outside of the audit period. While the supervisory DI performed a second audit on a limited number of controlled substances, this audit was also flawed because it relied on KASPER data (notwithstanding that Kentucky does not guarantee the accuracy of the data, Tr. 2335, and KASPER reports contain this caveat,
Recordkeeping is one of the CSA's principal tools for preventing the diversion of controlled substances.
One of the purposes of performing an audit is to assess a registrant's level of compliance with the CSA's recordkeeping requirements. Thus, using data from a non-CSA required record rather than CSA required records, cannot, by definition, provide an accurate picture as to the adequacy of a registrant's compliance with section 827.
Nonetheless, I agree with the ALJ's conclusion that the results of the “consultation examination” performed by Stivers and Associates provide substantial evidence that Respondents cannot account for significant quantities of various controlled substances and thus have violated section 827. ALJ at 85-87. Indeed, the shortages and overages that Stivers found at each of the Grider stores are stunning and establish that Respondents have committed egregious recordkeeping violations and likely diverted thousands of dosage units (d.u.) of controlled substances.
As found above, Grider #1 had shortages of the following benzodiazepines: 2,316 d.u. of alprazolam, 6,372 diazepam, and 2,191 lorazepam. With respect to the narcotics it handled, Grider #1 had shortages of 28,097 d.u. of hydrocodone, 462 Duragesic (fentanyl) patches, 500 Lorcet, 375 Lortab, 214 Endocet, and 200 Vicodin. Grider #1 also had overages of 7,568 clonazepam, 3,025 methadone, 1,751 phentermine, 1,335 oxycodone, 514 Stagesic, and 262 OxyContin.
Grider #2 had shortages of 17,875 d.u. of OxyContin, 8,135 hydrocodone, 3,207 methadone, 3,203 phentermine, 2,013 Stagesic, 1,253 lorazepam, 428 Ambien, and 290 Duragesic. It also had overages of 8,615 clonazepam, 2,787 diazepam, 662 Valium, 619 Lorcet, 425 Endocet, 342 Lortab, and 109 Vicodin.
Moreover, even after combining the shortages and overages for all three stores, Respondents had shortages of 1,496 alprazolam, 7,329 diazepam, 4,928 lorazepam, 605 Duragesic (fentanyl) patches, 35,418 hydrocodone, 16,998 OxyContin, and 2,791 phentermine. Respondents also had overages of 31,951 clonazepam, 15,747 methadone, 1,051 Lorcet, 900 oxycodone, 889 Lortab, 871 Endocet, and 872 Valium.
In their Exceptions, Respondents contend that its audit “was not presented as a final and accurate audit
Because Registrants are required to maintain the dispensing records under federal law and Agency regulations, and those records are required to be “complete and accurate,” 21 U.S.C. § 827, an audit is not rendered invalid because the hard copy prescriptions were not reviewed. Indeed, in performing audits, DEA personnel typically review only the dispensing log to determine the respective quantities of the various controlled substances which have been distributed.
Equally unpersuasive is Respondents' claim that the Stivers' results were skewed by “an inaccurate beginning inventory.” Exceptions, at 5. As Mr. Hicks explained in his report, his firm “used the same beginning inventory [May 31, 2003] as the DEA did.” RX 101, at 62. However, the evidence shows that the beginning inventories which DEA used were actually inventories which Respondents had themselves performed. Thus, if the beginning inventories used by Mr. Hicks's firm were inaccurate, it is because Respondents themselves did not take accurate inventories. Moreover, Mr. Hicks was adamant that the ending inventories were reliable, Tr. 2095, and that he had relied on “source documentation,”
Thus, it is patently disingenuous for Respondents to now assert that their own audit is not reliable. And as explained above, each DEA registrant is required to maintain complete and accurate records for each controlled substance it handles. Thus, the testimony of Mr. Hicks that when all the controlled substances are added up across all three stores, the audit shows an overage of 644 pills, which in his view is immaterial, is utter nonsense. Rather, the audit reflects an abject failure on Respondents' part to comply with the CSA's record keeping requirements and gives substantial credence to the Government's contention that Respondents were engaged in massive diversion. This provides further reason to conclude that Respondents have committed acts which render their registrations “inconsistent with the public interest.” 21 U.S.C. 824(a)(4).
As explained above, a principal component of the Government's evidence in support of many of the remaining allegations was data or reports obtained from KASPER. However, because the Government did not obtain a court order, it cannot rely on that evidence in this proceeding. Nonetheless, a few of the allegations were proved by substantial evidence.
For example, in several instances, the Government produced copies of labels for various prescriptions which were dispensed and yet they could not find either the original signed prescriptions or a called-in prescription which authorized the dispensing. These included prescriptions for hydrocodone (
Respondents thus argue that “the substantial evidence that the Respondents did not have hard copies of some prescriptions for schedule II drugs was Otero's inability to find those hard copies in the record the DEA seized. There was no evidence presented by the Government that Otero had searched the records seized by the Kentucky Pharmacy Board to determine whether the missing hard copies of the prescriptions in question were there.”
DI Otero testified, however, that during the search, the Investigators could not find some of the prescriptions, even though under Federal law, Respondents were required to maintain them at the respective registered location. Tr. 213; 671-72. This testimony is more than enough to provide substantial evidence that Respondent could not provide hard copies of various prescriptions. Contrary to Respondents' understanding, the Investigators were not required to conduct a subsequent search to establish this violation, let alone a review of the records seized by another agency more than a year later.
Respondents also contend that because of the ongoing state criminal proceedings against both Leon and Eric Grider, the ALJ “should not [have] allow[ed] the inability of the Respondents to rebut these alleged violations by providing the requisite hard copies of the prescriptions and call-in scripts carry the day * * * when it is a matter of record that the Respondents have been deprived of their records throughout these proceedings.” Resp. Exceptions, at 26.
To make clear, DEA did not deprive Respondents of any of their records, but rather allowed them to make copies of the records seized by the Agency. Tr. 214-16. Beyond this, the argument is to no avail because under Federal law and DEA regulations, Respondents were required to have the prescriptions at issue on hand and available on the date of the DEA search.
In addition, the record contains substantial evidence (apart from KASPER data) that Leon Grider provided an unauthorized refill of a Lortab (hydrocodone) prescription to BW.
The Government further established that a number of the prescription labels Respondent prepared contained the name of a physician other than the one who had actually prescribed the drug.
Finally, the Government also established that on several occasions,
The Government also contends that Respondents violated Kentucky law by failing to provide complete and accurate information to KASPER.
In its post-hearing brief, the Government also contends that the findings of an investigation of the Kentucky Medicaid Fraud Division establish that Grider #2 engaged in the billing fraud when it billed Medicaid for drugs that were not actually dispensed including controlled substances. Gov. Post-Hrng. Br., at 92. However, in support of its contention, the Government offered nothing more that the conclusory assertion that “[f]actor five is also relevant to findings of the investigation of the Kentucky Medicaid Fraud Division that * * * Grider Drug #2 unlawfully billed Medicaid (including transactions involving prescriptions for controlled substances) where prior authorization was not provided.”
The ALJ agreed with the Government, reasoning that this conduct constitutes “[s]uch other conduct which may threaten public health and safety” because “[w]hen a registrant clearly engages in conduct involving controlled substances that is untruthful, that registrant creates yet another risk of diversion.” ALJ at 93-94 (citing
However, while two of the three cases cited by the ALJ arguably support the proposition that billing fraud constitutes conduct which is actionable under factor five, in both cases the creation of a fraudulent record was clearly part of a scheme to divert controlled substances. For example, in
Most significantly, more than seven weeks before the ALJ issued her decision in this matter, I issued my Decision in
In
In rejecting the Government's contentions, I noted that the CSA, as originally enacted, authorized the revocation of a registration only on the following three grounds: (1) Where a registrant has materially falsified an application for registration; (2) where a registrant has been convicted of a felony related to controlled substances; and (3) where a registrant is no longer authorized by state law to handle controlled substances.
Moreover, as I explained in
In
In
As explained above, the ALJ concluded that Respondent's alleged Medicaid billing falls within factor five because “the prescription check and balance such Medicaid reporting creates was circumvented by this false method of reporting” and that “[w]ithout such trust and truthfulness, the system of monitoring of controlled substances falls apart.” ALJ at 94.
However, there is no evidence in this proceeding that Medicaid billing records are used to monitor the disposition of controlled substances and whether they are being diverted, and as explained above, the CSA creates its own scheme of recordkeeping to monitor the disposition of controlled substances. Second, to the extent the Government's evidence even constitutes substantial evidence of billing fraud—an issue which need not be decided—there is no evidence that Grider #2's pharmacists engaged in the fraud as part of a scheme to divert controlled substances.
As the KBI agent testified, the fraud involved billing for a drug in the Medicaid formulary when a patient brought in a prescription for a drug which was not covered by the formulary and would require pre-authorization. However, the KBI Agent testified that the patient received the drug that the doctor prescribed. Indeed, while in response to the question of whether the drugs involved controlled or non-controlled substances, the KBI Agent testified that “[t]hey were across-the-board,” Tr. 1116, neither the Agent in her testimony, nor any of the Interview Summaries of Respondents' employees, provide any basis for concluding that Respondents engaged in the scheme to facilitate the diversion of controlled substances.
In short, the Government's evidence simply establishes run-of-the-mill billing fraud, without any further proof as to how the fraud threatened public health or safety as required under factor five. Moreover, no evidence was offered that either Eric Grider or Grider #2 has been convicted of health care fraud and is subject to mandatory exclusion from participation in federal health care programs pursuant to 42 U.S.C. 1320a7(a).
This is not to deny the ALJ's well-placed concern that the commission of health care fraud raises a serious question as to the trustworthiness of a registrant. However, with respect to allegations that a registrant has engaged in health care fraud, because the CSA limits the Agency's revocation authority to those instances in which a registrant has been convicted of an offense which subjects it to mandatory exclusion, absent evidence that the fraud was engaged in as part of scheme to divert controlled substances, the CSA clearly contemplates that these allegations are to be litigated in the first instance in federal and state criminal courts, and not in DEA registration proceedings.
As found above, under factors two and four, the Government has proved with substantial evidence numerous violations of the CSA. These include: (1) Leon Grider's distribution of controlled substances either without a prescription or by providing refills which were not authorized by the prescribing physician; (2) Respondents' repeated dispensing of controlled substances to persons who were obviously either engaged in drug abuse or diversion; (3) Respondents' clear inability to account for substantial amounts of the controlled substances they handle; (4) their inability to provide prescriptions for various dispensings; and (5) the creation of false prescription labels. In sum, Respondents (and their principals, Leon and Eric Grider) have committed egregious misconduct which supports the further finding that they have “committed such acts as would render [their] registration[s] * * * inconsistent with the public interest” and which supports the revocation of their registrations. 21 U.S.C. 824(a)(4). I further conclude that the allegations underlying the Immediate Suspension Order have been proved by substantial evidence.
Where, as here, the Government has made out a
“Moreover, because `past performance is the best predictor of future performance,'
Respondents have utterly failed to rebut the Government's
While Eric Grider testified regarding the violations committed by Grider #2, he acknowledged that only one of the patients (CR) to whom Grider #2 had unlawfully dispensed controlled substances was engaged in doctor-shopping, and even then, did so grudgingly. Moreover, when taken as a whole, Eric Grider's testimony manifests that he neither accepts responsibility for his misconduct nor has implemented corrective measures to prevent diversion in the future. For example, when confronted with evidence of a patient obtaining prescriptions from multiple doctors, Grider testified that he nonetheless considers calling the prescriber to be a courtesy. As a further example, Grider testified that he would not even check to see if a patient was obtaining controlled substances from his father's store. Finally, Grider offered no evidence as to any remedial measures which have been undertaken at Grider #2. Thus, I conclude that Eric Grider remains utterly indifferent as to the scope of his and Grider #2's obligations under both Kentucky and Federal law to prevent the abuse and diversion of controlled substances. Accordingly, I conclude that Respondents have failed to rebut the Government's case.
Respondents nonetheless argue that I should reject the ALJ's conclusions that because Leon Grider did not testify, there is no evidence that he is remorseful or has implemented any corrective measures. Resp. Exceptions at 6. Noting that they made “repeated efforts to stay this proceeding,” Respondents argue that because Leon Grider was under two state court indictments at the time of this hearing, the ALJ should have stayed this proceeding until the conclusion of the two state criminal cases so as not to “ `undermine the party's Fifth Amendment privilege against self-incrimination.' ”
Respondents acknowledge that “ `as a general matter, due process is not infringed merely because an accused person is subjected, without his consent, to an administrative hearing concerning matters involved in a pending criminal proceedings.' ”
Respondents' argument gives no reason to reject the ALJ's conclusions.
While the D.C. Circuit further explained that “the strongest case for deferring civil proceedings is where a party under indictment for a serious offense is required to defend a civil or administrative action involving the same matter,” the potential harm to a party's Fifth Amendment privilege is just one of four reasons which may justify staying the noncriminal proceeding.
It is, of course, commonplace that matters involving DEA registrants will lead to both a revocation proceeding and a criminal investigation and subsequent charges at either the federal or state level. Moreover, the very purpose of a proceeding brought under 21 U.S.C. 823(f) and 824(a)(4) is to protect the public interest.
Here, it is noted that the ALJ did stay the proceeding for approximately nine months (between June 2008 and March 2009). Moreover, even after the stay was lifted, the actual hearing did not commence until August 11, 2009, five months later, and Respondents did not start putting on their case until December 2009. At that point, the two criminal cases against Leon Grider had been pending since August 2005, and thus for more than four years.
It is further noted that during the period of the stay, Respondents continued diverting controlled substances. Thus, the delay of this proceeding did cause serious injury to the public interest. As this case demonstrates, under
As explained above, it is settled that where the Government has established a
In support of their contention, Respondents quote the following paragraph from an email the supervisory DI wrote to his subordinate, who had expressed concern as to whether she could handle the matter:
All we need to do with [Leon Grider] is document how many scripts are bad for possible criminal sanctions, how many civil violations he has for nonconformance and a fine, and what we intend to do when we have the full picture (revocation/suspension/etc.). It will just take a while, that's all. He got off the hook before. We will not give him the opportunity this time. We cannot cut corners with him. We will drown him in violations. The more concrete the violation, the better.
This email does not even remotely establish bad faith or malicious intent on the part of the supervisory DI. Indeed, in a subsequent portion of the email, the supervisory DI told his subordinate to “look[] for bogus scripts, unauthorized refills, and failure to comply with prescriptions requirements, such as refilling schedule II's,” each of which constitutes a violation of the CSA. RX 103. He then instructed her “to be methodical. Pick a doctor with lots of scripts and question them. Record the bad ones and write a report. Look at whether any of these were filled early per KASPER, per early refill book, that would confirm fraudulent reporting.”
Notably, nowhere did the supervisory DI instruct his subordinate to find violations even in the absence of probable cause or to violate Leon Grider's constitutional rights. And ultimately, Respondents were allowed to test the Government's evidence with respect to every violation of the CSA which it alleged. Likewise, each of the two state criminal proceedings was initiated by indictment, which requires a finding of probable cause.
I therefore reject Respondent's contention that it was improper for the ALJ to rely on Leon Grider's silence in concluding that Respondents had not rebutted the Government's
Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 824(a)(4), as well as 28 CFR 0.100(b), I order that DEA Certificate of Registration AG3498347, issued to Grider Drug #1, be, and it hereby is revoked. I further order that any pending applications of Grider Drug #1 and Grider Drug #2, be, and they hereby are, denied. This Order is effective immediately.